Business Context and Reporting Period
Company: Creative Medical Technology Holdings, Inc. (CELZ)
Filing Type: Form 10-Q (Unaudited)
Reporting Period: Quarter and six months ended June 30, 2026
Business Overview: A clinical-stage biotechnology company focused on regenerative medicine therapies using stem cell technologies (AlloStem, ImmCelz, iPScelz platforms). The company is advancing clinical trials for chronic lower back pain (CELZ 201/Olastrocel) and Type 1 diabetes, and has initiated a biodefense platform (Project PHOENIX). The company has generated minimal revenue to date and relies on financing activities to fund operations.
Key Financial Metrics
| Metric | Six Months Ended June 30, 2026 | Six Months Ended June 30, 2025 |
|---|---|---|
| Revenues | $0 | $3,000 |
| Net Loss | $(2,914,967) | $(2,871,400) |
| Net Loss Attributable to CMTH | $(2,917,053) | $(2,871,400) |
| Operating Expenses | $3,021,316 | $2,925,798 |
| Research & Development | $1,000,858 | $1,244,565 |
| Selling, General & Administrative | $1,968,685 | $1,619,914 |
| Cash and Cash Equivalents (Ending) | $8,714,115 | $6,554,120 |
| Working Capital | $8,320,318 | $7,114,134 |
| Net Cash Used in Operating Activities | $(2,795,555) | $(2,750,282) |
| Net Cash Provided by Financing Activities | $4,476,544 | $3,354,000 |
Material Changes vs. Prior Period
- Revenue: The company reported $0 revenue for the six months ended June 30, 2026, compared to $3,000 in the prior year period.
- Operating Expenses: Total operating expenses increased by approximately $95,518 (3.3%) year-over-year.
- SG&A: Increased by $348,771 (22%), driven by a nationwide marketing campaign ($136,025), additional staff salaries ($114,971), and increased legal/accounting fees ($51,000).
- R&D: Decreased by $243,707 (20%), primarily due to the CELZ-201 ADAPT trial moving from recruitment/dosing to the follow-up stage.
- Other Income: Increased to $106,349 from $52,598, attributed to higher short-term investment balances.
- Capital Structure: Significant warrant exercise inducement transactions occurred in June 2026, generating approximately $4.5 million in gross proceeds and issuing new warrants for 5,580,680 shares.
Outlook, Risks, and Unusual Items
- Clinical Progress: The FDA cleared an expansion of the ADAPT trial for chronic lower back pain in June 2026 to include patients on opioid therapy. The company received WHO approval for "Olastrocel" as the International Non Proprietary Name.
- Liquidity: The company maintains positive working capital of approximately $8.3 million. Cash burn from operations is offset by financing activities, specifically warrant exercises.
- Investments: The company invested $125,000 in a related entity (SPAC Sponsor) and $50,000 in a convertible note receivable during the period.
- Risks: The company has a limited operating history, minimal revenue, and relies on capital markets for funding. It faces risks related to clinical trial outcomes, regulatory approvals, and competition. Cash balances exceed FDIC insurance limits at two institutions.
- Subsequent Events: On July 1, 2026, the CEO was approved a $100,000 bonus. On July 2, 2026, a warrant holder exercised 279,036 warrants on a cashless basis.
Investor Verification Checklist
- Capital Sufficiency: Verify if the current cash balance of $8.7 million is sufficient to fund operations through the completion of the expanded ADAPT trial and Phase 3 planning without further dilution.
- Warrant Overhang: Assess the impact of the 8,888,256 outstanding warrants (weighted average exercise price $2.22) on future share dilution.
- Related Party Transactions: Review the $125,000 investment in the SPAC Sponsor controlled by the CEO and the terms of the convertible notes held by the Bionance subsidiary.
- Clinical Milestones: Monitor the enrollment progress of the expanded ADAPT trial cohort and the timeline for Phase 3 regulatory interactions.
- Revenue Model: Confirm the timeline for commercialization of stem cell concentration kits or therapies, given the current lack of revenue.