CREATIVE MEDICAL TECHNOLOGY HOLDINGS, INC. - Quarter Report: 2012 June (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 June 30, 2012.

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   X  . 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	. (Do not check if a smaller reporting company)	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 July 31, 2012: 18,113,750

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JOLLEY MARKETING, INC.

FORM 10-Q

JUNE 30, 2012

INDEX

*Inapplicable items have been omitted

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PART I—FINANCIAL INFORMATION

Item 1. Financial Statements

JOLLEY MARKETING, INC.

UNAUDITED CONDENSED BALANCE SHEETS

		June 30,		December 31,
		2012		2011
ASSETS
CURRENT ASSETS:
Cash	$	531	$	1,105
Prepaid Expense		-		2,000
Total Current Assets		531		3,105
Total Assets	$	531	$	3,105
LIABILITIES & STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES:
Accounts payable	$	7,802	$	7,871
Notes payable and accrued interest – related parties		78,983		67,398
Total Current Liabilities		86,785		75,269
STOCKHOLDERS' DEFICIT:
Preferred stock, $0.001 par value,
10,000,000 shares authorized,
no shares issued and outstanding		-		-
Common stock, $0.001 par value,
600,000,000 shares authorized,
18,113,750 shares issued and
Outstanding		18,114		18,114
Capital in excess of par value		154,181		154,181
Retained Deficit		(258,549)		(244,459)
Total Stockholders' Deficit		(86,254)		(72,164)
Total Liabilities and Stockholders’ Deficit	$	531	$	3,105

Note: The balance sheet at December 31, 2011 was taken from the audited financial statements at that date and condensed.

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

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JOLLEY MARKETING, INC.

UNAUDITED CONDENSED STATEMENTS OF OPERATIONS

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

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JOLLEY MARKETING, INC.

UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS

		For the Six		For the Six
		Months Ended		Months Ended
		June 30,		June 30,
		2012		2011
Cash Flows From Operating Activities:
Net loss	$	(14,090)	$	(12,654)
Adjustments to reconcile net loss to net
cash used by operating activities:
Changes in assets and liabilities:
(Increase) decrease in prepaid expense		2,000		-
Increase (decrease) in accrued interest – related party		2,585		1,937
Increase (decrease) in accounts payable		(69)		2,053
Net Cash Used by
Operating Activities		(9,574)		(8,664)
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		9,000		8,650
Net Cash Provided (Used) by Financing Activities		9,000		8,650
Net Increase (Decrease) in Cash		(574)		(14)
Cash at Beginning of Period		1,105		414
Cash at End of Period	$	531	$	400
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 six months ended June 30, 2012:

None

For the six months ended June 30, 2011:

None

The accompanying notes are an integral part of these unaudited condensed 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 June 30, 2012 and 2011 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, 2011 audited financial statements in the Company’s 2011 annual report on Form 10-K. The results of operations for the periods ended June 30, 2012 and 2011 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 six months ended June 30, 2012, the Company incurred a net loss of $14,090, 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 2009, 2010 and 2011, an entity owned by an officer/shareholder of the Company loaned a total of $53,150 to the Company. The notes are due on demand and bear interest at 8% per annum. During the three months ended June 30, 2012 and 2011, the Company accrued interest expense of $1,063 and $1,027, respectively, on the notes.  During the six months ended June 30, 2012 and 2011, the Company accrued interest expense of $2,126 and $1,938, respectively, on the notes.  Total accrued interest is $10,211 and $8,085 at June 30, 2012 and December 31, 2011, respectively.

On August 1, 2011 a minority shareholder loaned $6,000 to the Company. The note is due on demand and bears interest at 8% per annum.  During the three and six months ended June 30, 2012, the Company accrued interest expense of $120 and $240 on the notes, respectively.  Accrued interest is $403 and $163 at June 30, 2012 and December 31, 2011, respectively.

On February 8, 2012 a minority shareholder loaned $3,500 to the Company.  On March 5, 2012, a related party loaned $3,000 to the Company.  On May 2, 2012, a minority shareholder loaned an additional $2,500 to the Company.  These notes are due on demand and bear interest at 8% per annum.  During the three and six months ended June 30, 2012, the Company accrued interest expense of $162 and $219 on the notes, respectively.

Management Compensation - During the three and six month periods ended June 30, 2012 and 2011, the Company paid no compensation to its officers and directors.

Office Space - The Company has not had a need to rent office space.  Officers/stockholders of the Company have allowed the Company to use their offices as a mailing address, as needed, at no cost to the Company.

NOTE 4 - CAPITAL STOCK

Preferred Stock - The Company has authorized 10,000,000 shares preferred stock, $0.001 par value, with such rights, preferences and designations and to be issued in such series as determined by the Board of Directors.  No shares are issued and outstanding at June 30, 2012.

Common Stock - The Company has authorized 600,000,000 shares of common stock, $0.001 par value.  The Company has 18,113,750 common shares issued and outstanding at June 30, 2012 and December 31, 2011.

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NOTE 5 - FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company’s financial instruments consist of cash and accounts payable.  The carrying amount of cash and accounts payable approximates fair value because of the short-term nature of these items.

NOTE 6 - SUBSEQUENT EVENTS

The Company has evaluated subsequent events from the balance sheet date through the date these financial statements were issued and concluded there are no additional events to disclose.

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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,” “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 June 30, 2012 and 2011

Revenue

Our revenues for the three months ended June 30, 2012 and 2011, were $0 and $0, respectively.

Operating Expenses

For the three months ended June 30, 2012, operating expenses were $5,039, consisting of $3,594 in professional fees, interest expense of $1,345, and other general and administrative costs of $100. For the three months ended June 30, 2011, operating expenses were $4,472, consisting of $3,253 in professional fees, interest expense of $1,025 and $194 in other general and administrative expenses.  The Company's interest expense increased during the three months ended June 30, 2012 as compared to the three months ended June 30, 2011, due to an increase in the notes payable.

 

Net Loss

Our net losses for the three months ended June 30, 2012 and 2011 were $5,039 and $4,472, respectively, which resulted in a net loss per share of $0.00 for each period.  The increase in net loss for the three months ended June 30, 2012 as compared to June 30, 2011 is due to an increase in interest expense.

Six Month Periods Ended June 30, 2012 and 2011

Revenue

Our revenues for the six months ended June 30, 2012 and 2011, were $0 and $0, respectively.

Operating Expenses

For the six months ended June 30, 2012, operating expenses were $14,090, consisting of $11,405 in professional fees, interest expense of $2,585, and other general and administrative expenses of $100. For the six months ended June 30, 2011, operating expenses were $12,654, consisting of $9,773 in professional fees, interest expense of $1,937, and $944 in other general and administrative expenses.  The Company's professional fees increased during the six months ended June 30, 2012 as compared to the June 30, 2011 due to an increase in fees paid for XBRL services.  These services were not required in 2011.  Interest expense increased during the six months ended June 30, 2012 as compared to the six months ended June 30, 2011, due to an increase in the notes payable.

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Net Loss

Our net losses for the six months ended June 30, 2012 and 2011 were $14,090 and $12,654, respectively, which resulted in a net loss per share of $0.00 for each period.  The increase in net loss for the six months ended June 30, 2012 as compared to June 30, 2011 is due to an increase in professional fees and interest expense.

Liquidity and Capital Resources

The Company’s balance sheet as of June 30, 2012, reflects total current assets of $531, consisting of cash.  As of June 30, 2012, our current liabilities were $86,785 which included $7,802 in accounts payable, $68,150 in notes payable to related parties, and $10,833 in interest payable.

We anticipate our expenses to be limited to accounting, auditing, legal and filing fees associated with continuing our reporting status with the Securities and Exchange Commission along with miscellaneous expenses related to our corporate existence.  We estimate our ongoing expenses to be $20,000 per year.  We do not have any commitments for capital expenditures nor do we anticipate entering into any such commitments.  We will likely need additional funds to cover our expenses for the next year.

In the past we have relied on advances from a related party to cover our operating costs.   Management anticipates that we will receive sufficient advances to meet our needs through the next 12 months.  However, there can be no assurances to that effect.  Our need for capital may change dramatically if we acquire an interest in a business opportunity during that period.  At present, we have no understandings, commitments or agreements with respect to the acquisition of any business venture, and there can be no assurance that we will identify a business venture suitable for acquisition in the future.  Further, we cannot assure that we will be successful in consummating any acquisition on favorable terms or that we will be able to profitably manage any business venture we acquire.  Should we require additional capital, we may seek additional advances from officers, sell common stock or find other forms of debt financing.

The Company has no other assets or line of credit, other than that which present management may agree to extend to or invest in the Company, nor does it expect to have one before a merger is effected.  The Company will carry out its business plan as discussed above. The Company cannot predict to what extent its liquidity and capital resources will be diminished prior to the consummation of a business combination or whether its capital will be further depleted by the operating losses (if any) of the business entity which the Company  may eventually acquire.

Our current operating plan is to continue searching for potential businesses, products, technologies and companies for acquisition and to handle the administrative and reporting requirements of a public company.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Not required for smaller reporting companies.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures. Our management, with the participation of our president and our principal 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 principal 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 principal 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 control over financial reporting that occurred during the quarter ended June 30, 2012 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II – OTHER INFORMATION

Item 5.  Unregistered Sales of Equity Securities and Use of Proceeds

In May 2012 we issued an unsecured promissory note to a related party for funds advanced to the Company for operating capital.  The principal amount of the note is $2,500 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.  

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: August 9, 2012

/s/ Steven L. White         

Steven L. White, President

(Chief Executive Officer and

Principal Financial Officer)

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