Marley Coffee paying salaries in stock to preserve cash
While revenues surged almost 60 per cent at yearend January 2015, Jammin Java Corp, which trades as Marley Coffee Inc, has turned to paying employee and consultant salaries partly in common stock as it seeks to retain cash for operational needs.
At the same time, the coffee company has doubled its compensation bill from US$4.47 million within the last year as the business grows.
In its annual report filed with the US Securities Exchange Com-mission, Marley Coffee said it had gained markets in more than 7,200 stores in the United States, distributing five different types of products on average per store. Annual revenue for the coffee marketer increased from US$5.64 million to US$8.9 million, primarily due to expanded distribution into the retail grocery market and growth of other distribution channels, the company said. However, big marketing and other expenses added to the company's net loss, which expanded from US$6.7 million to US$10.28 million.
The company says it plans to maintain that formula throughout this year, with a focus on growing the brand, and beyond that will be launching a Recyclable RealCup in July 2016, a new version of the Marley Coffee RealCup capsule. The RealCup technology and intellectual property is owned by Mother Parkers, a distributing partner which has been acquiring equity in Marley Coffee in exchange for its sustained support.
Marley Coffee's yearend earnings report states that compensation of officers, directors, employees and consultants is being paid with cash as well as the issuance of stocks and options.
"Jammin Java continues to accrue salaries, or pay such salaries in common shares, in order to utilise cash on hand to fund the company's operations and growth," the report said. General and administrative expenses increased by US$875,000 to US$2.81 million.
At yearend January 2015, the company had 120.2 million stock units in issue, up from 93.4 million. The additional shares were mainly for the final settlement of the Ironridge Global Partners transactions, which extinguished US$4.8 million of accounts payable and accrued expenses, and secondarily from the equity purchase of 7,333,529 units by Mother Parkers in April 2014.
Marley Coffee said that it anticipated securing cash for working capital from debt, equity and/or bank financing for the next 24 months.
The company is otherwise bullish on market growth, as cited by the International Coffee Organisation, which expects global coffee demand to rise 25 per cent by 2021.
"We believe that we are in a strong position to capitalise on that growth and our goal is to continue finding top-tier operators like the ones we have in place in Canada, South Korea, Chile and the United Kingdom," Marley Coffee said.