Filing identity and reporting period
Important discrepancy: The supplied filing is Jolley Marketing, Inc.’s Form 10-K for the fiscal year ended December 31, 2013, not a filing identified as Creative Medical Technology Holdings, Inc. The summary below describes the filing text provided; verify the issuer and filing before relying on it.
Jolley Marketing reports that it has been a shell company since 2008, has no current operations, and is seeking an operating business to acquire. It had not identified a target or begun acquisition negotiations as of the filing.
Financial performance and position
| Metric | 2013 | 2012 |
|---|---|---|
| Revenue | $0 | $0 |
| Operating expenses | $20,120 | $20,096 |
| Interest expense | $7,162 | $5,489 |
| Net loss | $27,282 | $25,585 |
| Cash used in operations | $22,907 | $16,774 |
| Cash at year-end | $374 | $781 |
| Total assets | $374 | $1,568 |
| Current liabilities | $125,405 | $99,317 |
| Stockholders’ deficit | $125,031 | $97,749 |
Operating margin is not meaningful because the company had no revenue. At December 31, 2013, current liabilities included $8,083 of accounts payable and $117,322 of notes payable and accrued interest to related parties. Negative working capital was $125,031. No material long-term debt, capital expenditures, or off-balance-sheet arrangements were reported.
Cash provided by financing was $22,500 in 2013, including $35,850 of related-party note proceeds and $13,350 of note repayments. The filing reports $1,675 of cash interest paid and no income taxes paid. It does not provide a separate, clear liquidity runway estimate.
Changes versus 2012
- Revenue remained zero. Net loss increased by $1,697, about 7%, and operating expenses were nearly flat.
- Interest expense rose by $1,673, which management attributed to increased notes payable.
- Cash used in operations increased by $6,133, while year-end cash fell by $407.
- Current liabilities increased by $26,088, including a larger balance of related-party notes and accrued interest.
Outlook, risks, and notable items
- Management estimated approximately $25,000 of expenses over the next 12 months and said the company lacked sufficient working capital for 2014. It planned to seek loans or sell common stock and might rely on advances from the president or shareholders, but had no agreements for such advances.
- The independent auditor’s report states that recurring losses, no revenue from planned operations, and other factors raise substantial doubt about the company’s ability to continue as a going concern. The financial statements include no adjustments for the outcome of this uncertainty.
- On November 7, 2013, the company issued a $9,300 unsecured related-party note bearing 8% interest, payable on demand. Multiple related-party and shareholder loans also bear 8% interest; several earlier notes were repaid during 2013.
- Management reported ineffective disclosure controls and internal control over financial reporting, citing a single officer handling financial reporting, lack of segregation of duties and accounting staff, and no audit committee. Management said it would consider additional staffing when finances allow.
- The company reported no active trading volume in its common stock during 2013 or 2012. It identified penny-stock and shell-company resale restrictions as factors that may constrain liquidity. Steven L. White beneficially owned 83.4% of shares as of March 14, 2014; the filing anticipates substantial dilution and a possible change of control in a future acquisition.
- There were no reported legal proceedings or subsequent events. No acquisition guidance or timing was provided, and the company gave no assurance it would find financing or a suitable transaction.
Key facts for investors to verify
- Confirm that Jolley Marketing, Inc. is the intended issuer; the request metadata names a different company.
- Reconcile the $117,322 related-party notes and accrued-interest balance to the individual notes, maturities, interest accruals, and repayment terms.
- Assess whether the company can fund its estimated $25,000 of near-term expenses given $374 cash, negative working capital, and no committed financing.
- Review the going-concern disclosure, identified control weaknesses, and any subsequent filings or financing/acquisition developments.
- Verify the share count, controlling ownership, trading status, and potential dilution or resale limitations associated with a future shell-company transaction.