Capstone International Corporation

(Name of small business issuer in its charter)

#246 - 13888 - 70 ^th Avenue

Surrey, B.C.

Canada, V3W 0R8

(604) 599-8843

(Address and telephone number of principal executive offices)

The Corporation Trust Company of Delaware

1209 Orange Street

Wilmington, Delaware, 19801

(302) 658-4205

(Name, address and telephone numbers of agent for service)

Approximate date of commencement of proposed sale to the public: As soon as practicable after this Registration Statement becomes effective.

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ]

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ]

If this Form is a post effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ]

If delivery of the prospectus is expected to be made pursuant to Rule 434, check the following box. [ ]

These securities have not been approved or disapproved by the Securities and Exchange Commission or any state securities commission, nor has the Securities and Exchange Commission or any state securities commission passed upon the accuracy or adaquacy of this prospectus/proxy.  Any representation to the contrary is a criminal offense.



The Offering:

This is a "self-underwritten" public offering, with no minimum purchase requirement.

1. Capstone is not using an underwriter for this offering. See Plan of Distribution.

2. The offering expenses shown do not include legal, accounting, printing and related costs incurred in making this offering. The Company will pay all such costs, which it estimates to be $20,000.

3. There is no arrangement to place the proceeds from this offering in an escrow, trust or similar account. Delaware law does not require that funds raised pursuant to the sale of securities be placed into an escrow account. Any funds raised from this offering will be immediately available to Capstone International Corporation for its use.

4. The closing date for the offering is November 30, 2001.

The information in this prospectus is not complete and may be changed. Capstone may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

Securities offered through this prospectus will not be sold through dealers, but will be sold on a direct participation basis only.

Capstone International Corporation was incorporated on November 16, 2000, in the state of Delaware. The Company's principal executive offices are located at Suite 246 - 13888 - 70 ^th Avenue, Surrey, BC Canada, V3W 0R8. The telephone number is (604) 599-8843.

Since becoming incorporated, Capstone has not made any significant purchases or sale of assets, nor has it been involved in any mergers, acquisitions or consolidations. The Company has never declared bankruptcy, it has never been in receivership, and it has never been involved in any legal action or proceedings.

Capstone is a development stage company that is in the process of establishing itself as a reseller of specialty insurance and annuity products. These products are specifically designed and sold to provide purchasers with the financial means to pay for final needs expenses at the time of their death. Full information about the Company's products will be available on the Internet at www.cicwebsite.com.

Marketing and distribution of Capstone products will take place through sales brokers and agents currently engaged in the general insurance business. General insurance agencies can be found almost everywhere. They typically sell automobile insurance, homeowners and renters policies, disability and casualty insurance, travel insurance, as well a commercial products including fire, theft and liability insurance.

By using this pre-existing network of fully licensed and experienced sales people, Capstone believes it can build its business with less capital than would be required to hire, train and facilitate its own in-house sales force. Capstone intends to begin operations in British Columbia and then, during the second year, to move eastward across Canada. The Company has no plans to expand into the United States for the foreseeable future.

It is doubtful that Capstone will be able to continue as a going concern unless the Company has immediate sales success or is able to raise additional funding. The Company does not currently have the $50,000 needed to develop and market its products, nor does it have a source to supply the necessary funding if it is unsuccessful in raising the capital through this offering. Capstone believes it will take from one (1) to two (2) months to raise capital for completion of the development of the business.

Capstone anticipates that it will operate in a deficit position and continue to sustain net losses for the foreseeable future. As at March 31, 2001, Capstone's accumulated deficit was $968.00.

Currently, Capstone has a three person Board of Directors. These three Board members have assumed responsibility for all planning, development and operational duties, and will continue to do so throughout the beginning stages of the Company. There are no employees at the present time and there are no plans to hire substantial numbers of employees during the next twelve months.

This offering consists of 2, 250,000 shares of Capstone Common Stock. The offering price is $0.10 per share. Of that amount, current shareholders are offering 1,750,000 shares. The Company is offering 500,000 shares. Officers, Directors or significant investors own none of the shares being offered. The Company's Officers and Directors collectively own 300,000 shares of Restricted Common Stock.

There is currently no market for Capstone stock.

The securities offered hereby are highly speculative and should be purchased only by persons who can afford to lose their entire investment in Capstone.  Each perspective investor should carefully consider the following risk factors, as well as all other information set forth elsewhere in this prospectus.

Failure to Earn a Profit Due to a Lack of Operational Experience: Capstone is a start-up company in its pre-operational development stage. Neither the Company nor its management has any direct experience operating businesses in this industry. This lack of relevant operational experience could prevent Capstone from becoming a profitable business.

As at March 31, 2001, Capstone sustained operating losses of $968 due to incorporation and legal expenses. The accumulated deficit as at March 31, 2001 is also $968.

Failure to Secure an Insurance and Annuity Supplier or Underwriter: Capstone has not yet secured a company to underwrite or supply insurance and annuity products. Without insurance and annuity products to offer for sale, Capstone does not have a business.

Failure to Secure Insurance and Annuity Sales Brokers and Agents: Capstone intends to use both brokers and agents to sell its insurance and annuity products. Without existing relationships or contacts in the insurance and financial services sectors, it will be difficult for Capstone to attract qualified and reputable firms and individuals to sell their products. If Capstone fails to attract the qualified and reputable firms and individuals necessary to make sales, the business will fail.

Inability to Compete Against Strong, Well-Established Competitors: Capstone is competing in an already well-established marketplace, with businesses that have been in the industry for many years. Capstone will find it very difficult to compete with strong, well-established competitors.

The chief competitive factors that Capstone's competitors bring to the marketplace are good reputations, quality products, reliable service and reasonable prices. Additionally, Capstone will be competing with firms that have substantially greater marketing, financial and human resources than Capstone. The established competitors will also have achieved a high level of brand recognition. Many competitors have similar if not identical products to those that Capstone intends to sell, and they will be competing directly with Capstone. The entrance of a new competitor into the marketplace may result in price reductions, reduced profit margins and an inability for Capstone to gain market share. All of these factors will make it very difficult for Capstone to build a financially viable business.

Failure to Secure Additional Financing: Capstone may require additional financing in order to establish profitable operations. Such financing, if required, may not be forthcoming, and even if additional financing is available, it may not be available on terms favorable to Capstone. The failure to secure needed additional financing will have a very serious, if not fatal effect on the Company's ability to survive.

Failure to Attract and Retain Experienced Management: The success of Capstone is largely dependent upon the Company's ability to attract and retain qualified management professionals. It is doubtful that Capstone can be successful if it is unable to attract and retain qualified experienced management.

Capstone Stock May be Difficult to Resell Because The Company Has No Expectations to Pay Cash Dividends in the Near Future: The holders of Capstone common stock are entitled to receive dividends when, and if declared by the Board of Directors. The Company does not intend to pay cash dividends in the foreseeable future, but instead intends to retain any and all earnings to finance the growth of its business. To date, Capstone has not paid cash dividends on the common stock. This lack of an ongoing return on investment may make it difficult to sell Capstone common stock and if the stock is sold the seller may be forced to sell the stock at a loss.

Difficulty For Capstone Stockholders to Resell Their Stock Due to a Lack of Public Trading Market: There is presently no public trading market for Capstone common stock, and it is unlikely that an active public trading market can be established or sustained in the foreseeable future. Capstone intends to have its common stock quoted on the OTC Bulletin Board as soon as practicable, however, there can be no assurance that the Company's shares will quoted on the OTC Bulletin Board. Until there is an established trading market, holders of Capstone common stock may find it difficult to sell their stock or to obtain accurate quotations for the price of the common stock.

Rules Governing Low-Priced Stocks that May Effect Ability to Resell Shares: Capstone's Common Stock is currently considered a "penny stock" under federal securities laws since its market price is below $5.00 per share. Penny stock rules generally impose additional sales practice and disclosure requirements on broker-dealers who sell or recommend the Company's shares to certain investors.

Broker-dealers who sell penny stock to certain types of investors are required to comply with the SEC's regulations concerning the transfer of penny stock. If an exemption is not available, these regulations require broker-dealers to: make a suitability determination prior to selling penny stock to the purchaser; receive the purchaser's written consent to the transaction; and, provide certain written disclosures to the purchaser. These rules may affect the ability of broker-dealers to make a market in or trade Capstone's shares. In turn, this may make it very difficult for investors to resell those shares in the public market.

Capstone's Auditor has Expressed Doubts as to Capstone's Ability to Continue as a Going Concern: In the opinion of Capstone's auditor, since Capstone has not generated revenue from operations, it raises substantial doubt about Capstone's ability to continue as a going concern.

Capstone intends to raise $50,000 from the sale of 500,000 shares of common stock at $0.10 per share. This offering has a maximum amount of $50,000, and no minimum. The Company has no intentions to return any stock sales proceeds to investors if the maximum amount is not raised.

Readers will note that the company has already raised a total of $20,500 from the sale of stock. A total of $3,000 has been raised from the sale of stock to Officers and Directors - this stock is restricted and is not being registered in this offering. In addition, the company has raised $17,500 from the sale of stock to other parties - as detailed in Item 7 Selling Security Holders. The offering expenses associated with this offering are estimated to be $20,000. None of the offering expenses are to be paid out of the proceeds of this offering.

The following table indicates how the Company intends to use these proceeds of this offering. Items are not listed in a priority order.

The above expenditure items are defined as follows:

There is no assurance that Capstone will raise the full $50,000 as anticipated. The following is the break down of how Management intends to use the proceeds if only 20 percent, 50 percent, or 75 percent of the total offering amount is raised:

Selling Shareholders will not be effected if Capstones is unable to raise any amount of money through this issuance, because Capstone does not intend to return stock sales proceeds to investors under any circumstances. However, if Capstone is unable to raise sufficient additional funds from the sale of stock, the Selling Shareholders may find that there is no market developed on the OTC Bulletin Board to allow those Selling Shareholders to sell their shares. The money Capstone has raised thus far from selling stock to its present shareholders will be sufficient to pay all expenses of this offering, including the offering by those shareholders. The Company estimates that amount to be $20,000. The total amount of the money raised from the sale of the 500,000 shares being offered by Capstone will be used for purposes of furthering the Company's plan of operations, as detailed in Item 17 of this filing.

None of the proceeds identified as consulting or professional fees will be paid to Officers, Directors or other persons who are not arms length from the Company. Capstone anticipates that it will be utilizing the services of two consultants, one being an insurance and annuity professional, and one being an experienced death services professional. Capstone also expects to utilize the services of a professional sales trainer. At the time of this filing Capstone has contracted the services of an insurance and annuity consultant. See Item 13 of this filing.

There is no established market for the Registrant's stock. The offering price for shares sold pursuant to this offering is set at $.10, which is the price paid by the existing shareholders. The additional factors that were included in determining the sales price are the lack of liquidity (since there is no present market for Capstone's stock) and the high level of risk considering the lack of operating history of Capstone. The Selling Shareholders, however, will sell their stock at a price determined by the market, and may not be the same price as is sold by Capstone. The Selling Shareholders will individually determine the price at which they will sell their shares, when and if they decide to sell.

Capstone is offering shares of its common stock for $.10 per share through this offering. Over the past five years, shares of its common stock have been purchased by its officers, directors and affiliated persons for $.01 per share. See Item 26, Recent Sales of Unregistred Securities, below.

The net tangible book value per share before this offering is .007563. The net tangible book value per share after this offering, assuming all shares are sold, including those being sold by selling shareholders, will be .025688.

The Selling Shareholders named in this prospectus are offering 1,750,000 of the 2,250,000 shares of common stock offered through this prospectus. The shares include the following:

1. 1,750,000 shares of the Capstone's common stock that the Selling Shareholders acquired from Capstone in an offering that was relied upon as being exempt from registration under Regulation D of the Securities Act of 1933, and completed on June 1, 2001.

The remaining selling shareholders may be deemed to be underwriters within the definition of Section 2(0a(11) of the Securities Act.

The following table provides as of June 1, 2001, information regarding the beneficial ownership of the common stock held by each of the selling shareholders, including:

1. number of shares owned by each prior to this offering;

2. position with issuer;

3. total number of shares that are to be offered for each;

4. total number of shares that will be owned by each upon completion of the offering;

5. percentage owned by each; and

6. identity of the beneficial holder of any entity that owns the shares.

Except as otherwise noted in this list, the named party beneficially owns and has sole voting and investment power over all shares or rights to these shares. The numbers in this table assume that none of the Selling Shareholders sells shares of common stock not being offered in this prospectus or purchases additional shares of common stock, and assumes that all shares offered are sold. The percentages are based on 2,050,000 shares of common stock outstanding on June 1, 2001. The 2,050,000 figure includes 300,000 common shares currently owned by Officers and Directors. These 300,000 shares are restricted shares and not being registered in this offering.

None of the selling shareholders or their beneficial owners:

(a) has had a material relationship with Capstone, other than as a shareholder at any time within the past three years; or

(b) has ever been an Officer or Director of Capstone International or any of its predecessors or affiliates.

There will be no underwriters used, no dealer's commissions, no finder's fees, and no passive market making. All the shares will be issued to business associates, friends, and family of current Capstone shareholders and principles of the Company. The Officers and Directors of the Company, Masseurs Koehn, Mills and Veremy, will not register as broker-dealers in connection with this offering. Masseurs Koehn, Mills and Veremy will not be deemed to be brokers pursuant to the safe harbor provisions of Rule 3a4-1 of the Securities and Exchange Act of 1934, since they are not subject to statutory disqualification, will not be compensated directly or indirectly from the sale of securities, are not an associated person of a broker or dealer, nor have they been so associated within the previous twelve months, primarily performs substantial duties as Officers and Directors that are not in connection with the sale of securities, and have not nor will not participate in the sale of securities more than once every twelve months.

The Selling Shareholders will be selling 1,750,000 of the 2,250,000 shares offered in this prospectus, and 1,750,000 of the 2,550,000 total shares that will be outstanding if all of the shares to be sold by Capstone are sold. The Selling Shareholders will be selling 77.8% of the stock being sold in this offering, and 68.6% of the total shares that will be outstanding, if all of the shares to be sold by Capstone are sold. The shares being sold by the Selling Shareholders will be sold individually by each shareholder, based on market prices and conditions, and will not necessarily be dependant on the price for which Capstone is offering the shares. If the shares sold by the Selling Shareholders are sold for a price that is less than the price for which Capstone is selling its stock, Capstone may not be able to sell its stock, and raise the necessary cash to complete its business development. In such event, the business may fail.

Capstone plans to offer its shares to the public, with no minimum amount to be sold, and will keep the offering open until its sells all of the shares registered, or November 30, 2001, which ever occurs first. The Selling Shareholders has no time or price limitation for the sale of their shares.

Capstone is not a party to any pending legal proceedings.

Brian Koehn, President, Member of the Board of Directors, age 52. Mr. Koehn graduated from the University of Alberta, located in Edmonton, Alberta in 1972 with a Bachelor of Arts Degree. In addition to his degree, Mr. Koehn also holds Professional Management Certificates in Market Planning, Executive Analysis, and Taxation.

Mr. Koehn has over 25 years experience managing and directing various manufacturing and service oriented companies. In September, 1972, Mr. Koehn began a private company, Master Brew Services Ltd., a service business that he owned and operated until it was sold in December 1979. In January 1980, Mr. Koehn, along with partners, acquired 100 percent of Astrographic Industries Ltd., a manufacturing firm. While holding a number of Executive positions, including Director of Sales and Marketing, the company's sales increased by 750 percent.

In April of 1988, Mr. Koehn acquired TAB Ventures Ltd. TAB was a magazine publishing company and Mr. Koehn held the position of Publisher. In August 1990 Mr. Koehn became Director of International Sales and Marketing with PSI Services Inc. PSI is a privately held company involved with helping small and medium-sized businesses develop international and specialty markets. While maintaining his position with PSI, Mr. Koehn has spent most of the past year working with a group of Vancouver area funeral homes developing market share for pre-paid funeral, insurance and annuity products. Mr. Koehn will continue to hold his position with PSI until such time as Capstone requires his full attention.

In working with Capstone, Mr. Koehn has accepted the responsibility for sales development and administrative support for sales brokers and agents. As President, he also assumes responsibility for the overall leadership and direction of the Company. Mr. Koehn currently spends about twenty-five percent (25%) of his time doing Capstone work. He will continue to make Capstone his first priority, and devote whatever time necessary to make the Company successful.

Darryl Mills, Secretary/Treasurer, Member of the Board of Directors, age 47. Mr. Mills graduated from the University of Saskatchewan, in Saskatoon, Saskatchewan with a Bachelor of Commerce Degree (1990) and from the University of Regina, in Regina Saskatchewan with a Graduate Diploma in Government Administration. (1993)

Most of Mr. Mills' career has been in public service. He spent nearly 20 years with the Province of Saskatchewan in a variety of increasingly responsible roles. He has been: an Assistant Director of Economic Development with the Department of Northern Saskatchewan from 1972 to 1982; an Auditor with the Saskatchewan Workers Compensation Board from 1982 to 1986; Executive Assistant to the Minister of Finance from October 1992 to April 1993, and Executive Director of the Saskatchewan Gaming Commission from May 1993 to December 1996.

From 1986 to 1990 Mr. Mills held the position of Secretary Treasurer of the Kamsack School Division, in Kamsack Saskatchewan. From 1990 to 1992 Mr. Mills attended the University of Saskatchewan full time.

In addition to his time spent with the Saskatchewan Government and the Kamsack School Division, Mr. Mills also worked with the Canadian Institute of Chartered Accounts as British Columbia Sales Manager for Professional Publications and Services from May 1997 to July 1999. He also held the position of Secretary and Director with Far East Ventures, Inc from February to August of 2000. Since leaving Far East Ventures in August of 2000 Mr. Mills has been doing private consulting work in the areas of governmental relations, organization design and business development.

In working with Capstone, Mr. Mills will be responsible for business development, as well as corporate and governmental relations. His primary function will be to secure an insurance and annuity supplier and work with that supplier to develop suitable products and services. This will include primary responsibility for developing training materials and customer service support. He will also have the ongoing responsibility to maintain good relations with the supplier and to handle any regulatory issues that may arise. Mr. Mills will provide whatever time is necessary to effectively carry out his duties. He is currently devoting fifty percent (50%) of his time on Capstone responsibilities; however, he expects that to grow to one hundred percent (100%) over the next several months.

Rodney Veremy, Member of the Board of Directors, age 25. In 1997, Mr. Veremy graduated from Grant McEwen Community College in Edmonton, Alberta with a Diploma in Business Administration.

In June 1997, after attending Business College, Mr. Veremy was hired by Future Transportation Systems Ltd. (FTSL), as Assistant General Manager. FTSL is a medium sized trucking firm. In 1999 Mr. Veremy was promoted to general manager. Mr. Veremy left his position with FTSL on August 15, 2000.

In the April of 2000, Mr. Veremy started his own trucking company, which he called Green Leaf Enterprises Ltd. Green Leaf employs 16 drivers. Mr. Veremy is the President and General Manager of Green Leaf Trucking and in that capacity is responsible for the entire operation of the company. In addition to doing private hauling, Green Leaf has 7 permanent contracts and 1 temporary contract.

Mr. Veremy's responsibilities with Capstone will be in the areas of financial management and accounting. He is currently devoting five percent (5%) of his time to Capstone responsibilities. He is prepared to give Capstone up to 25 percent of his time in the long term, and as much as 50 percent for during the critical first 6 months of operations.

The following is a table detailing the current shareholders of Capstone owning 5% or more of the common stock, and shares owned by Capstone's Directors and officers:

Capstone's Articles of Incorporation authorize the issuance of 100,000,000 shares of Common Stock of $.001 par value. Each record holder of Common Stock is entitled to one vote for each share held in all matters properly submitted to the stockholders for their vote. Cumulative voting for the election of directors is not permitted by the Articles of Incorporation.

Holders of outstanding shares of Common Stock are entitled to such dividends as may be declared from time to time by the Board of Directors out of legally available funds; and, in the event of liquidation, dissolution or winding up of the affairs of the Company, holders are entitled to receive, ratably, the net assets of the Company available to stockholders after distribution is made to the preferred stockholders, if any, who are given preferred rights upon liquidation. Holders of outstanding shares of Common Stock have no preemptive, conversion or redemptive rights. All of the issued and outstanding shares of Common Stock are, and all unissued shares when offered and sold will be, duly authorized, validly issued, fully paid, and nonassessable. To the extent that additional shares of Capstone's Common Stock are issued, the relative interest of then existing stockholders may be diluted.

Each shareholder has sole investment power and sole voting power over the shares owned by such shareholder.

No expert or counsel who was hired on a contingent basis will receive a direct or indirect interest in Capstone or was a promoter, underwriter, voting trustee, director, officer, or employee, of Capstone.

According to Section 5 of Capstone's Bylaws, the Company is obligated to indemnify its directors, officers, agents and employees to the fullest extent authorized under Delaware Law subject to certain specified limitations. As permitted by Delaware Statutes, the Company may indemnify its directors and officers against expenses and liabilities they incur to defend, settle, or satisfy any civil or criminal action brought against them on account of their being or having been Company directors or officers unless, in any such action, they are adjudged to have acted with gross negligence or willful misconduct. Insofar as indemnification for liabilities originates under the Securities Act of 1933 may be permitted to directors, officers or persons controlling the Company pursuant to the foregoing provisions, the Company has been informed that, in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in that Act and is, therefore, unenforceable.

There are no promoters being used in relation with this offering. Any persons who may, in the future, be considered a promoter will receive or expect to receive any assets, services or other consideration from Capstone. No assets will be or are expected to be acquired from any promoter on behalf of Capstone. In addition, see Certain Relationships and Related Transactions, Item 19, below.

Capstone International Corporation was incorporated on November 16, 2000, in the state of Delaware. The Company has never declared bankruptcy, it has never been in receivership, and it has never been involved in any legal action or proceedings. Since becoming incorporated, Capstone has not made any significant purchase or sale of assets, nor has it been involved in any mergers, acquisitions or consolidations. Capstone is not a blank check registrant as that term is defined in Rule 419(a)(2) of Regulation C of the Securities Act of 1933, since it has a specific business plan or purpose.

Capstone is creating a business as a reseller of insurance and annuity products. These products are specially designed and marketed to compete directly with what are known as pre-paid funerals. The products the Company intends to sell will provide its customers with the assurance that all their final needs are provided for before their death.

Capstone plans on offering final needs insurance and annuity products that are specially designed to compete with pre-paid funeral packages. By offering both insurance products and annuity products, the Company can supply a pre-arranged funeral expense alternative for virtually every consumer.

The insurance product is a life insurance policy that will pay out a predetermined sum to a beneficiary of the client's choice at the time of the policyholder's death. As with all life insurance policies, there are pre-determined premiums payable for a specified term with a pre-determined payout value. There are also maximum age requirements and health related qualifiers that must be met. At the time of the policyholder's death, the benefits are used to pay for funeral and other related expenses on behalf of the deceased policyholder.

The annuity type product that Capstone intends to sell is being made available for clients who do not want to purchase life insurance, or who are unable to qualify for life insurance due to health or age considerations. The annuity achieves virtually the same result as the insurance policy. The client purchases the annuity with a predetermined value. The cost of the annuity can be paid in one lump sum, or it can be financed with predetermined monthly payments for a prescribed term. At the time of the annuity holder's death, the beneficiary will use the money from the annuity to pay for the funeral arrangements and related expenses on behalf of the deceased annuity holder.

In the case of both the life insurance policy and the annuity, the client will have absolute discretion over how he or she wants the proceeds paid at the time of death. The client will specify a beneficiary who will receive the proceeds, and make disbursements as required. The beneficiary can be a person, the deceased's estate or a death services provider, such as a funeral home, crematorium or cemetery.

Two different types of businesses dominate the market for pre-paid and pre-arranged death services: funeral home and death care service providers - such as crematoriums, cemeteries and monument suppliers - and insurance companies and underwriters. The funeral home and death care service providers are allowed to sell both pre-paid funerals and the insurance/annuity type products. The insurance companies and underwriters sell only the insurance/annuity type products. Both of these groups operate throughout the market place and have a strong presence in every region.

As our society ages, the demand for pre-paid and pre-arranged funerals increases. People tend to be more concerned about their mortality as they grow older, and they often make financial plans and other arrangements for their own final needs. The final needs insurance and annuity products Capstone intends to provide are specifically designed to satisfy these concerns.

Competition in the pre-need death services marketplace comes from two major areas: funeral home and other service providers, and insurance and annuity underwriters. Generally speaking, the funeral home operators rely on walk-in trade and word of mouth advertising to generate sales. Some of the larger national operators also conduct direct mail marketing campaigns. Competition from insurance underwriters is mainly in the form of national television advertising, newspaper and magazine advertising, and direct mail marketing campaigns.

Capstone intends to avoid all these areas of promotion and to instead concentrate on building a strong network of independent brokers and agents. By offering our products through pre-existing agencies and firms Capstone will gain immediate access to base of clientele that direct mail and other mass marketing techniques may not reach. Capstone's agents and brokers will be able to present the Company's products directly to select pre-qualified customers as part of a comprehensive personal or family insurance portfolio.

By working with fully qualified experienced insurance professionals, Capstone will be able to offer its customers the best possible distribution and customer service network. All paperwork will be completed by fully trained professionals, who can answer any questions the customer may ask. Paperwork will then be sent directly to the underwriter for processing. The customer will receive the official acceptance and contract in the mail as soon as the underwriter has accepted it.

Capstone has never made any announcements concerning the introduction of new or innovative products or services, nor does the Company have any intentions to do so in the future.

All products and supplies that are required by Capstone for consumption or re-sale are readily available from numerous industry wholesalers. The final needs insurance and annuity industry has not been characterized by product shortages, restrictions or any other type of limiting factors, and there are no indications that such problems will occur in the foreseeable future.

The final needs insurance and annuity services business is not the type of business that is, or can be, dominated by one or a small number of customers. The types of products and services that Capstone intends to provide have always been considered to be very personal. Except for a very limited number of cases, the point of sale decision or actual purchase event takes place between the consumer or purchaser and the service provider.

There are no inherent factors or circumstances associated with this industry, or any of the products or services that Capstone plans to provide that would give cause for any patent, trademark or license infringements or violations. The Company has also not entered into any franchise agreements or other contracts that have given, or could give rise to obligations or concessions.

Capstone management has been in contact with government regulators in British Columbia, Alberta and Saskatchewan. In all cases the Company has been advised that it does not require government licensing as a re-seller of final needs insurance and annuity products. Only sales people and insurance underwriters are required to be licensed in the jurisdictions where we have made enquiries. We have also been advised that the insurance and financial service products being sold must also be approved for sale. This approval is granted to the insurance underwriter.

While there is no requirement for re-sellers such as Capstone to be licensed, as insurance agents, brokers or sellers at this time, the Company has the ability, through its consultant Mr. Santbir Minhas, to secure any type of licenses that may become necessary. Mr. Minhas is a fully licensed General Insurance Agent and Broker and as such has agreed to provide whatever services necessary or to undertake whatever role is necessary to fulfill both present and future regulatory requirements for the Company. That includes securing a General Agency license if necessary. Mr. Minhas has a agreement with Capstone that may be terminated with thirty (30) days notice by either party, and requires Mr. Minhas to assist Capstone in developing is agreements with underwriters, and pays Mr. Minhas a monthly amount for his services.

Other than the licensing requirements discussed above, there are no other types of government regulations existing or being contemplated that would adversely affect the Company's ability to operate. Labor Standards Laws, Workplace Occupational Health and Safety Regulations, and local government business licensing requirements are the only other government regulations that will affect Capstone.

Capstone has not undertaken any research and development to date, nor does it have any plans to undertake any research or development in the future.

There are no environmental laws that have been enacted, nor is Capstone aware of any such laws being contemplated for the future to address issues specific to the business of the issuer.

Capstone does not own or rent facilities of any kind. At present the Company is operating from its official address that is located within the offices of the Company's President. Capstone intends to continue to operate from this location until it has sufficient revenues from sales to support a rented facility. Capstone anticipates no need for additional space during the first year of operations, however, if growth occurs faster then expected the Company would make every effort to find facilities that offer long-term adaptability to growth.

Capstone has no intention to hire employees until the business has been successfully launched with sales revenues flowing into the Company. The Company's Officers and Directors intend to do whatever work is necessary to bring the Company to the point of earning revenues from the sale of final needs insurance and annuities. Human resource planning will be part of an ongoing process that will include constant evaluation of operations and revenue realization. The Company expects to have no more than two full time employees by the end of the first year of operations. Both of these employees will be hired very near the end of the first year.

Capstone will voluntarily make available to securities holders an annual report, including audited financials on Form 10-K or Form 10-KSB. Capstone is not currently a fully reporting company, but upon effectiveness of this registration statement, will be required to file reports with the SEC pursuant to the Exchange Act.

The public may read and copy any materials filed with the SEC at the SEC's Public Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549. The public may obtain information about the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at http://www.sec.gov.

The insurance, annuity and pre-paid sector of the final needs industry in Canada is dominated by two major groups of sellers: insurance and annuity underwriters, and funeral home operators. Insurance and annuity underwriters generally market their products directly to the public through nation-wide advertising campaigns and direct mail. Funeral home operators depend more on walk-in traffic and word of mouth referrals for new business, however they too have started to use direct mail and regional media advertising.

Capstone plans to market its insurance and annuity products differently from other sellers of the same products. Capstone's plan is to market its products through the existing network of general insurance and financial service brokers and agents. By using this pre-existing network, Capstone will gain instant access to hundreds of fully staffed and operational retail locations. This will lessen the financial pressure on the Company, as there will be no need to license and train employees, or to provide equipment, facilities and administrative support for a large workforce.

Because none of the Officers or Directors of the Company has a strong background in the insurance and annuity industry, the Company has contracted the services of an insurance industry professional. On June 30, 2001 Capstone entered into a contract with Mr. Santbir Minhas to provide technical expertise. Mr. Minhas will provide advise in matters pertaining to the selection of an underwriting firm, contracting with sales brokers and agents, and he will help develop training materials and operations manuals. The term of the contract is for one year. A copy of the contract is attached as an Exhibit.

During the past nine months Capstone management has met with numerous insurance underwriting firms in an effort to secure insurance and annuity products to sell. At present the Company is in the final negotiation stages with a well established American company.. The firm Capstone is dealing with has been in the business of providing final needs insurance and annuity products in the United States for over 25 years. The firm is very interested in gaining a presence in the Canadian market. The firm's products are currently not available in Canada

The underwriting firm has made applications to the appropriate Canadian authorities and we are now awaiting approval. Capstone expects to enter into a contract with the American firm as soon as approval has been granted by the British Columbia insurance licensing authorities. A number of approvals have already been granted to the underwriter by other Canadian jurisdictions. We have been told that approval is close and can be expected anytime. If we can gain approval and complete a supply contract by the end of September we intend to be confirming sales agency agreements early in October and beginning to sell products by the end of October.

Capstone has had ongoing discussions with a number of general insurance brokers and agents since early this year. The firms it met with have indicated a definite interest in offering the Capstone insurance and annuity products for sale. The Company continues to meet with potential sellers on a regular basis. At the time of this filing Capstone has not signed any contracts or agreements with sellers, as it would be imprudent to do so until the Company has a contract in place with an underwriter.

In addition to meeting with potential underwriters, sales brokers and agents, Capstone has also done a considerable amount of work developing training materials. A draft of the materials has been completed and is in the editing stage now. When editing is complete it will be reviewed by the Company's consultant and put into print. Capstone anticipates having the materials ready for distribution to sales brokers and agents by the end of September, 2001.

In discussions the Company has had with our prospective underwriter, it has been assured that promotional materials will be available very soon after signing an Underwriting Agreement. The underwriting firm has agreed in principle to supply all product related information. The Company anticipates no problem in having the promotional materials in-hand when it is ready to market its products.

As has been indicated previously in this filing, Capstone intends to operate with very limited administrative support. Sales will all be facilitated through independent broker/agents. The paperwork from each sale will be forwarded directly to the underwriter for processing - with a copy going to Capstone for audit purposes. Once accepted, the acceptance along with the official documentation will be sent directly to the client. Commissions will be sent from the underwriter directly to the seller. Capstone will be provided with monthly statements along with its over-ride check. This procedure has been discussed and agreed to by our prospective underwriter. All claims, cancellations or refunds will be handled directly by the underwriter.

Although Capstone has not yet completed negotiations on a re-sellers agreement nor settled on a final fee or commission structure with an underwriting firm, the Company believes it can generate gross revenues of between seventeen percent (17%) to twenty-three percent (23%) on the insurance policies and annuity contracts sold. The final amount will depend upon the age of the policy/contract holder, whether it is an insurance policy or an annuity and the payment terms. In discussions the Company has had with our prospective underwriter, broker/agents, and its consultant, it appears that it will be possible to negotiate broker/agent agreements with maximum commissions payable of approximately twelve percent (12%). That would leave net revenue to the Company of approximately five percent (5%) to ten percent (10%). The Company believes these figures to be accurate and realistic based on actual negotiations and discussions we have had with our prospective underwriter, prospective sales agents and brokers, and our insurance consultant.

How long Capstone will be able to satisfy its cash requirements, and whether the Company will require additional outside funding in the next twelve months depends on how quickly the Company can generate sales revenue and how much revenue can be generated.. At the present time the Company only has funds available to complete the expenses of this offering.

If Capstone is unable to raise additional funding through this offering or from other sources it will not be able to survive more than three or four months. In that event it will be critical that Capstone begins to realize sales revenues as quickly as possible. Capstone will require additional funding from either outside sources or from sales revenues to survive past the end of this calendar year.

Capstone is confident it can meet its financial obligations and pursue its plan of operations if it can either raise additional funding through this offering or achieve sales revenues within the next two months. In the event that the Company requires additional outside funding, it intends to raise the capital through a private placement.

The Company has no plans to undertake product research and development during the term covered by this registration. There are also no plans or expectations to purchase or sell any plant and or significant equipment in the first year of operations. Management also has no intention of hiring a significant number of employees during the first year of operations.

During the first year of operations, Capstone will concentrate its efforts exclusively on building its business in British Columbia. As the Company gains experience, and develops sufficient revenues from sales it will expand its business eastward across the country. At this time the Company has no plans to expand outside Canada

The following chart provides an overview of our budgeted expenditures by major area of activity, for the twelve (12) month period upon effectiveness of this Registration Statement.

Legal and Accounting Fees: This item refers to normal legal and accounting costs associated with maintaining a publicly traded company. The Company expects to be making these expenditures throughout the year.

Consulting and Professional Fees: These fees refer to the cost of consulting with insurance and financial services industry experts, as well as professional service fees for training sales agents and brokers. Capstone expects to be making these expenditures during the period from the second to twelfth month of operations.

Promotional Expenses: This item refers to the cost of providing product and program information necessary to conduct a recruitment campaign for insurance/annuity brokers and agents. Capstone expects to be incurring these costs during the period from the second to the eighth month of operations.

Training Expense: This item refers to the cost of product specific training for new sales agents and brokers. It will cover items such as room and equipment rental for training seminars, and copying and printing costs for training manuals and other materials. The Company expects to be incurring these costs during the period between the third and ninth month of operations.

Travel and Accommodations: This item refers to travel and accommodation expenses for meeting with potential underwriters, sales brokers and agents during the recruitment drive and contract negotiations. Capstone expects to be making these expenditures during the period between the first and seventh month of operations.

Communications Expenses: This item refers to telecommunication, postage, courier and all other related forms of communication costs. The Company expects to incur these costs throughout the period covered by this Registration Statement.

Website Development: This item refers to all costs associated with the Company's website development. Capstone expects to incur these costs during the period between the first and third month of operations.

Miscellaneous Administrative Costs: This item refers to any small miscellaneous costs that have not been otherwise listed - such as bank service charges or other sundry items. The Company expects to be incurring these costs throughout the year.

Capstone does not own any property, real or otherwise. For the first year, Capstone intends to operate from the President's office at his residence, at no cost to the Company.

The Company does not have any investments or interests in any real estate. Capstone does not invest in real estate mortgages, nor does it invest in Securities of, or interests in, persons primarily engaged in real estate activities.

Capstone has not entered into any agreements that require disclosure to our shareholders.

Currently there is no public trading market for Capstone stock, and Capstone has not applied to have its common stock listed.

Holders .

As of the filing of this Registration Statement, the Company had twenty (20) shareholder of record of its common stock.

Dividends .

As of the filing of this registration statement, registrant has not paid any dividends to its shareholder. There are no restrictions which would limit the ability of Capstone to pay dividends on common equity or that are likely to do so in the future. Capstone does not intend to pay dividends to its shareholders in the foreseeable future.

Capstone's Executive officer does not currently receive and is not accruing any compensation.

The following financial statements of Capstone are filed herewith:

Audited Financial Statements from date of inception, November 16, 2000, to March 31, 2001

Unaudited Financial Statements for the period ended June 30, 2001

David E. Coffey

3651 Lindell Road, Suite I, Las Vegas, NV 89103

_________________________________________

Certified Public Accountant

David E. Coffey, C. P. A.

Las Vegas, Nevada

May 10, 2001

The accompanying notes are an integral part of these financial statements.

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The accompanying notes are an integral part of these financial statements.

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The accompanying notes are an integral part of these financial statements.

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The accompanying notes are an integral part of these financial statements.

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CAPSTONE INTERNATIONAL CORPORATION

(A DEVELOPMENT STAGE COMPANY)

NOTE D: GOING CONCERN

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CAPSTONE INTERNATIONAL CORPORATION

( A DEVELOPMENT STAGE COMPANY )

FINANCIAL STATEMENTS

JUNE 30, 2001 AND DECEMBER 31, 2000

TABLE OF CONTENTS

The accompanying notes are an integral part of these financial statements.

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The accompanying notes are an integral part of these financial statements.

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The accompanying notes are an integral part of these financial statements.

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The accompanying notes are an integral part of these financial statements.

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CAPSTONE INTERNATIONAL CORPORATION

( A DEVELOPMENT STAGE COMPANY )

NOTES TO THE FINANCIAL STATEMENTS

JUNE 30, 2001 AND DECEMBER 31, 2000

NOTE A

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The Company was incorporated on November 16, 2000 under the laws of the State of Delaware.The business purpose of the Company is to acquire funeral facilities and the selling of prepaid funeral programs.

The Company will adopt accounting policies and procedures based upon the nature of future transactions.

EARNINGS (LOSS) PER SHARE

Basic EPS is determined using net income divided by the weighted average shares outstanding during the period.Diluted EPS is computed by dividing net income by the weighted average shares outstanding, assuming all dilutive potential common shares were issued. Since the Company has no common shares that are potentially issuable, such as stock options, convertible securities, or warrants, basic and diluted EPS are the same.

NOTE C

COMMON STOCK ISSUES

On November 20, 2000 the Company sold 100,000 shares of it's common stock at $.01 per share for $1,000. On May 9, 2001 the Company sold 400,000 shares of its common stock at $.01 per share for $4,000.  On May 14, 2001 the Company sold 700,000 shares of its common stock at $.01 per share for $7,000.   On June 14, 2001 the Company sold 850,000 shares of its common stock at $.01 per share for $8,500.  All of the proceeds were to be used for working capital.

NOTE D

GOING CONCERN

The Company's financial statements are prepared using generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business.  However, the Company has not generated any revenues from its planned principal operations through June 30, 2001.  Without realization of additional capital, it would be unlikely for the Company to continue as a going concern.

The Company intends to sell an additional 500,000 shares of its common stock for $50,000 in order to provide additional capital to begin its principal operations.

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None, not applicable.

Delaware law provides liberal indemnification of officers and directors of Delaware corporations.

Article Five of the By-Laws of Capstone provides for the mandatory indemnification and reimbursement of any director or officer against expenses actually and necessarily incurred by them in connection with the defense of an action, suit or proceeding in which they, or any of them, are made parties, or a party, by reason of being or having been director(s) or officer(s) of the corporation, except in relation to matters as to which any such director or officer shall be adjudged to be liable for negligence or misconduct in the performance of duty. Such indemnification shall not be deemed exclusive of any other rights to which those indemnified may be entitled, under By-Law, agreement, vote of shareholders or otherwise.

Capstone has or will expend fees in relation to this registration statement as detailed below:

Capstone has sold securities within the past three years without registering the securities under the Securities Act of 1933 on two separate occasions.

Mr. Brian Koehn purchased 100,000 shares of common stock from Capstone on November 20, 2000 for $1,000. The shares were issued as a private placement. No underwriters were used, and no commissions or other renumeration was paid except to Capstone. The securities were sold in reliance on Regulation D, Section 504 of the Securities Act of 1933. Mr. Koehn continues to be subject to Rule 144 of the Securities Act of 1933.

On June 1, 2001, a private placement offering was completed, under which 1,950,000 shares of common stock were sold at a price of $.01 per share to 20 shareholders for a total of $19,500. No underwriters were used, and no commissions or other remuneration was paid except to Capstone. The securities were sold in reliance on Regulation D, Section 504 of the Securities Act of 1933. All shareholders continue to be subject to Rule 144 of the Securities Act of 1933. The beginning date of the private placement offering was May 10, 2001. Capstone qualified for an exemption from registration under Rule 504 since it is not subject to the reporting requirements of Section 13 or 15(d) of the Securities Act of 1933, is not an investment company, it had a specific business plan at the time it sold the securities, it was not a blank check company, as that term is defined in Rule 419(a)(2) of Regulation C or Rule 504 (a)(3) of Regulation D of the Securities Act of 1933, and the aggregate offering price was less that $1,000,000,

Capstone hereby undertakes the following:

(1) For determining liability under the Securities Act, to treat the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the Registrant under Rule 424(b)(1) or (4) or 497(h) under the Securities Act as part of this registration statement as of the time the Commission declared it effective.

(2) For determining any liability under the Securities Act, to treat each post-effective amendment that contains a form of prospectus as a new registration statement for the securities offered in the registration statement, and that offering of the securities at that time as the initial bona fide offering of those securities.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to the provisions described under Item 24 above, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

In accordance with the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form SB-2 and authorized this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Surrey, Province of British Columbia, Canada, on September 14, 2001.

CAPSTONE INTERNATIONAL CORPORATION

/s/ Brian Koehn                                                        

Brian Koehn

President, Director

In accordance with the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates stated.

/s/ Darryl Mills                                                         

Darryl Mills

Secretary/Treasurer, Director

/s/ Rod Veremy