Creative Medical Technology Holdings, Inc. (OTCMKTS:CELZ) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01
| Entry into a Material Definitive Agreement |
On May 17, 2017, StemSpine, LLC (StemSpine), a
newly formed Nevada limited liability company and wholly owned
subsidiary of Creative Medical Technologies, Inc.
(CMT), the wholly owned subsidiary of Creative
Medical Technology Holdings, Inc. (the Company),
entered into a Patent Purchase Agreement dated May 17, 2017 (the
Agreement), with Creative Medical Holdings, Inc.
(CMH), the parent of the Company. Under the
terms of the Agreement, StemSpine acquired U.S. Patent No.
9,598,673 covering use of various stem cells for treatment of
lower back pain (the Patent). The inventors of
the Patent were Thomas Ichim, PhD and Amit Patel, MD, each a
director of the Company, CMT, and CMH, and Annette Marleau, PhD,
a Senior Vice-President of the Company and a senior officer of
CMT and CMH. The managers of StemSpine are Timothy Warbington,
Donald Dickerson, and CMH. The Patent was issued on March 21,
2017.
On or before June 29, 2017, StemSpine has agreed to pay CMH
$100,000 for the Patent. Under the terms of the Agreement,
StemSpine has also agreed for a period of five years from the
date of the first sale of any product derived from the Patent to
make royalty payments of 5% from gross sales of such products.
StemSpine has also agreed to pay royalties of 50% of sale price
or ongoing payments from third parties for licenses granted under
the Patent to third parties. In addition, StemSpine has agreed to
make progress payments under the Agreement determined by whether
the technology represented by the Patent is tested by use of
autologous cells or allogenic cells. In the case of pursuit of
the technology using autologous cells, StemSpine has agreed to
pay CMH $100,000 upon the signing of an agreement with a
university for the initiation of an IRB clinical trial; and
$200,000 upon completion of the clinical trial. In the event
StemSpine determines to pursue the technology using allogenic
cells, StemSpine has agreed to pay CMH $100,000 upon the filing
for IND with the FDA; $200,000 upon the dosing of the first
patient in Phase 1-2 clinical trial; and $400,000 upon the dosing
of the first patient in Phase 3 clinical trial. In each case,
except for the initial payment of $100,000 on or before June 29,
2017, StemSpine has the option to make these payments in cash or
in shares of the Companys common stock at a 30% discount to the
market price of the stock at the time of the transaction. The
parties to the Agreement have agreed that in no event will the
aggregate royalty payments under the Agreement exceed $2,500,000.
StemSpine has agreed to maintain books and records, and furnish
reports to CMH, sufficient to validate the payments due under the
Agreement. The Agreement also contains representations and
warranties by CMH as to the sole ownership and interest in the
Patent at the time of transfer and as to other matters customary
to a transaction of this nature.
| Item 8.01 | Other Events |
Press Release
On May 18, 2017, the Company issued a press release announcing
the acquisition of the Patent disclosed in Item 1.01 above.
The press release, furnished as Exhibit 99.1 to this Form 8-K,
may contain forward-looking statements. Such forward-looking
statements are based on information presently available to the
Companys management and are current only as of the date made.
Actual results could also differ materially from those
anticipated as a result of a number of factors, including, but
not limited to, those discussed in the Companys Annual Report on
Form 10-K for the year ended December 31, 2016, and subsequent
reports filed by the Company with the Commission. For those
reasons, undue reliance should not be placed on any
forward-looking statement. The Company assumes no duty or
obligation to update or revise any forward-looking statement,
although it may do so from time to time as management believes is
warranted or as may be required by applicable securities law. Any
such updates or revisions may be made by the Company by filing
reports with the Commission, through the issuance of press
releases or by other methods of public disclosure.
10b5-1 Plan
On May 15, 2017, CMH, the parent of the Company, both of which
are controlled by Timothy Warbington, entered into a trading plan
in accordance with Rule 10b5-1 of the Securities Exchange Act of
1934, as amended, to sell up to 750,000 shares of common stock of
the Company at prevailing market prices, subject to specified
minimum price thresholds. Shares will be sold under the plan on
the open market over the period of time and according to the
other parameters set forth under the trading plan. The plan has a
trading period that begins not sooner than May 30, 2017.
Rule 10b5-1 allows persons, when they are not in possession of
material nonpublic information, to adopt written, prearranged
trading plans to sell securities under specified conditions. Rule
10b51 trading plans are permitted under the Companys insider
trading policy, and, to the extent required, transactions under
the trading plan will be disclosed publicly through Form 144,
Schedule 13D, and/or Form 4 filings with the Securities and
Exchange Commission.
The Company does not undertake to report 10b5-1 plans that may be
adopted by any officers or directors in the future, or to report
any modification or termination of any trading plan, whether or
not the plan was publicly announced, except to the extent
required by law.
| Item 9.01. | Financial Statements and Exhibits |
| (d) | Exhibits. |
| Exhibit No. | Description | |
| 99.1 | Press Release dated May 18, 2017 |
About Creative Medical Technology Holdings, Inc. (OTCMKTS:CELZ)
Creative Medical Technology Holdings, Inc., formerly Jolley Marketing, Inc., is a clinical-stage company. The Company conducts its business operations primarily through its subsidiary, Creative Medical Technologies, Inc. (CMT). The Company is engaged in stem cell research and applications for use to treat male and female sexual dysfunction, infertility, miscarriages and related issues. CMT focuses on completing the testing of its erectile dysfunction (ED) treatment and, if warranted, marketing treatment kits under the name Caverstem to physicians for use with their patients suffering from ED. CMT also intends to test and, if warranted, market licensed stem cell products under its infertility technology license. Procedures for use of the Company’s ED stem cell treatment consist of a one-hour out-patient visit in a physician’s office. The physician would harvest a patient’s bone marrow from the hip using local anesthetic and separate the stem cells using a cell separator. Creative Medical Technology Holdings, Inc. (OTCMKTS:CELZ) Recent Trading Information
Creative Medical Technology Holdings, Inc. (OTCMKTS:CELZ) closed its last trading session 00.000 at 0.488 with shares trading hands.