CELZ

Business Context and Reporting Period

Company: Jolley Marketing, Inc. (Note: Request metadata listed "Creative Medical Technology Holdings, Inc.", but the filing text identifies the registrant as Jolley Marketing, Inc.)
Filing Type: Form 10-K (Annual Report)
Period Ended: December 31, 2008
Status: Shell Company / Smaller Reporting Company

The Company ceased its lighting product sales operations on June 30, 2008, due to increased competition and dwindling sales. It is currently a "shell company" seeking to acquire an operating business or be acquired by one. The Company has no employees and relies on the sole officer/director, Steven L. White, who provides office space at no cost.

Key Financial Metrics

Cash Flow Summary (2008): Net cash used in operating activities was $(57,164). Net cash provided by investing activities was $8,668 (repayment of related party loans). Net cash provided by financing activities was $27,045 (proceeds from stock issuance).

Material Changes vs. Prior Period

• Cessation of Operations: The Company discontinued its lighting business in June 2008. Consequently, continuing operations revenue dropped to $0, whereas 2007 included $3,263 in discontinued operations revenue.
• Increased Losses: Net loss increased significantly from $(9,544) in 2007 to $(52,636) in 2008. This was driven primarily by a rise in general and administrative expenses (professional, legal, and accounting fees) from $13,617 to $53,490.
• Liquidity Decline: Cash on hand plummeted from $21,768 in 2007 to $317 in 2008.
• Capital Structure: In August 2008, the Company sold 1,200,000 shares for $30,000 gross proceeds. In August 2007, a change of control occurred when Steven L. White purchased 15,000,000 shares for $15,000.

Outlook, Risks, and Management Commentary

• Going Concern: The independent auditor has raised substantial doubt about the Company's ability to continue as a going concern due to net losses, negative operating cash flows, and discontinued operations.
• Liquidity Needs: Management anticipates expenses of approximately $20,000 for the next twelve months. Current working capital ($757) is insufficient. The Company plans to seek financing through loans or stock sales, potentially relying on advances from the President or shareholders.
• Future Strategy: The Company is actively searching for a business acquisition or reverse merger. No specific target has been identified. Upon acquisition, current management is expected to resign, and current shareholders will likely experience significant dilution.
• Internal Controls: Management identified material weaknesses in internal controls due to the lack of segregation of duties (sole officer/director handles all financial reporting) and the absence of an audit committee.
• Subsequent Events: In April and May 2009, the Company received $11,000 in loans from the sole officer/shareholder, due on demand at 8% interest.

Investor Verification Checklist

• Capital Adequacy: Verify if the Company has secured the additional financing required to meet the estimated $20,000 annual operating expense, given the $317 cash balance.
• Acquisition Status: Confirm if a specific acquisition target has been identified or if negotiations are underway, as the business model relies entirely on a future merger.
• Related Party Transactions: Review the terms of the $11,000 in loans received from the sole officer in 2009 and the potential for further reliance on insider funding.
• Stock Liquidity: Note that the stock was only approved for OTC/BB quotation on April 30, 2009; verify current trading volume and bid/ask spreads.
• Internal Controls: Assess the risk of financial misstatement given the material weakness in internal controls and the lack of an independent audit committee.