Filing identity and reporting period
Important identity mismatch: The request identifies Creative Medical Technology Holdings, Inc., but the supplied Form 10-Q is for Jolley Marketing, Inc. Investors should verify the issuer and filing before relying on this summary.
Jolley Marketing, Inc. reports the unaudited quarter and nine months ended September 30, 2015, with comparisons to the corresponding 2014 periods. The filing describes the company as a non-revenue-generating shell seeking a business combination; it reports no identified acquisition target or active negotiations.
Financial results and position
| Metric | Three months ended Sept. 30, 2015 | Nine months ended Sept. 30, 2015 | Comparable 2014 period |
|---|---|---|---|
| Revenue | $0 | $0 | $0 |
| Operating expenses | $3,732 | $14,489 | $3,553 quarter; $15,227 nine months |
| Related-party interest expense | $2,567 | $7,349 | $2,200 quarter; $6,282 nine months |
| Net loss | $6,299 | $21,838 | $5,753 quarter; $21,509 nine months |
| Basic and diluted loss per share | $0.00 | $0.00 | $0.00 in both comparable periods |
At September 30, 2015, cash and total assets were $741, versus $954 at December 31, 2014. Current liabilities were $175,622, including $12,662 accounts payable and $162,960 in related-party notes and accrued interest. Working capital was therefore negative $174,881. Stockholders’ deficit was $174,881. No margin measure is meaningful because the company had no revenue.
For the first nine months of 2015, operating cash use was $12,713, compared with $11,985 in 2014. Financing provided $12,500, including $15,500 of related-party note proceeds and $3,000 of repayments; ending cash was $741. Cash interest paid was $697, and no income taxes were paid.
Changes, outlook, and risks
- Quarterly and nine-month net losses increased by $546 and $329, respectively, year over year. Nine-month operating expenses declined, but higher related-party interest expense offset that reduction.
- Management estimates ongoing public-company expenses of about $30,000 annually and expects to need additional funding. It anticipates related-party advances may cover needs for the next 12 months, but gives no assurance.
- The company had no revenue-generating activities and incurred losses, operating cash outflows, and current liabilities substantially exceeding current assets. Management states these conditions raise substantial doubt about the company’s ability to continue as a going concern. Funding could come from loans or common-stock sales; success is not assured.
- Related-party notes generally bear 8% interest and are due on demand; some note maturities were extended. A new $2,500 unsecured demand note was issued to a minority shareholder on August 13, 2015.
- Management concluded disclosure controls and procedures were not effective as of September 30, 2015. No material change in internal control over financial reporting was reported during the quarter.
- The filing says no subsequent events requiring disclosure were identified. It provides no specific acquisition timetable or forecast of revenue or profitability.
Important facts to verify
- Confirm that this Jolley Marketing, Inc. filing—not a Creative Medical Technology Holdings, Inc. filing—is the intended document.
- Reconcile the nine-month operating-expense figures: the financial statements show $14,489, while MD&A states $14,488 and gives different professional-fee detail.
- Confirm the composition and demand terms of related-party liabilities and whether management can secure further funding.
- Assess the going-concern uncertainty, the lack of revenue and acquisition target, and management’s disclosure that controls were ineffective.
- Verify the reported share count: 18,113,750 shares outstanding as of November 9, 2015, unchanged from December 31, 2014.