Note 19 Subsequent Events

The Company has evaluated subsequent events through August 12, 2026, the date these unaudited condensed consolidated financial statements were issued. Other than the events disclosed below, no other subsequent events occurred that would require recognition or disclosure in the unaudited condensed consolidated financial statements.

Warrant Exercise (3i, LP). On July 10, 2026, 3i, LP exercised in full the February 2026 warrant to purchase 405,000 shares of Common Stock at an exercise price of $0.01 per share (see Note 14), and the Company issued 405,000 shares of Common Stock upon the exercise. The Company has filed a registration statement on Form S-1 registering the resale of such shares.

Senior Secured Convertible Note Maturity Extension. The July 2025 Senior Secured Convertible Note matured on July 29, 2026 with an outstanding principal balance of $250,372, and the Company and the holder extended the maturity date to August 29, 2026. The extension was reported on the Current Report on Form 8-K filed with the SEC on August 3, 2026, and the extension agreement is incorporated by reference in Item 6.

Convertible Note Conversion Price Adjustment. On August 10, 2026, the Company and the holder of the Senior Secured Convertible Notes entered into a Conversion Price Voluntary Adjustment Notice under Section 7(h) of each Note reducing the conversion price of both Notes to $0.2949 per share, effective August 10, 2026 through the maturity date of the applicable Note. The adjusted price applies to all principal and other amounts outstanding under each Note, consisting of $250,372.01 of principal under the July 2025 Note, previously subject to a conversion price of $0.75, and $1,650,387.77 of principal under the October 2025 Note, of which $90,615.48 was previously subject to a conversion price of $0.75, $286,916.08 was previously subject to a conversion price of $0.57, and $1,272,856.21 was previously subject to a conversion price of $1.10. Following the adjustment, no principal amount outstanding under either Note remains subject to any other conversion price. The $1,900,759.78 of principal outstanding is convertible into approximately 6,445,438 shares of Common Stock at the adjusted price, compared with approximately 2,115,154 shares at the conversion prices in effect at June 30, 2026. Conversion is voluntary at the election of the holder. The adjustment is accounted for as a modification of the embedded conversion features, with the resulting change in the fair value of the bifurcated derivative liabilities reflected in earnings in the third quarter of 2026. A copy of the notice is filed as Exhibit 10.11 to this Quarterly Report.

Master Restricted Stock Agreements. On August 7, 2026, the Company entered into Master Restricted Stock Agreements (the "True-Up Agreements") with Matthew Lipman, the Company's Chief Executive Officer, and Michael Toporek, the Company's Chairman, pursuant to the Company's 2025 Stock Incentive Plan. In addition to the restricted stock previously granted to Mr. Lipman and Mr. Toporek on March 30, 2026, the True-Up Agreements provide that the Company will issue to each of Mr. Lipman and Mr. Toporek, on an annual basis beginning January 31, 2027 and continuing until the earliest of March 31, 2031, the applicable recipient's separation from service, or such earlier date as approved by at least 80% of the Board, additional shares of restricted common stock equal to 3.75% of the aggregate number of shares of the Company's Common Stock issued during the applicable measurement period (the "True-Up Shares"). The True-Up Shares are issuable under, and subject to the share reserve limitations of, the 2025 Stock Incentive Plan, and are subject to vesting conditions substantially consistent with those described above with respect to restricted stock awards held by the Company's executive officers and directors, as applicable.

Restricted Stock True-Up Awards. On August 7, 2026, the Compensation Committee approved, and the Company issued, 4,809,212 shares of restricted common stock to eleven executive officers and directors under the Capstone Holding Corp. 2025 Stock Incentive Plan, as amended (the “2025 Plan”), including the shares granted under the True-Up Agreements. The awards were made pursuant to the true-up framework approved by the Board on March 30, 2026, under which each participant is carried to a target ownership percentage as the number of shares of common stock outstanding increases. Section 4(a) of the 2025 Plan limits awards, after giving effect to the issuance of shares thereunder, to 35% of the shares of common stock outstanding as of the first trading day of each fiscal quarter; giving effect to these awards, aggregate shares issued under the 2025 Plan total 6,804,212 shares, or approximately 34.0% of the shares of common stock outstanding as of the first trading day of the third quarter of 2026, after giving effect to the awards. Awards to management participants vest on a three-year cliff on August 7, 2029, and awards to non-employee directors vest only if the recipient’s service terminates by reason of death or disability, by action of the Company other than for cause (including a failure to be nominated for re-election), or by a failure to be re-elected by the stockholders, and are forfeited if the recipient’s service terminates for any other reason. The grant date fair value was $0.27 per share, the closing price of the common stock on August 6, 2026, as fixed by the Compensation Committee written consent dated August 7, 2026, and the Company will recognize compensation cost of approximately $1,299.0 thousand over the applicable vesting periods.

Amendment to Certificate of Incorporation. On August 7, 2026, the Board of Directors approved, and stockholders holding a majority of the voting power of the Company’s outstanding voting stock approved by written consent in lieu of a special meeting, one or more amendments to the Company’s Certificate of Incorporation, as amended, to decrease the number of authorized shares of common stock and/or preferred stock, at such time and in such amounts as the Board of Directors may determine, including in connection with any reverse stock split. The holder of the Company’s Series B Preferred Stock consented to the amendments pursuant to Section 1.5 of the Certificate of Designation of the Series B Preferred Stock. The approval authorizes the amendments but does not effect them. As of the date of this report, the Company has not determined the reduced number of authorized shares and no certificate of amendment has been filed. Any such amendment will be effected, if at all, at such time and in such amounts as the Board of Directors may determine, and not before a definitive information statement on Schedule 14C has been mailed to stockholders and the applicable waiting period has elapsed.

Amendment to the Series B Certificate of Designation. On August 7, 2026, the Board of Directors approved, and the holder of the Series B Preferred Stock consented to, an amendment to the Certificate of Designation of Preferences, Rights and Limitations of Series B Preferred Stock, which the Company filed with the Delaware Secretary of State on August 10, 2026. The amendment provides that, upon any stock split, reverse stock split, combination or similar recapitalization of the Common Stock, the number of votes per share of the Series B Preferred Stock and the price conditions applicable to its conversion adjust proportionately, so that the relative voting power and the conversion economics of the Series B Preferred Stock are unchanged by any such transaction.

Authorization of Related Party Exchanges. On August 7, 2026, the Board of Directors authorized, but did not direct, the Company to enter into exchange agreements with BP Peptides, LLC and Brookstone Partners Acquisition XXI Corporation, entities affiliated with Matthew Lipman, the Company’s Chief Executive Officer, and Michael Toporek, the Chairman of the Board, pursuant to which such holders would surrender shares of Series Z Preferred Stock in exchange for shares of common stock at a price per share representing a premium to the market price of the common stock. No exchange agreement has been executed and no shares have been issued thereunder. The Board also approved in principle, and stockholders holding a majority of the voting power of the Company’s outstanding voting stock approved by written consent in lieu of a special meeting, the settlement of the remaining shares of Series Z Preferred Stock and accrued management fees payable to Brookstone Partners IAC, Inc. through one or more further exchanges. With each exchange occurring  at a price per share equal to 103% of the Nasdaq Official Closing Price on the trading day immediately preceding consummation, in one or more exchanges at any time on or prior to August 7, 2027, covering the issuance of up to 15,750,000 shares of common stock in the aggregate, with each recipient executing an 18-month lock-up agreement. Any such exchange will not be effected before a definitive information statement on Schedule 14C has been mailed to stockholders and the applicable waiting period has elapsed.

Subsequent Equity Line of Credit Draws. Between July 1, 2026 and August 7, 2026, the Company submitted sixteen VWAP Purchase Notices under the Equity Line of Credit agreement with Tumim Stone Capital, LLC (see Note 15), resulting in the issuance of an aggregate of 161,166 shares of Common Stock for aggregate gross proceeds of approximately $40.0 thousand. No further VWAP Purchase Notices were submitted through the date of this report