UNITED STATESSECURITIES AND EXCHANGE ~~COMMISSION WASHINGTON~~COMMISSIONWASHINGTON, D.C. 20549

FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURUTIES EXCHANGE ACT OF 1934

For the fiscal year ended May 31, ~~2017~~2018

Commission File Number 333-207100

CAPSTONE SYSTEMS INC.

(Exact name of registrant as specified in its charter)

NEVADA

(State or other jurisdiction of incorporation or organization)

~~242~~Yun ~~Dolenjska~~Gu ~~cesta~~Hui, ~~Ljubljana,~~International ~~Slovenia,~~Financial ~~1000~~ Center

42nd FL, Hanzhong Str 1, Qinhuai District

Nanjing, Jiangsu Province, China 210005

(Address of principal executive offices, including zip code.)

(~~725~~86)~~333~~ 025-~~4110~~57625881

(Telephone number, including area code)

Management Services Associates LLC

525 Swallow Cv, Boulder City, NV 89005

Tel. (347)402-~~7797~~7797out

(Name and address of agent for service)

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to section 12(g) of the Act: None

Common Stock, $.001 par value

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 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 past 90 days. Yes x No o

Indicate by check mark whether the registrant 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-T (§232.405 of this chapter) 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 if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company or emerging growth company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" and “emerging growth company” in Rule 12b-2 of the Exchange Act. ~~(Check one):~~

Large accelerated filer ¨ Non-accelerated filer ¨ Accelerated filer ¨ Smaller reporting company x (Do not check if a smaller reporting company) Emerging growth company x

~~Indicate~~If an emerging growth company, indicate by check mark ~~whether~~if the registrant ishas aelected ~~shell~~not ~~company~~to ~~(as~~use ~~defined~~the inextended ~~Rule 12b-2~~transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act). ~~Yes~~ o ~~No x~~

AsIndicate ofby ~~August~~check ~~29,~~mark ~~2017,~~whether the registrant ~~had~~is ~~5,085,000~~a ~~shares~~shell ofcompany ~~common~~(as ~~stock~~defined ~~issued~~in ~~and~~Rule ~~outstanding.~~12b-2 Noof ~~market value has been computed based upon~~ the ~~fact~~Exchange ~~that~~Act). noYes ~~active~~x ~~trading~~No ~~market had been established as of August 29, 2017.~~ o

As of August 24, 2018, the registrant had 5,085,000 shares of common stock issued and outstanding. No market value has been computed based upon the fact that no active trading market had been established as of August 24, 2018.

CAPSTONE SYSTEMS INC.

TABLE OF CONTENTS

		Page No.
Part I
Item 1.	Business	3
Item 1A.	Risk Factors	95
Item 2.	Properties	14
Item 1B.	Unresolved Staff Comments	5
Item 3.	Legal Proceedings	14
Item 2.	Properties	5
Item 4.	Mine Safety Disclosures	14
Item 3.	Legal Proceedings	5
Item 4.	Mine Safety Disclosures	5
Part II
Item 5.	Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	156
Item 7.	Management's Discussion and Analysis of Financial Condition and Plan of Operation	178
Item 8.	Financial Statements	2010
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	2211
Item 9A.	Controls and Procedures	2211
Part III
Item 10.	Directors and Executive Officers and Corporate Governance	2413
Item 11.	Executive Compensation	2616
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	2717
Item 13.	Certain Relationships and Related Transactions	2818
Item 14.	Principal Accounting Fees and Services	2819
Part IV
Item 15.	Exhibits	2920
Signatures		3021

2 ~~Table of Contents~~

PART I

Forward Looking Statements

This section includes a number of forward-looking statements that reflect our current views with respect to future events and financial performance. Forward-looking statements are often identified by words like: believe, expect, estimate, anticipate, intend, project and similar 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 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.

~~Item~~ITEM 1. ~~Business~~BUSINESS

~~Corporate~~Following ~~Background~~the consummation of the stock purchase agreement with its former sole director and ~~Business~~executive ~~Overview~~officer Jure Perko, and a group of individual purchasers on October 19, 2017, the Company became a shell company without any significant assets or operations.

~~Capstone~~Corporate ~~Systems~~Background ~~Inc. was incorporated in the State of Nevada on April 1, 2015~~ and ~~established~~Business a fiscal year end of May 31. We are a development-stage company formed to sell kitchen sinks and kitchen cabinets in the USA. We do have revenues; we have minimal assets which consist of cash and our office building which we purchased in Slovenia. As of today, we have developed our business plan, and executed Sales Agreements with AQUACUBIC SANITARY WARE CO. LTD, Foshan Mingdeng Kitchen Cabinet Co., Ltd, Foshan Opaly Composite Materials Co., Ltd, FOSHAN SANI SANITARY WARE CO., LTD, Hangzhou Relux House Furnishing Co., Ltd, OPPEIN Home Group Inc, dated April 3-7, 2015, and purchased our own office building in Slovenia. We maintain our statutory registered agent's office at 525 Swallow Cv, Boulder City, NV 89005. Our business office is located at 242 Dolenjska cesta, Ljubljana, Slovenia, 1000. Our telephone number is (702)793-2212. Overview

~~You~~Capstone ~~should~~Systems ~~read~~Inc. ~~the~~was ~~following~~incorporated ~~discussion~~in ~~and~~the ~~analysis~~State of ~~our~~Nevada ~~financial~~on ~~condition~~April 1, 2015 and ~~results~~established a fiscal year end of ~~operations~~May ~~together~~31. ~~with~~From ~~our~~inception ~~audited~~to ~~financial~~October ~~statements~~19, ~~and~~2017, ~~the~~we ~~related~~were ~~notes~~a ~~and~~development-stage ~~other~~company ~~financial~~formed ~~information~~to ~~included~~sell ~~elsewhere~~kitchen sinks and kitchen cabinets in ~~this~~the ~~report~~USA. ~~Some~~On ofOctober 19, 2017, the ~~information~~Company ~~contained~~and inits ~~this~~sole ~~discussion~~director and ~~analysis~~executive orofficer, ~~set~~Jure ~~forth~~Perko, ~~elsewhere~~entered ininto ~~this~~a ~~report,~~stock ~~including~~purchase ~~information~~agreement (the “SPA”) with ~~respect~~a group of individual purchasers, pursuant to ~~our~~which, ~~plans~~the ~~and~~control ~~strategy~~block ~~for~~of ~~our~~voting ~~business~~stock ~~and~~of ~~related~~the ~~financing~~Company, ~~includes~~represented ~~forward-looking~~by ~~statements~~4,000,000 ~~that~~shares ~~involve~~of ~~risks~~common ~~and~~stock ~~uncertainties~~(the “Shares”), approximately 78.7% ~~You~~of ~~should~~all ~~review~~outstanding common stock of the ~~"Risk~~Company, ~~Factors"~~was ~~section~~transferred ofto ~~this~~the ~~report~~purchasers. The consideration paid for the Shares was $0.0902 per share, for a ~~discussion~~total of ~~important~~$360,775 ~~factors~~in ~~that~~cash. ~~could~~The ~~cause~~source ~~actual~~of ~~results~~the tocash ~~differ~~consideration ~~materially~~for ~~from~~the Shares was personal funds of the ~~results~~Purchasers. ~~described~~In inconnection orwith ~~implied~~the SPA, Jure Perko entered into an assignment agreement with the Company whereby all assets of the Company were transferred to him, all liabilities were assumed by him and the ~~forward-looking~~net ~~statements~~difference ~~contained~~was treated as a reduction in additional paid in capital. Subsequently, the ~~following~~Company ~~discussion~~ceased all operations, and ~~analysis~~became a shell company without any significant assets or operations.

WeOn ~~qualify~~January as15, an2018, ~~"emerging~~the ~~growth~~Company ~~company"~~entered ~~under~~into a share exchange agreement (the ~~JOBS~~“SEA”) ~~Act.~~with AsYunguhui aGroup ~~result~~Limited (“Yunguhui”) and five stockholders of Yunguhui, wetogether ~~are~~holding ~~permitted~~100% of the issued and capital stock of Yunguhui (“Yunguhui Stockholders”). Pursuant to the SEA, in exchange for all of the issued and ~~intend~~outstanding tocapital stock of Yunguhui, ~~rely~~the onCompany ~~exemptions~~will, ~~from~~upon ~~certain~~the ~~disclosure~~closing ~~requirements.~~of ~~For~~the soSEA, ~~long~~issue asto wethe ~~are~~Yunguhui Stockholders an ~~emerging~~aggregate ~~growth~~amount ~~company~~of 200,000,000 weshares ~~will~~of the Company’s common stock. The SEA has not beclosed ~~required~~as ~~to:~~of August 24, 2018.

·Currently, ~~have~~we anare ~~auditor~~a ~~report~~shell oncompany ~~our~~and ~~internal~~have ~~controls~~not ~~over~~generated ~~financial~~any ~~reporting~~revenues ~~pursuant~~since toOctober ~~Section~~19, ~~404(b) of the Sarbanes-Oxley Act~~2017; ·we ~~provide~~also anhave ~~auditor~~none ~~attestation with respect~~ to ~~management's~~minimal ~~report~~assets. onSince ~~the~~becoming ~~effectiveness~~a ofshell ~~our~~company, ~~internal~~the ~~controls~~Company's ~~over~~activities ~~financial~~concentrated ~~reporting;~~on ·maintaining ~~comply~~its ~~with~~corporate ~~any~~existence ~~requirement~~and ~~that~~looking ~~may~~for beother ~~adopted~~opportunities byfor the ~~Public~~ Company. ~~Accounting~~We ~~Oversight~~maintain ~~Board~~our ~~regarding~~statutory ~~mandatory~~registered ~~audit firm rotation or a supplement to the auditor~~agent's ~~report~~office ~~providing~~at ~~additional~~525 ~~information~~Swallow ~~about~~Cv, ~~the~~Boulder ~~audit~~City, ~~and~~NV ~~the financial statements (i~~89005.~~e.,~~ anOur ~~auditor~~business ~~discussion~~office ~~and~~is ~~analysis);~~located ·at ~~submit~~Yun ~~certain~~Gu ~~executive~~Hui, ~~compensation~~International ~~matters~~Financial toCenter, ~~shareholder~~42nd ~~advisory votes~~FL, ~~such~~Hanzhong asStr ~~"say-on-pay"~~1, ~~and~~Qinhuai ~~"say-on-frequency;"~~District, ~~and~~Nanjing, ·Jiangsu ~~disclose~~Province, ~~certain~~China. ~~executive~~Our ~~compensation~~telephone ~~related~~number ~~items~~is ~~such~~(86) ~~as the correlation between executive compensation and performance and comparisons of the CEO's compensation to median employee compensation~~025-57625881.

3The ~~Table~~above ofdevelopments ~~Contents~~in connection with the SPA and SEA were disclosed in the Company’s current reports on Form-8K filed with the SEC on October 19, 2017, and January 15, 2018, respectively.

In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of the benefits of this extended transition period. Our financial statements may therefore not be comparable to those of companies that comply with such new or revised accounting standards. BUSINESS

WePrior ~~will remain an "emerging growth company" for up~~ to ~~five~~the ~~years~~SPA, orwe ~~until~~were in the ~~earliest~~business of ~~(i)~~selling ~~the~~kitchen ~~last~~sinks ~~day~~and ofkitchen ~~the~~cabinets ~~first fiscal year~~ in ~~which our total annual gross revenues exceed $1 billion, (ii)~~ the ~~date~~USA. ~~that~~We wegenerated ~~become~~ a ~~"large~~revenue ~~accelerated filer" as defined in Rule 12b-2 under the Securities Exchange Act~~ of ~~1934~~$30,258 ~~which~~in ~~would occur if~~ the ~~market~~financial ~~value~~quarter ofended ~~our~~August ~~ordinary shares that is held by non-affiliates exceeds $6~~31,~~028~~ ~~million~~2017 asfrom ~~of the last business day of~~ our ~~most recently completed second fiscal quarter or (iii) the date on which we have issued more than $1 billion in non-convertible debt during the preceding three year period~~business. ~~Even if we no longer qualify for the exemptions for an emerging growth company~~Currently, we ~~may~~ceased ~~still~~all ~~be,~~business inoperations ~~certain~~selling ~~circumstances,~~kitchen ~~subject~~sinks/cabinets toand ~~scaled~~became ~~disclosure~~a ~~requirements~~shell ascompany awith ~~smaller~~no ~~reporting company~~operations. ~~For~~We ~~example,~~have ~~smaller~~not ~~reporting~~generated ~~companies,~~any ~~like~~revenue ~~emerging~~since ~~growth~~October ~~companies~~19, ~~are~~2017 ~~not~~and ~~required~~we tohave ~~provide~~ a ~~compensation~~cash ~~discussion~~balance ~~and analysis under Item 402(b)~~ of ~~Regulation~~$nil ~~S-K~~as ~~or auditor attestation~~ of ~~internal~~August ~~controls~~24, ~~over financial reporting~~2018.

We are a development stage company and have generated limited revenue to date. Our full business plan entails activities described in the Plan of Operation section below. Long term financing may be required to expand our business. The exact amount of funding will depend on the scale of our development and expansion. Strategy

~~Our cash balance is $4,294 as of May 31, 2017.~~ We ~~believe~~are ~~our~~a ~~cash~~shell ~~balance~~company iswith ~~not~~no ~~sufficient to fund our~~ operations ~~for the next twelve months~~. InWe ~~addition~~are toactively ~~revenues,~~exploring weopportunities ~~may utilize funds from Jure Perko, our Chairman and President, who has informally agreed~~ to ~~advance~~acquire ~~funds~~businesses toin ~~allow~~both usChina ~~to pay for filing fees~~ and ~~professional~~the ~~fees.~~rest As of ~~May 31, 2017, Mr. Perko had advanced $100 to us. Mr. Perko, however, has no formal commitment, arrangement or legal obligation to advance or loan funds to~~ the ~~company~~world. Being a development stage company, we have a very limited operating history. After twelve months period we may need additional financing. We do not currently have any arrangements for additional financing. Our principal executive offices are located at 242 Dolenjska cesta, Ljubljana, Slovenia, 1000. Our phone number is (702)793-2212.

~~Our~~3 ~~independent~~Table ~~registered~~of public accountant has issued a going concern opinion. This means that there is substantial doubt that we can continue as an on-going business for the next twelve months unless we obtain additional capital to pay our bills. This is because we have limited revenues and no substantial revenues are anticipated until we complete our initial business development. There is no assurance we will ever reach that stage.Contents

~~If we need additional cash and cannot raise it, we will either have to suspend operations until we do raise the cash, or cease operations entirely.~~ Employees

4As ~~Table~~ of ~~Contents~~May 31, 2018, we had 0 full-time employee.

~~Product~~Emerging ~~Overview~~Growth Company Status

~~Sinks~~We ~~are~~qualify aas bowl-shaped plumbing fixtures used for washing hands, for dishwashing or other purposes. Sinks generally have taps (faucets) that supply hot and cold water and may include a spray feature to be used for faster rinsing. They also include a drain to remove used water; this drain may itself include a strainer and/or shut-off device and an ~~overflow-prevention~~"emerging ~~device.~~growth ~~Sinks~~company" ~~may~~under ~~also have an integrated soap dispenser. The washstand was a bathroom sink made in~~ the ~~United~~JOBS ~~States in the late 18th century~~Act. ~~The~~As ~~washstands were small tables on which were placed~~ a ~~pitcher and a deep bowl~~result, ~~following~~we the English tradition. Sometimes the table had a hole where the large bowl rested, which led to the making of dry sinks. From about 1820 to 1900 the dry sink evolved by the addition of a wooden cabinet with a trough built on the top, lined with zinc or lead. This is where the bowls or buckets for water were kept. Splashboards were sometimes added to the back wall, as well as shelves and drawers, the more elaborate designs usually placed in the kitchen. Sinks are ~~made~~permitted of many different materials. These include: ceramic, concrete, copper, enamel over steel or cast iron, glass, granite, marble, nickel, plastic, soapstone, stainless steel, stone, terrazzo and wood. Stainless steel is commonly used in kitchens and commercial applications because it represents a good trade-off between cost, usability, durability, and ease of cleaning. Most stainless steel sinks are made by drawing a sheet of stainless steel over a die. Some very deep sinks are fabricated by welding. Stainless steel sinks will not be damaged by hot or cold objects and resist damage from impacts. One disadvantage of stainless steel is that, being made of thin metal, they tend to ~~be noisier than most other sink materials~~, ~~although better sinks apply a heavy coating of vibration-damping material to the underside of the sink. Enamel over cast iron is a popular material for kitchen~~ and ~~bathroom~~intend ~~sinks. Heavy and durable, these sinks can also be manufactured in a very wide range of shapes and colors. Like stainless steel, they are very resistant~~ to ~~hot or cold objects~~, ~~but~~rely ~~they~~on ~~can~~exemptions befrom ~~damaged~~certain bydisclosure ~~sharp impacts and once the glass surface is breached, the underlying cast iron will often corrode, spalling off more of the glass~~requirements. ~~Aggressive~~For ~~cleaning~~so ~~will~~long dull the surface, leading to more dirt accumulation. Enamel over steel is a similar-appearing but far less rugged and less cost-effective alternative. Solid ceramic sinks have many of the same characteristics as ~~enamel~~we ~~over cast iron, but without the risk of surface damage leading to corrosion. Plastic sinks come in several basic forms: Inexpensive sinks~~ are simply injection-molded thermoplastics. These are often deep, free-standing sinks used in laundry rooms. Subject to damage by hot or sharp objects, the principal virtue of these sinks is their low cost. High-end acrylic drop-in (lowered into the countertop) and under mount (attached from the bottom) sinks are becoming more popular, although they tend to be easily damaged by hard objects - like scouring a cast iron frying pan in the sink. Plastic sinks may also be made from the same materials used to form "solid surface" countertops. Inexpensive sinks are simply injection-molded thermoplastics. These are often deep, free-standing sinks used in laundry rooms. Subject to damage by hot or sharp objects, the principal virtue of these sinks is their low cost. High-end acrylic drop-in (lowered into the countertop) and under mount (attached from the bottom) sinks are becoming more popular, although they tend to be easily damaged by hard objects - like scouring a cast iron frying pan in the sink. Plastic sinks may also be made from the same materials used to form "solid surface" countertops. These sinks are durable, attractive, and can often be molded with an ~~integrated~~emerging ~~countertop~~growth ~~or joined to a separate countertop in a seamless fashion~~company, ~~leading~~we towill nonot ~~sink-to-countertop joint or a very smooth sink-to-countertop joint that cannot trap dirt or germs. These sinks are subject to damage by hot objects but damaged areas can sometimes~~ be ~~sanded-down~~required to expose undamaged material. Soapstone sinks were once common, but today tend to be used only in very-high-end applications or applications that must resist caustic chemicals that would damage more-conventional sinks. Wood sinks are from the early days of sinks and baths were made from natural teak with no additional finishing. Teak is chosen because of its natural waterproofing properties – it has been used for hundreds of years in the marine industry for this reason. Teak also has natural antiseptic properties, which is a bonus for its use in baths and sinks. Glass sinks: A current trend in bathroom design is the handmade glass sink (often referred to as a vessel sink) which has become fashionable for wealthy homeowners. Stone sinks have been used for ages. Some of the more popular stones used are: marble, travertine, onyx, granite, and soap stone on high end sinks. Glass, concrete, and terrazzo sinks are usually designed for their aesthetic appeal and can be obtained in a wide variety of unusual shapes and colors such as floral shapes. Concrete and terrazzo are occasionally also used in very-heavy-duty applications such as janitorial sinks.

~~Kitchen~~· ~~cabinets~~have ~~are~~an auditor report on our internal controls over financial reporting pursuant to Section 404(b) of the ~~built~~Sarbanes-inOxley ~~furniture~~Act; ~~installed~~· inprovide ~~many~~an ~~kitchens~~auditor ~~for~~attestation ~~storage~~with respect to management's report on the effectiveness of ~~food,~~our ~~cooking~~internal ~~equipment,~~controls ~~and~~over ~~often~~financial ~~silverware~~reporting; · comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor's report providing additional information about the audit and ~~dishes~~the ~~for~~financial ~~table~~statements ~~service~~(i.e., ~~Appliances~~an auditor discussion and analysis); · submit certain executive compensation matters to shareholder advisory votes, such as ~~refrigerators,~~"say-on-pay" ~~dishwashers,~~and "say-on-frequency;" and ~~ovens~~· ~~are~~disclose ~~often~~certain ~~integrated~~executive ~~into~~compensation ~~kitchen~~related ~~cabinetry.~~items ~~There~~such ~~are~~as ~~many~~the ~~options~~correlation ~~for~~between ~~cabinets~~executive ~~available~~compensation atand ~~present~~performance and comparisons of the CEO's compensation to median employee compensation.

~~Cabinets~~In ~~may~~addition, beSection ~~either~~107 ~~face-frame~~of orthe ~~frameless~~JOBS inAct ~~construction.~~also ~~Each option~~ provides ~~features~~that ~~and~~an ~~drawbacks.~~emerging ~~Most~~growth ~~kitchen~~company ~~cabinets~~can ~~feature~~take ~~matching~~advantage ~~tops~~of ~~and~~the ~~bottoms~~extended ~~and~~transition ~~are~~period ~~available~~provided in ~~different~~Section ~~styles.~~7(a)(2)(B) ~~Traditional~~of ~~cabinets~~the ~~are~~Securities ~~constructed~~Act ~~using~~for ~~face~~complying ~~frames~~with ~~which~~new ~~typically~~or ~~consist~~revised ofaccounting ~~narrow strips of hardwood framing the cabinet box opening~~standards. ~~Cabinets~~In ~~were~~other ~~traditionally~~words, ~~constructed~~an ~~with~~emerging agrowth ~~separate~~company ~~face~~can ~~frame~~delay ~~until~~ the ~~introduction~~adoption of ~~modern~~certain ~~engineered~~accounting ~~wood~~standards ~~such~~until asthose ~~particle~~standards ~~board~~would ~~and~~otherwise ~~medium-density~~apply ~~fiberboard along with glues, hinges and fasteners required~~ to ~~join~~private ~~them~~companies. AWe ~~face~~have ~~frame~~elected ~~ensures~~to ~~squareness~~take advantage of the ~~cabinet~~benefits ~~front. It also increases rigidity and provides a mounting point for hinges. Face-frames confer an appearance~~ of ~~strength~~this ~~and~~extended ~~durability,~~transition ~~and face-frame cabinets retain popularity in the U~~period.S. AnOur ~~important~~financial ~~distinction~~statements ~~between~~may ~~modern~~therefore ~~(manufactured)~~not ~~and~~be ~~traditional~~comparable ~~custom-built face-frame cabinets relates~~ to ~~the~~those ~~catalog-selection~~ of ~~cabinet~~companies ~~components~~that ~~entailed~~comply bywith ~~mass~~such ~~production.~~new ~~Original custom face-frame cabinets accommodated multiple sections (cavities) in a single case. But stock (~~or ~~semi-custom)~~revised ~~face-frame~~accounting ~~cabinets are constructed individually and joined during installation~~standards.

5We ~~Table~~will remain an "emerging growth company" for up to five years, or until the earliest of ~~Contents~~(i) the last day of the first fiscal year in which our total annual gross revenues exceed $1 billion, (ii) the date that we become a "large accelerated filer" as defined in Rule 12b-2 under the Securities Exchange Act of 1934, which would occur if the market value of our ordinary shares that is held by non-affiliates exceeds $6,028 million as of the last business day of our most recently completed second fiscal quarter or (iii) the date on which we have issued more than $1 billion in non-convertible debt during the preceding three year period. Even if we no longer qualify for the exemptions for an emerging growth company, we may still be, in certain circumstances, subject to scaled disclosure requirements as a smaller reporting company. For example, smaller reporting companies, like emerging growth companies, are not required to provide a compensation discussion and analysis under Item 402(b) of Regulation S-K or auditor attestation of internal controls over financial reporting.

~~Custom~~Our ~~face-frame~~cash ~~cabinets~~balance ~~offer~~is ~~more~~$nil ~~efficient~~as ~~use~~ of ~~space~~May ~~because~~31, ~~double~~2018. ~~width~~We ~~stiles~~believe ~~can~~our becash ~~avoided.~~balance ~~They~~is ~~also~~not ~~provide~~sufficient ~~far~~to ~~greater~~fund ~~flexibility~~our ~~with~~operations ~~regard~~for tothe ~~materials~~next ~~and~~twelve ~~design~~months. ~~Every~~In ~~aspect~~addition ofto ~~custom~~revenues, ~~cabinetry~~our ~~can~~directors beand ~~made~~related toparties ~~specifications,~~may ~~which~~from ~~makes~~time itto ~~both~~lend funds to the ~~most~~Company ~~desirable~~to ~~and~~fund ~~the~~operations. ~~most~~There ~~expensive~~are ~~choice~~no written agreements in ~~the~~place ~~majority~~for such funding or issuance of ~~kitchen~~securities ~~installations.~~and ~~Framed~~there ~~cabinets~~can ~~have~~be ano ~~center~~assurance ~~stile.~~that ~~Hinges~~such ~~are~~will ~~mounted~~be toavailable in the ~~outer~~future. ~~cabinet~~We do not currently have any arrangements for additional financing.

~~Frameless~~Our ~~(a.k.a.~~independent ~~"full-access")~~registered ~~cabinets~~public ~~utilize~~accountant ~~the~~has ~~side,~~issued ~~top,~~a ~~and~~going ~~bottom~~concern ~~panels~~opinion. toThis ~~serve~~means ~~the~~that ~~same~~there ~~functions~~is assubstantial dodoubt ~~face-frames~~that inwe ~~traditional~~can ~~cabinets.~~continue Inas ~~general,~~an ~~frameless cabinets provide better utilization of space than face~~on-~~frame~~going ~~cabinets.~~business ~~A preference~~ for ~~frameless cabinet design developed in Europe in~~ the ~~1950s~~next ~~and~~twelve ~~1960s~~months ~~following~~unless ~~the~~we ~~devastation~~obtain ofadditional ~~World~~capital ~~War~~to ~~II.~~pay ~~Frameless~~our cabinets rely on updated manufacturing methods that permit the production of modern cabinet hardware (hinges and slides) and engineered wood products (for strength, dimensional tolerance, and stability)bills. ~~The~~This ~~intent of the frameless design~~ is tobecause ~~achieve~~we ahave ~~more~~limited ~~streamlined~~revenues ~~appearance~~ and ano ~~more~~substantial ~~efficient~~revenues ~~use~~are ofanticipated ~~space,~~until ~~with~~we ~~ergonomically~~complete ~~designed~~our ~~moving~~initial ~~components~~business ~~such as drawers, trays, and pull-out cabinets providing better access to interior components~~development. AThere ~~number~~is ofno ~~benefits~~assurance ~~stemming~~we ~~from~~will ~~frameless~~ever ~~cabinet~~reach ~~design~~that ~~have been successfully applied to face-frame cabinets, such as multiple drawers in base cabinets, full-overlay doors, and cup hinges~~stage. ~~With the rise in popularity of European style frameless cabinetry, a significant proportion of the hardware used by U.S. cabinet manufacturers is imported from Europe and China.~~

~~Cabinets~~If ~~can~~we beneed ~~purchased~~additional ~~from~~cash ~~specialty~~and ~~retailers,~~cannot ~~kitchen~~raise ~~remodelers~~it, ~~home~~we ~~centers,~~will ~~on-line~~either ~~retailers,~~have ~~and ready-~~to~~-assemble~~ ~~furniture~~suspend ~~manufacturers.~~operations ~~Some~~until ~~installers~~we ~~offer~~do araise ~~package~~the ~~deal from measurement~~cash, toor ~~construction,~~cease tooperations ~~installation~~entirely. ~~Cabinets are sometimes delivered in fully assembled form. Ready-to-assemble furniture cabinets are lower-in-cost and are delivered in a flat box.~~

~~Sales~~4 ~~and~~Table ~~Marketing~~of ~~Strategy~~Contents

WeITEM ~~sell kitchen sinks and kitchen cabinets in the USA~~1A. WeRISK intend to enter into agreements with numerous wholesale companies and sell our product to their retail clients. In the wholesale distribution business, various business strategies are used to increase the popularity of the products. We plan to offer free small samples which may ignite prospective customers to buy our kitchen sinks and kitchen cabinets. Other marketing strategies will involve taking our products to various events, such as shows, fairs and home builder's events. We intend also design bright flyers, stickers and signs and place them on our products to draw attention of potential customers. We intend also to implement word of mouth advertising into our business model. We believe a huge marketing opportunity on the internet is spreading word of mouth, a form of free advertising. We believe the internet has provided the biggest medium to spread word of mouth and social networking sites have been the place where everyone has come together. These days, companies have the capabilities of increased speed at which the message comes across. Bloggers and journalists can post their thoughts and reviews of products, and then people in all corners of the world can read it immediately. FACTORS

~~Competition~~We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

~~The~~ITEM ~~level of competition in same industry is extremely high~~1B. ~~Many~~UNRESOLVED ofSTAFF our established competitors have developed a brand following which would make our potential customers prefer their products over ours. Economies of scale would make it easier for our larger established competitors to negotiate price discounts with their suppliers of sinks and cabinets manufacturers which would leave us at a disadvantage. The principal competitive factors in our industry are pricing and quality of products. We will be in a market where we compete with many domestic and international companies offering similar same products. We will be in direct competition with them. Many large companies will be able to provide more favorable services to the potential customers. Many of these companies may have a greater, more established customer base than us. We will likely lose business to such companies. Also, many of these companies will be able to afford to offer better price for similar same product than us which may also cause us to lose business. We foresee to continue to face challenges from new market entrants. We may be unable to continue to compete effectively with these existing or new competitors, which could have a material adverse effect on our financial condition and results of operations. Capstone Systems Inc. has entered the market and has small market penetration to date. COMMENTS

6Not ~~Table of Contents~~applicable.

~~Contracts~~ITEM ~~with~~2. ~~our suppliers~~PROPERTIES

We ~~have~~do ~~executed~~not acurrently ~~Sales~~own ~~Agreement~~or ~~with~~lease ~~AQUACUBIC~~any ~~SANITARY WARE CO~~property. LTD, Foshan Mingdeng Kitchen Cabinet Co., Ltd, Foshan Opaly Composite Materials Co., Ltd, FOSHAN SANI SANITARY WARE CO., LTD, Hangzhou Relux House Furnishing Co., Ltd, OPPEIN Home Group Inc, dated April 3-7, 2015. The material terms of the Contract are the following:

1ITEM 3. ~~RECITALS~~LEGAL PROCEEDINGS

aFrom time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. ~~Seller~~Litigation is asubject ~~manufacturer~~to ofinherent ~~products~~uncertainties, and ~~desires~~an adverse result in these or other matters may arise from time to ~~sell~~time that may harm our business. The Company is not currently party to ~~Buyer~~any legal proceedings or threatened legal proceedings, the adverse outcome of which, individually or in the aggregate, it believes would have a material adverse effect on its ~~product~~business, consolidated financial condition and consolidated results of operations.

bITEM 4. ~~Buyer~~MINE ~~desires~~SAFETY ~~to buy these products and to perform all the provisions of this agreement.~~DISCLOSURES

2.Not ~~DURATION~~applicable.

~~The~~5 ~~term~~Table of ~~the agency created shall be 24 months beginning from the Date of agreement, unless sooner terminated.~~Contents

3.PART ~~BUYER'S BEST EFFORTS~~II

4.Market ~~NONDISCLOSURE~~for ~~OF SELLER'S AFFAIRS~~Securities

~~Buyer~~Our ~~agrees~~shares are quoted on the over-the-counter market, however to ~~keep~~date ~~confidential~~there ~~such~~has ~~information~~been asno ~~Seller~~active ~~may~~trading. ~~from~~In ~~time~~order tofor ~~time~~our ~~impart~~common stock to ~~Buyer~~continue ~~regarding~~to ~~Seller's~~be ~~business~~eligible ~~affairs~~for trading on the Over-the-Counter Bulletin Board we must remain current in our quarterly and ~~customers~~annual filings with the SEC. ~~Buyer~~If ~~will~~we are not, inable ~~whole~~to orpay inthe ~~part~~expenses associated with our reporting obligations, ~~now~~we orwill atnot be able to continue the quotation on the OTC Bulletin Board. There can be no assurance that any ~~time,~~market ~~disclose~~for ~~such~~our ~~information~~stock will develop.

5.Holders ~~CONTENTS~~of OFour ~~ORDERS~~Common Stock

a.As ~~All~~of ~~orders~~August ~~for~~24, ~~Seller's~~2018, ~~product~~there ~~shall~~were be34 ~~taken~~registered onstockholders, ~~printed~~holding ~~forms furnished by Seller~~5,085,000 ~~and~~shares ~~all~~of ~~such~~our ~~orders~~issued ~~shall~~and beoutstanding ~~sent~~common ~~to Seller immediately after being signed by purchasers~~stock.

6.Dividend ~~ACCEPTANCE OF ORDERS BY SELLER~~Policy

~~Orders~~There ~~taken~~are byno ~~Buyer~~restrictions ~~shall~~in ~~not~~our bearticles ~~binding~~of ~~until~~incorporation ~~accepted~~or bybylaws ~~Seller.~~that ~~Seller~~prevent ~~reserves~~us ~~the~~from ~~right~~declaring todividends. ~~reject~~The ~~any~~Nevada ~~order~~Revised ~~when~~Statutes, inhowever, ~~the~~do ~~judgment~~prohibit ofus ~~Seller,~~from ~~the~~declaring ~~product~~dividends ~~ordered~~where, ~~may~~after ~~not~~giving beeffect ~~suitable~~ to the ~~business~~distribution of the ~~customer.~~dividend:

7 Table of Contents

	1.	We would not be able to pay our debts as they become due in the usual course of business; or

	2.	Our total assets would be less than the sum of our total liabilities plus the amount that would be needed to satisfy the rights of shareholders who have preferential rights superior to those receiving the distribution.

7.We ~~BUYER'S~~have ~~EXPENSES~~not declared any dividends and we do not plan to declare any dividends in the foreseeable future.

~~All~~Recent ~~expenses~~Sales ~~for~~of ~~traveling,~~Unregistered ~~entertainment, office, clerical, office and equipment maintenance, and general selling expenses that may be incurred by Buyer in connection with this agreement will be borne wholly by Buyer.~~ Securities

8Information regarding any equity securities we have sold during the period covered by this Report that were not registered under the Securities Act of 1933, as amended, is set forth below. ~~COMPLIANCE~~Each ~~WITH~~such ~~LAWS~~transaction was exempt from the registration requirements of the Securities Act by virtue of Section 4(a)(2) of the Securities Act or Rule 506 of Regulation D promulgated by the SEC, unless otherwise noted. Unless stated otherwise: (i) the securities were offered and sold only to accredited investors; (ii) there was no general solicitation or general advertising related to the offerings; (iii) each of the persons who received these unregistered securities had knowledge and experience in financial and business matters which allowed them to evaluate the merits and risk of the receipt of these securities, and that they were knowledgeable about our operations and financial condition; (iv) no underwriter participated in, nor did we pay any commissions or fees to any underwriter in connection with the transactions; (v) each certificate issued for these unregistered securities contained a legend stating that the securities have not been registered under the Securities Act and setting forth the restrictions on the transferability and the sale of the securities.

~~Buyer~~We ~~agrees,~~did ~~for~~not ~~the~~have ~~benefit of Buyer's employees, to comply in all respects with the workers' compensation laws of~~ any ~~state~~sale ~~or states~~ of ~~which~~unregistered ~~Buyer's~~securities ~~territory~~within ~~may be a part, and to pay~~ the ~~premiums~~past ~~and~~three ~~other costs and expenses incident to such coverage~~years.

9.Pursuant ~~MODIFICATION~~to ~~AND~~the ~~TERMINATION~~SEA entered on January 15, 2018, we will, upon closing of the SEA, issue an aggregate of 200,000,000 shares of our common stock to five individuals pursuant to the exemption from registration available under Section 4(a)(2) of the Securities Act and Regulation S promulgated thereunder.

~~This~~Purchases ~~agreement~~of ~~covers~~Equity ~~all~~Securities ~~agreements~~by ~~between~~the ~~Buyer~~Issuer and ~~Seller~~Affiliated ~~relating to the Buyer for the handling of Seller's product.~~Purchasers

~~10.~~We ~~GOVERNING~~did ~~LAW~~not purchase any of our shares of common stock or other securities during our fiscal year ended May 31, 2018.

~~The~~6 ~~enforcement~~Table ~~and interpretation~~ of ~~this agreement shall be governed by the laws of NV, USA~~Contents

~~The~~Securities ~~parties~~Authorized ~~have~~for ~~executed~~Issuance ~~this~~Under ~~agreement~~Equity ~~the~~Compensation ~~day and year first above written.~~Plans

~~Remark:~~We 1.do ~~Payment~~not ~~term:~~have ~~30%~~any ~~T/T~~equity incompensation ~~advance + 70% balance after shipment or irrevocable L/C at sight; 2~~plans. ~~Valid time: 30 days; 3. Mini. Qty.: 1*40' HQ.~~

APenny ~~copy~~Stock ~~of the Contract is filed as Exhibit 10 to our Registration Statement on Form S-1 (as amended).~~ Rules

~~Offices~~The Securities and Exchange Commission has also adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks. Penny stocks are generally equity securities with a price of less than $5.00 (other than securities registered on certain national securities exchanges or quoted on the Nasdaq system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system).

A purchaser is purchasing penny stock which limits the ability to sell the stock. Our ~~business~~shares ~~office~~constitute ispenny ~~located~~stock atunder ~~242~~the ~~Dolenjska~~Securities ~~cesta,~~and ~~Ljubljana,~~Exchange ~~Slovenia~~Act. The shares will remain penny stocks for the foreseeable future. The classification of penny stock makes it more difficult for a broker-dealer to sell the stock into a secondary market, ~~1000~~which makes it more difficult for a purchaser to liquidate his/her investment. ~~Our~~Any ~~phone~~broker-dealer ~~number~~engaged isby ~~(702)793~~the purchaser for the purpose of selling his or her shares in us will be subject to Rules 15g-~~2212~~1 through 15g-10 of the Securities and Exchange Act. Rather than creating a need to comply with those rules, some broker-dealers will refuse to attempt to sell penny stock.

~~Insurance~~The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from those rules, to deliver a standardized risk disclosure document, which:

We· docontains ~~not~~a ~~maintain~~description ~~any~~of ~~insurance~~the nature and dolevel ~~not~~of ~~intend~~risk toin ~~maintain~~the ~~insurance~~market for penny stock in both public offerings and secondary trading; · contains a description of the ~~future.~~broker's ~~Because~~or wedealer's doduties ~~not~~to ~~have~~the ~~any~~customer ~~insurance,~~and ifof wethe ~~are~~rights ~~made~~and remedies available to the customer with respect to a ~~party~~violation of such duties or other requirements of the Securities Act of 1934, as amended; · contains a ~~products~~brief, ~~liability~~clear, ~~action~~narrative description of a dealer market, weincluding ~~may~~"bid" ~~not~~and ~~have~~"ask" ~~sufficient~~price ~~funds~~for tothe ~~defend~~penny stock and the ~~litigation.~~significance Ifof ~~that~~the ~~occurs~~spread between the bid and ask price; · contains a ~~judgment~~toll-free ~~could~~telephone benumber ~~rendered~~for ~~against~~inquiries uson ~~that~~disciplinary ~~could~~actions; ~~cause~~· usdefines tosignificant ~~cease~~terms ~~operations.~~in the disclosure document or in the conduct of trading penny stocks; and · contains such other information and is in such form (including language, type, size and format) as the Securities and Exchange Commission shall require by rule or regulation;

~~Employees~~The broker-dealer also must provide, prior to effecting any transaction in a penny stock, to the customer:

We· ~~are~~the abid ~~development~~and ~~stage~~offer ~~company~~quotations for the penny stock; · the compensation of the broker-dealer and ~~currently~~its ~~have~~salesperson noin ~~employees~~the transaction; · the number of shares to which such bid and ask prices apply, or other ~~than~~comparable ~~our~~information ~~sole~~relating ~~officer,~~to ~~Jure~~the ~~Perko.~~depth and liquidity of the market for such stock; and · monthly account statements showing the market value of each penny stock held in the customer's account.

~~Government~~In ~~Regulation~~addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from those rules; the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written acknowledgment of the receipt of a risk disclosure statement, a written agreement to transactions involving penny stocks, and a signed and dated copy of a written suitability statement. These disclosure requirements will have the effect of reducing the trading activity in the secondary market for our stock because it will be subject to these penny stock rules. Therefore, stockholders may have difficulty selling their securities.

We7 ~~will~~Table ~~be required to comply with all regulations, rules and directives~~ of governmental authorities and agencies applicable to same industry and operation of any facility in any jurisdiction which we would conduct activities. We do not believe that regulation will have a material impact on the way we conduct our business. Contents

8ITEM ~~Table~~6. ofSELECTED ~~Contents~~FINANCIAL DATA

~~Research~~Not ~~and~~applicable ~~Development~~to ~~Expenditures~~a smaller reporting company.

WeITEM ~~have~~7. ~~not~~MANAGEMENT'S ~~incurred~~DISCUSSION ~~any~~AND ~~research~~ANALYSIS ~~expenditures~~OF ~~since~~FINANCIAL ~~our~~CONDITION ~~incorporation.~~AND RESULTS OF OPERATIONS

~~Bankruptcy~~Capstone orSystems ~~Similar~~Inc. ~~Proceedings~~was incorporated in the State of Nevada on April 1, 2015 and established a fiscal year end of May 31. From inception to October 19, 2017, we were a development-stage company formed to sell kitchen sinks and kitchen cabinets in the USA. On October 19, 2017, the Company and its sole director and executive officer, Jure Perko, entered into a stock purchase agreement (the “SPA”) with a group of individual purchasers, pursuant to which, the control block of voting stock of the Company, represented by 4,000,000 shares of common stock (the “Shares”), approximately 78.7% of all outstanding common stock of the Company, was transferred to the purchasers. The consideration paid for the Shares was $0.0902 per share, for a total of $360,775 in cash. The source of the cash consideration for the Shares was personal funds of the Purchasers. In connection with the SPA, Jure Perko entered into an assignment agreement with the Company whereby all assets of the Company were transferred to him, all liabilities were assumed by him and the net difference was treated as a reduction in additional paid in capital. Subsequently, the Company ceased all operations, and became a shell company without any significant assets or operations.

~~There~~On ~~has~~January ~~been~~15, no2018, ~~bankruptcy~~the Company entered into a share exchange agreement (the “SEA”) with Yunguhui Group Limited (“Yunguhui”) and five stockholders of Yunguhui, ~~receivership~~together orholding ~~similar~~100% ~~proceeding~~of the issued and capital stock of Yunguhui (“Yunguhui Stockholders”). Pursuant to the SEA, in exchange for all of the issued and outstanding capital stock of Yunguhui, the Company will, upon the closing of the SEA, issue to the Yunguhui Stockholders an aggregate amount of 200,000,000 shares of the Company’s common stock. The SEA has not closed as of August 24, 2018.

~~Reorganizations~~Currently, ~~Purchase~~we orare ~~Sale~~a ofshell ~~Assets~~company and have not generated any revenues since October 19, 2017; we also have none to minimal assets. Since becoming a shell company, the Company's activities concentrated on maintaining its corporate existence and looking for other opportunities for the Company. We maintain our statutory registered agent's office at 525 Swallow Cv, Boulder City, NV 89005. Our business office is located at Yun Gu Hui, International Financial Center, 42nd FL, Hanzhong Str 1, Qinhuai District, Nanjing, Jiangsu Province, China. Our telephone number is (86) 025-57625881.

~~There~~At ~~have~~this ~~been~~time, nopending ~~material~~the ~~reclassifications,~~closing ~~mergers,~~of ~~consolidations~~the SEA, orour ~~purchase~~management orstill ~~sale~~is ofanalyzing athe ~~significant~~various ~~amount~~alternatives available to ensure our survival and to preserve our shareholder’s investment in our common stock. This analysis includes sourcing additional forms of ~~assets~~financing ~~not~~to carry out our business or mergers and/or acquisitions. At this stage in ~~the~~our ~~ordinary~~operations, we believe either course ofis acceptable, as our operations have not been profitable and our future prospects for our business are not good without further financing.

~~Patents~~RESULTS OF OPERATIONS FOR THE YEARS ENDED MAY 31, ~~Trademarks~~2018 ~~and~~AND ~~Copyrights~~MAY 31, 2017

We dogenerated ~~not~~$30,258 ~~own~~and $175,979 ~~either~~in ~~legally~~revenue orfor ~~beneficially~~the years ended May 31, ~~any~~2018 ~~patents~~and or2017, ~~trademarks~~respectively. We doincurred ~~not~~$29,549 ~~intend~~and at$144,728 ~~this~~in ~~time~~cost toof ~~protect~~goods ~~our~~sold, ~~website~~for ~~with~~the ~~copyright~~years ~~laws~~ended May 31, 2018 and 2017, respectively; and incurred $51,018 and $23,947 in general and administrative expenses for the same periods. ~~Beyond~~Advertising ~~our~~expenses ~~trade~~was ~~name~~$nil for the year ended May 31, 2018 and 2017. During the year ended May 31, 2018 and 2017, we doincurred ~~not~~$nil ~~hold~~and ~~any~~$43,428 ~~other~~in ~~intellectual~~product ~~property~~development costs. We generated net losses of $48,221 and $36,124 for the years ended May 31, 2018 and 2017, respectively.

~~Research~~Cash ~~and~~Flows ~~Development~~from ~~Activities~~Operating ~~and Costs~~Activities

WeFor ~~have~~the ~~not~~fiscal ~~incurred~~year ~~any~~ended ~~research~~May ~~and~~31, ~~development~~2018, ~~costs~~net cash flows used in operating activities was $39,727 compared to ~~date~~$39,328 for May 31, 2017.

~~Reports~~Cash toFlows ~~Stockholders~~from Investing Activities

WeFor ~~are required to file reports with~~ the ~~SEC~~fiscal ~~pursuant~~year toended ~~the~~May ~~Securities Exchange Act of 1934~~31, ~~as amended (the "Exchange Act"). These reports include annual reports on Form 10-K~~2018, ~~quarterly~~net ~~reports~~cash onflows ~~Form 10-Q and current reports on Form 8-K. You may obtain copies of these reports~~ from ~~the~~investing ~~SEC's~~activities ~~Public~~was ~~Reference~~$nil ~~Room~~compared ~~at 100 F Street, N.E., Washington, D.C. 20549, on official business days during the hours of 10 A.M.~~ to 3$nil ~~P.M.~~for orMay ~~on the SEC's website~~31, ~~at www~~2017.~~sec.gov. You may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.~~

~~Item~~8 ~~1A.~~Table ~~Risk~~of ~~Factors~~Contents

WECash ~~HAVE~~Flows Afrom ~~LIMITED~~Financing HISTORY OF OPERATIONS AND ACCORDINGLY THERE IS NO TRACK RECORD THAT WOULD PROVIDE A BASIS FOR ASSESSING OUR ABILITY TO CONDUCT SUCCESSFUL COMMERCIAL ACTIVITIES. WE MAY NOT BE SUCCESSFUL IN CARRYING OUT OUR BUSINESS OBJECTIVES.Activities

We ~~were incorporated on April 1, 2015 and to date,~~ have ~~been~~financed ~~involved~~our operations primarily infrom ~~organizational~~the ~~activities, closing first~~ sale ~~and~~of ~~purchasing~~shares ~~our office building in Slovenia for $6,515. Accordingly we have short track record~~ of ~~successful~~our ~~business~~common ~~activities,~~stock ~~strategic~~or ~~decision making~~ by ~~management,~~way ~~fund-raising ability, and other factors that would allow an investor to assess the likelihood that we will be successful as a development stage company which is engaging in the business~~ of ~~distributing~~loan ~~kitchen~~from ~~sinks~~our ~~and kitchen cabinets in the USA~~director. For the ~~period~~fiscal ~~from~~year ~~inception~~ended ~~(April 1, 2015) to~~ May 31, ~~2017~~2018, ~~we had a~~ net ~~loss~~ ofcash ~~$39,268.~~flows ~~Development~~used ~~stage companies~~ in ~~businesses~~financing ~~with~~activities ~~low~~was ~~barriers to entry~~$35,432 ~~such~~compared ~~as ours, often fail~~ to ~~achieve or maintain successful operations~~$43,400 ~~even~~for inMay ~~favorable market conditions. There is a substantial risk that we will not be successful in our business consulting activities~~31, ~~or if initially successful, in thereafter generating any operating revenues or in achieving profitable operations~~2017.

9Liquidity ~~Table~~and ofCapital ~~Contents~~Resources

IfWe wehad ~~experience~~$nil ain ~~shortage~~cash ofat ~~funds~~May we31, ~~may~~2018, ~~utilize~~and ~~funds~~there ~~from~~were ~~Jure~~outstanding ~~Perko,~~liabilities ~~our~~of ~~sole officer and director~~$46,382. ~~who~~Total ~~has~~assets ~~informally~~at ~~agreed~~May to31, ~~advance~~2018, ~~funds~~were to$209. ~~allow~~At usMay to31, ~~pay for professional fees~~2017, ~~including~~we ~~fees~~had ~~payable~~cash ~~for~~of ~~compliance~~$4,295 ~~with the Securities~~ and ~~Exchange~~total ~~Commission~~outstanding ~~reporting~~liabilities ~~compliance~~of ~~and operating expenses. However~~$2, Mr189. ~~Perko~~Total ~~has~~assets noat ~~formal~~May ~~commitment~~31, ~~arrangement~~2017, orwere ~~legal~~$10,321. ~~obligation~~The tomanagement ~~advance~~of ~~or loan funds to~~ the company. Wehas ~~may~~verbally ~~need~~agreed ~~additional~~to ~~financing.~~loan Wethe docompany ~~not~~funds ~~currently have any arrangements~~ for ~~additional~~operating ~~financing~~expenses.

~~OUR~~Going INDEPENDENT AUDITOR HAS ISSUED A GOING CONCERN OPINION; OUR ABILITY TO CONTINUE IS DEPENDENT ON OUR ABILITY TO RAISE ADDITIONAL CAPITAL AND OUR OPERATIONS COULD BE CURTAILED IF WE ARE UNABLE TO OBTAIN REQUIRED ADDITIONAL FUNDING WHEN NEEDED.Concern

The accompanying consolidated financial statements have been prepared assuming that ~~the~~we ~~Company~~ will continue as a going concern. ~~For~~We ~~the~~have ~~period~~a ~~April~~stockholders’ 1,deficit ~~2015~~and ~~(date~~a working capital deficiency of ~~inception)~~$46,623 ~~through~~at May 31, ~~2017~~2018 weand ~~had a~~ net loss from operations of $3948,~~268.~~221 Asand ~~of May 31~~$36,124, ~~2017~~respectively, for the ~~Company~~years ~~has~~ended ~~not~~May ~~emerged~~31, ~~from~~2018 ~~the~~and ~~development stage~~2017. ~~Our~~These ~~independent~~conditions ~~auditor~~raise ~~has expressed~~ substantial doubt about our ability to continue as a going concern. InThe ~~view~~consolidated offinancial ~~these~~statements ~~matters,~~do ~~recoverability~~not ofinclude any ~~asset~~adjustments ~~amounts~~that ~~shown~~might inbe ~~the~~necessary ~~accompanying~~if ~~financial~~we ~~statements~~are isunable ~~dependent upon our ability~~ to ~~begin~~continue ~~operations~~as ~~and to achieve~~ a ~~level~~going ~~of profitability~~concern.

WECritical ~~HAVE~~Accounting ~~LIMITED BUSINESS, SALES AND MARKETING EXPERIENCE IN OUR INDUSTRY.~~Policies

WeOur ~~currently~~significant ~~have~~accounting ~~one~~policies ~~customer~~are ~~and~~summarized ~~have~~in ~~generated~~Notes ~~limited~~2 ~~revenues.~~of ~~While~~our wefinancial ~~have~~statements ~~plans~~included ~~for~~in ~~marketing~~this ~~our~~annual ~~business,~~report ~~there~~on ~~can~~Form be10-K nofor ~~assurance~~the ~~that~~year ~~such~~ended ~~efforts~~May ~~will~~31, ~~be successful~~2018. ~~Mr.~~Our ~~Perko~~financial ~~has~~statements ~~been~~and ~~working~~related aspublic ~~the~~financial ~~business~~information ~~owner~~are atbased ~~Domov~~on ~~Kabinet~~the ~~Ltd,~~application aof ~~company~~accounting ~~that~~principles ~~made~~generally ~~and~~accepted ~~sold~~in ~~different~~the ~~types~~United ofStates ~~cabinet~~("GAAP"). ~~products~~GAAP ~~for~~requires ~~homes,~~the ~~however~~use heof ~~has~~estimates; noassumptions, ~~experience~~judgments ~~in international distribution~~ and ~~marketing~~subjective interpretations of ~~cabinet~~accounting ~~products.~~principles ~~There can be no assurance~~ that ~~our~~have ~~proposed~~an ~~business~~impact ~~will~~on ~~gain~~the ~~wide~~assets, ~~acceptance~~liabilities, inrevenues ~~its~~and ~~target~~expense ~~market~~amounts orreported. ~~that~~These weestimates ~~will~~can bealso ~~able~~affect tosupplemental ~~effectively~~information ~~market~~contained in our ~~product.~~external ~~Additionally,~~disclosures weincluding ~~are~~information aregarding ~~newly-formed~~contingencies, ~~development~~risk ~~stage~~and ~~company~~financial ~~with~~condition. ~~short~~We ~~prior~~believe ~~experience in~~ our ~~industry.~~use Weof ~~are~~estimates ~~entirely~~and ~~dependent~~underlying onaccounting ~~the~~assumptions ~~services~~adhere ofto ~~our~~GAAP ~~sole officer~~ and ~~director,~~are ~~Jure~~consistently ~~Perko,~~and toconservatively ~~build~~applied. ~~our~~We ~~customer~~ base. ~~Our~~our ~~company~~estimates ~~has~~on nohistorical ~~prior~~ experience ~~upon~~and ~~which~~on itvarious ~~can~~other ~~rely~~assumptions inthat ~~order~~we believe to ~~garner~~be ~~its~~reasonable ~~first~~under ~~prospective~~the ~~customers~~circumstances. toActual ~~buy~~results ~~our~~may ~~kitchen~~differ ~~sinks~~materially ~~and~~from ~~kitchen~~these ~~cabinets.~~estimates ~~Prospective~~under ~~customers~~different ~~will~~assumptions beor ~~less~~conditions. ~~likely~~We continue to ~~buy~~monitor ~~our~~significant ~~product~~estimates ~~than~~made aduring ~~competitor's~~the ~~because~~preparation weof ~~have no prior experience in~~ our ~~industry~~financial statements.

IFOff-Balance WESheet ~~DO NOT ATTRACT CUSTOMERS, WE WILL NOT MAKE A PROFIT, WHICH ULTIMATELY WILL RESULT IN A CESSATION OF OPERATIONS.~~Arrangements

WeAt ~~have~~May ~~identified and engaged our first customers but we cannot guarantee we will have other customers. Even if we obtain other customers~~31, ~~there is no guarantee that we will increase our current profit. If we cannot generate an increase in profit~~2018, we ~~will~~do not have toany ~~suspend~~off-balance orsheet ~~cease operations~~arrangements. ~~You are likely to lose your entire investment if we cannot sell our kitchen sinks and kitchen cabinets at prices which generate a profit.~~

~~COMPETITORS~~ITEM ~~WITH~~7A. ~~MORE~~QUANTITATIVE ~~RESOURCES~~AND ~~MAY~~QUALITATIVE ~~FORCE~~DISCLOSURES USABOUT ~~OUT~~MARKET ~~OF BUSINESS.~~RISK

~~Many~~Not ~~competitors with same products are significantly larger and have substantially greater financial, marketing and other resources and have achieved public recognition for their services~~applicable. Competition by existing and future competitors could result in an inability to secure adequate consumer relationships sufficient enough to support Company endeavors. We cannot be assured that we will be able to compete successfully against present or future competitors or that the competitive pressure we may face will not force us to cease our operations.

~~Also,~~9 ~~there~~Table ~~are many various sized same companies in our line~~ of business. Some of these competitors have established businesses with a substantial number of venues and valuable contacts. We will attempt to compete against these groups by offering unique products. We cannot assure you that such a business plan will be successful, or that competitors will not copy our business strategy.Contents

10ITEM ~~Table~~8. ofFINANCIAL ~~Contents~~STATEMENTS

~~BECAUSE~~CAPSTONE ~~WE ARE SMALL AND DO NOT HAVE MUCH CAPITAL~~SYSTEMS, ~~OUR MARKETING CAMPAIGN MAY NOT BE ENOUGH TO ATTRACT SUFFICIENT CLIENTS TO OPERATE PROFITABLY~~INC. ~~IF WE DO NOT INCREASE OUR PROFIT, WE WILL SUSPEND OR CEASE OPERATIONS.~~

~~Due~~AUDITED toFINANCIAL the fact we are small and do not have much capital, we must limit our marketing activities and may not be able to make our product known to potential customers. Because we will be limiting our marketing activities, we may not be able to attract enough customers to operate profitably. If we cannot operate profitably, we may have to suspend or cease operations.STATEMENTS

~~CURRENT~~FOR ~~MANAGEMENT'S~~THE ~~LACK~~YEARS OFENDED ~~EXPERIENCE~~MAY IN31, ~~AND~~2018 ~~WITH MARKETING~~ AND ~~SELLING KITCHEN SINKS AND KITCHEN CABINETS MEANS THAT IT IS DIFFICULT TO ASSESS, OR MAKE JUDGMENTS ABOUT, OUR POTENTIAL SUCCESS.~~2017

~~Jure~~INDEX ~~Perko,~~TO ~~our~~FINANCIAL sole officer and director has no prior experience with US customers to distribute kitchen sinks and kitchen cabinets. With no direct training in the US market with marketing and sales, our sole officer and director may not be fully aware of many of the specific requirements related to marketing and selling kitchen sinks and kitchen cabinets. Consequently, our operations, earnings, and ultimate financial success could suffer irreparable harm due to our sole officer and director's future possible mistakes, lack of sophistication, judgment or experience in marketing and sales.STATEMENTS

~~SINCE~~TABLE ~~A MAJORITY~~ OF OUR SHARES OF COMMON STOCK ARE OWNED BY OUR SOLE OFFICER AND DIRECTOR, OUR OTHER STOCKHOLDERS MAY NOT BE ABLE TO INFLUENCE CONTROL OF THE COMPANY OR DECISION MAKING BY MANAGEMENT OF THE COMPANY, AND AS SUCH, OUR SOLE OFFICER AND DIRECTOR MAY HAVE A CONFLICT OF INTEREST WITH THE MINORITY SHAREHOLDERS AT SOME TIME IN THE FUTURE.CONTENTS

As of May 31, 2017, Jure Perko, our sole officer and director beneficially owned 79% of our issued and outstanding shares of common stock. The interests of Mr. Perko may not be, at all times, the same as that of our other shareholders. Mr. Perko is not simply a passive investor but is also an executive officer of the Company, and as such his interests as an executive may, at times be adverse to those of passive investors. Where those conflicts exist, our shareholders will be dependent upon our sole officer and director exercising, in a manner fair to all of our shareholders, his fiduciary duties as an officer and as member of the Company's board of directors. Also, our sole officer and director will have the ability to control the outcome of most corporate actions requiring shareholder approval, including the sale of all or substantially all of our assets and amendments to our Articles of Incorporation. This concentration of ownership may also have the effect of delaying, deferring or preventing a change of control of us, which may be disadvantageous to minority shareholders.

	Page No.

Report of Independent Registered Public Accounting Firm		F-1

Audited Balance Sheets		F-2

Audited Statements of Operations		F-3

Audited Statements of Changes in Stockholders Equity/(Deficit)		F-4

Audited Statements of Cash Flows		F-5

Notes to Financial Statements		F-6 - F-10

~~BECAUSE~~10 ~~OUR~~Table ~~SOLE~~of OFFICER AND DIRECTOR WILL ONLY BE DEVOTING LIMITED TIME TO OUR OPERATIONS, OUR OPERATIONS MAY BE SPORADIC WHICH MAY RESULT IN PERIODIC INTERRUPTIONS OR SUSPENSIONS OF OPERATIONS. THIS ACTIVITY COULD PREVENT US FROM ATTRACTING ENOUGH CUSTOMERS AND RESULT IN A LACK OF REVENUES WHICH MAY CAUSE US TO CEASE OPERATIONS.Contents

~~Jure~~REPORT ~~Perko,~~OF ~~our~~INDEPENDENT ~~sole~~REGISTERED ~~officer~~PUBLIC ~~and~~ACCOUNTING director will only be devoting limited time to our operations. He will be devoting approximately 20 hours a week to our operations. Because our sole office and director will only be devoting limited time to our operations, our operations may be sporadic and occur at times which are convenient to him. As a result, operations may be periodically interrupted or suspended which could result in a lack of revenues and a possible cessation of operations.FIRM

11To ~~Table~~the Board of ~~Contents~~Directors and Stockholders of Capstone Systems Inc.

ITOpinion ~~WILL~~on BEthe ~~EXTREMELY~~Financial ~~DIFFICULT TO ACQUIRE JURISDICTION AND ENFORCE LIABILITIES AGAINST OUR SOLE OFFICER AND DIRECTOR AND ASSETS OUTSIDE THE UNITED STATES.~~Statements

~~Substantially~~We ~~all~~have ofaudited ~~our~~the ~~assets,~~accompanying ~~including~~balance ~~our~~sheet ~~office~~of ~~building~~Capstone ~~which~~Systems weInc. ~~purchased~~(the on“Company”) ~~April~~as 27of May 31, ~~2015~~2018, ~~are~~and ~~currently~~the ~~located~~related ~~outside~~statement of ~~the~~operations ~~United~~and ~~States.~~comprehensive ~~Additionally~~income, ~~our~~stockholders’ ~~sole~~equity, ~~officer~~ and ~~director~~cash ~~resides~~flows ~~outside~~for of the ~~United~~year ~~States,~~ended inMay ~~Slovenia.~~31, ~~As a result~~2018, itand ~~may~~the ~~not~~related benotes ~~possible~~(collectively ~~for~~referred ~~United~~to ~~States~~as ~~investors~~the tofinancial ~~enforce~~statements). ~~their~~In ~~legal~~our ~~rights~~opinion, tothe ~~effect~~financial ~~service~~statements ofpresent ~~process~~fairly, ~~upon~~in ~~our~~all ~~sole~~material ~~officer~~respects, ~~and~~the ~~director~~financial orposition ~~to enforce judgments~~ of ~~United~~the ~~States~~Company ~~courts~~as ~~predicated~~of ~~upon~~May ~~civil~~31, ~~liabilities~~2018, and ~~criminal~~the ~~penalties~~results of ~~our~~its ~~sole~~operations ~~officer~~ and ~~director~~its ~~under~~cash ~~Federal~~flows ~~securities~~for ~~laws.~~the ~~Moreover,~~year weended ~~have~~May ~~been~~31, ~~advised~~2018, ~~that~~in ~~Slovenia~~conformity ~~does~~with ~~not~~accounting ~~have~~principles ~~treaties~~generally ~~providing~~accepted ~~for~~in the ~~reciprocal~~United ~~recognition~~States ~~and enforcement~~ of ~~judgments of courts with the United States~~America.

~~ANY~~Emphasis ~~ADDITIONAL~~of ~~FUNDING WE ARRANGE THROUGH THE SALE OF OUR COMMON STOCK WILL RESULT IN DILUTION TO EXISTING SHAREHOLDERS.~~Matter

WeThe ~~must~~accompanying ~~raise~~financial ~~additional~~statements ~~capital~~have inbeen ~~order~~prepared ~~for~~assuming ~~our~~that ~~business~~the ~~plan~~Company towill ~~succeed~~continue as a going concern. ~~Our~~As ~~most~~discussed ~~likely~~in ~~source~~Note of3 ~~additional~~to the financial statements, the Company had incurred substantial losses in previous years and has a working capital ~~will~~deficit, bewhich ~~through~~raises ~~the~~substantial ~~sale~~doubt ofabout ~~additional~~its ~~shares~~ability ofto ~~common~~continue ~~stock~~as a going concern. ~~Such~~Management’s ~~stock~~plans ~~issuances~~in ~~will~~regards ~~cause~~to ~~stockholders'~~these ~~interests~~matters inare ~~our~~also ~~company~~described toin beNote ~~diluted~~3. ~~Such~~These ~~dilution~~financial ~~will~~statements ~~negatively~~do ~~affect~~not include any adjustments that might result from the ~~value~~outcome of anthis ~~investor's shares~~uncertainty.

~~OUR~~Basis ~~SOLE~~for ~~OFFICER AND DIRECTOR HAS NO EXPERIENCE MANAGING A PUBLIC COMPANY WHICH IS REQUIRED TO ESTABLISH AND MAINTAIN DISCLOSURE CONTROL AND PROCEDURES AND INTERNAL CONTROL OVER FINANCIAL REPORTING.~~Opinion

WeThese ~~have~~financial ~~never~~statements ~~operated~~are asthe aresponsibility ~~public~~of ~~company.~~the ~~Jure~~Company’s ~~Perko,~~management. ~~our~~Our ~~sole~~responsibility ~~officer and director has no experience managing a public company which~~ is ~~required~~ to ~~establish~~express ~~and~~an ~~maintain~~opinion ~~disclosure~~on ~~controls~~the ~~and~~Company’s ~~procedures~~financial ~~and~~statements ~~internal~~based ~~control~~on ~~over~~our ~~financial reporting~~audits. AsWe aare ~~result, we may not be able to operate successfully as~~ a public ~~company,~~accounting ~~even~~firm ifregistered ~~our~~with ~~operations~~the ~~are~~Public ~~successful.~~Company ~~Mr.~~Accounting ~~Perko~~Oversight ~~has~~Board ~~never~~(United ~~been~~States) a(PCAOB) ~~promoter,~~and ~~controlling~~are ~~interest~~required ~~holder~~to orbe ~~had~~independent ~~any direct or indirect relationship~~ with ~~any~~respect ~~companies~~to ~~that~~the ~~have~~Company ~~filed~~in ~~registration~~accordance ~~statements~~ with the U.S. ~~Securities~~federal ~~and~~securities ~~Exchange~~laws ~~Commission.~~and ~~We plan to comply with all of~~ the ~~various~~applicable rules and regulations, ~~which~~of ~~are required for a public company that is reporting company with~~ the Securities and Exchange Commission. ~~However,~~and ifthe ~~we cannot operate successfully as a public company, your investment may be materially adversely affected~~PCAOB.

ASWe ANconducted ~~"EMERGING~~our ~~GROWTH~~audits ~~COMPANY"~~in ~~UNDER~~accordance ~~THE~~with ~~JOBS~~the ~~ACT~~standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, WEwhether ~~ARE~~due ~~PERMITTED~~to TOerror ~~RELY~~or ONfraud. ~~EXEMPTIONS~~The ~~FROM~~Company ~~CERTAIN~~is ~~DISCLOSURE~~not ~~REQUIREMENTS~~required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

WeOur ~~qualify~~audits asincluded anperforming ~~"emerging~~procedures ~~growth~~to ~~company"~~assess ~~under~~ the ~~JOBS~~risks ~~Act.~~of Asmaterial amisstatement ~~result,~~of wethe ~~are~~financial ~~permitted~~statements, whether due to error or fraud, and ~~intend~~performing procedures that respond to, ~~rely~~those risks. Such procedures included examining, on ~~exemptions~~a ~~from~~test ~~certain~~basis, ~~disclosure~~evidence ~~requirements~~regarding the amounts and disclosures in the financial statements. ~~For~~Our soaudits ~~long~~also asincluded weevaluating ~~are~~the anaccounting ~~emerging~~principles ~~growth~~used ~~company~~and significant estimates made by management, weas ~~will~~well ~~not~~as beevaluating ~~required~~the ~~to:~~overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

· have an auditor report on our internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act; · provide an auditor attestation with respect to management's report on the effectiveness of our internal controls over financial reporting; · comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor's report providing additional information about the audit and the financial statements (i.e., an auditor discussion and analysis); · submit certain executive compensation matters to shareholder advisory votes, such as "say-on-pay" and "say-on-frequency"; and · disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the Chief Executive's compensation to median employee compensation.

San Mateo, CA	WWC, P.C.
August 24, 2018	Certified Public Accountants

12We ~~Table~~have ofserved ~~Contents~~as the Company’s auditor since 2017.

InF-1 ~~addition,~~Table ~~Section 107~~ of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of the benefits of this extended transition period. Our financial statements may therefore not be comparable to those of companies that comply with such new or revised accounting standards.Contents

WeCAPSTONE ~~will remain an "emerging growth company" for up to five years~~SYSTEMS, or until the earliest of (i) the last day of the first fiscal year in which our total annual gross revenues exceed $1 billion, (ii) the date that we become a "large accelerated filer" as defined in Rule 12b-2 under the Securities Exchange Act of 1934, which would occur if the market value of our ordinary shares that is held by non-affiliates exceeds $6,028 million as of the last business day of our most recently completed second fiscal quarter or (iii) the date on which we have issued more than $1 billion in non-convertible debt during the preceding three year periodINC. Even if we no longer qualify for the exemptions for an emerging growth company, we may still be, in certain circumstances, subject to scaled disclosure requirements as a smaller reporting company. For example, smaller reporting companies, like emerging growth companies, are not required to provide a compensation discussion and analysis under Item 402(b) of Regulation S-K or auditor attestation of internal controls over financial reporting.

~~Until~~AUDITED ~~such~~BALANCE time, however, we cannot predict if investors will find our common stock less attractive because we may rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile.SHEETS

~~THE~~AS ~~TRADING~~OF INMAY ~~OUR~~31, ~~SHARES~~2018 ~~IS REGULATED BY THE SECURITIES~~ AND ~~EXCHANGE COMMISSION RULE 15G-9 WHICH ESTABLIHED THE DEFINITION OF A "PENNY STOCK."~~2017

Our shares are defined as a penny stock under the Securities and Exchange Act of 1934, as amended (the "Exchange Act"), and rules of the Commission. The Exchange Act and such penny stock rules generally impose additional sales practice and disclosure requirements on broker-dealers who sell our securities to persons other than certain accredited investors who are, generally, institutions with assets in excess of $2,000,000 or individuals with net worth in excess of $1,000,000 or annual income exceeding $200,000 ($300,000 jointly with spouse), or in transactions not recommended by the broker-dealer. For transactions covered by the penny stock rules, a broker dealer must make certain mandated disclosures in penny stock transactions, including the actual sale or purchase price and actual bid and offer quotations, the compensation to be received by the broker-dealer and certain associated persons, and deliver certain disclosures required by the Commission. Consequently, the penny stock rules may make it difficult for you to resell any shares you may purchase, if at all.

	2018			2017
ASSETS

Current assets
Cash	$	-		$	4,295
Prepaid expense		209			-
Total current assets		209			4,295

Fixed assets, net		-			6,026
Total assets	$	209		$	10,321

LIABILITIES AND STOCKHOLDERS’ DEFICIENCY

Current liabilities
Accounts payable & accrued liabilities	$	11,400		$	-
Loan payable - related party		-			100
Due to related party		35,432			-
Income tax payable		-			2,089
Total liabilities		46,832			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 as of May 31, 2018 and 2017, respectively		5,085			5,085
Additional paid-in capital		35,781			42,315
Accumulated deficit		(87,489	)		(39,268	)
Total stockholders’ equity/(deficiency)		(46,623	)		8,132

Total liabilities and stockholders’ deficiency	$	209		$	10,321

13See ~~Table~~accompanying ofnotes ~~Contents~~to financial statements

WEF-2 ~~WILL~~Table ~~INCUR~~of ~~ONGOING COSTS AND EXPENSES FOR SEC REPORTING AND COMPLIANCE. WITHOUT REVENUE WE MAY NOT BE ABLE TO REMAIN IN COMPLIANCE, MAKING IT DIFFICULT FOR INVESTORS TO SELL THEIR SHARES, IF AT ALL.~~Contents

WeCAPSTONE ~~are required to file annual~~SYSTEMS, ~~quarterly and current reports, or other information with the SEC as provided by the Securities Exchange Act~~INC. Our shares are quoted on the OTC Electronic Bulletin Board. To be eligible for quotation, issuers must remain current in their filings with the SEC. In order for us to remain in compliance we will require future revenues to cover the cost of these filings, which could comprise a substantial portion of our available cash resources. If we are unable to generate sufficient revenues to remain in compliance it may be difficult for you to resell any shares you may purchase, if at all.

WEAUDITED ~~MAY~~STATEMENT ~~BE EXPOSED TO POTENTIAL RISKS AND SIGNIFICANT EXPENSES RESULTING FROM THE REQUIREMENTS UNDER SECTION 404~~ OF ~~THE SARBANES-OXLEY ACT OF 2002.~~OPERATIONS

WeFOR ~~will~~THE beYEARS ~~required,~~ENDED ~~pursuant~~MAY ~~to Section 404 of the Sarbanes-Oxley Act of 2002~~31, to2018 ~~include~~AND in our annual report our assessment of the effectiveness of our internal control over financial reporting. We expect to incur significant continuing costs, including accounting fees and staffing costs, in order to maintain compliance with the internal control requirements of the Sarbanes-Oxley Act of 2002. Development of our business will necessitate ongoing changes to our internal control systems, processes and information systems. If our business develops and grows, our current design for internal control over financial reporting will not be sufficient to enable management to determine that our internal controls are effective for any period, or on an ongoing basis. Accordingly, as we develop our business, such development and growth will necessitate changes to our internal control systems, processes and information systems, all of which will require additional costs and expenses.2017

In the future, if we fail to complete the annual Section 404 evaluation in a timely manner, we could be subject to regulatory scrutiny and a loss of public confidence in our internal controls. In addition, any failure to implement required new or improved controls, or difficulties encountered in their implementation, could harm our operating results or cause us to fail to meet our reporting obligations. However, as an "emerging growth company," as defined in the JOBS Act, our independent registered public accounting firm will not be required to formally attest to the effectiveness of our internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act of 2002 until the later of the year following our first annual report required to be filed with the SEC, or the date we are no longer an emerging growth company. At such time, our independent registered public accounting firm may issue a report that is adverse in the event it is not satisfied with the level at which our controls are documented, designed or operating.

	2018			2017

REVENUES
Merchandise Sales	$	30,258		$	175,979
TOTAL REVENUES		30,258			175,979

COST OF SALES
Purchases		29,549			144,728
TOTAL COST OF GOODS SOLD		29,549			144,728

GROSS PROFIT	$	709		$	31,251

OPERATING EXPENSES:
General and administrative		51,018			23,947
Product Development		-			43,428
TOTAL OPERATING EXPENSES		51,018			67,375

OTHER INCOME/(EXPENSES):
Other Income		2,088			-

LOSS BEFORE INCOME TAXES		(48,221	)		(36,124	)

PROVISION FOR INCOME TAX		-			-

NET LOSS	$	(48,221	)	$	(36,124	)

NET LOSS PER BASIC AND DILUTED SHARES	$	(0.01	)	$	(0.01	)

WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING		5,085,000			5,085,000

~~Item~~See 2.accompanying ~~Properties~~notes to financial statements

InF-3 ~~April~~Table ~~2015 the 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 valued at $2,515.~~Contents

~~Item~~CAPSTONE 3.SYSTEMS, ~~Legal Proceedings~~INC.

WeAUDITED ~~are~~STATEMENT ~~not~~OF ~~currently~~CHANGES aOF ~~party~~STOCKHOLDERS’ ~~to any legal proceedings, and we are not aware of any pending or potential legal actions.~~EQUITY/(DEFICIT)

~~Item~~FOR 4.THE ~~Mine~~YEARS ~~Safety~~ENDED ~~Disclosures~~MAY 31, 2018 AND 2017

N/A

	Number				Additional
	of		Common		paid in			Subscription			Accumulated
	shares		stock		capital			receivable			deficit			Total
Balance at June 1, 2016		5,085,000		5,085		42,315			(43,400	)		(3,144	)		856
Cash received for stock issuance		-		-		-			43,400			-			43,400
Net loss		-		-		-			-			(36,124	)		(36,124	)
Balance at May 31, 2017		5,085,000		5,085		42,315			-			(39,268	)		8,132

Balance at June 1, 2017		5,085,000		5,085		42,315			-			(39,268	)		8,132
Related party debt conversion		-		-		(6,534	)		-			-			(6,534	)
Net loss		-		-					-			(48,221	)		(48,221	)
Balance at May 31, 2018		5,085,000		5,085		35,781			-			(87,489	)		(46,623	)

14See ~~Table~~accompanying ofnotes ~~Contents~~to financial statements

~~PART~~F-4 IITable of Contents

~~Item~~CAPSTONE 5.SYSTEMS, ~~Market for Common Equity and Related Stockholder Matters~~INC.

~~Market~~AUDITED ~~for~~STATEMENT ~~Securities~~OF CASH FLOWS

~~Our~~FOR ~~shares~~THE ~~are~~YEARS ~~quoted~~ENDED onMAY ~~the over-the-counter market~~31, ~~however~~2018 toAND date there has been no active trading. In order for our common stock to continue to be eligible for trading on the Over-the-Counter Bulletin Board we must remain current in our quarterly and annual filings with the SEC. If we are not able to pay the expenses associated with our reporting obligations we will not be able to continue the quotation on the OTC Bulletin Board. There can be no assurance that any market for our stock will develop. 2017

Holders of our Common Stock

	2018			2017
CASH FLOWS FROM OPERATING ACTIVITIES

Net Loss	$	(48,221	)	$	(36,124	)
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		-			200
Increase in Prepaid Expenses		(209	)		-
Increase in Deferred Cost of Goods Sold		-			34,801
Increase in Accounts Payable and Accrued Liabilities		8,703			-
Decreased in Unearned Revenue		-			(38,205	)
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES		(39,727	)		(39,328	)

CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of Property		-			-
NET CASH (USED IN) INVESTING ACTIVITIES		-			-

CASH FLOWS FROM FINANCING ACTIVITIES
Subscription Receivable		-			43,400
Due to related party		35,432			-
NET CASH PROVIDED BY FINANCING ACTIVITIES		35,432			43,400

NET (DECREASE)/INCREASE IN CASH	$	(4,295	)	$	4,072

CASH AND CASH EQUIVALENTS – BEGINNING OF YEAR	$	4,295		$	223

CASH AND CASH EQUIVALENTS – ENDING OF YEAR	$	-		$	4,295

NON-CASH FINANCING ACTIVITIES
Reduction in additional paid in capital as a result of assignment of assets and liabilities to former shareholder	$	6,534		$	-

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

~~As of~~See ~~May~~accompanying ~~31,~~notes ~~2017,~~to ~~there~~financial ~~were 32 registered stockholders, holding 5,085,000 shares of our issued and outstanding common stock~~statements.

~~Dividend~~F-5 ~~Policy~~Table of Contents

~~There~~CAPSTONE ~~are~~SYSTEMS, ~~no restrictions in our articles of incorporation or bylaws that prevent us from declaring dividends~~INC.NOTES ~~The~~TO ~~Nevada~~FINANCIAL ~~Revised~~STATEMENTSFOR ~~Statutes,~~THE ~~however,~~YEARS doENDED ~~prohibit~~MAY ~~us from declaring dividends where~~31, ~~after~~2018 ~~giving~~AND ~~effect to the distribution of the dividend:~~2017

	1.	We would not be able to pay our debts as they become due in the usual course of business; or
	2.	Our total assets would be less than the sum of our total liabilities plus the amount that would be needed to satisfy the rights of shareholders who have preferential rights superior to those receiving the distribution.

NOTE 1 – Organization and Basis of Presentation

Capstone Systems Inc. (the “Company”) is a for profit corporation established under the Corporation Laws of the State of Nevada on April 1, 2015. The address of our business office is Yun Gu Hui, International Financial Center, 42nd Floor, Hangzhou Street 1, Qinhuai District, Nanjing, Jiangsu Province, China. We ~~have~~maintain ~~not~~our ~~declared~~statutory ~~any~~registered ~~dividends~~agent's ~~and~~office weat do525 ~~not~~Swallow Cove, Boulder City, NV 89005. We plan to ~~declare~~expand ~~any~~our ~~dividends~~business in the ~~foreseeable~~wholesale ~~future~~distribution of kitchen cabinets in the USA. The Company is subject to all risks inherent to the establishment of a start-up business enterprise.

~~Recent~~Our ~~Sales~~financial ofstatements ~~Unregistered~~and ~~Securities~~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.

OnNOTE ~~May~~2 ~~11,~~– ~~2015,~~Significant weAccounting ~~issued~~Policies aand ~~total~~Recent ofAccounting ~~4,000,000 shares of restricted common stock to Jure Perko in consideration of $4,000.~~ Pronouncements

~~During~~Use ~~May~~of ~~2016~~Estimates ~~the~~and ~~Company, pursuant to a Registration Statement on Form S-1, sold 1,085,000 shares to 31 independent shareholders for total proceeds of $43,400.~~Assumptions

AsThe preparation of ~~May~~financial ~~31,~~statements ~~2017,~~in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the ~~Company~~reported ~~had~~amounts ~~5,085,000~~of ~~shares~~assets and liabilities and disclosure of ~~common~~contingent ~~stock~~assets ~~issued~~and liabilities at the date of the financial statements and ~~outstanding~~the reported amounts of revenues and expenses during the period. Actual results could differ from those estimates.

15Due ~~Table~~to the limited level of ~~Contents~~operations, the Company has not had to make material assumptions or estimates other than the assumption that the Company is a going concern.

~~Purchases~~Cash ~~of Equity Securities by the Issuer~~ and ~~Affiliated~~Cash ~~Purchasers~~Equivalents

WeThe ~~did~~Company ~~not~~considers ~~purchase~~all ~~any~~highly ofliquid ~~our~~investments ~~shares~~with ofan ~~common~~original ~~stock~~maturity orof ~~other~~three ~~securities~~months ~~during~~or ~~our~~less ~~fiscal~~when ~~year~~purchased ~~ended~~to ~~May~~be ~~31,~~cash ~~2017~~equivalents.

~~Securities~~Fair ~~Authorized~~Value ~~for~~of ~~Issuance~~Financial ~~Under Equity Compensation Plans~~Instruments

WeASC do825, ~~not~~“Disclosures ~~have~~about ~~any~~Fair ~~equity~~Value ~~compensation~~of ~~plans~~Financial 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 May 31, 2018.

~~Penny~~The ~~Stock~~respective ~~Rules~~carrying values of certain on-balance-sheet financial instruments approximate their fair values. These financial instruments include cash, accrued liabilities and notes payable. Fair values were assumed to approximate carrying values for these financial instruments since they are short term in nature and their carrying amounts approximate fair value.

~~The~~Basic ~~Securities~~ and ~~Exchange~~Diluted ~~Commission~~Loss ~~has~~Per also adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks. Penny stocks are generally equity securities with a price of less than $5.00 (other than securities registered on certain national securities exchanges or quoted on the Nasdaq system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system).Share

AThe ~~purchaser~~Company iscomputes ~~purchasing~~earnings ~~penny~~(loss) ~~stock~~per ~~which~~share ~~limits~~in ~~the~~accordance ~~ability~~with toASC ~~sell~~260-10-45 ~~the~~“Earnings ~~stock.~~per ~~Our~~Share”, ~~shares~~which ~~constitute~~requires ~~penny~~presentation ~~stock~~of ~~under~~both ~~the~~basic ~~Securities~~ and ~~Exchange~~diluted ~~Act.~~earnings ~~The~~per ~~shares~~share ~~will~~on ~~remain~~the ~~penny~~face ~~stocks~~of ~~for~~ the ~~foreseeable~~statement ~~future. The classification~~ of ~~penny~~operations. ~~stock~~Basic ~~makes~~earnings it(loss) ~~more~~per ~~difficult~~share ~~for~~is acomputed ~~broker-dealer~~by todividing ~~sell~~net ~~the~~earnings ~~stock~~(loss) ~~into~~available ato ~~secondary~~common ~~market,~~stockholders ~~which~~by ~~makes~~the itweighted ~~more~~average ~~difficult~~number ~~for~~of aoutstanding ~~purchaser~~common toshares ~~liquidate~~during ~~his/her~~the ~~investment~~period. ~~Any~~Diluted ~~broker-dealer~~earnings ~~engaged~~(loss) byper ~~the~~share ~~purchaser~~gives ~~for~~effect ~~the~~to ~~purpose~~all ofdilutive ~~selling~~potential ~~his~~common ~~or her~~ shares inoutstanding usduring ~~will~~the beperiod. ~~subject~~Dilutive toearnings ~~Rules~~(loss) ~~15g-1~~per ~~through~~share ~~15g-10~~excludes ofall ~~the~~potential ~~Securities~~common ~~and~~shares ~~Exchange~~if ~~Act.~~their ~~Rather~~effect ~~than~~is ~~creating~~anti-dilutive. aThe ~~need~~Company tohas ~~comply~~no ~~with~~potential ~~those~~dilutive ~~rules~~instruments, ~~some~~and ~~broker-dealers~~therefore, ~~will~~basic ~~refuse~~and todiluted ~~attempt~~earnings to(loss) ~~sell~~per ~~penny~~share ~~stock~~are equal.

~~The penny stock rules require a broker~~F-~~dealer,~~6 ~~prior~~Table toof ~~a transaction in a penny stock not otherwise exempt from those rules, to deliver a standardized risk disclosure document, which:~~Contents

·CAPSTONE contains a description of the nature and level of risk in the market for penny stock in both public offerings and secondary trading; · contains a description of the broker's or dealer's duties to the customer and of the rights and remedies available to the customer with respect to a violation of such duties or other requirements of the Securities Act of 1934SYSTEMS, asINC.NOTES ~~amended;~~TO ·FINANCIAL ~~contains~~STATEMENTSFOR aTHE ~~brief,~~YEARS ~~clear,~~ENDED ~~narrative~~MAY ~~description of a dealer market~~31, ~~including~~2018 ~~"bid"~~AND and "ask" price for the penny stock and the significance of the spread between the bid and ask price; · contains a toll-free telephone number for inquiries on disciplinary actions; · defines significant terms in the disclosure document or in the conduct of trading penny stocks; and · contains such other information and is in such form (including language,type, size and format) as the Securities and Exchange Commission shall require by rule or regulation;2017

16The ~~Table~~following table sets forth the computation of ~~Contents~~basic earnings (loss) per share, for the year ended May 31, 2018 and 2017:

The broker-dealer also must provide, prior to effecting any transaction in a penny stock, to the customer:

	2018			2017
Net loss	$	(48,221	)	$	(36,124	)

Weighted average common shares outstanding (basic and diluted)		5,085,000			5,085,000

Net loss per common share, basic and diluted	$	(0.01	)	$	(0.01	)

·Revenue the bid and offer quotations for the penny stock; · the compensation of the broker-dealer and its salesperson in the transaction; · the number of shares to which such bid and ask prices apply, or other comparable information relating to the depth and liquidity of the market for such stock; and · monthly account statements showing the market value of each penny stock held in the customer's account.Recognition

InThe ~~addition,~~Company’s ~~the~~office ~~penny~~is ~~stock~~currently ~~rules~~based ~~require that prior to a transaction~~ in a penny stock not otherwise exempt from those rules; the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written acknowledgment of the receipt of a risk disclosure statementNanjing, ~~a written agreement to transactions involving penny stocks~~PRC, ~~and~~but awe ~~signed~~utilize ~~and~~the ~~dated copy of a written suitability statement~~U.S. ~~These~~dollar ~~disclosure~~as ~~requirements will have the effect of reducing the trading activity in the secondary market for~~ our ~~stock~~functional ~~because it will be subject to these penny stock rules~~currency. ~~Therefore, stockholders may have difficulty selling their securities.~~

~~Section~~The ~~16(a)~~company follows the guidelines of ASC 605-15 for revenue recognition. Revenue is recognized when all the following conditions have been met:

~~Based~~1. ~~solely~~Pervasive ~~upon~~evidence aof ~~review~~an ofarrangement ~~Form~~exists: 3an order has been placed and 4the ~~furnished~~customer byhas usprepaid ~~under~~for ~~Rule~~the ~~16a-3(d)~~product; of2. Delivery has occurred or services have been rendered: the ~~Securities~~product ~~Exchange~~has ~~Act~~been ofshipped ~~1934,~~from weeither ~~are~~the ~~not~~Company ~~aware~~or one of ~~any~~our ~~individual~~suppliers; ~~who~~the ~~failed~~product tohas ~~file~~been adelivered ~~required~~and ~~report~~signed onfor aby ~~timely~~the ~~basis~~customer ~~required~~as evidenced by ~~Section~~the ~~16(a)~~shipping ofcompany. 3. Seller’s price to the ~~Securities~~buyer ~~Exchange~~is ~~Act~~fixed or determinable: the price is fixed at the time of ~~1934~~the 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.

~~Item~~Customers 7are allowed to return the products within 30 days for exchange or refund if defects in manufacturing are identified. ~~Management's~~Prior ~~Discussion~~to ~~and~~the ~~Analysis~~expiration of ~~Financial~~the ~~Condition~~30 ~~and~~day ~~Results~~exchange ofor ~~Operations~~refund period the cash received is recorded as unrecognized revenue.

WeDeferred ~~are~~revenue ~~still~~and indeferred ~~our~~cost ~~development~~of ~~stage~~goods ~~and~~sold result from transactions where the Company has accepted prepayment for the product but all revenue recognition criteria have ~~generated~~not ~~$282~~yet been met,~~278~~ insuch ~~revenues~~as shipped product from the supplier has not arrived at the client for delivery. Deferred cost of goods sold related to ~~date~~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.

WeF-7 ~~generated~~Table ~~$175,979 and $75,978 in revenue for the years ended May 31, 2017 and 2016, respectively. We incurred $144,728 and $63,752 in cost~~ of goods sold, respectively, and incurred $23,947 and $11,216 in general and administrative expenses for the same periods. Advertising expenses was $12,511 for the year ended May 31, 2016, no advertising expenses were incurred during the year ended May 31, 2017. During the year ended May 31, 2017 we incurred $43,429 in product development costs. We generated net losses of $36,125 and $11,501 for the years ended May 31, 2017 and 2016, respectively.Contents

~~Cash~~CAPSTONE ~~Flows~~SYSTEMS, ~~from~~INC.NOTES ~~Operating~~TO ~~Activities~~FINANCIAL STATEMENTSFOR THE YEARS ENDED MAY 31, 2018 AND 2017

~~For the fiscal year ended May 31, 2017, net cash flows used in operating activities was $(39,328) compared to $(7,809) for May 31, 2016.~~Advertising

~~Cash~~Advertising ~~Flows~~expenses ~~from~~for ~~Investing~~the ~~Activities~~years ended May 31, 2018 and 2017 were $0 and $0, respectively.

~~For~~Recent ~~the~~Accounting ~~fiscal year ended May 31, 2017, net cash flows from investing activities was $43,400 compared to $NIL for May 31, 2016.~~Pronouncements

~~Cash~~In ~~Flows~~January ~~from~~2017, ~~Financing~~the ~~Activities~~FASB issued guidance which simplifies the accounting for goodwill impairment. The updated guidance eliminates Step 2 of the impairment test, which requires entities to calculate the implied fair value of goodwill to measure a goodwill impairment charge. Instead, entities will record an impairment charge based on the excess of a reporting unit’s carrying amount over its fair value, determined in Step 1. The Company is currently evaluating the impact on the financial statements of this guidance.

WeIn ~~have~~January ~~financed~~2017, ~~our~~the ~~operations~~FASB ~~primarily~~amended ~~from~~the existing accounting standards for business combinations. The amendments clarify the ~~sale~~definition of ~~shares~~a business with the objective of ~~our~~adding ~~common~~guidance ~~stock~~to orassist byentities ~~way~~with ofevaluating ~~loan~~whether ~~from~~transactions ~~our~~should ~~director.~~be ~~For~~accounted ~~the~~for ~~fiscal~~as ~~years~~acquisitions ~~ended~~(or ~~May~~disposals) ~~31,~~of ~~2017~~assets ~~and~~or ~~2016,~~businesses. ~~there~~The ~~was~~Company nois ~~net~~currently ~~cash~~evaluating ~~from~~the ~~financing~~impact ~~activities.~~on the financial statements of this guidance.

17NOTE ~~Table~~3 of– ~~Contents~~Going Concern

~~Liquidity~~The accompanying financial statements and ~~Capital~~notes ~~Resources~~have been prepared assuming that the Company will continue as a going concern.

~~We had $4,294 in cash at May 31, 2017, and there were outstanding liabilities of $2,189. Total assets were $10,321.~~ For the period from inception to May 31, ~~2016~~2018, wethe Company had ~~cash~~accumulated ofdeficit ~~$223, total outstanding liabilities~~ of $4087,~~394 and total assets were $84,650~~489. The ~~officer/director~~Company’s ofability ~~the~~to ~~company~~continue ~~has~~as ~~verbally~~a ~~agreed~~going toconcern ~~continue~~is todependent ~~loan~~upon the ~~company~~Company’s ~~funds~~ability ~~for~~to ~~operating~~generate ~~expenses~~sufficient inrevenues ato ~~limited~~operate ~~scenario~~profitably ~~until~~or weraise ~~generate~~additional ~~adequate~~capital ~~revenue,~~through ~~but~~debt hefinancing ~~has~~and/or nothrough ~~legal~~sales ~~obligation~~of tocommon ~~do so~~stock.

~~Plan~~Management has funded operations from sales and through the proceeds from an offering pursuant to a Registration Statement on Form S-1 or private placements of ~~Operation~~restricted 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 parties may 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 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.

WeThe ~~have~~failure ~~commenced limited operations in the business of selling kitchen sinks and kitchen cabinets in the USA. We have generated some revenue and our principal business activities~~ to ~~date~~achieve consist of creating a business plan, signing Sales Agreements with AQUACUBIC SANITARY WARE CO. LTD, Foshan Mingdeng Kitchen Cabinet Co., Ltd, Foshan Opaly Composite Materials Co., Ltd, FOSHAN SANI SANITARY WARE CO., LTD, Hangzhou Relux House Furnishing Co., Ltd, OPPEIN Home Group Inc, dated April 3-7, 2015. Our current cash balance will not be sufficient to fund our operations for the next 12 months; we will need to generate revenues from operations. We may also utilize funds from Mr. Perko, our Sole Officer and Director, who has informally agreed to advance funds to allow us to pay for filing fees, professional fees, including fees payable in connection with the filing the necessary ~~reports~~levels ~~with the Securities and Exchange Commission and operation expenses. There is no maximum amount~~ of ~~funds~~profitability ~~that our President has agreed to advance. Mr. Perko, however, has no formal commitment, arrangement~~ or ~~legal~~obtain ~~obligation~~the toadditional ~~advance~~funding orwould ~~loan~~be ~~funds~~detrimental to the ~~company~~Company.

~~Our~~NOTE ~~independent~~4 ~~registered~~– public accountant has issued a going concern opinion. This means that there is substantial doubt that we can continue as an on-going business for the next twelve months unless we obtain additional capital to pay our bills. This is because we have only generated limited revenues and no substantial revenues are anticipated until we complete our initial business development. Until this time, we do not believe that our operations will be able to grow. There is no assurance we will ever reach that stage.Debt

WeIn ~~will~~April ~~not~~2015, bethe ~~conducting~~former ~~any~~director ~~further~~and ~~product~~president ~~research~~of orthe ~~development~~Company ~~unless~~made ~~revenues warrant~~ the ~~expense.~~initial Wedeposit ~~do not expect~~ to ~~purchase~~the orCompany’s ~~sell~~bank ~~plant~~account orin ~~significant~~the ~~equipment.~~amount ~~Further~~$100, wewhich dowas ~~not~~being ~~expect~~carried ~~significant~~as ~~changes~~a inloan ~~the number of employees~~payable. ~~Our~~The ~~specific~~loan ~~goal~~was isnon-interest tobearing, ~~sell~~unsecured ~~more kitchen sinks~~ and ~~kitchen~~due ~~cabinets.~~upon demand.

~~Our~~On ~~plan~~September of19, ~~operations~~2017, ~~following~~the former shareholder, Mr. Jure Perko, entered into an assignment agreement with the ~~completion~~Company iswhereby all assets were transferred to him, and liabilities were assumed by him, and the net difference were treated as ~~follows:~~a reduction in additional paid in capital. As a result, the Company is no longer liable for the payable to related party.

~~Office Establishment (Time Frame: 1st~~F-~~2nd~~8 ~~month,~~Table ~~Cost~~of ~~$2,000)~~Contents

WeCAPSTONE plan to set up our office in the building which we purchased in Slovenia and acquire the necessary office equipment to expend operations. We need a computer with Windows 7 or Windows 8 operation systemSYSTEMS, ~~and a connection to the Internet~~INC.NOTES ~~Our~~TO ~~sole~~FINANCIAL ~~officer~~STATEMENTSFOR ~~and~~THE ~~director,~~YEARS ~~Jure~~ENDED ~~Perko~~MAY ~~will take care of our initial administrative duties. We believe that it will cost at least $2~~31,~~000~~ to2018 ~~set~~AND ~~up office and obtain the necessary office equipment and stationery to continue operations.~~ 2017

~~Negotiate~~NOTE ~~and~~5 ~~conclude~~– ~~agreements~~Capital ~~with property owners (Time Frame: 3rd-5th months, Material Costs: $6,000)~~Stock

~~During~~The ~~this~~Company ~~period~~has 75,000,000 weshares ~~intend~~of tocommon ~~begin~~stock ~~negotiations~~ with ~~property~~a ~~owners~~par ~~and~~value ~~managers in view~~ of ~~securing leasing agreements for the use of their premises for the office in the US~~$0.001 ~~Our~~per ~~goal during this stage will be to enter into leasing agreement for the US based office(s)~~share. We have not executed any Lease Agreements. Search for new potential customers for our products and negotiating agreements with the owner for US based office space are ongoing matters that will continue during the life of our operations.

~~Commence~~On ~~Marketing/Advertising~~May ~~Campaign~~11, ~~(Time~~2015 ~~Frame:~~the ~~7th-12th~~Company ~~months~~issued 4,000,000 ~~Cost~~shares of common stock for a purchase price of $160.001 per share to its sole director. The Company received aggregate gross proceeds of $4,000).

~~Initially,~~In ~~marketing~~May ~~will be conducted by our sole officer and director~~2016, ~~Jure Perko. In~~ the ~~sinks and cabinets distribution business~~Company, ~~various~~pursuant ~~business strategies are used~~ to ~~increase~~a ~~the~~Registration ~~popularity~~Statement ofon ~~the~~Form ~~products. We plan to offer free samples of our products which may ignite prospective customers to buy our kitchen sinks and kitchen cabinets (Cost $8~~S-1,~~000).~~ ~~Other~~sold ~~marketing strategies will involve taking the kitchen sinks and kitchen cabinets products to various events~~1, ~~such as shows~~085,000 ~~fairs~~shares ~~and home builders events. We intend also~~ to ~~design~~31 ~~bright~~independent ~~stickers~~shareholders ~~and~~for ~~signs~~total ~~and~~proceeds ~~place them at our sample products to draw attention~~ of ~~potential customers. (Cost~~ $843,~~000)~~400.

18As ~~Table~~ of ~~Contents~~May 31, 2018, there were no outstanding stock options or warrants.

~~Estimated~~NOTE ~~Expenses~~6 ~~for~~– ~~the~~Income ~~Next Twelve Month Period~~Taxes

~~The~~We ~~following~~use ~~provides~~the anasset ~~overview~~and liability method of ~~our~~accounting ~~estimated~~for ~~expenses~~income taxes in accordance with ASC Topic 740, “Income Taxes.” Under this method, income tax expense is recognized for the amount of: (i) taxes payable or refundable for the current year and (ii) deferred tax consequences of temporary differences resulting from matters that have been recognized in an entity’s financial statements or tax returns. Deferred tax assets and liabilities are measured using enacted tax rates expected to ~~fund~~apply ~~our~~to ~~plan~~taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of ~~operation~~a ~~over~~change in tax rates is recognized in the ~~next~~results ~~twelve~~of ~~months~~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, it is more likely than not some portion or all of the deferred tax assets will not be realized.

Description	Fees
SEC reporting and compliance	$	10,000
Establishing an office	$	2,000
Secure office lease agreement	$	6,000
Purchase samples to give to customers	$	8,000
Marketing and advertising	$	8,000
Operating Expenses	$	2,400
Total	$	36,400

ASC Topic 740-10-30 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.

The ~~various~~corporate ~~amounts~~tax ~~presented~~rate for fiscal year 2018 will be 21%, which we expect to be fairly consistent in the ~~table~~near ~~above~~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 ~~illustrative~~U.S. ~~purposes~~taxes only. ~~and~~We ~~the~~are ~~actual~~not ~~amount~~required ofto ~~costs~~pay ~~may~~corporate ~~differ~~taxes ~~significantly~~in Slovenia until our 3rd year in business.

~~When~~The ~~our~~Company ~~distribution~~over ~~operations~~accrued ~~are set up completely and revenues are rising~~$2,089 wein ~~plan~~Income toTaxes ~~hire~~Payable ~~employees~~for ~~who~~the ~~will~~year ~~sell~~ended ~~our~~May ~~kitchen sinks and kitchen cabinets~~31, ~~under~~2015. ~~our~~The ~~own~~Company ~~brand.~~has ~~Cost~~reversed ofthe ~~this~~over isaccrual ~~estimated~~during tothe beyear ~~$7,000~~ended -May ~~$20~~31,~~000~~ ~~which~~2018 ~~will~~and berecorded ~~supported~~the byreversal ~~revenues~~as ~~generated~~other income.

~~Jure~~F-9 ~~Perko,~~Table our president will be devoting approximately twenty hours per week to our operations. Once we expand operations, and are able to attract more and more customers to buy our products, Mr. Perko has agreed to commit more time as required. Because Mr. Perko will only be devoting limited time to our operations, our operations may be sporadic and occur at times which are convenient to him. As a result, operations may be periodically interrupted or suspended which could result in a lack of ~~revenues and a cessation of operations~~Contents

19CAPSTONE ~~Table~~SYSTEMS, ofINC.NOTES ~~Contents~~TO FINANCIAL STATEMENTSFOR THE YEARS ENDED MAY 31, 2018 AND 2017

~~Item~~NOTE 8.7 ~~Financial~~– ~~Statements~~Fixed Assets

~~CAPSTONE~~In ~~SYSTEMS~~April 2015, ~~INC~~the 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.

(AFixed ~~DEVELOPMENT~~assets ~~STAGE~~are ~~COMPANY)~~stated at cost. The Company utilizes straight-line depreciation over the estimated useful life of the asset.

~~FINANCIAL~~Buildings ~~STATEMENTS~~– 15 years

~~MAY~~Office ~~31,~~Equipment ~~2017~~– ~~AND~~7 ~~2016~~years

20Depreciation expense for the building for the years ended May 31, 2018 and 2017 was $0 and $133, respectively.

~~CAPSTONE~~On ~~SYSTEMS~~September 19, ~~INC~~2017, 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. Accordingly, the Company has waived its rights and title to aforementioned fixed assets.

~~INDEX~~NOTE TO8 ~~FINANCIAL~~– ~~STATEMENTS~~Related Party Transactions

~~TABLE~~The OFCompany ~~CONTENTS~~had related party transactions involving the Company’s former director. The nature and details of the transaction are described in Note 4 and Note 5.

			Page No.
Report of Independent Registered Public Accounting Firm			F-1
Balance Sheet			F-2
Statement of Operations			F-3
Statement of Changes in Stockholders’ Equity			F-4
Statement of Cash Flows			F-5
Notes to Financial Statements			F-6

As of May 31, 2018, the current director, Mr. Xu, Jiyuan has advanced the Company $35,432 to fund operations. The advances bear no interest, and are due upon demand.

21NOTE 9 – Concentration Risk

~~JEFFREY~~The TCompany had only one customer and the Company ordered from only one vendor. ~~GROSS~~As ~~LTD~~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.

~~CERTIFIED~~NOTE ~~PUBLIC~~10 ~~ACCOUNTANTS~~– Research and Development

~~6215~~All W.expenses ~~TOUHY~~related ~~AVENUE~~to our brand are recorded as Research and Development expenses in accordance with GAAP and are expensed as incurred.

~~CHICAGO,~~NOTE ~~ILLINOIS~~11 ~~60646-1105~~– Subsequent Events

The Company evaluates subsequent events that have occurred after the balance sheet date but before the financial statements are issued. There are two types of subsequent events: (~~773~~1)~~792~~ recognized, or those that provide additional evidence with respect to conditions that existed at the date of the balance sheet, including the estimates inherent in the process of preparing financial statements, and (2) non-~~1575~~recognized, or those that provide evidence with respect to conditions that did not exist at the date of the balance sheet but arose subsequent to that date.

~~REPORT~~F-10 OFTable ~~INDEPENDENT~~of ~~REGISTERED PUBLIC ACCOUNTING FIRM~~Contents

ToITEM ~~The~~9. ~~Board~~CHANGES ofIN ~~Directors~~AND DISAGREEMENTS WITH ACCOUNTANTS ON FINANCIAL DISCLOSURE

~~Capstone Systems, Inc~~None.

Boulder City, Nevada

We have audited the accompanying balance sheets of Capstone Systems, Inc. (a corporation), as of May 31, 2017 and 2016, and the related statement of operations, changes in stockholder’s equity and cash flows for the years then ended. These financial statements are the responsibility of Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit. We did not audit the financial statements for the year ending May 31, 2016. Those statements were audited by other auditors whose report has been furnished to us and our opinion is based solely on the report of the other auditors.

We conducted our audit in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit will provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Capstone Systems, Inc., as of May 31, 2017 and 2016, and the results of its operations and its cash flows for the year then ended in conformity with U.S. generally accepted accounting principles.

The 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 has suffered recurring losses from operations and has a net capital deficiency that raise substantial doubt about its ability to continue as a going concern. Management plans in regard to these matters are also described in Note 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Jeffrey T. Gross Ltd.

Certified Public Accountants

Chicago, Illinois

September 12, 2017

F-1

CAPSTONE SYSTEMS, INC.

(A DEVELOPMENT STAGE COMPANY)

BALANCE SHEET

MAY 31, 2017 AND 2016

	2017			2016
ASSETS
CURRENT ASSETS
Cash	$	4,295		$	223
Deferred Cost of Goods Sold		-			34,801
TOTAL CURRENT ASSETS		4,295			35,024
FIXED ASSETS
Slovenia Office Building		4,000			4,000
Slovenia Office Building Land		2,515			2,515
Accumulated Depreciation		(489	)		(289	)
TOTAL FIXED ASSETS		6,026			6,226
TOTAL ASSETS	$	10,321		$	41,250
LIABILITIES & STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Loan Payable – Related Party	$	100		$	100
Unearned Revenue		-			38,205
Income Taxes Payable		2,089			2,089
TOTAL CURRENT LIABILITIES	$	2,189		$	40,394
STOCKHOLDERS’ EQUITY
Common stock, ($0.01 par value, 75,000,000 shares authorized; 5,085,000 shares issued and outstanding as of May 31, 2017 and May 31, 2016	$	5,085		$	5,085
Additional Paid-In Capital		42,315			42,315
Subscriptions Receivable		-			(43,400	)
Net profit (loss) accumulated during development stage		(39,268	)		(3,144	)
TOTAL STOCKHOLDERS’ EQUITY		8,132			856
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	10,321		$	41,250

See notes to financial statements.

F-2

CAPSTONE SYSTEMS, INC.

(A DEVELOPMENT STAGE COMPANY)

STATEMENT OF OPERATIONS

FOR THE YEARS ENDED MAY 31, 2017 AND 2016

	2017			2016
REVENUES
Merchandise Sales	$	175,979		$	75,978
TOTAL REVENUES	$	175,979		$	75,978
COST OF SALES
Purchases		144,728			63,752
TOTAL COST OF GOODS SOLD	$	144,728		$	63,752
GROSS PROFIT	$	31,251		$	12,225
OPERATING EXPENSES:
General and Administrative	$	23,947		$	11,216
Product Development		43,428			-
Advertising & Promotion		-			12,511
TOTAL OPERATING EXPENSES	$	67,375		$	23,727
INCOME BEFORE INCOME TAXES	$	(36,124	)	$	(11,501	)
INCOME TAX BENEFIT (PROVISION)		-			-
NET INCOME (LOSS)	$	(36,124	)	$	(11,501	)
NET INCOME (LOSS) PER BASIC AND DILUTED SHARE		(0.0071	)		(0.0029	)
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING		5,085,000			4,002,973

See notes to financial statements.

F-3

CAPSTONE SYSTEMS, INC.

(A DEVELOPMENT STAGE COMPANY)

STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY

FOR THE YEARS ENDED MAY 31, 2017 AND 2016

	2017			2016
BEGINNING BALANCE	$	856		$	12,357
COMMON STOCK		-			1,085
ADDITIONAL PAID-IN CAPITAL		-			42,315
SUBSCRIPTION RECEIVABLE		43,400			(43,400	)
NET INCOME (LOSS)		(36,124	)		(11,501	)
ENDING BALANCE	$	8,132		$	856

See notes to financial statements.

F-4

CAPSTONE SYSTEMS, INC.

(A DEVELOPMENT STAGE COMPANY)

STATEMENT OF CASH FLOWS

FOR THE YEARS ENDED MAY 31, 2017 AND 2016

	2017			2016
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income (Loss)	$	(36,124	)	$	(11,501	)
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		200			289
Deferred Cost of Goods Sold		34,801			(34,801	)
Unearned Revenue		(38,205	)		38,205
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES	$	(39,328	)	$	(7,808	)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of Property		-			-
NET CASH (USED IN) INVESTING ACTIVITIES		-			-
CASH FLOWS FROM FINANCING ACTIVITIES
Subscription Receivable		43,400			-
NET CASH PROVIDED BY FINANCING ACTIVITIES		43,400			-
NET DECREASE IN CASH	$	4,072		$	(7,808	)
CASH AND CASH EQUIVALENTS – BEGINNING OF PERIOD	$	223		$	8,031
CASH AND CASH EQUIVALENTS – ENDING OF PERIOD	$	4,295		$	223

See notes to financial statements.

F-5

CAPSTONE SYSTEMS, INC.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

FOR THE YEARS ENDED MAY 31, 2017 AND 2016

NOTE 1 – Organization and Basis of Presentation

Capstone Systems Inc. (the “Company”) is a for profit corporation established under the Corporation Laws of the State of Nevada on April 1, 2015. The address of our business office is 242 Dolenjska cesta, Ljubljana, Slovenia, 1000. 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 financial statements 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.

The Financial Statements and related disclosures as of May 31, 2017 are audited pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”). Unless the context otherwise requires, all references to “Capstone”, “Capstone Systems”, “we”, “us”, “our” or the “company” are to Capstone Systems Inc.

NOTE 2 – Significant Accounting Policies and Recent Accounting Pronouncements

Use of Estimates and Assumptions

The preparation of financial statements in conformity with generally 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.

Due to the limited level of operations, the Company has not had to make material assumptions or estimates other than the assumption that the Company is a going concern.

Cash and Cash Equivalents

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

Fair Value of Financial Instruments

ASC 825, “Disclosures about Fair Value of Financial 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 May 31, 2017.

The respective carrying values of certain on-balance-sheet financial instruments approximate their fair values. These financial instruments include cash, accrued liabilities and notes payable. Fair values were assumed to approximate carrying values for these financial instruments since they are short term in nature and their carrying amounts approximate fair value.

F-6

CAPSTONE SYSTEMS, INC.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

FOR THE YEARS ENDED MAY 31, 2017 AND 2016

NOTE 2 – Significant Accounting Policies and Recent Accounting Pronouncements - continued

Basic and Diluted Loss Per Share

The Company computes earnings (loss) per share in accordance with ASC 260-10-45 “Earnings per Share”, which requires presentation of both basic and diluted 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.

Revenue Recognition

The Company’s offices are currently based in Slovenia, but we utilize the U.S. dollar as our functional currency.

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

1. Pervasive evidence of an arrangement exists: an order has been placed and the customer has prepaid for the product; 2. Delivery has occurred or services have been rendered: the product has been shipped from either the Company or one of our suppliers; the product has been delivered and signed for by the customer as evidenced by the shipping company. 3. Seller’s price to the buyer is fixed or determinable: the price is fixed at the time of the 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.

Customers are allowed to 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.

Deferred revenue and deferred cost of goods sold result from transactions where the Company has accepted prepayment for the product but all revenue recognition criteria have not yet been met, such as shipped product 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.

Advertising

The Company expenses its advertising when incurred. The Company has incurred $12,511 in advertising expense from inception (April 1, 2015). Advertising expenses for the years ended May 31, 2017 and 2016 were $0 and $12,511, respectively.

F-7

CAPSTONE SYSTEMS, INC.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

FOR THE YEARS ENDED MAY 31, 2017 AND 2016

NOTE 2 – Significant Accounting Policies and Recent Accounting Pronouncements – continued

Recent Accounting Pronouncements

The Financial Accounting Standards Board (“FASB”) periodically issues new accounting standards in a continuing effort to improve standards of financial accounting and reporting. The Company has reviewed the recently issued pronouncements. During this review the Company decided to early adopt ASU 2014-10 which eliminates the definition of a development stage entity, eliminates the development stage presentation and disclosure requirements under ASC 915, and amends provisions of existing variable interest entity guidance under ASC 810.

On June 10, 2014, The Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2014-10, Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, consolidation, which removes all incremental financial reporting requirements from GAAP for development stage entities, including the removal of Topic 915 from the FASB Accounting Standards Codification. For the first annual period beginning after December 15, 2014, the presentation and disclosure requirements in Topic 915 will no longer be required for the public business entities. The revised consolidation standards are effective one year later, in annual periods beginning after December 15, 2015. Early adoption is permitted. The Company has adopted the amendment as of fiscal year ended May 31, 2015.

There are several new accounting pronouncements issued by the Financial Accounting Standards Board (“FASB”) which are not yet effective. Each of these pronouncements, as applicable, has been or will be adopted by the Company. As of May 31, 2017, none of these pronouncements is expected to have a material effect on the financial position, results of operations or cash flows of the Company.

NOTE 3 – Going Concern

The accompanying financial statements and notes have been prepared assuming that the Company will continue as a going concern.

For the period from inception to May 31, 2017, the Company had a net profit (loss) of $(39,268). 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.

Management has funded operations from sales and through the proceeds from an offering pursuant to a Registration Statement on Form S-1 or private placements of restricted securities or the issuance of stock in lieu of cash for payment of services until such a time as profitable operations are achieved. There are no written agreements in place for such funding or issuance of 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.

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

F-8

CAPSTONE SYSTEMS, INC.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

FOR THE YEARS ENDED MAY 31, 2017 AND 2016

NOTE 4 – Debt

In April 2015 the Director and President of the Company made the initial deposit to the Company’s bank account in the amount $100 which is being carried as a loan payable. The loan is non-interest bearing, unsecured and due upon demand.

NOTE 5 – Capital Stock

The Company has 75,000,000 shares of common stock with a par value of $0.001 per share.

On May 11, 2015 the Company issued 4,000,000 shares of common stock for a purchase price of $0.001 per share to its sole director. The Company received aggregate gross proceeds of $4,000.

During 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 $43,400.

As of May 31, 2017 there were no outstanding stock options or warrants.

NOTE 6 – Income Taxes

We use the asset and liability method of accounting for income taxes in accordance with ASC Topic 740, “Income Taxes.” Under this method, income tax expense is recognized for the amount of: (i) taxes payable or refundable for the current year and (ii) deferred tax consequences of temporary differences resulting from matters that have been recognized in an entity’s financial statements or tax returns. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets 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, it is more likely than not some portion or all of the deferred tax assets will not be realized.

ASC Topic 740.10.30 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.

Our effective tax rate for fiscal year 2017 will be 35%, 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. We are not required to pay corporate taxes in Slovenia until our 3rd year in business.

The Company accrued $2,089 in Income Taxes Payable for the year ended May 31, 2015. An income tax return was filed that erroneously stated the Company had no liability and no payment was made. The Company will file a return for the year ended May 31, 2016 which will report losses of $11,501, which will offset the gain of $8,357 in 2015. We will file a revised tax return for 2015 at the same time we file the 2016 tax return.

F-9

CAPSTONE SYSTEMS, INC.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

FOR THE YEARS ENDED MAY 31, 2017 AND 2016

NOTE 7 – Fixed Assets

In April 2015 the 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.

Fixed assets are stated at cost. The Company utilizes straight-line depreciation over the estimated useful life of the asset.

Buildings – 15 years

Office Equipment – 7 years

Depreciation expense for the building for the years ended May 31, 2017 and 2016 was $200 and $289, respectively.

NOTE 8 – Related Party Transactions

The Company's sole officer and director is involved in other business activities and may in the future, become involved in other business opportunities as they become available.

The Company has a related party transaction involving the Company’s director. The nature and details of the transaction are described in Note 4 and Note 5.

NOTE 9 – Concentration Risk

We currently have only one customer and have 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.

NOTE 10 – Research and Development

All expenses related to our brand are recorded as Research and Development expenses in accordance with GAAP and are expensed as incurred. Since inception that company has recorded $43,428 in R&D expense for the design, CAD and prototype development of our private brand samples of kitchen and vanity cabinets.

NOTE 11 – Restatement of Prior Financial Statement for the Year Ended May 31, 2016 – Explanatory Note

As previously reported in our Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on September 9, 2016, and as further discussed in Note 5 – Capital Stock to our consolidated financial statements contained herein, we determined to restate our assets and equity for the year ended May 31, 2016 for the manner in which we accounted for the sale of our equity securities pursuant to the Registration Statement on Form S-1. The shares were sold and issued in May 2016 but the funds were not received until June, 2016, after our year end. The financial statements for the year ended May 31, 2016 have been restated to include a Subscription Receivable of $43,400, Capital Stock of $5,085 and Additional Paid in Capital of $42,315.

F-10

CAPSTONE SYSTEMS, INC.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

FOR THE YEARS ENDED MAY 31, 2017 AND 2016

NOTE 11 – Restatement of Prior Financial Statement for the Year Ended May 31, 2016 – Explanatory Note –continued

The following table represents the effects of the subsequent and first restated statements as of May 31, 2016.

	Restated May 31, 2016			Original May 31, 2016
	$			$
Common Stock		5,085			4,000
Additional Paid in Capital		42,315			-0-
Subscription Receivable		(43,400	)		-0-

The information herein amends and supercedes the information contained in our Annual Report on Form 10-K for the year ended May 31, 2016 and our Quarterly Reports on Form 10-Q for the subsequent periods affected by the restatement to the extent set forth herein. The affected financial statements and related financial information contained in our previously filed reports for those periods should no longer be relied upon and should be read only in conjunction with the restated financial information set forth herein.

NOTE 12 – Subsequent Events

The Company has evaluated events subsequent through the date these financial statements have been issued, September 12, 2017, to 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.

F-11 Table of Contents

Item 9. Changes in and Disagreements with Accountants on Financial Disclosure

None.

Item 9A. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

~~Under~~The ~~the~~Company ~~supervision~~maintains and with the participation of our management, including our principal executive officer and the principal financial officer (our president), we have conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as ~~defined~~required inunder ~~Rules~~Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities ~~and~~ Exchange Act of 1934, as ofamended (the ~~end~~“Exchange ~~of the period covered by this report. Based on this evaluation~~Act”), ~~our principal executive officer and principal financial officer concluded as of the evaluation date~~ that ~~our~~are ~~disclosure~~designed ~~controls~~to ~~and~~ensure ~~procedures were effective such~~ that ~~the material~~ information required to be ~~included~~disclosed in ~~our~~the ~~Securities~~Company’s ~~and~~ Exchange ~~Commission~~Act reports is ~~accumulated and communicated to our management, including our principal executive and financial officer,~~ recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, ~~relating~~and that such information is accumulated and communicated to ~~our~~the ~~company~~Company’s management, ~~particularly~~including ~~during~~its ~~the~~chief ~~period~~executive ~~when~~officer ~~this~~and ~~report~~chief ~~was~~financial ~~being~~officer, ~~prepared~~as appropriate, to allow timely decisions regarding required disclosure.

The Company’s management carried out an evaluation, under the supervision and with the participation of the Company’s chief executive officer and chief financial officer, of the effectiveness of its disclosure controls and procedures. Based on this evaluation, its chief executive officer and chief financial officer concluded that the Company’s disclosure controls and procedures were not effective as of May 31, 2018 because of the material weaknesses set forth below that our management identified in our internal control over financial reporting as of May 31, 2018.

Management's Annual Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, for the ~~company~~Company.

Internal control over financial reporting includes those policies and procedures that: (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of its management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.

Management recognizes that there are inherent limitations in the effectiveness of any system of internal control, and accordingly, even effective internal control can provide only reasonable assurance with respect to financial statement preparation and may not prevent or detect material misstatements. In addition, effective internal control at a point in time may become ineffective in future periods because of changes in conditions or due to deterioration in the degree of compliance with our established policies and procedures. A material weakness is a significant deficiency, or combination of significant deficiencies, that results in there being a more than remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected.

22Under ~~Table~~the supervision and with the participation of ~~Contents~~our president, management conducted an evaluation of the effectiveness of our internal control over financial reporting, as of May 31, 2018, based on the framework set forth in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) (2013). Based on our evaluation under this framework, management concluded that our internal control over financial reporting was not effective as of the evaluation date due to the factors stated below.

~~Under~~11 ~~the~~Table ~~supervision and with the participation~~ of our president, management conducted an evaluation of the effectiveness of our internal control over financial reporting, as of May 31, 2017, based on the framework set forth in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on our evaluation under this framework, management concluded that our internal control over financial reporting was not effective as of the evaluation date due to the factors stated below. Contents

Management assessed the effectiveness of the Company's internal control over financial reporting as of evaluation date and identified the following material weaknesses:

Insufficient Resources: We have an inadequate number of personnel with requisite expertise in the key functional areas of finance and accounting.

Inadequate Segregation of Duties: We have an inadequate number of personnel to properly implement control procedures.

Lack of Audit Committee & Outside Directors on the Company's Board of Directors: We do not have a functioning audit committee or outside directors on our board of directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures.

Management is committed to improving its internal controls and will (1) continue to use third party specialists to address shortfalls in staffing and to assist the Company with accounting and finance responsibilities, (2) increase the frequency of independent reconciliations of significant accounts which will mitigate the lack of segregation of duties until there are sufficient personnel and (3) may consider appointing outside directors and audit committee members in the future.

Management, including our president, has discussed the material weakness noted above with our independent registered public accounting firm. Due to the nature of this material weakness, there is a more than remote likelihood that misstatements which could be material to the annual or interim financial statements could occur that would not be prevented or detected.

This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by the our registered public accounting firm pursuant to ~~temporary~~applicable rules ~~of the SEC~~ that permit us to provide only management's report in this annual report.

Changes in Internal Controls Over Financial Reporting

There have been no changes in our internal control over financial reporting that occurred during the last fiscal quarter for our fiscal year ended May 31, ~~2017~~2018 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

23ITEM ~~Table~~9B. ofOTHER ~~Contents~~INFORMATION

~~PART III~~None.

~~Item~~12 ~~10.~~Table ~~Directors~~of ~~and Executive Officers and Corporate Governance~~Contents

~~The~~PART ~~name, age and titles of our executive officer and director are as follows:~~III

Name and Address of Executive Officer and/or Director		Age		Position
Jure Perko 242 Dolenjska cesta, Ljubljana, Slovenia, 1000		29		President, Treasurer, Secretary and Director (Principal Executive, Financial and Accounting Officer)

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

~~Jure~~The ~~Perko~~following ~~has~~table ~~acted~~includes asthe ~~our President~~names, ~~Treasurer~~positions held, ~~Secretary~~ and ~~Director~~ages ~~since our incorporation on April 1, 2015 . Mr. Perko owns 100%~~ of ~~the outstanding shares of~~ our ~~common~~current ~~stock. As~~executive ~~such,~~officers ~~it was unilaterally decided that Mr. Perko was going to be our sole President, Chief Executive Officer, Treasurer, Chief Financial Officer, Chief Accounting Officer, Secretary~~ and ~~sole member of our board of~~ directors. ~~Mr.~~as ~~Perko graduated from University~~ of ~~Ljubljana~~May ~~in 2011. Since 2011 he has been working as business owner at Domov Kabinet Ltd~~31, ~~a company that made and sold different types of cabinet products for homes. Mr. Perko intends to devote 20 hours a week of his time to planning and organizing activities of Capstone Systems Inc.~~2018:

During the past ten years, Mr. Perko has not been the subject to any of the following events:

Name and Address of Executive

Officer and/or Director

Age

Position

XU Jiyuan

President, Treasurer, Secretary and Director

(Principal Executive, Financial and Accounting Officer)

1.XU ~~Any~~Jiyuan ~~bankruptcy~~In ~~petition~~2000, ~~filed~~Mr. byXU orworked ~~against~~at ~~any~~Zhejiang ~~business~~Ningbo ofHaojing ~~which~~Decoration ~~Mr.~~Company, ~~Perko~~as ~~was~~ a general ~~partner~~manager orto ~~executive~~handle ~~officer~~the ~~either~~daily atoperations ~~the~~and ~~time~~supervision of the ~~bankruptcy~~entire orcompany ~~within~~and ~~two~~perform ~~years~~strategic ~~prior~~planning toof ~~that~~the ~~time.~~business 2development. ~~Any~~In ~~conviction~~2014, inhe aworked ~~criminal~~for ~~proceeding~~Shanghai orCorporate ~~being~~Resources ~~subject~~Technology toHolding ~~a pending criminal proceeding. 3. An order~~Limited, ~~judgment,~~as oran ~~decree,~~independent ~~not subsequently reversed~~consultant, ~~suspended~~who orwas ~~vacated,~~responsible orfor ~~any~~the ~~court~~consulting service of ~~competent~~the ~~jurisdiction,~~pre-sales ~~permanently~~business ordevelopment ~~temporarily~~and ~~enjoining,~~after ~~barring,~~sales ~~suspending~~project orreview ~~otherwise~~in ~~limiting~~engineering Mrfield. ~~Perko's~~In ~~involvement in any type of business~~2016, ~~securities~~he orjoined ~~banking~~Shanghai ~~activities.~~Yuanyi 4.Information ~~Found~~Technology byCompany aLimited ~~court~~as ~~of competent jurisdiction (in~~ a ~~civil action)~~president, ~~the Securities~~ and ~~Exchange~~he ~~Commission~~is orresponsible for the ~~Commodity~~company ~~Future~~daily ~~Trading~~operation ~~Commission~~and tobusiness ~~have~~development ~~violated~~in ainvestment ~~federal~~consulting orservice ~~state~~and ~~securities~~general orconsulting ~~commodities~~service. ~~law,~~Given ~~and~~Mr. ~~the~~Xu’s ~~judgment~~experience ~~has~~in ~~not~~sales ~~been~~and ~~reversed~~operation, ~~suspended or vacated~~Mr. 5.XU ~~Was~~was ~~the~~appointed ~~subject~~as ofa ~~any~~Chief ~~order~~Executive Officer, ~~judgment or decree~~President, ~~not subsequently reversed~~Secretary, ~~suspended~~Treasurer orand ~~vacated,~~Chairman of ~~any~~Board ~~Federal~~of orDirectors ~~State authority barring, suspending or otherwise limiting for more than 60 days the right to engage~~ in ~~any~~October ~~activity~~2017. ~~described~~Mr. inXU ~~paragraph~~graduated ~~(f)(3)(i)~~from ofChangjiang ~~this~~Entrepreneurial ~~section,~~University ~~or to be associated~~ with ~~persons engaged in any such activity; 6. Was found by~~ a ~~court~~Bachelor ofDegree ~~competent jurisdiction~~ in aHuman ~~civil~~Resources ~~action or by the Commission to have violated any Federal or State securities law, and the judgment~~ in ~~such civil action or finding by the Commission has not been subsequently reversed, suspended, or vacated;~~2013.

24During ~~Table~~the past ten years, Mr. XU has not been the subject to any of ~~Contents~~the following events:

7. Was the subject of, or a party to, any Federal or State judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of:

1.		Any bankruptcy petition filed by or against any business of which Mr. XU was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time.

2.	Any conviction in a criminal proceeding or being subject to a pending criminal proceeding.

3.		An order, judgment, or decree, not subsequently reversed, suspended or vacated, or any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting Mr. XU's involvement in any type of business, securities or banking activities.

4.		Found by a court of competent jurisdiction (in a civil action), the Securities and Exchange Commission or the Commodity Future Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended or vacated.

5.		Was the subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any Federal or State authority barring, suspending or otherwise limiting for more than 60 days the right to engage in any activity described in paragraph (f)(3)(i) of this section, or to be associated with persons engaged in any such activity;

6.		Was found by a court of competent jurisdiction in a civil action or by the Commission to have violated any Federal or State securities law, and the judgment in such civil action or finding by the Commission has not been subsequently reversed, suspended, or vacated;

7.		Was the subject of, or a party to, any Federal or State judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of:

	i.		Any Federal or State securities or commodities law or regulation; or

	ii.		Any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order; or

	iii.		Any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity.

8.		Was the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C. 78c(a)(26))), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.

i.13 ~~Any~~Table Federal or State securities or commodities law or regulation; or ii. Any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order; or iii. Any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; orContents

8.Term ~~Was the subject~~ of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C. 78c(a)(26))), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.Office

~~TERM~~Each OFof ~~OFFICE~~our directors is appointed to hold office until the next annual meeting of our stockholders or until his respective successor is elected and qualified, or until he resigns or is removed in accordance with the provisions of the Nevada Revised Statues. Our officers are appointed by our Board of Directors and hold office until removed by the Board or until their resignation.

~~Each~~Corporate ofGovernance ~~our~~& directors is appointed to hold office until the next annual meeting of our stockholders or until his respective successor is elected and qualified, or until he resigns or is removed in accordance with the provisions of the Nevada Revised Statues. Our officers are appointed by our Board ~~of Directors and hold office until removed by the Board or until their resignation.~~Independence

~~DIRECTOR~~As ~~INDEPENDENCE~~of the date of this Report, our Board of Directors has one director and has not established Audit, Compensation, and Nominating or Governance Committees as standing committees. The Board does not have an executive committee or any committees performing a similar function. We are not currently listed on a national securities exchange or in an inter-dealer quotation system that has requirements that a majority of the board of directors be independent and do not currently have any independent board members.

~~Our~~During ~~board~~fiscal of2018; ~~directors~~all isfunctions ~~currently composed~~ of ~~one member, Jure Perko, who does not qualify as an independent director in accordance with the published listing requirements of the NASDAQ Global Market. The NASDAQ independence definition includes~~ a ~~series~~nominating ~~of objective tests~~committee, ~~such~~audit ascommittee ~~that the director is not,~~ and ~~has~~compensation ~~not~~committee ~~been~~were ~~for~~performed atby ~~least three years, one of~~ our ~~employees~~whole ~~and~~board ~~that neither the director, nor any~~ of ~~his, family members has engaged in various types of business dealings with us~~directors. InOur ~~addition, our~~ board of directors ~~has~~intends ~~not~~to ~~made~~appoint asuch ~~subjective~~persons ~~determination~~and asform tosuch ~~each~~committees ~~director~~as ~~that~~are norequired ~~relationships~~to ~~exist~~meet ~~which, in~~ the ~~opinion~~corporate ofgovernance ~~our~~requirements ~~board~~imposed ofby ~~directors, would interfere with~~ the ~~exercise~~national ofsecurities ~~independent~~exchanges ~~judgment~~as innecessary. ~~carrying~~Therefore, ~~out~~we ~~the~~intend ~~responsibilities of~~that a ~~director,~~majority ~~though such subjective determination is required by the NASDAQ rules. Had our board~~ of ~~directors made these determinations,~~ our ~~board of~~ directors ~~would~~will ~~have~~eventually ~~reviewed~~be ~~and~~independent ~~discussed information provided by the~~ directors and usat ~~with~~least ~~regard~~one ~~to each~~ director's ~~business~~will ~~and~~qualify ~~personal activities and relationships~~ as ~~they~~an ~~may~~“audit ~~relate~~committee tofinancial ~~us and our management~~expert.”

~~Committees~~We do not have a policy regarding the consideration of any director candidates which may be recommended by our shareholders, including the minimum qualifications for director candidates, nor has our Board Ofof Directors established a process for identifying and evaluating director nominees. Further, when identifying nominees to serve as director, while we do not have a policy regarding the consideration of diversity in selecting directors, our Board seeks to create a Board of Directors that is strong in its collective knowledge and has a diversity of skills and experience with respect to accounting and finance, management and leadership, vision and strategy, business operations, business judgment, industry knowledge and corporate governance. We have not adopted a policy regarding the handling of any potential recommendation of director candidates by our shareholders, including the procedures to be followed. Our Board has not considered or adopted any of these policies as we have never received a recommendation from any shareholder for any candidate to serve on our Board of Directors. Given our relative size and lack of directors and officers insurance coverage, we do not anticipate that any of our shareholders will make such a recommendation in the near future. While there have been no nominations of additional directors proposed, in the event such a proposal is made, all members of our Board will participate in the consideration of director nominees. In considering a director nominee, it is likely that our Board will consider the professional and/or educational background of any nominee with a view towards how this person might bring a different viewpoint or experience to our Board.

We14 doTable ~~not presently have a separately constituted audit committee, compensation committee, nominating committee, executive committee or any other committees~~ of our Board of Directors. Nor do we have an audit committee "financial expert." As such, our entire Board of Directors acts as our audit committee and handles matters related to compensation and nominations of directors.Contents

25Board ~~Table~~Leadership ofStructure ~~Contents~~and the Board’s Role in Risk Oversight.

~~Potential~~Our ~~Conflicts~~Board currently has one member, who serves as our Chairman. Our Board is actively involved in our risk oversight function and collectively undertakes our risk oversight function. This review of ~~Interest~~our risk tolerances includes, but is not limited to, financial, legal and operational risks and other risks concerning our reputation and ethical standards.

~~Since~~We weare doa ~~not~~small ~~have~~company anwhich ~~audit~~has oryet ~~compensation~~to ~~committee~~achieve ~~comprised~~operating ofrevenues. ~~independent~~We ~~directors,~~believe ~~the functions~~ that ~~would have been performed by such committees are performed by~~ our ~~director~~present ~~who~~management ~~also~~structure ~~serves~~is asappropriate ~~the~~for ~~sole~~a ~~officer~~company of ~~the~~our ~~Company.~~size ~~Thus,~~and ~~there~~state ~~is an inherent conflict~~ of ~~interest~~development.

~~Significant~~Code ~~Employees~~of Business Conduct, Code of Ethics and Code of Ethics for Financial Professionals

WeThe ~~have~~Company nohas not adopted a Code of Ethics which applies to our directors, officers, employees. ~~Our~~and ~~sole~~representatives ~~officer~~due to our lack of operations and ~~director~~having ~~currently~~a ~~devotes~~limited ~~approximately~~number 20of ~~hours~~employees. ~~per~~We ~~week~~intend to ~~Company~~adopt ~~matters.~~a code of ethics during this fiscal year.

~~Stockholder~~Potential ~~Communications~~Conflicts ~~with the Board~~ of ~~Directors~~Interest

WeSince ~~have~~we do not ~~implemented~~have aan ~~formal~~audit ~~policy~~ or ~~procedure~~compensation bycommittee ~~which~~comprised ~~our stockholders can communicate directly with our Board~~ of ~~Directors.~~independent ~~Nevertheless~~directors, ~~every~~the ~~effort~~functions ~~will~~that bewould ~~made~~have tobeen ~~ensure~~performed ~~that~~by ~~the~~such ~~views~~committees ~~of stockholders~~ are ~~heard~~performed by ~~the~~our ~~Board~~director ofwho ~~Directors,~~also ~~and~~serves ~~that~~as ~~appropriate~~the ~~responses~~sole ~~are~~officer ~~provided~~of tothe ~~stockholders in a timely manner~~Company. ~~During the upcoming year~~Thus, ~~our~~there ~~Board~~is ~~will~~an ~~continue~~inherent toconflict ~~monitor~~of ~~whether it would be appropriate to adopt such a process~~interest.

~~Item~~Stockholder ~~11.~~Communications ~~Executive~~with ~~Compensation~~the Board of Directors

~~MANAGEMENT~~We ~~COMPENSATION~~have not implemented a formal policy or procedure by which our stockholders can communicate directly with our Board of Directors. Nevertheless, every effort will be made to ensure that the views of stockholders are heard by the Board of Directors, and that appropriate responses are provided to stockholders in a timely manner. During the upcoming year, our Board will continue to monitor whether it would be appropriate to adopt such a process.

~~The~~15 ~~following~~Table ~~tables~~of ~~set forth certain information about compensation paid, earned or accrued for services by our Executive Officer for the years ended May 31, 2017 and May 31, 2016:~~Contents

~~Summary~~ITEM ~~Compensation~~11. ~~Table~~EXECUTIVE COMPENSATION

Name and Principal Position	Year	Salary ($)		Bonus ($)		Stock Awards ($)		Option Awards ($)		Non-Equity Incentive Plan Compensation ($)		All Other Compensation ($)		All Other Compensation ($)		Total ($)
Jure Perko, President,	2017		-0-		-0-		-0-		-0-		-0-		-0-		-0-		-0-
Secretary and Treasurer	2016		-0-		-0-		-0-		-0-		-0-		-0-		-0-		-0-

MANAGEMENT COMPENSATION

26The ~~Table~~following oftables ~~Contents~~set forth certain information about compensation paid, earned or accrued for services by our Executive Officer for the years ended May 31, 2018 and May 31, 2017:

~~There~~Summary ~~are~~Compensation ~~no current employment agreements between the company and its officer.~~Table

Mr. Perko currently devotes approximately twenty hours per week to manage the affairs of the Company. He has agreed to work with no remuneration until such time as the company receives sufficient revenues necessary to provide management salaries. At this time, we cannot accurately estimate when sufficient revenues will occur to implement this compensation, or what the amount of the compensation will be.

Name and Principal Position	Year	Salary ($)		Bonus ($)		Stock Awards ($)		Option Awards ($)		Non-Equity Incentive Plan Compensation ($)		Change in pension value and nonqualified deferred compensation earnings ($)		All other compensation ($)		Total ($)

Jure Perko (1)	2017		0		0		0		0		0		0		0		0

XU Jiyuan (2)	2017		0		0		0		0		0		0		0		0
	2018		0		0		0		0		0		0		0		0

There are no ~~annuity,~~current ~~pension~~employment oragreements ~~retirement~~between ~~benefits proposed to be paid to~~ the ~~officer~~Company orand ~~director or employees in the event of retirement at normal retirement date pursuant to any presently existing plan provided or contributed to by the company or any of~~ its ~~subsidiaries, if any~~officer.

~~Director~~There ~~Compensation~~are no annuity, pension or retirement benefits proposed to be paid to the officer or director or employees in the event of retirement at normal retirement date pursuant to any presently existing plan provided or contributed to by the company or any of its subsidiaries, if any.

~~The~~Director ~~following table sets forth director compensation as of the year ended May 31, 2017:~~Compensation

Name		Fees Earned or Paid in Cash ($)				Stock Awards ($)				Option Awards ($)				Non-Equity Incentive Plan Compensation ($)				Nonqualified Deferred Compensation Earnings ($)				All Other Compensation ($)				Total ($)
Jure Perko			-0-				-0-				-0-				-0-				-0-				-0-				-0-

Our sole director is also our sole officer and he does not receive any compensation for his services as director. We do not have any agreements for compensating our directors for their services in their capacity as directors, although such directors may in the future to receive stock options to purchase shares of our common stock as awarded by our board of directors.

~~Item~~16 ~~12.~~Table ~~Security Ownership~~ of ~~Certain Beneficial Owners and Management~~Contents

~~The~~ITEM following table sets forth certain information concerning the number of shares of our common stock owned beneficially as of May 31, 2017 by: (i) each person (including any group) known to us to own more than five percent (5%) of any class of our voting securities, (ii) our director, and or (iii) our officer12. ~~Unless~~SECURITY ~~otherwise~~OWNERSHIP ~~indicated,~~OF ~~the~~CERTAIN ~~stockholder~~BENEFICIAL ~~listed~~OWNERS ~~possesses~~AND ~~sole voting and investment power with respect to the shares shown.~~MANAGEMENT

27The ~~Table~~following table sets forth certain information concerning the number of ~~Contents~~shares of our common stock owned beneficially as of August 23, 2018 by: (i) each person (including any group) known to us to own more than five percent (5%) of any class of our voting securities, (ii) our director, and or (iii) our officer. Unless otherwise indicated, the stockholder listed possesses sole voting and investment power with respect to the shares shown.

Title of Class		Name and Address of Beneficial Owner		Amount and Nature of Beneficial Ownership		Percentage
Common Stock		Jure Perko 242 Dolenjska cesta, Ljubljana, Slovenia, 1000		4,000,000 shares of common stock (direct)			79	%

As of August 23, 2018, we had 5,085,000 shares of Common Stock issued and outstanding.

~~(1)~~Beneficial Aownership ~~beneficial~~is ~~owner~~determined ofin aaccordance ~~security~~with ~~includes~~SEC ~~any~~rules ~~person~~and ~~who,~~generally ~~directly~~includes voting or ~~indirectly,~~investment ~~through~~power ~~any~~with ~~contract,~~respect ~~arrangement,~~to ~~understanding,~~securities. ~~relationship,~~For orpurposes ~~otherwise~~of ~~has~~this ortable, ~~shares:~~a ~~(i)~~person ~~voting~~or ~~power,~~group ~~which~~of ~~includes~~persons ~~the~~is ~~power~~deemed to ~~vote,~~have or“beneficial toownership” ~~direct~~of ~~the~~any ~~voting~~shares of ~~shares;~~common ~~and~~stock ~~(ii)~~that ~~investment~~such ~~power,~~person ~~which~~has ~~includes~~ the ~~power~~right to ~~dispose~~acquire orwithin ~~direct~~60 ~~the~~days ~~disposition~~ of ~~shares.~~August ~~Certain~~23, ~~shares~~2018. ~~may~~For bepurposes ~~deemed~~of tocomputing bethe ~~beneficially~~percentage ~~owned~~of byoutstanding ~~more~~shares ~~than~~of ~~one~~our ~~person~~common ~~(if,~~stock ~~for~~held ~~example,~~by ~~persons~~each ~~share~~person ~~the power to vote~~ or ~~the~~group ~~power to dispose~~ of ~~the~~persons ~~shares).~~named ~~In addition~~above, any shares ~~are~~that ~~deemed~~such ~~to be beneficially owned by a~~ person ifor ~~the~~persons ~~person~~ has the right to acquire ~~the shares (for example, upon exercise of an option)~~ within 60 days of ~~the~~August ~~date~~23, as2018 ~~of which the information~~ is ~~provided.~~deemed Into ~~computing~~be ~~the~~outstanding ~~percentage~~for ~~ownership~~such ~~of any~~ person, ~~the~~but ~~amount of shares outstanding~~ is not deemed to ~~include~~be outstanding for the ~~amount~~purpose of ~~shares~~computing ~~beneficially~~the ~~owned~~percentage byownership ~~such~~of ~~person~~any ~~(and~~other ~~only such~~ person). byThe ~~reason~~inclusion herein of ~~these~~any ~~acquisition~~shares ~~rights.~~listed Asas ~~of May~~beneficially ~~31,~~owned ~~2017,~~does ~~there~~not ~~were~~constitute ~~5,085,000~~an ~~shares~~admission of ~~our~~beneficial ~~common stock issued and outstanding~~ownership.

~~Future~~Except ~~sales~~as otherwise indicated, the persons listed below have sole voting and investment power with respect to all shares of our common stock owned by ~~existing~~them, ~~stockholders~~except to the extent that power may be shared with a spouse.

A total of 4,000,000 shares of common stock were issued to our sole officer and director, all of which are restricted securities, as defined in Rule 144 of the Rules and Regulations of the SEC promulgated under the Securities Act. Under Rule 144, the shares can be publicly sold, subject to volume restrictions and restrictions on the manner of sale. Such shares can only be sold after six months provided that the issuer of the securities is, and has been for a period of at least 90 days immediately before the sale, subject to the reporting requirements of section 13 or 15(d) of the Exchange Act. Shares purchased in our recent offering, which will be immediately resalable, and sales of all of our other shares after applicable restrictions expire, could have a depressive effect on the market price, if any, of our common stock.

Title of Class	Name and Address of Beneficial Owner (1)	Amount and Nature of Beneficial Owner		Percent of Class (2)
Common Stock	XU Jiyuan		2,850,000		56.05	%
	CEO and Director		Direct

	All officers and directors as a group (1 in number)		2,850,000		56.05	%

Our stock is quoted on the over-the-counter bulletin board. There has been no active trading of our stock. There are no outstanding options or warrants to purchase, or securities convertible into, our common stock. There is 32 holders of record for our common stock.__________

^{Item 13. Certain Relationships and Related Transactions
⁽¹⁾ Unless otherwise noted, the address for each beneficial owner is YONGZHEN VILLAGE, WANGJIANG COUNTY, ANHUI PROVINCE, CHINA.

⁽²⁾ Unless otherwise indicated in the footnotes to this table and subject to community property laws where applicable, we believe that each of the stockholders named in this table has sole voting and investment power with respect to the shares indicated as beneficially owned.

Jure17 PerkoTable is our officer, director, control person and promoter and he received no compensation for the placement of our recent offering.Contents}

~~Item~~Other ~~14.~~than ~~Principal~~the ~~Accounting~~relationships ~~Fees~~and transactions discussed below, we are not a party to, nor are we proposed to be a party, to any transaction since the beginning of the fiscal year ending May 31, 2018 involving an amount that exceeds the lesser of $120,000 or one percent of the average of our total assets at year end for the last two completed fiscal years and ~~Services~~in which a related person, as such term is defined by Item 404 of Regulation S-K, had or will have a direct or indirect material interest.

~~The~~On ~~total~~October ~~fees~~19, ~~charged~~2017, pursuant to the ~~company~~SPA ~~for~~previously ~~audit~~disclosed ~~services~~in this Report, ~~including~~our ~~quarterly~~former ~~reviews,~~sole ~~were~~officer $3and director Jure Perko transferred 4,000,000 ~~audit-related~~shares ~~services~~of ~~were~~the Company’s common stock to the purchasers for a total cash consideration of $~~Nil~~360,775. ~~tax~~The ~~services~~consideration ~~were~~paid for the Shares was $~~Nil~~0.0902 ~~and~~per ~~other~~share. ~~services~~The ~~were~~source ~~$Nil~~of ~~during~~the cash consideration for the ~~year~~Shares ~~ended~~was ~~May~~personal 31funds of the purchasers. In connection with the SPA, ~~2017~~Jure Perko entered into an assignment agreement with the Company whereby all assets of the Company were transferred to him, all liabilities were assumed by him and the net difference was treated as a reduction in additional paid in capital.

~~The~~As ~~total~~of ~~fees~~the ~~charged~~date toof ~~the~~this ~~company~~Report, ~~for~~our ~~audit~~Board ~~services,~~of ~~including~~Directors ~~quarterly~~has ~~reviews,~~one ~~were~~director $3and has not established Audit,~~000~~ Compensation, ~~audit~~and Nominating or Governance Committees as standing committees. The Board does not have an executive committee or any committees performing a similar function. We are not currently listed on a national securities exchange or in an inter-~~related~~dealer ~~services~~quotation ~~were~~system ~~$Nil,~~that ~~tax~~has ~~services~~requirements ~~were~~that ~~$Nil~~a majority of the board of directors be independent and ~~other~~do ~~services~~not ~~were~~currently ~~$Nil~~have ~~during~~any ~~the~~independent ~~year~~board ~~ended~~members. ~~May~~The ~~31,~~Company ~~2016~~lacks independent directors. See Item 10.

28Promoters ~~Table~~and ofCertain ~~Contents~~Control Persons

~~PART~~Other IVthan set forth herein, none of our management or other control persons were “promoters” (within the meaning of Rule 405 under the Securities Act), and none of such persons took the initiative in the formation of our business or in connection with the formation of our business and received 10% of our debt or equity securities or 10% of the proceeds from the sale of such securities in exchange for the contribution of property or services, during the last five years.

~~Item~~Our 15former officer and director, Mr. ~~Exhibits~~Jure Perko, may be considered a “promoter” within the meaning of Rule 405 under the Securities Act, of the Company in consideration of his participation and managing of the business of the Company, in addition to being the Company’s controlling shareholder by virtue of his ownership of 4,000,000 shares of Common Stock which carries voting rights equivalent to 78.7% of the voting shares at any meeting of shareholders.

~~The~~18 ~~following~~Table ~~exhibits~~of ~~are included with this filing:~~Contents

Exhibit
Number		Description
3(i)		Articles of Incorporation*
3(ii)		Bylaws*
31		Sec. 302 Certification of CEO & CFO
32		Sec. 906 Certification of CEO & CFO
101		Interactive data files pursuant to Rule 405 of Regulation S-T

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

~~___________~~The following table shows the fees that were billed for the audit and other services for 2018 and 2017.

* Included in our filing on Form S-1 under Commission File Number 333-207100.

	2018		2017
Audit Fees	$	16,250	$	3,000
Audit-Related Fees	$	0	$	0
Tax Fees	$	0	$	0
All Other Fees	$	0	$	0
Total	$	16,250	$	3,000

29Audit ~~Table~~Fees — This category includes the audit of ~~Contents~~our annual financial statements, review of financial statements included in our Quarterly Reports on Form 10-Q and services that are normally provided by the independent registered public accounting firm in connection with engagements for those fiscal years. This category also includes advice on audit and accounting matters that arose during, or as a result of, the audit or the review of interim financial statements.

~~SIGNATURES~~Audit-Related Fees — This category consists of assurance and related services by the independent registered public accounting firm that are reasonably related to the performance of the audit or review of our financial statements and are not reported above under “Audit Fees.” The services for the fees disclosed under this category include consultation regarding our correspondence with the Securities and Exchange Commission and other accounting consulting.

InTax ~~accordance~~Fees ~~with~~— ~~Section~~This 13category orconsists ~~15(d)~~ of ~~the~~professional ~~Securities~~services ~~Exchange~~rendered ~~Act,~~by ~~the~~our ~~registrant~~independent ~~caused~~registered ~~this~~public ~~report~~accounting tofirm befor ~~signed~~tax oncompliance ~~its~~and ~~behalf~~tax byadvice. The services for the ~~undersigned,~~fees ~~thereunto~~disclosed ~~duly~~under ~~authorized~~this ~~on September~~category ~~13,~~include ~~2017.~~tax return preparation and technical tax advice.

~~CAPSTONE~~All ~~SYSTEMS~~Other ~~INC.~~Fees ~~By:~~— ~~/s/~~This ~~Jure~~category ~~Perko~~consists ~~Name:~~of ~~Jure~~fees ~~Perko~~for ~~Title:~~other ~~President,~~miscellaneous ~~Treasurer and Secretary (Principal Executive, Financial and Accounting Officer)~~items.

InOur ~~accordance~~Board ~~with~~of ~~the~~Directors ~~requirements~~has adopted a procedure for pre-approval of all fees charged by our independent registered public accounting firm. Under the ~~Securities~~procedure, ~~Act~~the ofBoard ~~1933~~approves the engagement letter with respect to audit, ~~this~~tax ~~annual~~and ~~report~~review ~~was~~services. ~~signed~~Other fees are subject to pre-approval by the ~~following~~Board, ~~persons~~or, in the ~~capacities~~period between meetings, by a designated member of Board. Any such approval by the designated member is disclosed to the entire Board at the next meeting. The audit and ontax fees paid to the ~~dates~~auditors ~~stated~~with respect to 2018 were pre-approved by the entire Board of Directors.

Signature	Title	Date
/s/ Jure Perko	President, Treasurer, Secretary and Director	September 13, 2017
Jure Perko	(Principal Executive, Financial and Accounting Officer)

Table of Contents

30ITEM 15. EXHIBITS

The following exhibits are included with this filing:

Exhibit
Number		Description

3.1*		Articles of Incorporation (incorporated by reference from our Form S-1 under Commission File Number 333-207100.)
3.2*		Bylaws (incorporated by reference from our Form S-1 under Commission File Number 333-207100.)
3.3*		Certificate of Amendment (incorporated by reference from our Current Report on Form 8-K filed on January 17, 2018.)
16.1*		Letter dated September 14, 2017 from Michael Gillespie & Associates, PLLC (incorporated by reference from our Current Report on Form 8-K filed on September 15, 2017.)
16.2*		Letter dated August 21, 2018 from Jeffrey T. Gross, Ltd. (incorporated by reference from our Current Report on Form 8-K filed on August 23, 2018)
31.1**		Certification by Chief Executive Officer pursuant to Sarbanes Oxley Section 302
31.2**		Certification by Chief Financial Officer pursuant to Sarbanes Oxley Section 302
32.1***		Certification by Chief Executive Officer pursuant to 18 U.S.C. Section 1350
32.2***		Certification by Chief Financial Officer pursuant to 18 U.S.C. Section 1350
99.1*		Share Exchange Agreement between Capstone Systems Inc., Yunguhui Group Limited, and Yunguhui stockholders, dated January 15, 2018 (incorporated by reference from our Current Report on Form 8-K filed on January 16, 2018.)
101		Interactive data files pursuant to Rule 405 of Regulation S-T

___________

* Previously filed

** Filed herewith

*** Furnished herewith

Table of Contents

PART IV

SIGNATURES

In accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on August 27, 2018.

	CAPSTONE SYSTEMS INC.

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

In accordance with the requirements of the Securities Exchange Act of 1934, this annual report was signed by the following persons in the capacities indicated and on the dates stated.

Signature	Title	Date

/s/ Xu Jiyuan	President, Treasurer, Secretary and Director	August 27, 2018
Xu Jiyuan	(Principal Executive, Financial and Accounting Officer)

⁽¹⁾	Unless otherwise noted, the address for each beneficial owner is YONGZHEN VILLAGE, WANGJIANG COUNTY, ANHUI PROVINCE, CHINA.

⁽²⁾	Unless otherwise indicated in the footnotes to this table and subject to community property laws where applicable, we believe that each of the stockholders named in this table has sole voting and investment power with respect to the shares indicated as beneficially owned.

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