Capstone Holding Corp. (CAPS): debt financing — Capstone Holding enters $10.9M convertible note facility; $3M initial draw for acquisition

Capstone Holding Corp.

Company entered securities purchase agreement for up to $10.9M aggregate principal convertible notes with 8.34% OID; first note issued for ~$3.27M principal, gross proceeds $3.0M.
Convertible at $1.72/share, 7% annual interest, matures July 29, 2026; stockholder approval for issuance above 19.99% obtained July 27, 2025.
Proceeds from initial draw to fund previously announced acquisition of a Southeast U.S. thin veneer stone and hardscape distributor under non-binding LOI.
Beneficial ownership conversion limit set at 4.99% unless increased to 9.99% by buyer; Joseph Gunnar acted as placement agent with 7% cash fee.
Company targets full-year revenue run-rate of $100M through organic growth and M&A.

item 1.01 item 2.03 item 3.02 item 8.01 item 9.01

Key facts

Extracted from this filing and checked against the source text.

Debt Financings SEC 8-K Item 2.03/2.04 confidence 0.97

Capstone Holding Corp. incurred convertible notes of aggregate original principal amount of up to $10,909,885 with an institutional investor at 8.34% original issue discount.

Instrument: convertible notes
Principal: aggregate original principal amount of up to $10,909,885
Counterparty: an institutional investor
Rate: 8.34% original issue discount
Event: incurrence

Exact text from the filing

On July 29, 2025, Capstone Holding Corp. (the " Company ") entered into a securities purchase agreement (the " Purchase Agreement ") with an institutional investor (the " Buyer "), pursuant to which the Company authorized the issuance of senior secured convertible notes to the Buyer, in the aggregate original principal amount of up to $10,909,885, which are being issued with a 8.34% original issue discount (each, a " Convertible Note ").

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Capstone Holding Corp. filing history →

Source: SEC EDGAR

accession 0001213900-25-071366

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