Business Context and Reporting Period
Creative Medical Technology Holdings, Inc. (the "Company") filed this Form 8-K on November 14, 2017. The Company is a Nevada corporation with its principal executive offices in Phoenix, AZ. The filing reports on a material definitive agreement entered into on the same date involving StemSpine, LLC, a wholly owned operating subsidiary, and Creative Medical Health, Inc. ("CMH"), the Company's parent.
Key Financial Metrics
This filing does not contain standard financial statements, revenue, profit, cash flow, or liquidity metrics. The only specific financial figure disclosed relates to a contractual obligation:
- Initial Payment Obligation: $100,000 (waived from immediate payment).
Material Changes and Agreement Details
The Company entered into an amendment to the Patent Purchase Agreement dated May 17, 2017. Key changes include:
- Waiver of Initial Payment: The initial payment of $100,000 to CMH, originally due 30 business days after the May 2017 agreement, has been waived.
- Revised Payment Terms: Both the initial payment and progress payments (upon milestone achievement) are now payable upon 30 days' prior written demand from CMH.
- Payment Method: Payments may be made in cash or stock at CMH's option.
- Stock Valuation: If paid in stock, shares are issued at a 30% discount to the lowest closing price during the 20 trading days prior to the demand date.
- Anti-Dilution Provision: If the trading price falls below $0.01 per share for two or more consecutive trading days, the number of issuable shares doubles.
- Termination Right: CMH may terminate the agreement with 10 days' notice if StemSpine fails to make required payments.
Guidance, Risks, and Contingencies
The filing does not provide forward-looking guidance, management commentary on future operations, or a discussion of general business risks. The primary contingency identified is the risk of agreement termination by CMH if payment demands are not met under the new terms.
Investor Verification Checklist
- Verify the current trading price of the Company's common stock to assess potential dilution under the 30% discount and doubling provisions.
- Confirm whether CMH has issued any written demands for payment since November 14, 2017.
- Review the original May 17, 2017 Patent Purchase Agreement to understand the full scope of milestones and royalty obligations.
- Check subsequent filings for any updates on the status of the $100,000 obligation or progress payments.