Creative Medical Technology (CELZ) - 2025 Q2 - Quarterly Report

PART I – FINANCIAL INFORMATION This section presents the unaudited condensed consolidated financial statements and related disclosures for Creative Medical Technology Holdings, Inc Item 1. Financial Statements This section presents the unaudited condensed consolidated financial statements for Creative Medical Technology Holdings, Inc., including the Balance Sheets, Statements of Operations, Statements of Cash Flows, and Statements of Stockholders' Equity (Deficit), along with their accompanying notes, providing a snapshot of the company's financial position and performance for the periods ended June 30, 2025, and December 31, 2024 Unaudited Condensed Consolidated Balance Sheets This section provides a snapshot of the company's financial position, detailing assets, liabilities, and equity as of June 30, 2025, and December 31, 2024 | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------- | :-------------- | :------------------ | | ASSETS | | | | Cash | $6,544,120 | $5,940,402 | | Total Current Assets | $6,632,707 | $6,135,303 | | Licenses, net | $469,240 | $530,559 | | TOTAL ASSETS | $7,105,228 | $6,669,143 | | LIABILITIES & EQUITY | | | | Total Current Liabilities | $277,644 | $327,644 | | TOTAL LIABILITIES | $277,644 | $327,644 | | TOTAL STOCKHOLDERS' EQUITY | $6,827,584 | $6,341,499 | | TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $7,105,228 | $6,669,143 | Unaudited Condensed Consolidated Statements of Operations This section outlines the company's financial performance, including revenues, expenses, and net loss for the three and six months ended June 30, 2025, and 2024 | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenues | $ - | $ 8,000 | $ 3,000 | $ 8,000 | | Gross profit | $ - | $ 4,800 | $ 1,800 | $ 4,800 | | Research and development | $ 501,261 | $ 924,749 | $ 1,244,565 | $ 1,347,141 | | Selling, general and administrative | $ 731,517 | $ 676,086 | $ 1,619,914 | $ 1,347,570 | | TOTAL EXPENSES | $ 1,263,520 | $ 1,630,106 | $ 2,925,798 | $ 2,753,253 | | Operating loss | $ (1,263,520) | $ (1,625,306) | $ (2,923,998) | $ (2,748,453) | | Interest income | $ 30,217 | $ 67,578 | $ 52,598 | $ 149,181 | | NET LOSS | $ (1,233,303) | $ (1,557,728) | $ (2,871,400) | $ (2,599,272) | | NET LOSS PER SHARE - BASIC AND DILUTED | $ (0.48) | $ (1.11) | $ (1.26) | $ (1.84) | | WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING | 2,580,532 | 1,405,208 | 2,282,290 | 1,413,324 | Unaudited Condensed Consolidated Statements of Cash Flows This section details the cash inflows and outflows from operating, investing, and financing activities for the six months ended June 30, 2025, and 2024 | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------------- | :----------------------------- | :----------------------------- | | Net loss | $ (2,871,400) | $ (2,599,272) | | Net cash used in operating activities | $ (2,750,282) | $ (2,366,168) | | Net cash provided by investing activities | $ - | $ 6,520,191 | | Net cash provided by (used in) financing activities | $ 3,354,000 | $ (149,414) | | NET INCREASE IN CASH | $ 603,718 | $ 4,004,609 | | ENDING CASH BALANCE | $ 6,544,120 | $ 7,471,476 | Unaudited Condensed Consolidated Statements of Stockholder' Equity (Deficit) This section presents changes in the company's equity, including common stock, additional paid-in capital, and accumulated deficit, for the period ended June 30, 2025 | Metric | December 31, 2024 | June 30, 2025 | | :-------------------------- | :---------------- | :-------------- | | Common Stock Shares | 1,748,428 | 2,585,532 | | Common Stock Amount | $1,749 | $2,586 | | Additional Paid-in Capital | $70,931,663 | $74,298,311 | | Accumulated Deficit | $(64,591,913) | $(67,463,313) | | Treasury Stock | $ - | $(10,000) | | Total Stockholders' Equity | $6,341,499 | $6,827,584 | - The company's total stockholders' equity increased from $6,341,499 at December 31, 2024, to $6,827,584 at June 30, 2025, primarily due to proceeds from the exercise of warrants ($3,700,000) offset by a net loss of $2,871,400 and treasury stock purchases ($10,000)[16] Notes to Unaudited Condensed Consolidated Financial Statements This section provides detailed explanatory notes accompanying the financial statements, offering further context on accounting policies, agreements, and equity changes NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES This note describes the company's business, operational segment, limited operating history, and key accounting policies for revenue recognition and net loss per share - Creative Medical Technology Holdings, Inc. is a commercial-stage biotechnology company focused on novel biological therapeutics in immunotherapy, endocrinology, urology, neurology, and orthopedics. It conducts commercial operations through CMT, marketing CaverStem® and FemCelz® kits for erectile and female sexual dysfunction[20][22] - The company manages its operations as one reportable segment, with the CEO acting as the Chief Operating Decision Maker (CODM) who reviews and manages the business at a consolidated level[24] - The company has a limited operating history and minimal revenues, facing risks related to general economic conditions, limited marketing capabilities, rapid technological changes, and capital resource constraints for product development[27][29][30][31] - Revenue is recognized from the sale of disposable stem cell concentration kits upon transfer of control to customers, typically on delivery. Deferred revenue was $0 as of June 30, 2025, down from $40,000 at December 31, 2024[33][34] - Basic and diluted net loss per share calculations exclude common stock equivalents (options and warrants) during loss periods as they are anti-dilutive. For the six months ended June 30, 2025, 4,147,478 warrants and 11,183 options were anti-dilutive[36] NOTE 2 – LICENSING AGREEMENTS This note details the company's patent licensing agreements, including amortization schedules and carrying values for various intellectual properties Patent Amortization and Carrying Values (as of June 30, 2025) | Patent | Expiration | Amortization (6 months ended June 30, 2025) | Carrying Value (June 30, 2025) | | :------------------------------------------ | :--------- | :------------------------------------------ | :----------------------------- | | ED Patent | 2025 | $4,986 | $6,083 | | Multipotent Amniotic Fetal Stem Cells License | Feb 2026 | $586 | $275 | | Lower Back Patent (Initial) | May 2027 | $5,267 | $19,733 | | Lower Back Patent (Additional $300k) | 2026 | $22,970 | $41,524 | | Lower Back Patent (IND Filing $100k) | 2033 | $5,119 | $79,055 | | Lower Back Patent (First Patient Dosing $200k) | 2034 | $9,912 | $185,049 | | ImmCelz™ Patent | 2030 | $12,479 | $137,521 | Licensing Agreements Rollforward (Six Months Ended June 30, 2025) | Metric | Assets | Accumulated Amortization | | :-------------------------- | :------- | :----------------------- | | Balances at December 31, 2024 | $1,060,000 | $(529,441) | | Amortization | $ - | $(61,319) | | Balances at June 30, 2025 | $1,060,000 | $(590,760) | NOTE 3 – RELATED PARTY TRANSACTIONS This note discloses transactions with related parties, specifically the CEO's purchase and redemption of Series B Preferred Stock for voting purposes - On May 14, 2024, the CEO purchased one share of Series B Preferred Stock for $100, which carried 100,000,000 votes on a specific Share Increase Proposal. This share was automatically redeemed upon approval of the proposal on December 9, 2024[54] NOTE 4 – STOCK-BASED COMPENSATION This note outlines the company's stock-based compensation plan, including outstanding options and related expenses - The 2021 Equity Incentive Plan authorized 60,000 shares for awards. As of June 30, 2025, 11,183 stock options were outstanding with an average exercise price of $83.96 and a remaining life of 6.61 years. No options were issued, exercised, or expired during the six months ended June 30, 2025[55][58] - Stock-based compensation expense for the six-month periods ended June 30, 2025 and 2024 was $3,485. All stock-based compensation has been expensed as of June 30, 2025[58] NOTE 5 – STOCKHOLDERS' EQUITY This note details changes in stockholders' equity, including share repurchases and warrant exercise inducement offers - The Board approved a share repurchase program on June 12, 2023, authorizing up to $2 million in common stock repurchases. During the six months ended June 30, 2025, the company repurchased 5,000 shares for $10,000, recorded as treasury stock[60] - On March 6, 2025, the company entered into warrant exercise inducement offer letters, resulting in the exercise of 837,104 existing warrants at $4.42/share and the issuance of 1,674,208 new inducement warrants at $3.75/share. This transaction generated approximately $3.7 million in net proceeds for working capital[61][62] Warrant Activity (Six Months Ended June 30, 2025) | Metric | Warrants | Weighted Average Exercise Price | | :-------------------------- | :------- | :------------------------------ | | Outstanding, December 31, 2024 | 3,184,808 | $20.30 | | Issuances | 1,799,774 | $3.75 | | Exercises | (837,104) | $4.42 | | Outstanding, June 30, 2025 | 4,147,478 | $16.32 | NOTE 6 – SUBSEQUENT EVENTS This note confirms the absence of material subsequent events after the reporting period - There were no material subsequent events reported after June 30, 2025[66] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on the company's financial condition and results of operations for the three and six months ended June 30, 2025, compared to the prior year. It covers an overview of the company's biotechnology platforms and recent developments, detailed financial performance, liquidity, capital resources, and critical accounting policies Forward-Looking Statement Notice This section advises readers that the report contains forward-looking statements subject to risks and uncertainties, and the company disclaims any obligation to update them - The report contains forward-looking statements regarding product development, business, financial condition, and strategies, which are subject to risks and uncertainties that could cause actual results to differ materially from expectations[68][69] - The company disclaims any obligation to update or revise forward-looking statements to reflect events or circumstances arising after the report date[71] Overview This section provides a high-level summary of Creative Medical Technology Holdings, Inc.'s business as a commercial-stage biotechnology company and highlights key developments in its therapeutic platforms - Creative Medical Technology Holdings, Inc. is a commercial-stage biotechnology company focused on novel biological therapeutics across immunotherapy, endocrinology, urology, neurology, and orthopedics[72] - The company's commercial operations are primarily through Creative Medical Technologies, Inc. (CMT), which monetizes intellectual property related to erectile dysfunction (ED) and has expanded into 're-programmed' stem cell treatments for various disorders[74] - Key developments include: ImmCelz™ Platform Development This section details the development and advancements of the ImmCelz™ platform, including its efficacy improvements and Orphan Drug Designation for Brittle Type 1 Diabetes - ImmCelz™ (CELZ-100) platform develops treatments using 'reprogrammed' patient immune cells for multiple indications, demonstrating improved purity (>95%), reduced donor cell requirements (75% fewer), and enhanced functional suppression of effector T cells (>200% reduction) compared to industry standards[75][89] - In March 2024, ImmCelz™ (CELZ-100) received Orphan Drug Designation (ODD) from the FDA for treating Brittle Type 1 Diabetes, offering benefits like tax advantages, user fee exemptions, and market exclusivity[81] iPSCelz™ Program and AI Integration This section describes the progress of the iPScelz™ program, including viral-free iPSC line development, insulin-producing islet cells, and AI integration for drug discovery - The iPScelz™ program, in collaboration with Greenstone Biosciences Inc., successfully developed a viral-free human induced pluripotent stem cell (iPSC) line, saving 2-3 years in R&D and showing potential for therapeutic biologics and drug discovery[76] - In June 2024, the company successfully generated human iPSCs-derived islet cells that produce human insulin, with potential for clinical translation and stand-alone insulin production[86] - In July 2024, a program was initiated to combine AI with proprietary iPSCs for diagnosing and treating patients exposed to biological and chemical weapons, aiming to accelerate research efficiency, precision, and innovation in drug discovery and therapeutic interventions[87] AlloStem™ Clinical Cell Line Development This section outlines the development and clinical trial progress of the AlloStem™ Clinical Cell Line across various indications, including Type I Diabetes and Chronic Lower Back Pain - The AlloStem™ Clinical Cell Line (CELZ-200) was developed in October 2022, intended for use across multiple programs including ImmCelz™ immunotherapy, OvaStem™ for Premature Ovarian Failure, Type I Diabetes (CELZ-201 CREATE-1), and AlloStemSpine® Chronic Lower Back Pain (CELZ-201 ADAPT)[77] - The FDA cleared the Type I Diabetes (CELZ-201 CREATE-1) IND application in November 2022, allowing a Phase I/II clinical trial to begin patient recruitment in September 2023[78] - In September 2023, FDA clearance was received for a Phase I/II clinical trial of AlloStemSpine® Chronic Lower Back Pain (CELZ-201 ADAPT), with patient recruitment and dosing initiated between November 2023 and July 2024[83][84][90] - Initial data from the CELZ-201 ADAPT clinical trial's first cohort (10 participants) in January 2025 showed no dose-limiting toxicities or serious adverse events, with preliminary efficacy signals for back pain relief. The Data Safety Monitoring Board (DSMB) recommended proceeding to the next cohort, and the second cohort of 10 patients was dosed in Q2 2025[91] - In March 2024, FDA authorization was secured for an expanded access therapy using CELZ-201 to manage abnormal glucose tolerance and prevent Type I Diabetes in high-risk individuals[85] StemSpine® Pilot Study This section reports on the positive three-year follow-up data from the StemSpine® pilot study for chronic lower back pain treatment - Positive three-year follow-up data for the StemSpine® pilot study was reported in February 2023, demonstrating continued efficacy for treating chronic lower back pain without serious adverse effects[79] Type 2 Diabetes Treatment (CELZ-001) This section presents positive one-year follow-up data for CELZ-001 in Type 2 Diabetes patients, highlighting significant insulin requirement reduction - Positive one-year follow-up data for CELZ-001 in Type 2 Diabetes patients was reported in April 2023, showing significant efficacy with 93% of treated patients achieving at least a 50% reduction in insulin requirement, with no safety concerns[82] Results of Operations – For the Three-month Periods Ended June 30, 2025, and 2024 This section analyzes the company's financial performance, including revenues, expenses, and net loss, for the three-month periods ended June 30, 2025, and 2024 Financial Performance (Three Months Ended June 30) | Metric | 2025 | 2024 | Change ($) | Change (%) | | :--------------------------------- | :--- | :--- | :--------- | :--------- | | Gross Revenue | $ - | $ 8,000 | $ (8,000) | -100% | | Cost of Goods Sold | $ - | $ 3,200 | $ (3,200) | -100% | | Gross Profit/(Loss) | $ - | $ 4,800 | $ (4,800) | -100% | | Selling, General and Administrative Expenses | $ 731,517 | $ 676,086 | $ 55,431 | 8% | | Research and Development Expenses | $ 501,261 | $ 924,749 | $ (423,488) | -46% | | Operating Loss | $ (1,263,520) | $ (1,625,306) | $ 361,786 | -22% | | Other Income | $ 30,217 | $ 67,578 | $ (37,361) | -55% | | Net Loss | $ (1,233,303) | $ (1,557,728) | $ 324,425 | -21% | - The decrease in R&D expenses by $423,488 (46%) was primarily due to the timing of efforts with industry partners[99] - The increase in SG&A expenses by $55,431 (8%) was mainly driven by higher marketing expenses ($38,362) and public company expenses ($21,454)[97] Results of Operations – For the Six-month Periods Ended June 30, 2025, and 2024 This section analyzes the company's financial performance, including revenues, expenses, and net loss, for the six-month periods ended June 30, 2025, and 2024 Financial Performance (Six Months Ended June 30) | Metric | 2025 | 2024 | Change ($) | Change (%) | | :--------------------------------- | :----------- | :----------- | :--------- | :--------- | | Gross Revenue | $ 3,000 | $ 8,000 | $ (5,000) | -62.5% | | Cost of Goods Sold | $ 1,200 | $ 3,200 | $ (2,000) | -62.5% | | Gross Profit/(Loss) | $ 1,800 | $ 4,800 | $ (3,000) | -62.5% | | Selling, General and Administrative Expenses | $ 1,619,914 | $ 1,347,570 | $ 272,344 | 20% | | Research and Development Expenses | $ 1,244,565 | $ 1,347,141 | $ (102,576) | -8% | | Operating Loss | $ (2,923,998) | $ (2,748,453) | $ (175,545) | 6% | | Other Income | $ 52,598 | $ 149,181 | $ (96,583) | -65% | | Net Loss | $ (2,871,400) | $ (2,599,272) | $ (272,128) | 10% | - The 20% increase in SG&A expenses was primarily due to a $169,213 increase in marketing expenses, a $50,512 general liability contract renewal, and a $37,243 increase in legal expenses[105] - The 8% decrease in R&D expenses was due to a $466,520 reduction in general R&D and a $149,729 reduction in Type I Diabetes clinical trial expenses, partially offset by a $280,333 increase in the AlloStemSpine® Chronic Lower Back Pain trial[107] Liquidity and Capital Resources This section assesses the company's ability to meet its short-term and long-term financial obligations, detailing its cash position and working capital Liquidity Position | Metric | June 30, 2025 | December 31, 2024 | | :-------------------- | :-------------- | :------------------ | | Available Cash & US Treasuries | $6,544,120 | $5,940,402 | | Positive Working Capital | $6,355,063 | $5,807,659 | Cash Flows This section provides an analysis of the company's cash generation and usage from operating, investing, and financing activities for the six months ended June 30, 2025, and 2024 Cash Flow Summary (Six Months Ended June 30) | Cash Flow Activity | 2025 | 2024 | | :-------------------------------- | :----------- | :----------- | | Net cash used in operating activities | $ (2,750,282) | $ (2,366,168) | | Net cash received from investing activities | $ - | $ 6,520,191 | | Net cash from financing activities | $ 3,354,000 | $ (149,414) | - Net cash used in operating activities increased by $384,114 (16%) primarily due to increased R&D investments and corporate marketing[111] - Financing activities provided $3,354,000 in 2025, mainly from warrant exercises, a significant shift from $149,414 used in 2024 for treasury stock purchases[113] Critical Accounting Policies and Estimates This section discusses the significant accounting policies and estimates that require management's judgment and can materially affect the financial statements - The preparation of financial statements requires management to make assumptions and estimates about future events and apply judgments that affect reported amounts. These are regularly reviewed, but actual results may differ materially[114] Item 3. Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, Creative Medical Technology Holdings, Inc. has elected not to provide the disclosures typically required for quantitative and qualitative information about market risk - The company, as a smaller reporting company, has elected not to provide quantitative and qualitative disclosures about market risk[115] Item 4. Controls and Procedures This section details the evaluation of the company's disclosure controls and procedures and reports on any changes in internal control over financial reporting during the period Evaluation of disclosure controls and procedures This section confirms management's assessment of the effectiveness of the company's disclosure controls and procedures as of June 30, 2025 - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of June 30, 2025, ensuring timely and accurate reporting of required information[116][118] Changes in internal control over financial reporting This section reports on any material changes in the company's internal control over financial reporting during the period - There were no changes in internal control over financial reporting during the period covered by this report that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[119] PART II – OTHER INFORMATION This section provides additional information including legal proceedings, equity sales, and a list of exhibits Item 1. Legal Proceedings This section addresses the company's involvement in legal proceedings, noting that while lawsuits may arise in the ordinary course of business, litigation outcomes are inherently uncertain and could potentially harm the business - The company may become involved in various lawsuits and legal proceedings in the ordinary course of business, with inherent uncertainties that could adversely affect the business[121] Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities This section reports on the company's share repurchase program, indicating no share repurchases occurred during the three months ended June 30, 2025 - The company's Board of Directors authorized a share repurchase program for up to $2 million of common stock on June 12, 2023. No share repurchases were made during the three months ended June 30, 2025[122] Item 6. Exhibits This section lists the exhibits filed as part of the Form 10-Q, including corporate governance documents, certifications, and XBRL-related files - The exhibits include Articles of Incorporation, Bylaws, Rule 13a-14(a)/15d-14a(a) Certifications of Principal Executive and Financial Officers, Section 1350 Certifications, and Inline XBRL documents[123]