Company: CMCT
Filing Date: 2025-08-15
Form Type: PRE 14A
Source: 0001104659-25-079235
Chunk: 29

Company: Creative Media & Community Trust Corp
Filing Date: 2025-08-15
Form: PRE 14A
Chunk 29
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 Common Stock is a “penny stock,” which will require brokers trading in the Company’s shares to adhere to more stringent rules, possibly resulting in a reduced level of trading activity in the secondary trading market for its securities;

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a limited amount of news and analyst coverage for the Company;

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a decreased ability to issue additional securities or obtain additional financing in the future;

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potential need to register under applicable state securities or “blue sky” laws any Common Stock that is elected by the Company to be issued to redeem Preferred Stock in lieu of cash when the cash required is not available; and

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if registration under applicable state securities or “blue sky” laws is not able to be accomplished in a particular state and the cash required for such redemption is not available, there may not be an ability to redeem Preferred Stock when all other criteria for redemption have been met.

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Despite the efforts described above, there can be no assurance that the Company will ultimately maintain compliance with the Nasdaq Minimum Bid Price Rule.

Potential Adverse Effects of Approving this Proposal

We cannot assure you that the 1:7 Reverse Stock Split, if effected, will increase our stock price and have the desired effect of maintaining compliance with the Nasdaq Minimum Bid Price Rule.

The Board expects that the 1:7 Reverse Stock Split, if effected, will increase the market price of our Common Stock so that we are able to maintain compliance with the Nasdaq Minimum Bid Price Rule. However, the effect of the 1:7 Reverse Stock Split on the market price of our Common Stock cannot be predicted with any certainty, and the history of similar reverse stock splits for companies in like circumstances is varied.

It is possible that the per share price of our Common Stock after the implementation of the 1:7 Reverse Stock Split will not rise in proportion to the reduction in the number of shares of Common Stock outstanding resulting therefrom, and the market price per share after the 1:7 Reverse Stock Split may not exceed or remain in excess of $1.00 per share for a sustained period of time. Even if we effect the 1:7 Reverse Stock Split, the market price of our Common Stock may decrease due to factors unrelated to the 1:7 Reverse Stock Split, including our future financial and operating performance. If the 1:7 Reverse Stock Split is consummated and the trading price of our Common Stock declines, the percentage decline as an absolute number and as a percentage of our overall market capitalization may be greater than