Capstone Holding Corp. 8-K

What Happened

• Capstone Holding Corp. filed an 8‑K (Dec 29, 2025) reporting that stockholders approved a letter agreement with Nectarine Management LLC (owned by directors Michael Toporek, Matthew Lipman, Gordon Strout and John Holliman III) that permits Capstone to pay consent fees to Nectarine for certain corporate transactions. The approval followed the Company’s Nov 18, 2025 annual meeting and prior committee review.
• Under that Nectarine Letter Agreement, the Nominating and Corporate Governance Committee approved a 2% consent fee on the cash paid at closing of Capstone’s Dec 1, 2025 acquisition of Fraser Canyon Holdings Inc. (FCHI), plus reimbursement of certain legal fees. The filing also reports an amendment (Dec 19, 2025) extending TotalStone, LLC’s Berkshire Bank revolver maturity to June 19, 2026.

Key Details

• Consent fee: 2% of the US$4,435,225 cash paid at closing of the FCHI acquisition (≈ US$88,700 total).
  • Distribution (approx): Toporek ~$29,940; Lipman ~$29,940; Strout ~$17,740; Holliman ~$8,870; remaining amount to a Nectarine affiliate.
• Legal fee reimbursement: up to $50,000 related to the Acquisition.
• Contingent/secondary payments: Nectarine personnel to receive ~US$52,650 (CAD exchange rate) within two years if Capstone pays CAD$3,600,000 principal on a promissory note; and up to ~US$43,900 if an earn‑out of CAD$3,000,000 is fully paid — with specific per‑person breakdowns included in the filing.
• Revolver update: TotalStone’s outstanding revolver was $8.3 million as of Sept 30, 2025; maturity extended to June 19, 2026 by amendment dated Dec 19, 2025.

Why It Matters

• These payments create near‑term cash obligations (≈ $88.7k now, plus potential future contingent payments) tied to Capstone’s December 2025 acquisition, and they directly benefit the Company’s largest stockholder (Nectarine) whose owners are also directors. That raises related‑party and governance considerations investors should note.
• The revolver maturity extension pushes TotalStone’s near‑term bank deadline to mid‑2026, which is relevant for liquidity planning and short‑term financing risk.
• Investors should review the full 8‑K for the complete breakdown of payments, governance approvals, and any director changes (Item 5.02) noted in the filing.