Capstone cancels $3.7M in debt by issuing convertible preferred shares, causing potential 50% dilution

CAPSTONE COMPANIES, INC.

Cancelled $3,665,303 in debt owed to five related parties (Wallach, Group Nexus, Postal, Wolf, Fleisig estate) for 750,075 Series B-1 Convertible Preferred shares.
Each B-1 share converts into 66.66 common shares; full conversion would add ~50M shares (50.5% of then-outstanding common stock).
Stewart Wallach (20.1% holder, chair) and Jeffrey Postal (18.5% holder, former director) are among creditors; conversion could give them joint voting control.
Company has no revenue, limited funding through March 2025, and going concern doubts; debt cancellation deemed necessary to attract a new business line.
B-1 shares have no dividend or voting rights, are junior to other preferred, and are lock-up restricted until December 20, 2025, with limited transfer exceptions.

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