Creative Medical Technology Holdings, Inc. - Form 8-K Summary
Business Context and Reporting Period
This Current Report (Form 8-K) was filed on January 12, 2018, by Creative Medical Technology Holdings, Inc., a Nevada corporation. The filing reports on a material definitive agreement and amendments to the company's Articles of Incorporation executed on the same date.
Key Financial Metrics
The filing does not provide standard financial performance metrics such as revenue, profit, cash flow, or operating margins. The primary financial event reported is a debt settlement involving $150,000 in debt owed to the CEO, Chairman, and principal shareholder, Timothy Warbington.
Material Changes
- Debt Settlement: The Company entered into an agreement to exchange $150,000 of debt owed to Mr. Warbington for 3,000,000 shares of newly created Series A Preferred Stock.
- Capital Structure Amendment: The Board authorized and filed a Certificate of Designation creating the Series A Preferred Stock.
Terms of Series A Preferred Stock
- Dividends: Participate pari passu with common stockholders in any dividends declared.
- Liquidation Preference: Holders receive $0.05 per share plus 8% simple annual interest from the issuance date, prior to any distribution to common stockholders.
- Voting Rights: Each share carries 1,000 votes, voting as a single class with common stock.
- Redemption: The Company may redeem all outstanding shares on or after the fourth anniversary of issuance for $0.05 per share plus 8% simple annual interest and accrued dividends.
- Conversion: The stock is not convertible into common shares.
Outlook and Risks
The filing does not contain forward-looking guidance, management commentary on future operations, or specific risk factors beyond the structural changes to the capitalization. The transaction reduces immediate debt obligations but increases the equity claim of the principal shareholder with significant voting leverage.
Investor Verification Checklist
- Verify the total outstanding debt and equity structure following this transaction.
- Confirm the voting power concentration resulting from the 1,000-to-1 voting ratio of the Series A Preferred Stock.
- Review the Company's ability to meet the redemption obligation (principal plus 8% interest) after the fourth anniversary.
- Check for any subsequent filings regarding the utilization of the $150,000 debt relief.