Jammin Java Corp (OTCMKTS:JAMN) Continue The Upward Trend
Jammin Java Corp (OTCMKTS:JAMN) added a further 11% yesterday which means that the total gains since the beginning of the month amount to around 77%. That’s great performance, but is it justified?
Well, the press releases that we have seen from them in the past few weeks have indeed been great. They said that they recently managed to settle around $1.2 millions worth of debt, the Marley Coffee is being sold in an increasing number of retails stores and this should mean that the revenues are increasing. That is probably why the investors are so excited about JAMN right now. We read through the message boards, however, and we can see that there is some anxiety among them and especially among the long-term shareholders and it’s related to the next financial report.
The latest one is the 10-K for the twelve months that ended on January 31 and it discloses the following numbers:
- cash on hand: $0
- current assets: $678 thousand
- current liabilities: $1.3 million
- yearly revenues: $1.8 million
- yearly net loss: $4 million
Indeed, we see that year-over-year JAMN do seem to be moving in the right direction in terms of revenues (the results for previous year resulted on only $402 thousand in sales), but the stockholders will definitely sleep better at night if something is done about the significant losses that the company has been experiencing since its inception.
The 10-Q should be published quite soon, and if it doesn’t present any more optimistic financials, there is a risk of JAMN 
taking a tumble similar to the one displayed by Norstra Energy, Inc (OTCBB:NORX) and DNA Dynamics Inc (OTCMKTS:DNAD).
But let’s not get carried away with the parallels between DNAD, NORX and JAMN because the three companies are quite different. For one, JAMN have a real product and substantial revenue which is something the other two tickers have yet to see. More importantly, JAMN have managed to stay out of paid pumps in the past two years while DNAD and NORX are currently in such a bad state exactly because of the promotional pressure.
Of course, JAMN deserve a pat on the back for this, but shareholders and potential investors are not quite out of the woods yet. We can see that when estimated at yesterday’s close, JAMN‘s market cap amounts to well over $45 million which, as you can see from the figures above is a bit of a stretch, even though JAMN do appear to have at least some long-term potential.
That said, they might want to work on the credibility of the company. A quick research reveals that their corporate address 8200 Wilshire Blvd. Suite 200 Beverly Hills, CA 90211 is also quoted as the HQ of another small cap venture – Writer s Group Film Corp (OTCMKTS:WRIT), which in most cases means that they’re using a virtual office.
A more immediate danger, however, is the fall from February repeating itself. You can see from the chart at the beginning of the article that there was a surge when between February 1 and February 20 JAMN gained more than 40%. After that, however, there was a rapid descend and within a week, all the ground was lost.
Just like right now, the increased attention towards the ticker was driven by a series of optimistic announcements, but today, there is yet one more thing to worry about – the debt that we talked about in the second paragraph. Indeed, more than $1 million were paid off but it was done in the form of common shares which means that if this stock appears on the open market, it will inevitably put downward pressure on the price. Furthermore, the people who got the shares are part of an entity called Ironridge Global IV, Ltd. If you take a few minutes to look for that name among the SEC filings of penny stock companies, you will see that Ironridge have provided financing to quite a lot of ventures. The real problem is that when you check out their charts, you will see that most of them are not doing too well.
