CELZ — Q2 2026 Financial Report Analysis

Creative Medical Technology Holdings, a Phoenix-based developer of stem-cell therapies with no product sales, lost $1.51 million in the second quarter of 2026, up 22.6% from $1.23 million a year earlier. The research budget did not drive the increase. Research and development (R&D) fell 8% because the lead back-pain trial has moved from dosing patients to following up on them. Selling, general and administrative costs (SG&A, the cost of running the company rather than its labs) rose 48%, mostly because of a company-wide marketing campaign. On the last day of the quarter the company raised about $4.5 million by persuading warrant holders to exercise early at a cut price. That lifted cash to $8.7 million but grew the share count by 75% overnight and left 8.9 million new and old warrants outstanding.

At a glance

• $0 revenue, $1.56 million in operating costs. The company sold nothing in the quarter. Its only income was $50,913 of interest on cash, so the business is funded entirely by selling shares.
• SG&A was more than twice R&D: $1.08 million against $0.46 million. Running and promoting the company now costs more than the science, even though no product is on sale.
• Shares outstanding rose from 3.70 million to 6.49 million on June 30. Warrants for another 8.89 million shares remain, so the share count could more than double again.

The numbers

For the first half (January to June), the net loss was $2.92 million against $2.87 million, nearly flat. R&D fell 20% to $1.00 million and SG&A rose 22% to $1.97 million. Cash used in operations was $2.80 million against $2.75 million a year earlier. Revenue was $0 against $3,000 in the first half of 2025, which came from sales of disposable stem-cell concentration kits.

Where the money went

R&D is down because the main trial is in follow-up. The 10-Q attributes the quarter's $42,061 R&D decline to "a decrease of $114,794 associated with the AlloStemSpine® Chronic Lower Back Pain (CELZ-201 ADAPT) trial as trial proceeds to the follow-up stage." That was partly offset by $66,733 more spending on the company's other programs. This pattern should not last. In June 2026 the FDA cleared an expansion of ADAPT to enroll another group of patients, people already taking opioids (under 90 mg a day in morphine equivalents). Enrolling and dosing that group will push trial costs back up.

SG&A rose $348,528, and $206,642 of it was marketing. The filing describes this as "a Company-level marketing campaign." The rest came from $50,513 in general liability insurance timing, $38,244 in salary for an additional hire and $32,642 in travel. A company with no approved product spending on a national marketing campaign is mainly promoting itself to investors, not selling to customers. That spending competes directly with the trials for the same limited cash.

The pipeline, briefly:

• Olastrocel (CELZ-201), lead program. This is donor-derived ("allogeneic," meaning cells from another person) cell therapy for chronic lower back pain caused by degenerative disc disease. It is in the Phase 1/2 ADAPT trial, an early-stage study of safety and first signs of benefit, and received FDA Fast Track status in August 2025. Earlier blinded interim data showed improvements in disability and pain with no serious adverse events, according to an independent safety board. Management says it is "advancing toward Phase 3," the large, expensive trials that decide approval.
• CREATE-1. CELZ-201 in a Phase 1/2 trial for newly diagnosed Type 1 diabetes.
• Ultrasome. A cell-free therapy for knee osteoarthritis derived from the same platform. The company reports that a pilot study met its primary endpoint. The next stage of trials has not started.
• Biodefense / Project PHOENIX. An AI-driven registry of veterans exposed to military burn pits, aiming for at least 1,000 participants through a mobile app. The company says it is meant to run "without the need for new capital raises."

The capital raise: cheaper each time

The June 30 deal was the third "warrant inducement" in 16 months. A warrant is a contract that lets the holder buy a share at a fixed price. In an inducement, the company lowers that price so holders exercise now and pay cash immediately, and it gives them a larger batch of new warrants as a sweetener. Each round has been priced lower and has handed out more new warrants:

The adviser, Roth Capital, receives 8% of gross proceeds plus legal costs. At June 30, $407,164 of offering costs were still unpaid in accounts payable, so net cash from the raise is closer to $4.06 million than the $4.46 million shown in financing cash flow. Shareholders approved the exercise of the 5.58 million new warrants on August 28. The vote was 678,541 for and 344,460 against, a noticeably closer result than the 2,488,537-to-595,527 vote on the same day to raise authorized shares from 25 million to 100 million. Expanding the authorized-share ceiling fourfold leaves room for several more raises like this.

Takeaway: CELZ funds a cash burn of about $5.6 million a year by repeatedly repricing its own warrants: $4.42, then $3.75, then $2.86, now $1.60. Each round adds more new warrants than it retires. The $8.7 million cash balance looks healthy, but shareholders pay for it through a share count that rose 75% in one day and could more than double again from the 8.9 million warrants outstanding.

What the headline numbers hide

• The smaller loss per share is entirely dilution. The loss per share improved from -$0.48 to -$0.41 even though the dollar loss grew 22.6%. The weighted share count rose 43%, so the same loss is spread across more shares. The June 30 shares do not count in Q2's average at all, because they were issued on the last day. Q3's share base will be at least 75% larger again, so loss per share will "improve" mechanically even if nothing changes in the business.
• Without the raise, cash would have fallen. Cash was $7.21 million at December 31. Take away the $4.46 million received on June 30 and the June 30 balance would have been about $4.25 million. That is the real direction of travel between raises.
• Runway, our estimate. The 10-Q does not give a runway figure or a going-concern warning. Start from $8.71 million and subtract the $407,164 of unpaid offering costs, the $100,000 bonus paid to the CEO in July for completing the warrant deal, and the $200,000 cash paid in September for BioDefense shares (below). That leaves about $8.0 million. At the first half's operating burn of $2.80 million per six months, this lasts roughly 17 months from mid-2026, to around late 2027. Restarting enrollment in the ADAPT expansion or starting Phase 3 would shorten that considerably. Phase 3 trials typically cost far more than this whole balance.
• Related-party dealings are getting larger. In January the company advanced $125,000 to an entity controlled by CEO Timothy Warbington that intends to launch a special purpose acquisition company (SPAC, a shell company that raises money to buy a private business). The filing says the advance was made "without a formal written instrument" and that it is "uncertain when, if ever, the SPAC will be launched." Bionance LLC is a company subsidiary that buys discounted convertible notes issued by other small public companies (two notes, about $50,000 each). It is managed by an entity owned equally by the CEO, the CFO and a consultant, which receives 30% of distributions once members get their capital back. After the quarter, an 8-K dated September 24 shows CELZ buying 4 million BioDefense shares from Creative Acquisition Corp., which the CEO indirectly wholly owns, for $200,000 in cash plus 1 million CELZ shares. None of these amounts is large, but in total they mean money and shares moving between the listed company and entities its executives control.
• Clean on the accounting itself. The company has no debt, interest income rose on higher cash balances, and there were no impairments or one-off gains. Management concluded disclosure controls were effective. Stock-based compensation was $0 for the half, so SG&A is not inflated by non-cash charges.

What to watch next

Management gives no financial guidance. Its stated near-term priorities for Olastrocel are "completing enrolment of the expanded ADAPT cohort, generating longer term follow up data, continuing regulatory interactions related to Phase 3 planning and evaluating potential strategic and partnering opportunities." In order of importance, the things that would change this picture are:

1. Longer-term ADAPT data and any FDA feedback on a Phase 3 design. This is the only catalyst that could support raising money on better terms. A partner willing to pay for Phase 3 would matter more than any internal milestone.
2. Q3 cash burn. The Q3 10-Q, due around mid-November 2026, will show whether R&D rises as the expanded cohort enrolls, and whether marketing spend continues at Q2's level.
3. The next raise. The 5.58 million $1.60 warrants are now exercisable, and the share authorization has been raised to 100 million. If the stock trades above $1.60, holders can exercise, which would bring in up to about $8.9 million in cash but also nearly double the share count. If it trades below $1.60, the pattern so far suggests another repricing.

Our read: the science is still early but advancing, with Fast Track status, a clean safety record so far and a trial expansion. The financing pattern is the bigger issue for an existing shareholder. Each raise has been cheaper than the last, and nothing in this filing suggests that changes before the trial produces data strong enough to attract a partner.