UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED February 28, 2018

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

	For the quarterly period ended August 31, 2018

o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________ to ___________

Commission file number 333-207100

CAPSTONE SYSTEMS INC.

(Exact name of registrant as specified in its charter)

Nevada

Nevada

30-0867167

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

(State or other jurisdiction of incorporation or organization)

Yun Gu Hui, International Financial Center

42nd FL Fl, ~~Hangzhou~~Hanzhong Str 1, Qinhuai District,

Nanjing, Jiangsu Province, China 210005

(Address of principal executive offices, including zip code)

(86) 025-57625882

(Telephone number, including area code)

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the last 90 days. YES x NO oN/A

~~Indicate~~(Former byname, ~~check~~former ~~mark~~address ~~whether the registrant has submitted electronically~~ and ~~posted~~former onfiscal ~~its corporate Web site~~year, if ~~any,~~changed ~~every~~since ~~Interactive~~last ~~Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter~~report) ~~during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). YES x NO o~~

Indicate by check mark whether the registrant is(1) ahas ~~large~~filed ~~accelerated~~all ~~filer,~~reports anrequired ~~accelerated~~to ~~filer,~~be afiled ~~non-accelerated~~by ~~filer,~~Section 13 or a15(d) ~~smaller~~of ~~reporting~~the ~~company.~~Securities ~~See~~Exchange Act of 1934 during the ~~definitions~~preceding of12 ~~“large~~months ~~accelerated~~(or ~~filer,~~for ~~“accelerated~~such ~~filer,”~~shorter ~~“non-accelerated~~period ~~filer~~that the registrant was required to file such reports),” and ~~“smaller~~(2) ~~reporting~~has ~~company”~~been insubject ~~Rule~~to ~~12b-2~~such offiling requirements for the ~~Exchange~~last ~~Act~~90 days. Yes x No o

~~Large~~Indicate ~~accelerated~~by ~~filer~~check omark ~~Accelerated~~whether ~~filer~~the oregistrant ~~Non~~has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-~~accelerated~~T ~~filer~~(§232.405 oof ~~Smaller~~this ~~reporting~~chapter) ~~company~~during xthe ~~Emerging~~preceding ~~growth~~12 ~~company~~months ☐(or for such shorter period that the registrant was required to submit and post such files). Yes x No o

IfIndicate ~~an emerging growth company, indicate~~ by check mark ifwhether the registrant ~~has~~is ~~elected~~a ~~not~~large toaccelerated ~~use~~filer, ~~the~~an ~~extended~~accelerated ~~transition~~filer, ~~period~~a ~~for~~non-accelerated ~~complying~~filer, ~~with~~a ~~any~~smaller ~~new~~reporting company, or ~~revised~~an ~~financial~~emerging ~~accounting~~growth ~~standards~~company. ~~provided~~See ~~pursuant~~the todefinitions ~~Section~~of ~~13(a)~~“large accelerated filer, “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. ☐

~~Indicate~~Large byaccelerated ~~check~~filer ~~mark~~o ~~whether~~Accelerated ~~the~~filer ~~registrant~~o isNon-accelerated afiler ~~shell~~o ~~company~~Smaller ~~(as~~reporting ~~defined~~company inx ~~Rule~~Emerging ~~12b-2~~growth ofcompany ~~the Exchange Act). YES o NO~~ x

~~State~~If ~~the~~an ~~number~~emerging ofgrowth ~~shares~~company, ~~outstanding~~indicate ofby ~~each~~check ofmark if the ~~issuer’s~~registrant ~~classes~~has ofelected ~~common~~not ~~equity,~~to asuse of the ~~latest~~extended ~~practicable~~transition ~~date:~~period ~~5,085,000~~for ~~shares~~complying aswith any new or revised financial accounting standards provided pursuant to Section 13(a) of ~~April~~the ~~24,~~Exchange ~~2018~~Act. ¨

~~ITEM~~Indicate 1by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ~~FINANCIAL~~Yes ~~STATEMENTS~~x No ¨

~~CAPSTONE~~Indicate ~~SYSTEMS~~the number of shares outstanding of each of the issuer’s classes of common stock, ~~INC.~~as of the latest practicable date: 5,085,000 shares as of October 15, 2018

~~REVIEWED~~TABLE ~~FINANCIAL~~OF ~~STATEMENTS~~CONTENTS

~~FOR~~Index ~~THE~~to ~~YEAR~~Form ~~AND NINE MONTHS ENDED MAY 31, 2017 AND~~ 10-Q

FEBRUARY 28, 2018

		Page
	Part I FINANCIAL INFORMATION

Item 1.	Financial Statements

	Report of Independent Registered Public Accounting Firm		4

	Unaudited Condensed Balanced Sheets		5

	Unaudited Condensed Statement of Operations		6

	Unaudited Condensed Statement of Cash Flows		7

	Notes to Financial Statements		8-11

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		12

Item 3.	Quantitative and Qualitative Disclosures About Market Risk		13

Item 4.	Controls and Procedures		13

	Part II OTHER INFORMATION

Item 1.	Legal Proceedings		14

Item 1A.	Risk Factors		14

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		14

Item 3.	Defaults Upon Senior Securities		14

Item 4.	Mine Safety Disclosures		14

Item 5.	Other Information		14

Item 6.	Exhibits		15

SIGNATURE			16

~~INDEX~~2 TOTable ~~FINANCIAL~~of ~~STATEMENTS~~Contents

~~TABLE~~FORWARD-LOOKING ~~OF CONTENTS~~STATEMENTS

	Page No.
Report of Independent Registered Public Accounting Firm		3
Balance Sheets		4
Statements of Operations		5
Statements of Cash Flows		6
Notes to Financial Statements	7 – 12

This Quarterly Report on Form 10-Q contains certain forward-looking statements. The statements herein which are not historical reflect our current expectations and projections about the Company’s future results, performance, liquidity, financial condition, prospects and opportunities and are based upon information currently available to us and our management and our interpretation of what we believe to be significant factors affecting our business, including many assumptions about future events. Such forward-looking statements include statements regarding, among other things:

2· ~~Table~~our ability to produce, market and generate sales of ~~Contents~~our products and services; · our ability to develop and/or introduce new products and services; · our projected future sales, profitability and other financial metrics; · our future financing plans; · our anticipated needs for working capital; · the anticipated trends in our industry; · our ability to expand our sales and marketing capability; · acquisitions of other companies or assets that we might undertake in the future; · competition existing today or that will likely arise in the future; and · other factors discussed elsewhere herein.

~~REPORT~~Forward-looking OFstatements, ~~INDEPENDENT~~which ~~REGISTERED~~involve ~~PUBLIC~~assumptions ~~ACCOUNTING~~and ~~FIRM~~describe our future plans, strategies, and expectations, are generally identifiable by use of the words “may,” “should,” “will,” “plan,” “could,” “target,” “contemplate,” “predict,” “potential,” “continue,” “expect,” “anticipate,” “estimate,” “believe,” “intend,” “seek,” or “project” or the negative of these words or other variations on these or similar words. Actual results, performance, liquidity, financial condition and results of operations, prospects and opportunities could differ materially from those expressed in, or implied by, these forward-looking statements as a result of various risks, uncertainties and other factors, including the ability to raise sufficient capital to continue the Company’s operations. These statements may be found under Part I, Item 2-”Management’s Discussion and Analysis of Financial Condition and Results of Operations,” as well as elsewhere in this Quarterly Report on Form 10-Q generally. Actual events or results may differ materially from those discussed in forward-looking statements as a result of various factors, including, without limitation, matters described in this Quarterly Report on Form 10-Q.

ToIn ~~the~~light ~~Board~~ of ~~Directors~~these risks and ~~Stockholders~~uncertainties, ofthere ~~Capstone~~can ~~Systems~~be ~~Inc~~no assurance that the forward-looking statements contained in this Quarterly Report on Form 10-Q will in fact occur.

~~Results~~Potential ofinvestors ~~Review~~should not place undue reliance on any forward-looking statements. Except as expressly required by the federal securities laws, there is no undertaking to publicly update or revise any forward-looking statements, whether as a result of ~~Interim~~new ~~Financial~~information, ~~Information~~future events, changed circumstances or any other reason.

WeThe ~~have~~forward-looking ~~reviewed~~statements ~~the~~in ~~condensed~~this ~~balance~~Quarterly ~~sheet~~Report ofon ~~Capstone~~Form ~~Systems~~10-Q ~~Inc.~~represent ~~(the~~our ~~“Company”)~~views as of ~~February 28, 2018, and~~ the ~~related~~date ~~condensed statements~~ of ~~income~~this ~~and~~Quarterly ~~comprehensive~~Report ~~income~~on ~~for~~Form ~~the three~~10-~~month~~Q. ~~and~~Such ~~nine-month~~statements ~~period~~are ~~ended~~presented ~~February~~only ~~28,~~as ~~2018,~~a ~~and~~guide ~~condensed~~about ~~statements~~future ofpossibilities ~~cash~~and ~~flows~~do ~~for~~not ~~the~~represent ~~nine-month~~assured ~~period then ended~~events, and ~~the~~we ~~related~~anticipate ~~notes~~that ~~(collectively~~subsequent ~~referred~~events toand asdevelopments ~~the~~will ~~interim~~cause ~~financial~~our ~~statements).~~views ~~Based~~to onchange. ~~our~~You ~~reviews~~should, wetherefore, ~~are~~ not ~~aware~~rely ofon ~~any~~these ~~material~~forward-looking ~~modifications that should be made to the accompanying interim financial~~ statements ~~for~~as ~~them~~representing toour beviews inas ~~conformity~~of ~~with~~any ~~accounting~~date ~~principles~~after ~~generally~~the ~~accepted~~date inof ~~the~~this ~~United~~Quarterly ~~States~~Report ofon ~~America~~Form 10-Q.

~~Basis~~This ~~for~~Quarterly ~~Review~~Report ~~Results~~on Form 10-Q also contains estimates and other statistical data prepared by independent parties and by us relating to market size and growth and other data about our industry. These estimates and data involve a number of assumptions and limitations, and potential investors are cautioned not to give undue weight to these estimates and data. We have not independently verified the statistical and other industry data generated by independent parties and contained in this Quarterly Report on Form 10-Q. In addition, projections, assumptions and estimates of our future performance and the future performance of the industries in which we operate are necessarily subject to a high degree of uncertainty and risk.

~~These~~Potential ~~interim~~investors ~~financial~~should ~~statements~~not ~~are~~make ~~the~~an ~~responsibility~~investment ofdecision ~~the~~based ~~Company’s~~solely ~~management.~~on ~~We conducted~~ our review in accordance with the standards of the PCAOB. A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with standards of the PCAOBprojections, ~~the~~estimates ~~objective~~or ~~of which is the expression of an opinion regarding the financial statements taken as a whole~~expectations. Accordingly, we do not express such an opinion. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

~~San~~3 ~~Mateo,~~Table CAof ~~April 22, 2018 WWC, Professional Corporation Certified Public Accountants~~Contents

3REPORT ~~Table~~OF ofINDEPENDENT ~~Contents~~REGISTERED PUBLIC ACCOUNTING FIRM

~~CAPSTONE~~To ~~SYSTEMS,~~the ~~INC.~~Board of Directors and

~~UNAUDITED~~Stockholders ~~CONDENSED~~of ~~BALANCE~~Capstone ~~SHEETS~~Systems Inc.

ASResults OFof ~~MAY~~Review ~~31,~~of ~~2017~~Interim ~~AND~~Financial ~~FEBRUARY 28, 2018~~Information

	February 28,			May 31,
	2018			2017
				(Audited)
ASSETS
Current assets
Cash	$	-		$	4,295
Total current assets		-			4,295
Fixed assets, net		-			6,026
Total assets	$	-		$	10,321
LIABILITIES AND STOCKHOLDERS’ DEFICIENCY
Current liabilities
Accounts payable & accrued liabilities	$	5,500		$	-
Loan payable - related party		-			100
Due to related party		23,957
Income tax payable		-			2,089
Total liabilities		29,457			2,189
Commitments and Contingencies
Stockholders’ deficiency
Common stock, $0.001 par value, 75,000,000 shares authorized, 5,085,000 shares issued and outstanding, respectively		5,085			5,085
Additional paid-in capital		35,781			42,315
Accumulated deficit		(70,323	)		(39,268	)
Total stockholders’ deficiency		(29,457	)		8,132
Total liabilities and stockholders’ deficiency	$	-		$	10,321

We have reviewed the condensed balance sheet of Capstone Systems Inc. (the “Company”) as of August 31, 2018, and the related condensed statements of operations for the three-month periods ended August 31, 2018, and condensed statements of cash flows for the three-month periods then ended, and the related notes (collectively referred to as the interim financial statements). Based on our reviews, we are not aware of any material modifications that should be made to the accompanying interim financial statements for them to be in conformity with accounting principles generally accepted in the United States of America.

~~See~~We ~~accompanying~~have ~~notes~~previously toaudited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the balance sheet of the Company as of May 31, 2018, and the related statements of operations, stockholders’ deficiency, and cash flows for the year then ended (not presented herein); and in our report dated August 24, 2018, we expressed an unqualified opinion on those financial statements. In our opinion, the information set forth in the accompanying condensed balance sheet as of May 31, 2018, is fairly stated, in all material respects, in relation to the balance sheet from which it has been derived.

4The ~~Table~~accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the financial statements, the Company had incurred substantial losses in previous years, which raises substantial doubt about its ability to continue as a going concern. Management’s plans in regards to these matters are also described in Note 3. These financial statements do not include any adjustments that might result from the outcome of ~~Contents~~this uncertainty.

~~CAPSTONE~~Basis ~~SYSTEMS,~~for ~~INC.~~Review Results

~~UNAUDITED~~These ~~CONDENSED~~interim ~~STATEMENT~~financial OFstatements ~~OPERATIONS~~are the responsibility of the Company’s management. We conducted our review in accordance with the standards of the PCAOB. A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with standards of the PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

FOR THE THREE AND NINE MONTHS ENDED FEBRUARY 28, 2018 AND 2017

San Mateo, CA	WWC, Professional Corporation
October 15, 2018	Certified Public Accountants

	For the			For the		For the			For the
	Three MonthsEnded			Three MonthsEnded		Nine MonthsEnded			Nine MonthsEnded
	February 28,2018			February 28,2017		February 28,2018			February 28,2017
REVENUES
Sales:
Sales	$	-		$	72,722	$	30,258		$	143,897
Total Income		-			72,722		30,258			143,897
Cost of Goods Sold:
Purchases	$	-		$	53,045	$	29,549		$	118,018
Total Cost of Goods Sold		-			53,045		29,549			118,018
Gross Profit		-			19,677		709			25,879
Operating Expenses:
General and administrative	$	23,457		$	2,426	$	33,852		$	22,568
Product Development		-			-		-			43,429
Total Expenses		23,457			2,426		33,852			65,997
Other Income/(Expense):
Other Income		-			-		2,089			-
Income Before Income Tax	$	(23,457	)	$	17,251	$	(31,055	)	$	(40,118	)
Provision for Income Tax	$	-		$	-	$	-		$	-
Net Income or (Loss) for the year		(23,457	)		17,251		(31,055	)		(40,118	)
Net gain (loss) per share:
Basic and diluted	$	(0.001	)	$	0.0034	$	(0.001	)	$	(0.0079	)
Weighted average number of shares outstanding:
Basic and diluted		5,085,000			5,085,000		5,085,000			5,085,000

Table of Contents

~~See~~CAPSTONE ~~accompanying~~SYSTEMS, ~~notes to financial statements~~INC.

5UNAUDITED ~~Table~~CONDENSED ofBALANCE ~~Contents~~SHEETS

~~CAPSTONE~~AS ~~SYSTEMS~~OF AUGUST 31, ~~INC.~~2018 AND MAY 31, 2018

UNAUDITED CONDENSED STATEMENT OF CASH FLOWS

	August 31,			May 31,
	2018			2018
				(Audited)
ASSETS

Current assets
Prepaid expense	$	-		$	209
Total current assets		-			209

Total assets	$	-		$	209

LIABILITIES AND STOCKHOLDERS’ DEFICIENCY

Current liabilities
Accounts payable & accrued liabilities	$	24,798		$	11,400
Due to related party		37,571			35,432
Total liabilities		62,369			46,832

Commitments and Contingencies

Stockholders’ deficiency
Common stock, $0.001 par value, 2,000,000,000 shares authorized, 5,085,000 shares issued and outstanding, respectively		5,085			5,085
Additional paid-in capital		35,781			35,781
Accumulated deficit		(103,235	)		(87,489	)
Total stockholders’ deficiency		(62,369	)		(46,623	)

Total liabilities and stockholders’ deficiency	$	-		$	209

~~FOR~~See ~~THE~~accompanying ~~NINE~~notes ~~MONTHS~~to ~~ENDED~~financial ~~FEBRUARY 28, 2018 AND 2017~~statements.

	2018			2017
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income (Loss)	$	(31,055	)	$	(40,118	)
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		-			200
Deferred Cost of Goods Sold		-			34,801
Unearned Revenue		-			(38,205	)
Increase in accrued liabilities		2,803			-
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES	$	(28,252	)	$	(43,322	)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of Property		-			-
NET CASH (USED IN) INVESTING ACTIVITIES		-			-
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of common stock		-			43,400
Due to related party		23,957
NET CASH PROVIDED BY FINANCING ACTIVITIES		23,957			43,400
NET (DECREASE)/INCREASE IN CASH	$	(4,295	)	$	78
CASH AND CASH EQUIVALENTS – BEGINNING OF PERIOD	$	4,295		$	223
CASH AND CASH EQUIVALENTS – ENDING OF PERIOD	$	-		$	301
NON-CASH FINANCING ACTIVITIES
Reduction in additional paid in capital as a result of assignment of assets and liabilities to former shareholder		6,534			-

Table of Contents

~~See~~ CAPSTONE ~~accompanying~~SYSTEMS, ~~notes to financial statements~~INC.

6UNAUDITED ~~Table~~CONDENSED ofSTATEMENT ~~Contents~~OF OPERATIONS

~~CAPSTONE~~FOR ~~SYSTEMS~~THE THREE-MONTH PERIODS ENDED AUGUST 31, ~~INC.~~2018 AND 2017

NOTES TO CONDENSED FINANCIAL STATEMENTS

	For the three-month periods ended August 31,
	2018			2017
REVENUES
Sales:
Sales	$	-		$	30,258
Total Income		-			30,258

Cost of Goods Sold:
Purchases	$	-		$	29,549
Total Cost of Goods Sold		-			29,549

Gross Profit		-			709

Operating Expenses:
General and administrative	$	15,746		$	2,146
Total Expenses		15,746			2,146

Other Income/(Expense):
Other Income		-			-

Income Before Income Tax	$	(15,746	)	$	(1,437	)

Provision for Income Tax	$	-		$	-

Net Loss for the period		(15,746	)		(1,437	)

Net gain (loss) per share:
Basic and diluted	$	(0.0030	)	$	(0.0003	)

Weighted average number of shares outstanding:
Basic and diluted		5,085,000			5,085,000

~~FOR~~See ~~THE~~accompanying ~~NINE~~notes ~~MONTHS~~to ~~ENDED~~financial ~~FEBRUARY 28, 2018 AND 2017~~statements.

~~NOTE~~6 1Table ~~– Organization and Basis~~ of ~~Presentation~~Contents

~~Capstone~~CAPSTONE ~~Systems Inc. (the “Company”) is a for profit corporation established under the Corporation Laws of the State of Nevada on April 1~~SYSTEMS, ~~2015~~INC. The address of our business office is 25/F, First Trade Building, 985 Dong Fang Road, Pudong Xinqu, Shanghai, China, 200000. We maintain our statutory registered agent’s office at 525 Swallow Cove, Boulder City, NV 89005. We plan to expand our business in the wholesale distribution of kitchen cabinets in the USA. The Company is subject to all risks inherent to the establishment of a start-up business enterprise.

~~Our~~UNAUDITED ~~financial~~CONDENSED ~~statements~~STATEMENT ~~and~~OF ~~related~~CASH notes are presented in accordance with accounting principles generally accepted in the United States, and are expressed in U.S. dollars. All transactions including purchases, sales and current financing is in U.S. dollars. The Company’s fiscal year-end is May 31st.FLOWS

~~NOTE~~FOR 2THE –THREE-MONTH ~~Significant~~PERIOD ~~Accounting~~ENDED ~~Policies~~AUGUST ~~and~~31, ~~Recent~~2018 ~~Accounting~~AND ~~Pronouncements~~2017

Interim Financial Statements

	2018			2017
CASH FLOWS FROM OPERATING ACTIVITIES

Net Loss	$	(15,746	)	$	(1,437	)
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		-			134
Decrease in prepaid expenses		209			-
Increase in accrued liabilities		13,398			-
NET CASH (USED IN) OPERATING ACTIVITIES	$	(2,139	)	$	(1,303	)

NET CASH (USED IN) INVESTING ACTIVITIES		-			-

CASH FLOWS FROM FINANCING ACTIVITIES
Due to related party		2,139			-
NET CASH PROVIDED BY FINANCING ACTIVITIES		2,139			-

NET DECREASE IN CASH	$	-		$	(1,303	)

CASH AND CASH EQUIVALENTS – BEGINNING OF PERIOD	$	-		$	4,294

CASH AND CASH EQUIVALENTS – ENDING OF PERIOD	$	-		$	2,991

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for income taxes		-			-
Cash received for interest income		-			-
Cash paid for interest expense		-			-

~~The~~See accompanying ~~unaudited~~notes financial statements have been prepared in accordance with Regulation S-X and do not include all of the information and disclosures required by generally accepted accounting principles for complete financial statements. All adjustments which are, in the opinion of management, necessary for a fair presentation of the results of operations for the interim period(s), and to ~~make the~~ financial statements ~~not misleading, have been made and are of a recurring nature unless otherwise disclosed herein~~. ~~The results of operations for such interim period(s) are not necessarily indicative of operations for a full year.~~

~~Condensed~~7 ~~Financial~~Table ~~Statements~~of Contents

~~Certain~~CAPSTONE information and footnote disclosures normally included in the condensed financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company’s May 31SYSTEMS, ~~2017 audited financial statements as filed in the most recent Form 10-K~~INC. ~~The results of operations for the period ended February 28, 2018 are not necessarily indicative of the operating results for the full year.~~

~~Use~~NOTES ofTO ~~Estimates~~CONDENSED ~~and~~FINANCIAL ~~Assumptions~~STATEMENTS

~~The~~FOR ~~preparation~~THE ofTHREE-MONTH ~~financial~~PERIODS ~~statements~~ENDED inAUGUST ~~conformity~~31, ~~with~~2018 ~~generally~~AND accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Actual results could differ from those estimates.2017

NOTE 1 – Organization and Basis of Presentation

~~Due~~Capstone toSystems Inc. (the ~~limited~~“Company”) ~~level~~is a for profit corporation established under the Corporation Laws of ~~operations~~the State of Nevada on April 1, ~~the~~2015. ~~Company~~The ~~has~~address ~~not~~of ~~had~~our tobusiness ~~make~~office ~~material~~is ~~assumptions~~Yun orGu ~~estimates~~Hui, ~~other~~International ~~than~~Financial Center, 42nd Fl, Hanzhong Str 1, Qinhuai District, Nanjing, Jiangsu Province, China 210005. We maintain our statutory registered agent’s office at 525 Swallow Cove, Boulder City, NV 89005. We plan to expand our business in the ~~assumption~~wholesale ~~that~~distribution of kitchen cabinets in the USA. The Company is subject to all risks inherent to the establishment of a ~~going~~start-up ~~concern~~business enterprise.

7Our ~~Table~~financial ofstatements ~~Contents~~and related notes are presented in accordance with accounting principles generally accepted in the United States, and are expressed in U.S. dollars. All transactions including purchases, sales and current financing is in U.S. dollars. The Company’s fiscal year-end is May 31st.

~~CAPSTONE~~NOTE ~~SYSTEMS,~~2 ~~INC.~~– Significant Accounting Policies and Recent Accounting Pronouncements

~~NOTES~~Interim TOFinancial ~~CONDENSED FINANCIAL STATEMENTS~~Statements

~~FOR~~The ~~THE~~accompanying ~~NINE~~unaudited ~~MONTHS~~financial ~~ENDED~~statements ~~FEBRUARY~~have 28been prepared in accordance with Regulation S-X and do not include all of the information and disclosures required by generally accepted accounting principles for complete financial statements. All adjustments which are, ~~2018~~in ~~AND~~the ~~2017~~opinion of management, necessary for a fair presentation of the results of operations for the interim period(s), and to make the financial statements not misleading, have been made and are of a recurring nature unless otherwise disclosed herein. The results of operations for such interim period(s) are not necessarily indicative of operations for a full year.

~~The~~Condensed ~~Company~~Financial ~~considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents.~~Statements

~~Fair~~Certain ~~Value~~information and footnote disclosures normally included in the condensed financial statements prepared in accordance with accounting principles generally accepted in the United States of ~~Financial~~America ~~Instruments~~have been condensed or omitted. It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company’s May 31, 2018 audited financial statements as filed in the most recent Form 10-K. The results of operations for the period ended August 31, 2018 are not necessarily indicative of the operating results for the full year.

~~ASC~~Use ~~825, “Disclosures about Fair Value~~ of ~~Financial~~Estimates Instruments”, requires disclosure of fair value information about financial instruments. ASC 820, “Fair Value Measurements” defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of February 28, 2018.Assumptions

The ~~respective~~preparation ~~carrying~~of ~~values~~financial ofstatements ~~certain~~in ~~on-balance-sheet~~conformity ~~financial~~with ~~instruments~~generally ~~approximate~~accepted ~~their~~accounting ~~fair~~principles ~~values.~~requires ~~These~~management ~~financial~~to ~~instruments~~make ~~include~~estimates ~~cash,~~and ~~accrued~~assumptions ~~liabilities~~that ~~and~~affect ~~notes~~the ~~payable.~~reported ~~Fair~~amounts ~~values~~of ~~were~~assets ~~assumed~~and toliabilities ~~approximate~~and ~~carrying~~disclosure ~~values~~of ~~for~~contingent ~~these~~assets ~~financial~~and ~~instruments~~liabilities ~~since~~at ~~they~~the ~~are~~date ~~short~~of ~~term~~the infinancial ~~nature~~statements and ~~their~~the ~~carrying~~reported amounts ~~approximate~~of ~~fair~~revenues ~~value~~and expenses during the period. Actual results could differ from those estimates.

~~Basic~~Due ~~and~~to ~~Diluted~~the ~~Loss~~limited ~~Per~~level ~~Share~~of operations, the Company has not had to make material assumptions or estimates other than the assumption that the Company is a going concern.

~~The~~Cash ~~Company computes earnings (loss) per share in accordance with ASC 260-10-45 “Earnings per Share”, which requires presentation of both basic~~ and ~~diluted~~Cash earnings per share on the face of the statement of operations. Basic earnings (loss) per share is computed by dividing net earnings (loss) available to common stockholders by the weighted average number of outstanding common shares during the period. Diluted earnings (loss) per share gives effect to all dilutive potential common shares outstanding during the period. Dilutive earnings (loss) per share excludes all potential common shares if their effect is anti-dilutive. The Company has no potential dilutive instruments, and therefore, basic and diluted earnings (loss) per share are equal.Equivalents

~~Revenue~~The ~~Recognition~~Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents.

~~The~~Fair ~~Company’s~~Value ~~office~~of isFinancial ~~currently based in Shanghai, PRC, but we utilize the U.S. dollar as our functional currency.~~Instruments

~~The~~ASC ~~company~~825, ~~follows~~“Disclosures ~~the~~about ~~guidelines~~Fair Value of Financial Instruments”, requires disclosure of fair value information about financial instruments. ASC ~~605-15~~820, “Fair Value Measurements” defines fair value, establishes a framework for ~~revenue~~measuring ~~recognition~~fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. ~~Revenue~~Fair isvalue ~~recognized~~estimates ~~when~~discussed ~~all~~herein ~~the~~are ~~following~~based ~~conditions~~upon ~~have~~certain ~~been~~market ~~met:~~assumptions and pertinent information available to management as of August 31, 2018.

1.The ~~Pervasive~~respective ~~evidence~~carrying values of ancertain ~~arrangement~~on-balance-sheet ~~exists:~~financial aninstruments ~~order~~approximate ~~has~~their ~~been~~fair ~~placed and the customer has prepaid for the product; 2~~values. ~~Delivery~~These ~~has~~financial ~~occurred~~instruments orinclude ~~services~~cash, ~~have~~accrued ~~been~~liabilities ~~rendered: the product has been shipped from either the Company or one of our suppliers; the product has been delivered~~ and ~~signed~~notes ~~for by the customer as evidenced by the shipping company~~payable. 3.Fair ~~Seller’s~~values ~~price~~were assumed to ~~the~~approximate ~~buyer~~carrying isvalues ~~fixed~~for orthese ~~determinable:~~financial ~~the~~instruments ~~price~~since isthey ~~fixed~~are atshort ~~the~~term ~~time~~in ofnature ~~the order~~ and ~~the~~their ~~customer~~carrying ~~has~~amounts ~~prepaid~~approximate ~~prior~~fair ~~to shipping; and 4~~value. ~~Collectability is reasonable assured: the customer has prepaid for the product prior to shipping.~~

Table of Contents

CAPSTONE SYSTEMS, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

FOR THE ~~NINE~~THREE-MONTH ~~MONTHS~~PERIODS ENDED ~~FEBRUARY~~AUGUST 2831, 2018 AND 2017

Basic and Diluted Loss Per Share

~~Deferred~~The ~~revenue~~Company ~~and~~computes ~~deferred~~earnings ~~cost~~(loss) per share in accordance with ASC 260-10-45 “Earnings per Share”, which requires presentation of ~~goods~~both ~~sold~~basic ~~result~~and ~~from~~diluted ~~transactions~~earnings ~~where~~per share on the ~~Company~~face ~~has~~of ~~accepted~~the ~~prepayment~~statement ~~for~~of ~~the~~operations. ~~product~~Basic ~~but~~earnings ~~all~~(loss) ~~revenue~~per ~~recognition~~share ~~criteria~~is ~~have~~computed ~~not~~by ~~yet~~dividing ~~been~~net ~~met,~~earnings ~~such~~(loss) asavailable ~~shipped~~to ~~product~~common ~~from~~stockholders by the ~~supplier~~weighted ~~has~~average ~~not~~number ~~arrived~~of atoutstanding ~~the~~common ~~client~~shares ~~for~~during ~~delivery~~the period. ~~Deferred~~Diluted ~~cost~~earnings of(loss) ~~goods~~per ~~sold~~share ~~related~~gives effect to ~~deferred~~all ~~product~~dilutive ~~revenues~~potential ~~includes~~common ~~direct~~shares ~~product~~outstanding ~~costs~~during the period. ~~Once~~Dilutive earnings (loss) per share excludes all ~~revenue~~potential ~~recognition~~common ~~criteria~~shares ~~have~~if ~~been~~their ~~met~~effect is anti-dilutive. The Company has no potential dilutive instruments, ~~the~~and ~~deferred~~therefore, ~~revenues~~basic and ~~associated~~diluted ~~cost~~earnings of(loss) ~~goods~~per ~~sold~~share are ~~recognized~~equal.

~~Advertising~~Revenue Recognition

~~Advertising~~The ~~expenses~~Company’s ~~for~~office ~~the~~is ~~nine~~currently ~~months~~based ~~periods~~in ~~ended~~Nanjing, ~~February 28~~PRC, ~~2018~~but ~~and~~we ~~2017~~utilize ~~were~~the $0U.S. ~~and~~dollar ~~$0,~~as ~~respectively~~our functional currency.

~~Recent~~The ~~Accounting~~company ~~Pronouncements~~follows the guidelines of ASC 605-15 for revenue recognition. Revenue is recognized when all the following conditions have been met:

~~There~~1. ~~were~~Pervasive ~~various~~evidence ~~accounting~~of ~~standards~~an arrangement exists: an order has been placed and ~~interpretations~~the ~~issued~~customer ~~recently~~has prepaid for the product; 2. AsDelivery ofhas ~~February~~occurred ~~28,~~or ~~2018,~~services ~~none~~have been rendered: the product has been shipped from either the Company or one of ~~these~~our ~~pronouncements~~suppliers; isthe ~~expected~~product tohas ~~have~~been adelivered ~~material~~and ~~effect~~signed onfor by the ~~financial~~customer ~~position,~~as ~~results~~evidenced ofby ~~operations~~the shipping company. 3. Seller’s price to the buyer is fixed or ~~cash~~determinable: ~~flows~~the price is fixed at the time of the ~~Company~~order and the customer has prepaid prior to shipping; and 4. Collectability is reasonable assured: the customer has prepaid for the product prior to shipping.

~~NOTE~~Customers 3are –allowed ~~Going~~to ~~Concern~~return the products within 30 days for exchange or refund if defects in manufacturing are identified. Prior to the expiration of the 30 day exchange or refund period the cash received is recorded as unrecognized revenue.

~~The~~Deferred ~~accompanying~~revenue ~~financial~~and ~~statements~~deferred ~~and~~cost ~~notes~~of ~~have~~goods ~~been~~sold ~~prepared~~result ~~assuming~~from ~~that~~transactions where the Company ~~will~~has ~~continue~~accepted prepayment for the product but all revenue recognition criteria have not yet been met, such as ashipped ~~going~~product ~~concern~~from the supplier has not arrived at the client for delivery. Deferred cost of goods sold related to deferred product revenues includes direct product costs. Once all revenue recognition criteria have been met, the deferred revenues and associated cost of goods sold are recognized.

For the period from inception to February 28, 2018, the Company had a net loss of $70,323. The Company’s ability to continue as a going concern is dependent upon the Company’s ability to generate sufficient revenues to operate profitably or raise additional capital through debt financing and/or through sales of common stock.Advertising

~~Management~~Advertising ~~has~~expenses ~~funded~~for ~~operations from sales and through~~ the ~~proceeds from an offering pursuant to a Registration Statement on Form S~~three-1month orperiods ~~private~~ended ~~placements~~August of31, ~~restricted~~2018 ~~securities or the issuance of stock in lieu of cash for payment of services until such a time as profitable operations are achieved. Directors~~ and ~~related~~2017 ~~parties~~were ~~may~~$0 ~~from time to lend funds to the Company to fund operations. There are no written agreements in place for such funding or issuance of securities~~ and ~~there~~$0, ~~can be no assurance that such will be available in the future~~respectively. ~~Management believes that this plan provides an opportunity for the Company to continue as a going concern.~~

~~The~~Recent ~~failure~~Accounting ~~to achieve the necessary levels of profitability or obtain the additional funding would be detrimental to the Company.~~Pronouncements

9There ~~Table~~were various accounting standards and interpretations issued recently. As of ~~Contents~~August 31, 2018, none of these pronouncements is expected to have a material effect on the financial position, results of operations or cash flows of the Company.

~~CAPSTONE~~9 ~~SYSTEMS,~~Table ~~INC.~~of Contents

~~NOTES~~CAPSTONE TOSYSTEMS, ~~CONDENSED FINANCIAL STATEMENTS~~INC.

~~FOR~~NOTES ~~THE~~TO ~~NINE~~CONDENSED ~~MONTHS~~FINANCIAL ~~ENDED FEBRUARY 28, 2018 AND 2017~~STATEMENTS

InFOR ~~April~~THE ~~2015,~~THREE-MONTH ~~the~~PERIODS ~~former~~ENDED ~~director~~AUGUST ~~and president of the Company made the initial deposit to the Company’s bank account in the amount $100~~31, ~~which~~2018 ~~was~~AND ~~being carried as a loan payable. The loan was non-interest bearing, unsecured and due upon demand.~~2017

OnNOTE ~~September~~3 ~~19,~~– ~~2017,~~Going the former shareholder, Mr. Jure Perko, entered into an assignment agreement with the Company whereby all assets were transferred to him, and liabilities were assumed by him, and the net difference were treated as a reduction in additional paid in capital. As a result, the Company is no longer liable for the payable to related party.Concern

~~NOTE~~The 5accompanying –financial ~~Capital~~statements ~~Stock~~and notes have been prepared assuming that the Company will continue as a going concern.

~~The~~For ~~Company~~the ~~has~~period 75from inception to August 31,~~000~~ 2018,~~000~~ ~~shares~~the Company had accumulated deficit of ~~common~~$ ~~stock~~103,235. ~~with~~The Company’s ability to continue as a ~~par~~going ~~value~~concern ofis ~~$0.001~~dependent ~~per~~upon ~~share~~the Company’s ability to generate sufficient revenues to operate profitably or raise additional capital through debt financing and/or through sales of common stock.

OnManagement ~~May~~has ~~11,~~funded ~~2015~~operations from sales and through the ~~Company~~proceeds ~~issued~~from ~~4,000,000~~an ~~shares~~offering pursuant to a Registration Statement on Form S-1 or private placements of ~~common~~restricted securities or the issuance of stock in lieu of cash for payment of services until such a ~~purchase~~time ~~price~~as ofprofitable $0operations are achieved.~~001~~ ~~per~~Directors ~~share~~and related parties may from time to ~~its~~lend ~~sole~~funds ~~director.~~to ~~The~~the Company ~~received~~to ~~aggregate~~fund ~~gross~~operations. ~~proceeds~~There are no written agreements in place for such funding or issuance of ~~$4,000~~securities and there can be no assurance that such will be available in the future. Management believes that this plan provides an opportunity for the Company to continue as a going concern.

InThe ~~May~~failure ~~2016,~~to achieve the ~~Company,~~necessary ~~pursuant~~levels toof aprofitability ~~Registration~~or ~~Statement~~obtain onthe ~~Form~~additional ~~S-1,~~funding ~~sold~~would ~~1,085,000~~be ~~shares~~detrimental to 31the ~~independent shareholders for total proceeds of $43,400~~Company.

AsNOTE of4 ~~February~~– ~~28,~~Capital ~~2018, there were no outstanding stock options or warrants.~~Stock

~~NOTE~~The 6Company –has ~~Income~~2,000,000,000 ~~Taxes~~shares of common stock authorized with a par value of $0.001 per share.

WeOn ~~use~~May ~~the~~11, ~~asset and liability method of accounting for income taxes in accordance with ASC Topic 740~~2015, ~~“Income~~the ~~Taxes.”~~Company ~~Under~~issued ~~this method~~4,000,000 ~~income~~shares ~~tax expense is recognized for the amount~~ of: ~~(i)~~common ~~taxes~~stock ~~payable or refundable~~ for ~~the~~a ~~current~~purchase ~~year~~price ~~and (ii) deferred tax consequences~~ of ~~temporary differences resulting from matters that have been recognized in an entity’s financial statements or tax returns~~$0.001 ~~Deferred~~per ~~tax~~share ~~assets and liabilities are measured using enacted tax rates expected~~ to ~~apply~~its tosole ~~taxable income in the years in which those temporary differences are expected to be recovered or settled~~director. The ~~effect~~Company onreceived ~~deferred~~aggregate ~~tax~~gross ~~assets~~proceeds ~~and liabilities~~ of a change in tax rates is recognized in the results of operations in the period that includes the enactment date. A valuation allowance is provided to reduce the deferred tax assets reported if based on the weight of the available positive and negative evidence$4, ~~it is more likely than not some portion or all of the deferred tax assets will not be realized~~000.

10In ~~Table~~May 2016, the Company, pursuant to a Registration Statement on Form S-1, sold 1,085,000 shares to 31 independent shareholders for total proceeds of ~~Contents~~$43,400.

~~CAPSTONE~~On ~~SYSTEMS~~January 10, ~~INC~~2018, the Company amended its articles of incorporation increasing the authorized common stock from 75,000,000 shares to 2,000,000,000 shares.

~~NOTES~~As TOof ~~CONDENSED~~August ~~FINANCIAL~~31, ~~STATEMENTS~~2018, there were no outstanding stock options or warrants.

~~FOR~~NOTE ~~THE~~5 ~~NINE~~– ~~MONTHS~~Income ~~ENDED FEBRUARY 28, 2018 AND 2017~~Taxes

~~Our~~We ~~effective~~use the asset and liability method of accounting for income taxes in accordance with ASC Topic 740, “Income Taxes.” Under this method, income tax ~~rate~~expense is recognized for ~~fiscal~~the amount of: (i) taxes payable or refundable for the current year ~~2018~~and ~~will~~(ii) bedeferred ~~21%,~~tax ~~which~~consequences weof ~~expect~~temporary todifferences beresulting ~~fairly~~from ~~consistent~~matters that have been recognized in ~~the~~an ~~near~~entity’s ~~term~~financial statements or tax returns. ~~Our~~Deferred tax ~~rate~~assets ~~may~~and ~~also~~liabilities beare ~~affected~~measured byusing ~~discrete~~enacted ~~items~~tax ~~that~~rates ~~may~~expected ~~occur~~to apply to taxable income in ~~any~~the ~~given~~years ~~year,~~in ~~but~~which ~~are~~those ~~not~~temporary ~~consistent~~differences ~~from~~are ~~year~~expected to ~~year~~be recovered or settled. ~~Income~~The ~~taxes~~effect ~~are~~on ~~calculated~~deferred tax assets and ~~accrued~~liabilities ~~for~~of ~~U.S.~~a ~~taxes~~change ~~only~~in tax rates is recognized in the results of operations in the period that includes the enactment date. WeA ~~are~~valuation ~~not~~allowance ~~required~~is provided to ~~pay~~reduce ~~corporate~~the ~~taxes~~deferred intax ~~Slovenia~~assets ~~until~~reported ~~our~~if ~~3rd year~~based inon ~~business~~the weight of the available positive and negative evidence, it is more likely than not some portion or all of the deferred tax assets will not be realized.

~~The~~10 ~~Company~~Table ~~over~~of ~~accrued $2,089 in Income Taxes Payable for the year ended May 31, 2015. The Company has reversed the over accrual during the nine months ended February 28, 2018.~~Contents

~~NOTE~~CAPSTONE 7SYSTEMS, ~~– Fixed Assets~~INC.

InNOTES ~~April~~TO ~~2015,~~CONDENSED ~~the~~FINANCIAL Company purchased for $6,515 a small office located at 242 Dolenjska cesta, Ljubljana, Slovenia, 10001. The Company utilizes the space as a primary office. The price of the building was $4,000 and the land was $2,515.STATEMENTS

~~Fixed~~FOR ~~assets~~THE ~~are stated at cost. The Company utilizes straight~~THREE-~~line~~MONTH ~~depreciation~~PERIODS ~~over~~ENDED ~~the~~AUGUST ~~estimated~~31, ~~useful~~2018 ~~life~~AND ~~of the asset.~~2017

~~Buildings~~ASC –Topic 15740.10.30 ~~years~~clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC Topic 740.10.40 provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. We have no material uncertain tax positions for any of the reporting periods presented.

~~Office~~Our ~~Equipment~~effective –tax 7rate ~~years~~for fiscal year 2018 will be 21%, which we expect to be fairly consistent in the near term. Our tax rate may also be affected by discrete items that may occur in any given year, but are not consistent from year to year. Income taxes are calculated and accrued for U.S. taxes only.

~~Depreciation~~NOTE ~~expense~~6 ~~for~~– ~~the~~Related ~~building~~Party ~~for the years ended May 31, 2017 and 2016 was $0 and $133, respectively.~~Transactions

OnThe ~~September~~Company ~~19,~~underwent ~~2017,~~a ~~the~~change ~~former~~of ~~shareholder,~~control ~~Mr.~~in ~~Jure~~September ~~Perko,~~2017. ~~entered~~As ~~into~~of anAugust ~~assignment~~31, ~~agreement~~2018, ~~with~~there ~~the Company whereby all assets~~ were ~~transferred~~advances toof ~~him~~$37,571 ~~and~~from ~~liabilities~~the ~~were~~current ~~assumed~~shareholder byfor ~~him.~~the ~~Accordingly,~~purpose of operating the Company. ~~has~~The ~~waived~~advances ~~its~~bear ~~rights~~no interest and ~~title~~are todue ~~aforementioned~~upon ~~fixed assets~~demand.

NOTE 87 – ~~Related~~Concentration ~~Party Transactions~~Risk

~~The~~We ~~Company~~currently ~~has~~have aonly ~~related~~one ~~party~~customer ~~transaction~~and ~~involving~~have ~~the~~ordered ~~Company’s~~from ~~director~~only one vendor. ~~The~~As ~~nature~~we ~~and~~grow ~~details~~we expect to increase the number of customers and vendors we have, however; at this time there is a risk to the ~~transaction~~company ~~are~~if ~~described~~we inlose ~~Note~~either 4our ~~and~~customer ~~Note~~or 5vendor.

11NOTE ~~Table~~8 of– ~~Contents~~Research and Development

~~CAPSTONE~~All ~~SYSTEMS,~~expenses ~~INC~~related to our brand are recorded as Research and Development expenses in accordance with GAAP and are expensed as incurred.

~~NOTES~~NOTE TO9 ~~CONDENSED~~– ~~FINANCIAL~~Subsequent ~~STATEMENTS~~Events

~~FOR~~The ~~THE~~Company ~~NINE~~has ~~MONTHS~~evaluated ~~ENDED~~events ~~FEBRUARY~~subsequent 28through the date these financial statements have been issued, October 15, 2018, ~~AND~~to ~~2017~~assess the need for potential recognition or disclosure in this report. Based upon this evaluation, it was determined that no subsequent events occurred, other than that noted above, that require recognition or disclosure in the financial statements.

~~The~~11 ~~Company~~Table ~~had only one customer and the Company ordered from only one vendor. As we grow we expect to increase the number~~ of ~~customers and vendors we have, however; at this time there is a risk to the company if we lose either our customer or vendor.~~Contents

~~NOTE~~ITEM 102. –MANAGEMENT’S ~~Research~~DISCUSSION ~~and~~AND ~~Development~~ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

~~All~~This ~~expenses~~section ~~related~~includes toa number of forward-looking statements that reflect our ~~brand~~current ~~are~~views ~~recorded~~with asrespect ~~Research~~to future events and ~~Development~~financial ~~expenses~~performance. inForward-looking ~~accordance~~statements ~~with~~are ~~GAAP~~often identified by words like: believe, expect, estimate, anticipate, intend, project and ~~are~~similar ~~expensed~~expressions, or words which, by their nature, refer to future events. You should not place undue certainty on these forward-looking statements, which apply only as ~~incurred~~of the date of this report. These forward-looking states are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results or out predictions.

~~NOTE 11 – Subsequent Events~~General

OnOur ~~March~~financial ~~28,~~statements ~~2018,~~are ~~the~~stated ~~Company~~in ~~filed~~United anStates ~~amendment~~dollars to($US) ~~its~~and ~~annual~~are ~~report~~prepared onin ~~Form~~accordance ~~10-K~~with ~~for~~United ~~the~~States ~~year~~Generally ~~ended~~Accepted ~~May~~Accounting ~~31, 2016 to include the sale of equity securities~~Principles.

12In this report, unless otherwise specified, all references to “common stock” refer to the common shares in our capital stock.

~~ITEM~~As 2.used ~~MANAGEMENT’S~~in ~~DISCUSSION~~this ~~AND~~quarterly ~~ANALYSIS~~report, ORthe ~~PLAN~~terms OF“we,” ~~OPERATION~~“us,” “our,” “Company,” “Capstone” and “Capstone Systems” mean Capstone Systems Inc., unless the context clearly requires otherwise.

~~CAUTIONARY~~Results ~~STATEMENT~~of ~~REGARDING FORWARD-LOOKING STATEMENTS~~Operations

~~This~~Following ~~section~~the ~~includes~~consummation ~~a number~~ of ~~forward-looking~~the ~~statements~~stock ~~that~~purchase ~~reflect~~agreement ~~our current views~~ with ~~respect~~its toformer ~~future~~sole ~~events~~director and ~~financial~~executive ~~performance.~~officer ~~Forward-looking~~Jure ~~statements are often identified by words like: believe~~Perko, ~~expect, estimate, anticipate, intend, project~~ and ~~similar~~a ~~expressions,~~group orof ~~words~~individual ~~which,~~purchasers byon ~~their~~October ~~nature~~19, ~~refer to future events. You should not place undue certainty on these forward-looking statements~~2017, ~~which apply only as of~~ the ~~date~~Company ofbecame ~~this~~a ~~report.~~shell ~~These~~company ~~forward-looking~~without ~~states~~any ~~are~~significant ~~subject~~assets ~~to certain risks and uncertainties that could cause actual results to differ materially from historical results~~ or ~~out predictions~~operations.

~~General~~Three months ended August 31, 2018 and August 31, 2017

~~Our~~We ~~financial~~had ~~statements~~no ~~are~~revenue ~~stated~~for inthe ~~United~~three ~~States~~months ~~dollars~~ended (August 31, 2018. We incurred $~~US)~~15,746 in general and ~~are~~administrative ~~prepared~~expenses infor ~~accordance~~the ~~with~~same ~~United~~period. ~~States~~We ~~Generally~~generated ~~Accepted~~a ~~Accounting~~net ~~Principles~~loss of $15,746 for the three months ended August 31, 2018.

In ~~this~~comparison, ~~report~~we generated $30,258 ~~unless~~in ~~otherwise~~revenue ~~specified~~for the three months ended August 31, ~~all~~2017. ~~references~~We toincurred ~~“common~~$29,549 ~~stock”~~in ~~refer~~cost toof ~~the~~goods ~~common~~sold ~~shares~~and $2,146 in ~~our~~general ~~capital~~and ~~stock~~administrative expenses resulting in a net loss of $1,437 for the three months ended August 31, 2017.

AsCash ~~used~~Flows infrom ~~this~~Operating ~~quarterly report, the terms “we”, “us”, “our”, “Capstone” and “Capstone Systems” mean Capstone Systems Inc., unless the context clearly requires otherwise.~~Activities

~~Results~~For ofthe ~~Operations~~three months ended August 31, 2018, net cash flows used in operating activities was $2,139 compared to $1,303 for August 31, 2017.

WeCash ~~are~~Flows ~~still~~from inInvesting ~~our development stage and have no revenues to date.~~Activities

~~Three~~We neither used nor generated any cash from investing activities for the three months ended ~~February~~August 2831, 2018 and ~~February~~August 2831, 2017.

WeCash ~~have~~Flows nofrom ~~revenue~~Financing for the three months ended February 28, 2018. We incurred $23,457 in general and administrative expenses for the same period. We generated a net loss of $23,457 for the three months ended February 28, 2018.Activities

InWe ~~comparison, we~~ generated $722,~~722~~139 in ~~revenue~~cash from financing activities of for the three months ended ~~February~~August 2831, ~~2017.~~2018 Wecompared ~~incurred~~to ~~$53,045~~nil inas ~~cost~~ of ~~goods~~August ~~sold and incurred $2~~31,~~426~~ ~~in general and administrative expenses resulting in a net profit of $17,251 for the three months ended February 28,~~ 2017.

~~Nine~~Liquidity ~~months ended February 28, 2018~~ and ~~February~~Capital ~~28, 2017~~Resources

WeOn ~~generated~~August ~~$30~~31,~~258~~ in2018, ~~revenue for~~ the ~~nine~~Company ~~months~~had ~~ended~~nil ~~February~~in 28cash, ~~2018.~~total Weassets ~~incurred~~of ~~$29,549~~nil inand ~~cost~~outstanding liabilities of ~~goods~~$62,369. ~~sold~~Our ~~and~~director ~~incurred~~has ~~$33~~agreed,~~852~~ inverbally, ~~general~~to ~~and~~continue ~~administrative~~to ~~expenses.~~loan Wethe ~~generated~~company afunds ~~net~~for ~~loss~~operating ofexpenses ~~$31~~in a limited scenario,~~055~~ ~~for~~but ~~the~~he ~~nine~~has ~~months~~no ~~ended~~legal ~~February~~obligation ~~28,~~to ~~2018~~do so.

In12 ~~comparison,~~Table ~~we generated $143,897 in revenue for the nine months ended February 28, 2017. We incurred $118,018 in cost~~ of ~~goods sold, $22,568 in general and administrative expenses and $43,429 in product development for the same period, resulting in a net loss of $40,118 for the nine months ended February 28, 2017.~~Contents

~~Cash~~Off-Balance ~~Flows~~Sheet ~~from Operating Activities~~Arrangements

~~For~~We ~~the~~do ~~nine~~not ~~months~~have ~~ended~~any ~~February~~off-balance ~~28,~~sheet ~~2018,~~arrangements ~~net~~that ~~cash~~have ~~flows~~or ~~used~~are inreasonably ~~operating~~likely ~~activities~~to ~~was~~have ~~$(28~~a current or future effect on our financial condition,~~252)~~ ~~compared~~changes toin ~~$(43~~financial condition,~~322)~~ ~~for~~revenues ~~February~~or 28expenses, ~~2017~~results of operations, liquidity, capital expenditures or capital resources that is material to investors.

13Contractual Obligations

~~Cash~~We ~~Flows~~do ~~from~~not ~~Investing~~have ~~Activities~~any contractual obligations as of the filing of this report.

WeITEM ~~neither~~3. ~~used~~QUANTITATIVE ~~nor~~AND ~~generated~~QUALITATIVE ~~cash~~DISCLOSURES ~~from~~ABOUT ~~investing~~MARKET ~~activities for the nine months ended February 28, 2018 and February 28, 2017~~RISK.

~~Cash~~Not ~~Flows from Financing Activities~~applicable.

WeITEM ~~generated~~4. ~~cash~~CONTROLS ~~from~~AND ~~financing activities of $29,957 for the nine months ended February 28, 2018 compared to $43,400 as of February 28, 2017.~~PROCEDURES

~~During~~Evaluation ~~June~~of ~~2016~~Disclosure ~~the~~Control ~~Company,~~and ~~pursuant to a Registration Statement on Form S-1, sold 1,085,000 shares to 31 independent shareholders for total proceeds of $43,400~~Procedures.

As We ofmaintain ~~February~~disclosure 28controls and procedures that are designed to ensure that information required to be disclosed in our Securities Exchange Act reports is recorded, ~~2018~~processed, summarized and reported within the ~~Company~~time ~~had~~periods 5specified in the SEC’s rules and forms,~~085~~ and that such information is accumulated and communicated to our management,~~000~~ ~~shares~~including our President/Chief Executive and Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, we recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of ~~common~~achieving ~~stock~~the ~~issued~~desired control objectives, as ours are designed to do, and ~~outstanding~~we necessarily were required to apply our judgment in evaluating the cost-benefit relationship of possible changes or additions to our controls and procedures.

~~Liquidity~~As of August 31, 2018, we carried out an evaluation, under the supervision and ~~Capital~~with ~~Resources~~the participation of our management, including our President/Chief Executive and Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934. Based upon the fact that we have practically no activities and remain a shell company at this time, our President/Chief Executive and Financial Officer concluded that our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, provide a reasonable level of assurance that they are effective in enabling us to record, process, summarize and report information required to be included in our periodic SEC filings within the required time period.

AtChanges ~~February 28, 2018, the Company had nil~~ in ~~cash,~~internal ~~total~~control ~~assets~~over offinancial nil and there were outstanding liabilities of $29,457. Our director has agreed, verbally, to continue to loan the company funds for operating expenses in a limited scenario, but he has no legal obligation to do so.reporting

~~Off-Balance~~There ~~Sheet~~were ~~Arrangements~~no changes in the Company’s internal control over financial reporting that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

We13 doTable not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of ~~operations, liquidity, capital expenditures or capital resources that is material to investors.~~Contents

~~ITEM~~PART ~~3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MATERIAL RISKS~~II

~~Smaller~~OTHER ~~reporting companies are not required to provide the information required by this item.~~INFORMATION

ITEM 4. CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

Management maintains “disclosure controls and procedures,” as such term is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”), that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

In connection with the preparation of this quarterly report on Form 10-Q, an evaluation was carried out by management, with the participation of the Chief Executive Officer and the Chief Financial Officer, of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of February 28, 2018.

Based on that evaluation, management concluded, as of the end of the period covered by this report, that our disclosure controls and procedures were effective in recording, processing, summarizing, and reporting information required to be disclosed, within the time periods specified in the Securities and Exchange Commission’s rules and forms.

Changes in Internal Controls over Financial Reporting

As of the end of the period covered by this report, there have been no changes in the internal controls over financial reporting during the quarter ended February 28, 2018, that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting subsequent to the date of management’s last evaluation.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

WeFrom ~~are~~time ~~not~~to ~~currently~~time, ~~involved~~we inmay ~~any~~become ~~litigation~~involved ~~that~~in wevarious ~~believe~~lawsuits ~~could~~and ~~have~~legal aproceedings, ~~material~~which ~~adverse~~arise ~~effect~~in onthe ~~our~~ordinary ~~financial~~course ~~condition or results~~ of ~~operations~~business. ~~There~~However, litigation is nosubject ~~action,~~to ~~suit,~~inherent ~~proceeding~~uncertainties, ~~inquiry~~and oran ~~investigation~~adverse ~~before~~result orin bythese ~~any~~or ~~court,~~other ~~public~~matters ~~board,~~may ~~government~~arise ~~agency,~~from ~~self-regulatory~~time ~~organization~~to ortime ~~body~~that ~~pending~~may ~~or,~~harm tobusiness. ~~the~~We ~~knowledge~~are ofcurrently ~~the~~not ~~executive~~aware ~~officers~~ of ~~our company or~~ any ofsuch ~~our~~legal ~~subsidiaries,~~proceedings ~~threatened against~~ or ~~affecting~~claims ~~our~~that ~~company,~~will ~~our common stock~~have, ~~any~~individually ~~of our subsidiaries~~ or ~~of our companies or our subsidiaries’ officers or directors~~ in ~~their~~the ~~capacities as such~~aggregate, ina ~~which~~material an adverse ~~decision~~effect ~~could~~on ~~have~~our abusiness, ~~material~~financial ~~adverse~~condition ~~effect~~or operating results.

ITEM 1A. RISK FACTORS

WeNot ~~are~~applicable to a smaller reporting company ~~and therefore, we are not required to provide information required by this Item of Form 10-Q~~.

ITEM 2. UNREGISTERED ~~SALES~~SALE OF EQUITY SECURITIES AND USE OF PROCEEDS.

None.

ITEM 3. DEFAULT UPON SENIOR ~~SECRIUTIES~~ SECURITIES.

~~None~~Not applicable.

ITEM 4. MINE SAFETY ~~DISCLOSURES~~DISCLOSURE.

Not applicable.

ITEM 5. OTHER INFORMATION.

None.

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ITEM 6. EXHIBITS.

The following exhibits are included with this quarterly filing. Those marked with an asterisk and required to be filed hereunder, are incorporated by reference and can be found in their entirety in our Registration Statement on Form S-1, filed under SEC File Number 333-207100, at the SEC website at www.sec.gov:

Exhibit No.		Description
31.1		Sec. 302 Certification of Principal Executive Officer
3.1		Articles of Incorporation dated April 1, 2014 (incorporated by reference to our Form S-1 Registration Statement, Exhibit 3.1, filed with the Securities and Exchange Commission on September 24, 2015)
31.2		Sec. 302 Certification of Principal Financial Officer
3.2		Bylaws (incorporated by reference to our Form S-1 Registration Statement, Exhibit 3.2, filed with the Securities and Exchange Commission on September 24, 2015)
32.1		Sec. 906 Certification of Principal Executive Officer
3.3		Certificate of Amendment (incorporated by reference from our Current Report on Form 8-K filed on January 17, 2018.)
32.2		Sec. 906 Certification of Principal Financial Officer
31.1		Certification of Chief Executive Officer pursuant to Exchange Act Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 *
101		Interactive data files pursuant to Rule 405 of Regulation S-T
31.2		Certification of Chief Financial Officer pursuant to Exchange Act Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 *
32.1		Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 **
32.2		Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 **
101.INS		XBRL Instance Document **
101.SCH		XBRL Taxonomy Extension Schema Document **
101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document **
101.DEF		XBRL Taxonomy Extension Definition Linkbase Document **
101.LAB		XBRL Taxonomy Extension Label Linkbase Document **
101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document **

15______________

*	Filed herewith.
**	Furnished herewith.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the ~~registrant~~Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

CAPSTONE SYSTEMS INC. By: /s/ Xu Jiyuan Name: Xu Jiyuan Title: President, Treasurer and Secretary (Principal Executive, Financial and Accounting Officer)

	CAPSTONE SYSTEMS INC.

October 15, 2018	By:	/s/ Jiyuan Xu
	Name:	Jiyuan Xu
	Title:	President, Treasurer, Secretary,
		Principal Executive, Financial and Accounting Officer

In accordance with the requirements of the Securities Act of 1933, this report was signed by the following persons in the capacities and on the dates stated.

Signature	Title	Date
/s/ Xu Jiyuan	President, Treasurer, Secretary and Director	April 24, 2018
Xu Jiyuan	(Principal Executive, Financial and Accounting Officer)

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