About Capstone Therapeutics Corp.

Capstone Therapeutics Corp. (the “Company” or “we”), is traded on the OTCQB under the ticker symbol “CAPS”.  The Company has three assets that are being utilized in efforts to create shareholder value: (1) ownership of a wholly-owned subsidiary, TotalStone, LLC, which distributes masonry stone products for residential and commercial construction in the Midwest and Northeast United States; (2) ownership of a minority interest in Diamond Products Holdings, LLC, a sexual wellness products holding company with worldwide sales; and (3) a significant Net Operating Loss (“NOL”) that may be utilized as a benefit in filing consolidated Company federal tax returns.

TotalStone, LLC:  Based in Alsip, IL the company operates stone veneer and hardscape distribution sites in Illinois, New Jersey, Massachusetts and Ohio.  Operating under the trade names Instone and Northeast Masonry, the company is a wholesale distributor of both manufactured and natural stone veneer siding, hardscapes and related moisture management products, lath products and fireplaces.  The company sells exclusively through its dealer network and offers expedited product delivery through its dedicated route truck network.  An affiliate of Brookstone Partners (New York private equity firm) is the lead equity investor.  Through a recapitalization and merger transaction in March 2020 involving the issuance of $20,500,000 in preferred stock from TotalStone to the prior shareholders, Capstone gained an initial 100% ownership in TotalStone common equity.  For additional information, please see the Company’s press release dated March 27, 2020 on this website or go to www.instoneco.com.

Diamond Products Holdings, LLC:  DP Holdings, LLC is an entity formed by an affiliate of Brookstone Partners to holding its current 95% (61.75% fully diluted) ownership in Diamond Products, LLC, a Chatsworth, CA-based consumer products company marketing under the name Pipedream Products.  The operating company is one of the largest designers, manufacturers and distributors of proprietary romance and sexual wellness products sold globally in over 80 countries through 5,000 retailers as well as e-commerce websites.  DP Holdings, LLC is 20%-owned through a Capstone subsidiary, Capstone Beta, LLC, which issued an $8,000,000 note as consideration for its DPH Holdings, LLC interest. The 20% minority investment in DP Holdings, LLC represents an effective 19% equity interest in Diamond Products, LLC (approximately 12% on a fully-diluted basis).  For a more complete list of transaction terms, please see the Company’s press release dated April 6, 2021 on this website.

Prior Business:  Previously, we were focused on the development and commercialization of three pharmaceutical product platforms:

-Chrysalin (TP508) was a peptide molecule licensed from the University of Texas system and was developed for fresh fracture healing.  Human clinical data was positive, but regulatory hurdles precluded commercialization.  The license was terminated and returned to the inventor in 2012.

-AZX100 was a peptide molecule acquired in 2006 and was developed for dermal scarring and anti-inflammatory indications. Human clinical data was positive but was not licensed by strategics.  The IP license was returned to Arizona State University in 2014; and

-LipimetiX AEM-28 was a peptide molecule licensed in 2011 from the University of Alabama at Birmingham.  Developed for severe orphan hypercholesterolemia, human clinical trials were positive.  Formulation challenges and capital adequacy required industry strategic assistance and the IP platform was licensed to Anji Pharmaceuticals, Inc. in December 2020.  As a result, LipimetiX Development, Inc.is being reflected as a discontinued operation in the Company’s financial statements for 2020.

Net Operating Loss:  The Company has accumulated a net operating loss, primarily from prior peptide drug development efforts, in excess of $140 million at the federal tax level.  In 2017, Brookstone Partners, a New York-based private equity firm, purchased equity and funded debt through an affiliate into Capstone.  Presently, Brookstone owns approximately 34.1% of Capstone’s outstanding stock and holds two of five seats on the Company’s board.  Brookstone and the Company are seeking an acquisition of a profitable operating company in a consumer or basic industry.  Under certain conditions, the subsidiary may file a consolidated tax return with Capstone and utilize benefits from Capstone’s NOL.

Shareholder Matters

On August 22, 2019, the Company conducted an annual meeting of Shareholders and our Shareholders approved a certification of Amendment of the Company’s Restated Certificate of Incorporation to effect a 1-for-1000 reverse stock split to bring total shareholders of record below 300 to allow the Company to no longer be subject to reporting requirements of the Securities and Exchange Commission.  Being a non-reporting company under SEC guidelines will save Capstone money and management time and should provide more operating and transaction flexibility.  (The Company intends to file quarterly financial statements and conduct an annual independent audit, the results of which will be posted on the OTCQB website.  The Company intends to follow the Alternative Reporting Format outlined by the OTCQB in order to remain eligible to continue trading on that exchange.

Effective August 23, 2019 the Company adopted the Contingent Value Rights Agreement that assigns the net proceeds received by the Company from its investment in LipimetiX Development, Inc to Shareholders of record on July 10, 2019. Shareholders who acquired their stock after July 10, 2019 will not share in the value of the Company’s investment in LipimetiX Development, Inc. See our Current Report filed on Form 8-K filed with the Securities and Exchange Commission on August 26, 2019.