Capstone Companies Inc (CAPC)

[JTHawk]

They have a few options to address this.  Here are a few, but not limited to these. To make the Series B-1 Convertible Preferred Shares work for both Capstone ($CAPC) and Coppermine in a reverse merger, they would likely negotiate a conversion or restructuring deal that protects Coppermine’s control post-merger while still giving legacy Capstone stakeholders (like Stewart Wallach and Jeffrey Postal) a meaningful stake.Here’s how that might look:
1. Conversion to Common Shares at a Negotiated Ratio • Before the merger, Series B-1 holders could agree to convert their preferred shares into a reduced number of common shares, based on a fair valuation. • This avoids excessive dilution for Coppermine and allows the deal to go through cleanly. • Example: If 10M preferred shares would normally convert into 100M common shares, the holders may agree to a 10:1 conversion ratio, getting only 10M common shares instead.Benefits: • Coppermine gets majority ownership and control (e.g. 80–90%). • Series B-1 holders still retain equity in the new company, giving them upside if the deal succeeds.
2. Partial Cancellation or Buyout • Some Series B-1 shares could be canceled or bought out as part of the deal. • For example, Wallach and others could be compensated with cash, consulting agreements, or a smaller equity stake in exchange for releasing their conversion rights.Benefits: • Coppermine gets a cleaner cap table. • Legacy insiders get a defined exit or a lower-risk position.
3. Conversion Plus Role in New Entity • Wallach or Postal could convert their shares at a reduced rate and receive a board seat or advisory role in the new company, aligning interests but not interfering with control.Benefits: • Keeps continuity and honors past leadership without giving up future control. • May make the deal more acceptable to existing CAPC shareholders.
 Example Post-Merger Cap Table: • CAPC Common (existing): 50M shares • Series B-1 Converted: 10M shares (after a reduced conversion rate) • Coppermine New Issuance: 360M shares➡️ Total: 420M shares➡️ Coppermine holds ~86%➡️ CAPC + B-1 holders hold ~14%
Bottom Line:The Series B-1 shares will need to be converted or restructured in a way that preserves control for Coppermine while giving existing CAPC insiders a reasonable, minority equity stake and possibly future upside. It’s all about negotiated trade-offs between dilution, control, and value sharing.