Company: CMCT
Filing Date: 2025-08-27
Form Type: DEF 14A
Source: 0001104659-25-083990
Chunk: 41

Company: Creative Media & Community Trust Corp
Filing Date: 2025-08-27
Form: DEF 14A
Chunk 41
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 has previously failed to comply with the Nasdaq Minimum Bid Price Rule. As previously reported, after falling out of compliance with the Nasdaq Minimum Bid Price Rule, the Company had previously been eligible for and received the Nasdaq Compliance Grace Period. The Company is no longer eligible for the Nasdaq Compliance Grace Period. As such, if the Company fails to maintain compliance with the Nasdaq Minimum Bid Price Rule at any time, then it could be immediately delisted from Nasdaq.

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While the Company is currently in compliance with the Nasdaq Minimum Bid Price Rule, the Common Stock bid price has come under significant downward pressure since August 2024 when the Company announced its intention to redeem, and has redeemed, shares of its Preferred Stock and pay the redemption price in shares of Common Stock. Holders of the Preferred Stock have the right, at each such holder’s option, to require the Company to redeem any or all of such holder’s shares of Preferred Stock at a redemption price of $25.00 per share, plus an amount equal to all accrued but unpaid dividends, if any, to and including the redemption date, subject to the terms of such Preferred Stock set forth in the Charter. This holder redemption price may be paid in cash or in shares of Common Stock (based on the VWAP of the Common Stock for the 20 trading days immediately preceding the applicable redemption date, with each such term as defined in the Charter), at the Company’s option. Recently, the Company has chosen to pay such redemptions in shares of Common Stock in order to increase its common equity as a percentage of assets and improve its liquidity.

In addition, the Company has in the past exercised its right to redeem shares of Preferred Stock at its option (subject to the terms of the Preferred Stock set forth in the Charter) and pay the redemption price in shares of Common Stock, and the Company may do so again in the future.

We believe that the significant volume of Common Stock issued to meet redemption requests and in connection with redemptions at the Company’s option has placed significant downward pressure on the bid price of our Common Stock. If our Common Stock price declines, more shares of Common Stock are issuable under the 20-day VWAP formula, which in turn may place further downward pressure on the bid price of our Common Stock.

The proposed 1:10 Reverse Stock Split is intended to adjust the bid price of the Common Stock upward in an effort to maintain compliance with the Nasdaq Minimum Bid Price Rule. Our Board believes