Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Jan. 31, 2014 | 13-May-14 | Jul. 31, 2013 | |
Document And Entity Information | ' | ' | ' |
Entity Registrant Name | 'JAMMIN JAVA CORP. | ' | ' |
Trading Symbol | 'JAMN | ' | ' |
Entity Central Index Key | '0001334586 | ' | ' |
Document Type | '10-K | ' | ' |
Document Period End Date | 31-Jan-14 | ' | ' |
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 Public Float | ' | ' | $38,316,888 |
Entity Common Stock, Shares Outstanding | ' | 114,356,971 | ' |
Document Fiscal Period Focus | 'FY | ' | ' |
Document Fiscal Year Focus | '2014 | ' | ' |
BALANCE_SHEETS
BALANCE SHEETS (USD $) | Jan. 31, 2014 | Jan. 31, 2013 |
Current Assets: | ' | ' |
Cash | $857,122 | ' |
Restricted cash | ' | 65,382 |
Accounts receivable, net | 1,085,947 | 415,721 |
Notes receivable - related party | 2,724 | ' |
Inventory | 354,932 | ' |
Prepaid expenses | 1,163,914 | 173,264 |
Other current assets | 41,430 | 24,387 |
Total Current Assets | 3,506,069 | 678,754 |
Property and equipment, net | 440,194 | 19,705 |
License agreement | 657,001 | 705,667 |
Intangible assets | 47,525 | ' |
Deferred financing costs | ' | 43,490 |
Other assets | 15,716 | ' |
Goodwill | 88,162 | ' |
Total Assets | 4,754,667 | 1,447,616 |
Current Liabilities: | ' | ' |
Accounts payable | 1,181,510 | 762,663 |
Payable to Ironridge in common shares | 369,589 | ' |
Accounts payable - related party | ' | 2,258 |
Accrued expenses | 123,856 | 92,586 |
Accrued royalty and other expenses - related party | 219,799 | 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 | 1,899,719 | 1,346,046 |
Total Liabilities | 1,899,719 | 1,346,046 |
Stockholders' Equity: | ' | ' |
Common stock, $.001 par value, 5,112,861,525 shares authorized;104,085,210 and 79,373,546 shares issued and outstanding, as of January 31, 2014 and January 31, 2013, respectively | 103,166 | 79,377 |
Additional paid-in capital | 16,514,630 | 7,081,011 |
Accumulated deficit | -13,762,848 | -7,058,818 |
Total Stockholders' Equity | 2,854,948 | 101,570 |
Total Liabilities and Stockholders' Equity | $4,754,667 | $1,447,616 |
BALANCE_SHEETS_Parenthetical
BALANCE SHEETS (Parenthetical) (USD $) | Jan. 31, 2014 | 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 | 103,165,953 | 79,373,546 |
Common stock, shares outstanding | 103,165,953 | 79,373,546 |
STATEMENTS_OF_OPERATIONS
STATEMENTS OF OPERATIONS (USD $) | 12 Months Ended | |
Jan. 31, 2014 | Jan. 31, 2013 | |
Income Statement [Abstract] | ' | ' |
Revenue: | $6,077,956 | $1,820,945 |
Discounts and allowances | -433,745 | -4,513 |
Net revenue | 5,644,211 | 1,816,432 |
Cost of sales: | ' | ' |
Cost of sales products | 4,940,546 | 1,434,218 |
Total costs of sales | 4,940,546 | 1,434,218 |
Gross Profit | 702,665 | 382,214 |
Operating Expenses: | ' | ' |
Compensation and benefits | 2,298,951 | 2,437,786 |
Selling and marketing | 182,251 | 262,230 |
General and administrative | 2,762,485 | 1,463,511 |
Impairment of license | ' | 36,000 |
Total operating expenses | 5,243,687 | 4,199,527 |
Other income (expense): | ' | ' |
Other expense (Including loss on settlement of liabilities of $2,130,993) | -2,055,584 | -50,460 |
Interest expense | -108,424 | -150,180 |
Total other income (expense) | -2,164,008 | -200,640 |
Net Loss | ($6,704,030) | ($4,017,953) |
Net loss per share: | ' | ' |
Basic and diluted loss per share | ($0.07) | ($0.05) |
Weighted average common shares outstanding - basic and diluted | 93,430,025 | 77,338,169 |
STATEMENTS_OF_OPERATIONS_Paren
STATEMENTS OF OPERATIONS (Parenthetical) (USD $) | 12 Months Ended |
Jan. 31, 2014 | |
Income Statement [Abstract] | ' |
Loss on extinguishment of liabilities | $2,130,993 |
STATEMENTS_OF_STOCKHOLDERS_EQU
STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) (USD $) | Common Stock (Member) | Common Stock Shares To Be Issued (Member) | Paid-In Capital (Member) | Accumulated Deficit (Member) | Total | |
USD ($) | USD ($) | USD ($) | USD ($) | |||
Begining Balance at Jan. 31, 2012 | $76,744 | ' | $4,708,487 | ($3,040,865) | $1,744,366 | |
Begining Balance, Shares at Jan. 31, 2012 | 76,744,150 | ' | ' | ' | ' | |
Issuance of common stock for services | 2,633 | ' | 366,332 | ' | 368,965 | |
Issuance of common stock for services, shares | 2,629,396 | ' | ' | ' | ' | |
Stock based compensation | ' | ' | 2,006,192 | ' | 2,006,192 | |
Net loss | ' | ' | ' | -4,017,953 | -4,017,953 | |
Ending Balance at Jan. 31, 2013 | 79,377 | ' | 7,081,011 | -7,058,818 | 101,570 | |
Ending Balance Shares at Jan. 31, 2013 | 79,373,546 | ' | ' | ' | ' | |
Issuance of common stock for services | 3,505 | ' | 1,340,697 | ' | 1,344,202 | |
Issuance of common stock for services, shares | 3,505,914 | ' | ' | ' | ' | |
Issuance of common stock for cash | 647 | ' | 245,353 | ' | 246,000 | |
Issuance of common stock for cash, shares | 647,137 | ' | ' | ' | 647,137 | |
Issuance of common stock for acquisitions | 408 | ' | 170,710 | ' | 171,118 | |
Issuance of common stock for acquisitions, shares | 250,000 | 158,039 | ' | ' | ' | |
Shares issued to Ironridge for debt extinguishment | 19,129 | ' | 6,591,535 | ' | 6,610,664 | |
Shares issued to Ironridge for debt extinguishment, shares | 19,877,591 | ' | ' | ' | 19,877,591 | |
Cancellation of TCA shares | ' | ' | -100,000 | ' | -100,000 | |
Cancellation of TCA shares, shares | -588,235 | ' | ' | ' | ' | |
Exercise of stock options and stock option expense | 100 | ' | 23,900 | ' | 24,000 | |
Exercise of stock options and stock option expense, shares | 100,000 | 50,000 | ' | ' | ' | |
Option expense | ' | ' | 1,161,424 | ' | 1,161,424 | |
Shares issued for consulting services and subsequently recinded | [1] | 919,257 | ' | ' | ' | ' |
Net loss | ' | ' | ' | -6,704,030 | -6,704,030 | |
Ending Balance at Jan. 31, 2014 | $103,166 | ' | $16,514,630 | ($13,762,848) | $2,854,948 | |
Ending Balance Shares at Jan. 31, 2014 | 104,085,210 | 208,039 | ' | ' | ' | |
[1] | Shares were issued as consideration for a consulting agreement that was subsequently rescinded and the shares were returned in March 2014. No amount has been recorded to common stock or additional paid-in capital for these shares due to the rescission. |
STATEMENTS_OF_CASH_FLOWS
STATEMENTS OF CASH FLOWS (USD $) | 12 Months Ended | |
Jan. 31, 2014 | Jan. 31, 2013 | |
Cash Flows From Operating Activities: | ' | ' |
Net loss | ($6,704,030) | ($4,017,953) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ' | ' |
Common stock issued for services | 1,344,202 | 368,964 |
Common stock issued to Ironridge for debt extinguishment | -394,799 | ' |
Share-based employee compensation | 1,161,424 | 2,006,192 |
Depreciation | 32,421 | 6,327 |
Amortization of license agreement | 42,147 | 24,333 |
Amortization of intangible assets | 8,894 | ' |
Amortization of debt discount and deferred financing | 43,490 | 91,980 |
Loss on settlement of liabilities | 2,130,993 | ' |
Impairment of license | ' | 36,000 |
Changes in: | ' | ' |
Accounts receivable | -670,226 | -380,938 |
Notes receivable - related party | -2,724 | ' |
Inventory and Inventory in transit | -279,276 | ' |
Prepaid expenses and other current assets | -1,007,693 | 16,865 |
Other assets - long term | -15,716 | ' |
Accounts payable | 5,562,906 | 742,436 |
Accounts payable - related party | -2,258 | ' |
Accrued expenses | 31,270 | 7,936 |
Accrued royalty and other expenses - related party | 189,726 | ' |
Bank Overdraft | -8,931 | 8,931 |
Derivative liability | -120,006 | 120,006 |
Net cash provided by (used in) operating activities | 1,341,814 | -968,921 |
Cash Flows From Investing Activities: | ' | ' |
Purchases of property and equipment | -445,510 | -16,129 |
Acquisition of business, net of cash received | -50,000 | ' |
Restricted cash | 65,382 | -65,382 |
Net cash (used in) investing activities | -430,128 | -81,511 |
Cash Flows From Financing Activities: | ' | ' |
Common stock issued for cash | 246,000 | ' |
Exercise of stock options | 24,000 | ' |
Repayment on notes payable - related party | -11,825 | -44,192 |
Advances from related parties | 2,371 | 2,371 |
Repayment on promissory note | -350,000 | 350,000 |
Payment of financing costs | ' | -63,700 |
Financing on short term debt | 34,890 | -29,925 |
Net cash (used in) provided by financing activities | -54,564 | 214,554 |
Net change in cash | 857,122 | -835,878 |
Cash at beginning of period | ' | 835,878 |
Cash at end of period | 857,122 | ' |
Supplemental Cash Flow Information: | ' | ' |
Cash paid for interest | 54,103 | 54,103 |
Non-Cash Transactions: | ' | ' |
Financed insurance policy | 12,414 | ' |
Extinguishment of debt for stock | 4,749,260 | ' |
Common stock issued for acquisitions | $171,118 | ' |
NATURE_OF_BUSINESS_AND_SUMMARY
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended | ||||||||
Jan. 31, 2014 | |||||||||
Nature Of Business And Summary Of Significant Accounting Policies | ' | ||||||||
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ' | ||||||||
NOTE 1—NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||||||
Jammin Java Corp. (the “Company” or “Jammin Java”), operates as a United States (U.S.) based company providing premium roasted coffee on a wholesale level to the grocery, retail, online, service, hospitality, office coffee service and big box store industry. Through the use of our roaster distributor relationships, we have the exclusive right to manufacture and market our coffee lines to gourmet, natural and independent grocery markets in the U.S., Canada, Mexico and the Caribbean and the non-exclusive right worldwide. | |||||||||
As used herein, the terms “we,” “us,” “our,” and “Company” mean Jammin Java Corp., unless otherwise indicated. All dollar amounts in these financial statements are in U.S. dollars unless otherwise stated. | |||||||||
Jammin Java was incorporated on September 27, 2004 in Nevada under its former name “Global Electronic Recovery Corp.” On October 23, 2007, our Board of Directors (the “Board”) approved a 22.723829 for one (1) forward stock split of our authorized, issued and outstanding shares of common stock (the “2007 Forward Split”) and amended our Articles of Incorporation by the filing of a Certificate of Change with the Secretary of State of Nevada on September 11, 2007. As a result of the 2007 Forward Split, our authorized capital increased from 75,000,000 to 1,704,287,175 shares of common stock with a par value of $0.001 each. | |||||||||
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. Effective July 13, 2009, we formed and merged our then newly-formed subsidiary, Jammin Java Corp., into our Company and changed our name from “Marley Coffee Inc.” to “Jammin Java Corp.” Our common stock has, since September 17, 2009, been quoted on the Over-the-Counter Bulletin Board (“OTCBB”) or the OTCQB market under the symbol “JAMN.” | |||||||||
On January 10, 2010, the Board approved a three (3) for one (1) forward stock split of our authorized, issued and outstanding shares of common stock (the “2010 Forward Split” and, collectively with the 2007 Forward Split, the “Stock Splits”). We amended our Articles of Incorporation by the filing of a Certificate of Change with the Nevada Secretary of State, effective on February 2, 2010. As a result, our 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. | |||||||||
Unless otherwise stated, the shares of common stock disclosed throughout these financial statements have been retroactively reflected for the Stock Splits. | |||||||||
Summary of Significant Accounting Policies. The summary of our significant accounting policies presented below is designed to assist the reader in understanding our financial statements. Such financial statements and related notes are the representations of our management, who are responsible for their integrity and objectivity. In the opinion of management, these accounting policies conform to accounting principles generally accepted in the United States of America (“GAAP”) in all material respects, and have been consistently applied in preparing the accompanying financial statements. | |||||||||
Basis of Presentation. These financial statements have been prepared by management assuming that the Company will be able to continue as a going concern and realize its assets and discharge its liabilities in the normal course of business. However, certain conditions noted below currently exist which raise substantial doubt about the Company’s ability to continue as a going concern. These financial statements do not include any adjustments to the amounts and classifications of assets and liabilities that might be necessary should the Company be unable to continue as a going concern. | |||||||||
The Company has incurred a net loss of $6,704,030 and $4,017,953 for the years ended January 31, 2014 and 2013, respectively and has an accumulated deficit of $13,762,848 at January 31, 2014. In addition to the Company’s recent history of losses, the Company has 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. Further, the operations of the Company have primarily been funded by the issuance of common stock and debt. In order for us to conduct our business for the next twelve months and to continue operations thereafter and be able to discharge our liabilities and commitments in the normal course of business, we must increase sales, reduce operating expenses, and potentially raise additional funds, through either debt and/or equity financing to meet our working capital needs. 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 be required to curtail its operations. | |||||||||
If we become unable to continue as a going concern, we may have to liquidate our assets, and might realize significantly less than the values at which our net assets are carried on our financial statements, and stockholders may lose all or part of their investment in our common stock. The accompanying financial statements do not reflect any adjustments related to the outcome of this uncertainty. | |||||||||
Reclassifications. Certain prior year amounts have been reclassified to conform with the current year presentation for comparative purposes. | |||||||||
Use of Estimates. The preparation of financial statements in conformity with 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. Certain accounting principles require subjective and complex judgments to be used in the preparation of financial statements. Accordingly, a different financial presentation could result depending on the judgments, estimates, or assumptions that are used. Such estimates and assumptions include, but are not specifically limited to, those required in the assessment of the impairment of long-lived assets, the allowance for doubtful accounts, valuation allowances for deferred tax assets, and valuation of our derivatives and financial and equity instruments. While management believes that the estimates and assumptions used in the preparation of the financial statements are appropriate, actual results could differ from these estimates. | |||||||||
Fair Value of Financial Instruments. The carrying amount of the Company’s cash, accounts receivables, accounts payables, and accrued expenses approximates their estimated fair values due to the short-term maturities of those financial instruments. | |||||||||
The Company has adopted a single definition of fair value, a framework for measuring fair value, and providing expanded disclosures concerning fair value whereby estimated fair value is the price to be paid for an asset or the amount to settle a liability in an orderly transaction between market participants at the measurement date. Accordingly, 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. At January 31, 2014, the Company has no cash equivalents. During the year ended January 31, 2013, the Company invested funds in money market accounts with an average market yield of 0.05%. No funds were invested in money market accounts during the year ended January 31, 2014. | |||||||||
Restricted Cash. Cash held by the Company which pursuant to certain debt agreements is not available for general operating purposes is classified as restricted cash. Restricted cash at January 31, 2013 totaled approximately $65,000. There was no restricted cash at January 31, 2014. | |||||||||
Concentrations of Credit Risk. Our cash and cash equivalents are principally on deposit in a non-insured short-term asset management account at a large financial institution. Accounts receivable potentially subject us to concentrations of credit risk. Currently, our customer base is comprised of only a limited number of customers (see Note 13). | |||||||||
Revenue Recognition. Revenue is derived from the sale of coffee products and is recognized on a gross basis upon shipment to the customer. 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. Revenue is recognized as the net amount estimated to be received after deducting estimated amounts for discounts, trade allowances and product terms. We record promotional and return allowances based on recent and historical trends. Promotional allowances, including customer incentive and trade promotion activities, are recorded as a reduction to sales based on amounts estimated being due to customers, based primarily on historical utilization and redemption rates. Promotional allowances deducted from sales for fiscal years 2014 and 2013 were $433,745 and $4,513, respectively. | |||||||||
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; namely, 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 terms for each customer, and the length of time accounts receivable are outstanding. Management provides an allowance for accounts receivable whenever it is evident that they become uncollectible. The Company has determined that no allowance for doubtful accounts was required at January 31, 2014 and 2013. Because our accounts receivable are concentrated in a relatively few number of customers, a significant change in the liquidity or financial position of any one of these customers could have a material adverse effect on the collectability of our accounts receivable and our future operating results. | |||||||||
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 January 31, 2014 the Company determined that no reserve was required. | |||||||||
Acquisition of BlackRock Beverage Services, Inc. and Bike Caffe Franchising Inc. On August 16, 2013, the Company purchased certain assets including inventory, fixed assets, and IP owned by BlackRock Beverage Services Inc. for $81,118 in total consideration consisting of $10,000 in cash and 158,039 common shares of the Company valued at $71,118. In addition, on December 4, 2013, the Company purchased certain assets including fixed assets, inventory, IP and trademarks owned by Bike Caffe Franchising, Inc. for total consideration of $140,000 consisting of $40,000 in cash and 250,000 common shares of the Company valued at $100,000. No liabilities were assumed as part of the acquisitions. The acquisitions were accounted for by the Company using the purchase method of accounting in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Accordingly, at the date of acquisition, the net assets of BlackRock and BikeCaffe were recorded at their respective fair values and represents management’s estimates based on a third party valuation report. The Company incurred $5,000 of acquisition-related costs, which were expensed as incurred in the accompanying consolidated Statement of Operations included within Other Operating Expenses. | |||||||||
The results of BlackRock and BikeCaffe operations are included in the accompanying statements of operations from the date of acquisition through January 31, 2014. In connection with the Acquisition, the consideration paid, the net assets acquired, were recorded at fair value on the date of acquisition, as summarized in the following table: | |||||||||
Bike Caffe Franchising, Inc. | |||||||||
Tangible Assets Acquired | |||||||||
Current Assets | |||||||||
WIP & Inventory | $ | 75,656 | |||||||
Fixed Assets - Property and Equipment,net | 7,400 | ||||||||
Total Tangible Assets | $ | 83,056 | |||||||
Intangible Assets Acquired | |||||||||
Customer Base | 15,000 | ||||||||
Trade-Name/Marks | 20,800 | ||||||||
Non-Compete | 14,100 | ||||||||
Total Intangible Assets Acquired | $ | 49,900 | |||||||
Goodwill | 7,044 | ||||||||
Total Consideration Acquired | $ | 140,000 | |||||||
Black Rock Beverage Services, Inc. | |||||||||
Intangible Assets Acquired | 81,118 | ||||||||
Total Consideration Acquired | $ | 81,118 | |||||||
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. | |||||||||
Our property and equipment is summarized as follows: | |||||||||
31-Jan-14 | 31-Jan-13 | ||||||||
Equipment | $ | 217,005 | $ | 13,400 | |||||
Computers | 52,205 | 14,418 | |||||||
Furniture | 60,145 | - | |||||||
Leasehold improvements | 151,373 | - | |||||||
480,728 | 27,818 | ||||||||
Less Accumulated depreciation | 40,534 | 8,113 | |||||||
$ | 440,194 | $ | 19,705 | ||||||
Depreciation expense was $32,421 and $6,327 for the years ended January 31, 2014 and 2013, respectively. | |||||||||
Impairment of Long-Lived Assets. Long-lived assets consist primarily of a license agreement that was recorded at the estimated cost to acquire the asset. The license agreement is reviewed for impairment when events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Determination of recoverability is based on an estimate of undiscounted future cash flows resulting from the use of the asset and its eventual disposition. 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 the license and determined that no impairment existed at January 31, 2014 or 2013. | |||||||||
Stock-Based Compensation. Pursuant to the provisions of FASB ASC 718-10, “Compensation – Stock Compensation,” which establishes accounting for equity instruments exchanged for employee service, management utilizes 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 measure 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 recorded based on the value of the services or the value of the common stock whichever is more clearly determinable. Whenever the value of the services is not determinable, the measurement date occurs generally at the date of issuance of the stock. In more limited cases, it occurs when a commitment for performance has been reached with the counterparty and nonperformance is subject to significant disincentives. If the total value of stock issued exceeds the par value, the value in excess of the par value is added to the additional paid-in-capital. | |||||||||
We estimate volatility of our publicly-listed common stock by considering historical stock volatility. | |||||||||
Income Taxes. The Company follows Financial Accounting Standards Board (“FASB”) Accounting Standards Codification No 740, Income Taxes. | |||||||||
The Company records deferred tax assets and liabilities based on the differences between the financial statement and tax bases of assets and liabilities and on net operating loss carry forwards using enacted tax rates in effect for the year in which the differences are expected to 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 equal net earnings or loss divided by the weighted average of shares outstanding during the reporting period. Diluted earnings per share include 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 years ended January 31, 2014 and 2013, respectively and therefore, basic and diluted earnings per share for those periods are the same because all potential common equivalent shares would be anti-dilutive. Anti-dilutive shares include 4,973,333 options for fiscal year 2014 and 400,000 options for the fiscal year ended 2013. | |||||||||
Recently Issued Accounting Pronouncements. Accounting standards that have been issued by the FASB or other standards setting bodies that do not require adoption until a future date are being evaluated by the Company to determine whether adoption will have a material impact on the Company’s financial statements. | |||||||||
Subsequent Events. Management has evaluated events subsequent to January 31, 2014 through the date the accompanying consolidated financial statements were filed with the Securities and Exchange Commission for transactions and other events that may require adjustment of and/or disclosure in such financial statements. |
INVENTORY
INVENTORY | 12 Months Ended | ||||||||
Jan. 31, 2014 | |||||||||
InventoriesAbstract | ' | ||||||||
INVENTORY | ' | ||||||||
NOTE 2 – INVENTORY | |||||||||
Inventories were comprised of: | |||||||||
January 31, | January 31, | ||||||||
2014 | 2013 | ||||||||
Finished Goods - Coffee | $ | 354,932 | $ | - | |||||
$ | 354,932 | $ | - | ||||||
NOTE 3 – RECEIVABLES |
RECEIVABLES
RECEIVABLES | 12 Months Ended | ||||||||
Jan. 31, 2014 | |||||||||
Receivables [Abstract] | ' | ||||||||
RECEIVABLES | ' | ||||||||
NOTE 3 – RECEIVABLES | |||||||||
Receivables were comprised of: | |||||||||
January 31, | January 31, | ||||||||
2014 | 2013 | ||||||||
Grocery retail clients | $ | 771,359 | $ | 404,468 | |||||
Online clients | 35,539 | 11,253 | |||||||
Other foodservice clients | 279,049 | - | |||||||
$ | 1,085,947 | $ | 415,721 |
LICENSE_AGREEMENTS
LICENSE AGREEMENTS | 12 Months Ended | ||||||||
Jan. 31, 2014 | |||||||||
License Agreements | ' | ||||||||
LICENSE AGREEMENTS | ' | ||||||||
NOTE 4 – LICENSE AGREEMENTS | |||||||||
On March 31, 2010, the Company obtained a sub-license agreement (the “Agreement”) with Marley Coffee, LLC (“MCL”), a private limited liability company of which Rohan Marley, a Director of the Company, and his family have a combined controlling interest as more fully described below. | |||||||||
2010 MCL Trademark License Agreement | |||||||||
Fifty-Six Hope Road Music Limited, a Bahamas international business company (“Fifty-Six Hope Road”) owns and controls the intellectual property rights, including the “Marley Coffee” trademarks relating to the late reggae performer, Robert Nesta Marley, professionally known as Bob Marley (the “Trademarks”). On March 31, 2010, Fifty-Six Hope Road and MCL entered into an agreement which granted to MCL the exclusive, oral, terminable license to use the Trademarks and granted to the Company an exclusive, terminable, sublicense to use the Trademark. | |||||||||
On March 31, 2010, MCL entered into the Agreement with the Company, effective March 30, 2010, pursuant to which it sublicensed the use of the Trademarks to the Company (the “MCL Trademarks License Agreement”). Rohan Marley, a director of the Company, also serves as the managing member of MCL and is the beneficial owner of one-third of MCL’s membership interests. | |||||||||
The consideration for the MCL Trademarks License Agreement was as follows: | |||||||||
-1 | The Company entered into an Asset Purchase Agreement to sell all its interests in its Branding Development and Business Plan Development to MCL; | ||||||||
-2 | The Company assigned the Farm Lease Agreement that it had previously entered into with Rohan Marley relating to farm land located in Jamaica and all of the related leasehold improvements to MCL; and | ||||||||
-3 | The Company agreed to issue to MCL 10 million shares of the Company’s common stock as follows: | ||||||||
• | 1 million shares upon the execution of the MCL Trademark License Agreement on March 31, 2010; and; | ||||||||
• | 1 million shares on each anniversary of the execution of the MCL Trademark License Agreement for the following nine years through March 31, 2019. | ||||||||
In accordance with FASB ASC 505-25- “Share-Based payments to Non Employees,” management recorded the transaction based on the estimated fair value of the perpetual license at the measurement date of March 31, 2010 totaling $766,000, (the date when the Trademarks and its underlying rights were granted to the Company and when MCL’s performance was completed). | |||||||||
On August 5, 2011, the parties expanded the scope of the MCL Trademarks License Agreement in favor of the Company by an amendment in consideration for the Company assuming $126,000 in additional obligations of MCL. As part of the Agreement, the Company had issued 2,000,000 shares of its common stock. | |||||||||
On September 13, 2012, the MCL Agreement was replaced and superseded with the 2012 Trademarks License Agreement with Fifty-Six Hope Road more fully described below. The MCL Termination Agreement provided that all of the Company’s obligations under the MCL Agreement were terminated except for the Company’s obligations to: (i) issue to MCL the 1 million shares of its common stock which were due to MCL on March 31, 2012 (which obligation has since been forgiven); and (ii) repay its remaining outstanding debt obligation $19,715 in monthly installments, the final installment of which was paid in February 2013. | |||||||||
2012 Trademarks License Agreement | |||||||||
On September 13, 2012, the Company entered into a new trademark license agreement with Fifty-Six Hope Road which superseded and replaced the MCL Trademarks License Agreement (the “2012 Trademarks License Agreement”), with an effective date of August 7, 2012. Pursuant to the 2012 Trademarks License Agreement, Fifty-Six Hope Road granted to the Company a worldwide, exclusive, non-transferable license to utilize the Trademarks in connection with (i) the manufacturing, advertising, promotion, sale, offering for sale and distribution of coffee in all its forms and derivations, regardless of portions sizes or packaging (the “Exclusive Licensed Products”) and (ii) coffee roasting services, coffee production services and coffee sales, supply, distribution and support services, provided however that the Company may not open retail coffee houses under the Trademarks. In addition, Fifty Six Hope Road granted the Company the right to use the Trademarks on advertising and promotional materials that pertain solely to the sale of coffee cups, coffee mugs, coffee glasses, saucers, milk steamers, machines for brewing coffee, espresso and/or cappuccino, grinders, water treatment products, tea products, chocolate products, and ready-to-use (instant) coffee products (the “Non-Exclusive Licensed Products”, and together with the Exclusive Licensed Products, the “Licensed Products”). The Licensed Products may be sold by the Company pursuant to the 2012 Trademarks License Agreement through all channels of distribution, provided that, subject to certain exceptions, the Company cannot sell the Licensed Products by direct marketing methods (other than the Company’s website), including television, infomercials or direct mail without the prior written consent of Fifty-Six Hope Road. The 2012 Trademarks License Agreement has a 15 year term and provides two renewal periods of 15 years at the discretion of the Company. In return, the Company agreed to pay royalties to Fifty-Six Hope Road in an amount equal to 3% of the net sales of all Licensed Products. In addition, such royalty payments are to be deferred during the first 20 months of the term of the 2012 Trademarks License Agreement, and such deferred payments shall be paid on a quarterly-basis thereafter. At January 31, 2014, $157,417 has been accrued for such royalty fees and is included in Accrued royalty – related party in the Balance Sheet. | |||||||||
In connection with the termination and replacement, the Company recorded an impairment of license agreement assets totaling $36,000 and amortization expense totaling $24,333 for the year ended January 31, 2013. No impairment was recorded for the year ended January 31, 2014 and amortization expense was $48,666 for the year ended January 31, 2014. License agreement, net consists of the following: | |||||||||
January 31, | |||||||||
2014 | 2013 | ||||||||
License Agreement | $ | 730,000 | $ | 730,000 | |||||
Accumulated amortization | (72,999) | (24,333) | |||||||
License Agreement, net | $ | 657,001 | $ | 705,667 | |||||
The amortization period is fifteen years. Amortization expense consists of the following: | |||||||||
Years Ended January 31, | |||||||||
2014 | 2013 | ||||||||
License Agreement | $ | (48,666) | $ | (24,333) | |||||
Total License Agreement Amortization Expense | $ | (48,666) | $ | (24,333) | |||||
As of January 31, 2014, the remaining useful life of the Company's license agreement was approximately 13.5 years. The following table shows the estimated amortization expense for such assets for each of the five succeeding fiscal years and thereafter. | |||||||||
Years Ending January 31, | |||||||||
2015 | $ | 48,667 | |||||||
2016 | 48,667 | ||||||||
2017 | 48,667 | ||||||||
2018 | 48,667 | ||||||||
2019 | 48,667 | ||||||||
Thereafter | 413,666 | ||||||||
Total | $ | 657,001 |
GOODWILL
GOODWILL | 12 Months Ended |
Jan. 31, 2014 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ' |
GOODWILL | ' |
NOTE 5 – GOODWILL | |
The $88,162 recorded as goodwill represents the excess of the purchase price over the assets recorded from the acquisitions of BlackRock Beverage Services, LLC and Bike Caffe Franchising Inc. The Company does not amortize goodwill. Instead, the Company evaluates goodwill annually in the fourth quarter and whenever events or changes in circumstances indicate that it is more likely than not that an impairment loss has been incurred. As of January 31, 2014, the Company determined that no such impairment existed. |
PREPAID_EXPENSES
PREPAID EXPENSES | 12 Months Ended | ||||||||
Jan. 31, 2014 | |||||||||
Prepaid Expenses | ' | ||||||||
PREPAID EXPENSES | ' | ||||||||
NOTE 6 – PREPAID EXPENSES | |||||||||
Prepaid expenses are comprised of the following: | |||||||||
January 31, | January 31, | ||||||||
2014 | 2013 | ||||||||
Non refundable deposit-coffee supplier | $ | 1,004,198 | $ | - | |||||
Prepaid consulting services | 159,716 | 173,264 | |||||||
Total | $ | 1,163,914 | $ | 173,264 | |||||
During 2014, the Company made a non-refundable deposit to its largest coffee roaster based on the Company's projected purchases. As of January 31, 2014, the remaining non-refundable deposit totaled $1,004,198 and is expected to be fully utilized during the Company's fiscal year ending January 31, 2015. | |||||||||
RELATED_PARTY_TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Jan. 31, 2014 | |
Related Party Transactions [Abstract] | ' |
RELATED PARTY TRANSACTIONS | ' |
NOTE 7 – RELATED PARTY TRANSACTIONS | |
Transactions with Marley Coffee Ltd | |
During the year ended January 31, 2014, the Company paid $329,132 to 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. | |
Transactions with Nicole Whittle | |
During the year ended January 31, 2014, the Company paid $54,974 to Nicole Whittle. Ms. Whittle serves as the Company’s Creative Director, for ongoing creative design costs services. Nicole Whittle is the sister of Shane Whittle who is a former director and chief executive officer of the Company and who is currently a manager and equity owner of MCL. | |
Capital Advance by Company President/Shareholder | |
During the year ended January 31, 2014, Anh Tran, President of the Company, advanced the Company funds to supplement working capital totaling a balance due from Mr. Tran at January 31, 2014 of $2,724. The advances are unsecured, non-interest bearing and due on demand. |
STOCKHOLDERS_EQUITY
STOCKHOLDERS EQUITY | 12 Months Ended | ||
Jan. 31, 2014 | |||
Equity [Abstract] | ' | ||
STOCKHOLDERS EQUITY | ' | ||
NOTE 8 – STOCKHOLDER’S EQUITY | |||
Common Stock | |||
Holders of common stock are entitled to one vote for each share held. There are no restrictions that limit the Company's ability to pay dividends on its common stock. The Company has not declared any dividends since incorporation. | |||
As of January 31, 2014, the Company had 5,112,861,525 common shares authorized of its $0.001 par value common stock. | |||
During the year ended January 31, 2014, the Company issued the following shares of $0.001 par value common stock: | |||
· | 776,414 shares in exchange for services from six vendors providing finance, business development, investor relations and other services valued at $354,352. | ||
· | 195,801 shares in exchange for services with a director of the Company valued at $57,500. | ||
· | 2,533,699 shares in exchange for services with four executives/employees valued at $932,350. | ||
· | 647,137 shares in exchange for $246,000 in cash. | ||
· | 100,000 shares in exchange for $16,000 in cash for the exercise of stock options. | ||
· | 408,039 shares as consideration for acquisitions valued at $171,118. | ||
· | 19,877,591 shares for extinguishment of accounts payable and purchase of inventory and legal and accounting services valued at $6,610,664. |
STOCK_BASED_COMPENSATION
STOCK BASED COMPENSATION | 12 Months Ended | |||||||||
Jan. 31, 2014 | ||||||||||
Stock Based Compensation | ' | |||||||||
STOCK BASED COMPENSATION | ' | |||||||||
NOTE 9 – STOCK 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 on October 17, 2013), the Company registered the shares of common stock 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 January 31, 2014, 1,526,133 shares are available for issuance under the 2012 Equity Compensation Plan. | ||||||||||
On September 10, 2013, the Board of Directors approved the Company’s 2013 Equity Incentive Plan (the “2013 Plan”). The 2013 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 Plan, to the Company’s employees, officers, directors and consultants. On October 17, 2013, the Company registered the shares of common stock under the 2013 Plan on a registration statement on Form S-8 filed with the Securities and Exchange Commission. A total of 12,000,000 shares are authorized for issuance under the 2013 Plan, which has not been approved by the shareholders of the Company to date, and as of January 31, 2014, a total of 4,140,000 shares are available for issuance under the 2013 Plan. | ||||||||||
Activity in options during the year ended January 31, 2014 and related balances outstanding as of that date are set forth below: | ||||||||||
Weighted Average | ||||||||||
Number of | Weighted Average | Remaining Contract | ||||||||
Shares | Exercise Price | Term (# years) | ||||||||
Outstanding at February 1, 2012 | 7,200,000 | $ | - | |||||||
Granted | 6,233,333 | 0.40 | ||||||||
Exercised | - | - | ||||||||
Forfeited and canceled | (4,033,333) | - | ||||||||
Outstanding at January 31, 2013 | 9,400,000 | $ | 0.40 | 4.79 | ||||||
Exercisable at January 31, 2013 | 400,000 | $ | 0.26 | 4.96 | ||||||
Outstanding at February 1, 2013 | 9,400,000 | $ | 0.26 | |||||||
Granted | 7,960,000 | 0.45 | ||||||||
Exercised | (100,000) | 0.16 | ||||||||
Forfeited and canceled | - | - | ||||||||
Outstanding at January 31, 2014 | 17,260,000 | $ | 0.35 | 4.23 | ||||||
Exercisable at January 31, 2014 | 4,985,833 | $ | 0.30 | 3.77 | ||||||
During the years ended January 31, 2014 and 2013, the Company recognized share-based compensation expenses totaling $1,161,424 and $2,006,192, respectively. The remaining amount of unamortized stock options expense at January 31, 2014 is $2,985,529. | ||||||||||
The intrinsic value of exercisable and outstanding options at January 31, 2014 was $325,333. | ||||||||||
The grant date fair value of stock options granted during the year was $2,403,448 and $1,228,939 for the fiscal years ended January 31, 2014 and 2013, respectively. |
INCOME_TAXES
INCOME TAXES | 12 Months Ended | ||||||||
Jan. 31, 2014 | |||||||||
Income Tax Disclosure [Abstract] | ' | ||||||||
INCOME TAXES | ' | ||||||||
NOTE 10- INCOME TAXES | |||||||||
The provision for refundable income taxes consists of the following: | |||||||||
January 31, | January 31, | ||||||||
2014 | 2013 | ||||||||
Federal income tax benefit | $ | 2,053,743 | $ | 1,232,000 | |||||
State income tax benefit | 597,533 | 352,000 | |||||||
Less change in valuation allowance | -2,651,276 | (1,584,000 | ) | ||||||
Provision for income taxes | $ | - | $ | - | |||||
The cumulative tax effect of significant items comprising our net deferred tax amount is as follows: | |||||||||
January 31, | January 31, | ||||||||
2014 | 2013 | ||||||||
Deferred tax asset attributable to: | |||||||||
Compensatory stock options | $ | 1,640,309 | $ | 1,122,000 | |||||
Net operating loss carryforward | 3,644,967 | 1,512,000 | |||||||
Less valuation allowance | (5,285,276 | ) | (2,634,000 | ) | |||||
Net deferred tax asset | $ | - | $ | - | |||||
At January 31, 2014, the Company had unused net operating loss carryforwards of approximately $9,126,107 that are available to offset future federal and state taxable income which expires beginning in 2031. | |||||||||
The provision for income taxes on earnings subject to income taxes differs from the statutory federal rate at January 31, 2014 and 2013, due to the following: | |||||||||
January 31, | January 31, | ||||||||
2014 | 2013 | ||||||||
Federal income taxes at 34% | $ | -2,279,370 | $ | -1,352,000 | |||||
State income tax, net of federal benefit | -398,219 | -232,000 | |||||||
Tax effect on non-deductible expenses and credits | 26,313 | - | |||||||
Increase in valuation allowance | 2,651,276 | 1,584,000 | |||||||
$ | - | $ | - | ||||||
Pursuant to Internal Revenue Code Sections 382, use of our net operating loss carryforwards could be limited if a cumulative change in ownership of more than 50% occurs within a three-year period. | |||||||||
On July 13, 2006, the FASB issued FIN 48, subsequently codified in ASC 740, Income Taxes, which clarifies the accounting for uncertainty in income taxes recognized in an entity's financial statements, and prescribes a recognition threshold and measurement attributes for financial statement disclosure of tax positions taken or expected to be taken on a tax return. Under ASC 740, the impact of an uncertain income tax position on the income tax return must be recognized at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant taxing authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. Additionally, ASC 740 provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. ASC 740 is effective for fiscal years beginning after December 15, 2006. | |||||||||
We follow the provisions of ASC 740 relating to uncertain tax provisions and have commenced analyzing filing positions in all of the federal and state jurisdictions where we are required to file income tax returns, as well as all open tax years in these jurisdictions. As a result of adoption, no additional tax liabilities have been recorded. There are no unrecognized tax benefits as of January 31, 2014 or January 31, 2013. The Company files income tax returns in the U.S. federal jurisdiction and in certain state jurisdictions. The Company has not been subjected to tax examinations for any year and the statute of limitations has not expired. |
AGREEMENTS
AGREEMENTS | 12 Months Ended |
Jan. 31, 2014 | |
Agreements | ' |
AGREEMENTS | ' |
NOTE 11 – AGREEMENTS | |
On August 1, 2012, the Company entered into an Investment Agreement (the “Investment Agreement”) with Fairhills Capital. The Investment Agreement provided that from time to time in our sole discretion, in accordance with the terms and conditions of the Investment Agreement, the Company could deliver a notice of a put (“Put Notice”) to Fairhills Capital and require Fairhills Capital to purchase a number of shares of common stock equal to a maximum of 200% of the average daily volume of our common stock for the 10 trading days prior to the applicable Put Notice. The purchase price per share to be paid by Fairhills Capital was to be calculated at a 20% discount to the average of the three lowest bid prices during the 10 trading days immediately prior to Fairhills Capital’s receipt of the Put Notice. | |
In connection with the Investment Agreement, the Company and Fairhills Capital entered into a Registration Rights Agreement (“Registration Rights Agreement”). Under the Registration Rights Agreement, the Company agreed to use its commercially reasonable efforts to (a) file, within 21 days of the date of the Investment Agreement, a Registration Statement on Form S-1 covering the resale of the common stock subject to the Investment Agreement, and (b) to have the Registration Statement declared effective by the SEC within 120 calendar days after the date of the Registration Rights Agreement. | |
In addition to the Investment Agreement, on August 1, 2012, the Company entered into a Securities Purchase Agreement (the “Securities Purchase Agreement”) with Fairhills Capital pursuant to which Fairhills Capital purchased 625,000 shares of our common stock at a purchase price of $0.12 per share and an aggregate purchase price of $75,000 (the “SPA Shares”). The purchase of the SPA Shares was affected in two closings of 312,500 shares each, with the first closing on August 1, 2012 and the second closing occurring on or around November 30, 2012 (provided that Fairhills Capital assigned its right to purchase the second tranche of shares and its rights to the first tranche of shares purchased, to its affiliate, Deer Valley Management, LLC). Pursuant to the Securities Purchase Agreement, the Company agreed to (i) register the SPA Shares with the SEC and (ii) provide price protection for the SPA Shares. The Company agreed to issue the holder of the SPA Shares, additional shares of our common stock on the earlier of the (a) the date on which the SEC declared the SPA Registration Statement effective (provided that such Registration Statement has since been withdrawn as discussed below); and (b) such time as the SPA Shares can be sold pursuant to Rule 144 of the Securities Act, such that the total value of the SPA Shares and any additional shares issuable on such date total $75,000 in value, based on a 20% discount to the then trading price of our common stock. | |
On October 9, 2012, the Company filed a Form S-1 Registration Statement with the SEC covering 16,000,000 shares of our common stock relating to certain “put notices” pursuant to the Investment Agreement and 315,500 of the SPA Shares. In March 2013, the Company and Fairhills Capital agreed to terminate the Investment Agreement and the Registration Rights agreement and the Company withdrew the Form S-1 Registration Statement filing. Due to the termination of the Investment Agreement and the withdrawal of the Registration Statement, the Company will not be able to raise any funds or sell any securities in connection with the Investment Agreement moving forward. | |
In connection with the purchase of the SPA Shares, on each of August 24, 2012 and November 30, 2012, the Company paid to Kashwise Investments, as its consultant, a cash fee in the aggregate amount of $1,125 and 23,438 shares of common stock for advisory services in connection with the Investment Agreement. |
NOTE_PAYABLE_RELATED_PARTY
NOTE PAYABLE - RELATED PARTY | 12 Months Ended |
Jan. 31, 2014 | |
Note Payable - Related Party | ' |
NOTE PAYABLE - RELATED PARTY | ' |
NOTE 12 – NOTE PAYABLE - RELATED PARTY | |
The Company entered into the License Agreement with MCL, a private limited liability company of which (i) Rohan Marley, one of the Company’s directors, has a 33% ownership interest (and collectively with his family, has a controlling interest) and serves as a Manager, and (ii) Shane Whittle, a former chief executive officer and director of the Company, has a 29% ownership interest and serves as a Manager. In consideration for the License Agreement Amendment, the Company agreed to assume $126,000 of obligations by paying MCL $55,000, with the balance being paid, with no interest, in equal monthly installments over a period of eighteen months. The balance was fully paid at January 31, 2014. |
NOTE_PAYABLE
NOTE PAYABLE | 12 Months Ended |
Jan. 31, 2014 | |
Notes Payable [Abstract] | ' |
NOTE PAYABLE | ' |
NOTE 13 – NOTE PAYABLE | |
On July 19, 2012, the Company 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, the Company 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. After cash expenses, but not counting the cost of the Fee Facility Shares discussed below, the Company’s net amount of cash received at the closing on July 19, 2012 was $292,425 (the “Initial Funding”). | |
The Credit Agreement and Revolving Note were terminated in connection with the March 2013 Stipulation (Ironridge Transaction #1), described in Note 15, 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 13 for further details. | |
Upon an event of default under the Credit Agreement or the Revolving Note, TCA had the right to convert all or any portion of the outstanding principal, interest and all other amounts due under the Revolving Note into shares of our common stock at a conversion price equal to 85% of the lowest daily volume weighted average price during the five (5) trading days immediately prior to the conversion date, in each case subject to TCA not being able to beneficially own more than 4.99% of outstanding common stock upon any conversion. Because the conversion feature of the Revolving Note required the Company to issue a variable number of shares for settlement, the Revolving Note was deemed to be a derivative liability and reflected as debt on the Company’s balance sheet with an original discount valued at $59,850, under the caption “Liabilities and Stockholders’ Equity – Current Liabilities – Secured promissory note – net of discount of $0 and $29,925, respectively”. | |
The Company also agreed to pay TCA various fees during the term of the Credit Agreement, including a fee of $100,000, payable in shares of our common stock (initially equal to 588,235 shares of common stock) (the “Fee Facility Shares”). The number of Fee Facility Shares are adjusted upon the earlier of (i) the date that all Fee Facility Shares are sold or (ii) 12 months after the Initial Funding, such that the total value realized by TCA in connection with the sale of the Fee Facility Shares is equal to $100,000. The Facility Fee is reflected on the Balance Sheet under the line item “Deferred financing costs” and is amortized over the term of the loan. The unamortized balance at January 31, 2014 is $0. The Fee Facility Shares are carried as a derivative liability so long as the Company is obligated to redeem the shares in cash. At each reporting period the Company evaluates its obligation and adjusts the liability as needed. | |
During the term of the Credit Agreement, the Company was prohibited from (i) incurring any indebtedness (other than in connection with the Credit Agreement or as otherwise approved by TCA); (ii) making any new investments, creating any encumbrances on our assets, permitting a change in control of the Company, issuing any shares of common stock (other than as otherwise approved by TCA and/or in connection with the issuance of up to 15% of our issued and outstanding common stock towards employee stock option plans or acquisitions); and (iii) affecting any transactions with affiliates of the Company or undertaking certain other actions as described in the Credit Agreement, except in the usual course of business. |
CONCENTRATIONS
CONCENTRATIONS | 12 Months Ended |
Jan. 31, 2014 | |
Risks and Uncertainties [Abstract] | ' |
CONCENTRATIONS | ' |
NOTE 14 – CONCENTRATIONS | |
A significant portion of our revenue is derived from a limited number of customers. The loss of one or more of our significant customers would have a material impact on our revenues and results of operations. During the year ended January 31, 2014, three customers accounted for 57% of net revenues. During the year ended January 31, 2013, four customers accounted for 73% of net revenues. | |
During the year ended January 31, 2014, three vendors accounted for 93% of purchases. During the year ended January 31, 2013, two vendors accounted for 87% of purchases. | |
SETTLEMENT_OF_LIABILITIES_WITH
SETTLEMENT OF LIABILITIES WITH IRONRIDGE | 12 Months Ended | ||
Jan. 31, 2014 | |||
Settlement Of Liabilities With Ironridge | ' | ||
SETTLEMENT OF LIABILITIES WITH IRONRIDGE | ' | ||
NOTE 15 – 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 January 31, 2014, the Company, in connection with the above transaction, recorded an estimated loss on extinguishment of debt in the amount of $1,738,694 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 current liabilities for the excess shares owed to Ironridge of $2,288,066. This liability was reduced by the issuance of 4,524,079 common shares to Ironridge in November 2013. The remaining liability as of January 31, 2014 is $369,589. This amount will be adjusted each period until Calculation Period #3 has ended and the true-up is completed. |
SUBSEQUENT_EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Jan. 31, 2014 | |
Subsequent Events [Abstract] | ' |
SUBSEQUENT EVENTS | ' |
NOTE 16 – SUBSEQUENT EVENTS | |
On April 24, 2014, the Company entered into a Subscription Agreement with Mother Parkers Tea & Coffee Inc. (“Mother Parkers” and the “Subscription”). Pursuant to the Subscription, Mother Parkers purchased 7,333,529 units from the Company, each consisting of (a) one share of the Company’s common stock, $0.001 par value per share (the “Shares”); and (b) one (1) warrant to purchase one share of the Company’s common stock (the “Warrants” and collectively with the Shares, the “Units”) at a price per Unit equal to the fifty day weighted-average price per share of the Company’s common stock on the OTCQB market, for the fifty trading days ending March 7, 2014 (the date the parties first discussed the transactions contemplated by the Subscription), which was $0.34 (the “Per Unit Price”). The total purchase price paid for the Units was $2,500,000. | |
The Company processed two orders totaling $448,800 that were in transit to customers as of January 31, 2014, and will be recognized as revenue in the Company’s first quarter ending April 30, 2014. | |
In February 2014, the Company issued Ironridge an additional 3,366,316 shares of common stock pursuant to the July 2013 Order and Stipulation. See Note 15. |
NATURE_OF_BUSINESS_AND_SUMMARY1
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended | ||||||||
Jan. 31, 2014 | |||||||||
Nature Of Business And Summary Of Significant Accounting Policies Policies | ' | ||||||||
Basis of Presentation | ' | ||||||||
Basis of Presentation. These financial statements have been prepared by management assuming that the Company will be able to continue as a going concern and realize its assets and discharge its liabilities in the normal course of business. However, certain conditions noted below currently exist which raise substantial doubt about the Company’s ability to continue as a going concern. These financial statements do not include any adjustments to the amounts and classifications of assets and liabilities that might be necessary should the Company be unable to continue as a going concern. | |||||||||
The Company has incurred a net loss of $6,704,030 and $4,017,953 for the years ended January 31, 2014 and 2013, respectively and has an accumulated deficit of $13,762,848 at January 31, 2014. In addition to the Company’s recent history of losses, the Company has 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. Further, the operations of the Company have primarily been funded by the issuance of common stock and debt. In order for us to conduct our business for the next twelve months and to continue operations thereafter and be able to discharge our liabilities and commitments in the normal course of business, we must increase sales, reduce operating expenses, and potentially raise additional funds, through either debt and/or equity financing to meet our working capital needs. 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 be required to curtail its operations. | |||||||||
If we become unable to continue as a going concern, we may have to liquidate our assets, and might realize significantly less than the values at which our net assets are carried on our financial statements, and stockholders may lose all or part of their investment in our common stock. The accompanying financial statements do not reflect any adjustments related to the outcome of this uncertainty. | |||||||||
Reclassifications | ' | ||||||||
Reclassifications. Certain prior year amounts have been reclassified to conform with the current year presentation for comparative purposes. | |||||||||
Use of Estimates | ' | ||||||||
Use of Estimates. The preparation of financial statements in conformity with 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. Certain accounting principles require subjective and complex judgments to be used in the preparation of financial statements. Accordingly, a different financial presentation could result depending on the judgments, estimates, or assumptions that are used. Such estimates and assumptions include, but are not specifically limited to, those required in the assessment of the impairment of long-lived assets, the allowance for doubtful accounts, valuation allowances for deferred tax assets, and valuation of our derivatives and financial and equity instruments. While management believes that the estimates and assumptions used in the preparation of the financial statements are appropriate, actual results could differ from these estimates. | |||||||||
Fair Value of Financial Instruments | ' | ||||||||
Fair Value of Financial Instruments. The carrying amount of the Company’s cash, accounts receivables, accounts payables, and accrued expenses approximates their estimated fair values due to the short-term maturities of those financial instruments. | |||||||||
The Company has adopted a single definition of fair value, a framework for measuring fair value, and providing expanded disclosures concerning fair value whereby estimated fair value is the price to be paid for an asset or the amount to settle a liability in an orderly transaction between market participants at the measurement date. Accordingly, 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. At January 31, 2014, the Company has no cash equivalents. During the year ended January 31, 2013, the Company invested funds in money market accounts with an average market yield of 0.05%. No funds were invested in money market accounts during the year ended January 31, 2014. | |||||||||
Restricted Cash | ' | ||||||||
Restricted Cash. Cash held by the Company which pursuant to certain debt agreements is not available for general operating purposes is classified as restricted cash. Restricted cash at January 31, 2013 totaled approximately $65,000. There was no restricted cash at January 31, 2014. | |||||||||
Concentrations of Credit Risk | ' | ||||||||
Concentrations of Credit Risk. Our cash and cash equivalents are principally on deposit in a non-insured short-term asset management account at a large financial institution. Accounts receivable potentially subject us to concentrations of credit risk. Currently, our customer base is comprised of only a limited number of customers (see Note 13). | |||||||||
Revenue Recognition | ' | ||||||||
Revenue Recognition. Revenue is derived from the sale of coffee products and is recognized on a gross basis upon shipment to the customer. 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. Revenue is recognized as the net amount estimated to be received after deducting estimated amounts for discounts, trade allowances and product terms. We record promotional and return allowances based on recent and historical trends. Promotional allowances, including customer incentive and trade promotion activities, are recorded as a reduction to sales based on amounts estimated being due to customers, based primarily on historical utilization and redemption rates. Promotional allowances deducted from sales for fiscal years 2014 and 2013 were $435,062 and $4,513, respectively. | |||||||||
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; namely, 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 terms for each customer, and the length of time accounts receivable are outstanding. Management provides an allowance for accounts receivable whenever it is evident that they become uncollectible. The Company has determined that no allowance for doubtful accounts was required at January 31, 2014 and 2013. Because our accounts receivable are concentrated in a relatively few number of customers, a significant change in the liquidity or financial position of any one of these customers could have a material adverse effect on the collectability of our accounts receivable and our future operating results. | |||||||||
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 January 31, 2014 the Company determined that no reserve was required. | |||||||||
Acquisition of BlackRock Beverage Services, Inc. and Bike Caffe franchising Inc. | ' | ||||||||
Acquisition of BlackRock Beverage Services, Inc. and Bike Caffe Franchising Inc. On August 16, 2013, the Company purchased certain assets including inventory, fixed assets, and IP owned by BlackRock Beverage Services Inc. for $81,118 in total consideration consisting of $10,000 in cash and 158,039 common shares of the Company valued at $71,118. In addition, on December 4, 2013, the Company purchased certain assets including fixed assets, inventory, IP and trademarks owned by Bike Caffe Franchising, Inc. for total consideration of $140,000 consisting of $40,000 in cash and 250,000 common shares of the Company valued at $100,000. No liabilities were assumed as part of the acquisitions. The acquisitions were accounted for by the Company using the purchase method of accounting in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Accordingly, at the date of acquisition, the net assets of BlackRock and BikeCaffe were recorded at their respective fair values and represents management’s estimates based on a third party valuation report. The Company incurred $___ of acquisition-related costs, which were expensed as incurred in the accompanying consolidated Statement of Operations included within Other Operating Expenses. | |||||||||
The results of BlackRock and BikeCaffe operations are included in the accompanying statements of operations from the date of acquisition through January 31, 2014. In connection with the Acquisition, the consideration paid, the net assets acquired, were recorded at fair value on the date of acquisition, as summarized in the following table: | |||||||||
Bike Caffe Franchising, Inc. | |||||||||
Tangible Assets Acquired | |||||||||
Current Assets | |||||||||
WIP & Inventory | $ | 75,656 | |||||||
Fixed Assets - Property and Equipment,net | 7,400 | ||||||||
Total Tangible Assets | $ | 83,056 | |||||||
Intangible Assets Acquired | |||||||||
Customer Base | 15,000 | ||||||||
Trade-Name/Marks | 20,800 | ||||||||
Non-Compete | 14,100 | ||||||||
Total Intangible Assets Acquired | $ | 49,900 | |||||||
Goodwill | 7,044 | ||||||||
Total Consideration Acquired | $ | 140,000 | |||||||
Black Rock Beverage Services, Inc. | |||||||||
Intangible Assets Acquired | |||||||||
Goodwill | 81,118 | ||||||||
Total Consideration Acquired | $ | 81,118 | |||||||
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. | |||||||||
Our property and equipment is summarized as follows: | |||||||||
31-Jan-14 | 31-Jan-13 | ||||||||
Equipment | $ | 217,005 | $ | 13,400 | |||||
Computers | 52,205 | 14,418 | |||||||
Furniture | 60,690 | - | |||||||
Leasehold improvements | 151,373 | - | |||||||
481,273 | 27,818 | ||||||||
Less Accumulated depreciation | 40,534 | 8,113 | |||||||
$ | 440,739 | $ | 19,705 | ||||||
Depreciation expense was $33,688 and $6,327 for the years ended January 31, 2014 and 2013, respectively. | |||||||||
Impairment of Long-Lived Assets | ' | ||||||||
Impairment of Long-Lived Assets. Long-lived assets consist primarily of a license agreement that was recorded at the estimated cost to acquire the asset. The license agreement is reviewed for impairment when events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Determination of recoverability is based on an estimate of undiscounted future cash flows resulting from the use of the asset and its eventual disposition. 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 the license and determined that no impairment existed at January 31, 2014 or 2013. | |||||||||
Stock-Based Compensation | ' | ||||||||
Stock-Based Compensation. Pursuant to the provisions of FASB ASC 718-10, “Compensation – Stock Compensation,” which establishes accounting for equity instruments exchanged for employee service, management utilizes 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 measure 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 recorded based on the value of the services or the value of the common stock whichever is more clearly determinable. Whenever the value of the services is not determinable, the measurement date occurs generally at the date of issuance of the stock. In more limited cases, it occurs when a commitment for performance has been reached with the counterparty and nonperformance is subject to significant disincentives. If the total value of stock issued exceeds the par value, the value in excess of the par value is added to the additional paid-in-capital. | |||||||||
We estimate volatility of our publicly-listed common stock by considering historical stock volatility. | |||||||||
Income Taxes | ' | ||||||||
Income Taxes. The Company follows Financial Accounting Standards Board (“FASB”) Accounting Standards Codification No 740, Income Taxes. | |||||||||
The Company records deferred tax assets and liabilities based on the differences between the financial statement and tax bases of assets and liabilities and on net operating loss carry forwards using enacted tax rates in effect for the year in which the differences are expected to 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 equal net earnings or loss divided by the weighted average of shares outstanding during the reporting period. Diluted earnings per share include 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 years ended January 31, 2014 and 2013, respectively and therefore, basic and diluted earnings per share for those periods are the same because all potential common equivalent shares would be anti-dilutive. Anti-dilutive shares include 4,973,333 options for fiscal year 2014 and 400,000 options for the fiscal year ended 2013. | |||||||||
Recently Issued Accounting Pronouncements | ' | ||||||||
Recently Issued Accounting Pronouncements. Accounting standards that have been issued by the FASB or other standards setting bodies that do not require adoption until a future date are being evaluated by the Company to determine whether adoption will have a material impact on the Company’s financial statements. | |||||||||
Subsequent Events | ' | ||||||||
Subsequent Events. Management has evaluated events subsequent to January 31, 2014 through the date the accompanying consolidated financial statements were filed with the Securities and Exchange Commission for transactions and other events that may require adjustment of and/or disclosure in such financial statements. |
NATURE_OF_BUSINESS_AND_SUMMARY2
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended | ||||||||
Jan. 31, 2014 | |||||||||
Property, Plant and Equipment [Abstract] | ' | ||||||||
Schedule of the consideration paid, the net assets acquired on the date of acquisition | ' | ||||||||
In connection with the Acquisition, the consideration paid, the net assets acquired, were recorded at fair value on the date of acquisition, as summarized in the following table: | |||||||||
Bike Caffe Franchising, Inc. | |||||||||
Tangible Assets Acquired | |||||||||
Current Assets | |||||||||
WIP & Inventory | $ | 75,656 | |||||||
Fixed Assets - Property and Equipment,net | 7,400 | ||||||||
Total Tangible Assets | $ | 83,056 | |||||||
Intangible Assets Acquired | |||||||||
Customer Base | 15,000 | ||||||||
Trade-Name/Marks | 20,800 | ||||||||
Non-Compete | 14,100 | ||||||||
Total Intangible Assets Acquired | $ | 49,900 | |||||||
Goodwill | 7,044 | ||||||||
Total Consideration Acquired | $ | 140,000 | |||||||
Black Rock Beverage Services, Inc. | |||||||||
Intangible Assets Acquired | 81,118 | ||||||||
Total Consideration Acquired | $ | 81,118 | |||||||
Schedule of Property Plant and Equipment | ' | ||||||||
Our property and equipment is summarized as follows: | |||||||||
31-Jan-14 | 31-Jan-13 | ||||||||
Equipment | $ | 217,005 | $ | 13,400 | |||||
Computers | 52,205 | 14,418 | |||||||
Furniture | 60,145 | - | |||||||
Leasehold improvements | 151,373 | - | |||||||
480,728 | 27,818 | ||||||||
Less Accumulated depreciation | 40,534 | 8,113 | |||||||
$ | 440,194 | $ | 19,705 |
RECEIVABLES_Tables
RECEIVABLES (Tables) | 12 Months Ended | ||||||||
Jan. 31, 2014 | |||||||||
Receivables [Abstract] | ' | ||||||||
Schedule of receivables | ' | ||||||||
Receivables were comprised of: | |||||||||
January 31, | January 31, | ||||||||
2014 | 2013 | ||||||||
Grocery retail clients | $ | 771,359 | $ | 404,468 | |||||
Online clients | 35,539 | 11,253 | |||||||
Other foodservice clients | 279,049 | - | |||||||
$ | 1,085,947 | $ | 415,721 |
INVENTORY_Tables
INVENTORY (Tables) | 12 Months Ended | ||||||||
Jan. 31, 2014 | |||||||||
Inventory Tables | ' | ||||||||
Schedule of inventory | ' | ||||||||
Inventories were comprised of: | |||||||||
January 31, | January 31, | ||||||||
2014 | 2013 | ||||||||
Finished Goods - Coffee | $ | 354,932 | $ | - | |||||
$ | 354,932 | $ | - | ||||||
NOTE 3 – RECEIVABLES |
LICENSE_AGREEMENTS_Tables
LICENSE AGREEMENTS (Tables) | 12 Months Ended | ||||||||
Jan. 31, 2014 | |||||||||
License Agreements Tables | ' | ||||||||
Schedule of license agreements | ' | ||||||||
License agreement, net consists of the following: | |||||||||
January 31, | |||||||||
2014 | 2013 | ||||||||
License Agreement | $ | 730,000 | $ | 730,000 | |||||
Accumulated amortization | (72,999) | (24,333) | |||||||
License Agreement, net | $ | 657,001 | $ | 705,667 | |||||
Schedule of amortization expense | ' | ||||||||
The amortization period is fifteen years. Amortization expense consists of the following: | |||||||||
Years Ended January 31, | |||||||||
2014 | 2013 | ||||||||
License Agreement | $ | (48,666) | $ | (24,333) | |||||
Total License Agreement Amortization Expense | $ | (48,666) | $ | (24,333) | |||||
Schedule of future amortization expense | ' | ||||||||
The following table shows the estimated amortization expense for such assets for each of the five succeeding fiscal years and thereafter. | |||||||||
Years Ending January 31, | |||||||||
2015 | $ | 48,667 | |||||||
2016 | 48,667 | ||||||||
2017 | 48,667 | ||||||||
2018 | 48,667 | ||||||||
2019 | 48,667 | ||||||||
Thereafter | 413,666 | ||||||||
Total | $ | 657,001 |
PREPAID_EXPENSES_Tables
PREPAID EXPENSES (Tables) | 12 Months Ended | ||||||||
Jan. 31, 2014 | |||||||||
Prepaid Expenses Tables | ' | ||||||||
Schedule of prepaid expenses | ' | ||||||||
Prepaid expenses are comprised of the following: | |||||||||
January 31, | January 31, | ||||||||
2014 | 2013 | ||||||||
Non refundable deposit-coffee supplier | $ | 1,004,198 | $ | - | |||||
Prepaid consulting services | 159,716 | 173,264 | |||||||
Total | $ | 1,163,914 | $ | 173,264 |
STOCK_BASED_COMPENSATION_Table
STOCK BASED COMPENSATION (Tables) | 12 Months Ended | |||||||||
Jan. 31, 2014 | ||||||||||
Stock Based Compensation Tables | ' | |||||||||
Schedule of activity in stock options | ' | |||||||||
Activity in options during the year ended January 31, 2014 and related balances outstanding as of that date are set forth below: | ||||||||||
Weighted Average | ||||||||||
Number of | Weighted Average | Remaining Contract | ||||||||
Shares | Exercise Price | Term (# years) | ||||||||
Outstanding at February 1, 2012 | 7,200,000 | $ | - | |||||||
Granted | 6,233,333 | 0.40 | ||||||||
Exercised | - | - | ||||||||
Forfeited and canceled | (4,033,333) | - | ||||||||
Outstanding at January 31, 2013 | 9,400,000 | $ | 0.40 | 4.79 | ||||||
Exercisable at January 31, 2013 | 400,000 | $ | 0.26 | 4.96 | ||||||
Outstanding at February 1, 2013 | 9,400,000 | $ | 0.26 | |||||||
Granted | 7,960,000 | 0.45 | ||||||||
Exercised | (100,000) | 0.16 | ||||||||
Forfeited and canceled | - | - | ||||||||
Outstanding at January 31, 2014 | 17,260,000 | $ | 0.35 | 4.23 | ||||||
Exercisable at January 31, 2014 | 4,985,833 | $ | 0.30 | 3.77 |
INCOME_TAXES_Table
INCOME TAXES (Table) | 12 Months Ended | ||||||||
Jan. 31, 2014 | |||||||||
Income Tax Disclosure [Abstract] | ' | ||||||||
Schedule of provision for refundable income taxes | ' | ||||||||
The provision for refundable income taxes consists of the following: | |||||||||
January 31, | January 31, | ||||||||
2014 | 2013 | ||||||||
Federal income tax benefit | $ | 2,053,743 | $ | 1,232,000 | |||||
State income tax benefit | 597,533 | 352,000 | |||||||
Less change in valuation allowance | -2,651,276 | (1,584,000 | ) | ||||||
Provision for income taxes | $ | - | $ | - | |||||
Schedule of net deferred tax | ' | ||||||||
The cumulative tax effect of significant items comprising our net deferred tax amount is as follows: | |||||||||
January 31, | January 31, | ||||||||
2014 | 2013 | ||||||||
Deferred tax asset attributable to: | |||||||||
Compensatory stock options | $ | 1,640,309 | $ | 1,122,000 | |||||
Net operating loss carryforward | 3,644,967 | 1,512,000 | |||||||
Less valuation allowance | (5,285,276 | ) | (2,634,000 | ) | |||||
Net deferred tax asset | $ | - | $ | - | |||||
Reconciliation of provision for income tax | ' | ||||||||
The provision for income taxes on earnings subject to income taxes differs from the statutory federal rate at January 31, 2014 and 2013, due to the following: | |||||||||
January 31, | January 31, | ||||||||
2014 | 2013 | ||||||||
Federal income taxes at 34% | $ | -2,279,370 | $ | -1,352,000 | |||||
State income tax, net of federal benefit | -398,219 | -232,000 | |||||||
Tax effect on non-deductible expenses and credits | 26,313 | - | |||||||
Increase in valuation allowance | 2,651,276 | 1,584,000 | |||||||
$ | - | $ | - |
NATURE_OF_BUSINESS_AND_SUMMARY3
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) (USD $) | 0 Months Ended | 12 Months Ended | 2 Months Ended | ||||||
Oct. 10, 2010 | Oct. 23, 2007 | Jan. 31, 2014 | Jan. 31, 2013 | Jan. 11, 2010 | Oct. 24, 2007 | Sep. 27, 2004 | Jan. 31, 2014 | Jan. 31, 2014 | |
Bike Caffe Franchising, Inc. (Member) | Black Rock Beverage Services, Inc. (Member) | ||||||||
Stock split conversion terms | 'Three for one forward stock split | '22.723829 for one forward stock split | ' | ' | ' | ' | ' | ' | ' |
Common stock, shares authorized | ' | ' | 5,112,861,525 | 5,112,861,525 | 5,112,861,525 | 1,704,287,175 | 75,000,000 | ' | ' |
Common stock, par value | ' | ' | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 | ' | ' |
Net Loss | ' | ' | ($6,704,030) | ($4,017,953) | ' | ' | ' | ' | ' |
Accumulated deficit | ' | ' | -13,762,848 | -7,058,818 | ' | ' | ' | ' | ' |
Restricted Cash | ' | ' | ' | 65,382 | ' | ' | ' | ' | ' |
Depreciation Expense | ' | ' | 32,421 | 6,327 | ' | ' | ' | ' | ' |
Anti-dilutive options excluded from earnings per share calculation | ' | ' | 4,973,333 | 400,000 | ' | ' | ' | ' | ' |
Issuance of shares in acquisitions, shares | ' | ' | ' | ' | ' | ' | ' | 250,000 | 158,039 |
Issuance of shares in acquisitions | ' | ' | 171,118 | ' | ' | ' | ' | 100,000 | 71,118 |
Cash paid in acquisition | ' | ' | ' | ' | ' | ' | ' | 40,000 | 10,000 |
Promotional allowances deducted from sales | ' | ' | $433,745 | $4,513 | ' | ' | ' | ' | ' |
NATURE_OF_BUSINESS_AND_SUMMARY4
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) (USD $) | Jan. 31, 2014 |
Intangible Assets Acquired | ' |
Goodwill | $88,162 |
Bike Caffe Franchising, Inc. (Member) | ' |
Current Assets | ' |
WIP & Inventory | 75,656 |
Fixed Assets - Property and Equipment,net | 7,400 |
Total Tangible Assets | 83,056 |
Intangible Assets Acquired | ' |
Customer Base | 15,000 |
Trade-Name/Marks | 20,800 |
Non-Compete | 14,100 |
Total Intangible Assets Acquired | 49,900 |
Goodwill | 7,044 |
Total Consideration Acquired | 140,000 |
Black Rock Beverage Services, Inc. (Member) | ' |
Intangible Assets Acquired | ' |
Total Intangible Assets Acquired | 81,118 |
Total Consideration Acquired | $81,118 |
NATURE_OF_BUSINESS_AND_SUMMARY5
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 1) (USD $) | Jan. 31, 2014 | Jan. 31, 2013 |
Property and equipment, gross | $480,728 | $27,818 |
Less Accumulated Depreciation | 40,534 | 8,113 |
Property and equipment, net | 440,194 | 19,705 |
Equipment (Member) | ' | ' |
Property and equipment, gross | 217,005 | 13,400 |
Computer (Member) | ' | ' |
Property and equipment, gross | 52,205 | 14,418 |
Furniture (Member) | ' | ' |
Property and equipment, gross | 60,145 | ' |
Leasehold improvements (Member) | ' | ' |
Property and equipment, gross | $151,373 | ' |
INVENTORY_Details
INVENTORY (Details) (USD $) | Jan. 31, 2014 |
Inventory Disclosure [Abstract] | ' |
Finished Goods - Coffee | $354,932 |
[us-gaap:InventoryNet] | $354,932 |
RECEIVABLES_Details
RECEIVABLES (Details) (USD $) | Jan. 31, 2014 | Jan. 31, 2013 |
Accounts receivable, net | $1,085,947 | $415,721 |
Grocery Retail Clients [Member] | ' | ' |
Accounts receivable, net | 771,359 | 404,468 |
Online Clients [Member] | ' | ' |
Accounts receivable, net | 35,539 | 11,253 |
International Foodservice Clients [Member] | ' | ' |
Accounts receivable, net | $279,049 | ' |
LICENSE_AGREEMENTS_Details_Nar
LICENSE AGREEMENTS (Details Narrative) (USD $) | 12 Months Ended | ||||||
Jan. 31, 2014 | Jan. 31, 2013 | Sep. 13, 2012 | Sep. 13, 2012 | Mar. 31, 2010 | Aug. 05, 2011 | Jan. 31, 2014 | |
Trademarks [Member] | Marley Coffee Ltd (Member) | Marley Coffee Ltd (Member) | Marley Coffee Ltd (Member) | Fifty-Six Hope Road (Member) | |||
Fifty-Six Hope Road (Member) | Trademarks [Member] | Additional Trademarks Agreement (Member) | Trademarks [Member] | ||||
Total shares reserved for issuance, per the licensing agreement | ' | ' | ' | ' | 10,000,000 | ' | ' |
Licensing agreement, number of common shares issued immediately upon the execution of the agreement | ' | ' | ' | ' | 1,000,000 | 2,000,000 | ' |
Licensing agreement, number of shares to be issued on every anniversary of agreement | ' | ' | ' | ' | 1,000,000 | ' | ' |
License Agreement | $730,000 | $730,000 | ' | ' | $766,000 | ' | ' |
Additional obligations assumed | ' | ' | ' | ' | ' | 126,000 | ' |
Monthly installment to be paid for outstanding debt obligation | ' | ' | ' | 19,715 | ' | ' | ' |
Royalty percentage | ' | ' | 3.00% | ' | ' | ' | ' |
Accrued royalties | ' | ' | ' | ' | ' | ' | 157,417 |
Impairment of license | ' | $36,000 | ' | ' | ' | ' | ' |
Remaining useful life of license agreement | '13 years 6 months | ' | ' | ' | ' | ' | ' |
LICENSE_AGREEMENTS_Details
LICENSE AGREEMENTS (Details) (USD $) | Jan. 31, 2014 | Jan. 31, 2013 |
Notes to Financial Statements | ' | ' |
License Agreement | $730,000 | $730,000 |
Accumulated amortization | -72,999 | -24,333 |
License Agreement, net | $657,001 | $705,667 |
LICENSE_AGREEMENTS_Details_1
LICENSE AGREEMENTS (Details 1) (USD $) | 12 Months Ended | |
Jan. 31, 2014 | Jan. 31, 2013 | |
Notes to Financial Statements | ' | ' |
License Agreement | ($42,147) | ($24,333) |
LICENSE_AGREEMENTS_Details_2
LICENSE AGREEMENTS (Details 2) (USD $) | Jan. 31, 2014 | Jan. 31, 2013 |
Years Ending January 31, | ' | ' |
2015 | $48,667 | ' |
2016 | 48,667 | ' |
2017 | 48,667 | ' |
2018 | 48,667 | ' |
2019 | 48,667 | ' |
Thereafter | 413,666 | ' |
Total | $657,001 | $705,667 |
PREPAID_EXPENSES_Details
PREPAID EXPENSES (Details) (USD $) | Jan. 31, 2014 | Jan. 31, 2013 |
Prepaid Expenses Details | ' | ' |
Non-refundable deposit-coffee supplier | $1,004,198 | ' |
Prepaid consulting services | 159,716 | 173,264 |
Prepaid expenses | $1,163,914 | $173,264 |
GOODWILL_Details_Narrative
GOODWILL (Details Narrative) (USD $) | Jan. 31, 2014 |
Notes to Financial Statements | ' |
Goodwill from Goodwill Black Rock Beverage Services, LLC and BikeCaffe Franchising Inc | $88,162 |
RELATED_PARTY_TRANSACTIONS_Det
RELATED PARTY TRANSACTIONS (Details Narrative) (USD $) | 12 Months Ended |
Jan. 31, 2014 | |
Creative Design Service Charges paid to Nicole Whittle | $54,974 |
Anh Tran/Brent Toevs (Member) | ' |
Due from related party | 2,724 |
Marley Coffee Ltd - Rohan Marley (Member) | ' |
Purchase from related parties | $329,132 |
Chairman, ownership percentage | 25.00% |
STOCKHOLDERS_EQUITY_Details_Na
STOCKHOLDERS EQUITY (Details Narrative) (USD $) | 12 Months Ended | ||||
Jan. 31, 2014 | Jan. 31, 2013 | Jan. 11, 2010 | Oct. 24, 2007 | Sep. 27, 2004 | |
Common stock, par value | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 |
Common stock, shares authorized | 5,112,861,525 | 5,112,861,525 | 5,112,861,525 | 1,704,287,175 | 75,000,000 |
Issuance of common stock for services | $1,344,202 | $368,965 | ' | ' | ' |
Issuance of common stock for cash | 246,000 | ' | ' | ' | ' |
Issuance of common stock for cash, Shares | 647,137 | ' | ' | ' | ' |
Cash Proceed from the exercise of stock options | 24,000 | ' | ' | ' | ' |
Stock issued for extinguishment of accounts payable and purchase of inventory and legal and accounting services | 6,610,664 | ' | ' | ' | ' |
Stock issued for extinguishment of accounts payable and purchase of inventory and legal and accounting services, Shares | 19,877,591 | ' | ' | ' | ' |
Common Stock (Member) | ' | ' | ' | ' | ' |
Issuance of common stock for services | 3,505 | 2,633 | ' | ' | ' |
Issuance of common stock for services, shares | 3,505,914 | 2,629,396 | ' | ' | ' |
Issuance of common stock for cash | 647 | ' | ' | ' | ' |
Issuance of common stock for cash, Shares | 647,137 | ' | ' | ' | ' |
Cash Proceed from the exercise of stock options | 16,000 | ' | ' | ' | ' |
Stock issued for extinguishment of accounts payable and purchase of inventory and legal and accounting services | 19,129 | ' | ' | ' | ' |
Stock issued for extinguishment of accounts payable and purchase of inventory and legal and accounting services, Shares | 19,877,591 | ' | ' | ' | ' |
Director (Member) | ' | ' | ' | ' | ' |
Issuance of common stock for services | 57,500 | ' | ' | ' | ' |
Issuance of common stock for services, shares | 195,801 | ' | ' | ' | ' |
Four executives (Member) | ' | ' | ' | ' | ' |
Issuance of common stock for services | 932,350 | ' | ' | ' | ' |
Issuance of common stock for services, shares | 2,533,699 | ' | ' | ' | ' |
Six Vendors (Member) | ' | ' | ' | ' | ' |
Issuance of common stock for services | $354,352 | ' | ' | ' | ' |
Issuance of common stock for services, shares | 776,414 | ' | ' | ' | ' |
STOCK_BASED_COMPENSATION_Detai
STOCK BASED COMPENSATION (Details Narrative) (USD $) | 12 Months Ended | |
Jan. 31, 2014 | Jan. 31, 2013 | |
Stock-based compensation expense | $1,161,424 | $2,006,192 |
Remaining amount of unamortized stock option expense | 2,985,229 | ' |
Intrinsic value of stock options outstanding | 325,333 | ' |
Grant date fair value of stock options | $2,403,448 | $1,228,939 |
2012 Equity Compensation Plan (Member) | ' | ' |
Number of shares authorized under equity compensation plan | 12,000,000 | ' |
Shares available for issuance | 1,526,133 | ' |
2013 Equity Compensation Plan (Member) | ' | ' |
Number of shares authorized under equity compensation plan | 12,000,000 | ' |
Shares available for issuance | 4,140,000 | ' |
STOCK_BASED_COMPENSATION_Detai1
STOCK BASED COMPENSATION (Details) (Compensation and Incentive Plans (Member), USD $) | 12 Months Ended | |
Jan. 31, 2014 | Jan. 31, 2013 | |
Compensation and Incentive Plans (Member) | ' | ' |
Outstanding, beginning | 9,400,000 | 7,200,000 |
Granted | 7,960,000 | 6,233,333 |
Exercised | -100,000 | ' |
Forfeited and canceled | ' | -4,033,333 |
Outstanding, ending | 17,260,000 | 9,400,000 |
Weighted Average Exercise Price: | ' | ' |
Outstanding, beginning | $0.40 | ' |
Granted | $0.45 | $0.40 |
Excercised | $0.16 | ' |
Outstanding, ending | $0.35 | $0.40 |
Exercisable | $0.30 | $0.26 |
Weighted Average Remaining Contractual Term: | ' | ' |
Weighted Average Remaining Contractual Term of Options outstanding | '4 years 2 months 23 days | '4 years 9 months 14 days |
Weighted Average Remaining Contractual Term of Options exercisable | '3 years 9 months 7 days | '4 years 11 months 16 days |
INCOME_TAXES_Details
INCOME TAXES (Details) (USD $) | 9 Months Ended | 12 Months Ended |
Oct. 31, 2012 | Jan. 31, 2014 | |
Notes to Financial Statements | ' | ' |
Federal income tax benefit | $1,232,000 | $2,053,743 |
State income tax benefit | 352,000 | 597,533 |
Less change in valuation allowance | ($1,584,000) | ($2,651,276) |
INCOME_TAXES_Details_1
INCOME TAXES (Details 1) (USD $) | Jan. 31, 2014 | Jan. 31, 2013 |
Deferred tax asset attributable to: | ' | ' |
Compensatory stock options | $1,640,309 | $1,122,000 |
Net operating loss carryforward | 3,644,967 | 1,512,000 |
Less, valuation allowance | -5,285,276 | -2,634,000 |
Net deferred tax asset | ' | ' |
INCOME_TAXES_Details_2
INCOME TAXES (Details 2) (USD $) | 12 Months Ended | |
Jan. 31, 2014 | Jan. 31, 2013 | |
Notes to Financial Statements | ' | ' |
Federal income taxes at 34% | ($2,301,533) | ($1,352,000) |
State income tax, net of federal benefit | -402,091 | -232,000 |
Tax effect on non-deductible expenses and credits | 26,313 | ' |
Increase in valuation allowance | $2,677,311 | $1,584,000 |
AGREEMENTS_Details_Narrative
AGREEMENTS (Details Narrative) (USD $) | 12 Months Ended | 0 Months Ended | |
Jan. 31, 2014 | Oct. 09, 2012 | Aug. 02, 2012 | |
Fairhills Capital (Member) | |||
Issuance of common stock for cash | $246,000 | ' | $75,000 |
Issuance of common stock for cash, shares | 647,137 | ' | 625,000 |
Share price | ' | ' | $0.12 |
SPA Shares each closing | ' | ' | 312,500 |
S-1 Registration Shares | ' | 16,000,000 | ' |
Securities Purchase Agreement Shares in registration | ' | 315,500 | ' |
Fees paid for advisory services in connection with the Investment Agreement | $1,125 | ' | ' |
Fees paid for advisory services in connection with the Investment Agreement, shares | 23,438 | ' | ' |
NOTE_PAYABLE_RELATED_PARTY_Det
NOTE PAYABLE - RELATED PARTY (Details Narrative) (USD $) | 12 Months Ended | |
Jan. 31, 2014 | Jan. 31, 2013 | |
Note Payable - Related Party Details Narrative | ' | ' |
Notes Payable Related Party | ' | $9,454 |
Description of License Agreement with MCL | 'The Company entered into the License Agreement with MCL, a private limited liability company of which (i) Rohan Marley, one of the CompanyBs directors, has a 33% ownership interest (and collectively with his family, has a controlling interest) and serves as a Manager, and (ii) Shane Whittle, a former chief executive officer and director of the Company, has a 29% ownership interest and serves as a Manager. | ' |
Obligation Assumed for the agreement | $126,000 | ' |
Payment Terms of Assumed Liabilities | 'Paying MCL $55,000, with the balance being paid, with no interest, in equal monthly installments over a period of eighteen months | ' |
NOTE_PAYABLE_Details_Narrative
NOTE PAYABLE (Details Narrative) (USD $) | Jan. 31, 2014 | Jan. 31, 2013 | Jan. 31, 2014 | Jul. 19, 2012 | Jun. 18, 2013 |
Revolving Note (Member) | TCA Global Credit Master Fund LP (Member) | Ironridge Transaction #1 Notes Payable (Member) | |||
Revolving Note (Member) | |||||
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% | ' |
Debt conversion price, percent of average closing price | ' | ' | ' | 85.00% | ' |
Revolving Note | ' | 320,075 | 59,850 | ' | ' |
Secured promissory note, discount | 0 | 29,925 | ' | ' | ' |
Outstanding liabilities related to shares issued for debt purchased by Ironridge Global IV | ' | ' | ' | ' | $100,000 |
Shares issued for debt purchased by Ironridge | ' | ' | ' | ' | 588,235 |
CONCENTRATIONS_Details_Narrati
CONCENTRATIONS (Details Narrative) | 2 Months Ended | |
Jan. 31, 2014 | Jan. 31, 2013 | |
Customer Concentration Risk [Member] | ' | ' |
Percentage concentration | 57.00% | 73.00% |
Vendor Risk (Member) | ' | ' |
Percentage concentration | 93.00% | 83.00% |
SETTLEMENT_OF_LIABILITIES_WITH1
SETTLEMENT OF LIABILITIES WITH IRONRIDGE (Details Narrative) (USD $) | 12 Months Ended | 3 Months Ended | 9 Months Ended | 5 Months Ended | 9 Months Ended | 3 Months Ended | 6 Months Ended | ||||
Jan. 31, 2014 | Jun. 18, 2013 | Oct. 31, 2013 | Mar. 06, 2013 | Oct. 31, 2013 | Oct. 31, 2013 | Sep. 12, 2013 | 24-May-13 | Oct. 31, 2013 | Jan. 31, 2014 | Jul. 26, 2013 | |
Ironridge Transaction #1 (Member) | Ironridge Transaction #1 (Member) | Ironridge Transaction #1 (Member) | Ironridge Transaction #2 (Member) | Ironridge Transaction #2 (Member) | Ironridge Transaction #2 (Member) | Ironridge Transaction #2 (Member) | Ironridge Transaction #3 (Member) | Ironridge Transaction #3 (Member) | Ironridge Transaction #3 (Member) | ||
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 | 19,877,591 | 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 | -2,130,993 | ' | -340,398 | ' | ' | -51,901 | ' | ' | ' | -1,738,694 | ' |
Increase in payable to Ironridge in common shares | ' | ' | ' | ' | ' | ' | ' | ' | ' | $2,288,066 | ' |
SUBSEQUENT_EVENTS_Details_Narr
SUBSEQUENT EVENTS (Details Narrative) (USD $) | 12 Months Ended | 3 Months Ended | 3 Months Ended | 1 Months Ended | |||
Jan. 31, 2014 | Oct. 31, 2013 | Apr. 24, 2014 | Apr. 24, 2014 | Apr. 24, 2014 | 16-May-14 | Feb. 28, 2014 | |
Ironridge Transaction #3 (Member) | Subscription Agreement (Member) | Subscription Agreement (Member) | Subscription Agreement (Member) | Sales in Transit (Member) | July 2013 Order and Stipulation (Member) | ||
Capital Units [Member] | Warrant (Member) | Ironridge Transaction #3 (Member) | |||||
Subsequent Events Date | ' | ' | 24-Apr-14 | ' | ' | ' | ' |
Subsequent Event Description | ' | ' | 'The Company entered into a Subscription Agreement with Mother Parkers Tea & Coffee Inc | ' | ' | ' | ' |
Units issued during period, value | ' | ' | $2,500,000 | ' | ' | ' | ' |
Units issued during period, units | ' | ' | 7,333,529 | ' | ' | ' | ' |
Exercise price, per unit price | ' | ' | ' | 0.34 | ' | ' | ' |
Number of trading days | ' | ' | '50 days | ' | ' | ' | ' |
Unit composition, warrant to purchase, common share | ' | ' | ' | 1 | 1 | ' | ' |
Shares issued to Ironridge for debt extinguishment, shares | 19,877,591 | 5,000,000 | ' | ' | ' | ' | 3,366,316 |
Sales orders in transit to customers | ' | ' | ' | ' | ' | $448,000 | ' |