On Tuesday the stock of Jammin Java Corp. (OTCMKTS:JAMN) made an impressive jump and returned to $0.42 per share, price levels last visited at the end of November. On the very next day though the company got devastated and suffered a harsh blow, crashing down by more than 20% and dropping to $0.33. Nearly 4 million shares got dumped on the market, volume three times higher than the one from the previous session and more than 10 times higher than Monday’s.
The severe correction took place after the company announced its preliminary financial results for the fiscal year ending January 31, 2014. According to the 8-K form they had:
• $3.6 million current assets
• $1.9 million total liabilities
• $6.4 million revenues
• $6.6 million net loss
Although the numbers show a significant improvement over the results from the previous fiscal year investors were far from impressed, and with a good reason. When compared with the report for the third quarter of the fiscal year some rather disturbing facts are revealed. Apparently JAMN
have been able to reach a net loss of $4.1 million just for the three months between November and January.
Revenues for the quarter are around $1.8 million while the cost of goods sold stand at around $2.4 million, or in other words -the company was losing money with each sale they made. The poor performance at the end of the year might be the reason for the subscription agreement signed with Mother Parkers Tea & Coffee, Inc. announced at the end of April.
Although the deal will result in dilution of the common stock its terms are not that alarming for a pennystock financing. Mother Parkers will acquire 7.3 million units consisting of 1 common share and 1 warrant for a total of $2.5 million, or $0.34 per unit which is comparable to the market price of the stock in the past few months. The warrants have an exercise price equal to 150% of the price of each unit or $0.51.
have been able to expand their network of retail locations that offer their gourmet coffee brands and revenues have increased accordingly. If the company’s management team is able to keep the losses in check JAMN
could turn into a solid company and
once again look at last summer’s price levels. For now though investors will have to wait until May 16 when the official report should be submitted in order to see the full financial state of the company.
Yesterday the marijuana industry suffered another blow as the SEC suspended yet another company in the industry. Following the shocking suspension of Growlife, Inc. (OTCMKTS:PHOT
) on April 10, now the stock of Cannabusiness Group (OTCMKTS:CBGI) has been temporarily suspended from trading. The ban should be lifted on May 21 when CBGI will most likely resume trading at a considerably lower price on the Grey Market.