DEF: CELZ Seeks Shareholder Approval for Warrant Exercise

Creative Medical Technology Holdings, Inc. is holding a Special Meeting on December 26, 2025, to seek stockholder approval for the full exercise of warrants covering 2,790,340 shares of common stock.

Summary

• A Special Meeting of Stockholders will be held on December 26, 2025, at 9:00 a.m. Pacific Standard Time to approve the exercise in full of warrants.
• The warrants, referred to as 'Inducement Warrants,' allow for the purchase of an aggregate of 2,790,340 shares of Common Stock.
• These Inducement Warrants were issued on October 29, 2025, as part of an inducement offer where holders of existing warrants (1,116,136 shares) agreed to exercise them at $3.75 per share.
• The current exercise price of the Inducement Warrants is $2.86 per share, reduced from an initial $3.75 based on the lowest VWAP during a five-trading-day period.
• Stockholder approval is required to comply with Nasdaq Listing Rule 5635(d) because the issuance of shares upon exercise would exceed 20% of the outstanding Common Stock at a price less than the Minimum Price, and no cash consideration was paid for the Inducement Warrants themselves.
• The Board of Directors unanimously recommends that stockholders vote FOR the approval of the exercise in full of the Inducement Warrants.
• Failure to obtain stockholder approval will require the Company to call additional stockholder meetings every 90 days until approval is secured, incurring substantial costs.
• As of the record date, October 29, 2025, there were 2,850,532 shares of Common Stock issued and outstanding, held by 75 holders of record.

Sentiment

Score: 5

Explanation: Neutral to slightly negative. While the board recommends approval to avoid recurring costs and ensure compliance, the underlying transaction involves significant potential dilution (2,790,340 shares vs. 2,850,532 outstanding) and potential adverse impact on the stock price, which are negatives for existing shareholders. It's a necessary compliance step rather than a purely positive strategic move.

Positives

• The Board of Directors unanimously recommends approval, indicating management's belief that this action is in the best interest of the Company and its stockholders.
• Approval of the proposal will prevent the Company from incurring substantial costs associated with repeatedly calling additional stockholder meetings every 90 days until approval is obtained.

Negatives

• The exercise of the Inducement Warrants will result in significant dilution of the ownership interest of existing stockholders.
• The potential sale of the 2,790,340 shares of Common Stock issuable upon exercise into the public market could adversely affect the market price of the Company's Common Stock.

Risks

• Dilution of ownership interest for existing stockholders upon the exercise of the Inducement Warrants.
• Potential adverse effect on the market price of Common Stock due to the sale of shares issuable upon warrant exercise into the public market.
• Incurrence of substantial costs, including legal fees and proxy material printing/mailing, if stockholders fail to approve the proposal, as the Company would need to hold additional meetings every 90 days.

Future Outlook

The Inducement Warrants will not be exercisable until stockholder approval is obtained and will then be exercisable for a period of five years. The Company has agreed to file a registration statement with the SEC to register the resale of the shares of Common Stock underlying the Inducement Warrants under the Securities Act of 1933.

Management Comments

• "The Board has determined that allowing the holders of the Inducement Warrants to exercise them in full is in the best interest of the Company and its stockholders because the Company is required to obtain the approval its stockholders to such exercise and to repeatedly call stockholders meetings every 90 days until such stockholder approval is obtained."
• "As a result, in the event stockholders fail to approve the Proposal, the Company will incur substantial costs for holding additional meetings, including legal costs and costs for printing and mailing proxy materials to its stockholders."
• "The Board of Directors unanimously recommends that the stockholders vote FOR the approval of the exercise in full of the Inducement Warrants."

Industry Context

This filing highlights a common corporate finance strategy where companies use warrants as an inducement for existing warrant holders to exercise, often to raise capital or simplify their capital structure. The need for shareholder approval due to Nasdaq listing rules is a standard compliance requirement for significant equity issuances that could dilute existing shareholders.

Comparison to Industry Standards

• NA

Corporate Governance

Stakeholder Impact

• **Shareholders**: Potential significant dilution of ownership interest and adverse impact on the market price of Common Stock if Inducement Warrants are exercised and the underlying shares are sold. Will incur costs if approval is not granted, leading to repeated meetings.
• **Company**: Ensures compliance with Nasdaq listing rules, avoiding potential delisting issues. Avoids substantial recurring costs associated with holding multiple special meetings if the proposal is approved. Facilitates future capital inflow upon warrant exercise.

Next Steps

• Hold the Special Meeting of Stockholders on December 26, 2025, to vote on the warrant exercise proposal.
• If approved, the Inducement Warrants will become exercisable for a period of five years following the date of stockholder approval.
• File a registration statement with the SEC to register the resale of the shares of Common Stock underlying the Inducement Warrants.
• If the proposal is not approved, call additional stockholder meetings every 90 days until such stockholder approval is obtained.
• Announce preliminary voting results at the Special Meeting and disclose final voting results on a Current Report on Form 8-K within four business days after the meeting.

Key Dates

Recommendation

The filing details a necessary corporate action to comply with Nasdaq rules following a prior warrant issuance. While approval avoids recurring costs, the underlying transaction involves significant potential dilution (2,790,340 shares compared to 2,850,532 outstanding) and potential downward pressure on the stock price from future sales. Investors should hold and monitor the outcome of the vote and the subsequent market reaction, as the dilution is substantial relative to current outstanding shares. The transaction itself is a past event, and this vote is about enabling its full completion and avoiding further costs, rather than a new strategic initiative.

Keywords

Creative Medical Technology Holdings, CELZ, Warrants, Stockholder Meeting, Proxy Statement, Nasdaq Listing Rule 5635(d), Share Dilution, Corporate Governance, Inducement Warrants, Common Stock