Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Oct. 31, 2013 | Dec. 11, 2013 | |
Document And Entity Information | ' | ' |
Entity Registrant Name | 'JAMMIN JAVA CORP. | ' |
Trading Symbol | 'JAMN | ' |
Entity Central Index Key | '0001334586 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 31-Oct-13 | ' |
Amendment Flag | 'false | ' |
Current Fiscal Year End Date | '--01-31 | ' |
Is Entity a Well-known Seasoned Issuer? | 'No | ' |
Is Entity a Voluntary Filer? | 'No | ' |
Is Entity's Reporting Status Current? | 'Yes | ' |
Entity Filer Category | 'Smaller Reporting Company | ' |
Entity Common Stock, Shares Outstanding | ' | 102,360,125 |
Document Fiscal Period Focus | 'Q3 | ' |
Document Fiscal Year Focus | '2014 | ' |
BALANCE_SHEETS_Unaudited
BALANCE SHEETS (Unaudited) (USD $) | Oct. 31, 2013 | Jan. 31, 2013 |
Current Assets: | ' | ' |
Cash | $806,414 | ' |
Restricted cash | ' | 65,382 |
Accounts receivable | 2,661,906 | 415,721 |
Notes receivable - related party | 2,724 | ' |
Inventory | 2,249,684 | ' |
Prepaid expenses | 217,979 | 173,264 |
Other current assets | 26,160 | 24,387 |
Total Current Assets | 5,964,867 | 678,754 |
Property and equipment, net | 182,668 | 19,705 |
License agreement | 669,167 | 705,667 |
Deferred financing costs | ' | 43,490 |
Other assets | 15,716 | ' |
Total Assets | 6,832,418 | 1,447,616 |
Current Liabilities: | ' | ' |
Accounts payable | 1,201,255 | 762,663 |
Payable to Ironridge in common shares | 1,395,025 | ' |
Accounts payable - related party | ' | 2,258 |
Accrued Royalty - related party | 162,245 | ' |
Accrued expenses | 137,352 | 92,586 |
Accrued expenses - related party | 21,000 | 30,073 |
Bank Overdraft | ' | 8,931 |
Notes payable - related party | ' | 9,454 |
Secured promissory note - net of discount of $-0- and $29,925, respectively | ' | 320,075 |
Notes payable | 4,965 | ' |
Derivative liability | ' | 120,006 |
Total Current Liabilities | 2,921,842 | 1,346,046 |
Total Liabilities | 2,921,842 | 1,346,046 |
Stockholders' Equity: | ' | ' |
Common stock, $.001 par value, 5,112,861,525 shares authorized; 95,388,136 and 79,373,546 shares issued and outstanding, as of October 31, 2013 and January 31, 2013, respectively | 95,388 | 79,377 |
Additional paid-in capital | 13,386,283 | 7,081,011 |
Accumulated deficit | -9,571,095 | -7,058,818 |
Total Stockholders' Equity | 3,910,576 | 101,570 |
Total Liabilities and Stockholders' Equity | $6,832,418 | $1,447,616 |
BALANCE_SHEETS_Unaudited_Paren
BALANCE SHEETS (Unaudited) (Parenthetical) (USD $) | Oct. 31, 2013 | Jan. 31, 2013 |
Statement of Financial Position [Abstract] | ' | ' |
Secured promissory note, discount | $0 | $29,925 |
Common stock, par value | $0.00 | $0.00 |
Common stock, shares authorized | 5,112,861,525 | 5,112,861,525 |
Common stock, shares issued | 95,388,136 | 79,373,546 |
Common stock, shares outstanding | 95,388,136 | 79,373,546 |
STATEMENTS_OF_OPERATIONS_Unaud
STATEMENTS OF OPERATIONS (Unaudited) (USD $) | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2013 | Oct. 31, 2012 | Oct. 31, 2013 | Oct. 31, 2012 | |
Income Statement [Abstract] | ' | ' | ' | ' |
Revenue | $2,193,118 | $536,055 | $4,615,605 | $1,405,154 |
Cost of sales: | ' | ' | ' | ' |
Cost of sales products | 1,382,067 | 382,741 | 2,833,587 | 1,110,002 |
Total costs of sales | 1,382,067 | 382,741 | 2,833,587 | 1,110,002 |
Gross Profit | 811,051 | 153,314 | 1,782,018 | 295,152 |
Operating Expenses: | ' | ' | ' | ' |
Compensation and benefits | 686,241 | 567,668 | 1,373,394 | 1,778,397 |
Selling and marketing | 15,777 | 191,566 | 139,709 | 494,338 |
General and administrative | 758,635 | 237,774 | 1,627,383 | 731,546 |
Impairment of license | ' | 36,000 | ' | 36,000 |
Total operating expenses | 1,460,653 | 1,033,008 | 3,140,486 | 3,040,281 |
Other income (expense): | ' | ' | ' | ' |
Other expense (Including loss on extinguishment of liabilities of $1,120,593) | -728,705 | -11,200 | -1,044,891 | -11,200 |
Interest income | ' | 48 | ' | 461 |
Interest (expense) | -244 | -53,896 | -108,918 | -69,285 |
Total other income (expense) | -728,949 | -65,048 | -1,153,809 | -80,024 |
Net Loss | ($1,378,551) | ($944,742) | ($2,512,277) | ($2,825,153) |
Net loss per share: | ' | ' | ' | ' |
Basic and diluted loss per share | ($0.01) | ($0.01) | ($0.03) | ($0.04) |
Weighted average common shares outstanding - basic and diluted | 96,466,602 | 77,618,723 | 90,255,429 | 77,037,802 |
STATEMENTS_OF_OPERATIONS_Unaud1
STATEMENTS OF OPERATIONS (Unaudited) (Parenthetical) (USD $) | 9 Months Ended | |
Oct. 31, 2013 | Oct. 31, 2012 | |
Income Statement [Abstract] | ' | ' |
Loss on extinguishment of liabilities | $1,120,593 | ' |
STATEMENTS_OF_CASH_FLOWS_Unaud
STATEMENTS OF CASH FLOWS (Unaudited) (USD $) | 9 Months Ended | |
Oct. 31, 2013 | Oct. 31, 2012 | |
Cash Flows From Operating Activities: | ' | ' |
Net loss | ($2,512,277) | ($2,825,153) |
Adjustments to reconcile net loss to net cash used in operating activities: | ' | ' |
Common stock issued for services | 860,840 | 137,501 |
Share-based employee compensation | 741,104 | 1,462,613 |
Depreciation | 7,003 | 4,456 |
Amortization of license agreement | 36,500 | ' |
Amortization of debt discount and deferred financing | 43,490 | 52,761 |
Loss on extinguishment of liabilities | 1,120,593 | ' |
Impairment of license | ' | 36,000 |
Changes in: | ' | ' |
Accounts receivable | -2,246,185 | -352,489 |
Notes receivable - related party | -2,724 | ' |
Inventory | -2,249,684 | ' |
Prepaid expenses and other current assets | -46,488 | 15,700 |
Other assets - long term | -15,716 | ' |
Accounts payable | 5,346,350 | 455,914 |
Accrued expenses | 35,693 | -56,174 |
Bank Overdraft | -8,931 | ' |
Derivative liability | -120,006 | 71,050 |
Net cash provided by (used in) operating activities | 989,562 | -997,821 |
Cash Flows Used in Investing Activities: | ' | ' |
Purchases of property and equipment | -169,966 | -16,129 |
Restricted cash | 65,382 | -12,819 |
Net cash (used in) investing activities | -104,584 | -28,948 |
Cash Flows From Financing Activities: | ' | ' |
Common stock issued for cash | 196,000 | ' |
Repayment on notes payable - related party | -11,825 | -31,560 |
Advances from related parties | 2,371 | 2,500 |
Proceeds from sale of common stock | 50,000 | ' |
Repayment on promissory note | -350,000 | 350,000 |
Payment of financing costs | ' | -63,700 |
Financing on short term debt | 34,890 | -57,288 |
Net cash (used in) provided by financing activities | -78,564 | 199,952 |
Net change in cash | 806,414 | -826,817 |
Cash at beginning of period | ' | 835,878 |
Cash at end of period | 806,414 | 301,551 |
Supplemental Cash Flow Information: | ' | ' |
Cash paid for interest | 54,103 | 103 |
Non-Cash Transactions: | ' | ' |
Financed insurance policy | 12,414 | 15,280 |
Extinguishment of debt for stock | $4,747,771 | ' |
Basis_of_Presentation
Basis of Presentation | 9 Months Ended |
Oct. 31, 2013 | |
Basis Of Presentation | ' |
Basis of Presentation | ' |
Note 1. Basis of Presentation | |
The accompanying unaudited interim financial statements of Jammin Java Corp. (the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission (“SEC”) and should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s latest Annual Report filed with the SEC on Form 10-K. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year or any other future period. Notes to the financial statements that would substantially duplicate the disclosures contained in the audited financial statements for the most recent fiscal year as reported in the Company’s Annual Report on Form 10-K have been omitted. The accompanying balance sheet at January 31, 2013 has been derived from the audited balance sheet at January 31, 2013 contained in such Form 10-K. | |
As used in this Quarterly Report, the terms “we,” “us,” “our,” “Jammin Java” and the “Company” mean Jammin Java Corp., unless otherwise indicated. All dollar amounts in this Quarterly Report are in U.S. dollars unless otherwise stated. |
Business_Overview_and_Summary_
Business Overview and Summary of Accounting Policies | 9 Months Ended | |
Oct. 31, 2013 | ||
Business Overview And Summary Of Accounting Policies | ' | |
Business Overview and Summary of Accounting Policies | ' | |
Note 2. Business Overview and Summary of Accounting Policies | ||
Jammin Java, doing business as Marley Coffee, is a United States (U.S.)-based company that provides sustainably grown, ethically farmed and artisan roasted gourmet coffee through multiple U.S. and international distribution channels, using the Marley Coffee brand name. U.S. and international grocery retail channels have become the Company’s largest revenue channels, followed by online retail, office coffee services (referred to herein as OCS), food service outlets and licensing. The Company intends to continue to develop these revenue channels and achieve a leadership position in the gourmet coffee space by capitalizing on the global recognition of the Marley name through the licensing of the Marley Coffee trademarks. | ||
Reclassifications. Certain prior period amounts have been reclassified to conform with the current period presentation for comparative purposes. | ||
Use of Estimates in Financial Statement Preparation. The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, as well as certain financial statement disclosures. While management believes that the estimates and assumptions used in the preparation of the financial statements are appropriate, actual results could differ from those estimates. | ||
Fair Value. The Company has adopted a single definition of fair value, a framework for measuring fair value and expanded disclosures concerning fair value. In this valuation, the exchange price is the price in an orderly transaction between market participants to sell an asset or transfer a liability at the measurement date and fair value is a market-based measurement and not an entity-specific measurement. | ||
The Company utilizes the following hierarchy in fair value measurements: | ||
· | Level 1 – Inputs use quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. | |
· | Level 2 – Inputs use other inputs that are observable, either directly or indirectly. These inputs include quoted prices for similar assets and liabilities in active markets as well as other inputs such as interest rates and yield curves that are observable at commonly quoted intervals. | |
· | Level 3 – Inputs are unobservable inputs, including inputs that are available in situations where there is little, if any, market activity for the related asset or liability | |
Cash and Cash Equivalents. The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents. As of October 31, 2013, the Company had $806,414 of cash equivalents. Additionally, no interest income was recognized for the three and nine months ended October 31, 2013. As of October 31, 2013, the Company held no auction rate securities. | ||
Revenue Recognition. Revenue is derived from the sale of coffee products and is recognized on a gross basis upon shipment. All revenue is recognized when (i) persuasive evidence of an arrangement exists; (ii) the service or sale is completed; (iii) the price is fixed or determinable; and (iv) the ability to collect is reasonably assured. | ||
The Company utilizes third parties for the production and fulfillment of orders placed by customers. The Company, acting as principal, takes title to the product and assumes the risks of ownership; including, the risks of loss for collection, delivery and returns. | ||
Allowance for Doubtful Accounts. The Company does not require collateral from its customers with respect to accounts receivable. The Company determines any required allowance by considering a number of factors, including the length of time accounts receivable are past due. The Company’s policy is to provide reserves for accounts receivable when they become uncollectible. Historically, the Company has experienced minimal losses from collections. Accordingly, the Company has determined that no allowance for doubtful accounts was required at October 31, 2013. | ||
Inventories. Inventories are stated at the lower of cost or market. Cost is computed using weighted average cost, which approximates actual cost, on a first-in, first-out basis. Inventories on hand are evaluated on an on-going basis to determine if any items are obsolete or in excess of future needs. Items determined to be obsolete are reserved for. The Company provides for the possible inability to sell its inventories by providing an excess inventory reserve. As of October 31, 2013 the Company determined that no reserve was required. | ||
Property and Equipment. Equipment is stated at cost less accumulated depreciation and amortization. Maintenance and repairs, as incurred, are charged to expense. Renewals and enhancements which extend the life or improve existing equipment are capitalized. Upon disposition or retirement of equipment, the cost and related accumulated depreciation are removed and any resulting gain or loss is reflected in operations. Depreciation is provided using the straight-line method over the estimated useful lives of the assets, which are three years. | ||
Depreciation was $3,251 and $7,003 for the three and nine months ended October 31, 2013, respectively. Depreciation was $746 and $4,456 for the three and nine months ended October 31, 2012, respectively. | ||
Impairment of Long-Lived Assets. Long-lived assets consist of a license agreement and property and equipment. The license agreement is reviewed for impairment at least annually whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable (see Note 5). Determination of recoverability is based on an estimate of undiscounted future cash flows resulting from the use of the asset. In the event that such cash flows are not expected to be sufficient to recover the carrying amount of the assets, the assets are written down to their estimated fair values. Management evaluated the carrying value of long-lived assets including the license and determined that no impairment existed at October 31, 2013. | ||
Stock-Based Compensation. Pursuant to the provisions of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 718-10, “Compensation – Stock Compensation,” which establishes accounting for equity instruments exchanged for employee service, we utilize the Black-Scholes option pricing model to estimate the fair value of employee stock option awards at the date of grant, which requires the input of highly subjective assumptions, including expected volatility and expected life. Changes in these inputs and assumptions can materially affect the measurement of estimated fair value of our share-based compensation. These assumptions are subjective and generally require significant analysis and judgment to develop. When estimating fair value, some of the assumptions will be based on, or determined from, external data and other assumptions may be derived from our historical experience with stock-based payment arrangements. The appropriate weight to place on historical experience is a matter of judgment, based on relevant facts and circumstances. | ||
Common stock issued for services to non-employees is valued at (i) the market value of the stock on the date of issuance or (ii) the value of the services, whichever is more clearly determinable. If the total value exceeds the par value of the stock issued, the value in excess of the par value is added to the additional paid-in-capital account. We estimate volatility of our publicly-listed common stock by considering historical stock volatility. | ||
Income Taxes. The Company follows ASC 740, Income Taxes. Deferred tax assets or liabilities are recorded to reflect the future tax consequences of temporary differences between the financial reporting basis of assets and liabilities and their tax basis at each reporting period. These amounts are adjusted, as appropriate, to reflect enacted changes in tax rates expected to be in effect when the temporary differences reverse. A valuation allowance is provided when it is more likely than not that some portion or all of a deferred tax asset will not be realized. | ||
Earnings or Loss Per Common Share. Basic earnings per common share equals net earnings or loss divided by the weighted average of shares outstanding during the year. Diluted earnings per share includes the impact on dilution from all contingently issuable shares, including options, warrants and convertible securities. The common stock equivalents from contingent shares are determined by the treasury stock method. The Company incurred a net loss for the nine months ended October 31, 2013 and 2012, respectively. In addition, basic and diluted earnings per share for such periods are the same because all potential common equivalent shares would be anti-dilutive including the 17,160,000 outstanding options as of October 31, 2013. | ||
Recently Issued Accounting Pronouncements. Management has considered all recent accounting pronouncements issued since the last audit of our financial statements. The Company’s management believes that these recent pronouncements will not have a material effect on the Company’s financial statements. |
Going_Concern_and_Liquidity
Going Concern and Liquidity | 9 Months Ended |
Oct. 31, 2013 | |
Going Concern And Liquidity | ' |
Going Concern and Liquidity | ' |
Note 3 – Going Concern and Liquidity | |
These financial statements have been prepared by management assuming that the Company will be able to continue as a going concern and contemplate the realization of assets and the satisfaction of liabilities in the normal course of business. These financial statements do not include any adjustments to the recoverability of recorded asset amounts or the amounts or classifications of liabilities that might be necessary should the Company be unable to continue as a going concern. | |
The Company incurred a net loss of $2,512,277 for the nine months ended October 31, 2013, and has an accumulated deficit since inception of $9,571,095. The Company has a history of losses and has only recently begun to generate revenue as part of its principal operations. These conditions raise substantial doubt about the Company's ability to continue as a going concern. The operations of the Company have primarily been funded by the issuance of its common stock. The Company may, in the future, need to secure additional funds through future equity sales. No assurance can be given that additional financing will be available, or if available, will be on terms acceptable to the Company. | |
The Company’s ability to meet its obligations in the ordinary course of business is dependent upon its ability to sell its products directly to end-users and through distributors, establish profitable operations through increased sales and decreased expenses, and obtain additional funds when needed. Management intends to increase sales by increasing the Company’s product offerings, expanding its direct sales force and expanding its domestic and international distributor relationships. | |
There can be no assurance that the Company will be able to increase sales, reduce expenses or obtain additional financing, if necessary, at a level to meet its current obligations. As a result, the opinion the Company received from its independent registered public accounting firm on its January 31, 2013 financial statements contains an explanatory paragraph stating that there is a substantial doubt regarding the Company’s ability to continue as a going concern. |
Inventories
Inventories | 9 Months Ended | ||||||||
Oct. 31, 2013 | |||||||||
Inventories | ' | ||||||||
Inventories | ' | ||||||||
Note 4 – Inventories | |||||||||
Inventories were comprised of: | |||||||||
October 31, | January 31, | ||||||||
2013 | 2013 | ||||||||
Finished Goods - Coffee | $ | 2,249,684 | $ | - | |||||
2,249,684 | - |
Trademark_License_Agreements
Trademark License Agreements | 9 Months Ended | ||||||||||||||||
Oct. 31, 2013 | |||||||||||||||||
Trademark License Agreements | ' | ||||||||||||||||
Trademark License Agreements | ' | ||||||||||||||||
Note 5 - Trademark License Agreements | |||||||||||||||||
October 31, | January 31, | ||||||||||||||||
2013 | 2013 | ||||||||||||||||
License Agreement | $ | 766,000 | $ | 766,000 | |||||||||||||
Impairment | (36,000 | ) | (36,000 | ) | |||||||||||||
Accumulated amortization | (60,833 | ) | (24,333 | ) | |||||||||||||
License Agreement, net | 669,167 | 705,667 | |||||||||||||||
The license term and corresponding amortization period is fifteen years. Amortization expense consists of the following: | |||||||||||||||||
Three Months Ended October 31, | Nine Months Ended October 31, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
License Agreement | $ | 12,067 | $ | - | $ | 36,500 | $ | - | |||||||||
Total License Agreement Amortization Expense | $ | 12,067 | $ | - | $ | 36,500 | $ | - | |||||||||
As of October 31, 2013, the remaining useful life of the Company's license agreement was approximately 14 years. The following table shows the estimated amortization expense for the remaining current fiscal year, each of the four succeeding fiscal years and thereafter. | |||||||||||||||||
Years Ending January 31, | |||||||||||||||||
2014 | $ | 12,169 | |||||||||||||||
2015 | 48,667 | ||||||||||||||||
2016 | 48,667 | ||||||||||||||||
2017 | 48,667 | ||||||||||||||||
2018 | 48,667 | ||||||||||||||||
Thereafter | 462,330 | ||||||||||||||||
Total | $ | 669,167 | |||||||||||||||
Notes_Payable
Notes Payable | 9 Months Ended |
Oct. 31, 2013 | |
Notes Payable [Abstract] | ' |
Notes Payable | ' |
Note 6 – Notes Payable | |
On July 19, 2012, we entered into a credit agreement with TCA Global Credit Master Fund, LP, a Cayman Islands limited partnership (“TCA”), effective June 29, 2012 (the “Credit Agreement”). Pursuant to the Credit Agreement, TCA agreed to loan the Company up to $2 million for working capital purposes, based on the amount of eligible accounts receivable the Company provided to secure the repayment of the amounts borrowed. | |
On July 19, 2012, we borrowed $350,000 pursuant to the Credit Agreement, evidenced by a revolving note (the “Revolving Note”), the repayment of which was secured by a security interest in substantially all of our assets in favor of TCA, including the Trademarks. The Revolving Note accrued interest at the rate of 12% per annum (18% per annum upon a default) and was due and payable on July 18, 2013. | |
The Credit Agreement and Revolving Note were terminated in connection with the March 2013 Stipulation (Ironridge Transaction #1), described in Note 9, pursuant to which Ironridge purchased the outstanding debt which we owed to TCA and also purchased $100,000 of outstanding liabilities relating to 588,235 shares of our common stock originally issued to TCA, which shares TCA returned to the Company and cancelled in May 2013. See Note 9 for further details. |
Related_Party_Transactions
Related Party Transactions | 9 Months Ended |
Oct. 31, 2013 | |
Related Party Transactions [Abstract] | ' |
Related Party Transactions | ' |
Note 7 - Related Party Transactions | |
Transactions with Marley Coffee Ltd | |
During the three and nine months ended October 31, 2013, the Company made purchases of $391,825 and $768,960 from Marley Coffee Ltd. ("MC") a producer of Jamaican Blue Mountain coffee that the Company purchases in the normal course of its business. The Company directs these purchases to third-party roasters for fulfillment of sales orders. The Company's Chairman, Rohan Marley, is an owner of approximately 25% of the equity of MC. | |
Capital Advance by Company President & CEO/Shareholders | |
During the nine months ended October 31, 2013, Anh Tran, President of the Company, and Brent Toevs, Chief Executive Officer, advanced the Company funds to supplement working capital in the total amount of $81,423. At October 31, 2013, such amount had been repaid in full and there were no outstanding balances on these advances as of October 31, 2013. The advances were unsecured, non-interest bearing and due on demand. |
Stock_Options
Stock Options | 9 Months Ended | |||||||||
Oct. 31, 2013 | ||||||||||
Stock Options | ' | |||||||||
Stock Options | ' | |||||||||
Note 8 – Stock Options | ||||||||||
Share-based Compensation: | ||||||||||
On October 14, 2012, the Board approved the 2012 Equity Compensation Plan (the “2012 Equity Compensation Plan”). The Equity Compensation Plan authorizes the issuance of a variety of awards, including options, stock appreciation rights, restricted stock, restricted stock units, performance shares, performance units and stock awards. The 2012 Equity Compensation Plan provides that no more than 12 million shares of the Company’s common stock may be issued pursuant to awards under the 2012 Equity Compensation Plan. On November 13, 2012 (amended October 17, 2013), the Company registered the shares of common stock issuable under the 2012 Equity Compensation Plan on a registration statement on Form S-8 filed with the Securities and Exchange Commission. Awards under the 2012 Equity Compensation Plan may be made to employees, directors and consultants of the Company. As of October 31, 2013, 3,533,484 shares of common stock had been issued and options to purchase 5,400,000 shares of common stock had been granted under the 2012 Equity Compensation Plan. | ||||||||||
Effective September 10, 2013, the Board of Directors approved and adopted the Company’s 2013 Equity Incentive Plan (the “2013 Equity Compensation Plan”). The 2013 Equity Incentive Plan authorizes the issuance of various forms of stock-based awards, including incentive or non-qualified options, restricted stock awards, restricted units, stock appreciation rights, performance shares and other securities as described in greater detail in the 2013 Equity Incentive Plan, to the Company’s employees, officers, directors and consultants. A total of 12,000,000 shares are authorized for issuance under the 2013 Equity Incentive Plan. The 2013 Equity Compensation Plan provides that no more than 12 million shares of the Company’s common stock may be issued pursuant to awards under the 2013 Equity Compensation Plan. On October 17, 2013, the Company registered the shares of common stock issuable under the 2013 Equity Compensation Plan on a registration statement on Form S-8 filed with the Securities and Exchange Commission. Awards under the 2013 Equity Compensation Plan may be made to employees, directors and consultants of the Company. As of October 31, 2013, options to purchase 7,760,000 shares of common stock had been issued under the 2013 Equity Compensation Plan. | ||||||||||
During the three and nine months ended October 31, 2013, the Company recognized share-based compensation expenses totaling $317,972 and $741,104. The remaining amount of unamortized stock option expense at October 31, 2013 was $3,335,105. | ||||||||||
The intrinsic value of exercisable and outstanding options at October 31, 2013 was $611,833. | ||||||||||
Activity in stock options during the nine month period ended October 31, 2013 and related balances outstanding as of that date are set forth below: | ||||||||||
Number of | Weighted Average | Weighted Average | ||||||||
Shares | Exercise Price | Remaining Contract | ||||||||
Term (# years) | ||||||||||
Outstanding at February 1, 2013 | 9,400,000 | $ | 0.26 | 4.79 | ||||||
Granted | 7,760,000 | 0.46 | ||||||||
Exercised | - | - | ||||||||
Forfeited and canceled | - | - | ||||||||
Outstanding at October 31, 2013 | 17,160,000 | $ | 0.35 | 4.46 | ||||||
Exercisable at October 31, 2013 | 4,399,999 | $ | 0.31 | 3.99 |
Settlement_of_Liabilities_with
Settlement of Liabilities with Ironridge | 9 Months Ended | ||
Oct. 31, 2013 | |||
Settlement Of Liabilities With Ironridge | ' | ||
Settlement of Liabilities with Ironridge | ' | ||
Note 9 – Settlement of Liabilities with Ironridge | |||
Ironridge Transaction #1 | |||
On March 6, 2013, pursuant to an order setting forth a stipulated settlement (“Order #1” and “Stipulation #1”) issued by the Superior Court of the State of California for the County of Los Angeles – Central District (the “Court”), Ironridge Global IV, Ltd. (“Ironridge”), who had previously purchased a total of $1,017,744 in accounts payable and accrued expenses (“Claim #1”) owed by us to various parties, was issued 7,000,000 shares of our common stock (“Initial Issuance #1”) in satisfaction of such accounts payable and accrued expenses, which amount came off our balance sheet and was legally released. The accounts payable and accrued expenses represented amounts originally owed by us to various creditors in connection with trade payables, the purchase of property and equipment, prior credit agreements, and attorneys’ fees. | |||
The shares issued in Initial Issuance #1 were subject to adjustment as provided below: | |||
· | From the date of Stipulation #1 until that number of consecutive trading days following the Issuance Date required for the aggregate trading volume of the Common Stock to exceed $10,000,000 (“Calculation Period #1”), Ironridge was to retain that number of shares of Common Stock of Initial Issuance #1 (“Final Amount #1”) with an aggregate value equal to (a) $1,068,631 (105% of Claim Amount #1), plus reasonable attorney’s fees and expenses, divided by (b) 80% of the following: the closing price of the Common Stock on the trading day immediately preceding the date of entry of Order #1 (which closing price was $0.35 per share), not to exceed the arithmetic average of the individual volume weighted average prices of any five trading days during Calculation Period #1, less $0.01 per share (“Share Price #1”). | ||
· | If at any time during Calculation Period #1 Initial Issuance #1 was less than any reasonable possible Final Amount #1 or a daily volume weighted average price was below 80% of the closing price on the day before Issuance Date #1, Ironridge could request that the Company reserve and issue additional shares of Common Stock (“True Up Shares”), provided that no additional shares of common stock were requested. | ||
· | At the end of Calculation Period #1, if the sum of Initial Issuance #1 and any True-Up Shares did not equal the Final Amount #1, adjustments were to be made to the shares of Common Stock issued pursuant to Stipulation #1 and either additional shares were to be issued to Ironridge or Ironridge was required to return shares to the Company for cancellation. | ||
The Stipulation #1 provided that at no time shall shares of Common Stock be issued to Ironridge and its affiliates which would result in them owning or controlling more than 9.99% of the Company’s outstanding Common Stock. The Company also agreed pursuant to Stipulation #1 that (a) until at least one half of the total trading volume for Calculation Period #1 had traded, the Company would not, directly or indirectly, enter into or effect any split or reverse split of Common Stock; (b) until at least thirty days from the date Order #1 was approved, the Company would not, directly or indirectly, issue any securities pursuant to a Form S-8 registration statement; and (c) until at least six months from the date Order #1 was approved, the Company would not, directly or indirectly, issue or sell any free trading securities for financing purposes (except for shares issuable to TCA Global Credit Master Fund, LP). | |||
The Calculation Period #1 was satisfied as of June 18, 2013, at which time a final adjustment was made to the number of shares owed to Ironridge. The final number of shares owed was 5,353,512, resulting in 1,646,488 shares of the initial 7,000,000 shares issued being returned by Ironridge and cancelled by the Company in July 2013. | |||
For the nine months ended October 31, 2013, the Company, in connection with the above transaction, recorded a loss on extinguishment of debt in the amount of $340,398 which equaled the difference in the fair value of the shares issued to and the obligations assumed by Ironridge. | |||
Ironridge Transaction #2 | |||
On May 24, 2013, pursuant to an order setting forth a stipulated settlement (“Order #2” and “Stipulation #2”) issued by the Court, Ironridge, who had previously purchased a total of an additional $1,278,058 in accounts payable and accrued expenses (“Claim #2”) owed by us to various parties, was issued 5,000,000 shares of our common stock (“Initial Issuance #2”) in satisfaction of such accounts payable and accrued expenses, which amount came off our balance sheet and was legally released. The accounts payable and accrued expenses represented amounts originally owed by us to various creditors in connection with trade payables, the purchase of property and equipment, prior credit agreements, and attorneys’ fees. | |||
The shares issued in Initial Issuance #2 are subject to adjustment as provided below: | |||
· | From the date of Stipulation #2 until that number of consecutive trading days following Issuance Date #2 required for the aggregate trading volume of the Common Stock to exceed $20,000,000 (“Calculation Period #2”), Ironridge will retain that number of shares of Common Stock of the Initial Issuance #2 (“Final Amount #2”) with an aggregate value equal to (a) $1,278,058 (105% of Claim Amount #2), plus reasonable attorney’s fees and expenses, divided by (b) 80% of the following: the closing price of the Common Stock on the trading day immediately preceding the date of entry of Order #2 (which closing price was $0.32 per share), not to exceed the arithmetic average of the individual volume weighted average prices of any five trading days during Calculation Period #2, less $0.01 per share (“Share Price #2”) and (b) the positive difference, if any, between (i) $1,019,390 divided by 80% of the average of the lowest five lowest volume weighted average prices during Calculation Period #2, and (ii) $1,019,390 divided by 80% of the average of the lowest five volume weighted average prices during the period from March 4, 2013 to May 24, 2013. | ||
· | If at any time during Calculation Period #2 Initial Issuance #2 is less than any reasonable possible Final Amount #2 or a daily volume weighted average price is below 80% of the closing price on the day before Issuance Date #2, Ironridge may request that the Company reserve and issue True-Up Shares as soon as possible, and in any event, within one trading day. For each day after Ironridge requests issuance that shares are not, for any reason, received into Ironridge’s account in electronic form and fully cleared for trading, Calculation Period #2 shall be extended by one trading day. | ||
· | At the end of Calculation Period #2, if the sum of Initial Issuance #2 and any True-Up Shares does not equal Final Amount #2, adjustments shall be made to the shares of Common Stock issued pursuant to Stipulation #2 and either additional shares shall be issued to Ironridge or Ironridge shall return shares to the Company for cancellation. | ||
Stipulation #2 provides that at no time shall shares of Common Stock be issued to Ironridge and its affiliates which would result in them owning or controlling more than 9.99% of the Company’s outstanding Common Stock. The Company also agreed pursuant to Stipulation #2 that (a) until at least one half of the total trading volume for Calculation Period #2 has traded, the Company would not, directly or indirectly, enter into or effect any split or reverse split of Common Stock; (b) until at least thirty days from the date Order #2 is approved, the Company would not, directly or indirectly, issue any securities pursuant to a Form S-8 registration statement; and (c) until at least six months from the date Order #2 is approved, the Company would not, directly or indirectly, issue or sell any free trading securities for financing purposes. | |||
The Calculation Period #2 was satisfied as of September 12, 2013, at which time a final adjustment was made to the number of shares owed to Ironridge. The final number of shares owed was 5,406,337, resulting in 406,337 additional shares being owed to Ironridge. | |||
For the nine months ended October 31, 2013, the Company, in connection with the above transaction, recorded a loss on extinguishment of debt in the amount of $51,901 which equaled the difference in the fair value of the shares issued to and the obligations assumed by Ironridge. | |||
Ironridge Transaction #3 | |||
On July 26, 2013, pursuant to an order setting forth a stipulated settlement (“Order #3” and “Stipulation #3”) issued by the Court, Ironridge, who had previously purchased an additional total of $2,499,372 in accounts payable and accrued expenses (“Claim #3”) owed by us to various parties, was issued 5,000,000 shares of our common stock (“Initial Issuance #3”) in satisfaction of such accounts payable and accrued expenses, which amount came off our balance sheet and was legally released. The accounts payable and accrued expenses represented amounts originally owed by us to various creditors in connection with trade payables, the purchase of property and equipment, prior credit agreements, and attorneys’ fees. | |||
The shares issued in Initial Issuance #3 are subject to adjustment as provided below: | |||
· | From the date of Stipulation #3 until that number of consecutive trading days following Issuance Date #3 required for the aggregate trading volume of the Common Stock to exceed $50,000,000 (“Calculation Period #3”), Ironridge will retain that number of shares of Common Stock of Initial Issuance #3 (“Final Amount #3”) with an aggregate value equal to (a)(i) $2,624,340 (105% of Claim Amount #3), plus reasonable attorney’s fees and expenses, (ii) divided by 80% of the following: the closing price of the Common Stock on the trading day immediately preceding the date of entry of Order #3 (which closing price was $0.50 per share), not to exceed the arithmetic average of the individual volume weighted average prices of any five trading days during Calculation Period #3, less $0.01 per share; and (b) the sum of (i) the positive difference, if any, between (A) $1,358,299.08 divided by 80% of the average of the lowest five individual daily volume weighted average prices during Calculation Period #3, and (B) $1,358,299.08 divided by 80% of the average of the lowest five individual daily volume weighted average prices during the period from May 24, 2013 to the date of entry of Order #3, and (ii) the positive difference, if any, between (A) the sum of one and a half times Initial Issuance #3, and (B) the number of shares otherwise owed pursuant to the foregoing. | ||
· | If at any time during Calculation Period #3 Initial Issuance #3 is less than any reasonable possible Final Amount #3 or a daily volume weighted average price is below 80% of the closing price on the day before Issuance Date #3, Ironridge may request that the Company reserve and issue True-Up Shares as soon as possible, and in any event, within one trading day. For each day after Ironridge requests issuance that shares are not, for any reason, received into Ironridge’s account in electronic form and fully cleared for trading, Calculation Period #3 shall be extended by one trading day. | ||
· | At the end of Calculation Period #3, if the sum of Initial Issuance #3 and any True-Up Shares does not equal Final Amount #3, adjustments shall be made to the shares of Common Stock issued pursuant to Stipulation #3 and either additional shares shall be issued to Ironridge or Ironridge shall return shares to the Company for cancellation. | ||
Stipulation #3 provides that at no time shall shares of Common Stock be issued to Ironridge and its affiliates which would result in them owning or controlling more than 9.99% of the Company’s outstanding Common Stock and with regard to at least 5% of Final Amount #3, Ironridge shall not sell any shares of Common Stock issuable in connection with such amount until at least six months after entry of Order #3. We also agreed pursuant to Stipulation #3 that (a) until at least one half of the total trading volume for Calculation Period #3 has traded, we would not, directly or indirectly, enter into or effect any split or reverse split of our Common Stock; and (b) until at least thirty days from the date Order #3 is approved, we would not, directly or indirectly, issue any securities pursuant to a Form S-8 registration statement. Until at least 180 days after the end of Calculation Period #3, (a) we agreed that we would not issue, sell or agree to issue or sell any securities to any person other than Ironridge or its affiliates, except for: (A) common stock, options or warrants to employees, officers, consultants or directors pursuant to Employee Stock Ownership Plans, or (B) restricted common stock, in transactions with strategic industry, business or operating partners that provide benefits other than the investment of funds, issued at a fixed price not subject to any adjustment, reset or variable element of any kind. | |||
Through October 31, 2013, the Company, in connection with the above transaction, recorded an estimated loss on extinguishment of debt in the amount of $728,294 which equaled the difference in the fair value of the shares issued and the obligations assumed by Ironridge. The Company further recorded an additional amount to equity for the excess shares owed to Ironridge of $1,277,666. This amount will be adjusted each period until Calculation Period #3 has ended and the true-up is completed. |
Commitments_and_Contingencies
Commitments and Contingencies | 9 Months Ended | ||
Oct. 31, 2013 | |||
Commitments And Contingencies | ' | ||
Commitments and Contingencies | ' | ||
Note 10 – Commitments and Contingencies | |||
The Company’s commitments and contingencies include the usual claims and obligations of a wholesaler and distributor of coffee products in the normal course of a business. The Company may be, from time to time, involved in legal proceedings incidental to the conduct of our business. The Company is not involved in any litigation or legal proceedings as of October 31, 2013, which would be deemed material. | |||
On June 25, 2013, and effective August 1, 2013, the Company entered into a lease agreement for office space located at 4730 Tejon Street, Denver, Colorado 80211. The office space encompasses approximately 4,800 square feet. The lease has a term of 36 months expiring on July 31, 2016, provided that the Company has two additional three year options to renew the lease after the end of the initial term. Rent during the first three year option period escalates at the rate of 4% per year (starting with the last monthly rental cost of the initial term of the agreement, described below), and rent during the second three year option period will be at a rental cost mutually agreed by the Company and the landlord. Rent due under the initial term of the agreement is as follows: | |||
· | $7,858 per month from August 1, 2013 to July 31, 2014; | ||
· | $8,172 per month from August 1, 2014 to July 31, 2015; and | ||
· | $8,499 per month from August 1, 2015 to July 31, 2016. | ||
Effective August 1, 2013, in connection with the Company’s entry into the office space lease described above, the Company moved its principal place of business to Denver, Colorado. |
Subsequent_Events
Subsequent Events | 9 Months Ended |
Oct. 31, 2013 | |
Subsequent Events [Abstract] | ' |
Subsequent Events | ' |
Note 11 – Subsequent Events | |
Effective December 4, 2013, the Company entered into and closed an Asset Purchase Agreement with BikeCaffe Franchising Inc. (“BikeCaffe Franchising”), a franchisor of the BikeCaffe mobile coffee carts in the United States and throughout the world. Prior to us entering into the Asset Purchase Agreement, we were a brand partner of BikeCaffe Franchising. Pursuant to the Asset Purchase Agreement we purchased all of the assets of BikeCaffe Franchising (including the rights to the design of the BikeCaffe carts, intellectual property relating to the operation of BikeCaffe Franchising, and five Marley Coffee Branded BikeCaffe carts) in consideration for $140,000, of which $40,000 was paid in cash and $100,000 was paid through the issuance of 250,000 shares of our restricted common stock valued based on the closing price of the Company’s common stock on the effective date of the agreement ($0.40 per share). BikeCaffe Franchising and its owners agreed to indemnify us against various claims resulting from the operations of the assets acquired prior to closing. The Asset Purchase Agreement also required Pedal Power Supply, LLC, which is under common control with BikeCaffe Franchising, to build and sell BikeCaffe units to the Company for 12 months at the current sales price of such carts and for an additional 12 months thereafter (24 months in total) at no more than 110% of the current sales price. BikeCaffe and its owners agreed to a non-compete provision prohibiting them from competing against us in connection with any line of business similar to ours for a period of three years from the closing date. | |
Additionally, effective on the same date, we entered into a Supplier Business Relationship Agreement with Ralph Massetti / The Franchise Builders (“Supplier”)(President and CEO of BikeCaffe Franchising), pursuant to which the Supplier agreed to provide 150 hours of franchise consulting services to the Company, which services are to be rendered prior to January 31, 2014. We agreed to provide the Supplier consideration of (a) 8% of the annual net profits derived from the BikeCaffe related assets and opportunities for five years following the closing; and (b) 8% of the purchase value attributable to any sale of the BikeCaffe assets which occurs during the five year years following the closing. The first annual net profits payment is due 90 days following the end of the Company’s January 31, 2015 fiscal year. The Company has the right to pay the annual net profits payment in cash or stock. We also agreed to make a one-time payment to the supplier in consideration for the 150 hours of consulting services to be provided to the Company in the amount of $115,000, which we agreed to pay in Form S-8 common stock valued based on the closing price of our common stock on the date the agreement was entered into (which stock had a closing price of $0.40 per share), which totals 287,500 shares of common stock. | |
Management evaluated all activity through the date that the financial statements were issued, and concluded that no additional subsequent events have occurred that would require recognition in the financial statements or disclosure in the notes to the financial statements. |
Business_Overview_and_Summary_1
Business Overview and Summary of Accounting Policies (Policies) | 9 Months Ended | |
Oct. 31, 2013 | ||
Business Overview And Summary Of Accounting Policies Policies | ' | |
Reclassifications | ' | |
Reclassifications. Certain prior period amounts have been reclassified to conform with the current period presentation for comparative purposes. | ||
Use of Estimates in Financial Statement Preparation | ' | |
Use of Estimates in Financial Statement Preparation. The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, as well as certain financial statement disclosures. While management believes that the estimates and assumptions used in the preparation of the financial statements are appropriate, actual results could differ from those estimates. | ||
Fair Value | ' | |
Fair Value. The Company has adopted a single definition of fair value, a framework for measuring fair value and expanded disclosures concerning fair value. In this valuation, the exchange price is the price in an orderly transaction between market participants to sell an asset or transfer a liability at the measurement date and fair value is a market-based measurement and not an entity-specific measurement. | ||
The Company utilizes the following hierarchy in fair value measurements: | ||
· | Level 1 – Inputs use quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. | |
· | Level 2 – Inputs use other inputs that are observable, either directly or indirectly. These inputs include quoted prices for similar assets and liabilities in active markets as well as other inputs such as interest rates and yield curves that are observable at commonly quoted intervals. | |
· | Level 3 – Inputs are unobservable inputs, including inputs that are available in situations where there is little, if any, market activity for the related asset or liability | |
Cash and Cash Equivalents | ' | |
Cash and Cash Equivalents. The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents. As of October 31, 2013, the Company had $806,414 of cash equivalents. Additionally, no interest income was recognized for the three and nine months ended October 31, 2013. As of October 31, 2013, the Company held no auction rate securities. | ||
Revenue Recognition | ' | |
Revenue Recognition. Revenue is derived from the sale of coffee products and is recognized on a gross basis upon shipment. All revenue is recognized when (i) persuasive evidence of an arrangement exists; (ii) the service or sale is completed; (iii) the price is fixed or determinable; and (iv) the ability to collect is reasonably assured. | ||
The Company utilizes third parties for the production and fulfillment of orders placed by customers. The Company, acting as principal, takes title to the product and assumes the risks of ownership; including, the risks of loss for collection, delivery and returns. | ||
Allowance for Doubtful Accounts | ' | |
Allowance for Doubtful Accounts. The Company does not require collateral from its customers with respect to accounts receivable. The Company determines any required allowance by considering a number of factors, including the length of time accounts receivable are past due. The Company’s policy is to provide reserves for accounts receivable when they become uncollectible. Historically, the Company has experienced minimal losses from collections. Accordingly, the Company has determined that no allowance for doubtful accounts was required at October 31, 2013. | ||
Inventories | ' | |
Inventories. Inventories are stated at the lower of cost or market. Cost is computed using weighted average cost, which approximates actual cost, on a first-in, first-out basis. Inventories on hand are evaluated on an on-going basis to determine if any items are obsolete or in excess of future needs. Items determined to be obsolete are reserved for. The Company provides for the possible inability to sell its inventories by providing an excess inventory reserve. As of October 31, 2013 the Company determined that no reserve was required. | ||
Property and Equipment | ' | |
Property and Equipment. Equipment is stated at cost less accumulated depreciation and amortization. Maintenance and repairs, as incurred, are charged to expense. Renewals and enhancements which extend the life or improve existing equipment are capitalized. Upon disposition or retirement of equipment, the cost and related accumulated depreciation are removed and any resulting gain or loss is reflected in operations. Depreciation is provided using the straight-line method over the estimated useful lives of the assets, which are three years. | ||
Depreciation was $3,251 and $7,003 for the three and nine months ended October 31, 2013, respectively. Depreciation was $746 and $4,456 for the three and nine months ended October 31, 2012, respectively. | ||
Impairment of Long-Lived Assets | ' | |
Impairment of Long-Lived Assets. Long-lived assets consist of a license agreement and property and equipment. The license agreement is reviewed for impairment at least annually whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable (see Note 5). Determination of recoverability is based on an estimate of undiscounted future cash flows resulting from the use of the asset. In the event that such cash flows are not expected to be sufficient to recover the carrying amount of the assets, the assets are written down to their estimated fair values. Management evaluated the carrying value of long-lived assets including the license and determined that no impairment existed at October 31, 2013. | ||
Stock-Based Compensation | ' | |
Stock-Based Compensation. Pursuant to the provisions of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 718-10, “Compensation – Stock Compensation,” which establishes accounting for equity instruments exchanged for employee service, we utilize the Black-Scholes option pricing model to estimate the fair value of employee stock option awards at the date of grant, which requires the input of highly subjective assumptions, including expected volatility and expected life. Changes in these inputs and assumptions can materially affect the measurement of estimated fair value of our share-based compensation. These assumptions are subjective and generally require significant analysis and judgment to develop. When estimating fair value, some of the assumptions will be based on, or determined from, external data and other assumptions may be derived from our historical experience with stock-based payment arrangements. The appropriate weight to place on historical experience is a matter of judgment, based on relevant facts and circumstances. | ||
Common stock issued for services to non-employees is valued at (i) the market value of the stock on the date of issuance or (ii) the value of the services, whichever is more clearly determinable. If the total value exceeds the par value of the stock issued, the value in excess of the par value is added to the additional paid-in-capital account. We estimate volatility of our publicly-listed common stock by considering historical stock volatility. | ||
Income Taxes | ' | |
Income Taxes. The Company follows ASC 740, Income Taxes. Deferred tax assets or liabilities are recorded to reflect the future tax consequences of temporary differences between the financial reporting basis of assets and liabilities and their tax basis at each reporting period. These amounts are adjusted, as appropriate, to reflect enacted changes in tax rates expected to be in effect when the temporary differences reverse. A valuation allowance is provided when it is more likely than not that some portion or all of a deferred tax asset will not be realized. | ||
Earnings or Loss Per Common Share | ' | |
Earnings or Loss Per Common Share. Basic earnings per common share equals net earnings or loss divided by the weighted average of shares outstanding during the year. Diluted earnings per share includes the impact on dilution from all contingently issuable shares, including options, warrants and convertible securities. The common stock equivalents from contingent shares are determined by the treasury stock method. The Company incurred a net loss for the nine months ended October 31, 2013 and 2012, respectively. In addition, basic and diluted earnings per share for such periods are the same because all potential common equivalent shares would be anti-dilutive including the 17,160,000 outstanding options as of October 31, 2013. | ||
Recently Issued Accounting Pronouncements | ' | |
Recently Issued Accounting Pronouncements. Management has considered all recent accounting pronouncements issued since the last audit of our financial statements. The Company’s management believes that these recent pronouncements will not have a material effect on the Company’s financial statements. |
Inventories_Tables
Inventories (Tables) | 9 Months Ended | ||||||||
Oct. 31, 2013 | |||||||||
Inventories Tables | ' | ||||||||
Schedule of inventory | ' | ||||||||
Inventories were comprised of: | |||||||||
October 31, | January 31, | ||||||||
2013 | 2013 | ||||||||
Finished Goods - Coffee | $ | 2,249,684 | $ | - | |||||
2,249,684 | - |
Trademark_License_Agreements_T
Trademark License Agreements (Tables) | 9 Months Ended | ||||||||||||||||
Oct. 31, 2013 | |||||||||||||||||
Trademark License Agreements Tables | ' | ||||||||||||||||
Schedule of license agreements | ' | ||||||||||||||||
October 31, | January 31, | ||||||||||||||||
2013 | 2013 | ||||||||||||||||
License Agreement | $ | 766,000 | $ | 766,000 | |||||||||||||
Impairment | (36,000 | ) | (36,000 | ) | |||||||||||||
Accumulated amortization | (60,833 | ) | (24,333 | ) | |||||||||||||
License Agreement, net | 669,167 | 705,667 | |||||||||||||||
Schedule of amortization expense | ' | ||||||||||||||||
The license term and corresponding amortization period is fifteen years. Amortization expense consists of the following: | |||||||||||||||||
Three Months Ended October 31, | Nine Months Ended October 31, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
License Agreement | $ | 12,067 | $ | - | $ | 36,500 | $ | - | |||||||||
Total License Agreement Amortization Expense | $ | 12,067 | $ | - | $ | 36,500 | $ | - | |||||||||
Schedule of future amortization expense | ' | ||||||||||||||||
The following table shows the estimated amortization expense for the remaining current fiscal year, each of the four succeeding fiscal years and thereafter. | |||||||||||||||||
Years Ending January 31, | |||||||||||||||||
2014 | $ | 12,169 | |||||||||||||||
2015 | 48,667 | ||||||||||||||||
2016 | 48,667 | ||||||||||||||||
2017 | 48,667 | ||||||||||||||||
2018 | 48,667 | ||||||||||||||||
Thereafter | 462,330 | ||||||||||||||||
Total | $ | 669,167 |
Stock_Options_Tables
Stock Options (Tables) | 9 Months Ended | |||||||||
Oct. 31, 2013 | ||||||||||
Stock Options Tables | ' | |||||||||
Schedule of activity in stock options | ' | |||||||||
Activity in stock options during the nine month period ended October 31, 2013 and related balances outstanding as of that date are set forth below: | ||||||||||
Number of | Weighted Average | Weighted Average | ||||||||
Shares | Exercise Price | Remaining Contract | ||||||||
Term (# years) | ||||||||||
Outstanding at February 1, 2013 | 9,400,000 | $ | 0.26 | 4.79 | ||||||
Granted | 7,760,000 | 0.46 | ||||||||
Exercised | - | - | ||||||||
Forfeited and canceled | - | - | ||||||||
Outstanding at October 31, 2013 | 17,160,000 | $ | 0.35 | 4.46 | ||||||
Exercisable at October 31, 2013 | 4,399,999 | $ | 0.31 | 3.99 |
Business_Overview_and_Summary_2
Business Overview and Summary of Accounting Policies (Details Narrative) (USD $) | 3 Months Ended | 9 Months Ended | ||||
Oct. 31, 2013 | Oct. 31, 2012 | Oct. 31, 2013 | Oct. 31, 2012 | Jan. 31, 2013 | Jan. 31, 2012 | |
Business Overview And Summary Of Accounting Policies Details Narrative | ' | ' | ' | ' | ' | ' |
Cash equivalents | $806,414 | $301,551 | $806,414 | $301,551 | ' | $835,878 |
Depreciation expense | $3,251 | $746 | $7,003 | $4,456 | ' | ' |
Anti-dilutive options excluded from earnings per share calculation | ' | ' | 17,160,000 | ' | ' | ' |
Going_Concern_and_Liquidity_De
Going Concern and Liquidity (Details Narrative) (USD $) | 3 Months Ended | 9 Months Ended | |||
Oct. 31, 2013 | Oct. 31, 2012 | Oct. 31, 2013 | Oct. 31, 2012 | Jan. 31, 2013 | |
Going Concern And Liquidity Details Narrative | ' | ' | ' | ' | ' |
Net Loss | ($1,378,551) | ($944,742) | ($2,512,277) | ($2,825,153) | ' |
Accumulated deficit | ($9,571,095) | ' | ($9,571,095) | ' | ($7,058,818) |
Inventories_Details
Inventories (Details) (USD $) | Oct. 31, 2013 | Jan. 31, 2013 |
Inventory Disclosure [Abstract] | ' | ' |
Finished Goods - Coffee | $2,249,684 | ' |
[us-gaap:InventoryNet] | $2,249,684 | ' |
Trademark_License_Agreements_D
Trademark License Agreements (Details Narrative) | 9 Months Ended |
Oct. 31, 2013 | |
Trademark License Agreements Details Narrative | ' |
Remaining useful liife license agreement | '14 years |
Amortization period for license agreement | '15 years |
Trademark_License_Agreements_D1
Trademark License Agreements (Details) (USD $) | 9 Months Ended | 12 Months Ended |
Oct. 31, 2013 | Jan. 31, 2013 | |
Notes to Financial Statements | ' | ' |
License Agreement | $766,000 | $766,000 |
Impairment | -36,000 | -36,000 |
Accumulated amortization | -60,833 | -24,333 |
License Agreement, net | $669,167 | $705,667 |
Trademark_License_Agreements_D2
Trademark License Agreements (Details 1) (USD $) | 3 Months Ended | 9 Months Ended |
Oct. 31, 2013 | Oct. 31, 2013 | |
Notes to Financial Statements | ' | ' |
License Agreement | $12,067 | $36,500 |
Total License Agreement Amortization Expense | $12,067 | $36,500 |
Trademark_License_Agreements_D3
Trademark License Agreements (Details 2) (USD $) | Oct. 31, 2013 | Jan. 31, 2013 |
Years Ending January 31, | ' | ' |
2014 | $12,169 | ' |
2015 | 48,667 | ' |
2016 | 48,667 | ' |
2017 | 48,667 | ' |
2018 | 48,667 | ' |
Thereafter | 462,330 | ' |
Total | $669,167 | $705,667 |
Notes_Payable_Details_Narrativ
Notes Payable (Details Narrative) (USD $) | 9 Months Ended | 3 Months Ended |
Oct. 31, 2012 | Jun. 18, 2013 | |
Ironridge Transaction #1 Notes Payable | ||
Maximum borrowing capacity | $2,000,000 | ' |
Amount borrowed | 350,000 | ' |
Agreement date | 19-Jul-12 | ' |
Maturity date | 18-Jul-13 | ' |
Interest rate | 12.00% | ' |
Interest rate when in default | 18.00% | ' |
Outstanding liabilities related to shares issued for debt purchased by Ironridge Global IV | ' | $100,000 |
Shares issued for debt purchased by Ironridge | ' | 588,235 |
Related_Party_Transactions_Det
Related Party Transactions (Details Narrative) (USD $) | 3 Months Ended | 9 Months Ended |
Oct. 31, 2013 | Oct. 31, 2013 | |
Marley Coffee Ltd - Rohan Marley | ' | ' |
Purchase from related parties | $391,825 | $768,960 |
Chairman, ownership percentage | 25.00% | 25.00% |
Anh Tran/Brent Toevs | ' | ' |
Proceeds from advances from related parties | ' | $81,423 |
Stock_Options_Details_Narrativ
Stock Options (Details Narrative) (USD $) | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2013 | Oct. 31, 2013 | Oct. 31, 2012 | Jan. 31, 2013 | |
Options outstanding | 17,160,000 | 17,160,000 | ' | 9,400,000 |
Stock-based compensation expense | $317,972 | $741,104 | $1,462,613 | ' |
Remaining amount of unamortized stock option expense | 3,335,105 | 3,335,105 | ' | ' |
Intrinsic value of stock options outstanding | $611,833 | $611,833 | ' | ' |
2012 Equity Compensation Plan | ' | ' | ' | ' |
Number of shares authorized under equity compensation plan | 12,000,000 | 12,000,000 | ' | ' |
Equity award shares outstanding | 3,533,484 | 3,533,484 | ' | ' |
Options outstanding | 5,400,000 | 5,400,000 | ' | ' |
2013 Equity Compensation Plan | ' | ' | ' | ' |
Number of shares authorized under equity compensation plan | 12,000,000 | 12,000,000 | ' | ' |
Options outstanding | 7,760,000 | 7,760,000 | ' | ' |
Stock_Options_Details
Stock Options (Details) (USD $) | 9 Months Ended | |
Oct. 31, 2013 | Oct. 31, 2012 | |
Number of shares: | ' | ' |
Outstanding, beginning | 9,400,000 | ' |
Granted | 7,760,000 | ' |
Outstanding, ending | 17,160,000 | ' |
Exercisable | 4,399,999 | ' |
Outstanding, beginning | $0.26 | ' |
Granted | $0.46 | ' |
Outstanding, ending | $0.35 | ' |
Exercisable | $0.31 | ' |
Weighted Average Remaining Contractual Term: | ' | ' |
Weighted Average Remaining Contractual Term of Options outstanding | '4 years 5 months 16 days | '4 years 9 months 14 days |
Weighted Average Remaining Contractual Term of Options exercisable | '3 years 11 months 26 days | ' |
Settlement_of_Liabilities_with1
Settlement of Liabilities with Ironridge (Details Narrative) (USD $) | 9 Months Ended | 3 Months Ended | 9 Months Ended | 5 Months Ended | 9 Months Ended | 3 Months Ended | ||||||
Oct. 31, 2013 | Oct. 31, 2012 | Jan. 31, 2013 | Jun. 18, 2013 | Oct. 31, 2013 | Mar. 06, 2013 | Oct. 31, 2013 | Oct. 31, 2013 | Sep. 12, 2013 | 24-May-13 | Oct. 31, 2013 | Jul. 26, 2013 | |
Ironridge Transaction #1 | Ironridge Transaction #1 | Ironridge Transaction #1 | Ironridge Transaction #2 | Ironridge Transaction #2 | Ironridge Transaction #2 | Ironridge Transaction #2 | Ironridge Transaction #3 | Ironridge Transaction #3 | ||||
Accounts payable and accrued expenses purchased by Ironridge Global IV | ' | ' | ' | $1,017,744 | ' | ' | $1,278,058 | ' | ' | ' | $2,499,372 | ' |
Shares issued for settlement of debt | ' | ' | ' | 7,000,000 | ' | ' | 5,000,000 | ' | ' | ' | 5,000,000 | ' |
Aggregate trading volume amount, not to exceed | ' | ' | ' | 10,000,000 | ' | ' | 20,000,000 | ' | ' | ' | 50,000,000 | ' |
Aggregate value of initial issuance | ' | ' | ' | 1,068,631 | ' | ' | 1,278,058 | ' | ' | ' | 2,624,340 | ' |
Percentage of claim amount | ' | ' | ' | 105.00% | ' | ' | 105.00% | ' | ' | ' | 105.00% | ' |
Closing price of Company's stock | ' | ' | ' | ' | ' | $0.35 | ' | ' | ' | $0.32 | ' | $0.50 |
Share price reduction used in calculation | ' | ' | ' | ' | ' | $0.01 | ' | ' | ' | $0.01 | ' | $0.01 |
Percentage of closing price | ' | ' | ' | ' | ' | 80.00% | ' | ' | ' | 80.00% | ' | 80.00% |
Amount used in settlement calculation | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,019,390 | ' | 1,358,299 |
Maximum percentage ownership by Ironbridge and its affiliates | ' | ' | ' | ' | ' | 9.99% | ' | ' | ' | 9.99% | ' | 9.99% |
Percentage of restricted shares | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5.00% |
Number of common shares owed | ' | ' | ' | 5,353,512 | ' | ' | ' | ' | 5,406,337 | ' | ' | ' |
Number of shares to be returned by Ironridge | ' | ' | ' | 1,646,488 | ' | ' | ' | ' | ' | ' | ' | ' |
Number of shares owed to Ironridge | ' | ' | ' | ' | ' | ' | ' | ' | 406,337 | ' | ' | ' |
Loss on extinguishment of debt | -1,120,593 | ' | ' | ' | -340,398 | ' | ' | -51,901 | ' | ' | -728,294 | ' |
Payable to Ironridge in common shares | $1,395,025 | ' | ' | ' | ' | ' | ' | ' | ' | ' | $1,277,666 | ' |
Commitments_and_Contingencies_
Commitments and Contingencies (Details Narrative) (USD $) | 9 Months Ended | |
Oct. 31, 2012 | Oct. 31, 2013 | |
sqft | ||
Commitments And Contingencies Details Narrative | ' | ' |
Lease term | '3 years | ' |
Lease renewal terms | '3 years | ' |
Monthly rent, period one | ' | $7,858 |
Monthly rent, period two | ' | 8,172 |
Monthly rent, period three | ' | $8,499 |
Leased square footage of space | ' | 4,800 |
Rent escalation rate | 4.00% | ' |
Subsequent_Events_Details_Narr
Subsequent Events (Details Narrative) (Bike Caffe Franchising, USD $) | 0 Months Ended |
Dec. 04, 2013 | |
Total consideration paid | $140,000 |
Cash paid | 40,000 |
Value of restricted common shares issued in asset purchase agreement | 100,000 |
Number of restricted common shares issued in asset purchase agreement | 250,000 |
Price per share on the effective date of agreement | $0.40 |
Maximum sales price of unit compared to current sales price | 110.00% |
Supplier of Consulting Services | ' |
Price per share on the effective date of agreement | $0.40 |
Number of consulting hours to be provided | 150 |
Percentage of net profits to be provided to Supplier following the closing | 8.00% |
Percentage of purchase value from sale of any acquired assets to be provided to Supplier following the closing | 8.00% |
Issuance of shares for consulting services | $115,000 |
Issuance of shares for consulting services, shares | 287,500 |