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. This summary reflects the filing text provided and should not be attributed to Creative Medical without verifying the filing.
The filing covers the quarter and six months ended June 30, 2013; the financial statements are unaudited. Jolley Marketing describes itself as a shell company, reports no revenue since September 2008, and says it is seeking a business combination. It had not identified a target or begun acquisition negotiations.
Financial results and position
| Metric | Three months ended June 30 | Six months ended June 30 |
|---|---|---|
| Revenue | $0 in 2013 and 2012 | $0 in 2013 and 2012 |
| Net loss | $5,740 in 2013; $5,039 in 2012 | $15,789 in 2013; $14,090 in 2012 |
| Loss per share | $0.00 in both years | $0.00 in both years |
For the six-month period, professional fees were $12,340 versus $11,405, and related-party interest expense was $3,349 versus $2,585. The filing attributes higher professional fees partly to XBRL services and higher interest to increased notes payable. The six-month net loss increased by $1,699 year over year. No profit margin is meaningful because the company had no revenue.
At June 30, 2013, cash and total assets were $403, down from $781 in cash and $1,568 in total assets at December 31, 2012. Current liabilities were $113,941, including $6,705 accounts payable and $107,236 in related-party notes and accrued interest. Stockholders’ deficit was $113,538. There was no reported line of credit.
Six-month operating cash outflow was $14,928, compared with $9,574 in 2012. Related-party note proceeds were $14,550, and cash declined by $378 to $403. The company reported no cash paid for interest or income taxes.
Changes, outlook, and risks
- Losses increased in both the quarter and six-month period, primarily reflecting higher professional fees and interest expense.
- Related-party notes are unsecured, bear interest at 8%, and are due on demand. A new $5,700 related-party note was issued in May 2013.
- Management estimated ongoing expenses of approximately $20,000 per year and anticipated receiving related-party advances to meet needs over the next 12 months, but gave no assurance. It may seek further advances, equity sales, or other debt financing.
- The filing states that the six-month loss, operating cash outflow, liabilities exceeding current assets, and absence of revenue raise substantial doubt about the company’s ability to continue as a going concern. Management’s proposed financing or return to profitable operations is uncertain.
- Management reported disclosure controls and procedures were not effective as of June 30, 2013. No material change in internal control over financial reporting was reported during the quarter.
- The company reported no acquisition commitments and no subsequent events requiring disclosure. It cautioned that forward-looking results are subject to risks, including financing, competition, regulatory changes, and failure to develop business relationships.
Key facts for investors to verify
- Confirm the issuer’s identity: the supplied filing is for Jolley Marketing, Inc., not the company named in the request.
- Verify the company’s ability to obtain funding, including the terms and continued availability of related-party advances.
- Review the demand-note obligations, accrued interest, and near-term liquidity against only $403 of reported cash.
- Assess the going-concern uncertainty, lack of revenue, and absence of an identified acquisition target.
- Consider management’s conclusion that disclosure controls and procedures were ineffective.