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Capstone Holding Corp. (NASDAQ:CAPS), currently trading at $1.29 per share and showing significant volatility according to InvestingPro, announced Thursday that it has amended the terms of its senior secured convertible note with an institutional investor, reducing the conversion price from $1.72 to $1.00 per share. The stock has fallen 71% over the past year and currently trades well below its 52-week high of $16.18. The adjustment was made through a Conversion Price Voluntary Adjustment Notice signed by both parties and is effective starting Friday through the maturity date of the note.
The original securities purchase agreement, dated July 29, 2025, authorized the issuance of senior secured convertible notes in an aggregate principal amount of up to $10,909,885 with an 8.34% original issue discount. The first note was issued in the principal amount of approximately $3,272,966. With a current market capitalization of just $6.7 million and an overall financial health score rated as "WEAK" by InvestingPro, this financing appears crucial for the company’s operations.
The convertible notes are exchangeable for shares of Capstone’s common stock, par value $0.0005 per share, under certain conditions. According to the amended agreement, the investor may convert up to $1,363,736 of the note’s principal at the new $1.00 conversion price.
Capstone had previously registered 4,081,672 shares of common stock, which may be issued upon conversion of the notes, under an effective registration statement on Form S-1 (File No. 333-289222).
This information is based on a statement in a filing with the Securities and Exchange Commission. Investors should note that Capstone is scheduled to report its next earnings on August 19, 2025. InvestingPro subscribers have access to 8 additional key insights about the company’s financial position and market performance.
In other recent news, Capstone Holding Corp. has secured a $10 million convertible note facility to bolster its acquisition plans, with an initial $3 million drawn to finance the acquisition of a Southeast U.S.-based distributor of thin veneer stone and hardscape materials. This move is part of Capstone’s ongoing strategy to expand its market presence through strategic acquisitions. Additionally, Capstone’s Instone subsidiary has secured a significant $1 million order for PangaeaⓇ Natural Stone for a luxury resort development in the Mountain States region, marking its first major project in that area.
The company has already delivered $200,000 worth of stone for the resort, which will feature Instone’s newly launched profiles in more than 30 homes. Capstone has reiterated its financial goals for 2025, targeting a $100 million revenue run-rate and $10 million in adjusted EBITDA by the end of the year. CEO Matthew Lipman expressed confidence in achieving these targets through a combination of organic growth and strategic mergers and acquisitions.
To support its acquisition strategy, Capstone has arranged an Equity Line of Credit (ELOC) to avoid high-interest debt and significant equity dilution. The company is actively evaluating acquisition opportunities with valuations ranging from 4-6x EBITDA. These developments highlight Capstone’s commitment to growth and expansion in the building products distribution sector.
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