ITEM 5: OTHER INFORMATION.

We are reporting the following information in lieu of reporting on a Current Report on Form 8-K under Item 3.02, Unregistered Sales of Equity Securities and Item 5.02, Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On August 7, 2026, the Company granted 4,809,212 shares of common stock as restricted stock awards to eleven executive officers and directors under the Capstone Holding Corp. 2025 Stock Incentive Plan, as amended. 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.

We are reporting the following information in lieu of reporting on a Current Report on Form 8-K under Item 3.03, Material Modification to Rights of Security Holders and Item 5.03, Amendments to Articles of Incorporation or Bylaws.

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 (the “Amendment to Series B Preferred COD”). The Company filed the Amendment to Series B Preferred COD 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.

The foregoing does not purport to be a complete description of the Amendment to Series B Preferred COD, and such description is qualified in its entirety by reference to the full text of the Amendment to Series B Preferred COD, a copy of which is filed as Exhibit 3.1 to this Quarterly Report on Form 10-Q and is incorporated herein by reference.

We are reporting the following information in lieu of reporting on a Current Report on Form 8-K under Item 5.07, Submission of Matters to a Vote of Security Holders.

On  August 7, 2026, certain stockholders (collectively, the “Consenting Stockholders”) of the Company holding at least a majority of the voting power of the Company’s outstanding shares of capital stock entitled to vote, including the majority of each of (i) the Common Stock shares outstanding, (ii) the Series B Preferred Stock shares outstanding, and (c) the Series Z Preferred Stock shares outstanding, adopted resolutions by written consent (the “Written Consent”) in lieu of a meeting of stockholders to approve two matters.

The first matter approved is the filing of 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 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 information statement on Schedule 14C (a “Schedule 14C”) has been filed with the SEC and mailed to stockholders and the applicable waiting period has elapsed.

The second matter approved is the settlement of the remaining shares of Series Z Preferred Stock and accrued management fees payable to Brookstone Partners IAC, Inc. (an entity affiliated with Matthew Lipman, the Company’s Chief Executive Officer, and Michael Toporek, the Chairman of the Board) 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 Schedule 14C has been filed with the SEC and mailed to stockholders and the applicable waiting period has elapsed.

In connection with both matters, the Company will file with the U.S. Securities and Exchange Commission a Schedule 14C that will be mailed to all holders of record of the Company’s voting capital stock as of the close of business on August 7, 2026 (the “Record Date”). 

The Consenting Stockholders are, collectively, BPA XIV, LLC, Nectarine Management, LLC, Brookstone Partners Acquisition XXI Corporation, BP Peptides, LLC, Gordon Rocks, Inc. (an entity controlled by Gordon Strout, a member of the Board), each member of the Board and named executive officer listed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, and two employees of TotalStone, LLC. As of the close of business on the Record Date, the Consenting Stockholders together held 10,536,050 shares of Common Stock (representing approximately 51.2% of the shares outstanding) and all of the shares of Series B Preferred Stock and Series Z Preferred Stock outstanding, representing approximately 56.4% of the voting power of our outstanding shares of capital stock entitled to vote.

Insider trading arrangements and policies.

During the quarter ended June 30, 2026, no director or officer of the Company adopted or terminated any “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.