Capstone Holding Corp.

ITEM 2: UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

On February 12, 2026, in connection with the Letter Agreement with 3i, LP (see Note 15 to the consolidated financial statements included in this Quarterly Report), the Company issued warrants to purchase 405,000 shares of Common Stock at an exercise price of $0.01 per share. The warrants were issued in reliance on Section 4(a)(2) of the Securities Act of 1933, as amended, as a transaction not involving a public offering. The warrants were exercised in full on July 10, 2026 (See Note 19), and the Company has filed a registration statement on Form S-1 registering the resale of the shares issued upon the exercise.

During the six months ended June 30, 2026, in connection with the senior secured convertible notes, the Company issued 333,335 shares of Common Stock and on April 16, 2026, the Buyer submitted eight Notices of Conversion on the July and October notes that aggregated 2,557,198 shares of Common Stock. The shares were issued in reliance on Section 3(a)(9) of the Securities Act of 1933, as amended.

On August 7, 2026, the Company issued 4,809,212 shares of restricted common stock as restricted stock awards to eleven executive officers and directors under the Capstone Holding Corp. 2025 Stock Incentive Plan, as amended (see Note 19 to the consolidated financial statements included in this Quarterly Report). The shares were issued in reliance on Section 4(a)(2) of the Securities Act of 1933, as amended, as a transaction not involving a public offering. The shares have not been registered as of the date of this filing.