Note 11 Debt 

As of March 31, 2026, the Company had $8.8 million in long-term debt, with $4.4 million payable within 12 months. A summary of the Company’s long-term debt is as follows in (“000’s”):

Mezzanine Term Loan — Stream Finance, LLC.

TotalStone, LLC is party to the Second Amended and Restated Credit Agreement, dated March 8, 2023, with Stream Finance, LLC, as agent (as amended, the "Stream Finance Credit Agreement"). The mezzanine term loan bears interest at an annual rate of 14% (12% per annum plus payment-in-kind interest of 2%, equivalent to 12% payable in cash and 2% paid-in-kind) pursuant to the terms of the Stream Finance Credit Agreement, as amended. As of January 1, 2025, the outstanding balance of the mezzanine term loan was $1,552,244, consisting of principal of $1,309,244 and accrued and deferred interest of $243,000. On March 7, 2025, in connection with the corporate restructuring described in Note 2, the Special Preferred Membership Interests previously held by Stream Finance were exchanged for additional term loans, adding $1,143,646 (representing $1,006,377 of original principal plus $137,269 of accrued interest) to the outstanding principal balance. PIK interest of $40,774 was capitalized to principal through December 31, 2025. As of March 31, 2026 and December 31, 2025, the outstanding principal balance of the mezzanine term loan was $2,581,088 and $2,493,664, respectively. As of March 31, 2026 and December 31, 2025, including accrued and deferred interest of $524,431, and the total outstanding balance was $3,105,520 and $3,018,095, respectively. Including the $695,000 amendment fee payable on the Deferral Date, the Company's total obligation to Stream Finance was $3,713,095 as of December 31, 2025. The amendment fee is payable on the Deferral Date, defined as the earliest to occur of (i) the date of repayment or prepayment of the entire outstanding principal balance of the loan, (ii) the acceleration of the entire outstanding principal balance of the loan, and (iii) the Stream Finance Maturity Date. The Stream Finance Credit Agreement matures on September 30, 2027, as extended pursuant to the Third Amendment dated June 11, 2025. The loan is secured by a second-priority lien on substantially all assets of TotalStone, LLC.

The following table summarizes the activity in the Stream Finance mezzanine term loan for the three months ended  March 31, 2026:

(1) The table above presents principal activity only. As of  March 31, 2026 and December 31, 2025, accrued and deferred interest totaled $524,431 and the amendment fee of $695,000 remained payable on the Deferral Date. The Company's total obligation to Stream Finance, including principal of $2,581,088, accrued and deferred interest of $524,431, and the amendment fee of $695,000, was $3,800,520 at March 31, 2026.

Prior to the Fourteenth Amendment, the interest rate on the Credit Facility was determined on a performance-based sliding scale, with the applicable rate set each quarter by reference to trailing Adjusted EBITDA of TotalStone as measured under the two tables below (Table A excluding the Northeast operations and Table B including them):

Subordinated Promissory Note — Carolina Stone. In connection with the acquisition of Carolina Stone Holdings, LLC on August 22, 2025, CS Purchase Holdings LLC issued a subordinated promissory note to the seller in the original principal amount of $1,250,000 (the “CS Seller Note”). Following the final working capital adjustment of $56,047 added to the principal balance, the CS Seller Note had a balance of approximately $1,306,000 at closing. The CS Seller Note bears interest at a rate of SOFR plus 1.25%, payable quarterly beginning December 31, 2025. Quarterly principal payments of $100,000 commence December 31, 2026, with the remaining balance due at maturity on February 22, 2028. The CS Seller Note is subordinated and unsecured and is pre-payable without penalty. The balance outstanding as of March 31, 2026 was approximately $1,306,000.            .

Seller Notes — Fraser Canyon. In connection with the acquisition of Fraser Canyon Holdings Inc. and the assets of Continental Stone Industries, Inc. on December 1, 2025, Instone Canada Corp. issued two subordinated promissory notes to the sellers: First Seller Note. The first note was issued in the original principal amount of CAD $1,600,000 and matures on March 31, 2027. The note bears interest at TD Bank’s prime rate plus 1.00% through November 30, 2026, stepping up to prime rate plus 3.00% thereafter, payable quarterly. Principal payments of CAD $400,000 each are due on July 31, 2026 and October 31, 2026, with the remaining balance due at maturity. The note is guaranteed by Capstone Holding Corp. and includes a mandatory prepayment provision requiring 50% of net cash proceeds from Capstone equity or debt raises in excess of US $1,100,000. As of March 31, 2026, the outstanding principal balance was CAD $1,600,000 (approximately USD $1,170,000), excluding accrued interest. Second Seller Note. The second note was issued in the original principal amount of CAD $2,000,000 and matures on December 1, 2028. The note bears interest at 30-day average SOFR plus an escalating margin: 1.25% through November 30, 2026; 2.50% from December 1, 2026 through November 30, 2027; and 3.75% thereafter, payable quarterly. Quarterly principal payments of CAD $50,000 commence March 31, 2027, with the remaining balance due at maturity. The note includes a mandatory prepayment provision requiring 50% of quarterly fixed charge excess cash flow to be applied to principal. As of March 31, 2026, the outstanding principal balance was CAD $2,000,000 (approximately USD $1,463,000), excluding accrued interest. Both notes are subordinated to the TD Bank credit facilities.

Liquidity and Nasdaq Listing Compliance

In January 2026, the Company received a notification from the Nasdaq Stock Market indicating that the closing bid price of its Common Stock had been below $1.00 per share for 30 consecutive business days and that the Company was therefore not in compliance with Nasdaq Listing Rule 5550(a)(2). The Company has until July 6, 2026 to regain compliance, and the Board of Directors intends to seek shareholder authorization at the 2026 Annual Meeting to effect a reverse stock split, if needed, to satisfy the minimum bid price requirement. Continued listing on Nasdaq is an important component of the Company's access to capital markets, including its ability to issue shares under the ELOC and to raise additional equity capital on favorable terms. A delisting or prolonged non-compliance could adversely impact the Company's liquidity position. In addition, the Company has generated recurring net losses, including a net loss of $1,915 thousand for the three months ended March 31, 2026, and has had negative cash flow from operations in each of the past two fiscal years.

The Company’s recurring net losses, accumulated deficit, and upcoming debt maturities represent conditions that, in the aggregate, could raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date these consolidated financial statements are issued. Management has evaluated these conditions together with the Company's liquidity resources and operational plans. In April 2025, the Company entered into a $20.0 million Equity Line of Credit agreement with the Equity Line Investor (the "ELOC"), under which the Company has the right, but not the obligation, to require the Equity Line Investor to purchase shares of Common Stock from time to time, subject to certain conditions, including a per-notice "VWAP Purchase Maximum Amount", under which the Company may sell shares of its Common Stock from time to time to the Equity Line Investor at pricing determined under the ELOC agreement, subject to certain conditions, including the Company's continued Nasdaq listing. As of December 31, 2025, approximately $19.5 million remained undrawn under the ELOC, and as of May 19, 2026, approximately $19.2 million remained undrawn. The Company's ability to access the ELOC is subject to certain conditions, including the maintenance of the Company's Nasdaq listing (with respect to which the Company is currently not in compliance with the $1.00 per share minimum bid price requirement, as described above), the per-notice VWAP Purchase Maximum Amount, and other limitations under the ELOC. The Company intends to continue using the ELOC as a component of its liquidity strategy alongside its Revolving Credit Agreement. The Company is also actively integrating the businesses acquired in 2025 and implementing plans to realize operating synergies and cost reductions across the combined platform. On the revenue side, management is expanding the Company's product offering — including new stone veneer lines, complementary hardscape and masonry categories, and broader distribution into the Carolinas and Canadian markets — to drive organic growth and improve operating leverage in 2026. Based on this evaluation, management believes these plans alleviate the substantial doubt. Accordingly, the Company’s cash and available liquidity are expected to be sufficient to fund operations and meet obligations for at least one year from the issuance date of these consolidated financial statements.

Senior Secured Convertible Notes. 

The embedded conversion features are bifurcated as derivative liabilities and measured at fair value at each reporting date with changes in fair value recognized in earnings, in accordance with ASC 815-15. In July 2025, the Company issued a Senior Secured Convertible Note to 3i, LP (the "July Note") in the original principal amount of $3,272,966 (net of an 8.34% original issue discount), maturing July 29, 2026. In October 2025, the Company issued a second Senior Secured Convertible Note to 3i, LP (the "October Note") in the original principal amount of $3,545,712, maturing October 22, 2026. Both notes bear interest at 7.0% per annum, with quarterly cash amortization beginning after 90 days. The notes are secured by a first-priority lien on substantially all of the Company's assets. The embedded conversion features were bifurcated and accounted for as derivative liabilities at fair value in accordance with ASC 815 (see the derivative instruments disclosure below). During the year ended December 31, 2025, the Company entered into three amendments to the July Note and one amendment to the October Note that reduced the applicable conversion prices. The conversion price on the July Note was reduced from $1.72 to $1.00 per share and subsequently to $0.75 per share. On the October Note, the conversion price on $1,772,856 of principal was reduced from $1.10 to $0.75 per share, while the remaining $1,772,856 of principal continued at $1.10 per share. During the year ended December 31, 2025, the Buyer converted $2,710,280 of July Note principal into 2,900,000 shares of common stock at $1.00 per share and $186,916 of October Note principal and $13,084 of accrued interest into 266,667 shares at $0.75 per share. Separately, the Company redeemed $61,942 of July Note principal in cash on September 3, 2025. As of March 31, 2026 and December 31, 2025, the outstanding principal balance was $500,744, on the July Note, and $3,125,152 and $3,358,797, respectively, on the October Note, for aggregate balances of $3,625,896 and $3,859,541, respectively.

The following table summarizes the carrying value of the Company's senior secured convertible notes as of  March 31, 2026:

At December 31, 2025, the net carrying value of the Senior Secured Convertible Notes was $1,568,779, consisting of stated principal of $3,859,541 ($500,744 for SSN #1 and $3,358,797 for SSN #2), reduced by unamortized original issue discount of $327,052, unamortized debt issuance costs of $327,358, and unamortized derivative discount of $1,636,352.

The following table presents a roll forward of the derivative liabilities associated with the embedded conversion features for the three month ended March 31, 2026:

As of March 31, 2026, the following shares of common stock were issuable upon conversion of the outstanding senior secured convertible notes:

Promissory Note — Brookstone XXI, LLC. The $800,000 unsecured promissory note payable to Brookstone Partners Acquisition XXI Corporation was included in the combined principal and interest balance of $1,089,222 exchanged for 825,168 shares of Series Z 8% Non-Convertible Preferred Stock on September 30, 2025 (see above). Upon completion of the exchange, the note and all related obligations, including Capstone’s limited payment guaranty, were extinguished in full. As of March 31, 2026, no amounts remain outstanding.

Scheduled maturities of long-term debt as of March 31, 2026, are as follows: