Capstone Publishes Investor FAQ Detailing 72% Reduction in Convertible Principal and Reaffirming FY2026 Guidance

Key Terms

convertible-note principal financial

The convertible-note principal is the original sum of money a company borrows under a convertible note — essentially an IOU that can later turn into equity instead of being repaid in cash. It matters to investors because that principal represents a future claim that can dilute existing shareholders if converted into new shares, or remain a debt that must be repaid if conversion doesn’t occur, affecting ownership percentages and the company’s balance sheet.

working capital facilities financial

Short-term loans or credit lines a company uses to cover everyday operating needs—think payroll, inventory and supplier bills—when cash timing doesn’t match receipts. Investors care because these facilities show how easily a company can meet near-term obligations and keep operations running; the size, cost and terms affect liquidity risk, borrowing costs and the company’s ability to grow or weather slow periods, similar to a household overdraft for day-to-day expenses.

revolver financial

A revolver is a revolving credit facility — a line of borrowing a company can draw, repay and draw again as needed, similar to a corporate credit card for short-term cash needs. It matters to investors because it provides liquidity and flexibility to cover expenses, smooth cash flow swings, or bridge financing gaps; the size, cost and covenants of the revolver affect a company’s interest costs, financial health and default risk.

EBITDA financial

EBITDA stands for earnings before interest, taxes, depreciation, and amortization. It measures a company's profitability by focusing on the money it makes from its core operations, ignoring expenses like taxes and accounting adjustments. Investors use EBITDA to compare how well different companies are performing financially, as it provides a clearer picture of operational success without the influence of financial structure or accounting choices.

Form 8-K regulatory

A Form 8-K is a report that companies file with the government to share important news quickly, such as changes in leadership, major business deals, or financial updates. It matters because it helps investors stay informed about significant events that could affect the company's value or stock price.

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FAQ details capital structure progress and operating outlook, including FY2026 guidance of $72.1M in revenue and approximately 322% EBITDA growth

NEW YORK--(BUSINESS WIRE)-- Capstone Holding Corp. (NASDAQ: CAPS), a tech-enabled building products distribution platform, today published an investor FAQ on the Company’s website detailing recent progress on its convertible debt, working capital facilities, and FY2026 outlook.

A key disclosure in the FAQ is that as of May 1, approximately 72% of the original convertible-note principal has been converted, leaving $1.90 million outstanding.

The FAQ addresses questions submitted by shareholders following the Company’s April 16, 2026 earnings release and reaffirms the Company’s FY2026 outlook: revenue of $72.1 million, up 54%; gross profit of approximately $18.7 million, up 73%; and EBITDA of approximately $3.8 million, an approximate 322% increase year-over-year. A positive EBITDA run-rate is expected beginning in Q2.

“We’ve heard the questions our shareholders are asking, and this FAQ answers them directly,” said Matthew Lipman, Chief Executive Officer of Capstone. “We believe the capital structure is materially better than it was a year ago, and the operating business is materially larger. We expect both trends to continue.”

Highlights from the FAQ:

1. Convertible Note Reduction: Of the $6.82 million in convertible-note principal originally issued in July and October 2025, approximately $4.92 million—or 72%—has been converted as of May 1, leaving $1.90 million outstanding.
2. Working Capital Facility: At year-end 2025, Capstone had approximately $7.9 million drawn against its $11.5 million Beacon Bank & Trust revolver and was in compliance with all financial covenants, including Cash Flow Coverage and Tangible Net Worth requirements. Management is in active extension discussions and expects the facility to be extended.
3. FY2026 Outlook Reaffirmed: $72.1 million revenue, ~$18.7 million gross profit, 26% gross margin, and approximately $3.8 million of EBITDA, with a positive EBITDA run-rate expected beginning in Q2.

Access to Full Materials

The complete FAQ is available in the Investor Relations section of the Company’s website at https://capstoneholdingcorp.com/capstone-faq-may-2026/. The Company’s most recent Form 8-K filed with the Securities and Exchange Commission is available at sec.gov.

About Capstone Holding Corp.

Capstone Holding Corp. (NASDAQ: CAPS) is a national, technology-enabled building products distribution platform optimizing supply chains across 38 U.S. states and Canada. Through its Instone operating platform and inventory portal, the Company aggregates and delivers proprietary stone veneer, hardscape materials, and modular masonry systems. Capstone’s model combines digital infrastructure, owned-inventory logistics, and disciplined acquisitions to drive scalable margin expansion and operating leverage across its growing platform.

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 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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20260506252524/en/

Investor Contact
Investor Relations
Capstone Holding Corp.
investors@capstoneholdingcorp.com
www.capstoneholdingcorp.com

Source: Capstone Holding Corp.