Item 1.01.
Entry into a Material Definitive Agreement.
Warrant Exchange
On February 28, 2019, Creative Medical Technology Holdings,
Inc. (the “Company”) entered into three separate Exchange Agreements (each, an “Exchange Agreement”) with
the holders (the “Warrant Holders”) of Common Stock Purchase Warrants issued by the Company in September 2018 and November
2018. Under each Exchange Agreement, the Company issued a convertible promissory note in the principal amount of $100,000 (an “Exchange
Note”) to the Warrant Holder party to such Exchange Agreement in exchange for the cancellation of Common Stock Purchase Warrants
held by such Warrant Holder, initially exercisable for an aggregate of 3,232,912 shares of the Company’s common stock. The
exchanges were effected pursuant to Sections 3(a)(9) and 4(a)(2) of the Securities Act of 1933, as amended and Rule 506(b) promulgated
thereunder.
Each Exchange Note matures on February 28, 2020, bears interest
at a rate of 8% per annum, and beginning 31 days after the closing date, is convertible into shares of the Company’s common
stock at a conversion price equal to 65% of the Market Price of the common stock. “Market Price” as defined in each
Exchange Note means the average of the two lowest “VWAPs” (as defined) of the Company’s common stock during the
15 trading days preceding the applicable conversion date.
The information set forth above is qualified in its entirety
by reference to the actual terms of the Exchange Agreements and Exchange Notes, forms of which are attached hereto as Exhibits
10.1 and 4.1, respectively, and which are incorporated herein by reference.
Note and Warrant Purchase
On March 1, 2019, the Company completed the sale of Convertible
Notes (“Notes”) and Common Stock Purchase Warrants (“Warrants”) to four institutional investors (the “Investors”)
pursuant to a Securities Purchase Agreement between the Company and the Investors (the “Purchase Agreement”) dated
as of February 19, 2019. The transaction was effected pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended and
Rule 506(b) promulgated thereunder.
Pursuant to the Purchase Agreement, for a purchase price of
$100,000.00, each Investor purchased a Note in the principal amount of $110,000.00 and a Warrant to purchase 1,334,951 shares of
common stock. Each Note matures on March 1, 2020, bears interest at a rate of 8% per annum, and beginning 31 days after the closing
date, is convertible into shares of the Company’s common stock at a conversion price equal to 65% of the Market Price of
the common stock. “Market Price” as defined in each Exchange Note means the average of the two lowest “VWAPs”
(as defined) of the Company’s common stock during the 15 trading days preceding the applicable conversion date. In addition,
the Notes are subject to covenants, events of defaults and other terms and conditions customary in transactions of this nature.
Each Warrant is exercisable for a five-year period at an initial
exercise price of $0.0206 per share, subject to anti-dilution adjustment in the event of stock dividends, stock splits and other
specified events.
The information set forth above is qualified in its entirety
by reference to the actual terms of the Purchase Agreement, the Notes and the Warrants, which are attached hereto as Exhibits 10.2,
4.2 and 4.3, respectively, and which are incorporated herein by reference.