Filing and business context
Important identification discrepancy: The request identifies Creative Medical Technology Holdings, Inc., but the supplied Form 10-K is for Jolley Marketing, Inc. This summary describes the filing text provided, not the named company. The report covers the fiscal year ended December 31, 2015; it is an annual report, not a standalone fourth-quarter report.
Jolley Marketing is a Nevada shell company with no operating business, employees, or revenue since it ceased selling lighting products in June 2008. It is seeking an operating company to acquire or merge with, but reports no definitive acquisition agreement. Management describes preliminary discussions and due diligence with a potential target and says it prepared a letter of intent.
Financial results and liquidity
| Metric | 2015 | 2014 |
|---|---|---|
| Revenue | $0 | $0 |
| Operating expenses | $20,831 | $19,426 |
| Interest expense | $9,930 | $8,586 |
| Net loss | $30,761 | $28,012 |
| Net cash used in operations | $14,638 | $17,320 |
| Cash at year-end | $216 | $954 |
There is no operating revenue or gross margin to assess. Total assets were $216, all cash. At December 31, 2015, accounts payable were $17,079 and notes payable plus accrued interest were reported as $166,941, including $26,200 classified as long-term debt. The company reported negative working capital of $157,604 and stockholders’ deficit of $183,804. Most disclosed notes bear 8% interest; significant funding has come from related parties and shareholders.
Operating cash outflow improved year over year, but cash fell by $738 as $13,900 of net financing cash flow did not cover operating cash needs. The filing reports $697 of cash interest paid in 2015. No off-balance-sheet arrangements were reported.
Material changes, outlook, and risks
- Net loss increased by $2,749 from 2014. Professional fees rose $1,130, general and administrative expenses rose $275, and interest expense rose $1,344.
- Cash declined from $954 to $216, while accounts payable increased from $10,188 to $17,079. Notes payable and accrued interest remained the principal source of financing.
- Management estimates approximately $30,000 of expenses over the next 12 months and says it lacks sufficient working capital for 2016. It plans to seek loans or sell common stock and may rely on informal advances from the president or shareholders; no commitment for such advances is reported.
- The auditor issued an unqualified opinion on the financial statements but highlighted substantial doubt about the company’s ability to continue as a going concern. The statements contain no adjustments for the outcome of that uncertainty.
- Management reported ineffective disclosure controls and internal control over financial reporting, citing a single officer handling financial reporting, lack of segregation of duties, and no audit committee. Management said it would consider adding accounting staff when finances allow.
- The stock had no active market or trading volume in 2014 or 2015 and is quoted on the OTC Pink. Penny-stock restrictions may further limit liquidity. A future acquisition could substantially dilute existing shareholders and transfer control; management also disclosed potential conflicts if insiders negotiate sales of their shares as part of a transaction.
- After year-end, several shareholder-note maturities were extended to 2017. The company reported no legal proceedings and no formal financial guidance beyond its expense estimate and financing plans.
Important facts for investors to verify
- Confirm the issuer: the supplied filing is for Jolley Marketing, not Creative Medical Technology Holdings.
- Verify the status and terms of the reported target discussions and letter of intent, including how they relate to the agreement with Middle East General Consulting listed among the exhibits.
- Reconcile related-party debt and accrued-interest balances, note maturities, and any subsequent amendments; assess whether additional financing is available and on what terms.
- Assess the going-concern risk, near-term cash requirements, and the effectiveness of plans to fund operations.
- Consider the disclosed material weaknesses, lack of independent oversight, potential acquisition-related dilution, and absence of an active trading market.