Capstone Holding Corp. announced on October 2, 2025 that it has exchanged $1.9 million of debt with a related party for a newly issued series of non‑convertible preferred equity. The transaction fully retires the targeted debt, eliminating the associated interest obligations and reducing the company’s leverage profile. By converting debt into preferred equity, Capstone avoids diluting its common shareholders while simultaneously lowering projected 2026 interest expense by more than $170 k.
The move is part of Capstone’s broader deleveraging strategy, which has been supported by recent financing activities such as a $3.25 million IPO, a $20 million equity line, and a $10.91 million convertible note facility. The preferred equity structure provides the company with a permanent capital base that can be used to fund future acquisitions without increasing common equity dilution. This financial maneuver strengthens Capstone’s balance sheet and enhances its capacity to pursue its aggressive growth agenda in the building products distribution market.
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