CELZ

SEC Filing Summary: Jolley Marketing, Inc. (10-K)

Business Context and Reporting Period

This Annual Report on Form 10-K covers the fiscal year ended December 31, 2009. The registrant, Jolley Marketing, Inc. (noted as "CREATIVE MEDICAL TECHNOLOGY HOLDINGS, INC." in the request metadata, but identified as Jolley Marketing, Inc. in the filing text), is a Nevada corporation classified as a shell company. The Company ceased its previous lighting product operations in June 2008 due to competition and dwindling sales. Currently, the Company has no active business operations, no employees, and is seeking to acquire an operating business or assets to generate revenue.

Key Financial Metrics

Note: The filing does not provide margin data as there is no revenue from continuing operations.

Material Changes vs. Prior Period

• Net Loss Reduction: The net loss decreased from $52,636 in 2008 to $31,610 in 2009. This improvement was driven by a significant reduction in general and administrative expenses (from $53,490 to $30,553), primarily due to lower professional fees.
• Debt Increase: Total liabilities increased dramatically from $745 in 2008 to $33,928 in 2009. This is attributed to $31,000 in loans received from a related party (the sole officer/director) between April and December 2009.
• Discontinued Operations: The Company fully discontinued its lighting business in June 2008. Consequently, 2009 revenue from discontinued operations was $0, compared to $2,457 in 2008.
• Equity Position: Stockholders' equity shifted from a positive $757 in 2008 to a deficit of $(30,853) in 2009 due to accumulated losses and the increase in liabilities.

Outlook, Risks, and Management Commentary

• Liquidity and Going Concern: Management explicitly states that the Company does not have sufficient working capital to meet its needs for the year ending December 31, 2010. The independent auditor has issued a "going concern" opinion, citing substantial doubt about the Company's ability to continue operations without additional financing.
• Financing Needs: The Company anticipates expenses of approximately $24,000 for the next twelve months. Management plans 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.
• Business Strategy: The Company remains in a "shell" status, actively searching for a business acquisition or merger. It has no identified targets or negotiations in progress.
• Internal Controls: Management identified material weaknesses in internal controls over financial reporting due to the lack of segregation of duties (the CEO also serves as the Principal Financial Officer) and the absence of an audit committee.
• Stock Market Status: The common stock trades on the OTCBB and Pink Sheets under the symbol "JLLM" and is classified as a "penny stock," which limits liquidity and increases transaction costs.

Investor Verification Checklist

• Capital Adequacy: Verify the Company's ability to secure the estimated $24,000 in operating funds for 2010, given the current cash balance of only $575.
• Related Party Dependence: Confirm the terms and repayment status of the $31,000 in related-party loans, which constitute the majority of the Company's liabilities.
• Acquisition Progress: Monitor for any announcements regarding a specific acquisition target, as the Company has no current operations and relies entirely on a future merger for viability.
• Internal Control Remediation: Assess whether the Company has hired additional accounting staff or established an audit committee to address the material weaknesses in financial reporting.
• Stock Ownership Concentration: Note that the sole officer and director, Steven L. White, beneficially owns approximately 83.4% of the outstanding common stock.