Filing summary
Entity and period: The supplied filing is Jolley Marketing, Inc.’s unaudited Form 10-Q for the quarter and six months ended June 30, 2012—not a filing identified as Creative Medical Technology Holdings, Inc. Investors should verify the issuer and filing before relying on this summary.
Business context
Jolley Marketing described itself as a shell company with nominal assets and no revenue since September 2008. It intended to seek a merger or acquisition, but had identified no target and entered no acquisition negotiations. It had no employees; its sole officer and director provided time without compensation.
Financial results and liquidity
| Metric | Three months ended June 30, 2012 | Six months ended June 30, 2012 | Comparable 2011 period |
|---|---|---|---|
| Revenue | $0 | $0 | $0 |
| Operating expenses | $3,694 | $11,505 | $3,447 / $10,717 |
| Interest expense—related party | $1,345 | $2,585 | $1,025 / $1,937 |
| Net loss | $5,039 | $14,090 | $4,472 / $12,654 |
| Basic and diluted loss per share | $0.00 | $0.00 | $0.00 |
At June 30, 2012, cash and total current assets were $531, versus $3,105 at December 31, 2011. Current liabilities were $86,785, including $7,802 of accounts payable and $78,983 of related-party notes and accrued interest. Stockholders’ deficit was $86,254. The filing reports no investing cash flows; six-month operating cash use was $9,574, offset by $9,000 of related-party loan proceeds, leaving $531 cash. No cash interest or income taxes were paid. The filing provides no gross-margin figure; with no revenue, a revenue-based margin is not meaningful.
Changes, outlook, and risks
- Six-month net loss increased by $1,436 year over year, attributed to higher professional fees (including XBRL services not required in 2011) and higher interest expense as notes payable increased.
- Management estimated ongoing expenses of approximately $20,000 annually and said additional funds would likely be needed. It anticipated related-party advances could cover needs for the next 12 months, but gave no assurance.
- Related-party notes were due on demand and generally bore 8% interest. The company reported no line of credit, capital-expenditure commitments, or identified acquisition target.
- The company disclosed substantial doubt about its ability to continue as a going concern, citing losses, operating cash outflows, liabilities exceeding current assets, and no revenue. Management proposed loans or common-stock sales as potential funding, with no assurance of success.
- Management concluded disclosure controls and procedures were not effective as of June 30, 2012. It reported no material changes in internal control over financial reporting during the quarter.
- The report states no subsequent events requiring disclosure. It provides no specific acquisition timetable or financial guidance beyond estimated ongoing expenses and anticipated funding needs.
Important facts to verify
- Confirm the issuer: the provided 10-Q is for Jolley Marketing, Inc., despite the request metadata naming Creative Medical Technology Holdings, Inc.
- Reconcile related-party debt presentation: the balance sheet combines notes and accrued interest at $78,983; MD&A separately lists $68,150 in notes and $10,833 in interest payable.
- Assess the company’s ability to fund operations and whether anticipated related-party financing is available, given demand repayment terms and the going-concern warning.
- Verify the status of any acquisition plans and the implications of ineffective disclosure controls.