Company: CMCT
Filing Date: 2025-02-24
Form Type: PRE 14A
Source: 0001104659-25-016503
Chunk: 11

Company: Creative Media & Community Trust Corp
Filing Date: 2025-02-24
Form: PRE 14A
Chunk 11
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 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 currently plan to satisfy some or all redemption requests submitted by holders of shares of our Preferred Stock in Common Stock during 2025.

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.

Purposes of the Proposals and Consequences of Not Approving Them

We believe that Proposal 1 is important to the Company regaining compliance with the Nasdaq Minimum Bid Price Rule. The failure of our stockholders to approve Proposal 1 will result in the Common Stock being delisted from Nasdaq.

For Proposal 1, we seek stockholder approval of an amendment to the Charter to implement the Reverse Stock Split with a ratio of 1:25, which the Board believes will help the Company regain compliance with the Nasdaq Minimum Bid Price Rule and maintain the Company’s Nasdaq listing.

If Proposal 1 is not approved by stockholders, it could result in material adverse consequences for the Company. If our Common Stock is delisted from Nasdaq, we may be forced to seek to have the Common Stock traded or quoted on the OTC Bulletin Board or in the “pink sheets.” Such alternatives are generally considered to be less efficient markets and not as broad as Nasdaq, and therefore less desirable. If the Company’s Common Stock is delisted from Nasdaq, the Company could face material adverse consequences, including:

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a limited availability of market quotations for the Common Stock;

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reduced liquidity;

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a determination that the 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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the potential need to register under applicable state securities or “blue sky” laws any Common Stock that is elected by the Company