Capstone Energy Plus, Inc.

• California Air Resources Board Notice of Violation*

On August 4, 2026, the California Air Resources Board (“CARB”) issued a Notice of Violation (the “NOV”) alleging violations of California’s Distributed Generation Certification Regulation (Cal. Code Regs., tit. 17, §§ 94200–94214) involving 27 distributed generation units sold or leased for use in California. The NOV states that violations may result in civil penalties of up to $12,940 per day per violation but does not specify an aggregate penalty amount. The Company intends to meet with CARB to discuss the allegations and seek resolution. The matter is at a preliminary stage, and the Company cannot predict its outcome or reasonably estimate any resulting loss or range of loss.

Refer to Note 12 – Commitments and Contingencies – Legal Proceedings, in the Notes to Condensed Consolidated Financial Statements (Part I, Item 1 of this Form 10-Q) for information regarding legal proceedings in which we are involved. The Company is from time to time a party to various lawsuits, claims and other legal proceedings that arise in the ordinary course of business. The outcome of litigation is inherently uncertain. If one or more legal matters were to be resolved against the Company in a reporting period for amounts in excess of management’s expectations, the Company’s financial condition and operating results for that reporting period could be materially adversely affected.