CELZ

Business Context and Reporting Period

This Form 10-K covers the fiscal year ended December 31, 2010, for Jolley Marketing, Inc. (Note: The input metadata references "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 ceased its previous lighting product sales business in June 2008 and is currently seeking to acquire an operating company or assets to commence business. The Company has no employees and relies on its sole officer and director, Steven L. White, who provides office space at no cost.

Key Financial Metrics

Profitability & Margins: The Company generated no revenue and reported a net loss for both periods. Gross and operating margins are not applicable due to zero revenue.

Liquidity: The Company holds minimal cash ($414) and has significant negative working capital. It relies on related-party loans to fund operations.

Material Changes vs. Prior Period

• Net Loss Reduction: The net loss decreased by approximately 45% from $31,610 in 2009 to $17,256 in 2010, primarily due to a significant reduction in general and administrative expenses (professional fees dropped from $29,808 to $14,068).
• Increased Debt: Notes payable to related parties increased by $16,466 (from $32,057 to $48,523) as the Company borrowed additional funds to cover operating costs.
• Cash Flow: Net cash used in operating activities improved from $(30,742) in 2009 to $(13,661) in 2010. However, the Company still ended the year with a net decrease in cash of $161.
• Asset Base: Total assets declined from $3,075 to $414, driven by the utilization of prepaid expenses and cash.

Outlook, Risks, and Management Commentary

Going Concern: Management explicitly states that the Company's financial condition raises substantial doubt about its ability to continue as a going concern. The Company has no operations and insufficient working capital to meet needs for the year ending December 31, 2011.

Financing Needs: Management anticipates expenses of approximately $20,000 for the next twelve months. They plan to seek financing through loans or the sale of common stock, potentially relying on advances from the President or shareholders, though no formal agreements exist.

Strategic Plan: The Company intends to acquire an operating business via a reverse acquisition or merger. Upon such a transaction, current management and shareholders are expected to lose control of the Company.

Risks and Controls:

• Internal Controls: Management concluded that internal controls over financial reporting were not effective as of December 31, 2010. A material weakness exists due to the lack of segregation of duties, as the sole officer (CEO/PFO) performs all financial reporting functions without an audit committee.
• Stock Liquidity: The stock is quoted on the OTCBB/OTCMarkets under symbol "JLLM" and is subject to "penny stock" rules, which may limit liquidity and increase transaction costs.
• Related Party Dependence: The Company is heavily dependent on loans from the sole officer/director and uses his office space without a formal lease.

Investor Verification Checklist

• Going Concern Status: Verify if the Company has secured the necessary financing to survive the next 12 months, as current cash ($414) is insufficient for projected expenses ($20,000).
• Related Party Debt: Confirm the terms and repayment status of the $48,523 in notes payable to the sole officer, which bear 8% interest and are due on demand.
• Acquisition Progress: Determine if the Company has identified a specific acquisition target, as it currently has no active business operations.
• Internal Control Remediation: Assess if the Company has hired additional accounting staff or established an audit committee to address the material weakness in financial reporting.
• Shareholder Dilution: Understand that in a potential reverse acquisition, current shareholders may retain less than 5% ownership of the surviving entity.