CREATIVE MEDICAL TECHNOLOGY HOLDINGS, INC. - Quarter Report: 2011 March (Form 10-Q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

 X . QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2011.

or

     . TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______________________ to ___________________________

Commission File Number: 000-53500

JOLLEY MARKETING, INC.

(Exact name of registrant as specified in its charter)

Nevada	87-0622284
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
664 South Alvey Drive, Mapleton, Utah	84664
(Address of principal executive offices)	(Zip Code)
(801) 489-3346
(Registrant’s telephone number, including area code)

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  X . Yes      . No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes      . No      .

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer      .

Accelerated filer      .

Non-accelerated filer      .

Smaller reporting company  X .

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  X . Yes      . No

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of May 15, 2011: 18,113,750

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JOLLEY MARKETING, INC.

FORM 10-Q

MARCH 31, 2011

INDEX

*Inapplicable items have been omitted

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PART I—FINANCIAL INFORMATION

Item 1. Financial Statements

JOLLEY MARKETING, INC.

UNAUDITED CONDENSED FINANCIAL STATEMENTS

MARCH 31, 2011

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JOLLEY MARKETING, INC.

UNAUDITED CONDENSED FINANCIAL STATEMENTS

CONTENTS

		PAGE
-	Unaudited Condensed Balance Sheets at March 31, 2011 and December 31, 2010	5
-	Unaudited Condensed Statements of Operations, for the three months ended March 31, 2011 and 2010	6
-	Unaudited Condensed Statements of Cash Flows, for the three months ended March 31, 2011 and 2010	7
-	Notes to Unaudited Condensed Financial Statements	8

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JOLLEY MARKETING, INC.

UNAUDITED CONDENSED BALANCE SHEETS

		March 31,		December 31,
		2011		2010
ASSETS
CURRENT ASSETS:
Cash	$	314	$	414
Total Current Assets		314		414
Total Assets	$	314	$	414
LIABILITIES & STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES:
Accounts payable	$	3,520	$	-
Notes payable and accrued interest – related party		53,085		48,523
Total Current Liabilities		56,605		48,523
STOCKHOLDERS' EQUITY (DEFICIT):
Preferred stock, $0.001 par value,
10,000,000 shares authorized,
no shares issued and outstanding		-		-
Common stock, $0.001 par value,
200,000,000 shares authorized,
18,113,750 and 18,113,750 shares
issued and outstanding, respectively		18,114		18,114
Capital in excess of par value		154,181		154,181
Retained Earnings (Deficit)		(228,586)		(220,404)
Total Stockholders' Equity (Deficit)		(56,291)		(48,109)
Total Liabilities and Stockholders’ Equity (Deficit)	$	314	$	414

Note: The balance sheet at December 31, 2010 was taken from the audited financial statements at that date and condensed.

The accompanying notes are an integral part of these unaudited financial statements.

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JOLLEY MARKETING, INC.

UNAUDITED CONDENSED STATEMENTS OF OPERATIONS

		For the Three
		Months Ended
		March 31,
		2011		2010
REVENUE	$	-	$	-
OPERATING EXPENSES:
Professional fees		6,520		7,224
Other general and administrative		750		100
Total Operating Expenses		7,270		7,324
LOSS BEFORE OTHER INCOME (EXPENSE)		(7,270)		(7,324)
OTHER INCOME (EXPENSE):
Interest expense – related party		(912)		(622)
Total Other Income (Expense)		(912)		(622)
LOSS FROM CONTINUING
OPERATIONS BEFORE INCOME TAXES		(8,182)		(7,946)
CURRENT INCOME TAX BENEFIT (EXPENSE)		-		-
DEFERRED INCOME TAX BENEFIT (EXPENSE)		-		-
LOSS FROM CONTINUING OPERATIONS		(8,182)		(7,946)
NET INCOME (LOSS)	$	(8,182)	$	(7,946)
BASIC AND DILUTED INCOME (LOSS) PER COMMON SHARE:
Net income (loss) per common share	$	(0.00)	$	(0.00)
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING		18,113,750		18,113,750

The accompanying notes are an integral part of these financial statements.

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JOLLEY MARKETING, INC.

UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS

		For the Three		For the Three
		Months Ended		Months Ended
		March 31,		March 31,
		2011		2010
Cash Flows From Operating Activities:
Net loss	$	(8,182)	$	(7,946)
Adjustments to reconcile net loss to net
cash used by operating activities:
Changes in assets and liabilities:
(Increase) decrease in prepaid expense		-		2,500
Increase (decrease) in accrued interest – related party		912		622
Increase (decrease) in accounts payable		3,520		(147)
Net Cash Used by
Operating Activities		(3,750)		(4,971)
Cash Flows From Investing Activities:		-		-
Net Cash Provided (Used) by
Investing Activities		-		-
Cash Flows From Financing Activities:
Proceeds from issuance of notes payable – related party		3,650		4,500
Net Cash Provided (Used) by Financing Activities		3,650		4,500
Net Increase (Decrease) in Cash		(100)		(471)
Cash at Beginning of Period		414		575
Cash at End of Period	$	314	$	104
Supplemental Disclosures of Cash Flow Information:
Cash paid during the period for:
Interest	$	-	$	-
Income taxes	$	-	$	-

Supplemental Schedule of Non-cash Investing and Financing Activities:

For the three months ended March 31, 2011:

None

For the three months ended March 31, 2010:

None

The accompanying notes are an integral part of these financial statements.

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JOLLEY MARKETING, INC.

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Condensed Financial Statements - The accompanying financial statements have been prepared by the Company without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows at March 31, 2011 and 2010 and for the periods then ended have been made. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company’s December 31, 2010 audited financial statements in the Company’s 2010 annual report on Form 10-K. The results of operations for the periods ended March 31, 2011 and 2010 are not necessarily indicative of the operating results for the full year.

NOTE 2 - GOING CONCERN

The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of the Company as a going concern. However, during the three months ended March 31, 2011, the Company incurred a net loss of $8,182, had negative cash flows from operating activities, had current liabilities in excess of current assets, and had no revenue-generating activities. These factors raise substantial doubt about the ability of the Company to continue as a going concern. In this regard, management is proposing to raise any necessary additional funds not provided by operations through loans or through additional sales of common stock. There is no assurance that the Company will be successful in raising this additional capital or in achieving profitable operations. The financial statements do not include any adjustments that might result from the outcome of these uncertainties.

NOTE 3 - RELATED PARTY TRANSACTIONS

Notes Payable – During 2011, 2010 and 2009, an entity owned by an officer/shareholder of the Company loaned a total of $48,150 to the Company. The notes are due on demand and bear interest at 8% per annum. During the three months ended March 31, 2011 and 2010, the Company accrued interest expense of $912 and $622, respectively, on the notes.  Total accrued interest is $4,935 and $4,023 at March 31, 2011 and December 31, 2010, respectively.

NOTE 4 - INCOME TAXES

The Company has available at March 31, 2011, net operating loss carryforwards of approximately $114,500 which may be applied against future taxable income and which expire in 2027 through 2031. The net deferred tax assets are approximately $17,175 and $15,975 as of March 31, 2011 and December 31, 2010, respectively, with an offsetting valuation allowance of the same amount. The change in the valuation allowance for the three-month period ended March 31, 2011 is approximately $1,200.

NOTE 5 - SUBSEQUENT EVENTS

The Company has evaluated subsequent events from the balance sheet date through the date these financial statements were issued. In May 2011, the Company received a loan of $5,000 from an officer/shareholder of the Company. The loan is due on demand and bears interest at 8% per annum.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statement Notice

This Form 10-Q contains certain forward-looking statements. For this purpose any statements contained in this Form 10-Q that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the foregoing, words such as “may,” “will,” “expect,” “believe,” “anticipate,” “estimate” or “continue” or comparable terminology are intended to identify forward-looking statements. These statements by their nature involve substantial risks and uncertainties, and actual results may differ materially depending on a variety of factors, many of which are not within our control. These factors include but are not limited to economic conditions generally and in the industries in which we may participate; competition within our chosen industry, including competition from much larger competitors; changes in rules or regulations relating to shell companies; technological advances and failure to successfully develop business relationships.

Overview

General

Jolley Marketing, Inc. was incorporated on December 3, 1998, in the State of Nevada. Our company has assets of nominal value and we have generated no revenue since September 2008. We are a “shell company” as defined pursuant to Rule 12b-2 under the Securities Exchange Act of 1934 (the “Exchange Act”). We intend to seek to acquire the assets or voting securities of one or more other companies that are actively engaged in a business that generates revenues in exchange for securities of our company, or to be acquired by such a company. We have not identified a particular acquisition target or entered into any negotiations regarding any acquisition.

Our company currently intends to remain a shell company until a merger or acquisition is consummated. We currently anticipate that our company’s cash requirements will be minimal until we complete such a merger or acquisition and that our sole director and officer, or his affiliates, will provide the financing that may be required for our limited operations prior to completing such a transaction. We currently have no employees. Our sole director and officer has agreed to allocate a portion of his time to the activities of our company, without cash compensation. He anticipates that we can implement our business plan by devoting a portion of his available time to our business affairs.

Three Month Periods Ended March 31, 2011 and 2010

Revenue

Our revenues for the three months ended March 31, 2011 and 2010, were $0 and $0, respectively.

Operating Expenses

For the three months ended March 31, 2011, operating expenses were $8,182, consisting of $6,520 in professional fees, interest expense of $912, and $750 in other general and administrative expenses. For the three months ended March 31, 2010, operating expenses were $7,946, consisting of $100 in other general and administrative expenses, interest expense of $622 and $7,224 in professional fees for services performed during the period.  

 

Net Loss

Our net loss for the three months ended March 31, 2011 and 2010 was $8,182 and $7,946, respectively, which resulted in a net loss per share of $0.00 for each period.  

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Not required by smaller reporting companies.

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Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures. Our management, with the participation of our president and our chief financial officer, carried out an evaluation of the effectiveness of our "disclosure controls and procedures" (as defined in the Securities Exchange Act of 1934 (the "Exchange Act") Rule 13a-15(e)) as of the end of the period covered by this report (the "Evaluation Date"). Based upon that evaluation, our president and our chief financial officer concluded that, as of the Evaluation Date, our disclosure controls and procedures are not effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act (i) is recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms and (ii) is accumulated and communicated to our management, including our president and our chief financial officer, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting. There were no changes in our internal controls over financial reporting that occurred during the quarter ended March 31, 2011 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds

In March 2011 we issued an unsecured promissory note to Lorikeet, Inc. (“Lorikeet”), a Utah corporation owned and controlled by Steven L. White, our President, a director, and principal shareholder of the Company, for funds advanced to the Company for operating capital.  The principal amount of the note is $3,650 and bears interest at 8% per annum.  The note is due and payable upon demand.  The note was issued without registration under the Securities Act by reason of the exemptions from registration afforded by the provisions of Section 4(2) of the Securities Act.  Lorikeet was an accredited investor at the time of the issuance of the note.  Mr. White on behalf of Lorikeet acknowledged appropriate investment representations with respect to the note and consented to the imposition of a restrictive legend upon the note.  Lorikeet did not enter into the note transaction with us as a result of or subsequent to any advertisement, article, notice, or other communication published in any newspaper, magazine, or similar media or broadcast on television or radio, or presented at any seminar or meeting.  Lorikeet was afforded the opportunity to ask questions of our management and to receive answers concerning the terms and conditions of the note issuance.  No selling commissions were paid in connection with this transaction.

Item 6. Exhibits

Copies of the following documents are included as exhibits to this report pursuant to Item 601 of Regulation S-K.

Signature Page Follows

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

JOLLEY MARKETING, INC.

(Registrant)

Date: May 15, 2011

/s/ Steven L. White         

Chief Executive Officer

Chief Financial Officer

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