Capstone Holding: securities offering

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ea0243919-s1_capstone.htm

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As filed with the Securities and Exchange Commission on February 6 , 2025. June

Registration No. 333-284105 333-

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Fax: (732) 395 -4401

Barry I. Grossman, Esq.

Sarah Williams, Esq.

Justin Grossman, Esq.

Ellenoff Grossman & Schole LLP

1345 Avenue of the Americas

Phone: (212) 370 -1300

Fax: (212) 370 -7889

Approximate date of commencement of proposed

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

If any of the securities being registered on this

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. ☒

If this Form is filed to register additional

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please 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

If this Form is a post -effective amendment filed pursuant to Rule 462(d) 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. ☐

Indicate by check mark whether the registrant

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

See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company,"

and "emerging growth company" in Rule 12b-2 of the Exchange Act.

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If an emerging growth company, indicate by check

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 7(a)(2)(B) of the Securities Act. ☐

The registrant hereby amends this Registration

The registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, or until this Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to Section 8(a), may determine .

Securities Act of 1933, or until this Registration Statement shall become effective on such date as the Securities and Exchange

Commission, acting pursuant to Section 8(a), may determine.

The information in this prospectus is not complete and may be changed. We 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 is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

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DATED: FEBRUARY 6 , 2025

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This is a firm commitment underwritten public offering of 1,250,000 shares of common stock at an offering price of $4.00 per share (the "Common Stock") of Capstone Holding Corp., a Delaware corporation (the "Company," "we," "us," "our").

Our Common Stock is currently quoted on the OTCQB Marketplace (the "OTCQB") under the symbol "CAPS." As of February 3, 2025 the last reported sales price for our Common Stock as quoted on the OTCQB was $2.50 per share.

We have applied to list our shares of Common Stock on the Nasdaq Capital Market under the symbol "CAPS", pending the consummation of this offering. No assurance can be given that a trading market will develop for our Common Stock. Prices of our Common Stock as reported on the OTCQB may not be indicative of the prices of our Common Stock if our Common Stock were traded on the Nasdaq Capital Market.

We will be considered a "controlled company" following this offering under Nasdaq listing standards. We will be a "controlled company" because we expect that entities individually or jointly controlled by Matthew Lipman, our chief executive officer and a member of our board of directors, and Michael Toporek, the chairman of our board of directors (Brookstone Partners Acquisition XIV, LLC ("BPA XIV, LLC"), BP Peptides LLC, and Nectarine Management LLC) will have the ability to control all matters requiring shareholder approval because these entities will own over 50% of our common stock, will control over 50% of our voting stock (inclusive of the votes of the over 50% of the Series B Preferred Stock shares outstanding we expect to issue to Nectarine Management LLC prior to the consummation of this offering), and, via the protective provisions of the Series B Preferred Stock, will have to consent before we can conduct major corporate actions. Although we will be considered a "controlled company" following our listing on Nasdaq, we do not intend to rely on the exemptions to corporate governance requirements as a controlled company. BP Peptides, LLC, an entity controlled by Messrs. Lipman and Toporek, currently holds 77.3% of the voting power of the Company.

The offering price of the Common Stock will be determined by us and Joseph Gunnar & Co., LLC as representative of the underwriters ("Joseph Gunnar" or the "Representative"), taking into consideration several factors as described between the underwriters and us at the time of pricing, considering our historical performance and capital structure, prevailing market conditions, and overall assessment of our business, and will not be based upon the price of our Common Stock on the OTCQB. Therefore, the assumed public offering price used throughout this prospectus may not be indicative of the actual public offering price for our Common Stock.

Public offering price

Underwriting discounts and commissions (1)

Proceeds to us, before expenses (2)

(1) See "Underwriting" beginning on page 75 of this prospectus for additional information regarding underwriting compensation.

(2) The amount of offering proceeds to us presented in this table does not give effect to any exercise of the: (i) Underwriters' Over -Allotment Option we have granted to the underwriters as described below.

We have granted a 45 -day option to the underwriters, exercisable one or more times in whole or in part, to purchase up to an additional 187,500 shares of Common Stock at the public offering price per share of Common Stock less the underwriting discounts payable by us, in any combination solely to cover over -allotments , if any (the " Underwriters' Over -Allotment Option ").

The underwriters expect to deliver the securities against payment to the investors in this offering on or about [_], 2025.

Sole Book-Running Manager

Joseph Gunnar & Co., LLC

5,190,251 Shares of Common Stock

This prospectus relates to the offer and resale from time to time by the selling stockholder identified in this prospectus of up to an aggregate of 5,190,251 shares of common stock, par value $0.0005 per share (the "Common Stock"), of Capstone Holding Corp., a Delaware corporation (the "Company," "we,"

"us," "our"), consisting of (i) 215,054 shares to be issued as Commitment Shares (as defined herein) and (ii)

4,975,197 to be issued as Equity Line Securities (as defined herein), issuable pursuant to the common stock purchase agreement, dated

May 14, 2025 (the "Purchase Agreement").

Our registration of the shares of Common Stock

covered by this prospectus does not mean that the selling stockholder will offer or sell any of the shares. The selling stockholder may offer and sell or otherwise dispose of the shares of Common Stock described in this prospectus from time to time through public or private transactions at prevailing market prices, at prices related to prevailing market prices or at privately negotiated prices. See "Plan of Distribution".

We are not selling any shares of Common Stock

offered by this prospectus and will not receive any of the proceeds from the sale by the selling stockholder of the shares of Common Stock offered hereby.

The selling stockholder will pay all underwriting

discounts and selling commissions, if any, in connection with the sale of the shares of Common Stock. We have agreed to pay certain expenses in connection with this registration statement and to indemnify the selling stockholder and certain related persons against certain liabilities.

No underwriter or other person has been engaged to facilitate the sale of shares of Common Stock in this prospectus.

Shares of our Common Stock are listed on the Nasdaq Capital Market ("Nasdaq") under the symbol "CAPS". On May 30, 2025, the closing sale price of our Common Stock was $1.82 per share.

We are a "controlled company" following

this offering as defined under the Nasdaq Stock Market Rules. We are a "controlled company" because entities individually or jointly controlled by Matthew Lipman, our chief executive officer and a member of our board of directors, and Michael Toporek, the chairman of our board of directors (Brookstone Partners Acquisition XIV, LLC ("BPA XIV, LLC"), BP Peptides LLC, and Nectarine

Management LLC) have the ability to control all matters requiring shareholder approval because these entities own over 50% of our Common

Stock and control over 50% of our voting stock (inclusive of the votes of the over 50% of the Series B Preferred Stock shares outstanding).

Although we are considered a "controlled company", we do not intend to rely on the exemptions to corporate governance requirements as a "controlled company."

We are an "emerging growth company"

We are an "emerging growth company" and a "smaller reporting company," as defined in Rule 12b -2 12b-2 of the Securities Exchange Act of 1934, as amended, and have elected to take advantage of certain scaled disclosure available to smaller reporting companies. This prospectus is intended to comply with the requirements that apply to an issuer that is a smaller reporting company. See " Prospectus Summary - Implications of Being an Emerging Growth Company and a Smaller Reporting Company ."

Investing in our securities involves a

Investing in our securities involves a high degree of risk. See "Risk Factors" beginning on page 14 8 of this prospectus and under similar headings in the other documents that are incorporated by reference into this prospectus for a discussion of information that should be considered in connection with an investment in our securities.

You should rely only on the information contained

in this prospectus, contained in the other documents that are incorporated by reference into this prospectus, or contained any prospectus supplement or amendment hereto. We have not authorized anyone to provide you with different information.

Neither the Securities and Exchange Commission

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the securities offered hereby, or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

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Market For Our Common Stock and Related Stockholder Matters

Management's Discussion and Analysis of Financial Condition and Results of Operations

Directors and Executive Officers

Executive Compensation

Security Ownership of Certain Beneficial Owners and Management

Certain Relationships and Related Party Transactions

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and 20 more changes in the filing

Prospectus summary 217 changes

Capstone Holding Corp. formerly known as Capstone Therapeutics Corp. and OrthoLogic Corp., incorporated in Delaware in 1987 as a domestic corporation, is a building products distribution company. We intend to continue to grow our business organically and through successfully integrating well -timed acquisitions.

Our current operating company, TotalStone, LLC (dba Instone), services 31 US states (with such states having over 60% of American households). Our over 400 active customers are primarily masonry, building materials and landscape dealers.

A key differentiating factor for our strategy is that we own or control five of the eight brands we sell. Our products include stone veneer, landscape stone, and modular masonry fireplaces. The brands we distribute which we do not control are Cultured Stone, Dutch Quality, and Isokern. The brands we distribute which we own or control include Aura, Pangea, Toro Stone, Beon Stone, and Interloc.

We operate in a market environment where there are about 7,000 building products distributors, most of which are privately held. Most of these distributors are not able to optimize route density or properly use technology to drive profitability. According to a December 2023 study jointly released by the management consulting firm, Roland Berger, and the financial advisory firm, Lazard, "Trends in the Building Envelope Industry," the sector has recently grown by 5 -7 %. Given the recent peak of the interest rate cycle constraining the revenue of building products companies (due to fewer housing starts and less commercial construction) we believe current conditions are the ideal backdrop for us to execute value -creating , accretive acquisitions.

Utilizing the capital from the Offering, we plan to expand the breadth of our building products distribution organically and via acquisitions.

This summary highlights selected information

This summary highlights selected information appearing elsewhere in this prospectus. While this summary highlights what we consider to be important information about us, you should carefully read this entire prospectus and the documents incorporated by reference in this prospectus before investing in our Common Stock, especially the risks and other information we discuss under the headings heading "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operation" and our consolidated financial statements and related notes beginning on page F -1 . incorporated by reference herein. Our fiscal year end is December 31, and our fiscal years ended December 31, 2023 2024 and 2022 2023 are sometimes referred to herein as fiscal years 2023 2024 and 2022, 2023, respectively. Some of the statements made in this prospectus discuss future events and developments, including our future strategy and our ability to generate revenue, income and cash flow. These forward -looking forward-looking statements involve risks and uncertainties which could cause actual results to differ materially from those contemplated in these forward -looking forward-looking statements. See "Cautionary Note Regarding Forward -Looking Forward-Looking Statements". Unless otherwise indicated or the context requires otherwise, the words "Capstone," "we," "us," "our", the "Company" or "our Company" refer to Capstone Holding Corp., a Delaware corporation, and its subsidiaries.

Capstone Holding Corp. is a building products

distribution network. The existing company is comprised of Instone, a leading distributor of thin veneer stone and related masonry products in the United States, serving both residential and commercial construction markets. Founded over 30 years ago, we have grown to become the largest wholesale distributor in the thin veneer masonry products industry. Our comprehensive product offering includes a wide range of manufactured and natural stone products, supported by a strategically located distribution network designed to provide reliable and efficient service to our diverse customer base.

We are committed to being the preferred partner

for our customers by providing high-quality products, expert support, and exceptional service. Our success is driven by our deep industry expertise, long-standing customer relationships, and a relentless focus on operational excellence.

The Company was formed in 1987 as OrthoLogic Corp.

In 2005, the Company filed its restated certificate of incorporation (the "Restated Certificate of Incorporation"). In 2010, the Company changed its name to Capstone Therapeutics Corp. On August 22, 2019, the Company filed a certificate of amendment to its Restated Certificate of Incorporation effecting a 1 for 1,000 reverse stock split of the Common Stock of the Company, whereby each 1,000 shares of Common Stock of the Company became 1 share of Common Stock. In 2021, the Company filed a certificate of amendment to its Restated Certificate of Incorporation decreasing the total number of shares of Common Stock authorized to be issued by the Company from 150,000,000 shares to 205,000 shares, consisting of 200,000 shares of Common Stock, par value $0.0005 per share and 5,000 shares of preferred stock, par value $0.0005 per share. On February 18, 2022, the Company filed a certificate of amendment to its Restated Certificate of Incorporation, changing the Company's name from Capstone Therapeutics Corp. to Capstone Holding Corp. On February 20, 2025, following the Company's controlling shareholder's approval, the Company filed an amendment to its Restated Certificate of Incorporation with the Secretary of State of the State of Delaware to increase the authorized shares of Common Stock to 50,000,000 shares and increase the authorized shares of preferred stock to 25,000,000 shares. On February 20, 2025, the Company filed a Certificate of Designation (the "Series B Certificate of Designation") with the Delaware Secretary of State which designated 2 million shares of the Company's authorized preferred stock as Series B Preferred Stock ("Series B Preferred Stock"), no par value.

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On April 1, 2020, the Company obtained controlling interest in a materials distribution company called TotalStone, LLC ("TotalStone") that distributes masonry stone products for residential and commercial construction in the Midwest and Northeast United States under the trade name Instone, which going forward is the Company's primary business activity. TotalStone, LLC (dba "Instone"), a Delaware limited liability company, was formed on October 4, 2006. TotalStone is consolidated in the Company's financials. TotalStone currently has 5 Managers, who control decision -making and are appointed by Designees designated by Members. Through its membership interests, Capstone currently designates 4 of the 5 Managers (80%) of which 3 are officers or board members of Capstone.

Contingent on the Company raising at least $3,000,000 in gross proceeds from this Offering with the pricing of this Offering on or prior to February 13, 2025 (the "Restructuring Condition"), a series of transactions will be consummated on the date of the satisfaction of the Restructuring Condition (the "Restructuring Date") prior to the issuance of Common Stock on the Restructuring Date that will have the effect of the Company owning 100% of the equity interests of TotalStone on the Restructuring Date. Please see the description of the restructuring transactions to take place on the Restructuring Date under " Business — TotalStone, LLC — Future TotalStone Equity Interests Transactions " on page 53 of this prospectus.

TotalStone, LLC has a wholly owned subsidiary that is a single member Delaware limited liability company, Northeast Masonry Distributors, LLC ("NMD", f/k/a NEM Purchaser, LLC), that was formed on September 23, 2019. On November 14, 2019, NEM Purchaser, LLC completed the purchase of Northeast Masonry Distributors, LLC including all of the assets and assumed liabilities, receivables, fixed assets, and other assets. The aggregate purchase price was $6,029,342. Post acquisition, NEM Purchaser LLC changed its name to Northeast Masonry Distributors, LLC. Prior to the acquisition, NMD was engaged in light fabrication and distribution of natural stone products with operations in Plainville, Massachusetts. All of its manufacturing and distribution operations are performed in Massachusetts. Administrative functions are performed in Massachusetts and New Jersey. NMD services the Northeast and Midwest regions, which comprise 31 states.

TotalStone, LLC's administrative functions are performed in Massachusetts and Illinois, with its corporate headquarters located in New Jersey.

Listing on the Nasdaq Capital Market

Our Common Stock is currently quoted on the OTCQB under the symbol "CAPS." We intend to apply to list our shares of Common Stock on the Nasdaq Capital Market ("Nasdaq") under the symbol "CAPS", pending the consummation of this offering. Upon consummation of the offering, our Common Stock will cease to be traded on the OTCQB. No assurance can be given that a trading market will develop for our Common Stock. Nasdaq listing requirements include, among other things, a minimum stock price threshold. As a result, prior to effectiveness, we will need to take the necessary steps to meet Nasdaq listing requirements.

Description of Capital Stock

Below is a summary of each of our classes of capital stock:

As of February 3, 2025, there were 157,610 shares of Common Stock outstanding.

We have 5,000 shares of authorized preferred stock, the terms of which may be fixed by our Board of Directors (the "Board"). We presently have no outstanding shares of preferred stock. Our Board of Directors has the authority, without stockholder approval, to create and issue one or more series of such preferred stock and to determine the voting, dividend and other rights of holders of such preferred stock. If we raise additional funds to continue operations, we may issue preferred stock. The issuance of any of such series of preferred stock may have an adverse effect on the holders of common stock.

The Board of Directors of the Company approved a Tax Benefit Preservation Plan ("Benefit Plan") dated April 18, 2017, between the Company and Computershare. The Benefit Plan and the exercise of rights to purchase Series A Preferred Stock, pursuant to the terms thereof, may delay, defer or prevent a change in control without the approval of the Board. In addition to the anti -takeover effects of the rights granted under the Benefit Plan, the issuance of preferred stock, generally, could have a dilutive effect on our stockholders.

Under the Benefit Plan, each outstanding share of our common stock has attached one preferred stock purchase right, each share of our common stock subsequently issued prior to the expiration of the Benefit Plan will likewise have attached one right. Under specified circumstances involving an "ownership change," as defined in Section 382 of the Internal Revenue Code ("the Code"), the right under the Benefit Plan that attaches to each share of our common stock will entitle the holder thereof to purchase 1/100 of a share of our Series A Preferred Stock for a purchase price of $5.00 (subject to adjustment), and to receive, upon exercise, shares of our common stock having a value equal to two times the exercise price of the right. The Benefit Plan was recently extended on May 1, 2024 to a new maturity of April 1, 2027.

Concurrently with transaction close, this Preferred Stock and related Tax Benefit Preservation Plan provisions will be nullified.

Series "A" Preferred Stock

The Company, pursuant to the consent of the Board filed a Certificate of Designation with the Delaware Secretary of State which designated 5,000 (following a 1 for 400 reduction in the authorized preferred stock in February 2021) shares of the Company's authorized preferred stock as Series "A" Preferred Stock, par value $0.0005. The Series "A" Preferred Stock has the following attributes:

• Ranks senior only to any other class or series of designated and outstanding preferred shares of the Company;

• Is entitled to receive a dividend (a) quarterly, and (b) after a dividend has been made on the common stock;

• In the event of the voluntary or involuntary liquidation of the Corporation the "preferential amount" that the holders of the Series A Shares shall be entitled to receive out of the assets of the Corporation shall be $0.10 per share plus all accrued and unpaid dividends thereon;

• The Company does not have any rights of redemption;

• Has no voting rights except as provided by Delaware statutes;

• Entitled to same notice of meeting provisions as common stockholders; and • Protective provisions require approval of 66 -2 /3% of the Series "A" Preferred Shares outstanding to modify the provisions or increase the authorized Series "A" Preferred Shares; and Principal Risks We are subject to various risks discussed in detail under "Risk Factors" starting on page 14 of this prospectus and which include risks related to the following:

• history of losses;

• our ability to compete;

• our ability to successfully protect our intellectual property rights, and claims of infringement by others;

• the effectiveness of our sales and marketing efforts;

• our ability to retain key management personnel;

• failure to remedy material weaknesses in internal accounting controls and failure to implement proper and effective internal controls;

• our need to raise additional capital;

• the dilution of our shares as a result of the issuance of additional shares in connection with financing arrangements;

• the volatility of our stock price;

• the decline in the price of our stock due to offers or sales of substantial number of shares;

• limited trading volume and price fluctuations of our stock;

• the immediate and substantial dilution of the net tangible book value of our Common Stock; and • our ability to meet the continuing listing requirements of the Nasdaq Capital Market.

Implications of Being an Emerging Growth and Smaller Reporting Company We are an "emerging growth company" as defined in Section 2(a)(19) of the Securities Act of 1933, as amended (the "Securities Act"), as modified by the Jumpstart Our Business Startups Act of 2012 (the "JOBS Act"). As an emerging growth company, we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including, but not limited to: (1) presenting only two years of audited financial statements in addition to any required unaudited interim financial statements with correspondingly reduced "Management's Discussion and Analysis of Financial Condition and Results of Operations" disclosure in this prospectus; (2) not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes -Oxley Act of 2002 (the "Sarbanes -Oxley Act"); (3) having reduced disclosure obligations regarding executive compensation; (4) being exempt from the requirements to hold a non -binding advisory vote on executive compensation or to seek stockholder approval of any golden parachute payments not previously approved; and (5) not being required to adopt certain accounting standards applicable to public companies until those standards would otherwise apply to private companies.

Although we are still evaluating our options under the JOBS Act, we may take advantage of some or all of the reduced regulatory and reporting obligations that will be available to us so long as we qualify as an "emerging growth company," and thus the level of information we provide may be different than that of other public companies. If we do take advantage of any of these exemptions, some investors may find our securities less attractive, which could result in a less active trading market for our Common Stock, and the price of our Common Stock may be more volatile. As an "emerging growth company" under the JOBS Act, we are permitted to delay the adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies.

We do not intend to take advantage of this extended transition period, which means that the financial statements included in this prospectus, as well as any financial statements that we file in the future, will be subject to all new or revised accounting standards generally applicable to public companies. The decision not to take advantage of the extended transition period is irrevocable.

We could remain an "emerging growth company" until the earliest to occur of: (1) the end of the fiscal year following the fifth anniversary of this offering; (2) the first fiscal year after our annual gross revenues are $1.235 billion or more; (3) the date on which we have, during the previous three -year period, issued more than $1.0 billion in non -convertible debt securities; or (4) the date on which we are deemed to be a "large accelerated filer" under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). We have taken advantage of reduced disclosure regarding executive compensation arrangements and the presentation of certain historical financial information in this prospectus, and we may choose to take advantage of some but not all of these reduced disclosure obligations in future filings. If we do, the information that we provide to our stockholders may be different from what you might get from other public companies in which you hold stock.

We are also a smaller reporting company, as defined in the Exchange Act. Even after we no longer qualify as an emerging growth company, we may still qualify as a smaller reporting company, which would allow us to continue taking advantage of many of the same exemptions from disclosure requirements, including reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements. In addition, for so long as we continue to qualify as a non -accelerated filer, we will not be required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes -Oxley Act.

Corporate Information

Capstone Holding Corp., formerly known as Capstone Therapeutics Corp. and OrthoLogic Corp., was incorporated in Delaware in 1987 as a domestic corporation, with formal name changes in February 2022 and May 2010, respectively. The Company's principal executive offices are located at 5141 W. 122 nd St. Alsip, IL 60803 and the telephone number is (708) 371 -0660 .

Prior Medical Products Business

Prior to November 2003, the Company developed, manufactured and marketed proprietary, technologically advanced orthopedic products designed to promote the healing of musculoskeletal bone and tissue, with particular emphasis on fracture healing and spine repair. Our product lines, which included bone growth stimulation and fracture fixation devices, are referred to as our "Bone Device Business." In November 2003, we sold our Bone Device Business for total proceeds of approximately $100 million.

Subsequently, we were focused on the development and commercialization of two products: AZX100 and Chrysalin (TP508). In 2012, we terminated the license for Chrysalin (targeting orthopedic indications). In 2014, we terminated the license for AZX100 (targeting dermal scar reduction). Capstone no longer has any rights to or interest in Chrysalin or AZX100.

On August 3, 2012, we invested in a new company, LipimetiX Development, LLC, (now LipimetiX Development, Inc.), ("LIPI"), to develop Apo E mimetic peptide molecule AEM -28 and its analogs. LIPI had a development plan to pursue regulatory approval of AEM -28 , or an analog, as treatment for Homozygous Familial Hypercholesterolemia, other hyperlipidemic indications, and acute coronary syndrome/atherosclerosis regression. The initial AEM -28 development plan extended through Phase 1a and 1b/2a clinical trials and was completed in the fourth quarter of 2014. The clinical trials had a safety primary endpoint and an efficacy endpoint targeting reduction of cholesterol and triglycerides.

On December 31, 2020, LIPI, an approximately 62% owned subsidiary of the Company, entered into a License Transfer and Royalty Agreement (the "Agreement") with Anji Pharmaceuticals Inc. ("Anji Pharma").

In August 2019, the Company adopted a Contingent Value Rights Agreement, whereby the net proceeds, if any, from the Company's investment in LIPI were to be distributed to the Company's July 10, 2019 shareholders of record. Accordingly, the Company effectively has no financial interest in LipimetiX, Development, Inc..

Capstone Long-Term Growth

Capstone Long -Term Growth Strategy. Our long -term long-term growth strategy is built on the foundational strengths of our current operating subsidiary and the strategic opportunities available in the building products distribution and manufacturing industry. Our strategy has the following characteristics:

Deep Team . Capstone is controlled

by Brookstone Partners, a private equity group with 25 years of deep expertise in building products investment. Brookstone Partners is controlled by Matthew Lipman, our chief executive officer and a member of our board of directors, and Michael Toporek, the chairman of our board. The Capstone leadership team includes seasoned operating executives and building products acquisition and investment professionals.

Capstone's leadership team includes its Lead Independent Director, Charles "Chuck" Dana. Mr. Dana spent 19 years at Owens Corning, a leading building materials company. At Owens Corning, Mr. Dana held various positions including Controller, President Global Composites and then Group President Building Materials. In addition, from the Company's acquisition of Instone in April 2020 through December 31, 2024, Instone's revenues have increased from approximately $32.2 million to approximately $44.9 million.

Deep Team. Capstone is controlled by Brookstone Partners, a private equity group with 25 years of deep expertise in building products investment. Brookstone Partners is controlled by Matthew Lipman, our chief executive officer and a member of our board of directors and Michael Toporek, the chairman of our board. The Capstone leadership team includes seasoned operating executives and building products acquisition and investment professionals. Capstone's leadership team will include, following the pricing of this offering, its Lead Independent Director, Charles "Chuck" Dana. Mr. Dana spent 19 years at Owens Corning, a leading building materials company. At Owens Corning, Mr. Dana held various positions including Controller, President Global Composites and then Group President Building Materials. In addition, from the Company's acquisition of Instone in April 2020 through December 31, 2023, Instone's revenues have increased from approximately $32.2 million to approximately $48.4 million. In February 2008, a Brookstone Partners affiliate invested $8.8 million in Woodcrafter's Home Products Holdings LLC. Brookstone's team worked with Woodcrafter's management to grow earnings and Brookstone completed the sale of all of its interests in Woodcrafter's for $32 million in December 2013. The ability to identify, acquire and integrate acquisition candidates is a critical skill set to augment the operating expertise that drives organic growth. The current operating company has successfully executed multiple acquisitions and integrations, laying a solid foundation for continued expansion.

Strategic Timing. We believe

Strategic Timing. We believe we are strategically positioned to capitalize on market conditions within the building products sector. Historically, acquiring companies at interest rate peaks has yielded strong returns, and we are poised to leverage these strategic investment opportunities as the market evolves.

Industry Dynamics. According

Industry Dynamics. According to the Bain & Company Global M&A Report published in 2024 (the "Bain Report"), this is "just the type of environment that has proved to offer opportunities to companies that are willing to make bold moves." The Bain Report goes on to say, "building products companies that make frequent and material acquisitions substantially outpace inactive companies in total shareholder returns, 9.6% vs 2.7%" and "the most successful companies will pursue scope M&A to build product, geography, and capability adjacencies."

The M&A environment for the building

The M&A environment for the building products sector is expected to improve because, according to the Bain Report, "there are ample one -off one-off opportunities to acquire struggling assets", and "financial investors have taken a step back, especially in North America, removing a potentially formidable layer of competition."

Scale. For scale M&A,

opportunities in core businesses allow for more operational synergies. The Bain Report states that "allowing management to focus on a more related group of products with some level of shared channels, end markets, or manufacturing processes helps focus efforts and tells a clearer equity story."

Scope. Given macroeconomic

uncertainty, companies who leverage their parenting advantage, the ability to effectively manage and integrate acquisitions, will be the most successful with regards to scope M&A. The Bain Report states that "the path to leadership generally means overlooking smaller assets in favor of bigger players for a first move in a new space."

The "Annual total shareholder returns

The "Annual total shareholder returns for building products companies" chart and quotes from the Bain Report are used with permission from Bain & Company. The Bain Report was not commissioned by the Company. The Company does not currently and has not in the past had a direct or indirect business relationship with Bain & Company. The Bain Report is publicly available via the Insight - Featured Topics portion of Bain & Company's website.

Strategic Positioning. We

Strategic Positioning. We believe we are strategically well -positioned well-positioned to take advantage of the current market opportunities because of:

Team strength. The industry

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Risk factors 205 changes

Risks related to our industry and economic and market conditions

Our industry is cyclical and highly sensitive to macroeconomic conditions. Negative economic events including, but not limited to, recessions, lower consumer confidence, high interest rates, inflation, and lower new construction home starts may materially and adversely affect the outlook for our business, liquidity and results of operations.

The construction industry is highly sensitive to national and regional macroeconomic conditions.

The current market story for 2024 is one of "deferral", with home improvement projects and new constructions being delayed due to higher interest rates. This pent -up demand is likely to lead to a more volatile upswing when growth resumes in 2025 and beyond. According to Zonda Home ("Zonda"), building products spending overall will grow +2.6% in 2025, with repair/remodel spend set to grow +7% in 2025. Cash -out home equity lines of credit (HELOCs) are expected to increase ~25% and remodel growth is expected to increase 20%+ in 2025, based on historical precedents in the year following rate -hike driven deferrals.

In addition to commercial and residential market indicators, we also depend to a significant extent upon the levels of home repair and remodeling and new construction spending, affected by such factors as interest rates, inflation, consumer confidence, unemployment and the availability of consumer credit.

Our performance is also dependent upon consumers having the ability to finance home repair and remodeling projects and/or the purchase of new homes. The ability of consumers to finance these purchases is affected by such factors as new and existing home prices, homeowners' equity values, interest rates and home foreclosures, which in turn could result in a tightening of lending standards by financial institutions and reduce the ability of some consumers to finance home purchases or repair and remodeling expenditures. Despite the recent abatement of these negative market factors, any recurrence or worsening of these items may adversely affect our financial condition and operating results.

Historically, any uncertainty about current economic conditions has had a negative effect on our business, and will continue to pose a risk to our business as our customers may postpone spending in response to tighter credit, negative financial news and/or declines in income or asset values, which could have a material negative effect on the demand for our products. Other factors that could influence demand include fuel and other energy costs, conditions in the nonresidential real estate markets, labor and healthcare costs, access to credit, tariffs, and other macroeconomic factors. From time to time, our industry has also been adversely affected in various parts of the country by declines in nonresidential construction starts, including but not limited to, high vacancy rates, changes in tax laws affecting the real estate industry, high interest rates and the unavailability of financing. Sales of our products may be adversely affected by continued weakness in demand for our products within particular customer groups, or a continued decline in the general construction industry or particular geographic regions. These and other economic factors could have a material adverse effect on demand for our products and on our financial condition and operating results.

We cannot predict the timing or severity of any future economic or industry downturns or adverse weather conditions. A prolonged economic downturn or negative weather patterns, particularly in states where many of our sales are made, would have a material adverse effect on our results of operations and financial condition.

Uncertainty and volatility in the financial markets and worldwide economic conditions may adversely affect our operating results.

The markets in which we compete are sensitive to general business and economic conditions in the United States and worldwide, including availability of credit, interest rates, fluctuations in capital, credit and mortgage markets and business and consumer confidence. Adverse developments in global financial markets and general business and economic conditions, including through recession, downturn or otherwise, could have a material adverse effect on our business, financial condition, results of operations and cash flows, including our ability and the ability of our customers and suppliers to access capital.

An inability to successfully develop new products or improve existing products could negatively impact our ability to attract new customers and / or retain existing customers, including our significant customers.

Our success depends on meeting consumer needs and anticipating changes in consumer preferences with successful new products and product improvements. We aim to introduce products and new or improved production processes proactively to offset obsolescence and decreases in sales of existing products. While we devote significant focus to the development of new products, we may not be successful in product development and our new products may not be commercially successful. In addition, it is possible that competitors may improve their products more rapidly or effectively, which could adversely affect our sales. Furthermore, market demand may decline as a result of consumer preferences trending away from our categories or trending down within our brands or product categories, which could adversely impact our results of operations, cash flows and financial condition.

The loss of, or a significant adverse change in our relationships with our largest customers, or loss of market position of any major customer, whether because of an inability to successfully develop new products or improve existing products, or otherwise, could cause a material decrease in net sales. The loss of, or a reduction in orders from, any significant customers, losses arising from customers' disputes regarding shipments, fees, merchandise condition or performance or related matters, or an inability to collect accounts receivable from any major customer could adversely impact our net income and cash flow. In addition, revenue from customers that have accounted for significant revenue in past periods, individually or as a group, may not continue, or if continued, may not reach or exceed historical levels in any period.

Although we historically have been able to retain the majority of our customers on a year to year basis, if we fail to attract new customers, retain existing customers, or maintain or increase sales to customers, our business, financial condition, results of operations, and growth prospects will be harmed.

Although we historically have been able to retain the majority of our customers on a year to year basis, we do not have long -term agreements with our customers and their purchases are made on an order -by-order basis. Our business with our customers has been, and we expect it will continue to be, conducted based on the actual orders received from time to time. Our customers are not obligated in any way to continue placing orders with us at the same or increasing levels, or at all. Our customers level of demand for our products may fluctuate significantly from period to period. Such fluctuation is attributable mainly to changes in customer demand, including their business strategies and operational needs. The loss of our repeat customers, or if we are unable to attract new customers or if our existing customers decrease their spending on the products we offer, fail to make repeat purchases of our products, will harm our business, financial condition, results of operations, and growth prospects.

Our business may be adversely affected by weather conditions and other external factors beyond our control.

Markets for our products are seasonal and can be affected by inclement weather conditions. Historically, our business has experienced increased sales in the second and third quarters of the year due to increased construction during those periods. Because much of our overhead and operating expenses are spread ratably throughout the year, our operating profits tend to be lower in the first and fourth quarters. Inclement weather conditions can affect the timing of when our products are applied or installed, causing reduced profit margins when such conditions exist. For example, unseasonably cold weather or extraordinary amounts of rainfall may decrease construction activity.

Further, other external factors beyond our control could cause disruptions at any of our facilities, including maintenance outages; prolonged power failures or reductions; a breakdown, failure or substandard performance of any equipment or other operational problems; disruptions in the transportation infrastructure, including railroad tracks, bridges, tunnels or roads; fires, floods, hurricanes, earthquakes or other catastrophic disasters; pandemics, such as Coronavirus; or an act of terrorism. Any prolonged disruption in operations at any of our facilities could cause a significant loss in production. As a result, we could incur significantly higher costs and longer lead times associated with distributing our products to customers during the time that it takes for us to reopen or replace a damaged facility, which could cause our customers to purchase from our competitors either temporarily or permanently. If any of these events were to occur, it could adversely affect our business, financial condition, cash flows and results of operations Price volatility and supply constraints for raw materials could prevent us from meeting delivery schedules to our customers or reduce our profit margins.

Our suppliers are heavily dependent on the price and supply of raw materials such as limestone, and natural stone. Raw material prices have been volatile in recent years and may remain volatile in the future. Raw material prices are influenced by numerous factors beyond our control, including general economic conditions domestically and internationally, currency fluctuations, the availability of raw materials, competition, labor costs, freight and transportation costs, production costs, tariffs, import duties and other trade restrictions.

Further, energy is used in the freight transportation of our products, many of which are sourced from overseas. Consequently, our operating costs typically increase if energy costs rise. During periods of higher energy costs, we may not be able to recover our operating cost increases through price increases without reducing demand for our products. To the extent we are not able to recover these cost increases through price increases or otherwise, our profitability and cash flow will be adversely impacted. We partially hedge our exposure to higher prices through fixed forward positions.

Failure to retain or replace key personnel could hurt our operations.

Our success depends to a significant degree upon the efforts, contributions and abilities of our senior management and other highly skilled personnel, including our sales personnel. These executives and managers have many accumulated years of experience in our industry and have developed personal relationships with our customers and suppliers that are important to our business. If we do not retain the services of our key personnel or if we fail to adequately plan for the succession of such individuals, our customer relationships, or our supplier relationships, results of operations and financial condition may be adversely affected.

If we are unable to enforce our intellectual property rights, or if such intellectual property rights become obsolete, our competitive position could be adversely affected.

As a company that manufactures and markets branded products, we expect to rely on trademark and service mark protection to protect our brands. We have filed applications for three trademarks that are used on our products, all of which are under review or pending. These protections may not adequately safeguard our intellectual property and we may incur significant costs to defend our intellectual property rights, which may harm our operating results. There is a risk that third parties, including our current competitors, will infringe on our intellectual property rights, or claim that our products infringe on their intellectual property rights. These third parties may bring infringement claims against us or our customers, which may harm our operating results.

If we are unable to protect and maintain our intellectual property rights, or if there are any successful intellectual property challenges or infringement proceedings against us, our business and revenue could be materially and adversely affected.

We could incur significant costs as a result of compliance with, violations of or liabilities under applicable environmental, health and safety laws.

Our operations are subject to various federal, state, local and foreign environmental, health and safety laws. Among other things, these laws regulate the emission or discharge of materials into the environment, govern the use, storage, treatment, disposal and management of hazardous substances and wastes, protect the health and safety of our employees and the end -users of our products, regulate the materials used in our products and impose liability for the costs of investigating and remediating, and other damages resulting from, present and past releases of hazardous substances. Violations of these laws or of any conditions contained in environmental permits can result in substantial fines or penalties, injunctive relief, requirements to install pollution or other controls or equipment, civil and criminal sanctions, permit revocations and facility shutdowns. We could be held liable for the costs to investigate, remediate or otherwise address contamination at any real property we have ever owned, operated or used as a disposal site or other sites at which we or predecessors released hazardous materials. We also could incur fines, penalties or sanctions or be subject to third -party claims, including indemnification claims, for property damage, personal injury or otherwise as a result of violations of or liabilities under environmental, health and safety laws or in connection with releases of hazardous or other materials. In addition, changes in, or new interpretations of, existing laws, regulations or enforcement policies, the discovery of previously unknown contamination, or the imposition of other environmental liabilities or obligations in the future, including additional investigation, remediation or other obligations with respect to our products or business activities or the imposition of new permit requirements, may lead to additional costs that could have a material adverse effect on our business, financial condition or results of operations.

Changes in building codes and standards could increase the cost of our products, lower the demand for our products, or otherwise adversely affect our business.

Our products and markets are subject to extensive and complex local, state, federal, and foreign statutes, ordinances, rules, and regulations. These mandates, including building design and safety and construction standards and zoning requirements, affect the cost, selection, and quality requirements of building components.

These statutes, ordinances, rules, and regulations often provide broad discretion to governmental authorities as to the types and quality specifications of products used in new residential and non -residential construction and home renovations and improvement projects, and governmental authorities can impose different standards. Compliance with these standards and changes in such statutes, ordinances, rules, and regulations may increase the costs of manufacturing our products or may reduce the demand for certain of our products in the affected geographical areas or product markets. Conversely, a decrease in product safety standards could reduce demand for our more modern products if less expensive alternatives that did not meet higher standards became available for use in that market. All or any of these changes could have a material adverse effect on our business, financial condition, and results of operations.

The industries in which we operate are highly competitive.

We compete with all other alternative methods of building construction, which may be viewed as more traditional, more aesthetically pleasing, or having other advantages over our products. In addition, competition in the construction markets of the building industry is intense. It is based primarily on quality; service; on -time delivery and project completion; ability to provide added value in distribution, manufacture, design and engineering; price; and personal relationships with customers.

We may be significantly affected by global climate change or by legal, regulatory or market responses to global climate change.

Concern over the effects of global climate change has led to federal, state and international legislative and regulatory efforts to limit greenhouse gas, or GHG, emissions. In the past, the United States Congress has considered various bills to regulate GHG emissions. Though the legislation did not become law, the U.S. Congress could pass climate change legislation in the future. In addition, in the past, the United States Environmental Protection Agency, or EPA, took steps to regulate GHG emissions, though at this time the EPA is not actively regulating GHG emissions. More stringent federal, regional, state and foreign laws and regulations relating to global climate change and GHG emissions may be adopted in the future. These laws and regulations could impact our facilities, raw material suppliers, the transportation and distribution of our products, and our customers, and could reduce demand for our products or cause us to incur additional capital, operating or other costs. Until the timing, scope and extent of any future legislation or regulation becomes known, we cannot predict its effect on our business. In addition, global climate change may increase the frequency or intensity of extreme weather events, such as storms, floods, heat waves, and other events that could affect our facilities and demand for our products. We are mindful of the harmful effects of global climate change and are taking steps to minimize our GHG emissions.

We rely on third-party suppliers, some of which are international, for materials and if we fail to identify and develop relationships with a sufficient number of qualified suppliers, or if there is a significant interruption in our supply chains, our business and results of operations could be adversely affected.

Our ability to offer a wide variety of products to our customers is dependent upon our ability to obtain adequate product supply from third -party suppliers, namely quarries. We generally have multiple suppliers; however, in some cases, materials are provided by a single supplier. The loss of, or substantial decrease in the availability of, products from our suppliers, or the loss of a key supplier, could adversely impact our business, financial condition and results of operations. Supply interruptions could arise from production difficulties including the closure of a quarry, and any suitable alternative for a particular stone quality, color, size, or packaging may be at a significantly higher cost. In addition, we may be materially adversely impacted by commodity cost volatility, pandemics, labor disputes, natural disasters, weather conditions, international trade disputes or trade policy changes or restrictions, tariffs or import -related taxes, third -party strikes, lock -outs , work stoppages or slowdowns, shortages of supply chain labor and truck drivers, shipping capacity constraints, military conflicts, acts of terrorism, civil unrest, or other factors beyond our control.

For example, U.S. and global markets are experiencing volatility and disruption related to the escalation of geopolitical tensions and the military conflict currently ongoing in Ukraine and the Middle East. These conflicts could lead to market or operational disruptions, including significant volatility in commodity prices, credit and capital markets, as well as supply chain shipping and freight interruptions. The price and availability of freight shipping containers, known as container freight rates, could materially negatively impact our business as it may no longer be economical to import materials from overseas suppliers. Many of our suppliers and manufacturers are located outside of the United States. Thus, compliance with federal laws and regulations regarding the importation of products, import taxes or costs, including new or increased tariffs, anti -dumping duties, countervailing duties, or similar duties, some of which could be applied retroactively, could increase the cost of the products that we distribute. In addition, quotas, embargoes, sanctions, safeguards, and customs restrictions, as well as foreign labor strikes, work stoppages, or boycotts, could reduce the supply of the products available to us. Short- and long -term disruptions in our supply chain would result in a need to maintain higher inventory levels as we replace similar product, a higher cost of product and ultimately a decrease in our net sales and profitability. To the extent our suppliers experience disruptions, there is a risk for delivery delays, production delays, production issues or delivery of non -conforming products by our suppliers. Even where these risks do not materialize, we may incur costs as we prepare contingency plans to address such risks. In addition, disruptions in transportation lines could delay our receipt of materials. If the costs of our imported products increase and we are not able to pass along those increased costs to our customers, then our business, financial condition, and results of operations could be adversely affected.

Our agreements with suppliers are generally terminable by either party on limited notice, and in some cases we do not have written agreements with our suppliers. If market conditions change or worsen, suppliers may stop offering us favorable terms, including volume -based incentive terms. Our suppliers may increase prices or reduce discounts on the products we distribute and we may be unable to pass on any cost increase to our customers, thereby resulting in reduced margins and profits. Failure by our suppliers to continue to supply us with products on favorable terms, commercially reasonable terms, or at all, could put pressure on our operating margins or have a material adverse effect on our financial condition, results of operations, and cash flows.

Loss of key suppliers and manufacturers would be highly disruptive and could affect our financial health .

Our ability to offer a wide variety of products to our customers, including our private label products, is dependent upon our ability to obtain adequate product supply from manufacturers and suppliers. Our most critical suppliers are Westlake, Pangaea Stone, Stonehenge Slate, Hoch Stone, and Earthcore. Generally, our products are obtainable from various sources and in sufficient quantities subject to then current market conditions. However, the loss of, or a substantial decrease in the availability of, key products from our suppliers, or the loss of key supplier arrangements, could adversely impact our financial condition, operating results, and cash flows. Although in many instances we have agreements with our suppliers, these agreements are generally terminable by either party on limited notice. Failure by our suppliers to continue to supply us with products on commercially reasonable terms, or at all, would be highly disruptive and could have a material adverse effect on our financial condition, operating results, and cash flows.

Breaches of our information system security measures could disrupt our internal operations.

We are dependent upon information technology for the distribution of information internally and also to our customers and suppliers. This information technology is subject to theft, damage or interruption from a variety of sources, including but not limited to malicious computer viruses, security breaches and defects in design. Purchase of our products may involve the transmission and/or storage of data, including in certain instances customers' business and personally identifiable information. Thus, maintaining the security of computers, computer networks and data storage resources is a critical issue for us and our customers, as security breaches could result in vulnerabilities and loss of and/or unauthorized access to confidential information. We have in the past faced, and may in the future face attempts by hackers, cybercriminals or others with authorized access to our systems to misappropriate our proprietary information and technology, interrupt our business, and/or gain unauthorized access to confidential information. The reliability and security of our information technology infrastructure and software, and our ability to expand and continually update technologies in response to our changing needs is critical to our business. To the extent that any disruptions or security breaches result in a loss or damage to our data, it could cause harm to our reputation or brand. This could lead some customers to stop purchasing our products and reduce or delay future purchases of our products or the use of competing products; lead to state or federal enforcement action, which could result in fines, penalties and/or other liabilities and which may cause us to incur legal fees and costs; and/or result in additional costs associated with responding to a cyberattack. Increased regulation regarding cyber security may increase our costs of compliance, including fines and penalties, as well as costs of cyber security audits. Any of these actions could materially adversely impact our business and results of operations.

We have invested in industry appropriate protections and monitoring practices of our data and information technology to reduce these risks and continue to monitor our systems on an ongoing basis for any current or potential threats. There can be no assurance, however, that our efforts will prevent breakdowns or breaches to our third party providers' databases or systems that could adversely affect our business.

Damage to our computer infrastructure and software systems could harm our business.

The unavailability of any of our primary information management systems for any significant period of time could have an adverse effect on our operations. In particular, our ability to deliver products to our customers when needed, collect our receivables and manage inventory levels successfully largely depend on the efficient operation of our computer hardware and software systems. Through information management systems, we provide inventory availability to our sales and operating personnel, improve customer service through better order and product reference data and monitor operating results. Difficulties associated with upgrades, installations of major software or hardware, and integration with new systems could lead to business interruptions that could harm our reputation, increase our operating costs and decrease our profitability. In addition, these systems are vulnerable to, among other things, damage or interruption from power loss, computer system and network failures, loss of telecommunications services, operator negligence, physical and electronic loss of data, or security breaches and computer viruses.

We risk liabilities and losses due to property damage or product liability claims, which may not be covered by insurance.

Exposures that could create insured (or uninsured) liabilities are difficult to assess and quantify due to unknown factors, including but not limited to injury frequency and severity, natural disasters, terrorism threats, third -party liability, and claims that are incurred but not reported ("IBNR"). Although we engage third -party actuarial professionals to assist us in determining our probable future loss exposure, it is possible that claims or costs could exceed our estimates or our insurance limits, or could be uninsurable. In such instances we might be required to use working capital to satisfy these losses rather than to maintain or expand our operations, which could materially and adversely affect our operating results and our financial condition.

Further, we face an inherent business risk of exposure to product liability claims, including class action claims and warranties, in the event that the use of any of our products results in personal injury or property damage. In the event that any of our products are defective or prove to be defective, among other things, we may be responsible for damages related to any defective products and may be required to cease production, recall or redesign such products. Because of the long useful life of our products, it is possible that latent defects might not appear for several years. Any insurance we maintain may not continue to be available on acceptable terms or such coverage may not be adequate for liabilities actually incurred. Further, any claim or product discontinuance, recall or redesign could result in adverse publicity against us, which could cause sales to decline, or increase warranty costs.

Increases in labor costs, potential labor disputes, union organizing activity and work stoppages at our facilities or the facilities of our suppliers could delay or impede our production, reduce sales of our products and increase our costs.

Our financial performance is affected by the availability of qualified personnel and the cost of labor. Any interruption in the production or delivery of our products could reduce sales of our products and increase our costs. Our ability to attract and retain qualified personnel to operate our facilities efficiently is critical to our financial performance. Any labor shortage will create operating inefficiencies that could adversely impact our financial performance.

Risks related to our company

Our business has generated net loses, and we intend to continue to invest substantially in our business. Thus, we may not be able to achieve or maintain profitability. We may not be able to secure financing on favorable terms, or at all, to meet our future capital needs.

We may expand through investments in, acquisitions of, or the development of new products with assistance from, other companies, any of which may not be successful and may divert our management's attention.

In the past, we completed strategic acquisitions. We also may evaluate and enter into discussions regarding an array of potential strategic transactions, including acquiring complementary products, technologies or businesses. An acquisition, investment or business relationship may result in unforeseen operating difficulties and expenditures. In particular, we may encounter difficulties integrating the businesses, technologies, products, personnel or operations of the acquired companies, particularly if the key personnel of the acquired company choose not to be employed by us, and we may have difficulty retaining the customers of any acquired business due to changes in management and ownership. Acquisitions may also disrupt our ongoing business, divert our resources and require significant management attention that would otherwise be available for ongoing development of our business. Moreover, we cannot assure you that the anticipated benefits of any acquisition, investment or business relationship would be realized timely, if at all, or that we would not be exposed to unknown liabilities. In connection with any such transaction, we may:

• encounter difficulties retaining key employees of the acquired company or integrating diverse business cultures;

• incur large charges or substantial liabilities, including without limitation, liabilities associated with products or technologies accused or found to infringe on third -party intellectual property rights or violate existing or future privacy regulations;

• issue shares of our capital stock as part of the consideration, which may be dilutive to existing stockholders;

• become subject to adverse tax consequences, legal disputes, substantial depreciation or deferred compensation charges;

• use cash that we may otherwise need for ongoing or future operation of our business;

• enter new geographic markets that subject us to different laws and regulations that may have an adverse impact on our business;

• experience difficulties effectively utilizing acquired assets;

• encounter difficulties integrating the information and financial reporting systems of acquired businesses, particularly those that operated under accounting principles other than those generally accepted in the U.S. prior to the acquisition by us; and • incur debt, which may be on terms unfavorable to us or that we are unable to repay.

If we are unable to obtain additional financing, business operations will be harmed and if we do obtain additional financing then existing shareholders may suffer substantial dilution.

We need substantial capital to implement our sales distribution strategy for our current products, strategic acquisitions to maximize existing technologies to create opportunities to create synergy and opportunity. Our capital requirements will depend on many factors, including but not limited to:

• the problems, delays, expenses, and complications frequently encountered by early -stage companies;

• market acceptance of our products;

• the success of our sales and marketing programs; and

• we expect, if we raise at least $5,000,000 in gross proceeds in this offering, that the net proceeds, along with our current cash position, will be able to fund our operating expenses and capital expenditure for at least the next two years. Thereafter, unless we achieve profitability, we anticipate that we will need to raise additional capital to fund our operations and to otherwise implement our overall business strategy. We currently do not have any contracts or commitments for additional financing. There can be no assurance that financing will be available in amounts or on terms acceptable to us, if at all. Any additional equity financing may involve substantial dilution to then existing shareholders.

If adequate funds are not available or if we fail to obtain acceptable additional financing, we may be required to:

• severely limit or cease our operations or otherwise reduce planned expenditures and forego other business opportunities, which could harm our business;

• obtain financing with terms that may have the effect of substantially diluting or adversely affecting the holdings or the rights of the holders of our capital stock; or • obtain funds through arrangements with future collaboration partners or others that may require us to relinquish rights to some or all of our technologies or products.

Our success is substantially dependent on the continued service of our senior management.

Our success is substantially dependent on the continued service of our Chief Executive Officer ("CEO"), Matthew Lipman, our Chief Financial Officer ("CFO"), Edward Schultz, and Kevin Grotke, President and Chief Executive Officer of our subsidiary, TotalStone, LLC. We do not carry key person life insurance on any of its management, which would leave us uncompensated for the loss of any of its management. The loss of the services of any of our senior management could make it more difficult to successfully operate our business and achieve our business goals. In addition, our failure to retain qualified personnel in the diverse areas required for continuing its operations could harm our product development capabilities and customer and employee relationships, delay the growth of sales of our products and could result in the loss of key information, expertise or know -how .

We may not be able to hire or retain other key personnel required for our business, which could disrupt the development and sales of our products and limit our ability to grow.

Competition in our industry for senior management and other key personnel is intense. If we are unable to retain our existing personnel, or attract and train additional qualified personnel, either because of competition in our industry for such personnel or because of insufficient financial resources, our growth may be limited.

Affiliates of Brookstone (BPA XIV, LLC, Nectarine Management LLC and BP Peptides LLC) currently have and will, following this offering continue to have significant control over shareholder matters and the minority shareholders will have little or no control over our affairs.

Currently, BP Peptides LLC, an entity jointly controlled by Messrs. Lipman and Toporek, owns 77.3% of the Company's shares. Following the offering, we expect that BP Peptides LLC, an entity jointly controlled by Messrs. Lipman and Toporek, BPA XIV, LLC, an entity controlled by Mr. Lipman (but not Mr. Toporek), and an entity, Nectarine Management LLC, whose voting of our securities held by such entity is solely controlled by Mr. Toporek, will have the ability to control all matters requiring shareholder approval because these entities will own over 50% of our common stock, will control over 50% of our voting stock (inclusive of the votes of the over 50% of the Series B Preferred Stock shares outstanding we expect to issue to Nectarine Management LLC prior to the consummation of this offering), and, via the protective provisions of the Series B Preferred Stock, will have to consent before we can conduct major corporate actions. BP Peptides, LLC, BPA XIV, LLC, and Nectarine Management LLC may have interests that are different from yours. For example, these entities may support proposals and actions with which you may disagree. The concentration of ownership could delay or prevent a change in control of our Company or otherwise discourage a potential acquirer from attempting to obtain control of our Company, which in turn could reduce the price of our stock. In addition, these entities could use their voting influence to maintain our existing management and directors in office (including Messrs. Lipman and Toporek), delay or prevent changes in control of our Company, or support or reject other management and board proposals that are subject to stockholder approval, such as amendments to our employee stock plans and approvals of significant financing transactions.

We may not have sufficient resources to effectively introduce and market our services and products, which could materially harm our operating results.

Continuation of market acceptance for our existing services and products require substantial marketing efforts and will require our sales account executives and contract partners to make significant expenditures of time and money. In some instances, we will be significantly or totally reliant on the marketing efforts and expenditures of our contract partners, outside sales agents and distributors.

Because we currently have very limited marketing resources and sales capabilities, commercialization of our products, some of which require regulatory clearance prior to market entrance, we must either expand our own marketing and sales capabilities or consider collaborating with additional third parties to perform these functions. We may, in some instances, rely significantly on sales, marketing and distribution arrangements with collaborative partners and other third parties. In these instances, our future revenue will be materially dependent upon the success of the efforts of these third parties.

and 125 more changes in the filing

Use of proceeds 13 changes

We estimate that the net proceeds from this offering will be approximately $3,558,045, or $4,240,545 if the underwriter exercises their over -allotment option in full, after deducting the underwriting discounts and commissions and estimated offering expenses.

We currently expect to use the net proceeds of this offering primarily for the following purposes:

• Approximately $745,530 in total ($743,333 of principal and $2,197 of interest) for the repayment of a term loan issued by Berkshire Bank with interest charged at the one -month Secured Overnight Financing Rate ("SOFR") plus 3.5% (7.86% and 8.96% at September 30, 2024 and December 31, 2023, respectively) and a maturity date of December 1, 2025. The proceeds of the term loan were used for working capital; and • Approximately $ 2,731,378, or $3,413,878 if the underwriter exercises their over -allotment option in full, for general corporate purposes to enable us to grow organically by expanding the breadth of our distribution by both geography and new products, either through contractual relationships or owning in -house brands.

Although we plan to also grow via a rapid acquisition program of building products distributors and manufacturers, we do not currently have any definitive plans to acquire any specific entities or assets.

We believe that the expected net proceeds from this offering and our existing cash and cash equivalents, together with interest thereon, will be sufficient to fund our operations for at least the next twelve months, although we cannot assure you that this will occur.

The amount and timing of our actual expenditures will depend on numerous factors, including the status of our development efforts, sales and marketing activities and the amount of cash generated or used by our operations. We may find it necessary or advisable to use portions of the proceeds for other purposes, and we will have broad discretion and flexibility in the application of the net proceeds. Pending these uses, the proceeds will be invested in a variety of capital preservation investments, including short -term , investment -grade , interest -bearing instruments and US government securities. We anticipate that the proceeds from this offering will enable us to further grow the business and increase cash flows from operations.

All securities sold pursuant to this prospectus

will be offered and sold by the selling stockholder. We will not receive any proceeds from the resale of Common Stock offered by the selling stockholder.

We may receive up to $20.0 million in aggregate

gross proceeds from sales of our Common Stock that we may elect to make to the selling stockholder pursuant to the Purchase Agreement from time to time in our sole discretion, from and after the initial satisfaction of all of the conditions set forth in the Purchase Agreement.

We may use the proceeds from sales of our Common Stock to the selling stockholder for working capital and general corporate purposes.

Our expected use of proceeds from sales of our

Common Stock that we may elect to make to the selling stockholder pursuant to the Equity Line Purchase Agreement, if any, represents our intentions based on our present plans and business conditions, which could change as our plans and business conditions evolve. The amounts and timing of our actual expenditures will depend on numerous factors, including cash flows from operations, the extent and results of our research and development efforts, the anticipated growth of our business, and other factors. We may find it necessary or advisable to use such proceeds for other purposes, and, except as set forth above, we will have broad discretion in the application of such proceeds.

Forward-looking statements 5 changes

This prospectus, including the information incorporated

by reference into this prospectus, contains forward -looking forward-looking statements. Forward -looking Forward-looking statements give our current expectations or forecasts of future events. You can identify these statements by the fact that they do not relate strictly to historical or current facts. Forward -looking Forward-looking statements involve risks and uncertainties and include statements regarding, among other things, our projected revenue growth and profitability, our growth strategies and opportunity, anticipated trends in our market and our anticipated needs for working capital. They are generally identifiable by use of the words "may," "will," "should," "anticipate," "estimate," "plans," "potential," "projects," "continuing," "ongoing," "expects," "management believes," "we believe," "we intend" or the negative of these words or other variations on these words or comparable terminology. These statements may be found under the sections entitled "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Business," in our Annual Report, as well as in this prospectus generally. In particular, these include statements relating to future actions, prospective products, market acceptance, future performance or results of current and anticipated products, sales efforts, expenses, and the outcome of contingencies such as legal proceedings and financial results. Such forward -looking forward-looking statements include, without limitation, statements regarding:

7 unchanged paragraphs

We operate in a very competitive and rapidly changing

We operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for us to predict all of those risks, nor can we assess the impact of all of those risks on our business or the extent to which any factor may cause actual results to differ materially from those contained in any forward -looking forward-looking statement. The forward -looking forward-looking statements in this prospectus are based on assumptions management believes are reasonable. However, due to the uncertainties associated with forward -looking statements, you should not place undue reliance on any forward -looking statements. Further, forward -looking statements speak only as of the date they are made, and unless required by law, we expressly disclaim any obligation or undertaking to publicly update any of them in light of new information, future events, or otherwise.

However, due to the uncertainties associated with forward-looking statements, you should not place undue reliance on any forward-looking statements. Further, forward-looking statements speak only as of the date they are made, and unless required by law, we expressly disclaim any obligation or undertaking to publicly update any of them in light of new information, future events, or otherwise.

Dilution 19 changes

If you invest in our securities, your investment will be diluted immediately to the extent of the difference between the public offering price per share of Common Stock, and the pro forma as adjusted net tangible book value per share of Common Stock immediately after this offering.

Net tangible book value (deficit) represents the amount of our total tangible assets reduced by (a) our total liabilities and (b) the TotalStone Preferred Stock. Tangible assets equal our total assets less intangible assets. As of September 30, 2024, our actual net tangible book value (deficit) was $(35,181,606) and our net tangible book value (deficit) per share was $(223.22).

Pro forma net tangible book value per share represents our net tangible book value divided by the number of shares of Common Stock outstanding after this offering. Pro forma net tangible book value per share includes the effect of 1,250,000 shares to be issued in connection with this offering at an assumed public offering price of $4.00 per share, after deducting underwriting discounts and commissions and estimated offering expenses of $1,441,995. Pro forma net tangible book value (deficit) as of September 30, 2024 is $(31,623,561) or $(22.47) per share. This represents an immediate increase in pro forma net tangible book value (deficit) of $200.75 per share to existing stockholders and an immediate dilution of $(26.47) per share to new investors purchasing Common Stock in the offering.

Pro forma as adjusted net tangible book value per share includes the effects of the shares to be issued in the offering, net of expenses, and the following:

(i) 3,782,641 shares of Common Stock to be issued pursuant to the restructuring transactions to take place on the Restructuring Date, including (a) the cancellation of TotalStone's Class A TS Warrants to purchase 1,125 TotalStone's Class A Common Interests, (b) the exchange of all of TotalStone's Class B and Class C Preferred Interests with an outstanding balance of $28,579,525 as of September 30, 2024 for 3,782,641 shares of Common Stock, (please see the description of the restructuring transactions to take place on the Restructuring Date under " Business — TotalStone, LLC — Future TotalStone Equity Interests Transactions " on page 53 of this prospectus), and (ii) the Special Preferred Membership Interests of TotalStone being converted into loans in like aggregate principal amount of $1,006,377 plus certain amounts for each day after September 30, 2024 until the Restructuring Date, TotalStone's 75 Class C Preferred Interests, with an outstanding balance of approximately $42,000, are included in TotalStone's Class B Preferred Interests on the Company's consolidated balance sheet.

Our pro forma as adjusted net tangible book value (deficit) as of September 30, 2024 would have been $(3,044,036) or $(0.59) per share. The effects of (i) and (ii) above represent an additional immediate increase from pro forma net tangible book value (deficit) of $21.88 per share to existing stockholders and an immediate decrease in the net tangible book deficit of $21.88 per share to new investors purchasing Common Stock in the offering.

Net tangible book deficit value per share as of September 30, 2024 (223.22 ) Increase in net tangible book value per share attributable to the effects to this offering $ 200.75 Pro forma net tangible book value per share $ (22.47 ) Additional increase in net tangible book value per share attributable to the effects of the pro forma as adjusted items (i) and (ii) $ 21.88 Pro forma as adjusted net tangible book value per share $ (0.59 ) Dilution in net tangible book value per share to new investors (4.59 ) If the underwriter's overallotment option is exercised, our pro forma as adjusted net tangible book value following the offering will be $(0.44) per share, and the dilution to new investors in the offering will be $(4.44) per share.

A $1.00 increase or decrease in the assumed public offering price per share of Common Stock would increase or decrease our pro forma as adjusted net tangible book value per share after this offering by approximately $0.22 and dilution per share to new investors would be $(5.37) for an increase of $1.00, or $(3.81) for a decrease of $1.00, after deducting the underwriting discount and estimated offering expenses payable by us.

The pro forma and pro forma as adjusted information discussed above is illustrative only. Our net tangible book value following the completion of this offering is subject to adjustment based on the actual public offering price of our Common Stock and other terms of this offering determined at pricing.

The sale of our Common Stock to the selling stockholder

pursuant to the Purchase Agreement will have a dilutive impact on our stockholders. In addition, the lower our stock price is at the time we exercise our right to sell shares to the selling stockholder, the more shares of our Common Stock we will have to issue to the selling stockholder pursuant to the Purchase Agreement, as a result of which our existing stockholders would experience greater dilution.

Our net tangible book value represents total tangible

assets less total liabilities divided by the number of shares of Common Stock outstanding on March 31, 2025. As of March 31, 2025, we had a historical net tangible book value (deficit) of $(6,952,292), or $(1.34) per share of Common Stock.

After giving effect to the issuance of 5,190,251 shares

of our Common Stock to the selling stockholder pursuant to the Purchase Agreement at an assumed sale price of $1.82 per share of our Common Stock, which is the closing price of our Common Stock on Nasdaq on May 30, 2025, and after deducting estimated offering expenses payable by us, our as-adjusted net tangible book value (deficit) as of March 31, 2025 would have been approximately $(7,083,792), or $(0.68) per share. This represents an immediate increase in net tangible book value of $0.66 per share to existing stockholders and an immediate dilution of $(2.50) per share to new investors.

The following table illustrates this per share dilution:

Public Assumed offering price per share of Common Stock

Net tangible book deficit value per share as of March 31, 2025

Increase/Decrease in net tangible book deficit value per share attributable to the effects to this offering $ 0.66 As adjusted net tangible book deficit value per share after giving effect to this offering $ (0.68 ) Dilution in net tangible book deficit value per share to new investors $ (2.50 ) The calculations above are based on 5,190,251 shares of our Common Stock outstanding as of March 31, 2025.

Legal Matters 2 changes

Certain legal matters with respect to the securities

Certain legal matters with respect to the securities offered hereby will be passed upon by Lucosky Brookman LLP, Woodbridge, New Jersey. Certain other legal matters will be passed upon for the underwriter by Ellenoff Grossman & Schole LLP, New York, New York, in connection with this offering.

Experts 2 changes

The consolidated financial statements as of December 31,

The consolidated financial statements as of December 31, 2023 2024 and 2022, 2023, and for each of the years in the two -year two-year period ended December 31, 2023, 2024, incorporated by reference in this prospectus, have been included herein in reliance upon the report of audited by GBQ Partners LLC, an independent registered public accounting firm. appearing elsewhere herein, and Such financial statements are incorporated by reference in reliance upon the authority report of said such firm given their authority as experts in accounting and auditing.

Where You Can Find More Information 15 changes

We have filed with the SEC a registration statement on Form S -1 under the Securities Act with respect to the securities offered hereby. This prospectus, which constitutes a part of the registration statement, does not contain all of the information in the registration statement and the exhibits of the registration statement. For further information with respect to us and the securities being offered under this prospectus, we refer you to the registration statement, including the exhibits and schedules thereto.

The SEC maintains an Internet web site, which is located at www.sec.gov , which contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC. You may access the registration statement of which this prospectus is a part at the SEC's Internet web site. We are subject the information reporting requirements of the Exchange Act, and we will file reports, proxy statements and other information with the SEC.

You may request, orally or in writing, a copy of any or all of the documents incorporated herein by reference. These documents will be provided to you at no cost by contacting: Capstone Holding Corp., Attn: Office of the Corporate Secretary, 5141 W. 122 nd Street, Alsip, IL 60803. In addition, copies of any or all of the documents incorporated herein by reference may be accessed at our website at https: // www.capstonethx.com contained on, or that can be accessed through, our website is not incorporated by reference into this prospectus, and you should not consider information on our website to be part of this prospectus. The inclusion of our website address in this prospectus is only as an inactive textual reference.

For further information with respect to our company

and the securities being offered hereby, reference is hereby made to the registration statement, including the exhibits thereto and the financial statements, notes, and schedules filed as a part thereof.

No person is authorized to give you any information

or make any representation other than those contained or incorporated by reference in this prospectus. Any such information or representation must not be relied upon as having been authorized. Neither the delivery of this prospectus nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in our affairs since the date of the prospectus.

We are subject to the informational requirements

of the Exchange Act, and must file reports, proxy statements and other information with the SEC, such as current, quarterly and annual reports on Forms 8-K, 10-Q and 10-K, respectively. These filings are available on the SEC's website at http://www.sec.gov.

5,190,251 Shares of Common Stock

1 unchanged paragraph

INDEX TO FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm

Consolidated balance sheets as of December 31, 2023 and 2022

Consolidated statements of operations for the years ended December 31, 2023 and 2022 Consolidated statements of cash flows for the years ended December 31, 2023 and 2022 Consolidated statements of stockholders' deficit for the years ended December 31, 2023 and 2022

INFORMATION NOT REQUIRED IN PROSPECTUS

Exhibits 7 changes

Incorporated by Reference

Form of Underwriting Agreement

(b) Financial statement schedules.

All schedules have been omitted because either they are not required, are not applicable or the information is otherwise set forth in the financial statements and related notes thereto.

We have filed the exhibits listed on the accompanying Exhibit Index of this registration statement and below in this Item 16:

Exhibit Index of this registration statement and below in this Item 16:

Placement Agency Agreement, dated May 15, 2025, by and between Capstone Holding Corp. and Joseph Gunnar & Co., LLC 3.1 Restated Certificate of Incorporation, dated April 22, 2005, as amended on May 21, 2010, June 22, 2015, August 22, 2019, February 10, 2021, and February 18, 2022 3.1 12/31/2024 3.2 Bylaws of the Company 4.2 06/23/2015 3.3 Amended and Restated Certificate of Designation of Series A Preferred Stock, dated June 22, 2015 3.3 12/31/2024 3.4 Form of Certificate of Amendment to the Restated Certificate of Incorporation 3.4 2/6/2025 3.5 Form of Certificate of Designation of Series B Preferred Stock 3.5 2/6/2025 4.1 Form of Representative's Warrant 5.1 2/6/2025 4.2 Amended and Restated Warrant to Purchase Common Stock, dated March 20, 2020, issued to BP Peptides, LLC 4.2 12/31/2024 4.3 Warrant to Purchase Common Stock, dated January 30, 2018, issued to BP Peptides, LLC 8-K 10.2 02/01/2018 5.1 Opinion of Lucosky Brookman LLP 10.1 Form of Indemnification Agreement 10.1 2/6/2025 10.2 Series B Preferred Stock and Warrant Purchase Agreement, dated August 25, 2016, by and between LipimetiX Development, Inc. and Capstone Therapeutics Corp. 8-K 10.1 08/26/2016 10.3 Securities Purchase, Loan and Security Agreement dated July 14, 2017, by and between Capstone Therapeutics Corp. and BP Peptides, LLC 8-K 10.1 07/17/2017 10.4 First Amendment to Securities Purchase Loan and Security Agreement dated January 30, 2018, by and between Capstone Therapeutics, Corp. and BP Peptides, LLC 8-K 10.1 02/01/2018 II-3 II- 4 Exhibit Number Exhibit Description Incorporated by Reference Filed or Furnished Herewith Exhibit Description Form Exhibit Filing Date Herewith 10.5 Second Amendment to Securities Purchase Loan and Security Agreement dated March 15, 2019, by and between Capstone Therapeutics, Corp. and BP Peptides, LLC 8-K 10.1 03/19/2019 10.6 Third Amendment to Securities Purchase Loan and Security Agreement dated March 27, 2020, by and between Capstone Therapeutics, Corp. and BP Peptides, LLC 10.6 12/31/2024 10.7 Fourth Amendment to Securities Purchase Loan and Security Agreement dated March 15, 2021, by and between Capstone Therapeutics, Corp. and BP Peptides, LLC 10.7 12/31/2024 10.8 Termination of Securities Purchase, Loan and Security Agreement, dated November 13, 2024, by and between Capstone Holding Corp. and BP Peptides, LLC 10.8 12/31/2024 10.9 Promissory Note dated July 14, 2017, payable to BP Peptide, LLC 8-K 10.2 07/17/2017 10.10 Fourth Amended and Restated Operating Agreement of TotalStone, LLC, dated March 27, 2020 and Effective as of November 26, 2021 10.10 12/31/2024 10.11 Consent and First Amendment to the Fourth Amended and Restated Operating Agreement of TotalStone, LLC, dated March 27, 2020 and Effective as of November 26, 2021 10.11 12/31/2024 10.12 Second Amended and Restated Credit Agreement, dated March 8, 2023, by and between TotalStone, LLC, Northeast Masonry Distributors, LLC, TotalStone Properties, LLC, and Stream Finance, LLC 10.12 12/31/2024 10.13 Consent, Waiver and Amendment to Second Amended and Restated Credit Agreement, dated October 18, 2024, by and between TotalStone, LLC, Northeast Masonry Distributors, LLC, TotalStone Properties, LLC, and Stream Finance, LLC 10.13 12/31/2024 10.14 Non-negotiable Secured Subordinated Promissory Note by and between TotalStone, LLC and Northeast Masonry Distributors, LLC 10.14 12/31/2024 10.15 Non-negotiable Secured Subordinated Contingent Value Promissory Note by and between NEM Purchaser, LLC and Northeast Masonry Distributors, LLC 10.15 12/31/2024 10.16 Brookstone Partners IAC, Inc. Amended and Restated Management Fee Agreement Dated March 1, 2020 by and between TotalStone, LLC and Brookstone Partners IAC, Inc. 10.16 12/31/2024 10.17 Management Fee Agreement, dated March 27, 2020, by and between TotalStone, LLC and Capstone Holding Corp. 10.17 12/31/2024 10.18 Amendment of Amended and Restated Management Fee and Transaction Fee Agreement, dated November 15, 2024, by and between Capstone Holding Corp., TotalStone, LLC, and Brookstone Partners IAC, Inc. 10.18 12/31/2024 II-4 Exhibit Number Exhibit Description Incorporated by Reference Filed or Furnished Herewith Form Exhibit Filing Date 10.19 Limited Payment Guarantee dated March 31, 2021, between Capstone Therapeutics Corp. and Brookstone Acquisition Partners XXI Corporation 10.19 12/31/2024 10.20 Series B-2 Preferred Stock Purchase Agreement, dated August 11, 2017, by and between Capstone Therapeutics Corp. and LipimetiX Development, Inc. 10-Q 10.1 08/14/2017 10.21 First Amendment to the Amended and Restated Stockholders Agreement of LipimetiX Development, Inc., dated August 11, 2017 10-Q 10.2 08/14/2017 10.22 Joinder of August 25, 2016 Registration Rights Agreement of LipimetiX Development, Inc., dated August 11, 2017 10-Q 10.3 08/14/2017 10.23 LipimetiX Development, Inc. Contingent Value Rights Agreement, dated August 23, 2019, by and among Capstone Therapeutics Corp., the Shareholder Representative and Computershare Inc., and Computershare Trust Company, N.A., as Rights Agent 10.23 12/31/2024 10.24 Second Amended and Restated Promissory Note, dated November 11, 2024, issued by Capstone Holding Corp. to BP Peptides, LLC 10.24 12/31/2024 10.25 Revolving Credit, Term Loan and Security Agreement by and among TotalStone, LLC, Northeast Masonry Distributors, LLC, TotalStone Properties, LLC, and Berkshire Bank, dated December 20, 2017 10.25 12/31/2024 10.26 Amendments to Revolving Credit, Term Loan and Security Agreement Still in Effect As of December 30, 2024 10.26 12/31/2024 10.27 Second Amended and Restated Revolving Credit Note Issued by TotalStone, LLC and Northeast Masonry Distributors, LLC to Berkshire Bank, dated November 14, 2019 10.27 12/31/2024 10.28 Term Note Issued by TotalStone, LLC, Northeast Masonry Distributors, LLC, and TotalStone Properties, LLC to Berkshire Bank, dated November 22, 2021 10.28 12/31/2024 10.29 Second Amended and Restated Promissory Note Issued by Capstone Holding Corp. to Brookstone Partners Acquisition XXI Corporation, dated November 11, 2024 10.29 12/31/2024 10.30 Form of Master Exchange Agreement by and among Capstone Holding Corp., TotalStone, LLC, and TotalStone's Class B Member 10.31 Form of Subscription Agreement for Purchase of Series B Preferred Stock 10.32 Executive Employment Agreement by and between Capstone Holding Corp. and Matthew Lipman 21.1 List of Subsidiaries 21.1 12/31/2024 23.1 Consent of GBQ Partners LLC 23.2 Consent of Lucosky Brookman LLP (included in Exhibit 5.1) II-5 Exhibit Number Exhibit Description Incorporated by Reference Filed or Furnished Herewith Form Exhibit Filing Date 99.1 Consent of Charles Dana to be named as a director nominee 99.1 12/31/2024 99.2 Consent of Gordon Strout to be named as a director nominee 99.2 12/31/2024 99.3 Consent of Fredric J. Feldman to be named as a director nominee 99.3 12/31/2024 99.4 Consent of Elwood D. Howse to be named as a director nominee 99.4 12/31/2024 Filing Fee Table ____________ * To be filed by amendment.

Management 38 changes

The names of our executive officers and directors and their age, title, and biography as of December 30, 2024, are set forth below. Messrs. Dana, Strout, Feldman, and Howse have been appointed to serve as members of the Board effective upon the pricing of this offering.

Set forth below is certain biographical information concerning our current executive officers and directors. We currently have two executive officers as described below.

Directors and Executive Officers

Chief Executive Officer and Director

Michael M. Toporek, III

Chief Financial Officer

Director Nominee (Lead Independent Director)

John M. Holliman, III

Fredric J. Feldman, Ph.D.

Elwood D. Howse, Jr.

The following information sets forth the backgrounds and business experience of the directors and executive officers.

Matthew E. Lipman, Chief Executive Officer and Director. Mr. Lipman brings over 20 years of experience working with companies to establish growth strategies and execute acquisitions. Mr. Lipman has served as a director since July 14, 2017. Mr. Lipman has served as a member of the Board of Directors of Soluna Holdings, Inc., a Nasdaq -listed digital infrastructure company, since 2016. Since 2004, Mr. Lipman has served as Managing Director of Brookstone Partners. From July 2001 through June 2004, Mr. Lipman was an analyst in the mergers and acquisitions group at UBS Financial Services Inc. Mr. Lipman has a B.S. in Business Administration from Babson College. Mr. Lipman currently serves on the Board of Directors of Denison Pharmaceuticals, LLC, Advanced Disaster Recovery Inc., and Harmattan Energy Limited. The Board believes that Mr. Lipman's proficiency in reading and understanding financial statements, generally accepted accounting principles and internal controls, qualifies him to serve as Chief Executive Officer.

Michael M. Toporek, Chairman. Mr. Toporek has served as a director since July 14, 2017. Since 2003, Mr. Toporek has served as the Managing General Partner of Brookstone Partners, a lower/middle market private equity firm based in New York and an affiliate of BP Peptides, LLC ("Brookstone Partners"). Mr. Toporek, a member of the Board of Directors of Soluna Holdings since 2016, served as Soluna Holdings' Chief Executive Officer from November 2020 until May 2023 and has served as Executive Chairman of the Board since that date. Prior to founding Brookstone Partners in 2003, Mr. Toporek was both an active principal investor and an investment banker. Mr. Toporek began his career in Chemical Bank's Investment Banking Group, later joined Dillon, Read and Co., which became UBS Warburg Securities Ltd. during his tenure, and SG Cowen and Company. Mr. Toporek currently serves on the Board of Trustees of Harlem Academy. Mr. Toporek has a B.A. in Economics and an M.B.A from the University of Chicago. Mr. Toporek brings strategic and financial expertise to the Board as a result of his experience with Brookstone Partners, which the Board believes qualifies him to serve as Chairman.

Edward Schultz, CFO. Mr. Schultz has served as Chief Financial Officer since August 25, 2023. Mr. Schultz also serves as the Vice President of Finance of TotalStone, LLC since June 2021. Prior to his employment with Capstone and TotalStone, Mr. Schultz was employed as Director of Financial Reporting and Technical Accounting for Brookfield Properties Retail from September 2012 through June 2021. He holds a Bachelor of Science in Accountancy from the Governors State University.

Charles "Chuck" Dana, Director Nominee (Lead Independent Director). Mr. Dana, upon his joining the Board, will serve as lead independent director. Mr. Dana has been an investor in Brookstone since 2003, and in 2016 joined the firm as an Operating Partner. His main responsibilities are to assist in the strategy and operations of Brookstone's portfolio companies and to identify and acquire middle market companies. Mr. Dana has over 40 years of financial and general management experience. He started his career at GE and had successively more responsible financial role's culminating as President — GE Locomotives Indonesia. Mr. Dana then joined Owens Corning in 1995. He was the President of the Composites Solutions Business from 2003 to 2010 growing sales from $1.2 billion to $2.4 billion both through organic sales growth but also with via several acquisitions. Mr. Dana then served as the Group President for Building Materials ($4.5 billion sales) from 2010 to 2015, a segment that produced eighteen (18) consecutive quarters of net income growth for the insulation business under his leadership. Mr. Dana retired from Owens Corning and served as EVP at Molded Fiber Glass Companies before joining Brookstone. The Board believes the experience and knowledge of Mr. Dana qualifies him to serve on our Board.

John M. Holliman, III, Director. Mr. Holliman has served as a director of the Company since September 1987 and as former Chairman of the Board of Directors from August 1997 through July 2017. Since February 1993 he has been a general partner of entities which are the general partners of Valley Ventures, LP (formerly known as Arizona Growth Partners, LP), Valley Ventures II, LP, Valley Ventures III, LP, Valley Ventures III Annex, LP, all of which are venture capital funds. He has over thirty -nine years of business experience, including service on the boards of over forty companies, commercial lending experience with major financial institutions, and has been active in venture capital financing for over thirty -five years serving a variety of industries. Mr. Holliman earned a BBA in Finance and a MBA from Southern Methodist University and a Master of International Management from the Thunderbird School of Global Management. During his career Mr. Holliman has gained substantial executive and board level experience in business, finance and operations. The Board believes the experience and knowledge of Mr. Holliman qualifies him to serve on our board and to chair our Audit Committee.

Gordon Strout, Director Nominee . Mr. Strout ran a small industrial supply business as well as a heating oil business starting in 1985. After successfully selling off the heating oil business he purchased his father's minority stake in the Industrial supply company in 1989. Instone and Total Lubrication (a Mobil branded lubricants distributor) grew out of the industrial supply business. In 2004 Gordon acquired a majority equity position. Gordon then partnered with Brookstone Partners in 2006 and served as President and CEO through April 2021 at which time he transitioned to Executive Chairman of the Instone board. Mr. Strout holds a bachelor's degree from the University of Miami, Coral Gables Fla. The Board believes the experience and knowledge of Mr. Strout qualifies him to serve on our Board.

Fredric J. Feldman, Ph.D., Director Nominee. Fredric J. Feldman, Ph.D., has been the President of FJF Associates, a consultant to venture capital and emerging companies, since February 1992 and has served as a director of the Company since 1991. From September 1995 to June 1996, he was the Chief Executive Officer of Biex, Inc., a women's healthcare company. He served as Chief Executive Officer of Oncogenetics, Inc., a cancer genetics research company, from 1992 to 1995. Between 1988 and 1992, Dr. Feldman was the President and Chief Executive Officer of Microgenics Corporation, a medical diagnostics company. From 1984 to 1988 Dr. Feldman was Vice President and then President of Instrumentation laboratory a medium sized International Medical Diagnostic Instrumentation Company. Dr. Feldman received his Ph.D. in analytical chemistry from the University of Maryland. He has been a director of a number of public and private companies. The Board believes that Dr. Feldman's over 40 years of operating, scientific and business experience in industry qualifies him for service on our board.

Elwood D. Howse, Jr., Director Nominee. Elwood D. Howse, Jr., previously served as a director of the Company from 1987 to 2023. In 1982, Mr. Howse founded Cable, Howse and Ragen, investment banking and stock brokerage firm, subsequently known as Ragen MacKenzie. In 1977, Mr. Howse co-founded Cable & Howse Ventures, an early-stage venture capital firm focused on technology. In 1976, he served as Vice President, Corporate Finance, for Foster & Marshall, a northwest stock brokerage firm. In 1974 he was the Chief Financial Officer of Seattle Stevedore Company and the Miller Produce Company. Mr. Howse has served as a corporate director and advisor to various public, private and non-profit enterprises. He served on the board of the National Venture Capital Association and is past President of the Stanford Business School Alumni Association. Mr. Howse holds a BS in Engineering from Stanford University and an MBA from Stanford Graduate School of Business. Mr. Howse also served in the US Navy as a nuclear submariner. The Board believes Mr. Howse's education and company operations skills brings important financial and business experience to the board and qualifies him to serve on our board.

None of the above directors and executive officers has been involved in any legal proceedings as listed in Regulation S -K , Section 401(f).

Family Relationships

There are no family relationships among any of our directors or executive officers.

Board Composition, Committees, and Independence

Director Independence

The Nasdaq Marketplace Rules require a majority of a listed company's Board of Directors to be comprised of independent directors within one year of listing. In addition, the Nasdaq Marketplace Rules require that, subject to specified exceptions, each member of a listed company's audit, compensation and nominating and corporate governance committees be independent and that audit committee members also satisfy independence criteria set forth in Rule 10A -3 under the Exchange Act.

Under Rule 5605(a)(2) of the Nasdaq Marketplace Rules, a director will only qualify as an "independent director" if, in the opinion of our Board of Directors, that person does not have a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. In order to be considered independent for purposes of Rule 10A -3 of the Exchange Act, a member of an audit committee of a listed company may not, other than in his or her capacity as a member of the audit committee, the Board of Directors, or any other board committee, accept, directly or indirectly, any consulting, advisory, or other compensatory fee from the listed company or any of its subsidiaries or otherwise be an affiliated person of the listed company or any of its subsidiaries.

Our Board of Directors has reviewed the composition of our Board of Directors and its committees and the indepe ndence of ea ch director. Based upon information requested from and provided by each director concerning his background, employment and affiliations, including family relationships, our Board of Directors has determined that each of Messrs. Charles Dana, Gordon Strout, Fredric J. Feldman, Ph.D., Elwood D. Howse, Jr., and J ohn M. Holliman, III is an "independent director" as defined under Rule 5605(a)(2) of the Nasdaq Marketplace Rules. Our Board of Directors also determined that John M. Holliman, Elwood D. Howse Jr. and Fredric J. Feldman Ph.D., who will comprise our audit committee following this offering, Fredric J. Feldman Ph.D., Charles Dana and John M. Holliman, who will comprise our compensation committee following this offering, and Charles Dana, Elwood D. Howse Jr. and Fr edric J. Feldm an Ph.D., who will be members of our nominating and corporate governance committee following this offering, satisfy the independence standards for such committees established by the SEC and the NASDAQ Marketplace Rules, as applicable. In making such determinations, our Board of Directors considered the relationships that each such non -employee director has with our company and all other facts and circumstances our Board of Directors deemed relevant in determining independence, including the beneficial ownership of our capital stock by each non -employee director.

Audit Committee. We have established an audit committee consisting of John M. Holliman, III, Elwood D. Howse, Jr., and Fredric J. Feldman, Ph.D. John M. Holliman, III is chairman of the audit committee and he qualifies as an "audit committee financial expert" as defined in Item 407(d)(5) of Regulation S -K .

The audit committee's duties are to recommend to our board of directors the engagement of independent auditors to audit our financial statements and to review its accounting and auditing principles. The audit committee will review the scope, timing and fees for the annual audit and the results of audit examinations performed by the internal auditors and independent public accountants, including their recommendations to improve the system of accounting and internal controls. The audit committee will at all times be composed exclusively of directors who are, in the opinion of our board of directors, free from any relationship which would interfere with the exercise of independent judgment as a committee member and who possess an understanding of financial statements and generally accepted accounting principles.

Compensation Committee. We have established a compensation committee consisting of Fredric J. Feldman, Ph.D., Charles Dana, and John M. Holliman, III. Fredric J. Feldman is chairman of the compensation committee.

In considering and determining executive and director compensation, the compensation committee reviews compensation that is paid by other similar public companies to its officers and takes that into consideration in determining the compensation to be paid to our officers. The compensation committee also determines and approves any non -cash compensation paid to any employee. We do not engage any compensation consultants to assist in determining or recommending the compensation to our officers or employees.

Nominating and Corporate Governance Committee. We have established a nominating and corporate governance committee consisting of Charles Dana, Elwood D. Howse, Jr., and Fredric J. Feldman, Ph.D. Charles Dana is chairman of the nominating and corporate governance committee.

The responsibilities of the nominating and corporate governance committee include the identification of individuals qualified to become Board members, the selection of nominees to stand for election as directors, the oversight of the selection and composition of committees of the Board, establishing procedures for the nomination process, oversight of possible conflicts of interests involving the Board and its members, developing corporate governance principles, and the oversight of the evaluations of the Board and management. The nominating and corporate governance committee has not established a policy with regard to the consideration of any candidates recommended by stockholders. If we receive any stockholder recommended nominations, the nominating and corporate governance committee will carefully review the recommendation(s) and consider such recommendation(s) in good faith.

Our Board of Directors has adopted a Code of Business Conduct and Ethics applicable to each officer, director, and employee of the Company. The full text of our Code of Business Conduct and Ethics will be posted on our website at www.capstonethx.com . We intend to disclose on our website any future amendments of our Code of Business Conduct and Ethics or waivers that exempt any principal executive officer, principal financial officer, principal accounting officer or controller, persons performing similar functions or our directors from provisions in the Code of Business Conduct and Ethics. Information contained on, or that can be accessed through, our website is not incorporated by reference into this prospectus, and you should not consider information on our website to be part of this prospectus.

Our directors are appointed at the annual meeting of shareholders and hold office until the annual meeting of the shareholders next succeeding his or her election, or until his or her prior death, resignation or removal in accordance with our bylaws. Our officers are appointed by the Board and hold office until the annual meeting of the Board next succeeding his or her election, and until his or her successor shall have been duly elected and qualified, subject to earlier termination by his or her death, resignation or removal.

Fee Agreement, dated March 27, 2020, by and between TotalStone, LLC and Capstone Holding Corp. 10.17 12/31/2024 10.18 Amendment of Amended and Restated Management Fee and Transaction Fee Agreement, dated November 15, 2024, by and between Capstone Holding Corp., TotalStone, LLC, and Brookstone Partners IAC, Inc. 10.18 12/31/2024 II- 5 Exhibit Number Incorporated by Reference Filed or Furnished Exhibit Description Form Exhibit Filing Date Herewith 10.19 Limited Payment Guarantee dated March 31, 2021, between Capstone Therapeutics Corp. and Brookstone Acquisition Partners XXI Corporation 10.19 12/31/2024 10.20 Series B-2 Preferred Stock Purchase Agreement, dated August 11, 2017, by and between Capstone Therapeutics Corp. and LipimetiX Development, Inc. 10-Q 10.1 08/14/2017 10.21 First Amendment to the Amended and Restated Stockholders Agreement of LipimetiX Development, Inc., dated August 11, 2017 10-Q 10.2 08/14/2017 10.22 Joinder of August 25, 2016 Registration Rights Agreement of LipimetiX Development, Inc., dated August 11, 2017 10-Q 10.3 08/14/2017 10.23 LipimetiX Development, Inc. Contingent Value Rights Agreement, dated August 23, 2019, by and among Capstone Therapeutics Corp., the Shareholder Representative and Computershare Inc., and Computershare Trust Company, N.A., as Rights Agent 10.23 12/31/2024 10.24 Second Amended and Restated Promissory Note, dated November 11, 2024, issued by Capstone Holding Corp. to BP Peptides, LLC 10.24 12/31/2024 10.25 Revolving Credit, Term Loan and Security Agreement by and among TotalStone, LLC, Northeast Masonry Distributors, LLC, TotalStone Properties, LLC, and Berkshire Bank, dated December 20, 2017 10.25 12/31/2024 10.26 Amendments to Revolving Credit, Term Loan and Security Agreement Still in Effect As of December 30, 2024 10.26 12/31/2024 10.27 Second Amended and Restated Revolving Credit Note Issued by TotalStone, LLC and Northeast Masonry Distributors, LLC to Berkshire Bank, dated November 14, 2019 10.27 12/31/2024 10.28 Term Note Issued by TotalStone, LLC, Northeast Masonry Distributors, LLC, and TotalStone Properties, LLC to Berkshire Bank, dated November 22, 2021 10.28 12/31/2024 10.29 Second Amended and Restated Promissory Note Issued by Capstone Holding Corp. to Brookstone Partners Acquisition XXI Corporation, dated November 11, 2024 10.29 12/31/2024 10.30 Form of Master Exchange Agreement by and among Capstone Holding Corp., TotalStone, LLC, and TotalStone's Class B Member 10.30 2/6/2025 10.31 Form of Subscription Agreement for Purchase of Series B Preferred Stock 10.31 2/6/2025 10.32 Executive Employment Agreement by and between Capstone Holding Corp. and Matthew Lipman 10.32 2/6/2025 10.33 Form of Underwriting Agreement 1.1 2/6/2025 10.34 Form of Common Stock Purchase Agreement 10-Q 10.1 5/15/2025 10.35 Form of Registration Rights Agreement 10-Q 10.2 5/15/2025 21.1 List of Subsidiaries 21.1 12/31/2024 23.1 Consent of GBQ Partners LLC 23.2 Consent of Lucosky Brookman LLP (included in Exhibit 5.1) Filing Fee Table II- 6 (b) Financial statement schedules.

All schedules have been omitted because either

they are not required, are not applicable or the information is otherwise set forth in the financial statements and related notes thereto.

Undertakings 13 changes

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(2) That for the purpose of determining any liability under the

(2) That for the purpose of determining any liability under the Securities Act of 1933 each such post -effective post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

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The undersigned registrant undertakes

The undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:

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(7) Insofar as indemnification for liabilities arising under the

(7) 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 in Item 14 above, or otherwise, the Registrant has been advised that in the opinion of the SEC 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 its 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.

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(ii) That for the purpose of determining any liability under the

(ii) That for the purpose of determining any liability under the Securities Act, each post -effective post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and this offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

Pursuant to the requirements of the Securities Act of 1933,

Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized in the City of Alsip, Illinois, on February 6, June 3, 2025.

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Pursuant to the requirements of the Securities

Pursuant to 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 indicated:

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/s/ Fredric J. Feldman