Stockhouse Short Report: Short sellers jammin on JAMN
5/26/2011 2:10:28 PM | Peter Kennedy
Investors take a bath as heavily promoted Jammin Java attracts the attention of regulators, drawing a cease trading order in British Columbia for failure to file financial reports.
Jammin Java Corp. (OTC:BB: JAMN, Stock Forum), a heavily promoted coffee company that was recently cease traded by the British Columbia Securities Commission, has seen its stock price crash after rising all the way to $6.35 from under 20 cents last November.
At Wednesday’s $2.07 close, the company has a market value of $146 million, based on the roughly 71 million shares outstanding, meaning that many investors have taken a bath while short sellers have been making a killing.
Statements filed with the U.S. Securities & Exchange Commission say Jammin Java set out to go head to head with Starbucks Corp. (NASDAQ: SBUX, Stock Forum), Seattle’s Best, Tully’s and other giants in the retail coffee industry. But the Los Angeles, California-based company, has historically generated only $42,000 in sales, including $1,307 for the year ended January 31, 2011.
According to regulatory filings, Jammin Java had only $2,467 in cash as of January 31, 2011, meaning they probably couldn’t afford one month’s rent let alone run a business. The company’s principal executive office is located at 8200 Wilshire Blvd, in the Beverly Hills area of Los Angeles.
The stock market tumble came just before the BCSC issued a cease trading order on Friday, May 20th, 2011 saying the company had failed to file numerous documents, including financial statements from as far back as October 31, 2008, as well as news releases and material change reports that should have contained details of changes to the company’s corporate structure.
Those changes include:
A trademark licensing agreement with Marley Coffee, a private company headed by Rohan Marley, the son of the Jamaican reggae music legend Bob Marley. Rohan Marley remains a company director with 14.8 million shares or 21% of the company, according to regulatory filings.
A financing deal with Straight Path Capital under which SPC purchased 6.25 million common shares of Jammin at 40 cents a share for proceeds of $2.5 million. Straight Path Capital was incorporated in the Republic of the Marshall Island, regulatory filings show.
BCSC spokesman Richard Gilhooley said the cease trading order was issued in B.C. under rule 51-509 which requires U.S. over-the-counter market issuers with substantial connections to B.C. to make certain required disclosures. This rule does not apply in other Canadian provinces.
The order was issued on the first anniversary of the resignation of Shane Whittle, a B.C. stock promoter, and former Jammin Java chief executive officer, treasurer, secretary and director.
He was replaced by Anh Tran, who prior to his appointment was involved in online movie distribution as CEO of San Francisco-based GreenCine.com, regulatory filings show.
Investors who bought in at the peak of the recent rally must now wait and hope that the company can suddenly deliver on the original business plan which involved trying to capitalize on the Marley name, and create other product lines.
Meanwhile, in recent regulatory filings, Jammin Java said it has become aware of “unauthorized and unaffiliated internet stock promoters who are promoting short-term investments in the company’s common stock in their stock reports’’ and on their websites.
Jammin Java said these promoters have been paid by third parties “with whom the company has no knowledge or affiliation.’’
For example, a paid advertisement on the Beacon Equity website, lists five reasons why Jammin Java is getting so much attention.
A second paid advertisement noted that many of Beacon’s members were making huge gains on the stock, pointing out that Jammin has a knack for rolling out press releases and news to keep its trading active.
Those reports don’t mention the company’s miniscule sales revenue or the fact that the company posted a net loss of $151,235 for the year ended January 31, 2011, an increase from the year earlier loss of $129, 487.
The company said people should thoroughly research any investment prior to making a financial commitment and or seek the advice of a licensed broker prior to investing in this or any other stock.
It said investors should never rely upon unsolicited email or phone calls, or third party “stock reports’’ or websites recommending extreme profits in only a short period of time in connection with any investment decision.
ABOUT THE AUTHOR
Peter Kennedy is a Stockhouse reporter and web content editor.
Jammin Java Corp. Continues to Secure Additional Distributors Across North America
2011-06-16 14:30 ET - News Release
LOS ANGELES, June 16, 2011 /PRNewswire/ -- Jammin Java Corp. (OTC Bulletin Board: JAMN) continues to secure more and more coffee distributors, after its successful exhibits at the National Automatic Merchandising Association and the National Restaurant Association tradeshows. These distributors span across North America, both online and offline.
"We are extremely pleased with all of the deals we've closed after these two shows," says Rohan Marley, Chairman of Jammin Java Corp. "After most tradeshows, people collect business cards and it takes months to actually get business done. With the management team we have in place, we are quickly closing deals and generating purchase orders in an industry that usually has a long sales cycle. We have additional key distribution deals that we plan on closing in the coming weeks. After over a year of honing the perfect roast profile, developing our product offerings, and building our story, this company has really started to get its distribution legs."
"We've been looking at Rohan and his company for a while now, but after seeing all the excitement and tasting the coffee at the National Restaurant Association show, we knew we had to act quickly to get this into our market in the Philadelphia area, so we've launched online at coffeecow.com and we're ready to launch this product in our OCS market," says Joe Horn, President of Springtime Coffee.
Since the two tradeshows, the company has distribution deals in place with Markcol Distribution (www.markcol.com - Toronto, Canada), Blue Tiger Coffee (www.bluetigercoffee.com - Seattle, WA), Distillata (www.distillata.com - Ohio), Good as Gold Coffee (www.goodasgold.com - Worcester, MA) and Vend X Distributing (Auburn, WA).
The company has also picked up additional online retailers such as www.Shoffee.com and www.coffeecow.com.
For distribution in your area, please visit our new distributors' websites. For new distribution opportunities, please e-mail the company at firstname.lastname@example.org.
About Jammin Java Corp.
Jammin Java Corp. is a US-based company providing premium roasted coffee on a wholesale level to the service, hospitality, office coffee service and big box store industry. Jammin Java is a fully reporting company quoted on the OTCBB under the symbol JAMN. For more information, please visit the company's website at www.jamminjavacoffee.com or to purchase the coffee go to www.MarleyCoffee.com.
The Company's SEC filings are available at http://www.sec.gov.
Jammin Java Corp.
8200 Wilshire Blvd. Suite 200
Beverly Hills, CA 90211
SOURCE Jammin Java Corp.
Stockhouse Short Report:
Investors not Jammin on this stock
Regulators in the U.S. have launched an investigation into Jammin Java, its officers and directors in connection with an alleged “pump and dump” scheme.
Dear Stockhouse Member,
Jammin Java Corp. (OTC:BB: JAMN, Stock Forum), a heavily promoted coffee company that was recently cease traded by the British Columbia Securities Commission, is being investigated by regulators in the United States, Stockhouse has learned.
As noted in a May 26 Stockhouse Short Report, Jammin Java has been a disaster for investors who bought in when the stock was trading around the $6 level.
Having taken a nosedive to 66 cents, the company currently has a market cap of $50.1 million, based on 76.7 million shares outstanding. The 52-week range for the stock is $6.35 and 17 cents.
A quick rebound seems unlikely now that the U.S. Securities and Exchange Commission is investigating Jammin Java and its officers and directors in connection with an alleged “pump-and-dump” scheme.
(“Pump and dump” schemes generally involved the touting of a company’s stock through false and misleading statements to the marketplace. After pumping the stock, the perpetrators make huge profits by selling their cheap stock into the market.)
According to documents filed in a U.S. District Court in Oakland Calif., SEC staff is looking into allegations that thousands of investors were defrauded out of millions of dollars when they purchased shares of Jammin Java at artificially inflated prices, allegedly based on online newsletters that were widely disseminated through blast emails, websites and investor message boards, court documents show.
The stock price rose from 17 cents in December 2010 to $6.35 on May 12, 2011 and then plummeted to under a $1 even though Jammin Java’s public filings portray the firm as a shell company that had generated no revenues and had an accumulated deficit of $511,760.
Jammin’s chairman Rohan Marley is the son of the late reggae star Bob Marley. The company’s address is Beverly Hills, California.
SEC staff are now seeking information about who is responsible for newsletters that allegedly touted Jammin Java’s stock, and have obtained information indicating that the email address email@example.com potentially belongs to an alleged touter in the “pump and dump” scheme.
Lawsuits filed by “John Doe” plaintiffs who own free e-mail accounts from Google Inc. (NASDAQ: GOOG, Stock Forum) seek to block subpoenas to the search engine company sent to uncover their identities, Bloomberg News Service has reported.
John Doe’s is attempting to quash the subpoenas on the basis that the SEC hasn’t offered any evidence to support its claims, or shown why John Doe’s real identity is necessary to the investigation, court documents show.
On September 9, Jammin Java issued a statement saying that neither Jammin, nor anyone affiliated with the company has participated in any “pump and dump” or other unlawful scheme designed to unlawfully inflate the company’s stock.
“Jammin expressly repudiates any such fraudulent conduct and strongly condemns any unlawful activity,’’ the company said in a press release.
Jammin also said it is co-operating with the SEC investigation.
News of the SEC probe comes after the BCSC issued a cease trading order on May 20th, 2011, noting that the company had failed to file numerous documents, including financial statements from as far back as October 31, 2008, as well as news releases and material change reports that should have contained details of changes to the company’s corporate structure.
At the time, BCSC spokesman Richard Gilhooley said the cease trading order was issued in B.C. under rule 51-509 which requires U.S. over-the-counter market issuers with substantial connections to B.C. to make certain required disclosures. (Click on the link for details).
The cease trade order in B.C. remains in effect, but does not apply in other Canadian provinces.
Jammin Java Corp
Office located in this bldg at Suite 200 - 8200 Wilshire Blvd Los Angeles