UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, ~~2022~~2023

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR ~~15 (d)~~15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ~~___________~~__________ to ~~___________~~__________

Commission File Number: 000-53500

CREATIVE MEDICAL TECHNOLOGY HOLDINGS, INC.

(Exact name of ~~registrant~~Registrant as specified in its charter)

Nevada

87-0622284

(State or other jurisdiction of

of incorporation or organization)

(I.R.S. Employer

Identification No.)

211 E Osborn Road, Phoenix, AZ		85012
(Address of principal executive offices)		(Zip Code)

~~(480) 399-2822~~

(Registrant’s telephone number, including area ~~code)~~code: (480) 399-2822

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, par value $0.001 per share		CELZ		The ~~Nasdaq~~NASDAQ Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by ~~Section~~section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports)~~. Yes ☒ No ☐~~

~~Indicate by check mark whether the registrant~~, and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated Filer	☒	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange ~~Act.~~Act ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the ~~Exchange~~ Act). Yes ☐ No ☒

~~The number~~As of August 11, 2023, there were 1,430,530 shares ~~outstanding~~ of the registrant’s common stock on ~~August 12, 2022~~~~, was~~ ~~14,070,279~~.outstanding.

		Page Number
PART I – FINANCIAL INFORMATION

Item 1.	Financial Statements

	Unaudited Condensed Consolidated Balance Sheets	3

	Unaudited Condensed Consolidated Statements of Operations	4

	Unaudited Condensed Consolidated Statements of Cash Flows	5

	Unaudited Condensed Consolidated Statements of Stockholder’ ~~(Equity)~~Equity (Deficit)	6

	Notes to Unaudited Condensed Consolidated Financial Statements	87

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1816

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	2219

Item 4.	Controls and Procedures	2219

PART II – OTHER INFORMATION

Item 1.	Legal Proceedings	23

~~Item 2.~~	~~Unregistered Sales of Equity Securities and Use of Proceeds~~	2320

Item 6.	Exhibits	2320

Table of Contents

~~CREATIVE MEDICAL TECHNOLOGY HOLDINGS, INC.~~

~~UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS~~

June 30, 2022

December 31, 2021

ASSETS

CURRENT ASSETS

Cash

$ 22,863,661

$ 10,723,870

Accounts receivable

0

2,485

Inventory

20,625

10,866

Prepaids and other current assets

64,960

0

Total Current Assets

22,949,246

10,737,221

OTHER ASSETS

Other assets

3,281

3,281

Licenses, net of amortization

481,637

527,679

TOTAL ASSETS

$ 23,434,164

$ 11,268,181

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)

CURRENT LIABILITIES

Accounts payable

$ 310,681

$ 761,862

Accrued expenses

64,920

24,385

Management fee and patent liabilities - related parties

0

250,000

Advances from related party

14,194

14,194

Total Current Liabilities

389,795

1,050,441

Commitments and contingencies

STOCKHOLDERS’ EQUITY (DEFICIT)

Common stock, $0.001 par value, 50,000,000 authorized; 13,956,246 and 6,338,872 issued and 13,956,238 and 6,338,864 outstanding at June 30, 2022 and December 31, 2021, respectively

13,957

6,339

Additional paid-in capital

69,644,239

53,879,215

Accumulated deficit

(46,613,827 )

(43,667,814 )
TOTAL STOCKHOLDERS’ EQUITY (DEFICIT)

23,044,369

10,217,740

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)

$ 23,434,164

$ 11,268,181

~~The accompanying notes are an integral part of these condensed consolidated financial statements~~
CREATIVE MEDICAL TECHNOLOGY HOLDINGS, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

June 30,
2023

December 31,
2022

ASSETS

CURRENT ASSETS

Cash

$ 3,989,550

$ 8,320,519

Certificates of deposit

9,581,207

10,078,617

Inventory

10,194

10,194

Prepaids and other current assets

153,692

338,120

Total Current Assets

13,734,643

18,747,450

OTHER ASSETS

Other assets

3,281

3,281

Licenses, net of amortization

389,553

435,595

TOTAL ASSETS

$ 14,127,477

$ 19,186,326

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES

Accounts payable

$ 344,413

$ 3,267,538

Accrued expenses

39,920

39,920

Advances from related party

14,194

14,194

Total Current Liabilities

398,527

3,321,652

TOTAL LIABILITIES

398,527

3,321,652

Commitments and contingencies

STOCKHOLDERS' EQUITY

Common stock, $0.001 par value, 5,000,000 and 50,000,000 shares authorized; 1,431,127 and 1,407,625 issued and 1,431,126 and 1,407,624 outstanding at June 30, 2023 and December 31, 2022, respectively

1,431

1,408

Additional paid-in capital

69,693,425

69,675,124

Accumulated deficit

(55,965,906 )

(53,811,858 )
TOTAL STOCKHOLDERS' EQUITY

13,728,950

15,864,674

TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY

$ 14,127,477

$ 19,186,326

The Accompanying notes are an integral part of these condensed consolidated financial statements

3
Table of Contents

~~CREATIVE MEDICAL TECHNOLOGY HOLDINGS, INC.~~
~~UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS~~

For the Three Months Ended
June 30, 2022

For the Three Months Ended
June 30, 2021

For the Six Months Ended
June 30, 2022

For the Six Months Ended
June 30, 2021

Revenues

$ 0

$ 10,000

$ 15,000

$ 10,000

Cost of revenues

0

4,500

6,791

4,500

Gross profit

0

5,500

8,209

5,500

OPERATING EXPENSES

Research and development

659,695

0

669,695

0

Selling, general and administrative

1,108,428

498,321

2,238,485

779,244

Amortization of patent costs

23,021

23,021

46,042

46,042

TOTAL EXPENSES

1,791,144

521,342

2,954,222

825,286

Operating loss

(1,791,144 )

(515,842 )

(2,946,013 )

(819,786 )

OTHER INCOME/(EXPENSE)

Interest expense

0

(234,338 )

0

(570,414 )
Gain on extinguishment of convertible notes

0

96,444

0

96,444

Change in fair value of derivatives liabilities

0

(2,251,446 )

0

26,224,593

Total other income (expense)

0

(2,389,340 )

0

25,750,623

INCOME (LOSS) BEFORE PROVISION FOR INCOME TAXES

(1,791,144 )

(2,905,182 )

(2,946,013 )

24,930,837

Provision for income taxes

0

0

0

0

NET INCOME (LOSS)

$ (1,791,144 )

$ (2,905,182 )

$ (2,946,013 )

$ 24,930,837

BASIC NET INCOME (LOSS) PER SHARE

$ (0.20 )

$ (1.25 )

$ (0.38 )

$ 11.12

DILUTED NET INCOME (LOSS) PER SHARE

$ (0.20 )

$ (1.25 )

$ (0.38 )

$ 10.76

WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING - BASIC

9,011,248

2,320,084

7,739,696

2,242,318

WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING - DILUTED

9,011,248

2,320,084

7,739,696

2,328,927

~~The accompanying notes are an integral part of these condensed consolidated financial statements~~
CREATIVE MEDICAL TECHNOLOGY HOLDINGS, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

For the Three Months Ended
June 30, 2023

For the Three Months Ended
June 30, 2022

For the Six Months Ended
June 30, 2023

For the Six Months Ended
June 30, 2022

Revenues

$ -

$ -

$ -

$ 15,000

Cost of revenues

-

-

-

6,791

Gross profit

-

-

-

8,209

OPERATING EXPENSES

Research and development

309,480

659,695

628,509

669,695

Selling, general and administrative

859,537

1,108,428

1,630,557

2,238,485

Amortization of patent costs

23,021

23,021

46,042

46,042

TOTAL EXPENSES

1,192,038

1,791,144

2,305,108

2,954,222

Operating loss

(1,192,038 )

(1,791,144 )

(2,305,108 )

(2,946,013 )

OTHER INCOME/(EXPENSE)

Interest income

89,913

-

151,060

-

Total other income (expense)

89,913

-

151,060

-

LOSS BEFORE PROVISION FOR INCOME TAXES

(1,102,125 )

(1,791,144 )

(2,154,048 )

(2,946,013 )

Provision for income taxes

-

-

-

-

NET LOSS

$ (1,102,125 )

$ (1,791,144 )

$ (2,154,048 )

$ (2,946,013 )

NET LOSS PER SHARE - BASIC AND DILUTED

$ (0.78 )

$ (1.99 )

$ (1.53 )

$ (3.81 )

WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING - BASIC AND DILUTED

1,409,948

901,125

1,408,793

773,970

The Accompanying notes are an integral part of these condensed consolidated financial statements

4
Table of Contents

~~CREATIVE MEDICAL TECHNOLOGY HOLDINGS, INC.~~
~~UNAUDITED CONDENSED CONSOLIDATED CASH FLOWS~~
CREATIVE MEDICAL TECHNOLOGY HOLDINGS, INC.
CREATIVE MEDICAL TECHNOLOGY HOLDINGS, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Six Months Ended
June 30, 2022

For the Six Months Ended
June 30, 2021

For the Six Months Ended
June 30, 2023

For the Six Months Ended
June 30, 2022

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income (loss)

$ (2,946,013 )

$ 24,930,837

Adjustments to reconcile net income (loss) to

net cash from operating activities:

Net loss

$ (2,154,048 )

$ (2,946,013 )
Adjustments to reconcile net loss to

net cash used in operating activities:

Stock-based compensation

50,422

211,768

18,324

50,422

Amortization

46,042

46,042

46,042

46,042

Amortization of debt discounts

0

451,614

Change in fair value of derivatives liabilities

0

(26,224,593 )
Increase in principal and accrued interest balances due to penalty provision

0

93,821

Gain on extinguishment of convertible notes

0

(96,444 )
Changes in assets and liabilities:

Accounts receivable

2,485

0

-

2,485

Inventory

(9,759 )

0

-

(9,759 )
Prepaids and other current assets

(64,960 )

0

184,428

(64,960 )
Accounts payable

(451,181 )

14,143

(2,923,125 )

(451,181 )
Accrued expenses

40,535

25,355

-

40,535

Management fee payable

0

(116,200 )
Net cash used in operating activities

(3,332,429 )

(663,657 )

(4,828,379 )

(3,332,429 )

CASH FLOWS FROM INVESTING ACTIVITIES:

Net cash used in investing activities

0

0

Investments in certificates of deposit

(4,551,049 )

-

Redemptions of certificates of deposit

5,048,459

-

Net cash provided by investing activities

497,410

-

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from sale of common stock and warrants, net of issuance costs

15,471,775

0

-

15,471,775

Proceeds from exercise of warrants

445

0

-

445

Proceeds from note payable

0

100,000

Proceeds from convertible notes payable

0

134,640

Proceeds from sale of preferred stock

0

462,000

Related party advances

0

226,500

Payments to settle convertible notes payable and warrants

0

(198,907 )
Net cash provided by financing activities

15,472,220

724,233

-

15,472,220

NET INCREASE IN CASH

12,139,791

60,576

NET INCREASE (DECREASE) IN CASH

(4,330,969 )

12,139,791

BEGINNING CASH BALANCE

10,723,870

98,012

8,320,519

10,723,870

ENDING CASH BALANCE

$ 22,863,661

$ 158,588

$ 3,989,550

$ 22,863,661

SUPPLEMENTAL CASH FLOW INFORMATION:

Cash payments for interest

$ -

$ 9,186

Cash payments for income taxes

$ -

$ -

NON-CASH INVESTING AND FINANCING ACTIVITIES:

Conversion of notes payable, accrued interest and derivative liabilities into common stock

$ 0

$ 13,454,704

Conversion of management fees and patent liability into common stock

$ 250,000

$ 50,000

$ -

$ 250,000

Discounts on convertible notes payable due to derivative liabilities

$ 0

$ 134,640

The ~~accompanying~~Accompanying notes are an integral part of these condensed consolidated financial ~~statements.~~statements

5
Table of Contents

~~CREATIVE MEDICAL TECHNOLOGY HOLDINGS, INC.~~
~~UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY (DEFICIT)~~
CREATIVE MEDICAL TECHNOLOGY HOLDINGS, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)

Series A Preferred Stock

Series B Preferred Stock

Series C Preferred Stock

Common Stock

Additional
Paid-in

Accumulated

Total
Stockholders'

Shares

Amount

Shares

Amount

Shares

Amount

Shares

Amount

Capital

Deficit

Equity

December 31, 2022

-

$ -

-

$ -

-

$ -

1,407,624

$ 1,408

$ 69,675,124

$ (53,811,858 )

$ 15,864,674

Round-up shares issued in reverse stock split

-

-

-

-

-

-

23,502

23

(23 )

-

-

Stock-based compensation

-

-

-

-

-

-

-

-

18,324

-

18,324

Net loss

-

-

-

-

-

-

-

-

-

(2,154,048 )

(2,154,048 )

June 30, 2023

-

$ -

-

$ -

-

$ -

1,431,126

$ 1,431

$
69,693,425

$ (55,965,906 )

$ 13,728,950

Series A Preferred Stock

Series B Preferred Stock

Series C Preferred Stock

Common Stock

Shares

Amount

Shares

Amount

Shares

Amount

Shares

Amount

Additional
Paid-in Capital

Accumulated
Deficit

Total
Stockholders’
Equity

December 31, 2021

-

$ -

-

$ 0

-

$ 0

6,338,864

$ 6,339

$ 53,879,215

$ (43,667,814 )

$ 10,217,740

Issuance of common stock and accompanying warrants, net of issuance costs

-

0

-

0

-

0

2,991,669

2,992

15,468,783

0

15,471,775

Common stock issued for related party patent liabilities

-

0

-

0

-

0

181,818

182

249,818

0

250,000

Common stock issued for warrant exercise

-

0

-

0

-

0

4,443,887

4,444

(3,999 )

0

445

Stock-based compensation

-

0

-

0

-

0

-

0

50,422

0

50,422

Net loss

-

0

-

0

-

0

-

0

0

(2,946,013 )

(2,946,013 )

June 30, 2022

-

$ 0

-

$ 0

-

$ 0

13,956,238

$ 13,957

$ 69,644,239

$ (46,613,827 )

$ 23,044,369

Series A Preferred Stock

Series B Preferred Stock

Series C Preferred Stock

Common Stock

Additional
Paid-in

Accumulated

Total
Stockholders'

Shares

Amount

Shares

Amount

Shares

Amount

Shares

Amount

Capital

Deficit

Equity

March 31, 2023

-

$ -

-

$ -

-

$ -

1,407,624

$ 1,408

$ 69,684,286

$ (54,863,781 )

$ 14,821,913

Round-up shares issued in reverse stock split

-

-

-

-

-

-

23,502

23

(23 )

-

-

Stock-based compensation

-

-

-

-

-

-

-

-

9,162

-

9,162

Net loss

-

-

-

-

-

-

-

-

-

(1,102,125 )

(1,102,125 )

June 30, 2023

-

$ -

-

$ -

-

$ -

1,431,126

$ 1,431

$
69,693,425

$ (55,965,906 )

$ 13,728,950

Series A Preferred Stock

Series B Preferred Stock

Series C Preferred Stock

Common Stock

Series A Preferred Stock

Series B Preferred Stock

Series C Preferred Stock

Common Stock

Additional
Paid-in

Accumulated

Total
Stockholders'

Shares

Amount

Shares

Amount

Shares

Amount

Shares

Amount

Additional
Paid-in Capital

Accumulated
Deficit

Total
Stockholders’
Equity

Shares

Amount

Shares

Amount

Shares

Amount

Shares

Amount

Capital

Deficit

Equity

March 31, 2022

-

$ 0

-

$ 0

-

$ 0

6,520,682

$ 6,521

$ 54,170,393

$ (44,822,683 )

$ 9,354,231

December 31, 2021

-

$ -

-

$ -

-

$ -

633,886

$ 634

$ 53,884,920

$ (43,667,814 )

$ 10,217,740

Issuance of common stock and accompanying warrants, net of issuance costs

-

0

-

0

-

0

2,991,669

2,992

15,468,783

0

15,471,775

-

-

-

-
��

-

-

299,167

299

15,471,476

-

15,471,775

Common stock issued for related party patent liabilities

-

-

-

-

-

-

18,182

18

249,982

-

250,000

Common stock issued for warrant exercise

-

0

-

0

-

0

4,443,887

4,444

(3,999 )

0

445

-

-

-

-

-

-

444,389

444

1

-

445

Stock-based compensation

-

0

-

0

-

0

-

0

9,062

0

9,062

-

-

-

-

-

-

-

-

50,422

-

50,422

Net loss

-

0

-

0

-

0

-

0

0

(1,791,144 )

(1,791,144 )

-

-

-

-

-

-

-

-

-

(2,946,013 )

(2,946,013 )

June 30, 2022

-

$ 0

-

$ 0

-

$ 0

13,956,238

$ 13,957

$ 69,644,239

$ (46,613,827 )

$ 23,044,369

-

$ -

-

$ -

-

$ -

1,395,624

$ 1,395

$ 69,656,801

$ (46,613,827 )

$ 23,044,369

Series A Preferred Stock

Series B Preferred Stock

Series C Preferred Stock

Common Stock

Additional
Paid-in

Accumulated

Total Stockholders'

Shares

Amount

Shares

Amount

Shares

Amount

Shares

Amount

Capital

Deficit

Equity

March 31, 2022

-

$ -

-

$ -

-

$ -

652,068

$ 652

$ 54,176,262

$ (44,822,683 )

$ 9,354,231

Issuance of common stock and accompanying warrants, net of issuance costs

-

-

-

-

-

-

299,167

299

15,471,476

-

15,471,775

Common stock issued for warrant exercise

-

-

-

-

-

-

444,389

444

1

-

445

Stock-based compensation

-

-

-

-

-

-

-

-

9,062

-

9,062

Net loss

-

-

-

-

-

-

-

-

-

(1,791,144 )

(1,791,144 )

June 30, 2022

-

$ -

-

$ -

-

$ -

1,395,624

$ 1,395

$ 69,656,801

$ (46,613,827 )

$ 23,044,369

The Accompanying notes are an integral part of these condensed consolidated financial statements


6
Table of Contents

Series A Preferred Stock

Series B Preferred Stock

Series C Preferred Stock

Common Stock

Shares

Amount

Shares

Amount

Shares

Amount

Shares

Amount

Additional
Paid-in
Capital

Accumulated
Deficit

Total
Stockholders’
Deficit

December 31, 2020

3,000,000

$ 3,000

-

$ 0

-

$ 0

1,537,073

$ 1,537

$ 22,082,689

$ (61,890,236 )

$ (39,803,010 )

Proceeds from sales of preferred stock

-

0

350

321,000

150

141,000

4,286

4

(4 )

0

462,000

Common stock issued for related party management liabilities

-

0

-

0

-

0

89,286

89

49,911

0

50,000

Common stock issued for conversion of convertible notes, accrued interest and derivative liabilities

-

0

-

0

-

0

772,099

772

1,228,579

0

1,229,351

Relief of derivative liabilities

-

0

-

0

-

0

-

-

12,225,353

0

12,225,353

Dividends on preferred stock

-

0

-

0

-

0

-

0

(20,752 )

0

(20,752 )

Cashless exercise of warrants

-

0

-

0

-

0

37,870

38

(38 )

0

0

Stock-based compensation

-

0

-

0

-

0

-

0

211,768

0

211,768

Net income

-

0

-

0

-

0

-

0

0

24,930,837

24,930,837

June 30, 2021

3,000,000

$ 3,000

350

$ 321,000

150

$ 141,000

2,440,614

$ 2,440

$ 35,777,506

$ (36,959,399 )

$ (714,453 )

Series A Preferred Stock

Series B Preferred Stock

Series C Preferred Stock

Common Stock

Shares

Amount

Shares

Amount

Shares

Amount

Shares

Amount

Additional
Paid-in
Capital

Accumulated
Deficit

Total
Stockholders’
Deficit

March 31, 2021

3,000,000

$ 3,000

350

$ 326,600

150

$ 141,049

2,280,160

2,280

$ 31,138,715

$ (34,054,217 )

$ (2,442,573 )

Common stock issued for related party management liabilities

-

-

-

0

-

0

-

0

0

0

0

Common stock issued for conversion of convertible notes, accrued interest and derivative liabilities

-

0

-

0

-

0

142,695

142

341,646

0

341,788

Relief of derivative liabilities

-

0

-

0

-

0

-

0

4,100,498

0

4,100,498

Dividends on preferred stock

-

0

-

(5,600 )

-

(49 )

-

0

(15,103 )

0

(20,752 )

Cashless exercise of warrants

-

0

-

0

-

0

17,759

18

(18 )

0

0

Stock-based compensation

-

0

-

0

-

0

-

0

211,768

0

211,768

Net loss

-

0

-

0

-

0

-

0

0

(2,905,182 )

(2,905,182 )

June 30, 2021

3,000,000

$ 3,000

350

$ 321,000

150

$ 141,000

2,440,614

$ 2,440

$ 35,777,506

$ (36,959,399 )

$ (714,453 )
~~The accompanying notes are an integral part of these consolidated financial statements.~~
7
~~Table of Contents~~

CREATIVE MEDICAL TECHNOLOGY HOLDINGS, ~~INC~~INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, ~~2022~~2023

NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization – - Creative Medical Technologies Holdings, Inc. (the “Company”) is a commercial stage biotechnology company ~~focused on immunology,~~dedicated to the advancement of identifying and translating novel biological therapeutics in the fields of immunotherapy, endocrinology, urology, ~~orthopedics~~neurology and ~~neurology using adult stem cell treatments.~~orthopedics. The Company was incorporated on December 3, 1998, in the State of Nevada under the name Jolley Marketing, Inc. On May 18, 2016, the Company closed a transaction which was accounted for as a recapitalization, reverse merger, under which Creative Medical Technologies, Inc., a Nevada corporation (“CMT”) became the Company’s ~~wholly-owned~~wholly owned subsidiary, and Creative Medical Health, Inc. (“CMH”), which was CMT’s sole stockholder prior to the merger, became the Company’s principal stockholder. In connection with this merger, the Company changed its name to Creative Medical Technologies Holdings, Inc. to reflect its current business.

CMT was originally created on December 30, 2015 (“Inception”), as the urological arm of CMH to monetize a patent and related intellectual property related to the treatment of erectile dysfunction (“ED”), which it acquired from CMH in February 2016. Subsequently, the Company has expanded its development and acquisition of intellectual property beyond urology to include therapeutic treatments utilizing “re-programmed” stem cells, and the treatment of neurologic disorders, lower back pain, type I diabetes, and heart, liver, kidney, and other diseases using various types of stem cells through our ImmCelz, Inc., StemSpine, Inc. and ~~AmnioStem~~AlloCelz LLC subsidiaries. However, neither ImmCelz Inc., StemSpine Inc. nor ~~AmnioStem~~AlloCelz LLC have commenced commercial activities.

The Company currently conducts substantially all of its commercial operations through CMT, which markets and sells the Company’s ~~CaverStem®~~CaverStem^® and ~~FemCelz®~~ FemCelz^®disposable kits utilized by physicians to perform autologous procedures that treat erectile dysfunction and female sexual dysfunction, respectively. In addition to its CaverStem® and FemCelz® products, the Company is currently in the process of recruiting clinical sites for its StemSpine® Regenerative Stem Cell Procedure for the Treatment of Degenerative Disc Disease, an autologous procedure that utilizes a patient’s own stem cells to treat lower back pain.

In 2020, through the Company’s ImmCelz Inc. subsidiary, the Company began ~~exploring the development of~~developing treatments that utilize a patient’s own extracted immune cells that are then “reprogrammed” by culturing them outside the patient’s body with optimized stem cells. The immune cells are then re-injected into the patient from whom they were extracted. The Company believes this process endows the immune cells with regenerative properties that may be suitable for the treatment of ~~stroke victims, among other~~multiple indications. In contrast to other stem cell-based approaches, the immune cells are significantly smaller in size than stem cells and are believed to more effectively penetrate areas of the damaged tissues and induce regeneration.

Use of Estimates – – The preparation of the ~~condensed~~ consolidated financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the balance sheet and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Basis of Presentation -– The consolidated financial statements and accompanying notes have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. ~~GAAP~~”GAAP”). The consolidated financial statements include the accounts of the Company and its ~~wholly-owned~~wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. In the opinion of the Company’s management, the consolidated financial statements include all adjustments, which include only normal recurring adjustments, necessary for the fair presentation of the Company’s financial position for the periods presented. ~~The operations for the six-month period ended June 30, 2022, are not necessarily indicative of the operating results for the full year.~~

Risks and Uncertainties - The Company has a limited operating history and has ~~only recently started to generate~~generated minimal revenues from its ~~planned principal~~ operations.

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On January 30, 2020, the World Health Organization declared the COVID-19 outbreak a “Public Health Emergency of International Concern” and on March 10, 2020, declared it to be a pandemic. Actions taken around the world to help mitigate the spread of the COVID-19 include restrictions on travel, and quarantines in certain areas, and forced closures for certain types of public places and businesses. The COVID-19 and actions taken to mitigate it have had and are expected to continue to have an adverse impact on the economies and financial markets of many countries, including the geographical area in which the Company operates. While it is unknown how long these conditions will last and what the complete financial effect will be to the company, to-date, the Company has experienced a reduction in revenues due to the COVID-19 outbreak.

The Company’s business and operations are sensitive to general business and economic conditions in the U.S. and worldwide. These conditions include short-term and long-term interest rates, inflation, fluctuations in debt and equity capital markets and the general condition of the U.S. and world economy. A host of factors beyond the Company’s control could cause fluctuations in these conditions, including the political environment and acts or threats of war or terrorism. Adverse developments in these general business and economic conditions, including through recession, downturn or otherwise, could have a material adverse effect on the Company’s financial condition and the results of its operations.

The Company has only recently started to generate sales and we have limited marketing and/or distribution capabilities. The Company has limited experience in developing, training, or managing a sales force and will incur substantial additional expenses if it decides to market any of its current and future products and services with an internal sales organization. Developing a marketing and sales force is also ~~time consuming~~time-consuming and could delay the launch of its future products and services. In addition, the Company will compete with many companies that currently have extensive and well-funded marketing and sales operations. The Company’s marketing and sales efforts may be unable to compete successfully against these companies. In addition, the Company has limited capital to devote to sales and marketing.

The Company’s industry is characterized by rapid changes in technology and customer demands. As a result, the Company’s products and services may quickly become obsolete and unmarketable. The Company’s future success will depend on its ability to adapt to technological advances, anticipate customer demands, develop new products and services, and enhance the Company’s current products and services on a timely and cost-effective basis. Further, the Company’s products and services must remain competitive with those of other companies with substantially greater resources. The Company may experience technical or other difficulties that could delay or prevent the development, introduction or marketing of new products and services or enhanced versions of existing products and services. Also, the Company may not be able to adapt new or enhanced products and services to emerging industry standards, and the Company’s new products and services may not be favorably received. In addition, the Company may not have the capital resources to further the development of existing and/or new ones.

On July 8, 2022, the Company received a letter from The Nasdaq Stock Market LLC advising us that we were not in compliance with Nasdaq Listing Rule 5550(a)(2) because the closing bid price of our common stock was below $1.00 per share for 30 consecutive business days. Pursuant to Nasdaq’s Listing Rules, the Company ~~has~~had a ~~180 day~~180-day grace period, until January 4, 2023, during which the Company ~~may regain~~could have regained compliance if the bid price of our common stock ~~closes~~closed at $1.00 per share or more for a minimum of ten consecutive business days. ~~In addition,~~Subsequent to January 4, 2023, the Company ~~may be eligible for~~has been granted an additional 180-day grace ~~period if we meet Nasdaq’s initial listing standards (other than with respect to minimum bid price) for The Nasdaq Capital Market. The Company intends to actively monitor~~period. On June 12, 2023, the company effected a 10-to-1 reverse common stock split. Following the reverse stock split, the closing bid price ~~for~~of our common stock ~~between now and January 4, 2023, and will consider available options~~was above $1.00 per share for ten consecutive business days from June 12, 2020 to ~~regain~~June 26, 2023. Pursuant to Nasdaq’s Listing Rules, the company was in compliance with ~~Nasdaq’s~~Nasdaq Listing Rule 5550(a)(2). On June 27, 2023 the Company received written notice from the Nasdaq Stock Market notifying the Company that is had regained compliance with the minimum bid price requirements. However, there can be no assurance that the Company will be able to regain compliance with Nasdaq’s Listing Rules and maintain our Nasdaq listing. The delisting of our shares of common stock from Nasdaq may have a material negative impact on the liquidity of our securities, as well as a material negative impact on our ability to raise capital in the future.requirement.

Regarding the war between Russia and Ukraine, we have no direct exposure to those geographies. We cannot predict how global supply chain activities, or the economy at large may be impacted by a prolonged war in Ukraine or sanctions imposed in response to the war, or whether future conflicts, if any, may adversely affect our results of operations.

Revenue - The Company recognizes revenues in accordance with Accounting Standards Codification (“ASC”) 606, “Revenue from contracts with customers”. Revenues are recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. Deferred revenue represents amounts which still have yet to be earned.

~~Table of Contents~~

The Company generates revenue from the sale of disposable stem cell concentration kits. Revenues are recognized when control of the promised goods or services are transferred to the customer, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services, which is generally on delivery to the customer.

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Payments received for which the earnings process is not yet complete are deferred. As of June 30, ~~2022,~~2023, the Company had $40,000 in deferred revenue. There was no deferred ~~revenue.~~revenue as of June 30, 2022.

Concentration Risks -– The Federal Deposit Insurance Corporation insures cash deposits in most general bank accounts for up to $250,000 per institution. The Company maintains its cash balances at ~~two~~four financial institutions. As of June 30, ~~2022,~~2023, the Company’s balance exceeded the limit at ~~both~~two institutions.

Fair Value of Financial Instrument - – The Company’s financial instruments consist of cash and cash equivalents, and payables. The carrying amount of cash and cash equivalents and payables approximates fair value because of the short-term nature of these items.

Fair value is an exit price, representing the amount that would be received from the sale of an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. Fair value measurements are required to be disclosed by level within the following fair value hierarchy:

Level 1 – Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date.

Level 2 – Inputs (other than quoted prices included in Level 1) are either directly or indirectly observable for the asset or liability through correlation with market data at the measurement date and for the duration of the instrument’s anticipated life.

Level 3 – Inputs lack observable market data to corroborate management’s estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model.

When determining fair value, whenever possible the Company uses observable market data, and relies on unobservable inputs only when observable market data is not available. As of June 30, 2023, and 2022, the Company ~~has~~had no outstanding derivative liabilities.

Basic and Diluted ~~Loss~~Income (Loss) Per Share – The Company follows Financial Accounting Standards Board (“FASB”) ASC 260 Earnings per Share to account for earnings per share. Basic earnings per share (“EPS”) calculations are determined by dividing net loss by the weighted average number of shares of common stock outstanding during the year. Diluted earnings per share calculations are determined by dividing net income by the weighted average number of common shares and dilutive common share equivalents outstanding. Dilutive common share equivalents include the dilutive effect of in-the-money share equivalents, which are calculated, based on the average share price for each period using the treasury stock method. Under the treasury stock method, the exercise price of an award, if any, the amount of compensation cost, if any, for future service that the Company has not yet recognized, and the estimated tax benefits that would be recorded in paid-in capital, if any, when an award is settled are assumed to be used to repurchase shares in the current period. During loss periods when common stock equivalents, if any, are anti-dilutive they are not considered in the computation. During the six-months ended June 30, 2023 and 2022, the Company had options to purchase 11,183 shares of common stock and warrants to purchase 2,284,932 shares of common stock; however, the effects were anti-dilutive due to the net loss.

Following the approval of the Company’s Board of Directors, on June 12, 2023, the Company effected a 1-for-10 reverse split of the Company’s outstanding shares of common stock by filing a Certificate of Change Pursuant to NRS 78.209 with the Secretary of State of the State of Nevada. The filing of the Certificate of Change also reduced the authorized number of shares of the Company’s Common Stock from 50 million to five million. All share references in this filing have been restated to reflect the reverse split to the earliest period presented. No fractional shares were issued, and no cash or other consideration were paid in connection with the Reverse Stock Split. Instead, the Company issued one whole share of the post-Reverse Stock Split Common Stock to any stockholder who otherwise would have received a fractional share as a result of the Reverse Stock Split. As a result, the Company issued an additional 23,502 shares.

Cash Equivalents – The Company classifies its highly liquid investments with maturities of three-months or less at the date of purchase as cash equivalents. Management determines the appropriate classification of its investments at the time of purchase and reevaluates the designations of each investment as of the balance sheet date for each reporting period. The Company classifies its investments as either short-term or long-term based on each instrument’s underlying contractual maturity date. Investments with maturities of less than 12 months are classified as short-term and those with maturities greater than 12 months are classified as long-term. The cost of investments sold is based upon the specific identification method.

Inventories – Inventories are valued on a cost basis. The cost of inventories is determined on a first-in, first-out basis.

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The following is a summary of outstanding securities which have been included in the calculation of diluted net income per share and reconciliation of net income to net income available to common stockholders for the six-months ended June 30, 2021.

For the Six-months Ended June 30,
2021

Weighted average common shares outstanding used in calculating basic earnings per share

2,242,318

Effect of Series B and C preferred stock

24,000

Effect of warrants

35,873

Effect of convertible notes payable

22,115

Effect of convertible related party management fee and patent liabilities

4,623

Weighted average common shares outstanding used in calculating diluted earnings per share

2,328,929

Net income as reported

$ 24,930,837

Add - Interest on convertible notes payable

117,649

Net income available to common stockholders

$ 25,048,486

The Company excluded 7 options and 18 warrants from the computation of diluted net income per share for the six-months ended June 30, 2021 as their exercise prices were in excess of the average closing market price of the Company’s common stock during that period.
During the six-months ended June 30, 2022, the Company had 111,824 options and 22,969,265 warrants to purchase shares of common stock which have been excluded from the dilutive net loss per share calculation as their effects are anti-dilutive.

Recent Accounting Pronouncements – The Company has reviewed all recently issued, but not yet adopted, accounting standards in order to determine their effects, if any, on its results of operation, financial position or cash flows. Based on that review, the Company believes that none of these pronouncements will have a significant effect on its financial statements.

NOTE 2 – LICENSING AGREEMENTS

ED Patent– The Company acquired a patent from CMH, a related company on February 2, 2016, in exchange for ~~431,111~~43,112 shares of CMTH ~~restricted~~ common stock valued at $100,000. The patent expires in 2025 and the Company has elected to amortize the patent over a ten-year period on a straight-line basis. Amortization expense of $4,986 was recorded for the six-months ended June 30, ~~2022~~2023, and ~~2021.~~2022. As of June 30, ~~2022,~~2023, the carrying value of the patent was ~~$36,000.~~$26,030. The Company expects to amortize $9,972 annually through 2026 related to the patent costs.

Multipotent Amniotic Fetal Stem Cells License Agreement - On August 25, 2016, CMT entered into a License Agreement dated August 25, 2016, with a ~~University.~~university. This license agreement grants to CMT the exclusive right to all products derived from a patent for use of multipotent amniotic fetal stem cells composition of matter throughout the world during the period ending on the expiration date of the longest-lived patent rights under the patent. The license agreement also permits CMT to grant sublicenses. Under the terms of the license agreement, CMT is required to diligently develop, manufacture, and sell any products licensed under the agreement. CMT paid the University an initial license fee within 30 days of entering into the agreement. CMT is also required to pay annual license maintenance fees on each anniversary date of the agreement, which maintenance fees would be credited toward any earned royalties for any given period. The License Agreement provides for payment of various milestone payments and earned royalties on the net sales of licensed products by CMT or any sub licensee. CMT is also required to reimburse the University for any future costs associated with maintaining the patent. CMT may terminate the license agreement for any reason upon 90 days’ written notice and the University may terminate the agreement in the event CMT fails to meet its obligations set forth therein, unless the breach is cured within 30 days of the notice from the University specifying the breach. CMT is also obligated to indemnify the University against claims arising due to the exercise of the license by CMT or any sub licensee. As of June 30, ~~2022,~~2023, no amounts are currently due to the University.

~~Table of Contents~~

The Company estimates that the patent expires in February 2026 and has elected to amortize the patent through the period of expiration on a straight-line basis. Amortization expense of $586 was recorded for the six-months ended June 30, ~~2022~~2023, and ~~2021.~~2022. As of June 30, ~~2022,~~2023, the carrying value of the patent was ~~$3,791.~~$2,619. The Company expects to amortize approximately $1,172 annually through ~~2026~~2025 related to the patent costs.

Lower Back Patent– The Company, through its subsidiary StemSpine, LLC, acquired a patent from CMH, a related company, on May 17, 2017, covering the use of various stem cells for the treatment of lower back pain from pursuant to a Patent Purchase Agreement, which was amended in November 2017. As amended, the agreement provides the following:

·
The Company is required to pay CMH $100,000 within 30 days of demand as an initial payment.

·
In the event the Company determines to pursue the technology via use of autologous cells, the Company will pay CMH:

o
$100,000 upon the signing agreement with a university for the initiation of an IRB clinical trial.

o
$200,000, upon completion of the IRB clinical trial.

o
$300,000 in the event we commercialize the technology via use of autologous cells by a physician without a clinical trial.

·
In the event the Company determines to pursue the technology via use of allogenic cells, the Company will pay CMH:
10
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o
$100,000 upon filing an IND with the FDA.

o
$200,000 upon dosing of the first patient in a Phase 1-2 clinical trial.

o
$400,000 upon dosing the first patient in a Phase 3 clinical trial.

·
Payment may be made in cash or shares of our common at a discount of 30% to the lowest closing price within 20 business days prior to the conversion date.

·
In the event the Company’s shares of common stock trade below $0.01 per share for two or more consecutive trading days, the number of any shares issuable as payment doubles.

·
For a period of five years from the date of the first sale of any product derived from the patent, the Company is required to make royalty payments of 5% from gross sales of products, and 50% of sale price or ongoing payments from third parties for licenses granted under the patent to third parties.

The Company paid CMH the $100,000 obligation of the initial payment due under this agreement, by a $50,000 cash payment and the issuance of ~~6,667~~667 shares of common stock on December 12, ~~2019.~~2020. On ~~January 8, 2021,~~December 31, 2020, following the Company’s announcement with respect to the clinical commercialization of the StemSpine technology, the Company paid CMH $50,000 of the $300,000 obligation due under this agreement through the issuance of ~~133~~14 shares of common stock. On September 30, ~~2020,~~2021, the Company paid CMH an additional $40,000 of the $300,000 obligation due under this agreement through the issuance of ~~84,656~~8,466 shares of common stock, and in January 2021 the Company paid CMH an additional $50,000 of the $300,000 obligation due under this agreement through the issuance of ~~89,286~~8,929 shares of common stock. The remaining portion of the $300,000 obligation was paid in cash in ~~2021.~~2020.

The patent expires on May 19, 2027, and the Company has elected to amortize the patent over a ten-year period on a straight-line basis. Amortization expense of $5,000 was recorded for the ~~six-month periods~~six-months ended June 30, ~~2022~~2023, and ~~2021.~~2022. As of June 30, ~~2022,~~2023, the carrying value of the initial patent license was ~~$50,000.~~$40,000. The Company expects to amortize approximately $10,000 annually through 2027 related to the patent costs.

The Company has elected to amortize the ~~increased obligation from~~additional $300,000 associated with the ~~election to commercialize the StemSpine technology~~patent over a ten-year period on a straight-line basis. Amortization expense of $22,970 was recorded for the ~~six-month periods~~six-months ended June 30, ~~2022~~2023, and ~~2021.~~2022. As of June 30, ~~2022,~~2023, the carrying value of the patent was ~~$179,344.~~$133,404. The Company expects to amortize approximately $46,000 annually through ~~2027~~2026 related to the patent costs.
12
~~Table of Contents~~

ImmCelz™ - On December 28, 2020, ImmCelz, Inc. (“ImmCelz”), a newly formed Nevada corporation and wholly owned subsidiary of the Company, entered into a Patent License Agreement dated December 28, 2020 (the “Agreement”), with Jadi Cell, LLC. (“Jadi”), a company controlled by Dr. Amit Patel, a former director of the Company. The Agreement grants to ImmCelz™ the patent rights under U.S. Patent# 9,803,176 B2, “Methods and compositions for the clinical derivation of an allogenic cell and therapeutic uses”. The contract grants ImmCelz™ access to proprietary process of expanding the master cell bank of Jadi Cell LLC, as currently practiced by Licensor, and as documented in standard operating procedures (SOPs) and other written ~~documentation.~~documentation to augment autologous cells. The terms of the agreement are as follows:

·
Licensee shall pay Licensor a license fee of $250,000 (the “Upfront Royalty”), which can also be paid in CELZ stock at a discount of 25% of the closing price of $0.0037, which is based on the date of this agreement

·
Within thirty (30) days of the end of each calendar quarter during the term of this Agreement, Licensee will pay Licensor five percent (5%) of the Net Income of ImmCelz™. during such calendar quarter (the “Continuing Royalty”)

·
in one or a series of related transactions, of all or substantially all of the business or assets of Licensee ImmCelz, Inc. (“Sale of Assets”) will result in a one-time ten-percent allocation to the licensor, the Continuing Royalty will be calculated at five percent (5%) of the Net Income of Licensee in any calendar quarter in which the Net Income in such calendar quarter reflects the receipt of any consideration from such Sale of Assets.

To date, the Company has not made any payments to Jadi Cell under this agreement, other than the $250,000 initial license fee, which was paid by the issuance of ~~180,180~~18,018 shares of common stock to Jadi Cell in February 2022.
11
Table of Contents

The Company has elected to amortize the patent over a ten-year period on a straight-line basis. Amortization ~~expense~~expenses of $12,500 were recorded for the ~~six-month periods~~six-months ended June 30, ~~2022~~2023, and ~~2021.~~2022. As of June 30, ~~2022,~~2023, the carrying value of the patent was ~~$212,500.~~$187,500. The Company expects to amortize approximately $25,000 annually through 2030 related to the patent costs.

The following is a ~~roll-forward~~rollforward of the Company’s licensing agreements for the ~~six-months ended~~six months-ended June 30, ~~2022.~~2023.

Assets

Accumulated
Amortization

Assets

Accumulated
Amortization

Balances at December 31, 2021

$ 760,000

$ (232,321 )
Balances at December 31, 2022

$ 760,000

$ (324,405 )
Addition of new assets

0

-

Amortization

0

(46,042 )

-

(46,042 )
Balances at June 30, 2022

$ 760,000

$ (278,363 )
Balances at June 30, 2023

$ 760,000

$ (370,447 )

NOTE 3 – RELATED PARTY TRANSACTIONS
~~Management Reimbursement Agreement~~
On November 17, 2017, the Company entered into a Management Reimbursement Agreement with CMH, a related party whose directors and executive officers include the Company’s officers and directors. Pursuant to this agreement, during 2019 and 2020, and until September 16, 2021, the Company reimbursed CMH an aggregate of $45,000 per month for the services of management and consultants employed by CMH (including the Company’s Chief Executive Officer and Chief Financial Officer, and the Company’s former directors Dr. Patel and Dr. Ichim). The agreement provided that at the option of CMH, the reimbursable amounts may be paid from time to time in shares of common stock of the Company at a price equal to a 30% discount to the lowest closing price during the 20 trading days prior to time the notice is given. This agreement was terminated effective September 15, 2021. At June 30, 2022, no amounts were owed CMH under this agreement. At June 30, 2021, the Company owed CMH $52,582.
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~~Debt Settlement Agreement~~
On January 12, 2018, the Company entered into a Debt Settlement Agreement with Timothy Warbington, the Company’s Chief Executive Officer, under which the Company issued 3,000,000 shares of super-voting Series A Preferred Stock to Mr. Warbington in exchange for the cancellation of $150,000 of debt owed by the Company to CMH, which CMH in turn was obligated to pay Mr. Warbington. The Series A Preferred Stock previously provided Mr. Warbington with substantial control over all matters subject to a vote of the Company’s shareholders. Mr. Warbington surrendered the Series A Preferred Stock to the Company in December 2021 immediately prior to the closing of the Company’s public offering in exchange for $150,000 plus 8% interest on such amount from January 2018 until the date of surrender.

Jadi Cell License Agreement

On December 28, 2020, the Company entered into a patent license agreement with Jadi Cell, LLC, a company owned and controlled by Dr. Amit Patel, a former director of the Company. The agreement provides Company with an exclusive, worldwide license to U.S. Patent No. 9,803,176 “Methods and compositions for the clinical derivation of an allogenic cell and therapeutic uses” and the proprietary process of expanding the master cell bank of Jadi Cell LLC, in the field of enhancing autologous cells. The agreement is described in detail in Note 2 above. To date, the Company has not made any payments to Jadi Cell under this agreement, other than the $250,000 initial license fee, which was paid by the issuance of ~~181,818~~18,018 shares of common stock to Jadi Cell in February 2022.

StemSpine Patent Purchase

The Company acquired U.S. Patent No. 9,598,673 covering the use of various stem cells for the treatment of lower back pain from its affiliate CMH pursuant to a Patent Purchase Agreement dated May 17, 2017, which was amended in November 2017. The inventors of the patent were Thomas Ichim, PhD and Amit Patel, MD, former directors of the Company, and Annette Marleau, PhD. The Patent Purchase Agreement is described in detail in Note 2 above. Pursuant to the Patent Purchase Agreement, the Company paid CMH the $100,000 obligation of the initial payment due under this agreement, by a $50,000 cash payment and the issuance of ~~6,667~~667 shares of common stock on December 12, 2020. On ~~January 8, 2021,~~December 31, 2020, following the Company’s announcement with respect to the clinical commercialization of the StemSpine technology, the Company paid CMH $50,000 of the $300,000 obligation due under this agreement through the issuance of ~~133~~14 shares of common stock. On September 30, ~~2020,~~2021 the Company paid CMH an additional $40,000 of the $300,000 obligation due under this agreement through the issuance of ~~84,656~~8,466 shares of common stock, and in January 2021 the Company paid CMH an additional $50,000 of the $300,000 obligation due under this agreement through the issuance of ~~89,286~~8,929 shares of common stock. The remaining portion of the $300,000 obligation has been paid in cash.

~~Insider Loans~~
On May 28, 2021, Timothy Warbington, who is our CEO and Chairman; and Dr. Amit Patel, who was formerly a director of ours, advanced the Company $50,000 and $150,000 respectively. The two notes were repaid during the quarter ended September 30, 2021, did not have any conversion features, and bore interest at the rate of 5% per annum.
NOTE 4 – DEBT
~~As-of June 30, 2022, the Company had no outstanding loans and there was no loan activity during the six-months ended June 30, 2022.~~

During the six-months ended June 30, ~~2021, we issued $157,150 in convertible notes to accredited investors with net proceeds of $134,640. The notes matured during February of~~2023 and 2022 ~~and bore interest at rate of 8%. The notes~~there were convertible into shares of the Company’s common stock at conversion prices ranging from 60% to 71% of the average of the two lowest traded prices or the lowest trade price of the Company’s common stock during the previous 15 trading days preceding the conversion date. The Company was amortizing the discount due to derivative liabilities and on-issuance discount totaling $157,150 to interest expense using the straight-line method over the original terms of the loans.
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On May 28, 2021, our CEO, Mr. Timothy Warbington, and Board Member, Dr. Amit Patel, advanced the company $50,000 and $150,000 respectively. The two notes mature on August, 28 2021, and were repaid in full with an interest rate of 5%.no debt issuances.

~~During the six-months ended June 30, 2021, the Company amortized $451,614 to interest expense.~~ As of June 30, ~~2021, total discounts of $120,185 remained for which were planned to be expensed through February 2022.~~
~~During the six-months ended June 30, 2021,~~2023, and 2022, the Company ~~issued an aggregate of 772,099 shares upon the conversion of 1,229,351 of~~had no outstanding ~~principal, interest and fees on existing, outstanding notes and 37,870 shares upon the cashless exercise of 43,167 warrants.~~
~~During the six-months ended June 30, 2021, the Company extinguished $118,000 of principal or interest.~~loans.

NOTE 5 – DERIVATIVE LIABILITIES

~~Derivative Liabilities~~
As-of June 30, 2023 and 2022, the Company had no outstanding derivative liabilities and there was no derivative activity during the six-months ended June 30, 2023 and 2022.

12
During the six-months ended June 30, 2021, the Company recorded initial derivative liabilities of $817,791 based upon the following Black-Scholes option pricing model average assumptions: an exercise price of $5.30 to $6.90 our stock price on the date of grant of $15.50 to $6.90, expected dividend yield of 0%, expected volatility of 98.14%, risk free interest rate of 0.10% and expected terms of 1.0 year. Upon initial valuation, the derivative liabilities exceeded the face values certain of the convertible notes payable by approximately $683,151, which was recorded as a day one loss in derivative liability.
On June 30, 2021, the derivative liabilities were revalued at $248,097 resulting in a loss of $2,251,446 and a gain of $262,224,593 related to the change in fair market value of the derivative liabilities during the three and six-months ended June 30, 2021, respectively. The derivative liabilities were revalued using the Black-Scholes option pricing model with the following average assumptions: an exercise price of $9.45 to $1,545.00, our stock price on the date of valuation ($17.50), expected dividend yield of 0%, expected volatility of 75.03% to 98.81%, risk-free interest rate of 0.46% to 0.70%, and expected terms ranging from 0.5 to 2.7 years.
In connection with convertible notes converted, as disclosed in Note 4, the Company reclassed derivative liabilities with a fair value of $12,225,353 to additional paid-in capital for the six-month period ended June 30, 2021. The Company revalued the derivative liabilities at each conversion date recording the pro-rata portion of the derivative liability as compared to the portion of the convertible note converted to the pre-conversion carrying value to additional paid-in capital.
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NOTE 6 – STOCK-BASED COMPENSATION

On September 6, 2021, the Company’s Board of Directors, and holders of a majority of the voting power of the Company’s stockholders approved the Company’s 2021 Equity Incentive Plan (the “2021 Plan”), and reserved ~~600,000~~60,000 shares of common stock for the issuance of awards thereunder. The 2021 Plan provides for the granting to our employees, officers, directors, consultants, and advisors of performance awards payable in shares of common stock, stock options (non-statutory and incentive), restricted stock awards, stock appreciation rights (“SARs”), restricted share units (“RSUs”) and other stock-based awards. The purpose of the 2021 Plan is to secure for the Company and its stockholders the benefits arising from capital stock ownership by eligible participants who are expected to contribute to the Company’s future growth and success.

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During the six-months ended June 30, 2022, Messrs. Warbington and Dickerson received 10-year options to purchase an aggregate of ~~111,187~~11,182 shares of common stock with an exercise price of ~~$1.69.~~$16.90. The options vested immediately as to 25% of the shares subject to the option, and will vest in three equal installments of 25% of the shares subject to the option on each of the next three annual anniversary dates of the grant date. As of June 30, 2023, future estimated stock-based compensation expected to be recorded was estimated to be $58,455. The value of the options was determined to be $145,525 based upon the Black-Scholes method, see variables used below.

Inputs
Used

Inputs
Used

Annual dividend yield

$ 0

$ -

Expected life (years)

10.0

10.0

Risk-free interest rate

0.81 %

0.81 %
Expected volatility

92.95 %

92.95 %
Common stock price

$ 1.69

$ 16.90

During the six-months ended June 30, ~~2021,~~2023 and 2022, the fair market value of the options was insignificant to the financial statements.

Since the expected life of the options was greater than the Company’s historical stock information available, the Company determined the expected volatility based on price fluctuations of comparable public companies.

There were no options issued during the six-months ended June 30, ~~2021.~~2023, and 11,183 options issued during the six-months ended June 30, 2022.

Option activity for the six-months ended June 30, ~~2022~~2023, consists of the following:

Stock
Options

Weighted
Average
Exercise
Price

Weighted
Average
Life
Remaining

Stock
Options

Weighted
Average
Exercise
Price

Weighted
Average
Life
Remaining

Outstanding, December 31, 2021

7

$ 7,500

4.64

Outstanding, December 31, 2022

11,183

$ 83.96

9.11

Issued

111,817

-

-

-

-

Exercised

-

0

-

-

-

-

Expired

-

0

-

-

-

-

Outstanding, June 30, 2022

111,824

$ 2.16

9.62

Vested, June, 30, 2022

27,961

$ 3.57

9.62

Outstanding, June 30, 2023

11,183

$ 83.96

8.61

Vested, June 30, 2023

7,456

$
117.47

8.62

See Note 2 for discussion related to the issuance of common stock in connection with licensing agreements.
See Note 7 for warrant rollforward.
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NOTE 7 – STOCKHOLDERS’ EQUITY

May 2022 Private Offering
On May 3, 2022, the ~~“Company”~~Company completed the sale of (i)~~2,991,669~~ 299,167 shares of common stock, and pre-funded warrants to purchase ~~4,563,887~~456,389 shares of common stock (the “Pre-Funded Warrants”), and (ii) accompanying warrants to purchase ~~15,111,112~~1,511,112 shares of common stock (the “Common Warrants”), at a combined offering price of ~~$2.25~~$22.50 per share of common stock/Pre-Funded Warrant and related Common Warrant, to a group of institutional investors (the “Purchasers”), pursuant to a Securities Purchase Agreement between the Company and the Purchasers dated as of April 28, 2022 (the “Purchase Agreement”), resulting in gross proceeds to the Company of approximately $17,000,000. The transaction was effected pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended and Rule 506(b) promulgated thereunder.

The Common Warrants have a five-year term, and an exercise price of ~~$2.00~~$20.00 per share. The Pre-Funded Warrants dodid not ~~expire,~~have an expiration date and ~~have~~had an exercise price of ~~$0.0001~~$0.001 per share. As of June 30, 2023, all of the Pre-Funded Warrants had been exercised.

The Pre-Funded Warrants ~~are~~were classified as a component of permanent equity because they are freestanding financial instruments that are legally detachable and separately exercisable from the shares of common stock with which they were issued, are immediately exercisable, dodid not embody an obligation for the Company to repurchase its shares, and ~~permit~~permitted the holders to receive a fixed number of shares of common stock upon exercise. In addition, the Pre-Funded Warrants dodid not provide any guarantee of value or return.

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Roth Capital Partners (“Roth”), acted as sole placement agent for the offering. The Company paid Roth a placement agent fee in the amount of $1,360,000 and issued Roth a warrant to purchase ~~1,133,333~~113,334 shares of Common Stock with the same terms as the Common Warrants issued to the Purchasers.

On June 12, 2023 the Company announced that its Board of Directors has approved a share repurchase program. The ~~issuances~~program authorizes the Company to repurchase up to $2 million of its shares of common stock, in the open market or through privately negotiated transactions, in accordance with applicable securities laws and ~~exercises during~~other restrictions. The manner, timing and amount of any purchase will be based on an evaluation of market conditions, the Company's stock price and other factors. The program has no termination date, may be suspended or discontinued at any time, and does not obligate the Company to acquire any particular number of shares of common stock. As-of June 30, 2023 no shares had been purchased under this program.
Warrants
In connection with our May 2022 private offering, we issued pre-funded warrants to purchase 456,389 shares of common stock and accompanying warrants to purchase 1,624,446 shares of common stock at a price of $20.00 per share.
Assumptions used in calculating the fair value of the warrants issued in 2022 were as follows:

Range of
Inputs
Used

Annual dividend yield

$ -

Expected life (years)

5.0

Risk-free interest rate

0.81 %
Expected volatility

92.95 %
Common stock price

$ 18.30

As of June 30, 2023, and 2022, warrants to purchase 2,284,932 and 2,296,927 shares of common stock were outstanding respectively.
Warrant activity for the six-months ended June 30, ~~2022, are as follows:~~2023 consists of the following:

Outstanding at December 31, 2021

6,604,820

Issuances

20,808,332

Exercises

(4,443,887 )
Outstanding at June 30, 2022

22,969,265

Weighted Average Price at June 30, 2022

$ 2.64

~~NOTE 8 – SUBSEQUENT EVENTS~~
~~In accordance with ASC 855, management reviewed all material events through May 15, 2022, for these financial statements and there are no material subsequent events to report.~~

Warrants

Weighted
Average
Exercise
Price

Weighted
Average
Life
Remaining

Outstanding, December 31, 2022

2,284,932

$ 26.59

4.22

Issuances

-

-

-

Exercises

-

-

-

Outstanding, June 30, 2023

2,284,932

$ 26.59

3.72

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NOTE 8 – SIGNIFICANT RESEARCH AND DEVELOPMENT PURCHASE
On December 15, 2022, the Company purchased a set of components referred to as “research tools” for $5,000,000 from Narkeshyo LLC, an entity a former director and current consultant of the Company is affiliated with, pursuant to the terms of an Asset Purchase Agreement between the Company and Narkeshyo. Some of the acquired research tools were originally developed by the former director and current consultant. Under the terms of the agreement, the Company made an initial payment to Narkeshyo in the amount of $2,000,000 upon execution of the agreement, with the remaining amounts to be paid at various times through March 15, 2023, which were made as scheduled. Upon execution of the agreement, the Company recorded $5,000,000 as research and development expenses.
The vision and pipeline of the Company is based on robust and thorough development of its biological platforms, therapies and products. This acquisition of the research tools aligned with the Company’s priority of advancing and augmenting its suite of cGMP (Current Good Manufacturing Practices) cellular therapy products. The Company believes that the acquired research tools will allow it to protect its intellectual property while complying with regulatory requirements, and accelerate product development. The information contained in the research tools will not only be used to support and fast-track the Company’s regulatory filings (such as IND, NDA, ANDA and export applications), but also, provide clinical and regulatory support to potential partners and collaborators without having to divulge trade secrets and know-how.
A third-party analysis of this acquisition concluded it would accelerate development time by 3-5 years and result in a substantial reduction in the Company’s research and development expenses over the long term.
The purchased tools included (but were not limited to):
·
Toxicology
·
Screening
·
Preclinical Testing
·
Assays
·
Authorization
·
Tools of Biological Transaction
·
Tools of Intellectual Property
NOTE 9 – SUBSEQUENT EVENTS
There were no material subsequent events during this period.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Management’s Discussion and Analysis of Financial Condition and Results of Operations analyzes the major elements of our balance sheets and statements of operations. This section should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, ~~2021, and our interim financial statements~~2022, and accompanying notes to these financial statements included in this report. All amounts are in U.S. dollars.

Forward-Looking Statement Notice

This quarterly report on Form 10-Q contains forward-looking statements about our expectations, beliefs or intentions regarding, among other things, our product development efforts, business, financial condition, results of operations, strategies or prospects. In addition, from time to time, we or our representatives have made or may make forward-looking statements, orally or in writing. Forward-looking statements can be identified by the use of forward-looking words such as “believe,” “expect,” “intend,” “plan,” “may,” “should” or “anticipate” or their negatives or other variations of these words or other comparable words or by the fact that these statements do not relate strictly to historical or current matters. These forward-looking statements may be included in, but are not limited to, various filings made by us with the SEC, press releases or oral statements made by or with the approval of one of our authorized executive officers. Forward-looking statements relate to anticipated or expected events, activities, trends or results as of the date they are made. Because forward-looking statements relate to matters that have not yet occurred, these statements are inherently subject to risks and uncertainties that could cause our actual results to differ materially from any future results expressed or implied by the forward-looking statements. Many factors could cause our actual activities or results to differ materially from the activities and results anticipated in forward-looking statements, including, but not limited to, those set forth in our most recent annual report referenced below.

This report identifies important factors which could cause our actual results to differ materially from those indicated by the forward-looking statements.

All forward-looking statements attributable to us or persons acting on our behalf speak only as of the date of this report and are expressly qualified in their entirety by the cautionary statements included in this report. We undertake no obligations to update or revise forward-looking statements to reflect events or circumstances that arise after the date made or to reflect the occurrence of unanticipated events. In evaluating forward-looking statements, you should consider these risks and uncertainties.

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Overview

We are a commercial stage biotechnology company ~~focused on immunology,~~dedicated to the advancement of identifying and translating novel biological therapeutics in the fields of immunotherapy, endocrinology, urology, neurology and ~~orthopedics using adult stem cell treatments and interrelated regenerative technologies for the treatment of multiple indications.~~orthopedics. Our ~~existing and pipeline of~~platforms, therapies and products include of the following:
Our subsidiary, Creative Medical Technologies, Inc. (“CMT”), was originally created to monetize U.S. Patent No. 8,372,797 and related intellectual property related to the treatment of erectile dysfunction (“ED”), which it acquired in ~~February~~May 2016. Subsequently, we have expanded our development and acquisition of intellectual property beyond urology to include therapeutic treatments utilizing “re-programmed” stem cells, and the treatment of neurologic disorders, lower back pain, ~~type I~~Type-1 diabetes, and heart, liver, kidney, and other diseases using various types of stem cells through our ImmCelz, Inc., StemSpine, Inc. and ~~AmnioStem~~AlloCelz LLC subsidiaries. However, neither ImmCelz Inc.~~, StemSpine Inc.~~ nor ~~AmnioStem~~AlloCelz LLC have commenced commercial activities.

We currently conduct substantially all of our commercial operations through CMT, which markets and sells our CaverStem^® and FemCelz^®disposable kits utilized by physicians to perform autologous procedures that treat erectile dysfunction and female sexual dysfunction, respectively. Our CaverStem^® and FemCelz^® kits are currently available through physicians at eight locations in the United States.

16
~~In addition to our CaverStem~~^® ~~and FemCelz~~^®~~products, we are currently in the process of recruiting clinical sites for our StemSpine~~^® ~~Regenerative Stem Cell Procedure for the Treatment of Degenerative Disc Disease. Our StemSpine~~^® ~~treatment is an autologous procedure that utilizes a patient’s own stem cells to treat lower back pain.~~
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In 2020, through our ImmCelz Inc. subsidiary, we began ~~exploring the development of~~developing treatments that utilize a patient’s own extracted immune cells that are then ~~“reprogrammed”~~“reprogrammed/supercharged” by culturing them outside the patient’s body with optimized ~~stem cells.~~cell-free factors. The immune cells are then re-injected into the patient from whom they were extracted. We believe this process endows the immune cells with regenerative properties that may be suitable for the treatment of multiple ~~indications, among other~~ indications. In contrast to other stem cell-based approaches, the immune cells are significantly smaller in size than stem cells and are believed to more effectively penetrate areas of the damaged tissues and induce regeneration.

In June 2022, we signed an agreement with Greenstone Biosciences Inc. for the development of a human induced pluripotent stem cell (iPSC) pipeline for our ImmCelz® platform. This project was identified as iPScelz™. The efforts by Greenstone Biosciences Inc. are expected to complement and expand our current work on novel therapeutic cell lines.
In October 2022, we announced the development of our AlloStem™ Clinical Cell Line, a proprietary allogenic cell line which includes a Master Cell Bank and a Drug Master File. We believe we will able to use this cell line for many of our programs, including our ImmCelz® immunotherapy platform for multiple diseases, OvaStem® for Premature Ovarian Failure, CELZ-201 for Type 1 diabetes, StemSpine® for lower back pain, and IPScelz ™ inducible pluripotent stem cell program in ongoing development with Greenstone Biosciences.
In November 2022, we announced that the FDA had cleared the Company’s CELZ-201 Investigational New Drug (IND) application for the treatment of Type 1 Diabetes, which will allow us to begin a Phase I/II clinical trial. The primary objective of the study will be to evaluate CELZ-201 in patients with newly diagnosed Type 1 Diabetes. Patient recruitment is expected to begin in 2023.
In February 2023, the Company reported positive three-year follow-up data for its StemSpine® pilot study. The three-year data demonstrates continued efficacy of the StemSpine® procedure for treating chronic lower back pain without any serious adverse effects reported.
In March 2023, the Company announced that it filed an application with the FDA to receive Orphan Drug Designation for the treatment of Brittle Type 1 Diabetes using its ImmCelz®(CELZ-100) platform, and in April 2023, the Company reported positive one-year follow-up data and significant efficacy using CELZ-001 to treat patients with Type 2 Diabetes without any serious adverse effects reported
In addition to our clinical research efforts, we are currently ~~primarily focused on expanding~~seeking to expand the commercial sale and use of our ~~CaverStem~~^®CaverStem® and ~~FemCelz~~^®FemCelz® products by physicians in the United ~~States and further developing our StemSpine~~^® treatment for lower back pain and OvaStem® treatment for Premature Ovarian Failure programs, including but not limited to disclosed Pilot Studies.. We also recently filed an Investigational New Drug (IND) application with the FDA to treat stroke utilizing our ImmCelz^TM technology. We continue to further develop additional therapeutic products that utilize our proprietary intellectual property, including the collaboration with GreenStone Biosciences for the development of an Inducible Pluripotent Stem Cell (IPSC) line.States.

Results of Operations – For the Three-month Periods Ended June 30, ~~2022~~2023, and ~~2021~~2022

Gross ~~Revenue.~~Revenue. We generated no revenue for the ~~three-month period~~three-months ended June 30, ~~2022, in comparison with $10,000 for the comparable quarter a year ago.~~2023 and 2022.

Cost of Goods Sold. We generated no cost of goods sold for the ~~three-month period~~three-months ended June 30, ~~2022, in comparison with $4,500 cost of goods sold for the comparable quarter a year ago.~~2023 and 2022.
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Gross Profit/(Loss). We generated no gross profit for the ~~three-month period~~three-months ended June 30, ~~2022, in comparison with $5,500 for the comparable quarter a year ago.~~2023 and 2022.

Selling, General and Administrative ~~Expenses.~~ Expenses. General and administrative expenses for the ~~three-month period~~three-months ended June 30, ~~2022,~~2023, totaled ~~$1,108,428~~$859,537, in comparison with ~~$498,321,~~$1,108,428 for the comparable ~~quarter~~period a year ago. The ~~increase~~decrease of ~~$610,107~~$248,891, or ~~122%~~23% is primarily due to ~~approximately $130,000 in director and officer insurance premiums that began in September 2021, an increase~~a decrease of approximately $180,000 in salary expenses from terminating the management service agreement in September 2021 and entering into direct employment arrangements with our CEO, CFO and other key leaders of the management team, an increase of approximately $164,000$90,194 in marketing, $38,152 in travel, $76,000 in timing-related Board of Director expenses ~~as we ramp-up our commercial activity,~~ and ~~an increase of $98,000~~$37,887 in ~~outside consulting expenses focused on moving key elements of our programs forward.~~D&O.

Amortization Expenses. Amortization expenses for the three-month periods ended June 30, ~~2022~~2023 and ~~2021,~~2022, totaled $23,021.

Research and Development ~~Expenses.~~ Expenses. Research and development expenses for the ~~three-month period~~three-months ended June 30, 2023, totaled $309,480 in comparison to $659,695 for the comparable period a year ago. The decrease of $350,215, or 53% was primarily due to trial-related start-up expenses of $410,000 incurred in 2022 ~~totaled $659,695~~associated with our CELZ-201 Phase I/II diabetes trial.

Operating Loss. For the reasons stated above, our operating loss for the three-months ended June 30, 2023, was $1,192,038 in comparison with ~~no expenses,~~$1,791,144 for the comparable ~~quarter~~period a year ago.

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Other Income. Other income for the three-months ended June 30, 2023, totaled $89,913 in comparison with $0 for the comparable period a year ago. The increased ~~research and development expenses reflects investments in in regulatory, research, laboratory and manufacturing resources required to move our programs forward.~~

~~Other Income/Expense.~~ ~~There was no other~~ income ~~or expense for the three-month period ended June 30, 2022, in comparison with $2,389,340 expense, for the comparable quarter a year ago. The decreased expense~~ of ~~$2,389,340,~~$89,913 is ~~primarily~~ due to ~~loss~~increased interest income associated with $9,581,207 in ~~the fair value~~short-term certificates of ~~derivative liabilities of $2,251,446, zero interest expense versus $234,338, offset by a $96,444 gain on extinguishment of convertible notes for the comparable quarter a year ago.~~deposit.

Net Income/~~Loss.~~Loss. For the reasons stated above, our net loss for the ~~three-month period~~three-months ended June 30, ~~2022, totaled $1,791,144~~2023, was $1,102,125 in comparison towith a net loss of ~~$2,905,182,~~$1,791,144 for the comparable ~~quarter~~period a year ago.

Results of Operations – For the Six-month Periods Ended June 30, ~~2022~~2023, and ~~2021~~2022

Gross ~~Revenue.~~Revenue. We generated ~~$15,000 in~~no revenue for the ~~six-month period~~six-months ended June 30, ~~2022,~~2023, in comparison with ~~$10,000 in revenue~~$15,000 for the comparable period a year ago. The pause in sales reflects the Company’s re-evaluation of marketing and distribution options to generate improved sales of the Caverstem and FemCelz procedures.

Cost of Goods Sold. We generated ~~$6,791 of goods sold for the six-month period ended June 30, 2022, in comparison with $4,500~~no cost of goods sold for the six-months ended June 30, 2023, in comparison with $6,791 for the comparable period a year ago. The decrease is due to the reduction in sales.

Gross Profit/(Loss). We generated a$0 in gross profit ~~of $8,209~~ for the ~~six-month period~~six-months ended June 30, ~~2022,~~2023, in comparison with ~~$5,500~~$8,209 in gross profit for the comparable period a year ago.

Selling, General and Administrative ~~Expenses.~~ Expenses. General and administrative expenses for the ~~six-month period~~six-months ended June 30, ~~2022,~~2023, totaled ~~$2,238,485~~$1,630,557, in comparison with ~~$779,244,~~$2,238,845 for the comparable period a year ago. The ~~increase~~decrease of ~~$1,459,241~~$607,928, or ~~187%~~27% is primarily due to ~~approximately $305,000~~decreases of $194,000 in ~~director and officer~~consulting expenses, $131,136 in marketing expenses, $121,309 in D&O insurance, premiums that began in September 2021, an increase of approximately $378,000 in net salary expenses offset by the termination of the management service agreement in September 2021 and entering into direct employment arrangements with our CEO, CFO and other key leaders of the management team, $226,000$76,000 in Board of ~~Director expenses as a result of bringing on independent board members, an increase of approximately $279,000~~Directors payment timing, $49,490 in ~~marketing expenses,~~accounting fees, $44,672 in travel, and ~~an increase of $235,000~~$32,098 in ~~outside consulting expenses focused on moving key elements of our programs forward.~~stock-based compensation.

Amortization Expenses. Amortization expenses for the six-month periods ended June 30, ~~2022~~2023 and ~~2021,~~2022, totaled $46,042.

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Research and Development ~~Expenses.~~ Expenses. Research and development expenses for the ~~six-month period~~six-months ended June 30, 2023, totaled $628,500 in comparison to $669,695 for the comparable period a year ago. The decrease of $41,186, or 6% was primarily due to of trial-related start-up expenses in 2022 ~~totaled $669,694~~associated with our CELZ-201 Phase I/II diabetes trial.

Operating Loss. For the reasons stated above, our operating loss for the six-months ended June 30, 2023, was $2,305,108 in comparison with ~~no expenses,~~$2,946,013 for the comparable period a year ago.

Other Income. Other income for the six-months ended June 30, 2023, totaled $151,060 in comparison with $0 for the comparable period a year ago. The increased ~~research and development expenses reflects investments in regulatory, research, laboratory and manufacturing resources required to move our programs forward.~~

~~Other Income/Expense.~~ ~~There was no other income or expense for the six-month period ended June 30, 2022, in comparison with $25,750,623 income, for the comparable period a year ago. The decreased~~ income of ~~$25,750,623,~~$151,060 is ~~primarily~~ due to ~~a gain~~interest income associated with $9,581,207 in ~~the fair value~~short-term certificates of ~~derivative liabilities of $26,224,593, offset by interest expense of $570,414 for the comparable period a year ago.~~deposit.

Net Income/~~Loss.~~Loss. For the reasons stated above, our net loss for the ~~six-month period~~six-months ended June 30, ~~2022, totaled $2,946,013~~2023, was $2,154,048 in comparison towith a net ~~income~~loss of ~~$24,930,837,~~$2,946,013 for the comparable period a year ago.

Liquidity and Capital Resources

As of June 30, 2023, we had $13,570,757 of available cash and certificates of deposit and positive working capital of approximately $13,336,116. In comparison, as of December 31, 2022, we had ~~$22,863,661~~$18,399,136 of available cash and positive working capital of ~~approximately $22,559,451. In comparison, as of December 31, 2021, we had approximately $10,723,870 of available cash and positive working capital of approximately $9,686,780.~~$15,425,798.

On ~~December 7, 2021,~~May 3, 2022 we ~~sold~~received gross proceeds of $17,000,000, before deducting placement agent fees and expenses, upon the closing of an ~~aggregate~~unregistered sale of ~~3,875,000~~equity securities of (i) 299,167 shares of our common stock and pre-funded warrants to purchase 456,389 shares of common stock (the “Pre-Funded Warrants”), and (ii) accompanying warrants to purchase ~~3,875,000~~1,511,112 shares of common stock at an exercise price of ~~$4.13~~$20.00 per share at a combined public offering price to the public of $4.13 per share of common stock and related Warrant, pursuant to an Underwriting Agreement we entered into with Roth Capital Partners, LLC. We received gross proceeds of $16,003,750, before deducting underwriting discounts and commissions of seven percent (7%(“Warrants”) of the gross proceeds and offering expenses. We used a portion of the proceeds from the offering to (i) redeem our Bridge Notes described below, in the aggregate outstanding amount of $5,146,176, and (ii) repurchase the Company’s Series A Preferred Stock from the Company’s Chief Executive Officer for an aggregate purchase price of approximately $195,000.

In addition, on May 3, 2022 we completed the sale of (i) 2,991,669 shares of common stock and pre-funded warrants to purchase 4,563,887 shares of common stock, and (ii) accompanying warrants to purchase 15,111,112 shares of common stock,, at a combined offering price of ~~$2.25~~$22.50 per share of common stock/Pre-Funded Warrant and related ~~Common~~ Warrant to a group of institutional investors ~~resulting~~(the “Purchasers”). The Warrants have a five-year term, and an exercise price of $20.00 per share. The Pre-Funded Warrants do not expire and had an exercise price of $0.001 per share. Roth Capital Partners acted as sole placement agent for the offering. We paid Roth a placement agent fee in ~~gross proceeds~~the amount of $1,360,000 and issued Roth a warrant to purchase 113,334 shares of common stock with the same terms as the common warrants issued to the purchasers. Pursuant to the Purchase Agreement, the Company and the Purchasers entered into a Registration Rights Agreement, pursuant to which the Company agreed to file a registration statement with the Securities and Exchange Commission to register the resale of ~~approximately $17,000,000.~~ the shares of Common Stock issued in the offering and the shares of Common Stock underlying the Warrants and Pre-Funded Warrants. On May 10, 2022, we filed a Form S-3 registration statement to register the shares, Warrants and Pre-Funded Warrants for resale. The registration went effective on May 19, 2022, fulfilling our contractual obligation. From June through July 2022, all of the Pre-Funded Warrants were exercised for shares of common stock.

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Cash Flows

Net Cash used in Operating Activities. We used cash in our operating activities due to our losses from operations. Net cash used in operating activities was ~~$3,332,429~~$4,828,379 for the ~~six-month period ended~~six months-ended June 30, ~~2022~~2023, in comparison to ~~$663,657~~$3,332,429 for the comparable period a year ago, an increase of ~~$2,668,772~~$1,495,950 or ~~402%~~45%. The increase in cash used in operations was primarily related to $3,000,000 in cash payments related to the ~~increased expenses mentioned above.~~purchase of research tools referenced in Note 8 offset by reductions in general and administrative expenses.

Net Cash Received in Investing Activities. Cash received in investing activities was $497,410 for the six-months ended June 30, 2023, related to net redemptions of $497,410 in certificates of deposit in comparison to $0 for the six-months ended June 30, 2022.

Net Cash ~~used in Investing Activities~~from Financing Activities..

There ~~was~~were no cash ~~used in investing~~proceeds or expenditures from financing activities induring the ~~six-month period~~six-months ended June 30, ~~2022 and June 30, 2021, respectively.~~

~~Net Cash From Financing Activities.~~ ~~We raised~~2023 compared to $15,472,220 ~~during~~for the ~~six-month period~~six-months ended June 30, 2022. The $15,472,220 is related to the May, 2022 ~~through the issuance of common stock and pre-paid warrants, net of offering costs. We raised $724,233 through the issuance of convertible debt, preferred stock and a related party advance~~financing referenced in ~~the six-month period ended June 30, 2021.~~Note 7.

Critical Accounting Policies and Estimates

Our consolidated financial statements are prepared in accordance with generally accepted accounting principles accepted in the United States. In connection with the preparation of our financial statements, we are required to make assumptions and estimates about future events and apply judgments that affect the reported amounts of assets, liabilities, revenue, expenses, and the related disclosures. We base our assumptions, estimates and judgments on historical experience, current trends, and other factors that management believes to be relevant at the time our consolidated financial statements are prepared. On a regular basis, we review the accounting policies, assumptions, estimates and judgments to ensure that our financial statements are presented fairly and in accordance with GAAP. However, because future events and their effects cannot be determined with certainty, actual results could differ from our assumptions and estimates, and such differences could be material.

~~Table of Contents~~

Item 3. Quantitative and Qualitative Disclosures About Market Risk

As a smaller reporting company, we have elected not to provide the disclosure required by this item.

Item 4. Controls and Procedures

Evaluation of disclosure controls and procedures

~~As required by Rule 13a-15 under the Exchange Act, our management evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of June 30, 2022.~~

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 15(d)-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures as of the end of the period covered by this report were not effective in ensuring that information required to be disclosed by us in reports that we file or submit under the Exchange Act (i) is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and (ii) is accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Description of Material Weaknesses

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of a company’s annual or interim financial statements will not be prevented or detected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control over financial reporting that is less severe than a material weakness, yet important enough to merit attention by those responsible for oversight of a company’s financial reporting. In connection with the preparation and audit of the Company’s financial statements for the year ended the December 31, 2022, management identified the following deficiencies that alone or in combination, represent material weaknesses in internal control over financial reporting, the material weaknesses are still present for the six months ended June 30, 2023 and are as follows:

·	Previously, we failed to adequately disclose the transaction in which we purchased research tools for $5,000,000 from Narkeshyo LLC, an entity a former director and current consultant of the Company is affiliated with.

·	During the year ended December 31, 2022, we did not sufficiently segregate the duties of our officers.

We intend to remediate the deficiencies described above, and take such other action as we deem appropriate to further strengthen our internal control over financial reporting. We are currently in the process of establishing additional review and procedure controls. For instance, subsequent to quarter end we have implemented a policy whereby disbursements over a certain dollar threshold require dual authorization for processing and payment. The Company expects to remediate the deficiencies and obtain operating effectiveness over the next few quarters. However, because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Changes in internal control over financial reporting

There were no changes in our internal control over financial reporting that occurred during the period covered by this Quarterly Report on Form 10-Q that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

2219

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PART II – OTHER INFORMATION

Item 1. Legal Proceedings

From time to time, we may become involved in various lawsuits and legal proceedings, which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. ~~As of June 30, 2022 we were not involved in any legal proceedings.~~

~~Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.~~

In ~~February~~October 2022, we ~~paid~~terminated an employee for cause. Subsequent to the ~~initial Jadi Cell obligation~~termination, in December 2022, the employee brought claims against us for breach of ~~$250,000 through~~contract, wrongful termination and related claims in the ~~issuance~~Superior Court of ~~181,818 shares of common stock.~~the State California (Orange County). The parties have submitted the action for arbitration before JAMS, where it is now pending.

Item 6. Exhibits

~~SEC Ref. No.~~Exhibits		~~Title of Document~~

3.1.1		Articles of Incorporation of Creative Medical Technology Holdings, Inc., a Nevada corporation (incorporated by reference to Exhibit 3.1 to the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 17, 2021).
3.1.2		Certificate of Designation of the Series A Preferred Stock of the Company (incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on January 16, 2018).
3.1.3		Certificate of Amendment to Certificate of Designation of the Series A Preferred Stock Pursuant to NRS 78.1955, filed with the Secretary of State of the State of Nevada on March 11, 2021 (incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 12, 2021).
3.1.4		Certificate of Designation of the Series B Preferred Stock of the Company, filed March 30, 2021 (incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 12, 2021).
3.1.5		Certificate of Designation of the Series C Preferred Stock of the Company, filed March 30, 2021 (incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on April 2, 2021).
3.1.6		Certificate of Amendment to Articles of Incorporation Pursuant to NRS 78.385 and 78.390, as filed with the Secretary of State of the State of Nevada on November 2, 2021 (incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on November 5, 2021).
3.1.7		Certificate of Withdrawal of Certificate of Designation of Series B Convertible Preferred Stock, as filed with the Secretary of State of the State of Nevada on November 2, 2021 (incorporated by reference to Exhibit 3.2 of the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on November 5, 2021).
3.1.8		Certificate of Withdrawal of Certificate of Designation of Series C Convertible Preferred Stock, as filed with the Secretary of State of the State of Nevada on November 2, 2021 (incorporated by reference to Exhibit 3.3 of the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on November 5, 2021).
3.1.9		Certificate of Change Pursuant to NRS 78.209, as filed with the Secretary of State of the State of Nevada on November 8, 2021 (incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on November 9, 2021).
3.10		Certificate of Change Pursuant to NRS 78.209, as filed with the Secretary of State of the State of Nevada on June 1, 2023 (incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on June 9, 2023).
3.2		Bylaws of Creative Medical Technology Holdings, Inc., a Nevada corporation (incorporated by reference to Exhibit 3.2 to the Company’s Form 10 filed with the Securities and Exchange Commission on November 18, 2008).
4.1		Form of Public Warrant issued in December 7, 2021 public offering (incorporated by reference to Exhibit 4.1 of the Company’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on November 23, 2021).
4.2		Underwriter’s Warrant issued to Roth Capital Partners, LLC dated December 7, 2021 (incorporated by reference to Exhibit 4.1 of the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 7, 2021).
4.3		Form of Common Stock Purchase Warrant issued under Securities Purchase Agreement dated as of August 9, 2021 between Creative Medical Technology Holdings, Inc. and the purchasers named therein (incorporated by reference to Exhibit 4.2 of the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on August 12, 2021).
10.1		Patent Purchase Agreement dated May 17, 2017, between Creative Medical Technology Holdings, Inc. and Creative Medical Health, Inc. (incorporated by reference to Exhibit 10.25 to the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 17, 2021).
10.2		Amendment and Waiver to Patent Purchase Agreement dated November 14, 2017, between Creative Medical Technology Holdings, Inc. and Creative Medical Health, Inc. (incorporated by reference to Exhibit 10.26 to the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 17, 2021).
10.3		Agreement dated December 28, 2020, between Jadi Cell LLC and ImmCelz, Inc. (incorporated by reference to Exhibit 4.1 of the Company’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on September 28, 2021).
10.4		Warrant Agency Agreement between Creative Medical Technology Holdings, Inc. and vStock Transfer LLC dated December 7, 2021 (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 7, 2021).
10.5†		2021 Equity Incentive Plan (incorporated by reference to Appendix B to the Company’s Information Statement on Schedule 14C filed with the Securities and Exchange Commission on September 24, 2021).
10.6†		Employment Agreement between Creative Medical Technology Holdings, Inc. and Timothy Warbington, dated as of February 9, 2022. (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 11, 2022).
10.7†		Employment Agreement between Creative Medical Technology Holdings, Inc. Company and Donald Dickerson, dated as of February 9, 2022. (incorporated by reference to Exhibit 10.2 of the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 11, 2022).
31.1		Rule 13a-14(a)/15d-14a(a) Certification byof Principal Executive ~~Officer~~Officer*
31.2		Rule 13a-14(a)/15d-14a(a) Certification byof Principal Financial ~~Officer~~Officer*
32.1		Section 1350 Certification of Principal Executive Officer *
32.2		Section 1350 Certification of Principal Financial Officer *
101.INS		Inline XBRL Instance Document
101.SCH		Inline XBRL Taxonomy Extension Schema Document
101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document

________

† Management contract or compensatory plan or arrangement.

2320

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	Creative Medical Technology Holdings, Inc.

Date: August ~~12, 2022~~11, 2023	By	/s/ Timothy Warbington
		Timothy Warbington, Chief Executive Officer
		(Principal Executive Officer)

Date: August ~~12, 2022~~11, 2023	By	/s/ Donald Dickerson
		Donald Dickerson, Chief Financial Officer
		(Principal Financial Officer)

	June 30, 2022			December 31, 2021
ASSETS
CURRENT ASSETS
Cash	$	22,863,661		$	10,723,870
Accounts receivable		0			2,485
Inventory		20,625			10,866
Prepaids and other current assets		64,960			0
Total Current Assets		22,949,246			10,737,221

OTHER ASSETS
Other assets		3,281			3,281
Licenses, net of amortization		481,637			527,679
TOTAL ASSETS	$	23,434,164		$	11,268,181

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)

CURRENT LIABILITIES
Accounts payable	$	310,681		$	761,862
Accrued expenses		64,920			24,385
Management fee and patent liabilities - related parties		0			250,000
Advances from related party		14,194			14,194
Total Current Liabilities		389,795			1,050,441

Commitments and contingencies

STOCKHOLDERS’ EQUITY (DEFICIT)
Common stock, $0.001 par value, 50,000,000 authorized; 13,956,246 and 6,338,872 issued and 13,956,238 and 6,338,864 outstanding at June 30, 2022 and December 31, 2021, respectively		13,957			6,339
Additional paid-in capital		69,644,239			53,879,215
Accumulated deficit		(46,613,827	)		(43,667,814	)
TOTAL STOCKHOLDERS’ EQUITY (DEFICIT)		23,044,369			10,217,740

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)	$	23,434,164		$	11,268,181

CREATIVE MEDICAL TECHNOLOGY HOLDINGS, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
	June 30, 2023			December 31, 2022
ASSETS
CURRENT ASSETS
Cash	$	3,989,550		$	8,320,519
Certificates of deposit		9,581,207			10,078,617
Inventory		10,194			10,194
Prepaids and other current assets		153,692			338,120
Total Current Assets		13,734,643			18,747,450

OTHER ASSETS
Other assets		3,281			3,281
Licenses, net of amortization		389,553			435,595
TOTAL ASSETS	$	14,127,477		$	19,186,326

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
Accounts payable	$	344,413		$	3,267,538
Accrued expenses		39,920			39,920
Advances from related party		14,194			14,194
Total Current Liabilities		398,527			3,321,652

TOTAL LIABILITIES		398,527			3,321,652

Commitments and contingencies

STOCKHOLDERS' EQUITY
Common stock, $0.001 par value, 5,000,000 and 50,000,000 shares authorized; 1,431,127 and 1,407,625 issued and 1,431,126 and 1,407,624 outstanding at June 30, 2023 and December 31, 2022, respectively		1,431			1,408
Additional paid-in capital		69,693,425			69,675,124
Accumulated deficit		(55,965,906	)		(53,811,858	)
TOTAL STOCKHOLDERS' EQUITY		13,728,950			15,864,674
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
	$	14,127,477		$	19,186,326

The Accompanying notes are an integral part of these condensed consolidated financial statements

	For the Three Months Ended June 30, 2022			For the Three Months Ended June 30, 2021			For the Six Months Ended June 30, 2022			For the Six Months Ended June 30, 2021

Revenues	$	0		$	10,000		$	15,000		$	10,000

Cost of revenues		0			4,500			6,791			4,500

Gross profit		0			5,500			8,209			5,500

OPERATING EXPENSES
Research and development		659,695			0			669,695			0
Selling, general and administrative		1,108,428			498,321			2,238,485			779,244
Amortization of patent costs		23,021			23,021			46,042			46,042
TOTAL EXPENSES		1,791,144			521,342			2,954,222			825,286

Operating loss		(1,791,144	)		(515,842	)		(2,946,013	)		(819,786	)

OTHER INCOME/(EXPENSE)
Interest expense		0			(234,338	)		0			(570,414	)
Gain on extinguishment of convertible notes		0			96,444			0			96,444
Change in fair value of derivatives liabilities		0			(2,251,446	)		0			26,224,593
Total other income (expense)		0			(2,389,340	)		0			25,750,623

INCOME (LOSS) BEFORE PROVISION FOR INCOME TAXES		(1,791,144	)		(2,905,182	)		(2,946,013	)		24,930,837

Provision for income taxes		0			0			0			0

NET INCOME (LOSS)	$	(1,791,144	)	$	(2,905,182	)	$	(2,946,013	)	$	24,930,837

BASIC NET INCOME (LOSS) PER SHARE	$	(0.20	)	$	(1.25	)	$	(0.38	)	$	11.12

DILUTED NET INCOME (LOSS) PER SHARE	$	(0.20	)	$	(1.25	)	$	(0.38	)	$	10.76

WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING - BASIC		9,011,248			2,320,084			7,739,696			2,242,318

WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING - DILUTED		9,011,248			2,320,084			7,739,696			2,328,927

CREATIVE MEDICAL TECHNOLOGY HOLDINGS, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

	For the Three Months Ended June 30, 2023			For the Three Months Ended June 30, 2022			For the Six Months Ended June 30, 2023			For the Six Months Ended June 30, 2022

Revenues	$	-		$	-		$	-		$	15,000

Cost of revenues		-			-			-			6,791

Gross profit		-			-			-			8,209

OPERATING EXPENSES
Research and development		309,480			659,695			628,509			669,695
Selling, general and administrative		859,537			1,108,428			1,630,557			2,238,485
Amortization of patent costs		23,021			23,021			46,042			46,042
TOTAL EXPENSES		1,192,038			1,791,144			2,305,108			2,954,222

Operating loss		(1,192,038	)		(1,791,144	)		(2,305,108	)		(2,946,013	)

OTHER INCOME/(EXPENSE)
Interest income		89,913			-			151,060			-
Total other income (expense)		89,913			-			151,060			-

LOSS BEFORE PROVISION FOR INCOME TAXES		(1,102,125	)		(1,791,144	)		(2,154,048	)		(2,946,013	)

Provision for income taxes		-			-			-			-

NET LOSS	$	(1,102,125	)	$	(1,791,144	)	$	(2,154,048	)	$	(2,946,013	)

NET LOSS PER SHARE - BASIC AND DILUTED	$	(0.78	)	$	(1.99	)	$	(1.53	)	$	(3.81	)

WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING - BASIC AND DILUTED		1,409,948			901,125			1,408,793			773,970

The Accompanying notes are an integral part of these condensed consolidated financial statements

CREATIVE MEDICAL TECHNOLOGY HOLDINGS, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)

	Series A Preferred Stock				Series B Preferred Stock				Series C Preferred Stock				Common Stock				Additional Paid-in			Accumulated			Total Stockholders'
	Shares		Amount		Shares		Amount		Shares		Amount		Shares		Amount		Capital			Deficit			Equity
December 31, 2022		-	$	-		-	$	-		-	$	-		1,407,624	$	1,408	$	69,675,124		$	(53,811,858	)	$	15,864,674

Round-up shares issued in reverse stock split		-		-		-		-		-		-		23,502		23		(23	)		-			-
Stock-based compensation		-		-		-		-		-		-		-		-		18,324			-			18,324
Net loss		-		-		-		-		-		-		-		-		-			(2,154,048	)		(2,154,048	)

June 30, 2023		-	$	-		-	$	-		-	$	-		1,431,126	$	1,431	$	69,693,425		$	(55,965,906	)	$	13,728,950

	For the Six-months Ended June 30, 2021
Weighted average common shares outstanding used in calculating basic earnings per share		2,242,318
Effect of Series B and C preferred stock		24,000
Effect of warrants		35,873
Effect of convertible notes payable		22,115
Effect of convertible related party management fee and patent liabilities		4,623
Weighted average common shares outstanding used in calculating diluted earnings per share		2,328,929

Net income as reported	$	24,930,837
Add - Interest on convertible notes payable		117,649
Net income available to common stockholders	$	25,048,486

	·	The Company is required to pay CMH $100,000 within 30 days of demand as an initial payment.
	·	In the event the Company determines to pursue the technology via use of autologous cells, the Company will pay CMH:

	o	$100,000 upon the signing agreement with a university for the initiation of an IRB clinical trial.
	o	$200,000, upon completion of the IRB clinical trial.
	o	$300,000 in the event we commercialize the technology via use of autologous cells by a physician without a clinical trial.

	o	$100,000 upon filing an IND with the FDA.
	o	$200,000 upon dosing of the first patient in a Phase 1-2 clinical trial.
	o	$400,000 upon dosing the first patient in a Phase 3 clinical trial.

	Assets		Accumulated Amortization			Assets		Accumulated Amortization

Balances at December 31, 2021	$	760,000	$	(232,321	)
Balances at December 31, 2022						$	760,000	$	(324,405	)
Addition of new assets				0					-
Amortization		0		(46,042	)		-		(46,042	)
Balances at June 30, 2022	$	760,000	$	(278,363	)
Balances at June 30, 2023						$	760,000	$	(370,447	)

	Inputs Used			Inputs Used

Annual dividend yield	$	0		$	-
Expected life (years)		10.0			10.0
Risk-free interest rate		0.81	%		0.81	%
Expected volatility		92.95	%		92.95	%
Common stock price	$	1.69		$	16.90

	Stock Options		Weighted Average Exercise Price		Weighted Average Life Remaining		Stock Options		Weighted Average Exercise Price		Weighted Average Life Remaining
Outstanding, December 31, 2021		7	$	7,500		4.64
Outstanding, December 31, 2022								11,183	$	83.96		9.11
Issued		111,817				-		-		-		-
Exercised		-		0		-		-		-		-
Expired		-		0		-		-		-		-
Outstanding, June 30, 2022		111,824	$	2.16		9.62
Vested, June, 30, 2022		27,961	$	3.57		9.62
Outstanding, June 30, 2023								11,183	$	83.96		8.61
Vested, June 30, 2023								7,456	$	117.47		8.62

	Range of Inputs Used
Annual dividend yield	$	-
Expected life (years)		5.0
Risk-free interest rate		0.81	%
Expected volatility		92.95	%
Common stock price	$	18.30

Outstanding at December 31, 2021		6,604,820
Issuances		20,808,332
Exercises		(4,443,887	)
Outstanding at June 30, 2022		22,969,265
Weighted Average Price at June 30, 2022	$	2.64

	Warrants		Weighted Average Exercise Price		Weighted Average Life Remaining
Outstanding, December 31, 2022		2,284,932	$	26.59		4.22
Issuances		-		-		-
Exercises		-		-		-
Outstanding, June 30, 2023		2,284,932	$	26.59		3.72

	·	Toxicology
	·	Screening
	·	Preclinical Testing
	·	Assays
	·	Authorization
	·	Tools of Biological Transaction
	·	Tools of Intellectual Property