Filing Summary
Entity mismatch: The request identifies Creative Medical Technology Holdings, Inc., but the supplied Form 10-K is for Jolley Marketing, Inc. (ticker JLLM). This summary reflects the filing provided, not the named company.
Business context and reporting period
This is Jolley Marketing’s annual report for the fiscal year ended December 31, 2012, with 2011 comparatives. The company reports that it has been a shell since ceasing its lighting-product operations in June 2008. It has no current operations or employees and is searching for a business to acquire; it had not identified a target or entered acquisition negotiations as of the filing.
Financial results and liquidity
| Metric | 2012 | 2011 |
|---|---|---|
| Revenue | $0 | $0 |
| Operating expenses | $20,096 | $19,830 |
| Net loss | $25,585 | $24,055 |
| Cash used in operating activities | $16,774 | $13,959 |
| Cash at year-end | $781 | $1,105 |
| Related-party notes payable and accrued interest | $89,337 | $67,398 |
With no revenue, a gross margin is not applicable. At December 31, 2012, total assets were $1,568, current liabilities were $99,317, and stockholders’ deficit was $97,749; negative working capital was also $97,749. Accounts payable were $9,980. Cash-flow financing consisted of $16,450 in related-party note proceeds. The filing reports no off-balance-sheet arrangements.
Material changes versus 2011
- Net loss increased by $1,530; professional fees rose to $19,246 from $18,036, partly due to higher XBRL fees.
- Interest expense increased to $5,489 from $4,225, attributed to increased notes payable.
- Year-end related-party notes payable and accrued interest increased by $21,939, while cash declined by $324.
- Operating cash use increased by $2,815. The company continued to have no revenue or operations.
Outlook, risks, contingencies, and unusual items
- Management estimates expenses of approximately $25,000 over the next 12 months and says available working capital is insufficient. It expects to seek loans or sell common stock and may rely on advances from the president or shareholders, but has no agreements for such funding.
- The auditor’s report includes a going-concern paragraph: recurring losses, no operating revenue, and negative cash flows raise substantial doubt about the company’s ability to continue. The financial statements include no adjustments for the outcome of this uncertainty.
- Related-party notes generally bear 8% interest; certain notes are due on demand. A related party provided an additional $6,000 loan on February 4, 2013, due in 24 months at 8%.
- Management concluded disclosure controls and internal control over financial reporting were ineffective, citing a sole officer handling financial reporting, lack of segregation of duties, and no audit committee. Management said it would consider additional accounting staff when finances permit.
- The stock had no active market or trading volume during 2012. The company is a shell, and any acquisition could substantially dilute current shareholders and change control. The filing also describes potential conflicts if management negotiates sales of its own shares alongside an acquisition.
- The filing reports no legal proceedings and no dividends. The independent auditor issued an unqualified opinion on the financial statements, while noting the going-concern uncertainty.
Important facts for investors to verify
- Confirm the filing is for Jolley Marketing, Inc., not Creative Medical Technology Holdings, Inc., and obtain the correct issuer’s filing if needed.
- Review the full debt and related-party note details, including demand terms, accrued interest, and the subsequent $6,000 loan.
- Assess whether the company can fund its estimated $25,000 of near-term costs and whether any financing has since been obtained.
- Verify current shell-company status, acquisition developments, share count, and potential dilution or control changes.
- Consider the stated going-concern doubt, ineffective controls, and the stock’s lack of trading activity when evaluating risk.