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 September 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 November 13, 2023, there were 1,382,126 shares ~~outstanding~~ of the registrant’s common stock ~~on November 10, 2022, was 14,076,246.~~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 ~~Stockholders’ (Equity)~~Stockholder’ 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	2220

Item 4.	Controls and Procedures	2220

PART II – OTHER INFORMATION

Item 1.	Legal Proceedings	2321

Item 2.	Unregistered Sales of Equity Securities, ~~and~~ Use of Proceeds, and Issuer Purchases of Equity Securities	2321

Item 6.	Exhibits	2321

Table of Contents

CREATIVE MEDICAL TECHNOLOGY HOLDINGS, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

September 30,
2022

December 31,
2021

ASSETS

CURRENT ASSETS

Cash

$ 16,969,063

$ 10,723,870

Certificates of deposit

5,021,307

-

Accounts receivable

-

2,485

Inventory

15,894

10,866

Total Current Assets

22,006,264

10,737,221

OTHER ASSETS

Other assets

3,281

3,281

Licenses, net of amortization

458,616

527,679

TOTAL ASSETS

$ 22,468,161

$ 11,268,181

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES

Accounts payable

$ 327,843

$ 761,862

Accrued expenses

54,920

24,385

Management fee and patent liabilities - related parties

-

250,000

Advances from related party

14,194

14,194

Total Current Liabilities

396,957

1,050,441

Commitments and contingencies

STOCKHOLDERS' EQUITY

Common stock, $0.001 par value, 25,000,000,000 and 6,000,000,000 shares authorized; 14,076,246 and 6,338,872 issued and 14,076,238 and 6,338,864 outstanding at September 30, 2022 and December 31, 2021, respectively

14,077

6,339

Additional paid-in capital

69,653,293

53,879,215

Accumulated deficit

(47,596,166 )

(43,667,814 )
TOTAL STOCKHOLDERS' EQUITY

22,071,204

10,217,740

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$ 22,468,161

$ 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

September 30,
2023

December 31,
2022

ASSETS

CURRENT ASSETS

Cash

$ 4,507,108

$ 8,320,519

Certificates of deposit

7,467,346

10,078,617

Inventory

7,794

10,194

Prepaids and other current assets

61,478

338,120

Total Current Assets

12,043,726

18,747,450

OTHER ASSETS

Other assets

3,281

3,281

Licenses, net of amortization

466,532

435,595

TOTAL ASSETS

$ 12,513,539

$ 19,186,326

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES

Accounts payable

$ 367,045

$ 3,267,538

Accrued expenses

39,920

39,920

Advances from related party

14,194

14,194

Total Current Liabilities

421,159

3,321,652

TOTAL LIABILITIES

421,159

3,321,652

Commitments and contingencies

STOCKHOLDERS' EQUITY

Common stock, $0.001 par value, 5,000,000 and 50,000,000 shares authorized; 1,431,126 and 1,407,624 issued, and 1,391,126 and 1,407,624 outstanding at September 30, 2023 and December 31, 2022, respectively

1,431

1,408

Additional paid-in capital

69,702,587

69,675,124

Treasury stock, at cost, 40,000 shares as of September 30, 2023

(191,780 )

-

Accumulated deficit

(57,419,858 )

(53,811,858 )
TOTAL STOCKHOLDERS' EQUITY

12,092,380

15,864,674

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$ 12,513,539

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

For the Three Months Ended
September 30,
2022

For the Three Months Ended
September 30,
2021

For the Nine Months Ended
September 30,
2022

For the Nine Months Ended
September 30,
2021

For the Three
Months Ended
September 30,
2023

For the Three
Months Ended
September 30,
2022

For the Nine
Months Ended
September 30,
2023

For the Nine
Months Ended
September 30,
2022

Revenues

$ 55,000

$ 10,000

$ 70,000

$ 20,000

$ 6,000

$ 55,000

$ 6,000

$ 70,000

Cost of revenues

16,000

4,000

22,791

8,500

2,400

16,000

2,400

22,791

Gross profit

39,000

6,000

47,209

11,500

3,600

39,000

3,600

47,209

OPERATING EXPENSES

Research and development

230,940

59,180

900,635

59,180

992,722

230,940

1,621,231

900,635

Selling, general and administrative

805,461

757,235

3,043,946

1,536,479

531,042

805,461

2,161,599

3,043,946

Amortization of patent costs

23,021

23,021

69,063

69,063

23,021

23,021

69,063

69,063

TOTAL EXPENSES

1,059,422

839,436

4,013,644

1,664,722

1,546,785

1,059,422

3,851,893

4,013,644

Operating loss

(1,020,422 )

(833,436 )

(3,966,435 )

(1,653,222 )

(1,543,185 )

(1,020,422 )

(3,848,293 )

(3,966,435 )

OTHER INCOME/(EXPENSE)

Interest expense

-

(1,305,273 )

-

(1,875,687 )
Gain on extinguishment of convertible notes

-

489,157

-

585,601

Change in fair value of derivatives liabilities

-

(194,044 )

-

26,030,549

Other income

38,083

-

38,083

-

Interest income

89,233

38,083

240,293

38,083

Total other income (expense)

38,083

(1,010,160 )

38,083

24,740,463

89,233

38,083

240,293

38,083

INCOME (LOSS) BEFORE PROVISION FOR INCOME TAXES

(982,339 )

(1,843,596 )

(3,928,352 )

23,087,241

LOSS BEFORE PROVISION FOR INCOME TAXES

(1,453,952 )

(982,339 )

(3,608,000 )

(3,928,352 )

Provision for income taxes

-

-

-

-

-

-

-

-

NET INCOME (LOSS)

$ (982,339 )

$ (1,843,596 )

$ (3,928,352 )

$ 23,087,241

NET LOSS

$ (1,453,952 )

$ (982,339 )

$ (3,608,000 )

$ (3,928,352 )

BASIC NET INCOME (LOSS) PER SHARE

$ (0.07 )

$ (0.75 )

$ (0.40 )

$ 9.98

NET LOSS PER SHARE - BASIC AND DILUTED

$ (1.02 )

$ (0.70 )

$ (2.55 )

$ (3.98 )

DILUTED NET INCOME (LOSS) PER SHARE

$ (0.07 )

$ (0.75 )

$ (0.40 )

$ 9.77

WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING - BASIC

14,068,412

2,452,076

9,872,450

2,313,005

WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING - DILUTED

14,068,412

2,452,076

9,872,450

2,363,145

WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING - BASIC AND DILUTED

1,431,426

1,406,841

1,416,319

987,245

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

4
Table of Contents

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

For the Nine
Months Ended
September 30,
2022

For the Nine
Months Ended
September 30,
2021

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income (loss)

$ (3,928,352 )

$ 23,087,241

Adjustments to reconcile net income (loss) to

net cash from operating activities:

Stock-based compensation

59,584

595,380

Amortization

69,063

69,063

Amortization of debt discounts

-

1,755,104

Change in fair value of derivatives liabilities

-

(26,030,549 )
Increase in principal and accrued interest balances due to penalty provision

-

93,821

Gain on extinguishment of convertible notes

-

(585,601 )
Changes in assets and liabilities:

Accounts receivable

2,485

-

Inventory

(5,028 )

-

Accounts payable

(434,019 )

103,626

Accrued expenses

30,535

26,169

Management fee payable

-

(168,700 )
Net cash used in operating activities

(4,205,732 )

(1,054,446 )

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchase of certificates of deposit

(5,021,307 )

-

Advance to related party

-

(200,000 )
Net cash used in investing activities

(5,021,307 )

(200,000 )

CASH FLOWS FROM FINANCING ACTIVITIES:

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

15,471,775

-

Proceeds from exercise of warrants

457

-

Proceeds from note payable

-

3,887,750

Payments on notes payable

-

(105,000 )
Payment of debt issuance costs

-

(443,239 )
Payment of deferred offering costs

-

(3,282 )
Proceeds from convertible notes payable

-

435,040

Proceeds from sale of preferred stock

-

462,000

Related party advances

-

226,500

Repayment of related party advances

-

(220,000 )
Payments to settle convertible notes payable and warrants

-

(705,405 )
Net cash provided by financing activities

15,472,232

3,534,364

NET INCREASE IN CASH

6,245,193

2,279,918

BEGINNING CASH BALANCE

10,723,870

98,012

ENDING CASH BALANCE

$ 16,969,063

$ 2,377,930

SUPPLEMENTAL CASH FLOW INFORMATION:

Cash payments for interest

$ -

$ 9,186

Cash payments for income taxes

$ -

$ -

NON-CASH INVESTING AND FINANCING ACTIVITIES:

Accrued dividends on preferred stock

$ -

$ 27,725

Warrants issued with notes payable as a service fee

$ -

$ 2,097,629

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

$ -

$ 13,747,415

Conversion of management fees and patent liability into common stock

$ 250,000

$ 50,000

Discounts on convertible notes payable due to derivative liabilities

$ -

$ 134,640

Exchange of preferred stock for notes payable

$ -

$ 572,275

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

For the Nine
Months Ended
September 30,
2023

For the Nine
Months Ended
September 30,
2022

CASH FLOWS FROM OPERATING ACTIVITIES:

Net loss

$ (3,608,000 )

$ (3,928,352 )
Adjustments to reconcile net loss to net cash used in operating activities:

Stock-based compensation

27,486

59,584

Amortization

69,063

69,063

Changes in assets and liabilities:

Accounts receivable

-

2,485

Inventory

2,400

(5,028 )
Prepaids and other current assets

276,642

-

Accounts payable

(2,900,493 )

(434,019 )
Accrued expenses

-

30,535

Net cash used in operating activities

(6,132,902 )

(4,205,732 )

CASH FLOWS FROM INVESTING ACTIVITIES:

Investments in certificates of deposit

(6,437,188 )

(5,021,307 )
Redemptions of certificates of deposit

9,048,459

-

Payment of patent purchase obligation

(100,000
)

-

Purchase of treasury stock

(191,780 )

-

Net cash provided by (used in) investing activities

2,319,491

(5,021,307 )

CASH FLOWS FROM FINANCING ACTIVITIES:

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

-

15,471,775

Proceeds from exercise of warrants

-

457

Net cash provided by financing activities

-

15,472,232

NET INCREASE (DECREASE) IN CASH

(3,713,411 )

6,245,193

BEGINNING CASH BALANCE

8,320,519

10,723,870

ENDING CASH BALANCE

$ 4,507,108

$ 16,969,063

SUPPLEMENTAL CASH FLOW INFORMATION:

Cash payments for interest

$ -

$ -

Cash payments for income taxes

$ -

$ -

NON-CASH INVESTING AND FINANCING ACTIVITIES:

Conversion of management fees and patent liability into common stock

$ -

$ 250,000

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

5
Table of Contents

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, 2021

-

$ -

-

$ -

-

$ -

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

-

-

-

-

-

-

2,991,669

2,992

15,468,783

-

15,471,775

Common stock issued for related party patent liabilities

-

-

-

-

-

-

181,818

182

249,818

-

250,000

Common stock issued for warrant exercise

-

-

-

-

-

-

4,563,887

4,564

(4,107 )

-

457

Stock-based compensation

-

-

-

-

-

-

-

-

59,584

-

59,584

Net loss

-

-

-

-

-

-

-

-

-

(3,928,352 )

(3,928,352 )

September 30, 2022

-

$ -

-

$ -

-

$ -

14,076,238

$ 14,077

$ 69,653,293

$ (47,596,166 )

$ 22,071,204

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

Common Stock

Additional Paid-in

Treasury

Accumulated

Total Stockholders'

Shares

Amount

Capital
Stock
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 )

-

-

-

Purchase of treasury stock

(40,000
)

-

-

(191,780 )

-

(191,780 )
Stock-based compensation

-

-

27,486

-

-

27,486

Net loss

-

-

-

-

(3,608,000 )

(3,608,000 )

September 30, 2023

1,391,126

$ 1,431

$
69,702,587

$
(191,780 )

$ (57,419,858 )

$ 12,092,380

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

June 30, 2022

-

$ -

-

$ -

-

$ -

13,956,238

$ 13,957

$ 69,644,239

$ (46,613,827 )

$ 23,044,369

Common stock issued for warrant exercise

-

-

-

-

-

-

120,000

120

(108 )

-

12

Stock-based compensation

-

-

-

-

-

-

-

-

9,162

-

9,162

Net loss

-

-

-

-

-

-

-

-

-

(982,339 )

(982,339 )

September 30, 2022

-

$ -

-

$ -

-

$ -

14,076,238

$ 14,077

$ 69,653,293

$ (47,596,166 )

$ 22,071,204

Common Stock

Additional Paid-in

Treasury

Accumulated

Total Stockholders'

Shares

Amount

Capital
Stock
Deficit
Equity

June 30, 2023

1,431,126

$ 1,431

$ 69,693,425

$ -

$ (55,965,906 )

$ 13,728,950

Purchase of treasury stock

(40,000
)

-

-

(191,780 )

-

(191,780 )
Stock-based compensation

-

-

9,162

-

-

9,162

Net loss

-

-

-

-

(1,453,952 )

(1,453,952 )

September 30, 2023

1,391,126

$ 1,431

$
69,702,587

$
(191,780 )

$ (57,419,858 )

$ 12,092,380

Common Stock

Additional Paid-in

Treasury

Accumulated

Total Stockholders'

Shares

Amount

Capital
Stock
Deficit
Equity

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

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

456,389

456

1

-

-

457

Stock-based compensation

-

-

59,584

-

-

59,584

Net loss

-

-

-

-

(3,928,352 )

(3,928,352 )

September 30, 2022

1,407,624

$ 1,407

$ 69,665,963

$ -

$ (47,596,166 )

$ 22,071,204

Common Stock

Additional Paid-in

Treasury

Accumulated

Total Stockholders'

Shares

Amount

Capital
Stock
Deficit
Equity

Balance at June 30, 2022

1,395,624

$ 1,395

$ 69,656,801

$ -

$ (46,613,827 )

$ 23,044,369

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

-

-

-

-

-

-

Common stock issued for warrant exercise

12,000

12

-

-

-

12

Stock-based compensation

-

-

9,162

-

-

9,162

Net loss

-

-

-

-

(982,339 )

(982,339 )

Balance at September 30, 2022

1,407,624

$ 1,407

$ 69,665,963

$ -

$ (47,596,166 )

$ 22,071,204

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

Additional Paid-in

Accumulated

Total Stockholders’

Shares

Amount

Shares

Amount

Shares

Amount

Shares

Amount

Capital

Deficit

Deficit

December 31, 2020

3,000,000

$ 3,000

-

$ -

-

$ -

1,537,073

$ 1,537

$ 22,082,689

$ (61,890,236 )

$ (39,803,010 )

Proceeds from sales of preferred stock

-

-

350

321,000

150

141,000

4,286

4

(4 )

-

462,000

Common stock issued for related party management liabilities

-

-

-

-

-

-

89,286

89

49,911

-

50,000

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

-

-

-

-

-

-

789,727

790

1,382,541

-

1,383,331

Relief of derivative liabilities

-

-

-

-

-

-

-

-

12,364,084

-

12,364,084

Dividends on preferred stock

-

-

-

-

-

-

-

-

(27,725 )

-

(27,725 )

Cashless exercise of warrants

-

-

-

-

-

-

37,870

38

(38 )

-

-

Warrants issued with notes payable

-

-

-

-

-

-

-

-

2,097,629

-

2,097,629

Preferred stock redemption

-

-

(350 )

(321,000 )

(150 )

(141,000 )

-

-

(110,275 )

-

(572,275 )

Stock-based compensation

-

-

-

-

-

-

-

-

595,380

-

595,380

Net income

-

-

-

-

-

-

-

-

-

23,087,241

23,087,241

September 30, 2021

3,000,000

$ 3,000

-

$ -

-

$ -

2,458,242

$ 2,458

$ 38,434,192

$ (38,802,995 )

$ (363,345 )

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

Deficit

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 )

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

-

-

-

-

-

-

17,628

18

153,962

-

153,980

Relief of derivative liabilities

-

-

-

-

-

-

-

-

138,731

-

138,731

Dividends on preferred stock

-

-

-

-

-

-

-

-

(6,973 )

-

(6,973 )

Warrants issued with notes payable

-

-

-

-

-

-

-

-

2,097,629

-

2,097,629

Preferred stock redemption

-

-

(350 )

(321,000 )

(150 )

(141,000 )

-

-

(110,275 )

-

(572,275 )

Stock-based compensation

-

-

-

-

-

-

-

-

383,612

-

383,612

Net loss

-

-

-

-

-

-

-

-

-

(1,843,596 )

(1,843,596 )

September 30, 2021

3,000,000

$ 3,000

-

$ -

-

$ -

2,458,242

$ 2,458

$ 38,434,192

$ (38,802,995 )

$ (363,345 )
~~The accompanying notes are an integral part of these condensed consolidated financial statements.~~
7
~~Table of Contents~~
CREATIVE MEDICAL TECHNOLOGY HOLDINGS, ~~INC~~INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 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.

On October 20, 2022 the Company announced it has produced an allogenic Cell Line called AlloStem™, which includes a Master Cell Bank and a Drug Master File which shall be submitted for FDA registration. The importance of the company creating and developing such assets, as opposed to licensing agreements with third parties, provides further de-risking of an important component to many of our programs, including, but not limited to, the ImmCelz^® ~~immunotherapy platform for multiple diseases, OvaStem~~^® ~~for Premature Ovarian Failure, AlloStem™ for Type 1 diabetes, StemSpine~~^® ~~for lower back pain, and IPSCelz ™ inducible pluripotent stem cell program in ongoing development with Greenstone Biosciences.~~
In 2020, through the Company’s ImmCelz Inc. subsidiary, the Company began ~~exploring~~developing treatments under its ImmCelz® platform (CELZ-100) that utilize a patient’s own extracted immune cells that are then “reprogrammed/supercharged” by culturing them outside the ~~development of an immunotherapy platform that “supercharges” the patients own~~patient’s body with optimized stem cells. The immune ~~cells. Secreted factors from AlloStem™~~ cells are ~~used to “reprogram” the patient’s own immune cells. They are~~ then ~~harvested and injected back~~re-injected into the patient ~~in less than 72 hours.~~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 multiple indications. The Company has validated this ability through third-party studies that were independently conducted on human donor patient cells for accuracy and reproducibility. 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.

On June 15, 2022, the Company signed an agreement with Greenstone Biosciences Inc. in Palo Alto, CA for the development of a human induced pluripotent stem cell (iPSC) pipeline for the Company's ImmCelz® platform. This project is identified as iPScelz^TM. Human iPSc's are genetically reprogrammed to differentiate into a wide array of human cell and tissue types, possess the ability to proliferate almost indefinitely in culture, and represent a single source of cells that could be used to replace those lost to damage or disease. Beyond the therapeutic benefits offered by iPSC, the next generation iPScelz^TM ~~pipeline for ImmCelz® will enable the ability for large scale production and sustainability, while helping to reduce long term costs of manufacturing.~~
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.

8
~~Table of Contents~~
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 nine-month period ended September 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.
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.
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Table of Contents

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.

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~~Table of Contents~~
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,~~was above $1.00 per share for ten consecutive business days from June 12, 2023 ~~and will consider available options~~ 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~~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 ~~no assurance that~~impacted by a prolonged war in Ukraine or sanctions imposed in response to the ~~Company will~~war, or whether future conflicts, if any, may adversely affect our results of operations.
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 ~~able~~a pandemic. Actions taken around the world to ~~regain compliance with Nasdaq’s Listing Rules~~help mitigate the spread of the COVID-19 include restrictions on travel, and ~~maintain our Nasdaq listing.~~quarantines in certain areas, and forced closures for certain types of public places and businesses. The ~~delisting of our shares of common stock from Nasdaq may~~COVID-19 and actions taken to mitigate it have ~~a material negative~~had and are expected to continue to have an adverse impact on the ~~liquidity~~economies and financial markets of ~~our securities, as well as~~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 ~~material negative impact on our ability~~reduction in revenues due to ~~raise capital in~~ the ~~future.~~COVID-19 outbreak.

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.

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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Table of Contents
Payments received for which the earnings process is not yet complete are deferred. As of September 30, 2023 and 2022, the Company had no$40,000 and $55,000 in deferred ~~revenue.~~revenue respectively.

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 September 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 September 30, 2023, and 2022, the Company ~~has~~had no outstanding derivative liabilities.

~~Table of Contents~~

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.

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

For the Nine-
Months Ended September 30,
2021

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

2,313,005

Effect of Series B and C preferred stock

-

Effect of warrants

50,140

Effect of convertible notes payable

-

Effect of convertible related party management fee and patent liabilities

-

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

2,363,145

Net income as reported

$ 23,087,241

Add - Interest on convertible notes payable

-

Net income available to common stockholders

$ 23,087,241

~~The Company excluded 7 options~~2023 and 18 warrants from the computation of diluted net income per share for the Nine-Months ended September 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 Nine-Months ended September 30,~~ 2022, the Company had ~~111,824~~ options ~~and 22,849,272 warrants~~ to purchase 11,183 shares of common stock ~~which have been excluded from~~and warrants to purchase 2,284,932 shares of common stock; however, the ~~dilutive~~effects were anti-dilutive due to the net ~~loss per share calculation as their effects are anti-dilutive.~~loss.

~~On November 10, 2021, we~~Following the approval of the Company’s Board of Directors, on June 12, 2023, the Company effected a ~~1-for-500~~1-for-10 reverse split of ~~our authorized and issued and~~the Company’s outstanding shares of common ~~stock.~~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 ~~for this~~to reflect the reverse split to the earliest period presented. AsNo 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 ~~split,~~Reverse Stock Split. As a result, the ~~authorized shares~~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 ~~Company’s common stock decreased to 50,000,000 shares.~~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.
9
Table of Contents
Inventories – Inventories are valued on a cost basis. The cost of inventories is determined on a first-in, first-out basis.

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.

~~Table of Contents~~

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 ~~$7,479~~$7,479 was recorded for the ~~Nine-Months~~nine-months ended September 30, ~~2022~~2023, and ~~2021.~~2022. As of September 30, ~~2022,~~2023, the carrying value of the patent was ~~$33,507.~~$23,537. 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 September 30, ~~2022,~~2023, no amounts are currently due to the University.

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 $879was recorded for the ~~Nine-Months~~nine-months ended September 30, ~~2022~~2023, and ~~2021.~~2022. As of September 30, ~~2022,~~2023, the carrying value of the patent was ~~$3,498.~~$2,326. 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.

Table of Contents

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

		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.

~~Table of Contents~~

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. In August 2023, the Company paid CMH $100,000 related to the filing of an IND with the FDA per the terms of the agreement.

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 $7,500 was recorded for the ~~nine-month periods~~nine-months ended September 30, ~~2022~~2023, and ~~2021.~~2022. As of September 30, ~~2022,~~2023, the carrying value of the initial patent license was ~~$47,500.~~$37,500. The Company expects to amortize approximately ~~$10000~~$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 $34,455 was recorded for the ~~nine-month periods~~nine-months ended September 30, ~~2022~~2023, and ~~2021.~~2022. As of September 30, ~~2022,~~2023, the carrying value of the patent was ~~$167,859.~~$121,919. The Company expects to amortize approximately $46,000 annually through 2026 related to the patent costs.

The Company has elected to amortize the additional $100,000 associated with the filing of the IND with the FDA over a four-year period on a straight-line basis. The Company expects to amortize approximately $25,000 annually through 2027 related to the patent costs.

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.

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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.

The Company has elected to amortize the patent over a ten-year period on a straight-line basis. Amortization ~~expense~~expenses of $18,750 were recorded for the ~~nine-month periods~~nine-months ended September 30, ~~2022~~2023, and ~~2021.~~2022. As of September 30, ~~2022,~~2023, the carrying value of the patent was ~~$206,250.~~$181,250. The Company expects to amortize approximately $25,000 annually through 2030 related to the patent costs.

~~Table of Contents~~

The following is a ~~roll-forward~~rollforward of the Company’s licensing agreements for the ~~Nine-Months~~nine-months ended September 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				-			100,000		-
Amortization		-		(69,063	)		-		(69,063	)
Balances at September 30, 2022	$	760,000	$	(301,384	)
Balances at September 30, 2023						$	860,000	$	(393,468	)

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 September 30, 2021 and 2022, no amounts were owed CMH under this agreement.

~~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 the 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. In August 2023, the Company paid CMH $100,000 related to the filing of an IND with the FDA per the terms of the agreement.

NOTE 4 – DEBT

During the nine-months ended September 30, 2023 and 2022 there were no debt issuances.

As of September 30, 2023, and 2022, the Company had no outstanding loans.

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~~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 September 30, 2022, the Company had no outstanding loans and there was no loan activity during the Nine-Months ended September 30, 2022.~~

On August 11, 2021, we completed the sale of 15% Original Issue Discount Senior Notes (“Bridge Notes”) in the aggregate principal amount of $4,456,176 to a group of institutional investors (the “Purchasers”). In connection with the sale of the Bridge Notes, holders of our shares of Series B Preferred Stock and Series C Preferred Stock exchanged such preferred stock for additional Bridge Notes in the aggregate principal amount of $690,000. The Bridge Notes were scheduled to mature on February 11, 2022, subject to the requirement that we redeem the Bridge Notes prior to such date with the net proceeds of any future offering of our securities. The notes were redeemed in full as a result of the securities offering on December 7, 2021. The Notes did not bear interest other than upon an event of default, and were not convertible into the Company’s common stock. In addition, the Notes were subject to covenants, events of defaults and other terms and conditions customary in transactions of this nature. The Company amortized the on-issuance discount and financing fees totaling $758,426 to interest expense with respect to these notes.

The Company also issued to the purchasers of the Bridge Notes five-year warrants to purchase an aggregate of 363,046 shares of our common stock at an initial exercise price of $14.175 per share, subject to anti-dilution adjustment in the event of future sales of our equity below the then exercise price, stock dividends, stock splits and other specified events.

Roth Capital Partners (“Roth”), acted as sole placement agent for the offering. Pursuant to terms of an engagement letter with Roth, the Company paid Roth a placement agent fee in the amount $312,750. The Company also issued Roth a warrant to purchase 20,189 shares of common stock with the same terms as the warrants issued to the Purchasers.

During the nine-months ended September 30, 2021, we also issued $498,800 in convertible notes to accredited investors with net proceeds of $435,040, which have since been repaid in full. The notes were to mature during February and July of 2022 and bore interest at a rate of 8%. The notes 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 amortized the discount due to derivative liabilities and on-issuance discount totaling $443,905 to interest expense with respect to these notes.

On May 28, 2021, Mr. Timothy Warbington, who is our CEO and Chairman; and Dr. Amit Patel, who is 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.

~~Table of Contents~~

On June 21, 2021, we issued a $105,000, non-convertible note to an accredited investor with net proceeds of $100,000. The note was repaid during the quarter ended September 30, 2021, did not have any conversion features, and bore interest at the rate of 10% per annum.

During the nine-months ended September 30, 2022 there was no amortization to interest expense. During the nine-months ended September 30, 2021, the Company amortized $1,755,104 to interest expense. As of September 30, 2022, total discounts were $0.

During the nine-months ended September 30, 2021, the Company issued an aggregate of 789,727 shares upon the conversion of $1,383,331 of outstanding principal, interest and fees on outstanding notes, and 37,870 shares upon the cashless exercise of 43,167 warrants.

NOTE 5 – DERIVATIVE LIABILITIES

~~Derivative Liabilities~~

As-of September 30, 2023 and 2022, the Company had no outstanding derivative liabilities and there was no derivative activity during the ~~Nine-Months ended September 30, 2022.~~

In connection with convertible notes payable, the Company records derivative liabilities for the conversion feature. The derivative liabilities are valued on the date the convertible note payable become convertible and revalued at each reporting period. During the nine-months ended September 30, 2021, the Company recorded initial derivative liabilities of $1,077,757 based upon the following Black-Scholes option pricing model average assumptions: an exercise price of $0.0106 to $0.0248 our stock price on the date of grant of $0.0340 to $0.0806, expected dividend yield of 0%, expected volatility of 75.03% to 98.14%, risk free interest rate of 0.10%2023 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 $697,602, which was recorded as a day one loss in derivative liability.

In August 2021, we completed the sale of 15% Original Issue Discount Senior Notes (“Bridge Notes”) in the aggregate principal amount of $4,456,176 to a group of institutional investors (the “Purchasers”). A portion of the proceeds were used to repay the principal, accrued interest, pre-payment fees and other premiums of all the outstanding convertible notes as well as all previously outstanding warrants with re-pricing and anti-dilutive features. The result was $0 in derivative liabilities as-of the period ended September 30, 2021. 2022.

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.

During the ~~Nine-Months~~nine-months ended September 30, 2022, Messrs. Warbington and Dickerson received 10-year options to purchase an aggregate of ~~111,187~~11,183 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 September 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

Annual dividend yield

$ -

Expected life (years)

10.0

Risk-free interest rate

0.81 %
Expected volatility

92.95 %
Common stock price

$ 1.69

16
~~Table of Contents~~

Inputs
Used

Annual dividend yield

$ -

Expected life (years)

10.0

Risk-free interest rate

0.81 %
Expected volatility

92.95 %
Common stock price

$ 16.90

During the ~~Nine-Months~~nine-months ended September 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 ~~Nine-Months~~nine-months ended September 30, ~~2021.~~2023, and 11,183 options issued during the nine-months ended September 30, 2022.

Option activity for the ~~Nine-Months~~nine-months ended September 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

-

-

-

-

-

-

Expired

-

-

-

-

-

-

Outstanding, September 30, 2022

111,824

$ 2.16

9.32

Vested, September, 30, 2022

27,961

$ 3.57

9.32

Outstanding, September 30, 2023

11,183

$ 83.96

8.36

Vested, September 30, 2023

7,456

$ 117.47

8.35

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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Table of Contents

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 September 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.

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 ~~Nine-Months~~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 September 30, 2023, 40,000 shares had been repurchased under this program for a total purchase price of $191,780.
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

14
Table of Contents
As of September 30, 2023, and 2022, warrants to purchase 2,284,932 and 2,284,932 shares of common stock were outstanding respectively.
Warrant activity for the nine-months ended September 30, ~~2022, are as follows:~~2023 consists of the following:

Outstanding at December 31, 2021

6,604,820

Issuances

20,808,332

Exercises

(4,563,887
)
Outstanding at September 30, 2022

22,849,272

Weighted Average Price at September 30, 2022

$
2.66

Warrants

Weighted
Average
Exercise
Price

Weighted
Average
Life
Remaining

Outstanding, December 31, 2022

2,284,932

$ 26.59

4.22

Issuances

-

-

-

Exercises

-

-

-

Outstanding, September 30, 2023

2,284,932

$ 26.59

3.47

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

~~In accordance with ASC 855, management reviewed all material events through November 15, 2022, for these financial statements. The~~There were no material subsequent events ~~are as follows:~~
On October 20, 2022 the Company announced it has produced an allogenic Cell Line called AlloStem™, which includes a Master Cell Bank and a Drug Master File which shall be submitted for FDA registration. The importance of the company creating and developing such assets, as opposed to licensing agreements with third parties, provides further de-risking of an important component to many of our programs, including, but not limited to, the ImmCelz^® ~~immunotherapy platform for multiple diseases, OvaStem~~^® ~~for Premature Ovarian Failure, AlloStem™ for Type 1 diabetes, StemSpine~~^® ~~for lower back pain, and IPSCelz ™ inducible pluripotent stem cell program in ongoing development with Greenstone Biosciences.~~
On November 3, 2022 the Company announced he U.S. Food and Drug Administration has cleared the Company's Investigational New Drug (IND) application, enabling the Company to proceed with initiating a clinical trial for Type 1 Diabetes using AlloStem™ AlloStem™ leverages a unique approach to harnessing the power of Perinatal Tissue Derived Cells® (PRDC) to multi-potentialities, including self-renewal ability, low antigenicity, reduced toxicity, and large-scale clinical expansion. The primary objective of the study (CELZ-201) is to evaluate AlloStem™ in patients with newly diagnosed Type 1 Diabetes. Patient recruitment is expected to begin in Q1 2023 with trial commencement updates to follow.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.

Overview
We are a commercial stage biotechnology company dedicated to the advancement of identifying and translating novel biological therapeutics in the fields of immunotherapy, endocrinology, urology, neurology and orthopedics. Our platforms, therapies and products include the following:

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Table of Contents

~~Overview~~
We are a commercial stage biotechnology company focused on immunology, urology, neurology and orthopedics using adult stem cell treatments and interrelated regenerative technologies for the treatment of multiple indications. Our existing and pipeline of 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.

In 2020, through our ImmCelz Inc. subsidiary, we began developing treatments under our ImmCelz® platform (CELZ-100), that utilize a patient’s own extracted immune cells that are then “reprogrammed/supercharged” by culturing them outside the patient’s body with optimized 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 (or “supercharges” them) providing them with the ability to treat multiple indications. We have validated this ability through the third-party studies described below that were independently conducted on selected human donor patient cells for accuracy and reproducibility. 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 March 2023, we reported the following results of independent studies:
·
ImmCelz® (CELZ-100) platform required 75% fewer donor patient cells compared to industry standard.
·
The purity of the final ImmCelz® (CELZ-100) product was greater than 95% compared to the industry standard of greater than 80%.
·
ImmCelz® (CELZ-100) demonstrated a greater than 200% reduction in functional suppression of effector T cells, which are a critical concern for patients with autoimmune issues, while still possessing a high number of functional T regulatory cells.
·
The ability to verify repeated potency of the final ImmCelz®(CELZ-100) product.
We believe these results show that we will be able to substantially reduce production costs, while allowing for the manufacture of the best clinical product for patients with immune disorders, which will enable us to accelerate our clinical applications and encourage potential collaborations with respect to our ImmCelz® platform.
In June 2022, we signed an agreement with Greenstone Biosciences Inc. (“Greenstone”) 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 May 2023, we announced that that we had received confirmation that Greenstone had successfully developed a human induced pluripotent stem cell (iPSC). We estimate that the development of this cell line will save the Company two to three years in research and development time along with associated expenses. The final iPScelz™ results in a viral-free cell line which has ~~produced~~great potential for differentiation into therapeutic biologics both for the cellular and cell-free programs along with targeted drug discovery. Greenstone’s developments were confirmed by an ~~allogenic~~independent, industry-leading research firm.
In October 2022, we announced the development of our AlloStem™ Clinical Cell Line ~~called AlloStem™~~(CELZ-200), a proprietary allogenic cell line which includes a Master Cell Bank and a Drug Master ~~File which shall be submitted~~File. We believe we will able to use this cell line for ~~FDA registration. This is an important component to~~ many of our programs, including ~~but not limited to, the ImmCelz~~^®our ImmCelz® immunotherapy platform for multiple diseases, ~~OvaStem~~^®OvaStem® for Premature Ovarian Failure, ~~AlloStem™~~CELZ-201 for Type 1 diabetes, ~~StemSpine~~^®StemSpine® for lower back pain, and ~~IPSCelz ™~~IPScelz™ inducible pluripotent stem cell program in ongoing development with Greenstone Biosciences.

~~The Company is working with Greenstone Biosciences Inc. in Palo Alto, CA to develop a human induced pluripotent stem cell (iPSC) pipeline for~~In November 2022, we announced that the ~~Company's ImmCelz® platform. The project is identified as iPScelz~~^TM. Human iPSc's are genetically reprogrammed to differentiate into a wide array of human cell and tissue types, possess the ability to proliferate almost indefinitely in culture, and represent a single source of cells that could be used to replace those lost to damage or disease. Beyond the therapeutic benefits offered by iPSC, the next generation iPScelz^TM ~~pipeline for ImmCelz® will enable the ability for large scale production and sustainability, while helping to reduce long term costs of manufacturing.~~
~~On November 3, 2022 the Company announced he U.S. Food and Drug Administration has~~FDA had cleared the ~~Company's~~Company’s CELZ-201 Investigational New Drug (IND) application ~~enabling~~for the ~~Company to proceed with initiating a clinical trial for~~treatment of Type 1 Diabetes ~~using~~utilizing our AlloStem™ ~~AlloStem™ leverages~~Clinical Cell Line, which will allow us to begin a ~~unique approach to harnessing the power of Perinatal Tissue Derived Cells® (PRDC) to multi-potentialities, including self-renewal ability, low antigenicity, reduced toxicity, and large-scale~~Phase I/II clinical ~~expansion.~~trial. The primary objective of the study ~~(CELZ-201) is~~will be to evaluate ~~AlloStem™~~CELZ-201 in patients with newly diagnosed Type 1 Diabetes. The trial has also received Institutional Board Review (IRB) approval for the trial to proceed as well as approval of the patient recruitment material. Patient recruitment was initiated in September 2023.
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Table of Contents
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 (“ODD”) for the treatment of Brittle Type 1 Diabetes using its ImmCelz® (CELZ-100) platform. The FDA has responded to the ODD filing with additional clarification requests, which we are in the process of responding.
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. There were no safety concerns related to CELZ-001 at one year follow-up utilizing the same infusion procedure as in the currently U.S. FDA cleared CELZ-201 clinical trial. There were 30 patients in the study, 15 who received CELZ-001 and the rest received optimized medical therapy. At one year, there was an overall efficacy of 93% in the treated patients demonstrating at least a 50% reduction in insulin requirement.
In September 2023, the Company received FDA clearance to initiate a Phase I/II clinical trial of StemSpine® using AlloStem™ (CELZ-201-DDT) for the treatment of lower back pain. The study is ~~expected~~designed to ~~begin~~evaluate the safety, efficacy, and tolerability of CELZ-201-DDT. The study will enroll 30 individuals suffering from chronic lower back pain. Using an ultrasound guided, non-surgical procedure, AlloStem™ is injected in Q1areas surrounding the diseased disc(s), thereby potentially repairing, remodeling, and improving the blood supply around the disc and lower back area, without exposing the patient to radiation or any other cell-based procedures. In October, 2023 we filed for and received approval from an institutional review board (IRB) to proceed with ~~trial commencement updates to follow.~~this trial.

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

Gross Revenue. We generated ~~$55,000~~$6,000 in revenue for the ~~three-month period~~three-months ended September 30, ~~2022,~~2023, in comparison with ~~$10,000~~$55,000 for the comparable ~~quarter~~period a year ago. The reduction 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 $2,400 in cost of goods sold for the three-months ended September 30, 2023, in comparison with $16,000 for the comparable period a year ago. The decrease is due to the reduction in sales.
Gross Profit/(Loss). We generated $3,600 and $39,000 in gross profit for the three-months ended September 30, 2023 and 2022 respectively.
Selling, General and Administrative Expenses. General and administrative expenses for the three-months ended September 30, 2023, totaled $531,042, in comparison with $805,461 for the comparable period a year ago. The decrease of $274,419, or 34% is primarily due to a decrease of $75,033 in marketing, $95,831 in compensation, and $97,459 in consulting expenses.
Amortization Expenses. Amortization expenses for the three-month periods ended September 30, 2023 and 2022, totaled $23,021.
Research and Development Expenses. Research and development expenses for the three-months ended September 30, 2023, totaled $992,722 in comparison to $230,940 for the comparable period a year ago. The increase of ~~$45,000~~$761,782, or ~~450%~~330% was primarily due to ~~new physician recruitment.~~$97,105 associated with the StemSpine IND filing, $228,716 in Type I Diabetes trial-related expenses and $409,310 in general research and development activities.
Operating Loss. For the reasons stated above, our operating loss for the three-months ended September 30, 2023, was $1,543,185 in comparison with $1,020,422 for the comparable period a year ago.
Other Income. Other income for the three-months ended September 30, 2023, totaled $89,233 in comparison with $38,083 for the comparable period a year ago. The increased income of $51,150 is due to increased interest income from higher short-term certificates of deposit balances and increased interest rates associated with $7,467,346 in short-term certificates of deposit.
18
Table of Contents
Net Income/Loss. For the reasons stated above, our net loss for the three-months ended September 30, 2023, was $1,453,952 in comparison with a net loss of $982,339 for the comparable period a year ago.
Results of Operations – For the Nine-month Periods Ended September 30, 2023, and 2022
Gross Revenue. We generated $6,000 in revenue for the nine-months ended September 30, 2023, in comparison with $70,000 for the comparable period a year ago. The reduction 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 $2,400 in cost of goods sold for the nine-months ended September 30, 2023, in comparison with $22,791 for the comparable period a year ago. The decrease is due to the reduction in sales.
Gross Profit/(Loss). We generated $3,600 in gross profit for the nine-months ended September 30, 2023, in comparison with $47,209 in gross profit for the comparable period a year ago.
Selling, General and Administrative Expenses. General and administrative expenses for the nine-months ended September 30, 2023, totaled $2,161,599, in comparison with $3,043,946 for the comparable period a year ago. The decrease of $882,347, or 29% is primarily due to decreases of $318,579 in consulting expenses, $206,168 in marketing expenses, $115,829 in D&O insurance expense, $76,000 in Board of Directors payment timing, $82,932 in accounting fees, and $108,438 in stock-based compensation.
Amortization Expenses. Amortization expenses for the nine-month periods ended September 30, 2023 and 2022, totaled $69,063.
Research and Development Expenses. Research and development expenses for the nine-months ended September 30, 2023, totaled $1,621,231 in comparison to $900,635 for the comparable period a year ago. The increase of $720,596, or 80% was primarily due to $97,105 associated with the StemSpine IND filing, $328,100 associated with the Type I diabetes trial, and $279,327 in general research and development activities.
Operating Loss. For the reasons stated above, our operating loss for the nine-months ended September 30, 2023, was $3,848,293 in comparison with $3,966,435 for the comparable period a year ago.
Other Income. Other income for the nine-months ended September 30, 2023, totaled $240,293 in comparison with $38,083 for the comparable period a year ago. The increased income of $202,210 is due to increased interest income from higher short-term certificates of deposit balances and increased interest rates associated with $7,467,346 in short-term certificates of deposit.
Net Income/Loss. For the reasons stated above, our net loss for the nine-months ended September 30, 2023, was $3,608,000 in comparison with a net loss of $3,928,352 for the comparable period a year ago.
Liquidity and Capital Resources
As of September 30, 2023, we had $11,974,454 of available cash and certificates of deposit and positive working capital of approximately $11,622,567. In comparison, as of December 31, 2022, we had $18,399,136 of available cash and positive working capital of $15,425,798.
On May 3, 2022 we received gross proceeds of $17,000,000, before deducting placement agent fees and expenses, upon the closing of an unregistered sale of 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 1,511,112 shares of common stock at an exercise price of $20.00 per share (“Warrants”), at a combined offering price of $22.50 per share of common stock/Pre-Funded Warrant and related Warrant to a group of institutional investors (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 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 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.

19
Table of Contents

~~Cost of Goods Sold~~Cash Flows. We generated $16,000 of cost of goods sold for the three-month period ended September 30, 2022, in comparison with $4,000 cost of goods sold for the comparable period a year ago. The increase of $12,000 or 300% was due to the increased sales.
~~Gross Profit/(Loss)~~. We generated a gross profit of $39,000 for the three-month period ended September 30, 2022, in comparison with $6,000 gross profit for the comparable period a year ago. The increase of $33,000 or 550% was due to the increased sales.

~~General and Administrative Expenses.~~ General and administrative expenses for the three-month period ended September 30, 2022, totaled $805,461 in comparison with $757,235, for the comparable quarter a year ago. The increase of $48,226 or 6% is primarily due to approximately $87,000 in director and officer insurance premiums that began in September 2021, an increase of approximately $164,000 in increased net salary expenses from terminating the management service agreement in September 2021 and entering into direct employment arrangements with our CEO, CFO and the hiring of other key leaders of the management team, an increase of approximately $58,000 in marketing expenses as we ramp-up our commercial activity, and an increase of $139,000 in outside consulting expenses focused on moving key elements of our programs forward along with investments in intellectual property, offset by a reduction of $374,000 in stock-based compensation.
~~Amortization Expenses.~~ ~~Amortization expenses for the three-month periods ended September 30, 2022 and 2021, totaled $23,021.~~
~~Research and Development Expenses.~~ Research and development expenses for the three-month period ended September 30, 2022, totaled $230,940 in comparison with $59,180, for the comparable quarter a year ago. The increase of $171,760 or 290% reflects investments in in regulatory, research, laboratory and manufacturing resources required to move our programs forward.
~~Other Income/Expense.~~ Other income for the three-month period ended September 30, 2022 was $38,083, in comparison with a loss of $1,010,160, for the comparable quarter a year ago. The increased income of $1,048,243, is driven by the elimination of convertible debt that eliminated interest expense in 2022 compared to $1,305,273 in 2021, a loss of $184,044 on the change of fair value of derivative liabilities in 2021, offset by a gain of $489, 157 from the extinguishment of convertible notes in 2021 and $38,083 in interest income from short-term certificate of deposit investments in 2022.
~~Net Income/Loss.~~ ~~For the reasons stated above, our net loss for the three-month period ended September 30, 2022, totaled $982,339 in comparison to a loss of $1,010,160, for the comparable quarter a year ago.~~
~~Results of Operations – For the Nine-month Periods Ended September 30, 2022 and 2021~~
~~Gross Revenue.~~ We generated $70,000 in revenue for the nine-month period ended September 30, 2022, in comparison with $20,000 in revenue for the comparable period a year ago. The increase of $50,000 or 250% was primarily due to new physician recruitment.
~~Cost of Goods Sold~~. We generated $22,791 of cost of goods sold for the nine-month period ended September 30, 2022, in comparison with $8,500 cost of goods sold for the comparable period a year ago. The increase of $14,291 or 168% was primarily due to new physician recruitment.
~~Gross Profit/(Loss)~~. We generated a gross profit of $47,209 for the nine-month period ended September 30, 2022, in comparison with $11,500 gross profit for the comparable period a year ago. The increase of $35,709 or 311% was due to the increased sales.
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~~Table of Contents~~
~~General and Administrative Expenses.~~ General and administrative expenses for the nine-month period ended September 30, 2022, totaled $3,043,946 in comparison with $1,536,479, for the comparable period a year ago. The increase of $1,507,467 or 98% is primarily due to approximately $392,000 in director and officer insurance premiums that began in September 2021, an increase of approximately $542,000 in increased 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 the hiring of other key leaders of the management team, $226,000 in Board of Director expenses as a result of bringing on independent board members, an increase of approximately $337,000 in marketing expenses, and an increase of $381,000 in outside consulting expenses focused on moving key elements of our programs forward along with investments in intellectual property offset by a $536,000 reduction in stock-based compensation.
~~Amortization Expenses.~~ ~~Amortization expenses for the nine-month periods ended September 30, 2022 and 2021, totaled $69,063.~~
~~Research and Development Expenses.~~ Research and development expenses for the nine-month period ended September 30, 2022, totaled $900,635 in comparison with $59,180, for the comparable period a year ago. The increase of $841,455 or 1,422% reflects investments in in regulatory, research, laboratory and manufacturing resources required to move our programs forward.
~~Other Income/Expense.~~ Other income for the nine-month period ended September 30, 2022 was $38,083, in comparison with 24,740,463, for the comparable period a year ago. The decreased income of $24,702,380, is primarily driven by the 2021 gain of $26,030,549 in the change in the fair value of derivative liabilities and a gain of $585,601 on the extinguishment of convertible notes, offset by interest expense of $1,875,687 in 2021 that was tied to convertible debt.
~~Net Income/Loss.~~ ~~For the reasons stated above, our net loss for the nine-month period ended September 30, 2022, totaled $3,928,352 in comparison to net income of $23,087,241, for the comparable period a year ago.~~
~~Liquidity and Capital Resources~~
As of September 30, 2022, we had $21,990,370 of available cash and short-term certificates of deposit and positive working capital of approximately $21,609,307. In comparison, as of December 31, 2021, we had approximately $10,723,807 of available cash and positive working capital of approximately $9,686,780.
On December 7, 2021, we sold an aggregate of 3,875,000 shares of our common stock, and accompanying warrants to purchase 3,875,000 shares of common stock at an exercise price of $4.13 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%) 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 per share of common stock/Pre-Funded Warrant and related Common Warrant, to a group of institutional investors, resulting in gross proceeds to the Company of approximately $17,000,000.
~~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 ~~$4,205,732~~$6,132,902 for the ~~nine-month period~~nine-months ended September 30, ~~2022~~2023, in comparison to ~~$1,054,446~~$4,205,732 for the comparable period a year ago, an increase of ~~$3,151,286~~$1,927,170 or ~~299%~~46%. The increase in cash used in operations was primarily related to $3,000,000 in cash payments related to the ~~increased expenses mentioned above.~~
~~Net Cash used~~purchase of research tools referenced in ~~Investing Activities~~. ~~There was $5,021,307 cash used to invest~~Note 8 of the accompanying financial statements, offset by reductions in ~~short-term certificates of deposit in the nine-month period ended September 30, 2022 compared to $200,000 used as an advance to a related party for comparable period a year ago.~~general and administrative expenses.
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~~Table of Contents~~

Net Cash Received From ~~Financing Activities.~~ Investing Activities~~We raised $15,472,232 during~~. Cash received in investing activities was $2,319,491 for the ~~nine-month period~~nine-months ended September 30, ~~2022 through~~2023, related to net redemptions of $2,611,271 in certificates of deposit offset by $191,780 associated with the ~~issuance~~repurchase of our common stock under our stock re-purchase program, and ~~pre-paid warrants, net~~$100,000 in cash paid related to patents in comparison to $5,021,307 of ~~offering costs. We raised $3,534,364 through~~investments in certificates of deposit for the ~~issuance of convertible debt, preferred stock and a related party advance in the nine-month period~~nine-months ended September 30, ~~2021.~~2022.

Net Cash from Financing Activities.
There were no cash proceeds or expenditures from financing activities during the nine-months ended September 30, 2023 compared to $15,472,232 for the nine-months ended September 30, 2022. The $15,472,232 is related to the May 2022 financing described above.
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.

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 September 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 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.

Remediation of previously identified material weakness
As previously disclosed under “Item 9A – Controls and Procedures” in our Annual Report on Form 10-K for the year ended December 31, 2022, and “Item 4 – Controls and Procedures” in our Quarterly Reports on Form 10-Q for the periods ending March 31, 2023 and June 30, 2023, management had identified the following deficiencies that alone or in combination, represent material weaknesses in internal control over financial reporting: (i) our failure to adequately disclose during 2022 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, and (ii) insufficient segregation of duties of our officers during the year ended December 31, 2022.
As previously reported in our public reports referred to above, we undertook to remediate these deficiencies and strengthen our internal control over financial reporting by establishing additional review and procedure controls which include the following:
As noted, the Company has utilized the services of a third-party for financial reporting for a significant period of time. The third-party is an expert in financial reporting. One additional control provided is that the third-party consultant is allowed editorial input to our quarterly and annual filings. Editorial input was established during the Q1 2023 quarterly filing. Management deems this a quarterly control.  Thus, as of September 30, 2023, under the guidance established by The Committee of Sponsoring Organizations’ (COSO), the control has been working effectively for the period prescribed in COSO
In early Q2 2023, the Company implemented a policy whereby disbursements over a $50,000 threshold require dual authorization for processing and payment. This control is performed a few times a month and has been implemented for a period of approximately six months. Management deems this a daily control. Thus, as of September 30, 2023, under COSO the control has been working effectively for the period prescribed in COSO.
Given these remediation efforts, management has concluded that the material weaknesses set forth above were remediated as of September 30, 2023.
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.~~reporting, other than those noted above.

2220
Table of Contents

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 September 30,~~
In October 2022, we ~~were not involved~~terminated an employee for cause. Subsequent to the termination, in ~~any legal proceedings.~~December 2022, the employee brought claims against us for breach of contract, wrongful termination and related claims in the Superior Court of the State California (Orange County). The parties have submitted the action for arbitration before JAMS, where it is now pending.

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

~~In February 2022,~~On June 12, 2023, we ~~paid~~announced that our Board of Directors authorized a share repurchase program for the ~~initial Jadi Cell obligation~~repurchase of ~~$250,000 through~~up to $2 million of our common stock (the “Repurchase Plan).  Purchases under the ~~issuance~~Repurchase Plan commenced in August 2023. The following table provides information about our monthly share repurchases for the three months ended September 30, 2023, which consisted solely of ~~181,818 shares of common stock.~~repurchases under the Repurchase Plan.
ISSUER PURCHASES OF EQUITY SECURITIES

Period

Total Number
of Shares
Purchased

Average Price
Paid per
Share

Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs

Maximum Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs

July 1 - July 31, 2023

-

$ -

0

$ 2,000,000

August 1 - August 31, 2023

11,500

4.57

11,500

1,947,462

September 1 - Sepetmber 30, 2023

28,500

4.88

40,000

1,755,682

Total

40,000

4.79

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).
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

2321
Table of Contents

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: November ~~10, 2022~~13, 2023
By
/s/ Timothy Warbington

Timothy Warbington, Chief Executive Officer

(Principal Executive Officer)

Date: November ~~10, 2022~~13, 2023
By
/s/ Donald Dickerson

Donald Dickerson, Chief Financial Officer

(Principal Financial Officer)

2422

CREATIVE MEDICAL TECHNOLOGY HOLDINGS, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

	September 30, 2022			December 31, 2021
ASSETS
CURRENT ASSETS
Cash	$	16,969,063		$	10,723,870
Certificates of deposit		5,021,307			-
Accounts receivable		-			2,485
Inventory		15,894			10,866
Total Current Assets		22,006,264			10,737,221

OTHER ASSETS
Other assets		3,281			3,281
Licenses, net of amortization		458,616			527,679
TOTAL ASSETS	$	22,468,161		$	11,268,181

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
Accounts payable	$	327,843		$	761,862
Accrued expenses		54,920			24,385
Management fee and patent liabilities - related parties		-			250,000
Advances from related party		14,194			14,194
Total Current Liabilities		396,957			1,050,441

Commitments and contingencies

STOCKHOLDERS' EQUITY
Common stock, $0.001 par value, 25,000,000,000 and 6,000,000,000 shares authorized; 14,076,246 and 6,338,872 issued and 14,076,238 and 6,338,864 outstanding at September 30, 2022 and December 31, 2021, respectively		14,077			6,339
Additional paid-in capital		69,653,293			53,879,215
Accumulated deficit		(47,596,166	)		(43,667,814	)
TOTAL STOCKHOLDERS' EQUITY		22,071,204			10,217,740

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	22,468,161		$	11,268,181

CREATIVE MEDICAL TECHNOLOGY HOLDINGS, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

	September 30, 2023			December 31, 2022
ASSETS
CURRENT ASSETS
Cash	$	4,507,108		$	8,320,519
Certificates of deposit		7,467,346			10,078,617
Inventory		7,794			10,194
Prepaids and other current assets		61,478			338,120
Total Current Assets		12,043,726			18,747,450

OTHER ASSETS
Other assets		3,281			3,281
Licenses, net of amortization		466,532			435,595
TOTAL ASSETS	$	12,513,539		$	19,186,326

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
Accounts payable	$	367,045		$	3,267,538
Accrued expenses		39,920			39,920
Advances from related party		14,194			14,194
Total Current Liabilities		421,159			3,321,652

TOTAL LIABILITIES		421,159			3,321,652

Commitments and contingencies

STOCKHOLDERS' EQUITY
Common stock, $0.001 par value, 5,000,000 and 50,000,000 shares authorized; 1,431,126 and 1,407,624 issued, and 1,391,126 and 1,407,624 outstanding at September 30, 2023 and December 31, 2022, respectively		1,431			1,408
Additional paid-in capital		69,702,587			69,675,124
Treasury stock, at cost, 40,000 shares as of September 30, 2023		(191,780	)		-
Accumulated deficit		(57,419,858	)		(53,811,858	)
TOTAL STOCKHOLDERS' EQUITY		12,092,380			15,864,674
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
	$	12,513,539		$	19,186,326

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

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

	For the Nine Months Ended September 30, 2022			For the Nine Months Ended September 30, 2021

CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	(3,928,352	)	$	23,087,241
Adjustments to reconcile net income (loss) to
net cash from operating activities:
Stock-based compensation		59,584			595,380
Amortization		69,063			69,063
Amortization of debt discounts		-			1,755,104
Change in fair value of derivatives liabilities		-			(26,030,549	)
Increase in principal and accrued interest balances due to penalty provision		-			93,821
Gain on extinguishment of convertible notes		-			(585,601	)
Changes in assets and liabilities:
Accounts receivable		2,485			-
Inventory		(5,028	)		-
Accounts payable		(434,019	)		103,626
Accrued expenses		30,535			26,169
Management fee payable		-			(168,700	)
Net cash used in operating activities		(4,205,732	)		(1,054,446	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of certificates of deposit		(5,021,307	)		-
Advance to related party		-			(200,000	)
Net cash used in investing activities		(5,021,307	)		(200,000	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from sale of common stock and warrants, net of issuance costs		15,471,775			-
Proceeds from exercise of warrants		457			-
Proceeds from note payable		-			3,887,750
Payments on notes payable		-			(105,000	)
Payment of debt issuance costs		-			(443,239	)
Payment of deferred offering costs		-			(3,282	)
Proceeds from convertible notes payable		-			435,040
Proceeds from sale of preferred stock		-			462,000
Related party advances		-			226,500
Repayment of related party advances		-			(220,000	)
Payments to settle convertible notes payable and warrants		-			(705,405	)
Net cash provided by financing activities		15,472,232			3,534,364

NET INCREASE IN CASH		6,245,193			2,279,918
BEGINNING CASH BALANCE		10,723,870			98,012
ENDING CASH BALANCE	$	16,969,063		$	2,377,930

SUPPLEMENTAL CASH FLOW INFORMATION:
Cash payments for interest	$	-		$	9,186
Cash payments for income taxes	$	-		$	-

NON-CASH INVESTING AND FINANCING ACTIVITIES:
Accrued dividends on preferred stock	$	-		$	27,725
Warrants issued with notes payable as a service fee	$	-		$	2,097,629
Conversion of notes payable, accrued interest and derivative liabilities into common stock	$	-		$	13,747,415
Conversion of management fees and patent liability into common stock	$	250,000		$	50,000
Discounts on convertible notes payable due to derivative liabilities	$	-		$	134,640
Exchange of preferred stock for notes payable	$	-		$	572,275

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

	For the Nine Months Ended September 30, 2023			For the Nine Months Ended September 30, 2022

CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(3,608,000	)	$	(3,928,352	)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation		27,486			59,584
Amortization		69,063			69,063
Changes in assets and liabilities:
Accounts receivable		-			2,485
Inventory		2,400			(5,028	)
Prepaids and other current assets		276,642			-
Accounts payable		(2,900,493	)		(434,019	)
Accrued expenses		-			30,535
Net cash used in operating activities		(6,132,902	)		(4,205,732	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Investments in certificates of deposit		(6,437,188	)		(5,021,307	)
Redemptions of certificates of deposit		9,048,459			-
Payment of patent purchase obligation		(100,000	)		-
Purchase of treasury stock		(191,780	)		-
Net cash provided by (used in) investing activities		2,319,491			(5,021,307	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from sale of common stock and warrants, net of issuance costs		-			15,471,775
Proceeds from exercise of warrants		-			457
Net cash provided by financing activities		-			15,472,232

NET INCREASE (DECREASE) IN CASH		(3,713,411	)		6,245,193
BEGINNING CASH BALANCE		8,320,519			10,723,870
ENDING CASH BALANCE	$	4,507,108		$	16,969,063

SUPPLEMENTAL CASH FLOW INFORMATION:
Cash payments for interest	$	-		$	-
Cash payments for income taxes	$	-		$	-

NON-CASH INVESTING AND FINANCING ACTIVITIES:
Conversion of management fees and patent liability into common stock	$	-		$	250,000

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, 2021		-	$	-		-	$	-		-	$	-		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		-		-		-		-		-		-		2,991,669		2,992		15,468,783			-			15,471,775

Common stock issued for related party patent liabilities		-		-		-		-		-		-		181,818		182		249,818			-			250,000

Common stock issued for warrant exercise		-		-		-		-		-		-		4,563,887		4,564		(4,107	)		-			457

Stock-based compensation		-		-		-		-		-		-		-		-		59,584			-			59,584

Net loss		-		-		-		-		-		-		-		-		-			(3,928,352	)		(3,928,352	)

September 30, 2022		-	$	-		-	$	-		-	$	-		14,076,238	$	14,077	$	69,653,293		$	(47,596,166	)	$	22,071,204

	Common Stock					Additional Paid-in		Treasury			Accumulated			Total Stockholders'
	Shares			Amount		Capital		Stock			Deficit			Equity
June 30, 2023		1,431,126		$	1,431	$	69,693,425	$	-		$	(55,965,906	)	$	13,728,950

Purchase of treasury stock		(40,000	)		-		-		(191,780	)		-			(191,780	)
Stock-based compensation		-			-		9,162		-			-			9,162
Net loss		-			-		-		-			(1,453,952	)		(1,453,952	)

September 30, 2023		1,391,126		$	1,431	$	69,702,587	$	(191,780	)	$	(57,419,858	)	$	12,092,380

	For the Nine- Months Ended September 30, 2021
Weighted average common shares outstanding used in calculating basic earnings per share		2,313,005
Effect of Series B and C preferred stock		-
Effect of warrants		50,140
Effect of convertible notes payable		-
Effect of convertible related party management fee and patent liabilities		-
Weighted average common shares outstanding used in calculating diluted earnings per share		2,363,145

Net income as reported	$	23,087,241
Add - Interest on convertible notes payable		-
Net income available to common stockholders	$	23,087,241

	Inputs Used

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

	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		-		-		-		-		-		-
Expired		-		-		-		-		-		-
Outstanding, September 30, 2022		111,824	$	2.16		9.32
Vested, September, 30, 2022		27,961	$	3.57		9.32
Outstanding, September 30, 2023								11,183	$	83.96		8.36
Vested, September 30, 2023								7,456	$	117.47		8.35

	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		(4,563,887	)
Outstanding at September 30, 2022		22,849,272
Weighted Average Price at September 30, 2022	$	2.66

	Warrants		Weighted Average Exercise Price		Weighted Average Life Remaining
Outstanding, December 31, 2022		2,284,932	$	26.59		4.22
Issuances		-		-		-
Exercises		-		-		-
Outstanding, September 30, 2023		2,284,932	$	26.59		3.47

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

	·	ImmCelz® (CELZ-100) platform required 75% fewer donor patient cells compared to industry standard.
	·	The purity of the final ImmCelz® (CELZ-100) product was greater than 95% compared to the industry standard of greater than 80%.
	·	ImmCelz® (CELZ-100) demonstrated a greater than 200% reduction in functional suppression of effector T cells, which are a critical concern for patients with autoimmune issues, while still possessing a high number of functional T regulatory cells.
	·	The ability to verify repeated potency of the final ImmCelz®(CELZ-100) product.

ISSUER PURCHASES OF EQUITY SECURITIES

Period	Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Maximum Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs
July 1 - July 31, 2023		-	$	-		0	$	2,000,000

August 1 - August 31, 2023		11,500		4.57		11,500		1,947,462

September 1 - Sepetmber 30, 2023		28,500		4.88		40,000		1,755,682

Total		40,000		4.79

~~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).

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

	Creative Medical Technology Holdings, Inc.

Date: November ~~10, 2022~~13, 2023	By	/s/ Timothy Warbington
		Timothy Warbington, Chief Executive Officer
		(Principal Executive Officer)

Date: November ~~10, 2022~~13, 2023	By	/s/ Donald Dickerson
		Donald Dickerson, Chief Financial Officer
		(Principal Financial Officer)