Capstone Holding Corp. 8-K

What Happened Capstone Holding Corp. (through its operating company TotalStone, LLC) filed an 8-K on January 27, 2026 disclosing that on January 21, 2026 TotalStone entered into a Conditional Fee Waiver and Deferral Agreement with related parties Brookstone Partners IAC and Board Chairman Gordon Strout. Under existing agreements, Brookstone provides $400,000 per year in consulting/management fees (plus 5% of EBITDA above $4.0 million) and Mr. Strout is entitled to salary/fee accruals under an Executive Agreement. Pursuant to the new Fee Waiver, Brookstone waived $400,000 of 2026 fees and Mr. Strout waived $94,091, for a total of $494,091 in waived fees, and TotalStone’s obligation to pay those amounts is extinguished unless and until specified performance targets in the Fee Waiver are met.

Key Details

• Fee Waiver date: January 21, 2026; waiver covers period Jan 1–Dec 31, 2026.
• Waived amounts: $400,000 (Brookstone consulting/management fees) + $94,091 (G. Strout salary/fee accruals) = $494,091 total.
• Existing Management Agreement (dated March 1, 2020) also provides for a 5% fee on EBITDA above $4.0 million (unchanged).
• Payment of the waived fees is conditional — obligations are extinguished unless TotalStone achieves the performance targets specified in the Fee Waiver.

Why It Matters This filing discloses a related‑party arrangement that temporarily reduces TotalStone’s near‑term cash outflows by nearly $0.5 million if performance targets are not met, which can affect liquidity and operating cash requirements in 2026. The waiver is conditional, so the company may owe these amounts in the future if performance triggers are satisfied, which could increase expenses then. Investors should note this is a financial arrangement with related parties (Brookstone and the chairman) and not a change in management; it alters timing and conditioning of compensation rather than cancelling contractual rights outright.