# EDGAR Filing Document

**Accession Number:** 0000887151
**File Stem:** 0001213900-25-096315
**Filing Date:** 2025-10
**Character Count:** 75126
**Document Hash:** f2ca8a636c31c7952453e1460463abea
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001213900-25-096315.hdr.sgml**: 20251006

**ACCESSION NUMBER**: 0001213900-25-096315

**CONFORMED SUBMISSION TYPE**: 8-K

**PUBLIC DOCUMENT COUNT**: 16

**CONFORMED PERIOD OF REPORT**: 20250930

**ITEM INFORMATION**: Entry into a Material Definitive Agreement

**ITEM INFORMATION**: Unregistered Sales of Equity Securities

**ITEM INFORMATION**: Material Modifications to Rights of Security Holders

**ITEM INFORMATION**: Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year

**ITEM INFORMATION**: Other Events

**ITEM INFORMATION**: Financial Statements and Exhibits

**FILED AS OF DATE**: 20251006

**DATE AS OF CHANGE**: 20251006

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Capstone Holding Corp.
- **CENTRAL INDEX KEY:** 0000887151
- **STANDARD INDUSTRIAL CLASSIFICATION:** WHOLESALE-LUMBER & OTHER CONSTRUCTION MATERIALS [5030]
- **ORGANIZATION NAME:** 07 Trade & Services
- **EIN:** 860585310
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 8-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-33560
- **FILM NUMBER:** 251375880

**BUSINESS ADDRESS:**
- **STREET 1:** 5141 W. 122ND STREET
- **CITY:** ALSIP
- **STATE:** IL
- **ZIP:** 60803
- **BUSINESS PHONE:** 7083710660

**MAIL ADDRESS:**
- **STREET 1:** 5141 W. 122ND STREET
- **CITY:** ALSIP
- **STATE:** IL
- **ZIP:** 60803

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** Capstone Therapeutics Corp.
- **DATE OF NAME CHANGE:** 20100521

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** ORTHOLOGIC CORP
- **DATE OF NAME CHANGE:** 19940211

?xml version='1.0' encoding='ASCII'?

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**WASHINGTON, D.C. 20549**

**FORM 8-K**

**CURRENT REPORT**

**PURSUANT TO SECTION 13 OR 15(d) OF**

**THE SECURITIES EXCHANGE ACT OF 1934**

**Date of Report (Date of earliest event reported): September 30, 2025**

**CAPSTONE HOLDING CORP.**

(Exact name of registrant as specified in its charter)

---

| | | |
|:---|:---|:---|
| **Delaware** | **001-33560** | **86-0585310** |
| (State or other jurisdiction<br> of incorporation) | (Commission File Number) | (I.R.S. Employer<br> Identification No.) |

---

**5141 W. 122nd Street**

**Alsip, IL 60803**

(Address of principal executive offices)

Registrant's telephone number, including area code: **(708) 371-0660**

**N/A**

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

---

| | | |
|:---|:---|:---|
| **Title of each class** | **Trading Symbol(s)** | **Name of each exchange on which registered** |
| Common Stock, par value $0.0005 per share | CAPS | The Nasdaq Stock Market LLC |

---

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

**Item 1.01. Entry into a Material Definitive Agreement.**

*Exchange Agreement and Certificate of Designation*

As previously disclosed, the Chief Executive Officer of Capstone Holding Corp. (the "Company"), Matthew Lipman and the Chairman of the Board of Directors of the Company (the "Board"), Michael Toporek, control Brookstone Partners ("Brookstone"), a private equity group with 25 years of deep expertise in building products investments.

A number of Brookstone entities controlled by Messrs. Lipman and Toporek control over 50% of the Company's voting stock. In addition, as of September 30, 2025, one Brookstone entity, BP Peptides, LLC ("BP Peptides"), held a note from the Company in the combined principal and interest amount of $847,919.95. As of September 30, 2025, another Brookstone entity, Brookstone Partners Acquisition XXI Corporation ("Brookstone Acquisition"), held a note from the Company in the combined principal and interest amount of $1,089,222.22. Both notes had a maturity date of June 30, 2026.

On September 30, 2025, following approval by the Audit Committee of the Board, the Company and each of BP Peptides and Brookstone Acquisition (collectively, the "Brookstone Lenders"), entered into an Exchange Agreement (the "Exchange Agreement") whereby the Brookstone Lenders agreed to exchange their notes for shares of the Company's newly created Series Z 8% Non-Convertible Preferred Stock (the "Series Z Preferred"). Based on the Nasdaq Official Closing Price of the Company's common stock, $0.0005 par value per share (the "Common Stock"), of $1.32 on the day prior to the parties entering into the Exchange Agreement, BP Peptides will receive 642,276 Series Z Preferred shares and Brookstone Acquisition will receive 825,067 Series Z Preferred shares.

The shares of Series Z Preferred Stock will be issued pursuant to the exemption from registration under Section 4(a)(2) of the Securities Act of 1933, as amended and applicable state securities laws.

On September 30, 2025, following Board approval, the Company filed the Certificate of Designation of Preferences, Rights and Limitations of Series Z 8% Non-Convertible Preferred Stock (the "Certificate of Designation") with the Secretary of State of the State of Delaware with up to three million five hundred thousand (3,500,000) Series Z Preferred shares being authorized for issuance.

Pursuant to the Certificate of Designation, the Series Z Preferred shares are not convertible into shares of Common Stock, has voting rights of one vote per shares and will vote together as a single class with the Common Stock shareholders. Each share of Series Z Preferred will accrue cumulative dividends at a rate of eight percent (8%) per annum based on the $1.32 stated value per share of the Series Z Preferred, accruing daily and payable, at the sole option of the Board, either in cash or payment-in-kind via the issuance of further shares of Series Z Preferred. The Series Z Preferred shares are redeemable upon the earlier of the seven year anniversary of the issuance of the shares or the occurrence of a fundamental transaction (as defined in the Certificate of Designation).

The foregoing description of the Exchange Agreement and the Certificate of Designation does not purport to be a complete description and is qualified in its entirety by reference to the full text of the of the Exchange Agreement and the Certificate of Designation, copies of which are filed herewith as Exhibits 10.1 and 3.1, respectively, and incorporated by reference herein.

*Conversion Price Voluntary Adjustment Notice* 

As previously disclosed, on July 29, 2025, the Company entered into a securities purchase agreement (the "Purchase Agreement") with an institutional investor (the "Buyer"), pursuant to which the Company authorized the issuance of senior secured convertible notes to the Buyer, in the aggregate original principal amount of up to $10,909,885, which are being issued with a 8.34% original issue discount (each, a "Convertible Note"). The first Convertible Note was issued in the original principal amount of approximately $3,272,966 (the "Note"). The Convertible Notes are convertible into shares of Common Stock in certain circumstances in accordance with the terms of the Convertible Notes.

Pursuant to an effective registration statement on Form S-1 (File No. 333-289222), the Company registered 4,081,672 shares of Common Stock issuable upon conversion of the Convertible Notes.

As of October 3<sup>rd</sup>, the conversion price share was $1.00 with regard to $1,363,736 of the principal of the Convertible Note and $1.72 with regard to the balance of the principal of the Convertible Note (collectively, the "Conversion Price").

On October 5, 2025, pursuant to Section 7(h) of the Note, the Company and the Buyer agreed, pursuant to a Conversion Price Voluntary Adjustment Notice (the "Adjustment Notice") signed by both parties, to reduce the Conversion Price of the Convertible Note with regard to the entire principal of the Convertible Note to $1.00 starting on October 6, 2025 through the maturity date of the Convertible Note.

Pursuant to the Convertible Note, if the Company sells any shares of Common Stock pursuant to a Permitted ATM (as defined in the Convertible Note) or to Tumim Stone Capital, LLC pursuant to the terms of that certain Common Stock Purchase Agreement dated May 14, 2025, by and between the Company and Tumim Stone Capital, LLC, as such agreement may be modified, amended or supplemented from time-to-time (the "Permitted Equity Line") the Buyer hall have the right to require the Company to use up to fifty percent (50%) of the gross proceeds raised from such sales (less certain fees) to redeem the amounts owed pursuant to the Convertible Note. As of October 3<sup>rd</sup>, the redemption price was the greater of (a) 100% of the conversion amount being redeemed and (b) the product of (x) the Conversion Rate (as defined in the Convertible Note) with respect to the conversion amount being redeemed multiplied by (y) the greatest closing sale price of the Common Stock during a certain trading period.

Pursuant to the Adjustment Notice, the Company and the Buyer agreed that the Company is not obligated to redeem the Convertible Note upon sales pursuant to the Permitted ATM or Permitted Equity Line until April 6, 2026. In addition, the redemption price will be 100% of the conversion amount being redeemed.

The foregoing description of the Adjustment Notice does not purport to be a complete description and is qualified in its entirety by reference to the full text of the of the Adjustment Notice, a copy of which is filed herewith as Exhibit 10.2 and incorporated by reference herein.

**Item 3.02 Unregistered Sale of Equity Securities.** 

The applicable disclosures set forth in Item 1.01 above regarding the issuance of the Series Z Preferred shares is hereby incorporated by reference into this Item 3.02.

**Item 3.03 Material Modification to Rights of Security Holders.**

The applicable disclosures set forth in Item 1.01 above regarding the Series Z Preferred shares and the Certificate of Designation are incorporated by reference into this Item 3.03.

**Item 5.03. Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.**

The applicable disclosures set forth in Item 1.01 above regarding the Certificate of Designation are incorporated by reference into this Item 5.03.

**Item 8.01. Other Events.**

On October 1, 2025, the Company issued a press release announcing the Company's entrance into the Exchange Agreement. A copy of the press release is filed herewith as Exhibit 99.1.

**Item 9.01. Financial Statements and Exhibits.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) *Exhibits.*

---

| | |
|:---|:---|
| **Exhibit No.** | **Description** |
| 3.1 | [Certificate of Designation of Preferences, Rights and Limitations of Series Z 8% Non-Convertible Preferred Stock](ea025969101ex3-1_capstone.htm) |
| 10.1 | [Exchange Agreement by and among Capstone Holding Corp., BP Peptides, LLC, and Brookstone Partners Acquisition XXI Corporation, dated September 30, 2025](ea025969101ex10-1_capstone.htm) |
| 10.2 | [Conversion Price Voluntary Adjustment Notice, dated October 5, 2025](ea025969101ex10-2_capstone.htm) |
| 99.1 | [Press Release, dated October 1, 2025](ea025969101ex99-1_capstone.htm) |
| 104 | Cover Page Interactive Data File (embedded with the Inline XBRL document) |

---

**SIGNATURES**

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

---

| | | |
|:---|:---|:---|
| Date: October 6, 2025 | **Capstone Holding Corp.** | **Capstone Holding Corp.** |
|  | By: | */s/ Matthew E. Lipman* |
|  | Name: | Matthew E. Lipman |
|  | Title: | Chief Executive Officer |

---

## Exhibit 3.1

**Exhibit 3.1**

**CAPSTONE HOLDING CORP.** 

**CERTIFICATE OF DESIGNATION OF PREFERENCES,**

<br> **RIGHTS AND LIMITATIONS**

**OF**

**SERIES Z 8% NON-CONVERTIBLE PREFERRED STOCK**

PURSUANT TO SECTION 151 OF DELAWARE GENERAL CORPORATION LAW

The undersigned, Edward Schultz, does hereby certify that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. He
 is the Chief Financial Officer of Capstone Holding Corp., a Delaware corporation (the " <u>Corporation</u> ").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. The
 Corporation is authorized to issue 25,000,000 shares of preferred stock, of which: (i) the
 Corporation has designated 2,000,000 shares of Series B Preferred Stock, no par value (the
 " <u>Series B Preferred Stock</u> "), of which 985,063 are issued and outstanding.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. The
 following resolutions were duly adopted by the board of directors of the Corporation (the
 " <u>Board of Directors</u> "):

WHEREAS, the restated certificate of incorporation of the Corporation provides for a class of its authorized stock known as preferred stock, consisting of 25,000,000 shares, issuable from time to time in one or more series;

WHEREAS, the Board of Directors is authorized to fix the dividend rights, dividend rate, voting rights, conversion rights, rights and terms of redemption and liquidation preferences of any wholly unissued series of preferred stock and the number of shares constituting any series and the designation thereof, of any of them; and

WHEREAS, it is the desire of the Board of Directors, pursuant to its authority as aforesaid, to fix the rights, preferences, restrictions and other matters relating to a series of the preferred stock, designated as Series Z Preferred Stock, which shall consist of, except as otherwise set forth in the Exchange Agreement (as defined herein), up to three million five hundred thousand (3,500,000) shares of the preferred stock which the Corporation has the authority to issue, as follows:

NOW, THEREFORE, BE IT RESOLVED, that the Board of Directors does hereby provide for the issuance of a series of preferred stock for cash or exchange of other securities, rights or property and does hereby fix and determine the rights, preferences, restrictions and other matters relating to such series of preferred stock as follows:

**TERMS OF PREFERRED STOCK**

<u>Section 1</u>. <u>Definitions</u>. For the purposes hereof, the following terms shall have the following meanings:

"<u>Affiliate</u>" means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a Person, as such terms are used in and construed under Rule 405 of the Securities Act.

"<u>Business Day</u>" means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or any day on which banking institutions in the State of New York are authorized or required by law or other governmental action to close.

"<u>Closing Date</u>" means the Trading Day on which all of the Transaction Documents have been executed and delivered by the applicable parties thereto and all conditions precedent to (i) each Holder's obligations to provide the Exchange Deliverables and (ii) the Corporation's obligations to deliver the Series Z Preferred Stock have been satisfied or waived.

"<u>Closing</u>" means the closing of the exchange of the Securities pursuant to the Exchange Agreement.

"<u>Commission</u>" means the United States Securities and Exchange Commission.

"<u>Common Stock Equivalents</u>" means any securities of the Corporation or the Subsidiaries which would entitle the holder thereof to acquire at any time Common Stock, including, without limitation, any debt, preferred stock, rights, options, warrants or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.

"<u>Common Stock</u>" means the Corporation's common stock, par value $.0005 per share, and stock of any other class of securities into which such securities may hereafter be reclassified or changed.

"<u>Exchange Act</u>" means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

"<u>Exchange Agreement</u>" means that certain Exchange Agreement among the Corporation and the Note Holders, as amended, modified or supplemented from time to time in accordance with its terms.

"<u>Exchange Deliverables</u>" shall mean, as to each Holder, all Securities to be delivered to the Corporation for cancellation pursuant to the Exchange Agreement, in exchange for the Preferred Stock issued pursuant to the Exchange Agreement as specified below such Holder's name on the signature page of the Exchange Agreement and next to the heading "Exchange Deliverables."

"<u>Fundamental Transaction</u>" shall have the meaning set forth in Section 7(d).

"<u>Holder</u>" shall have the meaning given such term in Section 2.

"<u>Liquidation</u>" shall have the meaning set forth in Section 5.

"<u>New York Courts</u>" shall have the meaning set forth in Section 9(d).

"<u>Original Issue Date</u>" means the date of the first issuance of any shares of the Series Z Preferred Stock regardless of the number of transfers of any particular shares of Series Z Preferred Stock and regardless of the number of certificates which may be issued to evidence such Series Z Preferred Stock.

"<u>Person</u>" means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.

"<u>Preferred Stock</u>" means collectively, the Series B Preferred Stock, and Series Z Preferred Stock.

"<u>Rule 144</u>" means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.

"<u>Rule 424</u>" means Rule 424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect as such Rule.

"<u>Securities Act</u>" means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

"<u>Securities</u>" means the Preferred Series Z Stock, the Preferred Stock, and the Common Stock.

"<u>Series Z Preferred Stock</u>" means, collectively, the shares of Series Z 8% Non-Convertible Preferred Stock no par value of the Corporation issued pursuant to the Exchange Agreement.

"<u>Stated Value</u>" shall have the meaning set forth in Section 2, as the same may be increased pursuant to Section 3.

"<u>Subsidiary</u>" means any subsidiary of the Corporation and shall, where applicable, also include any direct or indirect subsidiary of the Corporation formed or acquired after the date of the Exchange Agreement.

"<u>Successor Entity</u>" shall have the meaning set forth in Section 7(d).

"<u>Trading Day</u>" means a day on which the principal Trading Market is open for business.

"<u>Trading Market</u>" means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange, the OTC Pink, OTCQB or the OTCQX (or any successors to any of the foregoing).

"<u>Transfer Agent</u>" means Computershare Trust Company, N.A., and any successor transfer agent of the Corporation.

<u>Section 2</u>. <u>Designation, Amount and Par Value</u>. The series of preferred stock shall be designated as the Corporation's Series Z 8% Non-Convertible Preferred Stock, the number of shares so designated shall be three million five hundred thousand (3,500,000) shares of Series Z Preferred Stock, (which shall not be subject to increase without the prior written consent of all of the holders of the Series Z Preferred Stock (each, a "<u>Holder</u>" and collectively, the "<u>Holders</u>")). Each share of Series Z Preferred Stock shall have no par value per share and a stated value equal to $1.32 (the "<u>Stated Value</u>").

<u>Section 3</u>. <u>Dividends</u>. Each share of Series Z Preferred Stock shall accrue cumulative dividends at a rate of eight percent (8%) per annum of the Stated Value, accruing daily from the Original Issue Date and payable, at the sole option of the Board of Directors, either in cash or payment-in-kind via the issuance of shares of Series Z Preferred Stock either (a) quarterly in arrears on each March 31, June 30, September 30 and December 31 (or, if such date is not a Business Day, the next Business Day without accrual of additional dividends for such deferral), or (b) annually in arrears on December 31 of each year, in each case at the election of the Chief Financial Officer (or such other officer as the Board of Directors designates), if, as and when declared by the Board of Directors (or a duly authorized committee thereof) and to the extent permitted by law out of funds legally available therefor (each, a "<u>Dividend Payment Date</u>"). Accrued but unpaid dividends shall be cumulative and compound quarterly to the extent not paid on a Dividend Payment Date. Dividends shall be computed on the basis of a 360-day year of twelve 30-day months.

<u>Section 4</u>. <u>Voting Rights</u>. The Holder shall have one vote for each share of Series Z Preferred Stock then held, with respect to any matter upon which the holders of Common Stock are entitled to vote, except as otherwise required by applicable law. Except as otherwise expressly provided herein or as required by law, the Holders and the holders of Common Stock shall vote together as a single class and not as separate classes. In addition, for so long as any shares of Series Z Preferred Stock remain outstanding, the Corporation shall not, without the affirmative vote of the Holders of a majority of the then-outstanding shares of Series Z Preferred Stock: (a) alter or change adversely the powers, preferences or rights of the Series Z Preferred Stock or amend this Certificate of Designation in a manner that adversely affects the Holders, (b) amend its certificate of incorporation or other charter documents in any manner that adversely affects the rights of the Holders, (c) increase the number of authorized shares of Series Z Preferred Stock, or (d) enter into any agreement with respect to any of the foregoing.

<u>Section 5</u>. <u>Liquidation</u>. Upon any liquidation, dissolution or winding-up of the Corporation, whether voluntary or involuntary (a "<u>Liquidation</u>"), the Holders shall be entitled to receive out of the assets, whether capital or surplus, of the Corporation the same amount that a holder of Common Stock would receive. The Corporation shall mail written notice of any such Liquidation, not less than 45 days prior to the payment date stated therein, to each Holder.

<u>Section 6</u>. <u>Maturity</u>. The Series Z Preferred Stock shall be redeemed, in accordance with this Certificate of Designation, upon the earlier of (a) the seven-year anniversary of the initial issuance of shares of Series Z Preferred Stock by the Corporation and (b) the occurrence of a Fundamental Transaction.

<u>Section 7</u>. <u>Certain Adjustments</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) <u>Stock Dividends and Stock Splits</u>. If the Corporation, at any time while this Series Z Preferred Stock is outstanding: (i) subdivides outstanding shares of Common Stock into a larger number of shares such that the price of the Common Stock automatically adjusts in accordance with such subdivision or (ii) combines (including by way of a reverse stock split) outstanding shares of Common Stock into a smaller number of shares such that the price of the Common Stock automatically adjusts in accordance with such combination, then, in each case, the Stated Value and number of outstanding shares of Series Z Preferred Stock shall be proportionally adjusted in the same manner. Any adjustment made pursuant to this Section 7(a) shall become effective immediately after the effective date of such a subdivision or combination.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) <u>Subsequent Rights Offerings</u>. In addition to any adjustments pursuant to Section 7(a) above, if at any time the Corporation grants, issues or sells any Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any class of shares of Common Stock (the "<u>Purchase Rights</u>"), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had held the number of shares of Common Stock (based on the closing price of the Common Stock on the record date for the grant, issuance, or sale of the Purchase Rights) equal to the aggregate Stated Value of the shares of Series Z Preferred Stock held by the Holder immediately before the record date for the grant, issuance or sale of such Purchase Rights.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c) <u>Pro Rata Distributions</u>. During such time as this Series Z Preferred Stock is outstanding, if the Corporation declares or makes any dividend or other distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital or otherwise (including, without limitation, any distribution of cash, stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a "<u>Distribution</u>"), at any time after the issuance of this Series Z Preferred Stock, then, in each such case, the Holder shall be entitled to participate in such Distribution to the same extent that the Holder would have participated therein if the Holder had held the number of shares of Common Stock (based on the closing price of the Common Stock on the record date for the Distribution) equal to the aggregate Stated Value of the shares of Series Z Preferred Stock held by the Holder immediately before the record date for the Distribution.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d) <u>Fundamental Transaction</u>. If, at any time while this Series Z Preferred Stock is outstanding, (i) the Corporation, directly or indirectly, in one or more related transactions effects any merger or consolidation of the Corporation with or into another Person, (ii) the Corporation, directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one or a series of related transactions (excluding any sale or transfer in the ordinary course of business or as part of a financing or capital raise), (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether by the Corporation or another Person) is completed pursuant to which holders of Common Stock are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more of the outstanding Common Stock, (iv) the Corporation, directly or indirectly, in one or more related transactions effects any reclassification, reorganization or recapitalization of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property, or (v) the Corporation, directly or indirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with another Person whereby such other Person acquires more than 50% of the outstanding shares of Common Stock (not including any shares of Common Stock held by the other Person or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such stock or share purchase agreement or other business combination) (each a "<u>Fundamental Transaction</u>"), then upon the consummation and closing of such Fundamental Transaction, each share of Series Z Preferred Stock shall be redeemed in accordance with Section 8 hereof. To the extent necessary to effectuate the foregoing provisions, any successor to the Corporation or surviving entity in such Fundamental Transaction shall file a new certificate of designation with the same terms and conditions and issue to the Holders new preferred stock consistent with the foregoing provisions. The Corporation shall cause any successor entity in a Fundamental Transaction in which the Corporation is not the survivor (the "Successor Entity") to assume in writing all of the obligations of the Corporation under this Certificate of Designation and the other Transaction Documents (as defined in the Exchange Agreement) in accordance with the provisions of this Section 7(d) pursuant to written agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior to such Fundamental Transaction. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this Certificate of Designation and the other Transaction Documents referring to the "Corporation" shall refer instead to the Successor Entity), and may exercise every right and power of the Corporation and shall assume all of the obligations of the Corporation under this Certificate of Designation and the other Transaction Documents with the same effect as if such Successor Entity had been named as the Corporation herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e) <u>Calculations</u>. All calculations under this Section 7 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes of this Section 7, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the number of shares of Common Stock (excluding any treasury shares of the Corporation) issued and outstanding.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;f) <u>Notice to the Holders</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i. <u>Adjustment to Stated Value and Shares Outstanding</u>. Whenever the Stated Value and shares of Series Z Preferred Stock outstanding is adjusted pursuant to any provision of this Section 7, the Corporation shall promptly deliver to each Holder a notice setting forth the Stated Value and shares of Series Z Preferred Stock outstanding after such adjustment and setting forth a brief statement of the facts requiring such adjustment.

<u>Section 8</u>. <u>Redemption</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (a) <u>Redemption After Seven Years.</u> Unless earlier redeemed pursuant to Section 8(b) below, the Corporation shall, on the seven-year anniversary of the initial issuance of shares of Series Z Preferred Stock by the Corporation, redeem all outstanding shares of Series Z Preferred Stock at a redemption price equal to (i) the Stated Value per share, plus (ii) all accrued and unpaid dividends thereon, whether or not declared, to but excluding the redemption date (the "<u>Redemption Price</u>"). Without limiting the obligation of the Corporation to pay the Redemption Price, in connection with such redemption, the Corporation shall use its reasonable best efforts to declare and pay any accrued and unpaid dividends on the Series Z Preferred Stock outstanding as of such redemption date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (b) <u>Redemption upon Fundamental Transaction.</u> Upon the consummation of a Fundamental Transaction, then the Corporation shall, within five (5) Trading Days following the closing of such Fundamental Transaction, redeem all outstanding shares of Series Z Preferred Stock at the Redemption Price. Without limiting the obligation of the Corporation to pay the Redemption Price, in connection with such redemption, the Corporation shall use its reasonable best efforts to declare and pay any accrued and unpaid dividends on the Series Z Preferred Stock outstanding as of such redemption date.

<u>Section 9</u>. <u>Miscellaneous</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) <u>Notices</u>. Any and all notices or other communications or deliveries to be provided by the Holders hereunder including, shall be in writing and delivered personally, by facsimile, or sent by a nationally recognized overnight courier service, addressed to the Corporation, at the address set forth above Attention: Edward Schultz, e-mail address e.schultz@instoneco.com or such other e-mail address or address as the Corporation may specify for such purposes by notice to the Holders delivered in accordance with this Section 9. Any and all notices or other communications or deliveries to be provided by the Corporation hereunder shall be in writing and delivered personally, by facsimile, or sent by a nationally recognized overnight courier service addressed to each Holder at the facsimile number or address of such Holder appearing on the books of the Corporation, or if no such facsimile number or address appears on the books of the Corporation, at the principal place of business of such Holder, as set forth in the Exchange Agreement. Any notice or other communication or deliveries hereunder shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number set forth in this Section prior to 5:30 p.m. (New York City time) on any date, (ii) the next Trading Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number set forth in this Section on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (iii) the second Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service, or (iv) upon actual receipt by the party to whom such notice is required to be given.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) <u>Absolute Obligation</u>. Except as expressly provided herein, no provision of this Certificate of Designation shall alter or impair the obligation of the Corporation, which is absolute and unconditional, to pay liquidated damages and accrued dividends, as applicable, on the shares of Series Z Preferred Stock at the time, place, and rate, and in the coin or currency, herein prescribed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c) <u>Lost or Mutilated</u> Series Z <u>Preferred Stock Certificate</u>. If a Holder's Series Z Preferred Stock certificate shall be mutilated, lost, stolen or destroyed, the Corporation shall execute and deliver, in exchange and substitution for and upon cancellation of a mutilated certificate, or in lieu of or in substitution for a lost, stolen or destroyed certificate, a new certificate for the shares of Series Z Preferred Stock so mutilated, lost, stolen or destroyed, but only upon receipt of evidence of such loss, theft or destruction of such certificate, and of the ownership hereof reasonably satisfactory to the Corporation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d) <u>Governing Law</u>. All questions concerning the construction, validity, enforcement and interpretation of this Certificate of Designation shall be governed by and construed and enforced in accordance with the internal laws of the State of Delaware, without regard to the principles of conflict of laws thereof. All legal proceedings concerning the interpretation, enforcement and defense of the transactions contemplated herein (whether brought against a party hereto or its respective Affiliates, directors, officers, shareholders, employees or agents) shall be commenced in the state and federal courts sitting in the City of New York, Borough of Manhattan (the "<u>New York Courts</u>"). The Corporation and each Holder hereby irrevocably submits to the exclusive jurisdiction of the New York Courts for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of such New York Courts, or such New York Courts are improper or inconvenient venue for such proceeding. The Corporation and each Holder hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Certificate of Designation and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by applicable law. The Corporation and each Holder hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Certificate of Designation or the transactions contemplated hereby. If the Corporation or any Holder shall commence an action or proceeding to enforce any provisions of this Certificate of Designation, then the prevailing party in such action or proceeding shall be reimbursed by the other party for its attorneys' fees and other costs and expenses incurred in the investigation, preparation and prosecution of such action or proceeding.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e) <u>Waiver</u>. Any waiver by the Corporation or a Holder of a breach of any provision of this Certificate of Designation shall not operate as or be construed to be a waiver of any other breach of such provision or of any breach of any other provision of this Certificate of Designation or a waiver by any other Holders. The failure of the Corporation or a Holder to insist upon strict adherence to any term of this Certificate of Designation on one or more occasions shall not be considered a waiver or deprive that party (or any other Holder) of the right thereafter to insist upon strict adherence to that term or any other term of this Certificate of Designation on any other occasion. Any waiver by the Corporation or a Holder must be in writing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;f) <u>Severability</u>. If any provision of this Certificate of Designation is invalid, illegal or unenforceable, the balance of this Certificate of Designation shall remain in effect, and if any provision is inapplicable to any Person or circumstance, it shall nevertheless remain applicable to all other Persons and circumstances. If it shall be found that any interest or other amount deemed interest due hereunder violates the applicable law governing usury, the applicable rate of interest due hereunder shall automatically be lowered to equal the maximum rate of interest permitted under applicable law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;g) <u>Next Business Day</u>. Whenever any payment or other obligation hereunder shall be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;h) <u>Headings</u>. The headings contained herein are for convenience only, do not constitute a part of this Certificate of Designation and shall not be deemed to limit or affect any of the provisions hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i) <u>Status of Redeemed Preferred Stock</u>. Shares of Series Z Preferred Stock may only be issued pursuant to the Exchange Agreement or pursuant to dividends declared in accordance with this Certificate of Designation. If any shares of Series Z Preferred Stock shall be redeemed by the Corporation in connection with Section 8, such shares shall resume the status of authorized but unissued shares of preferred stock and shall no longer be designated as Series Z Preferred Stock.

\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*

RESOLVED, FURTHER, that the Chairman, the president or any vice-president, and the secretary or any assistant secretary, of the Corporation be and they hereby are authorized and directed to prepare and file this Certificate of Designation of Preferences, Rights and Limitations in accordance with the foregoing resolution and the provisions of Delaware law.

[*Signature Page to Follow*]

IN WITNESS WHEREOF, the undersigned have executed this Certificate of Designation this 30th day of September 2025.

---

| | |
|:---|:---|
| */s/ Edward Schultz* | */s/ Edward Schultz* |
| Name: | Edward Schultz |
| Title: | Chief Financial Officer |

---

## Exhibit 10.1

**Exhibit 10.1**

**EXCHANGE AGREEMENT**

This EXCHANGE AGREEMENT (this "**Agreement**"), dated as of September 30, 2025 (the "**Effective Date**"), is by and among Capstone Holding Corp. (f/k/a Capstone Therapeutics Corp.), a Delaware corporation (the "**Company**"), and each holder of the Existing Notes (as defined below) listed on the Schedule of Note Holders set forth on <u>Schedule A</u> hereto (each, a "**Note Holder**" and together, the "**Note Holders**"). The Company and the Note Holders are collectively referred to herein as the "**Parties,**" and each is a "**Party**."

**RECITALS**

WHEREAS, the Company has outstanding amended and restated notes, issued to the Note Holders on the date and in the aggregate principal amounts, including all accrued interest outstanding and unpaid on the Existing Notes due and owing to the Note Holders set forth on Schedule A opposite such Note Holder's name (the "**Existing Notes**");

WHEREAS, the Company seeks to exchange shares of Series Z 8% Non-Convertible Preferred Stock (the "**Series Z Preferred Stock**") of the Company in exchange for the Existing Notes; and

WHEREAS, each Note Holder desires to enter into this Agreement to effect the exchange of the Existing Notes for the Series Z Preferred Stock (the "**Exchange**") on the terms and conditions set forth in this Agreement.

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, agree as follows:

**ARTICLE I.**

<u>DEFINITIONS</u>

Section 1.01. <u>Definitions</u>. In addition to terms defined elsewhere in this Agreement, the following terms when used in this Agreement shall have the meanings indicated below:

"**Business Day**" shall mean any day other than a Saturday, Sunday or other day on which commercial banks in New York, New York are authorized or required by law to remain closed.

"**Law**" means the common law of any jurisdiction, or any provision of any foreign, federal, state or local law, statute, rule, regulation, order, permit, judgment, injunction, decree or other decision of any court or other tribunal or governmental authority legally binding on the relevant Person or its properties.

"**Lien**" shall mean any lien, claim, levy, charge, assessment, assignment, pledge, security interest, encumbrance, right of first refusal, preemptive right or other restriction.

"**Person**" shall mean an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.

**ARTICLE II.**

<u>EXCHANGE</u>

Section 2.01. <u>Exchange</u>. Subject to the terms and conditions hereof, each Note Holder hereby agrees to exchange the Existing Notes set forth opposite each such Note Holder's name on Schedule A for shares of Series Z Preferred Stock, in the amounts set forth opposite each such Note Holder's name on <u>Schedule A</u>.

Section 2.02. <u>Deliveries</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Promptly following the execution of this Agreement, the Note Holder shall deliver to the Company for cancellation (i) its original Existing Notes (or an affidavit of loss in respect of such Existing Notes reasonably acceptable to the Company) with all of each Note Holder's interest in any Existing Notes set forth opposite such Note Holder's name on <u>Schedule A</u> (including any interests in any Existing Notes not formally documented and (ii) any other documentation reasonably requested by the Company to effectuate the transactions contemplated by this Agreement (foregoing clauses (i) and (ii), the "**Note Holder Deliverables**").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Upon receipt by the Company of the Note Holder Deliverables, but in no event prior to such receipt by the Company, the Company shall promptly deliver to such Note Holder a fully executed stock certificate or book entry statement evidencing such Note Holder's shares of Series Z Preferred Stock.

Section 2.03. <u>Effect of Agreement</u>. For the avoidance of doubt, and notwithstanding whether the Note Holder shall have delivered its Note Holder Deliverables to the Company, from and after the Effective Date, (i) each Note Holders' right, title and interest under its Existing Notes shall be extinguished and each Note Holder shall no longer be deemed to be a creditor of the Company with respect to such Note Holder's Notes; (ii) all of the rights of each Note Holder under the Existing Notes shall be fully paid and satisfied, and the Notes shall be canceled and no longer in force or effect; (iii) each Note Holder shall be deemed for all corporate purposes to have become the holder of record of their respective shares of Series Z Preferred Stock; and (iv) the rights of each Note Holder under its Existing Notes shall be cancelled and no longer in force or effect, and replaced with the terms as set forth under this Agreement.

Section 2.04. <u>Release</u>. In consideration for the transactions contemplated herein and effective as of the date hereof, each Note Holder, on behalf of itself and its heirs, family members, executors, successors and assigns, hereby knowingly and voluntarily unconditionally and irrevocably waives, releases and forever discharges the Company and each of its respective past, present and future directors, managers, officers, employees, agents, predecessors, successors, assigns, equityholders, partners, insurers, affiliates and affiliated companies (collectively, the "**Releasees**") from any and all claims, demands, damages, lawsuits, obligations, promises, and causes of action of any kind whatsoever, whether known or unknown, asserted or unasserted, foreseen or unforeseen, discovered or undiscovered, fixed or contingent, at law or in equity, that the Note Holder may have had or has against the Releasees at any time from the beginning of time up to and including the date on hereof, including, without limitation, any liability arising from, relating to or in connection with, to the extent relating to, arising out of or in connection with (i) any act or omission by any of the Releasees prior to the date hereof, (ii) the amount, form or calculation of the Series Z Preferred Stock to be received by the Note Holder pursuant this Agreement, or (iii) the Note Holder's status as a Note Holder or its Existing Notes and right in or to any equity interests of the Company exercisable under the Existing Notes (the "**Released Liabilities**"), in each case whether such Released Liabilities are absolute or contingent, liquidated or unliquidated, vested or unvested, and neither the Note Holder nor any person, organization or other entity acting on the Note Holder's behalf, shall not seek to recover any amounts in connection with the Released Liabilities from the Company or any other Releasee. The Note Holder agrees that neither the Note Holder nor any person, organization, or other entity acting on the Note Holder's behalf will file a lawsuit or administrative proceeding seeking legal, equitable, administrative, or other relief asserting any claims or causes of action for any Released Liability. If any such claim or cause of action is asserted, the Note Holder will indemnify and hold harmless each of the Releasees from and against any and all losses, costs, damages, expenses, and attorneys' fees incurred as a result of any attempt to assert such claims or cause of action.

**ARTICLE III.**

<u>REPRESENTATIONS AND WARRANTIES OF THE NOTE HOLDER</u>

Each Note Holder hereby represents and warrants to the Company as follows:

Section 3.01. <u>Organization and Authority; Enforceability</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) (i) The Note Holder is duly organized, validly existing and in good standing under the laws of the state of its organization, and has full power, right and authority to enter into and perform its respective obligations under this Agreement and each Note Holder Deliverable to which it is a party; (ii) the execution, delivery and performance of this Agreement and the Note Holder Deliverable(s) have been duly and properly authorized by all requisite action in accordance with applicable law and with the organizational and governing documents of the Note Holder; and (iii) each person executing this Agreement and the Note Holder Deliverable(s) on behalf of the Note Holder, has the requisite power and authority to execute and deliver this Agreement and the Note Holder Deliverable(s), to consummate the transactions contemplated hereby and thereby and to cause the Note Holder to perform its obligations hereunder and thereunder. Each of this Agreement and any Note Holder Deliverable to which the Note Holder is a party has been duly executed and delivered by the Note Holder and constitutes a legal, valid and binding obligation of the Note Holder, enforceable against the Note Holder in accordance with its terms, except as such enforceability may be limited by any applicable bankruptcy, insolvency, moratorium or other laws relating to or affecting creditors' rights generally and the exercise of judicial discretion in accordance with general equitable principles.

Section 3.02. <u>Title</u>. As of the date hereof, the Note Holder is the record and beneficial owner of, and has good and valid title to, its Existing Notes, free and clear of all Liens, and has full and unrestricted power to dispose of and to exercise all rights thereunder, without the consent or approval of, or any other action on the part of, any other Person. Other than the transactions contemplated by this Agreement, there is no outstanding contract, agreement, vote, plan, proposal or other right of any Person to acquire all or any of the Note Holder's Existing Notes including any portion thereof. The Note Holder holds no other interest in any Existing Notes other than as set forth opposite such Note Holder's name on <u>Schedule A</u>.

Section 3.03. <u>No Conflicts</u>. The execution, delivery and performance of this Agreement and each Note Holder Deliverable to which the Note Holder is a party, and the consummation of the transactions contemplated hereby and thereby, will not (i) violate or result in a breach of any of the terms, conditions or provisions of the organizational documents of the Note Holder, if the Note Holder is an entity; (ii) violate or result in a breach of any Law applicable to the Note Holder or by which any of the Note Holder's property or assets, including, but not limited to its Existing Notes, may be bound; or (iii) contravene, result in a violation or breach of or default under (with or without the giving of notice or the lapse of time or both), permit any party to terminate, amend or accelerate the provisions of, or result in the imposition of any Lien (or any obligation to create any Lien) upon any property or assets of the Note Holder (including its Existing Notes) under any contract, agreement, indenture, letter of credit, mortgage, security agreement, pledge agreement, deed of trust, bond, note, guarantee, surety obligation, license, permit, power of attorney, instrument or other agreement to which the Note Holder is a party or by which any of the Note Holder's property or assets (including its Existing Notes) may be bound.

Section 3.04. <u>No Consents</u>. No authorization, consent or approval of or by, or any notification of or filing with, any Person is required by the Note Holder in connection with the execution, delivery and performance of this Agreement or any Note Holder Deliverable to which the Note Holder is a party, or the consummation by the Note Holder of the transactions contemplated hereby or thereby.

Section 3.05. <u>Securities Representations</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Note Holder is an "accredited investor" within the meaning of Rule 501(a) of Regulation D under the Securities Act of 1933, as amended (the "**Securities Act**"). The Note Holder has previously delivered to the Company an investor questionnaire pursuant to which it confirmed to the Company that it was an "accredited investor" and indicated the specific basis of such "accredited investor" status.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Note Holder acknowledges that it has had the opportunity to ask questions of, and receive answers from, the Company concerning, and is thus familiar with, the terms and conditions of the Exchange, and of the business, affairs and current prospects of the Company, and all such questions have been answered to the Note Holder's full satisfaction. The Note Holder has made such further investigation of the Company as it deemed appropriate to obtain additional information about the Company and to evaluate the merits and risks of an investment in the Series Z Preferred Stock.

**ARTICLE IV.**

<u>REPRESENTATIONS AND WARRANTIES OF COMPANY</u>

The Company hereby represents and warrants to the Note Holders as of the date hereof:

Section 4.01. <u>Organization, Good Standing and Qualification</u>. The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and has all requisite corporate power and authority to carry on its business as now conducted and as proposed to be conducted. The Company is duly qualified to transact business and is in good standing in each jurisdiction in which the failure so to qualify would have a material adverse effect on its business or properties.

Section 4.02. <u>Authorization and Enforceability</u>. The Company has the power and authority to issue the Series Z Preferred Stock contemplated hereunder. All corporate action on the part of the Company, its officers, directors and stockholders necessary for the authorization, execution and delivery of this Agreement and any other agreements necessary to consummate the transactions contemplated hereunder, the performance of all obligations of the Company hereunder and thereunder as of the Effective Date, and the authorization, issuance (or reservation for issuance), and delivery of the Series Z Preferred Stock being issued hereunder, when executed and delivered by the Company, will constitute valid and legally binding obligations of the Company, enforceable in accordance with their respective terms, subject to: (a) laws limiting the availability of specific performance, injunctive relief and other equitable remedies; and (b) bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect generally relating to or affecting creditors' rights generally.

Section 4.03. <u>Compliance with Other Instruments</u>. The Company is not in violation or default with respect to (i) any provisions of Company's Certificate of Incorporation or Bylaws (as amended, the "**Charter Documents**"), (ii) any material judgment, order or decree of any court or arbitrator to which the Company is a party or is subject, (iii) any material agreement or contract of the Company, or (iv) to the Company's knowledge, any provision of law applicable to the Company, except, in each case, for such violations or default as would not reasonably be expected to, individually or in the aggregate, result in a material adverse effect on the Company. The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated thereby will not result in any such violation or default, or be in conflict with or result in a violation or breach of, with or without the passage of time or the giving of notice or both, the Charter Documents of the Company, any judgment, order or decree of any court or arbitrator to which the Company is a party or is subject, any material agreement or contract of the Company, or, to the Company's knowledge, a violation of any statute, law, regulation or order, or an event which results in the creation of any lien, charge or encumbrance upon any asset of the Company.

**ARTICLE V.**

<u>MISCELLANEOUS</u>

Section 5.01. <u>Counterparts</u>. This Agreement may be executed in two or more identical counterparts, all of which shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to each other party; provided that a facsimile signature (including by portable document format) shall be considered due execution and shall be binding upon the signatory thereto with the same force and effect as if the signature were an original, not a facsimile signature.

Section 5.02. <u>Headings</u>. The headings of this Agreement are for convenience of reference and shall not form part of, or affect the interpretation of, this Agreement.

Section 5.03. <u>Severability</u>. If any provision of this Agreement shall be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect the validity or enforceability of the remainder of this Agreement in that jurisdiction or the validity or enforceability of any provision of this Agreement in any other jurisdiction.

Section 5.04. <u>Entire Agreement</u>. This Agreement, and the documents referred to herein constitute the entire agreement between the parties hereto pertaining to the subject matter hereof, and any and all other written or oral agreements existing between the parties hereto are expressly canceled.

Section 5.05. <u>Amendments</u>. Any term of this Agreement may be amended and the observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written signed consent of the Company and the Note Holders. Any waiver, modification or amendment of any provision of this Agreement requested by any party hereto must be in writing, and such writing must expressly state an intent to so waive, modify or amend such provision. Any amendment or waiver effected in accordance with this paragraph shall be binding upon the parties.

Section 5.06. <u>Successors and Assigns</u>. This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and permitted assigns. None of the Parties shall assign this Agreement or any rights or obligations hereunder without the prior written consent of each of the other Party.

Section 5.07. <u>Waiver</u>. No failure or delay on the part of any Party in the exercise of any power, right or privilege hereunder or any of the Transaction Documents shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privilege.

Section 5.08. <u>Governing Law</u>. This Agreement and all acts and transactions pursuant hereto and the rights and obligations of the parties hereto shall be governed, construed and interpreted in accordance with the laws of the State of New York, without giving effect to principles of conflicts of law.

Section 5.09. <u>Jury Trial</u>. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING (WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATED TO THIS AGREEMENT.

***[The remainder of the page is intentionally left blank]***

**IN WITNESS WHEREOF**, each party hereto has caused this Exchange Agreement to be duly executed as of the date first written above.

---

| | |
|:---|:---|
| **<u>THE COMPANY:</u>** | **<u>THE COMPANY:</u>** |
| **CAPSTONE HOLDING CORP.** | **CAPSTONE HOLDING CORP.** |
| By: | */s/ Edward Schultz* |
| Name: | Edward Schultz |
| Title: | Chief Financial Officer |

---

**IN WITNESS WHEREOF**, each party hereto has caused this Exchange Agreement to be duly executed as of the date first written above.

---

| | |
|:---|:---|
| **<u>NOTE HOLDER:</u>** | **<u>NOTE HOLDER:</u>** |
| **BROOKSTONE PARTNERS ACQUISITION XXI CORPORATION** | **BROOKSTONE PARTNERS ACQUISITION XXI CORPORATION** |
| By: | */s/ Matthew Lipman* |
| Name: | Matthew Lipman |
| Title: | President |

---

**IN WITNESS WHEREOF**, each party hereto has caused this Exchange Agreement to be duly executed as of the date first written above.

---

| | |
|:---|:---|
| **<u>NOTE HOLDER:</u>** | **<u>NOTE HOLDER:</u>** |
| **BP PEPTIDES, LLC** | **BP PEPTIDES, LLC** |
| By: | */s/ Matthew Lipman* |
| Name: | Matthew Lipman |
| Title: | President |

---

**<u>SCHEDULE A</u>**

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Note Holder** | **Date of<br> Issuance** | **Original<br> Principal<br> Amount of<br> Note** | **Note -<br> Indebtedness<br> Outstanding** | **Shares of<br> Series Z<br> Preferred<br> Stock to be<br> Issued** |
| BP Peptides, LLC | 11/11/2024 | $700618 | $847805 | 642276 |
| Brookstone Partners Acquisition XXI Corporation, LLC | 11/11/2024 | $800000 | $1089089 | 825067 |

---

## Exhibit 10.2

**Exhibit 10.2**

October 5, 2025

3i, LP<br> 2 Wooster Street, 2nd Floor<br> New York, New York 10013<br> Attn: Maier Joshua Tarlow, Manager of 3i Management, LLC, the general partner of 3i, LP

Re: Conversion Price Voluntary Adjustment Notice

Dear Sirs:

Reference is made to (a) that certain Securities Purchase Agreement dated as of July 29, 2025 (the "Purchase Agreement") between Capstone Holding Corp. (the "Company") and the purchaser identified therein (the "Investor"), (b) that certain senior secured convertible note of the Company with a 8.34% original issue discount issued to the Investor (the "Note"), and (c) the other transaction documents, as modified from time to time (including, without limitation, pursuant to that certain letter agreement between the Company and Investor dated August 14, 2025), referred to collectively, as the "Transaction Documents". Capitalized terms used but not defined herein shall have the meanings given to them in the Purchase Agreement, or if not defined therein, in the Note, or if not defined therein, in the applicable Transaction Document, in each case as of the date hereof.

This letter agreement (this "Letter Agreement") confirms our recent discussions about, among other matters, certain modifications to the Note.

Pursuant to Section 7(h) of the Note, the Company hereby reduces the Conversion Price of the Note to $1.00 starting on October 6, 2025 through the Maturity Date of the Note. Any conversion which occurs shall be voluntary at the election of the Investor, which shall evidence its election as to the Note being converted in writing on a conversion notice.

This Letter Agreement is a Transaction Document and is limited as written. As of the date first written above, each reference in the Purchase Agreement or any other applicable Transaction Document to "this Agreement," "hereunder," "hereof," "herein," or words of like import, and each reference in the other Transaction Documents to such Purchase Agreement or other Transaction Documents (including, without limitation, by means of words like "thereunder," "thereof" and words of like import), shall refer to the Purchase Agreement as modified thereby, and this Letter Agreement and the Purchase Agreement shall be read together and construed as a single agreement. The execution, delivery and effectiveness of this Letter Agreement shall not, except as expressly provided herein, (a) waive or modify any right, power or remedy under, or any other provision of, any Transaction Document or (b) commit or otherwise obligate the Investor to enter into or consider entering into any other amendment, waiver or modification of any Transaction Document.

All communications and notices hereunder shall be given as provided in the Transaction Documents. This Letter Agreement (a) shall be governed by and construed in accordance with the law of the State of New York, (b) is for the exclusive benefit of the parties hereto and the beneficiaries of the Purchase Agreement and, together with the other Transaction Documents, constitutes the entire agreement of such parties, superseding all prior agreements among them, with respect to the subject matter hereof, (c) may be modified, waived or assigned only in writing and only to the extent such modification, waiver or assignment would be permitted under the Transaction Documents (and any attempt to assign this Letter Agreement without such writing shall be null and void), (d) is a negotiated document, entered into freely among the parties upon advice of their own counsel, and it should not be construed against any of its drafters, and (e) shall survive the satisfaction or discharge of the amounts owing under the Transaction Documents. The fact that any term or provision of this Letter Agreement is held invalid, illegal or unenforceable as to any person in any situation in any jurisdiction shall not affect the validity, enforceability or legality of the remaining terms or provisions hereof or the validity, enforceability or legality of such offending term or provision in any other situation or jurisdiction or as applied to any person.

This Letter Agreement is expressly conditioned on the following conditions precedent:

● The Company's Board of Directors shall have approved this Letter Agreement and all undertakings thereto in all respects and shall provide written evidence of the same to the Investor by October 5, 2025; and

● The Company shall have verified and confirmed with its transfer agent that there are no impediments to the issuance of shares as a result of this Letter Agreement.

Kindly confirm your agreement with the above by signing in the space indicated below and by PDFing a partially executed copy of this letter to the undersigned, and which may be executed in identical counterparts, each of which shall be deemed an original but all of which shall constitute one and the same agreement.

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| | |
|:---|:---|
| Very truly yours, | Very truly yours, |
| Capstone Holding Corp. | Capstone Holding Corp. |
| By: | */s/ Matthew Lipman* |
| Name: | Matthew Lipman |
| Title: | Chief Executive Officer |
| AGREED AND ACCEPTED: | AGREED AND ACCEPTED: |
| 3i, LP | 3i, LP |
| By: | 3i Management LLC, As General Partner |
| By: | */s/ Maier J. Tarlow* |
| Name: | Maier J. Tarlow |
| Title: | Manager |

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## Exhibit 99.1

**Exhibit 99.1**

**Capstone Retires $1.9 Million Debt, Decreases Leverage Without Diluting Common Shareholders**

 

*Transaction Strengthens Balance Sheet and Improves Position for Accretive M&A*

**October 1, 2025 — New York, NY —** Capstone Holding Corp.("Capstone" or the "Company") (NASDAQ: CAPS), a national building products distribution platform, today announced the exchange of $1.9 million in debt by a related party for a newly issued series of non-convertible preferred equity. This strategic deleveraging **retires 100% of the targeted debt** and lowers 2026 interest expense by more than $170k. The transaction strengthens Capstone's balance sheet and leverage profile, providing **greater financial flexibility to pursue accretive acquisitions.**

Importantly, no new common shares were issued. The preferred equity is non-dilutive, leaving the common share count unchanged and **preserving value for existing shareholders.**

*Key Highlights:* 

● **$1.9 Million Debt Retired:** All targeted Brookstone debt was exchanged for preferred equity. Capstone's funded debt drops by $1.9 million — a significant decrease in leverage — which will boost credit metrics.

● **No Dilution to Common Stockholders:** Preferred shares are not convertible into common stock, ensuring no dilution to current equity owners.

● **Dividend Structure:** Dividends accrue at an 8% coupon and, at the Company's election, can be paid-in-kind (PIK) by issuing additional preferred shares, preserving cash to fund growth.

● **Voting Rights:** Preferred shares do have a vote, proportional to their economic interest.

● **Long-Term Alignment:** Preferred equity is redeemable only in the event of a change of control or after 7 years, aligning investor interest with Capstone's multi-year growth plan.

"This disciplined debt reduction further improves our financial position and preserves capital for growth," said Matthew Lipman, CEO. "By **removing $1.9 million of debt** from the balance sheet and eliminating its interest cost, we unlock more capital for acquisitions without shareholder dilution. We believe that Capstone is now **better positioned to move quickly on high-return acquisitions and to deliver value to investors**."

Capstone's management noted that the exchange affirms its commitment to prudent capital structure management. **The transaction lowers financial risk and signals confidence in the Company's long-term cash flows.**

Additional details will be available in Capstone's Form 8-K that we expect to file with the Securities and Exchange Commission on October 1, 2025.

**About Capstone Holding Corp.**

Capstone Holding Corp. (NASDAQ: CAPS) is a diversified platform of building products businesses focused on distribution, brand ownership, and acquisition. Through its Instone subsidiary, Capstone serves 31 U.S. states, offering proprietary stone veneer, hardscape materials, and modular masonry systems. The Company's strategy combines disciplined M&A, operational efficiency, and a growing portfolio of owned brands to build a scalable and durable platform.

**Investor Contact**

Investor Relations

Capstone Holding Corp.

investors@capstoneholdingcorp.com

www.capstoneholdingcorp.com

**Forward-Looking Statements**

This press release contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. These statements relate to future events and performance, including guidance regarding possible high-value acquisitions, revenue and EBITDA targets, M&A strategy, use of capital, and operating outlook. Actual results may differ materially from those projected due to a range of factors, including but not limited to acquisition timing, macroeconomic conditions, and execution risks. Please review the Company's filings with the SEC for a full discussion of risk factors. Capstone undertakes no obligation to revise forward-looking statements except as required by law.

**Source:** Capstone Holding Corp.