Canadian regulator puts temporary hold on Marley coffee stock
Published:Sunday | June 19, 2011 | 12:00 AM
Steven Jackson, Business Reporter
Regulators in British Colombia, Canada have prohibited the trading of shares in Jammin Java, a coffee company chaired by Rohan Marley, son of reggae legend Bob Marley, over failure to file its financial report.
The British Columbia Securities Commission (BCSC) issued a cease trade order against the stock inside its jurisdiction, posted on the BCSC's website late last month.
However, the stock trades freely elsewhere. Essentially, the Canadian regulator wants about 30 financial documents, most of which are already filed to US regulators, officially sent to BCSC.
Once filed, in accordance with its Securities Act, the commission noted it would consider lifting the cease order.
matter under review
Specifically, the BCSC wants Jammin Java to file its quarterly and annual financial statements outstanding since 2008, management discussions, annual information forms from 2009; a notice of its changes in corporate structure, particularly related to its name change from Marley Coffee to Jammin Java; and copies of news releases and reports disclosing material changes in its business affairs since 2008.
In response, Jammin Java said in a notice filed to shareholders last week that it would comply.
"The company is currently reviewing the matter and working with legal counsel to ensure compliance with all laws applicable to the company, including filing any deficient reports with the BCSC, if any," said Jammin Java president and CEO Ahn Tran who did not return Sunday Business calls up to press time.
Jammin Java Corp, a US-based company, provides roasted coffee on a wholesale level to the service, hospitality, office coffee service and big box store industry. Last year, its chairman Rohan Marley listed Jammin Java on the Over The Counter stock exchange, the OTC, in the US.
The Canadian hold follows a period of volatility for the penny stock, which became the darling of the OTC market last month hitting a US$6.11 high on May 12 then dipping rapidly to US$1 a week later.
The company has been touted as the next big coffee brand in line with Fortune 500 Starbucks, despite having only US$40,000 in sales, its latest financials indicate.
Investors have traded millions of units daily resulting in a 74 per cent drop from its peak value in a matter of weeks.
The flurry of activity resulted in the stock's market capitalisation rising over US$500 million in May, but on Friday, June 17, the stock sold for US$1.60, valuing the company at US$116 million.
The volatility prompted the company in its annual report released last month to explicitly deny inflating the stock price via third parties.
"The company further cautions the public about unauthorised stock promotion campaigns touting short term investments in the company's common stock which are paid for by third parties without the involvement, knowledge, consent, or participation of the company," stated the director's report enclosed in the annual report.
Jammin Java, still in its 'developmental stages', reported US$151,000 net loss, a performance that was 16.7 per cent worse than the previous year, due to higher fees.
The company has an accumulated deficit of US$574,000; however, it recently secured US$2.5 million in working capital financing which it revealed last month in US filing.
The BCSC also wants documentation of that funding.