DENVER, Oct. 06, 2016 (GLOBE NEWSWIRE) — Jammin Java Corp. (d/b/a Marley Coffee) (OTCQB:JAMN) (“Marley Coffee”, “we”, “us” and the “company”), the sustainably grown, ethically farmed and artisan-roasted premium coffee company, has issued the following letter to its shareholders to discuss its current state of business, corporate filing, and provide updates on its litigation against Rohan Marley, Hope Road Merchandising (“HRM”) and Fifty-Six Hope Road Music Limited (“56HR”).
First of all, I want to thank our shareholders for their patience, as we have not sent out an update in quite some time. These have been difficult times, and our resources and energy have been focused on our operations. We are doing everything we can to restructure the company so that it has legs for the future. This includes streamlining our business and cutting costs while maintaining as many accounts as possible. Additionally, we’ve been working on expanding the business outside of the Marley Coffee name. Meanwhile, we have tried to find a viable business solution for the current litigation, but to date, 56HR has not cooperated in finding a business solution.
Since this litigation began, we have been both maintaining and restructuring our business. We have cut costs across the board, closed our main office and reduced our head count. Our focus is on the maintenance of accounts to ensure we have sufficient cash flow to keep the business afloat while seeking out growth options.
We are not looking at bankruptcy restructuring as an option at the moment, as we are trying to sustain the business, grow a new division, and continue with our litigation plan. We have worked with our two largest debt holders to enable us to keep the business going. We have several other smaller debt holders that we have structured a payment plan with, and some we have not. We cannot guarantee that a debt holder will not try to put us into involuntary bankruptcy, but the company has no intention at this time of filing for any type of bankruptcy.
The litigation is ongoing with a March 2017 trial date now set. At this time, the litigation has not resulted in the company being ordered to stop doing business before trial. We are seeking damages and a full legal recognition of the validity of our license with 56 Hope Road.
We believe that the company is currently undervalued. Though we have lost some accounts, we still have many accounts that we are maintaining both in the US and internationally. Additionally, we have 6 years left in a 10-year minimum deal with the Marley Coffee branded coffee houses in South Korea. The remaining 6 years is worth ~$1 million in licensing revenue to the company.
Credit is still tight, though we have been able to structure a credit deal with National Coffee Roasters for our ground and whole bean products. We are seeking additional funds to help with single serve capsule fulfillment.
The executives and some employees are being paid in primarily stock options, and may sell shares over the next few weeks in order to recoup compensation. As noted in our previous filings, the vast majority of shares the current executives have received over the last two years have not been sold.
We are currently late to file our second fiscal quarter Form 10-Q. Though we have been working diligently over the past few weeks to get caught up, we are late due to the lack of resources to file. Our objective is to file within the next few weeks and catch up to file fiscal Q3 on time.
Again, we are in a very fluid state and things are changing quickly. We have several convertible debt holders converting their position at the moment. We recommend that all shareholders review our risk factors in our latest Form 10-Q and Form 10-K, all of which continue to be material.
Non-Marley Coffee Products
We are developing a line of non Marley Coffee related products under the Jammin Java name, which we will distribute through our existing channels with a planned November launch date. This line of products will feature premium coffee in a number of formats, including ground, whole bean, and Keurig®, Nespresso®, and Dolce Gusto® compatible single serve capsules.
We have already discussed our new brand with current and potential customers and have received positive feedback and commitments to order once we launch. These products will not require the company to pay licensing fees. We should start generating revenues from these sales starting mid-November, and we plan to break out non-Marley Coffee sales in the upcoming 10-Q.
We are looking at a potential acquisition of an EBITDA positive roasting and distribution company, and may have investors willing to assist with financing in order to do so. We cannot guarantee that a transaction shall be completed, but we have a term sheet that we have presented and are negotiating. Over the last 4 years we have proven that with limited capital, our management can grow a business in a hyper-competitive industry. We have built a robust distribution network with strong connections to our customers and their buyers, and we believe that we can succeed in growing another brand as we have shown with Marley Coffee. If we are able to get our letter of intent signed, we will disclose that in a form 8-K. We are also looking at other opportunities to further expand our portfolio with additional brands, and will provide updates as these talks progress.
Our objective has and still remains to reach a business solution instead of pushing forward with litigation. We have been active in trying to bring buyers to the table to talk to 56HR about long-term business options. We have built tremendous value in the Marley Coffee brand and will work diligently to create maximum value for shareholders and creditors through all available opportunities. We have moved the public litigation documents to jamminjavacorp.com should shareholders wish to see the pleadings.
We have recently engaged new counsel. Colorado-based firm MRD Law will serve as lead counsel. Los Angeles-based firm Michelman and Robinson, LLP will serve as local counsel. The new firms work on a contingency basis, which we hope will both reduce costs and accelerate the possibility of resolution. Though our ideal objective is a business solution, we believe that this litigation is a significant asset. The company was defrauded, and we are seeking monetary damages in the tens of millions of dollars. Our counsel has the depth and resources to take this battle for the long haul if need be.
Even though we have been put in a very difficult position, we will keep fighting to not only stay in business, but to restructure and pivot to grow the company further. As usual, we remain open to answer questions. Please feel free to call the company or email me.
Brent Toevs, CEO
This Press Release includes forward-looking statements. See disclaimer here.
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