Attached files
| file | filename |
|---|---|
| EX-31.1 - JAMMIN JAVA CORP. | ex31-1.htm |
| EX-32.1 - JAMMIN JAVA CORP. | ex32-1.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended January 31, 2010
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from [ ] to [ ]
Commission file number 333-127143
|
JAMMIN JAVA CORP.
|
|
(Name of small business issuer in its charter)
|
|
Nevada
|
264204714
|
|
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification
No.)
|
|
8350 Wilshire Blvd
|
90211
|
|
|
(Address of principal executive offices)
|
(Zip Code)
|
|
Nevada
|
EIN: 264204714
|
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
Issuer's telephone number 323-556-0746
Securities registered pursuant to Section 12(b) of the Act:
|
Title of each class
None
|
Name of each exchange on which registered
N/A
|
Securities registered pursuant to Section 12(g) of the Act:
|
Common Shares, par value $0.001
|
|
(Title of class)
|
Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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.
Yes [X] No [ ]
Indicate by checkmark 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. (Check one):
|
Large accelerated filer
|
Accelerated filer
|
|
Non-accelerated filer
(Do not check if a smaller reporting company)
|
Smaller reporting company X
|
Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B is not contained in this form, and no disclosure will be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ ]
State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was sold, or the average bid and asked prices of such common equity, as of a specified date within 60 days. (See definition of affiliate in Rule 12b-2 of the Exchange Act.)
There is no public trading market for our common shares in the United States or elsewhere. Based on the last sale price of our shares of $0.10, our aggregate market value is $569,000.
State the number of shares outstanding of each of the issuer's classes of equity stock, as of the latest practicable date.
98,910,594 common shares issued and outstanding as of May 17, 2010
Transitional Small Business Disclosure Format (Check one): Yes [ ]; No [X].
Check whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ X] No [ ]
PART I
Item 1. Description of Business.
This annual report contains forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as” may", "should", "expects", "plans”,” anticipates", "believes", "estimates”,” predicts", "potential" or "continue" or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled "Risk Factors”, that may cause our or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.
Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.
Our financial statements are stated in United States Dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles.
In this annual report, unless otherwise specified, all dollar amounts are expressed in United States dollars. All references "common shares” refer to the common shares in our capital stock.
As used in this annual report, the terms "we", "us”,” our", and "Jammin Java" mean Jammin Java Corp.
Business History
Marley was incorporated on September 27, 2004 under its former name “Global Electronic Recovery Corp.” Our resident agent is Empire Stock Transfer of Nevada located at 2470 Saint Rose Parkway, Suite 304 Henderson, Nevada. Prior to the February 25, 2008, we were engaged in the recycling of electronic waste in the city of Los Angeles, California. We commenced limited operations including a feasibility study and the search for an appropriate facility location. We also joined various recycling organizations to assist in the marketing of our recycling facility. As our management conducted due diligence on the electronic waste recycling industry, management realized that this industry did not present the best opportunity for our company to realize value for our shareholders. In an effort to substantiate shareholder value, Marley Coffee then sought to identify, evaluate and investigate various companies and compatible or alternative business opportunities with the intent that, should the opportunity arise, a new business be pursued.
On February 5, 2008 we incorporated a subsidiary named Marley Coffee Inc. On February 25, 2008 we changed our name from” Global Electronic Recovery Corp." to "Marley Coffee Inc." when we merged our subsidiary, Marley Coffee Inc., into our company. Our common stock will be quoted on the NASD Over-the-Counter Bulletin Board under the new symbol "MYCF" effective at the opening of the market on March 7, 2008.
Effective July 13, 2009, we changed our name from "Marley Coffee Inc." to “Jammin Java Corp.” when we merged our subsidiary, Jammin Java Corp., into our company. Our common stock was quoted on the NASD Over-the-Counter Bulletin Board under the new symbol "JAMN" effective at the opening of the market on September 17, 2009.
-3-
Current Business Operations
Jammin Java
In February 2008, we decided to pursue the business of premium roasted coffee to take advantage of the consumer awareness and significant trend toward packaged ground premium and super premium coffees with new Marley Coffee branded entries to the category. We also intend to develop a share of the category and create a leadership position by capitalizing on the success of the Marley name with our new brand and franchise while using Jamaican Blue Mountain as the flagship item. The brand will be “Jammin Java” by Rohan Marley. In addition, we intend to use this opportunity to take advantage of this strong increase in consumer demand by stepping forward and combining name, music and quality coffees to generate interest.
We also intend to produce our own premium organic coffee on the farmland we lease in the Blue Mountain region of Jamaica. Our goal is to manage the Marley Coffee Farm in a manner that ensures economic viability, optimal yields and unrivaled product quality while maintaining the environmental integrity of the ecosystem incompliance with international organic standards.
To achieve our objectives, we will do the following:
|
1.
|
Develop and implement a sustainable fertility management program compliant with international organic standards.
|
|
2.
|
Develop and implement a sustainable pest management program compliant with international organic standards.
|
|
3.
|
Continually review and adjust the installed system for the management of our human and financial resources
|
|
4.
|
Continue the resuscitation of existing coffee trees and restoration of location-specific optimal planting density
|
|
5.
|
Conduct research into sustainable organic agronomic practices and novel marketable coffee blends
|
|
6.
|
Identify and outsource suitable local pulping and roasting facilities with the intent to construct and install washing, pulping
and roasting mechanism that is compliant to international organic standards on site.
|
|
7.
|
Identify and facilitate the sale of secondary cash crops on the local market
|
Our administrative office is located at 375 South Fairfax Avenue Suite #321, Los Angeles California, USA 90036, telephone (323) 316-3456 and our registered statutory office is located at 2470 Saint Rose Parkway, Suite 304 Henderson, Nevada 89074. Our fiscal year end is January 31.
Product Research and Development
We do not anticipate that we will expend any significant funds on research and development over the twelve months ending January 31, 2011.
Employees
Currently, we have no employees other than our officers. We do not have employment contracts with our officers. We are not a party to any collective bargaining agreements. We have not entered into any employment agreements with any of our executives. We anticipate that we will enter into employment agreements without officers when, and if, our revenue production justifies such agreements. We do not currently anticipate that we will hire any employees in the next three months, unless we successfully raise funds necessary to implement our business plan. From time-to-time, we anticipate that we will also use the services of independent contractors and consultants to support our business development. We believe our future success depends in large part upon the continued service of our senior management personnel and our ability to attract and retain highly qualified technical and managerial personnel.
-4-
Purchase or Sale of Equipment
We intend to purchase some equipment to operate our business. We anticipate such expenditures to be approximately $5,000.
RISK FACTORS
Much of the information included in this quarterly report includes or is based upon estimates, projections or other "forward-looking statements". Such forward-looking statements include any projections or estimates made by us and our management in connection with our business operations. While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions, or other future performance suggested herein. We undertake no obligation to update forward-looking statements to reflect events or circumstances occurring after the date of such statements.
Such estimates, projections or other "forward-looking statements” involve various risks and uncertainties as outlined below. We caution readers of this annual report that important factors in some cases have affected and, in the future, could materially affect actual results and cause actual results to differ materially from the results expressed in any such estimates, projections or other "forward-looking statements". In evaluating us, our business and any investment in our business, readers should carefully consider the following factors.
We have no operating history and have maintained losses since inception that we expect to continue into the future. If the losses continue we may go out of business. We have no experience in the proposed line of business, certifications, current customers, or negotiations or agreements with any processing centers or refurbishes
We were incorporated in September 27, 2004 and only just recently began commencing a new business plan. We have only just completed our business plan to grow and roast our own and third party organic coffee. We have not realized any revenues to date. We have no operating history upon which an evaluation of our future success or failure can be made. There is a net loss since inception of $423,591 and also an accumulated deficit of $423,591. We expect to incur losses for the foreseeable future; therefore, we may not be able to achieve profitable operations and we may not even be able to generate any revenues. We will encounter difficulties as an early stage company in the rapidly evolving and highly marketed recycling end of life electronic industry. Therefore, the revenue and income potential of our business model is unproven.
We face substantial competition from established and new companies in our industry. If we are unable to compete with these companies our proposed business will fail.
We face intense competition from established coffee growers and roasters. We may not be able to compete effectively with these companies now or in the future. Many of our potential competitors have significantly greater financial, marketing, technical and other competitive resources, as well as greater name recognition, than we have. As a result, our competitors may be able to adapt more quickly to changes in consumer requirements or may be able to devote greater resources to the promotion and sale of their services. We may not be able to compete successfully with our potential and existing competitors. In addition, competition could increase if new companies enter the market or if existing competitors expand their services. An increase in competition could result in price reductions and loss of market share and could have a material adverse effect on our business, financial condition or results of operations. To be competitive we will need to continue to invest in sales and marketing. We may not have sufficient resources to make such investments necessary to remain competitive. In addition, current and potential competitors have established or may in the future establish collaborative relationships among themselves or with third parties, including third parties with whom we have relationships, to increase the visibility and utility of their services. Accordingly, new competitors or alliances may emerge and rapidly acquire significant market share. If we are unable to compete with companies in the coffee industry, our proposed business will fail and you will lose your entire investment.
-5-
We depend on our key personnel to manage our business effectively in a rapidly changing market. If we are unable to retain our key employees, our business, financial condition and results of operations could be harmed.
Our future success depends to a significant degree on the skills, efforts and continued services of our executive officers and other key sales, marketing and support personnel who have critical industry experience and relationships. If we were to lose the services of one or more of our key executive officers and senior management members, we may not be able to grow our business as we expect, and our ability to compete could be harmed, adversely affecting our business and prospects.
Changes in the government regulation of our coffee farm could harm our business.
Our coffee products are subject to foreign government regulation by the Jamaican Coffee Board and international regulatory bodies. These regulatory bodies could enact regulations which affect our products or the service providers which distribute our products, such as limiting the scope of the service providers' market, capping fees for services provided by them or imposing coffee quality control standards which impact our products.
If we are unable to obtain organic certification, our business may be impaired.
It is proposed that we obtain organic certification for our leased farmland in Jamaica from the certifying agency Certification of Environmental Standards (CERES). If we are unable to obtain certification we may be forced to grow non-organic coffee on our property. This may impair our business plan and force us to buy from third party sources.
We need to continue as a going concern if our business is to succeed, if we do not we will go out of business.
Our independent accountant's report to our audited financial statements for the period ended January 31, 2010 indicates that there are a number of factors that raise substantial doubt about our ability to continue as a going concern. Such factors identified in the report are our accumulated deficit since inception, our failure to attain profitable operations and our dependence upon adequate financing to pay our liabilities. If we are not able to continue as a going concern, it is likely investors will lose their investments.
If we do not obtain additional financing, our business will fail.
Our current operating funds are less than necessary to complete all intended exploration of the property, and therefore we will need to obtain additional financing in order to complete our business plan. As of January 31, 2010 we had cash in the amount of $27,513. We currently have minimal operations and we have no income.
Our business plan calls for significant expenses in connection with the development of our coffee business. We will require additional financing to sustain our business operations if we are not successful in earning revenues once coffee production is complete. We do not currently have any arrangements for financing and we can provide no assurance to investors that we will be able to find such financing if required. Obtaining additional financing would be subject to a number of factors, including the market prices for copper, silver and gold, investor acceptance of our property and general market conditions. These factors may make the timing, amount, terms or conditions of additional financing unavailable to us.
The most likely source of future funds presently available to us is through the sale of equity capital. Any sale of share capital will result in dilution to existing shareholders.
-6-
Because we have commenced limited business operations, we face a high risk of business failure.
We have not yet commenced operations Accordingly, we have no way to evaluate the likelihood that our business will be successful. We were incorporated on September 27, 2004 and have been involved primarily in organizational activities and the development of our coffee farm. We have not earned any revenues as of the date of this prospectus.
Prior to completion of our coffee production stage, we anticipate that we will incur increased operating expenses without realizing any significant revenues. We therefore expect to incur significant losses into the foreseeable future. There is no history upon which to base any assumption as to the likelihood that we will prove successful, and we can provide investors with no assurance that we will generate any operating revenues or ever achieve profitable operations. If we are unsuccessful in addressing these risks, our business will most likely fail.
We lack an operating history and we expect to have losses in the future.
We have not started our proposed business operations or realized any revenues. We have no operating history upon which an evaluation of our future success or failure can be made. Our ability to achieve and maintain profitability and positive cash flow is dependent upon the following:
|
|
·
|
Our ability to operate a profitable coffee farm;
|
|
|
·
|
Our ability to generate revenues; and
|
|
|
·
|
Our ability to reduce farming and marketing costs.
|
Based upon current plans, we expect to incur operating losses in future periods. This will happen because there are expenses associated with the development of our coffee property. We cannot guarantee that we will be successful in generating revenues in the future. Failure to generate revenues will cause us to go out of business.
Item 2. Description of Property.
Our administrative office is located at 375 South Fairfax Avenue Suite 321,Los Angeles, CA 90036 and our telephone number is (323) 100-X. Effective February 15, 2008 Marley Coffee entered into a lease agreement for 52 acres of coffee farmland in the Jamaican Blue Mountains. The term is eight years and has an annual lease payment of $1,000.
On March 31, 2010 the Company entered into an asset purchase and sale agreement (the “Asset Agreement”) and Trade Mark License Agreement (the “License Agreement”) with Marley Coffee LLC (“MCL”), a private limited liability company of which the two directors of the Company have a combined controlling interest.
MCL owns “Marley Coffee” and related trademarks (the “Trademarks”). In accordance with the License Agreement, MCL grants to the Company an exclusive, transferable, sub-licensable, worldwide license to use the Trademarks for the licensed products.
The consideration for the license of the Trademarks is as follows:
|
|
(1)
|
The Company entered into the Asset Agreement to sell all its interests in the development of Marley Coffee trademarks, branding, business plan and farm lease improvements to MCL.
|
|
|
(2)
|
The Company assigns the Farm Lease Agreement to MCL and transfers to MCL all its interest in the Farm Lease Agreement and leasehold improvement on the farm .
|
-7-
|
|
(3)
|
The Company will issue to MCL ten million (10,000,000) shares of common stock of the Company as follows:
|
|
|
-
|
One Million (1,000,000) shares upon the execution of the License Agreement (not issued)
|
|
|
-
|
An additional One Million (1,000,000) shares on each anniversary of the execution of the License Agreement for the following nine years.
|
The farm is located at Chepstowe,Skibo in Portland, Jamaica. The farm is spread out over 52 acres of land. Currently only 12 acres have been identified for coffee production but this will be increased but to a maximum of 30 acres to preserve ecological diversity. Due to the altitude and geographic location of the land on which the farm is located, the coffee produced can be classified as “Blue Mountain Coffee.” At the moment, there are other marketable crops being produced on the farm. These included sheen, cocoa, coconuts, bananas, plantain, oranges etc. which may be sold on the local market.
We have a website address at www.jamminjavacoffee.com.
Item 3. Legal Proceedings.
We know of no material, active or pending legal proceedings against us, nor are we involved as a plaintiff in any material proceedings or pending litigation . There are no proceedings in which any of our directors, officers or affiliates, or any registered beneficial shareholder are an adverse party or has a material interest adverse to us.
Item 4. Submissions of Matters to a Vote of Security Holders.
None.
PART II
Item 5. Market for Common Equity and Related Stockholder Matters.
As of May 17, 2010 there were 32 holders of record of our common stock. As of such date, 98,910,594 common shares were issued and outstanding. Our common stock is quoted on the Over-the-Counter Bulletin Board under the symbol "JAMN”.
Our common shares are issued in registered form. Empire Stock Transfer, Henderson, Nevada 89128-8380 (Telephone: 702-988-1242; Facsimile: 702-988-1244) is the registrar and transfer agent for our common shares.
There are no outstanding options or warrants to purchase, or securities convertible into, our common shares. We have not declared any dividends since incorporation and do not anticipate that we will do so in the foreseeable future. Although there are no restrictions that limit the ability to pay dividends on our common shares, our intention is to retain future earnings for use in our operations and the expansion of our business.
Recent Sales of Unregistered Securities
In December 2009 the Company issued 1,200,000 common shares at $0.075 per share for total proceeds of $90,000, of which $50,000 was received after the year end.
-8-
Item 6. Selected Financial Data.
Not applicable
Item 7. Management Discussion and Analysis and Plan of Operation.
Results of Operations.
For the year ending January 31, 2010 we posted losses of $129,487 as compared to losses of $200,686 for the year ended January 31, 2009. Inception through January 31, 2010 losses total $423,591. General and administrative expenses are the principal component of our losses since inception.
Financial Condition, Liquidity and Capital Resources
At January 31, 2010, we had cash of $27,513.
As of January 31, 2010, we had a working capital deficit of $17,371. We will require financing before can implement our scaled back business plan and generate significant revenues. We intend to raise additional capital required to implement our business plan.
At January 31, 2010 our total assets were $28,807 comprised of cash and property and equipment.
As of January 31, 2010, our total liabilities were $44,884 comprised of third party payables and related party payables. This compares to our total liabilities of $17,137 at January 31, 2009.
Cash Requirements
Over the next twelve months we intend to use funds to commence marketing our service, leasehold improvements and for general and administrative expenditures, as follows:
Estimated Funding Required During the Next Twelve Months
|
General and Administrative
|
$ | 55,000 | ||
|
Operations
|
||||
|
Marketing/Advertising
|
$ | 25,000 | ||
|
Working Capital
|
$ | 50,500 | ||
|
Total
|
$ | 130,500 |
We will attempt to meet any additional needs through sales of our securities in secondary offerings or private placements. We have no agreements in place to do this at this time.
There are no assurances that we will be able to obtain additional funds required for our continued operations. In such event that we do not raise sufficient additional funds by secondary offering or private placement, we will consider alternative financing options, if any, or be forced to scale down or perhaps seven cease our operations.
-9-
Recently Issued Accounting Standards
The adoption of recently issued pronouncements is not expected to have a material effect on our financial position or results of operations.
APPLICATION OF CRITICAL ACCOUNTING POLICIES
Our financial statements and accompanying notes are prepared in accordance with generally accepted accounting principles in the United States. Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. These estimates and assumptions are affected by management's application of accounting policies. We believe that understanding the basis and nature of the estimates and assumptions involved with the following aspects of our financial statements is critical to an understanding of our financials.
Cash and Cash Equivalents
The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents.
Agricultural Costs
Recurring agricultural costs include costs relating to irrigation, fertilizing, seedling, utility, farming wages and other ongoing crop and land maintenance activities. Recurring agricultural costs are capitalized as inventory and expensed when the crops are harvested and sold. Non-recurring agricultural costs, primarily comprising of soil and farm improvements and other long-term crop growing costs that benefit multiple harvests, including amortization of farm equipment are capitalized as property and equipment and amortized over the estimated production period.
Property and Equipment
Property and equipment are stated at cost plus the fair value of asset retirement obligations, if any, less accumulated depreciation. Depreciation is computed by the straight-line method over the estimated useful lives of these assets. The Company reviews long-lived assets to be held and used for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If an evaluation of recoverability is required, the estimated undiscounted future cash flows directly associated with the asset are compared to the asset’s carrying amount. If this comparison indicates that there is impairment, the amount of the impairment is calculated by comparing the carrying value to discounted expected future cash flows or comparable market values, depending on the nature of the asset.
Farm equipment is amortized over its estimated useful life for farm production and recorded as farming costs.
Revenue Recognition
Revenue will be recognized at the point title and risk of loss is transferred to the customer, collection is reasonably assured, persuasive evidence of an arrangement exists and the price is fixed or determinable. As of January 31, 2010 the Company has not generated sales.
-10-
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the balance sheet. Actual results could differ from those estimates.
Basic Loss per Share
Basic loss per share has been calculated based on the weighted average number of shares of common stock outstanding during the period.
Income Taxes
The asset and liability approach is used to account for income taxes by recognizing deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax basis of assets and liabilities. The Company records a valuation allowance to reduce the deferred tax assets to the amount that is more likely than not to be realized.
Financial Instruments
The Company's financial instruments consist of cash, prepaid expenses, accounts payable and due to related party. Unless otherwise noted, it is management's opinion that the Company is not exposed to significant interest, currency or credit risks arising from these financial instruments. The fair values of these financial instruments approximate their carrying values, unless otherwise noted.
Foreign Currency Translation
The financial statements are presented in United States dollars. In accordance with Financial Accounting Standards Board Accounting Standards Codification (“FASB ASC”) 830 Foreign Currency Matters, foreign denominated monetary assets and liabilities are translated into their United States dollar equivalents using foreign exchange rates which prevailed at the balance sheet date. Non monetary assets and liabilities are translated at the exchange rates prevailing at the transaction date. Revenue and expenses are translated at average rates of exchange during the year. Gains or losses resulting from foreign currency transactions are included in results of operations.
Item 8. Financial Statements.
Our financial statements are stated in United States Dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles.
The report of Independent Registered Public Accounting Firm, LBB & Associates Ltd., LLP for the audited financial statements as of January 31, 2010 and 2009, and for the years ended January 31, 2010 and 2009 and the period from September 27, 2004 (Inception) through January 31, 2010 is included herein immediately preceding the audited financial statements.
Jammin Java Corp. :
|
|
·
|
Report of Independent Registered Public Accounting Firm, dated May 14, 2010.
|
|
|
·
|
Balance Sheets at January 31, 2010 and 2009.
|
|
|
·
|
Statements of Operations for the years ended January 31, 2010 and 2009, and for the period from September 27, 2004 (inception) to January 31, 2010.
|
|
|
·
|
Statements of Stockholders Equity (Deficit) from September 27, 2004 (inception) to January 31, 2010.
|
|
|
·
|
Statements of Cash Flows for the years ended January 31, 2010 and 2009, and for the period from September 27, 2004 (inception) to January 31, 2010.
|
|
|
·
|
Notes to Financial Statements
|
-11-
Report of Independent Registered Public Accounting Firm
To the Board of Directors of
Jammin Java Corp.
(A Development Stage Company)
Los Angeles, California
We have audited the accompanying balances sheets of Jammin Java Corp. (the “Company”) as of January 31, 2010 and 2009, and the related statements of operations, stockholders' equity (deficit), and cash flows for each of the years then ended and for the period from September 27, 2004 (inception) through January 31, 2010. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Jammin Java Corp. as of January 31, 2010 and 2009, and the results of its operations and its cash flows for each of the years then ended and the period from September 27, 2004 (inception) through January 31, 2010 in conformity with accounting principles generally accepted in the United States of America.
As discussed in Note 1 to the financial statements, the Company's absence of significant revenues, recurring losses from operations, and its need for additional financing in order to fund its projected loss in 2011 raise substantial doubt about its ability to continue as a going concern. The 2010 financial statements do not include any adjustments that might result from the outcome of this uncertainty.
LBB & Associates Ltd., LLP
Houston, Texas
May 14, 2010
F-1
JAMMIN JAVA CORP.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS
|
January 31, 2010
|
January 31, 2009
|
|||||||
|
ASSETS
|
||||||||
|
Current assets
|
||||||||
|
Cash
|
$ | 27,513 | $ | 8,197 | ||||
|
Prepaid expenses
|
- | 5,600 | ||||||
|
Total current assets
|
27,513 | 13,797 | ||||||
|
Property and equipment, net
|
1,294 | 76,750 | ||||||
|
Total assets
|
$ | 28,807 | $ | 90,547 | ||||
|
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
|
||||||||
|
Current liabilities
|
||||||||
|
Accounts payable
|
$ | 6,973 | $ | 5,685 | ||||
|
Advances from related parties
|
37,911 | 11,452 | ||||||
|
Total current liabilities
|
44,884 | 17,137 | ||||||
|
Total liabilities
|
44,884 | 17,137 | ||||||
|
Commitments
|
||||||||
|
STOCKHOLDERS' EQUITY (DEFICIT):
|
||||||||
|
Common stock, $.001 par value, 5,112,861,525 shares authorized,
|
||||||||
|
98,910,594 and 97,710,594 shares issued and outstanding
|
||||||||
|
as of January 31, 2010 and 2009 respectively
|
98,910 | 97,710 | ||||||
|
Additional paid-in capital
|
358,604 | 269,804 | ||||||
|
Subscription receivable
|
(50,000 | ) | - | |||||
|
Deficit accumulated during the development stage
|
(423,591 | ) | (294,104 | ) | ||||
|
Total Stockholders' Equity (Deficit)
|
(16,077 | ) | 73,410 | |||||
|
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
|
$ | 28,807 | $ | 90,547 | ||||
See accompanying notes to financial statements.
F-2
|
JAMMIN JAVA CORP.
|
|
(A DEVELOPMENT STAGE COMPANY)
|
|
STATEMENTS OF OPERATIONS
|
|
Years Ended January 31, 2010 and 2009
|
|
And the period from September 27, 2004 (Inception) through January 31, 2010
|
|
Year Ended
January 31, 2010 |
Year Ended
January 31, 2009 |
Inception through
January 31,2010
|
||||||||||
|
Expenses:
|
||||||||||||
|
General and administrative
|
$ | 47,628 | $ | 197,603 | $ | 337,378 | ||||||
|
Farming cost
|
813 | 3,083 | 5,167 | |||||||||
|
Impairment of property and equipment
|
81,046 | - | 81,046 | |||||||||
|
Net loss
|
$ | (129,487 | ) | $ | (200,686 | ) | $ | (423,591 | ) | |||
|
Net loss per share:
|
||||||||||||
|
Basic and diluted
|
$ | (0.00 | ) | $ | (0.00 | ) | ||||||
|
Weighted average shares outstanding:
|
||||||||||||
|
Basic and diluted
|
97,855,252 | 136,931,925 | ||||||||||
See accompanying notes to financial statements.
F-3
JAMMIN JAVA CORP.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
Periods from September 27, 2004 (Inception) through January 31, 2010
|
Common stock
|
|
Deficit accumulated | ||||||||||||||||
|
Shares
|
Amount
|
Additional
paid-in capital |
Subscription
Receivable |
during the
development stage |
Total
|
|||||||||||||
|
Issuance of common stock for cash to founders
|
213,514,461 | $ | 213,514 | $ | (210,514 | ) | $ | - | $ | - | $ | 3,000 | ||||||
|
Net loss
|
- | - | - | - | (40 | ) | (40 | ) | ||||||||||
|
Balance, January 31, 2005
|
213,514,461 | 213,514 | (210,514 | ) | - | (40 | ) | 2,960 | ||||||||||
|
Imputed interest
|
- | - | 402 | - | - | 402 | ||||||||||||
|
Net loss
|
- | - | - | - | (11,549 | ) | (11,549 | ) | ||||||||||
|
Balance, January 31, 2006
|
213,514,461 | 213,514 | (210,112 | ) | - | (11,589 | ) | (8,187 | ) | |||||||||
|
Issuance of common stock for cash
|
46,980,300 | 46,980 | 19,030 | - | - | 66,010 | ||||||||||||
|
Imputed interest
|
- | - | 602 | - | - | 602 | ||||||||||||
|
Net loss
|
- | - | - | - | (13,180 | ) | (13,180 | ) | ||||||||||
|
Balance, January 31, 2007
|
260,494,761 | 260,494 | (190,480 | ) | - | (24,769 | ) | 45,245 | ||||||||||
|
Issuance of common stock for cash
|
375,000 | 375 | 124,625 | - | - | 125,000 | ||||||||||||
|
Net loss
|
- | - | - | - | (68,649 | ) | (68,649 | ) | ||||||||||
|
Balance, January 31, 2008
|
260,869,761 | 260,869 | (65,855 | ) | - | (93,418 | ) | 101,596 | ||||||||||
|
Issuance of common stock for cash
|
375,000 | 375 | 124,625 | - | - | 125,000 | ||||||||||||
|
Shares returned to treasury
|
(163,534,167 | ) | (163,534 | ) | 163,534 | - | - | - | ||||||||||
|
Subscription received
|
- | - | 47,500 | - | - | 47,500 | ||||||||||||
|
Net loss
|
- | - | - | - | (200,686 | ) | (200,686 | ) | ||||||||||
|
Balance, January 31, 2009
|
97,710,594 | 97,710 | 269,804 | - | (294,104 | ) | 73,410 | |||||||||||
|
Issuance of common stock for cash
|
1,200,000 | 1,200 | 88,800 | (50,000 | ) | - | 40,000 | |||||||||||
|
Net loss
|
- | - | - | - | (129,487 | ) | (129,487 | ) | ||||||||||
|
Balance, January 31, 2010
|
98,910,594 | $ | 98,910 | $ | 358,604 | $ | (50,000 | ) | $ | (423,591 | ) | $ | (16,077 | ) | ||||
See accompanying notes to financial statements.
F-4
|
JAMMIN JAVA CORP.
|
||||||||||||
|
(A DEVELOPMENT STAGE COMPANY)
|
||||||||||||
|
STATEMENTS OF CASH FLOWS
|
||||||||||||
|
Years Ended January 31, 2010 and 2009
|
||||||||||||
|
and the period from September 27, 2004 (Inception) through January 31, 2010
|
||||||||||||
|
Year
|
Year
|
Inception
|
||||||||||
|
Ended
|
Ended
|
through
|
||||||||||
|
January 31,
|
January 31,
|
January 31,
|
||||||||||
|
2010
|
2009
|
2010
|
||||||||||
|
CASH FLOWS FROM OPERATING ACTIVITIES:
|
||||||||||||
|
Net loss
|
$ | (129,487 | ) | $ | (200,686 | ) | $ | (423,591 | ) | |||
|
Adjustments to reconcile net loss to cash used by operating activities:
|
||||||||||||
|
Imputed interest on shareholder advance
|
- | - | 1,004 | |||||||||
|
Depreciation
|
1,552 | 1,268 | 3,091 | |||||||||
|
Impairment of property and equipment
|
81,046 | - | 81,046 | |||||||||
|
Net change in:
|
||||||||||||
|
Prepaid expenses
|
5,600 | 30,607 | - | |||||||||
|
Accounts payable
|
1,288 | (13,202 | ) | 6,973 | ||||||||
|
CASH FLOWS USED IN OPERATING ACTIVITIES
|
(40,001 | ) | (182,013 | ) | (331,477 | ) | ||||||
|
CASH FLOWS USED IN INVESTING ACTIVITIES
|
||||||||||||
|
Purchase of property and equipment
|
(7,142 | ) | (63,956 | ) | (85,431 | ) | ||||||
|
CASH FLOWS USED IN INVESTING ACTIVITIES
|
(7,142 | ) | (63,956 | ) | (85,431 | ) | ||||||
|
CASH FLOWS FROM FINANCING ACTIVITIES
|
||||||||||||
|
Shareholder advances, net
|
26,459 | (8,136 | ) | 37,911 | ||||||||
|
Proceeds from sale of common stock
|
40,000 | 125,000 | 359,010 | |||||||||
|
Subscription received
|
- | 47,500 | 47,500 | |||||||||
|
CASH FLOWS PROVIDED BY FINANCING
|
66,459 | 164,364 | 444,421 | |||||||||
|
NET INCREASE (DECREASE) IN CASH
|
19,316 | (81,605 | ) | 27,513 | ||||||||
|
Cash, beginning of period
|
8,197 | 89,802 | - | |||||||||
|
Cash, end of period
|
$ | 27,513 | $ | 8,197 | $ | 27,513 | ||||||
|
SUPPLEMENTAL CASH FLOW INFORMATION
|
||||||||||||
|
Cash paid for interest
|
$ | - | $ | - | $ | - | ||||||
|
Cash paid for income taxes
|
$ | - | $ | - | $ | - | ||||||
|
Non-cash transactions
|
||||||||||||
|
Common shares issued for subscription receivable
|
$ | 50,000 | $ | - | $ | 50,000 | ||||||
See accompanying notes to financial statements.
F-5
JAMMIN JAVA CORP.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 2010
NOTE 1 –NATURE OF OPERATIONS AND BASIS OF PRESENTATION
Jammin Java Corp. (formerly Marley Coffee Inc.) (the "Company") was incorporated as Global Electronic Recovery Corp on September 27, 2004 under the laws of Nevada to engage in the business of electronic waste recycling. Pursuant to a re-evaluation of its business plan, the Company, in October 2007 commenced producing its own premium organic coffee on leased farmland in the Blue Mountain region of Jamaica. On February 5, 2008 the Company created a subsidiary called Marley Coffee Inc. On February 25, 2008 the Company changed its name from Global Electronic Recovery Corp. to Marley Coffee Inc. when the Company merged with its subsidiary Marley Coffee Inc. to pursue the business of premium roasted coffee branded Marley Coffee.
On July 3, 2009 the Company created a subsidiary called Jammin Java Corp. (“ Jammin Java”). Effective July 13, 2009, the Company changed its name from Marley Coffee Inc. to Jammin Java Corp. when the Company merged the subsidiary.
In March 2010, the Company changed its business plan from coffee production to coffee distribution per the asset and licensing agreements entered into, as described in more detail in note 8.
These financial statements have been prepared on the basis of a going concern which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As at January 31, 2010, the Company has incurred significant losses since inception. Because of its recurring losses, the Company will require additional working capital to develop its business operations.
There are no assurances that the Company will be able to either (1) achieve a level of revenues adequate to generate sufficient cash flow from operations; or (2) obtain additional financing through either private placement, public offerings and/or bank financing necessary to support the Company's working capital requirements. No assurance can be given that additional financing will be available, or if available, will be on terms acceptable to the Company. If adequate working capital is not available, the Company may not renew its operations.
These conditions raise substantial doubt about the Company's ability to continue as a going concern. These financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Cash and Cash Equivalents
The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents.
F-6
Agricultural Costs
Recurring agricultural costs include costs relating to irrigation, fertilizing, seedling, utility, farming wages and other ongoing crop and land maintenance activities. Recurring agricultural costs are capitalized as inventory and expensed when the crops are harvested and sold. Non-recurring agricultural costs, primarily comprising of soil and farm improvements and other long-term crop growing costs that benefit multiple harvests, including amortization of farm equipment are capitalized as property and equipment and amortized over the estimated production period.
Inventories
Inventories are valued at the lower of cost or market. Costs related to inventory are determined on the first-in, first-out basis. Specific identification and average cost methods are also used primarily for certain packing materials and operating supplies.
Property and Equipment
Property and equipment are stated at cost plus the fair value of asset retirement obligations, if any, less accumulated depreciation. Depreciation is computed by the straight-line method over the estimated useful lives of these assets. The Company reviews long-lived assets to be held and used for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If an evaluation of recoverability is required, the estimated undiscounted future cash flows directly associated with the asset are compared to the asset’s carrying amount. If this comparison indicates that there is an impairment, the amount of the impairment is calculated by comparing the carrying value to discounted expected future cash flows or comparable market values, depending on the nature of the asset.
Farm equipment is amortized over its estimated useful life for farm production and recorded as farming costs.
Impairment of Long-Lived Assets
In accordance with Financial Accounting Standards Board Accounting Standards Codification (“FASB ASC”) 360, Property, Plant, and Equipment, long-lived assets to be held and used are reviewed for impairment on an annual basis or whenever events or changes in circumstances indicate that the carrying amount of such asset may not be recoverable. The determination of recoverability of long-lived assets is based on an estimate of undiscounted future cash flows resulting from the use of the asset or its disposition. Measurement of an impairment loss for long-lived assets that management expects to hold and use is based on the fair value of the asset. Long-lived assets to be disposed of are reported at the lower of carrying amount or net realizable value. See footnote 3 for impairment of certain property and equipment recognized during the year ending January 31, 2010.
Revenue Recognition
Revenue will be recognized at the point title and risk of loss is transferred to the customer, collection is reasonably assured, persuasive evidence of an arrangement exists and the price is fixed or determinable. As of January 31, 2010 the Company has not generated sales.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the balance sheet. Actual results could differ from those estimates.
F-7
Basic Loss per Share
Basic loss per share has been calculated based on the weighted average number of shares of common stock outstanding during the period.
Income Taxes
The Company follows Accounting Standards Codification (“ASC”) 740 “Income Taxes”. The asset and liability approach is used to account for income taxes by recognizing deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax basis of assets and liabilities. The Company records a valuation allowance to reduce the deferred tax assets to the amount that is more likely than not to be realized.
Financial Instruments
The Company's financial instruments consist of cash, prepaid expenses, accounts payable and due to related party. Unless otherwise noted, it is management's opinion that the Company is not exposed to significant interest, currency or credit risks arising from these financial instruments. The fair values of these financial instruments approximate their carrying values, unless otherwise noted.
Foreign Currency Translation
The financial statements are presented in United States dollars. In accordance with ASC 830 “Foreign Currency Matters”, foreign denominated monetary assets and liabilities are translated into their United States dollar equivalents using foreign exchange rates which prevailed at the balance sheet date. Non monetary assets and liabilities are translated at the exchange rates prevailing at the transaction date. Revenue and expenses are translated at average rates of exchange during the year. Gains or losses resulting from foreign currency transactions are included in results of operations. The Company’s functional currency is the United States dollar.
Recent Accounting Pronouncements
Effective August 1, 2009, we adopted the FASB ASC 105, “Generally Accepted Accounting Principles.” ASC 105 establishes the FASB Accounting Standards Codification™ (“Codification”) as the source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in conformity with GAAP for SEC registrants. All guidance contained in the Codification carries an equal level of authority. The Codification supersedes all existing non-SEC accounting and reporting standards. The FASB will now issue new standards in the form of Accounting Standards Updates (“ASUs”). The FASB will not consider ASUs as authoritative in their own right. ASUs will serve only to update the Codification, provide background information about the guidance and provide the bases for conclusions on the changes in the Codification. References made to FASB guidance have been updated for the Codification throughout this document.
Effective May 1, 2009, we adopted guidance issued by the FASB that requires disclosure about the fair value of financial instruments for interim financial statements of publicly traded companies, which is included in the Codification in ASC 825, “Financial Instruments.” The adoption of FASB ASC 825 did not have an impact on our results of operations or financial condition.
Effective January 1, 2008, we adopted ASC 820, “Fair Value Measurements and Disclosures,” with respect to recurring financial assets and liabilities. We adopted ASC 820 on February 1, 2009, as it relates to nonrecurring fair value measurement requirements for nonfinancial assets and liabilities. ASC 820 defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. Our adoption of the standard had no impact on our financial results.
F-8
Effective June 30, 2009, we adopted guidance issued by the FASB and included in ASC 855, “Subsequent Events,” which establishes general standards of accounting for and disclosures of events that occur after the balance sheet date but before the financial statements are issued.
NOTE 3 – PROPERTY AND EQUIPMENT
Property and equipment consist of farm expansion and farm equipment. The farm equipment is amortized using straight-line method over their estimated useful life of two years. The farm expansion was to be amortized beginning when the first coffee crop is ready for harvest over the then estimated useful life (see Note 8).
|
January 31, 2010
|
January 31, 2009
|
|||||||
|
Farm
|
$ | - | $ | 73,905 | ||||
|
Equipment
|
2,218 | 4,384 | ||||||
| 2,218 | 78,289 | |||||||
|
Less: accumulated depreciation
|
(924 | ) | (1,539 | ) | ||||
| $ | 1,294 | $ | 76,750 | |||||
Depreciation expense for the years ending January 31, 2010 and 2009 was $1,552 and $1,268, respectively.
Due to the Company’s lack of development on the farm in 2010, management considered the farm and related equipment to be impaired as at January 31, 2010 and expense of $81,046 was recognized.
NOTE 4 – RELATED PARTY TRANSACTIONS
At January 31, 2008, $19,588 was owed to a director of the Company for the Company’s expenditures. During the year ended January 31, 2009, a net repayment of $8,136 was made to this director, reducing the amount owed to this director at January 31, 2009 to $11,452.
During the year ended January 31, 2010, the director advanced additional $26,459 to the Company, increasing the amount owed to this director at January 31, 2010 to $37,911.
The advance is unsecured, non-interest bearing and has no specific terms of repayment.
On October 23, 2007, the Company completed a 23 (approximate) for one (1) forward stock split of the Company's authorized, issued and outstanding shares of common stock. As a result, the Company's authorized capital increased from 75,000,000 to 1,704,287,175 shares of common stock with a par value of $0.001 each, and issued and outstanding share capital increased from 3,660,100 shares of common stock to 86,831,587 shares of common stock.
F-9
On January 10, 2010, the Company completed a three for one forward stock split of the Company's authorized, issued and outstanding shares of common stock. As a result, the Company's authorized capital increased from 1,704,287,175 to 5,112,861,525 shares of common stock with a par value of $0.001 each, and issued and outstanding share capital increased from 32,970,198 shares of common stock to 98,910,594 shares of common stock.
All references in these financial statements to number of common shares, price per share and weighted average number of common shares outstanding prior to the 23:1 and 3:1 forward splits have been adjusted to reflect these stock splits on a retroactive basis, unless otherwise noted.
In December 2007, the Company issued 375,000 shares of the Company’s common stock at $0.3333 per share for gross proceeds of $125,000.
In February 2008, the Company received $125,000 as subscription for private placement of 375,000 shares of the Company’s common stock at $0.3333 per share. The related common shares were issued in May, 2008.
In April, 2008, David O’Neill transferred 40,980,297 common shares to Rohan Marley for no consideration, and transferred 9,000,000 common shares to Shane Whittle for cash consideration of $20,000. During the same period, Rohan Marley transferred 3,079,521 shares to Jonathan Forster for no consideration, and David O’Neill returned 163,534,167 common shares to the treasury of the Company for no consideration.
In November 2008, the Company received $47,500 as subscription for private placement of 114,000 shares of the Company’s common stock at $0.42 per share. The related common shares were not issued by January 31, 2010.
In June 2009, a Director, David O’Neill, and Rohan Marley entered into a Stock Transfer Agreement whereby Mr. Marley transferred his 37,906,776 shares of common stock in the Company, representing 38.7% of the Company’s outstanding shares of common stock, to David O’Neill.
As a result of the above transaction, Mr. O’Neill obtained control of approximately 38.3% of the Company’s voting shares.
In December, 2009 the Company issued 1,200,000 common shares at $0.075 per share for total proceeds of $90,000, of which $50,000 was received after the year end.
NOTE 6 – INCOME TAXES
No net provision for refundable Federal income tax has been made in the accompanying statement of operations because no recoverable taxes were paid previously. Similarly, no deferred tax asset attributable to the net operating loss carry forward has been recognized, as it is not deemed likely to be realized.
The provision for Federal income tax consists of the following:
|
Year ended
January 31, 2010
|
Year ended
January 31, 2009
|
|||||||
|
Federal income tax attributable to:
|
||||||||
|
Current operations
|
$ | 44,000 | $ | 68,000 | ||||
|
Less, change in valuation allowance
|
(44,000 | ) | (68,000 | ) | ||||
|
Net provision
|
$ | - | $ | - | ||||
F-10
The cumulative tax effect at the expected rate of 34% of significant items comprising the Company’s net deferred tax amount is as follows:
|
Year ended
January 31, 2010
|
Year ended
January 31, 2009
|
|||||||
|
Deferred tax asset attributable to:
|
||||||||
|
Net operating loss carryover
|
$ | 144,000 | $ | 100,000 | ||||
|
Valuation allowance
|
(144,000 | ) | (100,000 | ) | ||||
|
Net deferred tax asset
|
$ | - | $ | - | ||||
At January 31, 2010, the Company had an unused net operating loss carryover approximating $424,000 that is available to offset future taxable income, which expires beginning in 2025.
There is a risk of loss of the Company’s net operating loss carryover due to recent changes in ownership of the Company.
NOTE 7 – COMMITMENTS
On October 31, 2007, the Company entered into a farm lease agreement (the “Farm Lease Agreement”) with a Company owned by one of the directors, HM Estates (the “Landowner”), of Chepstowe Portland Farm, Jamaica to grow coffee on a farm situated in the Blue Mountain Coffee region of Jamaica. The term of the lease is from February 15, 2008 to February 15, 2015, renewable with extension agreement signed four month before the end of the lease term. The lease payment is $1,000 per year with the first payment due upon execution of the agreement and the subsequent annual payments due on every December 15. The cost of the lease is recorded as farming expense. The lease agreement was assigned to Marley Coffee LLC on March 31, 2010 (Note 8).
In November 2007, the Company entered into a car lease for the benefit of one of the directors. The lease expires in October 2011 requiring monthly payments of approximately $400 per month. The Company’s lease obligation was terminated in May, 2009.
NOTE 8 – SUBSEQUENT EVENTS
On March 31, 2010 the Company entered into an asset purchase and sale agreement (the “Asset Agreement”) and Trade Mark License Agreement (the “License Agreement”) with Marley Coffee LLC (“MCL”), a private limited liability company of which the two directors of the Company have a combined controlling interest.
MCL owns “Marley Coffee” and related trademarks (the “Trademarks”). In accordance with the License Agreement, MCL grants to the Company an exclusive, transferable, sub-licensable, worldwide license to use the Trademarks for the licensed products.
The consideration for the license of the Trademarks is as follows:
|
|
(4)
|
The Company entered into the Asset Agreement to sell all its interests in the development of Marley Coffee trademarks, branding, business plan and farm lease improvements to MCL.
|
|
|
(5)
|
The Company assigns the Farm Lease Agreement to MCL and transfers to MCL all its interest in the Farm Lease Agreement and leasehold improvement on the farm (Note 7).
|
|
|
(6)
|
The Company will issue to MCL ten million (10,000,000) shares of common stock of the Company as follows:
|
|
|
-
|
One Million (1,000,000) shares upon the execution of the License Agreement (not yet issued)
|
|
|
-
|
An additional One Million (1,000,000) shares on each anniversary of the execution of the License Agreement for the following nine years.
|
On April 22, 2010, the Board of Directors approved Anh Tran as the President of the Company after the resignation of Shane Whittle.
F-11
Item 9. Changes In and Disagreements With Accountants on Accounting and Financial Disclosure.
None
Item 9A. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
As of January 31, 2010, our principal executive officer and principal financial officer evaluated the effectiveness of the Company's disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended). This evaluation of the disclosure controls and procedures included controls and procedures designed to ensure that information required to be disclosed by the Company in its reports that it files or submits under the Act is recorded, processed, summarized and reported within the time periods specified in the Security and Exchange Commission’s rules and forms. Such disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Act is accumulated and communicated to the Company's management, including its principal executive and principal financial officers, to allow timely decisions regarding required disclosure. Based on the foregoing, our principal executive and financial officers concluded that our disclosure controls and procedures were not effective as of January 31, 2010 as we failed to provide the disclosure required by Item 307 of Regulation S-K. To remediate this in the future our management intends to more carefully ensure that all aspects of our disclosure conform with Rule 13a-15 -- Issuer's Disclosure Controls and Procedures Related to Preparation of Required Reports.
Management’s Annual Report on Internal Control over Financial Reporting
Internal control over financial reporting refers to the process designed by, or under the supervision of, our Chief Executive Officer and Chief Financial Officer, and effected by our board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles, and includes those policies and procedures that:
(1) Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets;
(2) Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorization of our management and directors; and
(3) Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisitions, use or disposition of our assets that could have a material effect on the financial statements.
-12-
Internal control over financial reporting cannot provide absolute assurance of achieving financial reporting objectives because of its inherent limitations. Internal control over financial reporting is a process that involves human diligence and compliance and is subject to lapses in judgment and breakdowns resulting from human failures. Internal control over financial reporting also can be circumvented by collusion or improper management override. Because of such limitations, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitations are known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk. Management is responsible for establishing and maintaining adequate internal control over financial reporting for the Company.
Management has used the framework set forth in the report entitled Internal Control-Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission, known as COSO, to evaluate the effectiveness of our internal control over financial reporting. Based on this assessment, management has concluded that our internal control over financial reporting was effective as of January 31, 2010.
This Annual Report does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting. Our internal control over financial reporting was not subject to attestation by our independent registered public accounting firm pursuant to temporary rules of the SEC that permit us to provide only management’s report in this Annual Report.
There has been no change in our internal controls over financial reporting during our most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.
Item 9B. Other Information
None.
PART III
Item 10. Directors, Executive Officers, Promoters and Control Persons; Compliance with Section16 (a) of the Exchange Act.
Directors and Executive Officers, Promoters and Control Persons
Our directors, executive officers and other significant employees, their ages, positions held and duration each person has held that position, are as follows:
|
Name
|
Position Held with the Company
|
Age
|
Date First Elected
or Appointed
|
|
Shane Whittle
|
CEO, Treasurer, Secretary & Director
|
34
|
August 22, 2007
|
|
Rohan Marley
|
Director
|
34
|
March 7, 2008
|
|
Anh Tran
|
President and Director
|
33
|
April 22, 2010
|
-13-
Business Experience
The following is a brief account of the education and business experience of each director, executive officer and key employee during at least the past five years, indicating each person's principal occupation during the period, and the name and principal business of the organization by which he or she was employed.
Shane Whittle, Chief Executive Officer, Treasurer, Secretary and Director
Mr. Whittle is currently the CEO of Privatekits.com a provider of health diagnostic kits and the President of Whittle Investments, a real estate development company.
Rohan Marley, Director
Rohan Marley is the son of late reggae artist Bob Marley. Rohan Marley is heavily involved in all of the family businesses including 56 Hope Road Music, Bob Marley Music, Zion Rootswear as well as various land and resort holdings across the globe. Rohan Marley founded Tuff Gong Clothing in 2004.
Ahn Tran, President, Director
Mr. Tran is a management consultant and the former President of Greencine.com.
Involvement in Certain Legal Proceedings
Our directors, executive officers and control persons have not been involved in any of the following events during the past five years:
|
|
1.
|
any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;
|
|
|
2.
|
any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);
|
|
|
3.
|
being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; or
|
|
|
4.
|
being found by a court of competent jurisdiction (in a civil action), the Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated.
|
Audit Committee Financial Expert
Our Board of Directors has determined that it does not have a member of its audit committee that qualifies as an "audit committee financial expert" as defined in Item 401(e) of Regulation S-B, and is” independent" as the term is used in Item 7(d)(3)(iv) of Schedule 14Aunder the Securities Exchange Act of 1934, as amended.
We believe that the members of our Board of Directors are collectively capable of analyzing and evaluating our financial statements and understanding internal controls and procedures for financial reporting. In addition, we believe that retaining an independent director who would qualify as an” audit committee financial expert" would be overly costly and burdensome and is not warranted in our circumstances given the early stages of our development and the fact that we have generated limited revenues to date.
-14-
Code of Ethics
Effective October 30, 2005, our Company's board of directors adopted a Code of Business Conduct and Ethics that applies to, among other persons, our company’s president (being our principal executive officer) and our company’s secretary (being our principal financial and accounting officer and controller), as well as persons performing similar functions. As adopted, our Code of Business Conduct and Ethics sets forth written standards that are designed to deter wrongdoing and to promote:
|
|
1.
|
honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships;
|
|
|
2.
|
full, fair, accurate, timely, and understandable disclosure in reports and documents that we file with, or submit to, the Securities and Exchange Commission and in other public communications made by us;
|
|
|
3.
|
compliance with applicable governmental laws, rules and regulations;
|
|
|
4.
|
the prompt internal reporting of violations of the Code of Business Conduct and Ethics to an appropriate person or persons identified in the Code of Business Conduct and Ethics; and
|
|
|
5.
|
accountability for adherence to the Code of Business Conduct and Ethics.
|
Our Code of Business Conduct and Ethics requires, among other things, that all of our company's personnel shall be accorded full access to our president and secretary with respect to any matter which may arise relating to the Code of Business Conduct and Ethics. Further, all of our company's personnel are to be accorded full access to our company's board of directors if any such matter involves an alleged breach of the Code of Business Conduct and Ethics by our president or secretary.
In addition, our Code of Business Conduct and Ethics emphasizes that all employees, and particularly managers and/or supervisors, have a responsibility for maintaining financial integrity within our company, consistent with generally accepted accounting principles, and federal, provincial and state securities laws. Any employee who becomes aware of any incidents involving financial or accounting manipulation or other irregularities, whether by witnessing the incident or being told of it, must report it to his or her immediate supervisor or to our company's president or secretary. If the incident involves an alleged breach of the Code of Business Conduct and Ethics by the president or secretary, the incident must be reported to any member of our board of directors. Any failure to report such inappropriate or irregular conduct of others is to be treated as a severe disciplinary matter. It is against our company policy to retaliate against any individual who reports in good faith the violation or potential violation of our company's Code of Business Conduct and Ethics by another
Our Code of Business Conduct and Ethics is filed herewith with the Securities and Exchange Commission as Exhibit 14.1 to this annual report. We will provide a copy of the Code of Business Conduct and Ethics to any person without charge, upon request. Requests can be sent to: Marley Coffee Inc., Suite 321 357 South Fairfax Avenue, Los Angeles California 90036.
Section 16(a) Beneficial Ownership Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our executive officers and directors and persons who own more than 10% of registered class of our equity securities to file with the Securities and Exchange Commission initial statements of beneficial ownership, reports of changes in ownership and annual reports concerning their ownership of our common stock and other equity securities, on Forms 3, 4 and 5 respectively. Executive officers, directors and greater than 10% shareholders are required by the Securities and Exchange Commission regulations to furnish us with copies of all Section 16(a) reports they file.
To the best of our knowledge, all executive officers, directors and greater than 10% shareholders filed the required reports in a timely manner.
-15-
Item 11. Executive Compensation.
Neither of our executive officers received any cash or other compensation during the fiscal years ended January 31, 2010 and 2009.
There were no grants of stock options or stock appreciation rights made during the fiscal years ended January 31, 2010 and 2009 to our executive officers and directors. There were no stock options outstanding as at January 31, 2010. To date, we have not granted stock options or stock appreciation rights to any of our employees, consultants, directors or executive officers.
We intend to continue to pay consulting fees to our directors and officers in the future as we determine necessary. In addition, we intend to compensate our directors in the future with stock options to purchase common shares as awarded by our board of directors or (as to future stock options) a compensation committee that may be established. Directors are entitled to reimbursement for reasonable travel and other out-of-pocket expenses incurred in connection with attendance at meetings of our board of directors. Our board of directors may also award special remuneration to any director undertaking any special services on our behalf other than services ordinarily required of a director. No director received and/or accrued any compensation for their services as a director, including committee participation and/or special assignments.
There are no formal management agreements with our directors or executive officers.
We have no plans or arrangements in respect of remuneration received or that may be received by our executive officers to compensate such officers in the event of termination of employment (as a result of resignation, retirement, change of control) or a change of responsibilities following a change of control, where the value of such compensation exceeds $60,000 per executive officer.
There are no arrangements or plans in which we provide pension, retirement or similar benefits for directors or executive officers. We have no material bonus or profit sharing plans pursuant to which cash or non-cash compensation is or may be paid to our directors or executive officers, except that stock options may be granted at the discretion of the Board of Directors or a committee thereof.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
Beneficial Ownership
The following table sets forth, as of May 15, 2010, certain information with respect to the beneficial ownership of our common shares by each shareholder known to us to be the beneficial owner of 5% of our common shares, and by each of our officers and directors. Each person has sole voting and investment power with respect to the common shares, except as otherwise indicated. Beneficial ownership consists of a direct interest in the common shares, except as otherwise indicated.
|
Name and Address of
Beneficial Owner
|
Amount and Nature of
Beneficial Ownership
|
Percentage
of Class(1)
|
|
David O’Neil
|
37,906,776 common shares
|
38%
|
|
Shane Whittle
|
9,000,000
|
9%
|
|
Directors and Officers (as a group)
|
46,906,776 common shares
|
47%
|
(1) Based on 98,910,594 shares outstanding as of May 17, 2010.
-16-
Changes in Control
We are unaware of any contract or other arrangement the operation of which may at a subsequent date result in a change in control of our company.
Item 13. Certain Relationships and Related Transactions.
None.
Item 14. Exhibits.
Exhibits required by Item 601 of Regulation S-B
(3) Articles of Incorporation and By-laws
3.1 Articles of Incorporation (incorporated by reference from our Registration Statement on Form SB-2, filed on August 3, 2005).
3.2 Bylaws (incorporated by reference from our Registration Statement on Form SB-2, filed on August 3, 2005).
(31) Section302 Certification
31.1 Certification of Anh Tran.
(32) Section906 Certification
32.1 Certification of Shane Whittle.
Item 15. Principal Accountant Fees and Services
Audit Fees
The aggregate fees billed by LBB & Associates Ltd., LLP for professional services rendered for the audit of our annual financial statements included in our Annual Report on Form 10-K for the fiscal year ended January 31, 2010 were $7,010.
Audit Related Fees
For the fiscal year ended January 31, 2010, the aggregate fees billed for assurance and related services by LBB & Associates Ltd., LLP relating to the performance of the audit of our financial statements which are not reported under the caption "Audit Fees" above, was $16,510.
-17-
Tax Fees
For the fiscal year ended January 31, 2010, the aggregate fees billed by LBB& Associates Ltd., LLP for other non-audit professional services, other than those services listed above, totaled $0.
We do not use LBB & Associates Ltd., LLP for financial information system design and implementation. These services, which include designing or implementing a system that aggregates source data underlying the financial statements or generates information that is significant to our financial statements, are provided internally or by other service providers. We do not engage LBB & Associates Ltd., LLP to provide compliance outsourcing services.
Effective May 6, 2003, the Securities and Exchange Commission adopted rules that require that before LBB & Associates Ltd., LLP is engaged by us to render any auditing or permitted non-audit related service, the engagement be:
|
|
·
|
approved by our audit committee (which consists of entire Board of Directors); or
|
|
|
·
|
entered into pursuant to pre-approval policies and procedures established by the audit committee, provided the policies and procedures are detailed as to the particular service, the audit committee is informed of each service, and such policies and procedures do not include delegation of the audit committee's responsibilities to management.
|
The audit committee pre-approves all services provided by our independent auditors. The pre-approval process has just been implemented in response to the new rules, and therefore, the audit committee does not have records of what percentage of the above fees were pre-approved. However, all of the above services and fees were reviewed and approved by the audit committee either before or after the respective services were rendered.
The audit committee has considered the nature and amount of fees billed bulb & Associates, L.L.P and believes that the provision of services for activities unrelated to the audit is compatible with maintaining LBB &Associates Ltd., LLP’s independence.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
JAMMIN JAVA CORP.
By: /s/Shane Whittle
Shane Whittle Chief Executive Officer, Treasurer, Secretary and Director
Date: May 17, 2010
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By: /s/Shane Whittle
Shane Whittle Chief Executive Officer, Treasurer, Secretary and Director (Principal Executive Officer)
Date: May 17, 2010
By: /s/Anh Tran
Anh Tran, President and Director
Date: May 17, 2010
-18-