Business Context and Reporting Period
This Form 10-Q covers the quarterly period ended September 30, 2010, for Jolley Marketing, Inc. (Note: The input metadata referenced "Creative Medical Technology Holdings, Inc.", but the filing text explicitly identifies the registrant as Jolley Marketing, Inc.). The company is a Nevada corporation classified as a shell company with no active business operations. It discontinued its lighting business in June 2008 and currently intends to seek a merger or acquisition with an operating entity. The company has no employees, and its sole director/officer provides services without cash compensation.
Key Financial Metrics
| Metric | 9 Months Ended Sep 30, 2010 | 9 Months Ended Sep 30, 2009 | Balance Sheet (Sep 30, 2010) |
|---|---|---|---|
| Revenue | $0 | $0 | N/A |
| Net Loss | $(13,399) | $(21,879) | N/A |
| Operating Expenses | $11,266 | $21,327 | N/A |
| Cash Flow from Operations | $(10,822) | $(20,887) | N/A |
| Cash Balance | N/A | N/A | $253 |
| Total Assets | N/A | N/A | $438 |
| Total Liabilities | N/A | N/A | $44,690 |
| Stockholders' Equity (Deficit) | N/A | N/A | $(44,252) |
| Debt (Related Party Notes) | N/A | N/A | $44,690 |
Note: The company reported zero revenue and zero gross margin. All expenses were operating in nature, primarily professional fees.
Material Changes vs. Prior Period
- Reduced Net Loss: The net loss for the nine months ended September 30, 2010, was $13,399, a decrease of approximately 39% compared to the $21,879 loss in the same period in 2009.
- Lower Operating Expenses: Operating expenses dropped from $21,327 in 2009 to $11,266 in 2010. This reduction was driven primarily by a decrease in professional fees ($21,232 in 2009 vs. $11,166 in 2010), as the 2009 period included costs associated with submitting the company's stock for trading.
- Increased Related Party Debt: Notes payable and accrued interest to related parties increased from $32,057 at December 31, 2009, to $44,690 at September 30, 2010. This reflects new borrowings of $10,500 during the period to fund operations.
- Cash Position: Cash on hand decreased from $575 at the beginning of the period to $253 at period end.
Outlook, Risks, and Management Commentary
- Going Concern Uncertainty: Management has raised substantial doubt about the company's ability to continue as a going concern due to accumulated losses, negative cash flows, and a working capital deficit. The financial statements do not include adjustments that might result from these uncertainties.
- Capital Requirements: The company has no revenue-generating activities. Management intends to raise necessary funds through loans or additional sales of common stock, though there is no assurance of success.
- Business Strategy: The company remains a shell entity seeking to acquire assets or voting securities of an operating company. No specific acquisition target has been identified.
- Internal Controls: Management concluded that disclosure controls and procedures were not effective as of the evaluation date.
- Related Party Transactions: The company relies heavily on loans from an entity owned by its President/Principal Shareholder (Lorikeet, Inc.). A new $1,000 note was issued in September 2010. All notes bear 8% interest and are due on demand.
Investor Verification Checklist
- Shell Status: Verify the company's status as a shell company with no active operations and no revenue since 2008.
- Liquidity Risk: Confirm the extremely low cash balance ($253) against total liabilities ($44,690) and the reliance on related-party financing.
- Going Concern: Review the "Going Concern" note (Note 2) regarding the substantial doubt on the company's ability to continue operations without additional capital.
- Related Party Dependence: Assess the risk associated with the company's total debt being owed to a related party (officer/shareholder) and the terms of these loans.
- Internal Controls: Note the explicit statement that disclosure controls and procedures are ineffective.