ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

You should read the following discussion and analysis in conjunction with our Consolidated Financial Statement and related Notes thereto included in Part II, Item 8 of this Report and the "Risk Factors" included in Part I, Item IA of this Report, before deciding to purchase, hold or sell our common stock.

Overview

We are in the business of providing premium roasted coffee through all of our distribution channels, which include, but are not limited to, the service, hospitality, office coffee service and "big box" store markets. We intend to develop a significant market share of the category and achieve a leadership position by capitalizing on the global recognition of the Marley name through a co-branding relationship with MCL. Through a licensing agreement with MCL, the Company has the worldwide right to use, and sublicense, the intellectual property rights in and to the late reggae performer, Robert Nesta Marley, professionally known as Bob Marley, including "Marley Coffee".

Pursuant to the Company's Amended License Agreement with MCL, the Company markets the name "Marley Coffee" within the U.S. (including its territories and possessions), Canada, Mexico and the nations of the Caribbean Sea to sell coffee in any form or derivation through any distribution channel, provided that the Company may not use the brand "Marley Coffee" through coffee houses or coffee shop franchises.

The Company also may distribute tea products and instant coffee products. During the time of effectiveness of the License, MCL granted to the Company a revocable right to use the name "Marley Coffee" and reasonably similar variations thereof, subject to MCL's consent, as its "doing business as" or "DBA" name but solely within the scope of the License.

On April 25, 2011, the Company entered into an Exclusive Sales and Marketing Agreement (the "NCSV Agreement") with National Coffee Service & Vending ("NCSV"). Pursuant to the NCSV Agreement, we agreed to appoint NCSV as our exclusive agent and distributor of "Jammin Java Coffee" brand roasted coffee within the U.S. in the office coffee vending, office products, water, and other industries featuring a "break room," and divisions and offshoots thereof. Pursuant to the NCSV Agreement, we compensate NCSV based on a percentage of net profits (as defined) on sales fulfilled by NCSV.

During the year ended January 31, 2012 ("Fiscal 2012") we grew from a development stage company to a fully functional organization. We raised $2,525,000 in private placements, which allowed us to hire additional personnel, more effectively market our products and increase our business lines.

Results of Operations

Year Ended January 31, 2012 Compared with Year Ended January 31, 2011

Sales Revenue. Sales revenue for the for the fiscal year ended January 31, 2012 was $402,700, an increase of $401,661, as compared with sales revenue of $1,037 for the fiscal year ended January 31, 2011. Sales revenue increased as a result of the Company's continued maturation from its development stage.

Cost of Sales. Cost of sales for the fiscal year ended January 31, 2012 was $340,395, an increase of $338,704 as compared to $1,691 for the fiscal year ended January 31, 2011. The increase in the cost of sales was in direct correlation to the Company's growth.

Compensation and Benefit Expenses. Compensation and benefits for the fiscal year ended January 31, 2012, were $939,317 as compared to $-0- for the fiscal year ended January 31, 2011. The increase was a result of stock compensation expenses associated with options granted.

Selling and Marketing Expenses. Selling and marketing expenses for the fiscal year ended January 31, 2012, were $221,888, an increase of $217,895, as compared to $3,993 in expenses for the fiscal year ended January 31, 2011. The increase was principally the result of marketing expenses related to the ramping up of sales operations.

General and Administrative Expenses. General and administrative expenses for the fiscal year ended January 31, 2012, were $1,369,372, an increase of $1,222,784, as compared to $146,588 in expenses for the fiscal year ended January 31, 2011. The increase was principally the result of increased professional fees, payroll and corporate reporting expenses.

Net Loss. We incurred a net loss of $2,466,039 for the fiscal year ended January 31, 2012, compared to $151,235 for the fiscal year ended January 31, 2011. The principal reason for the increase was an increase in professional fees, payroll, selling expenses, corporate reporting expenses and stock compensation expenses associated with options granted.

Rising coffee commodity prices generally negatively affects our net income. However, in the latter part of the fiscal quarter ended January 31, 2012, coffee commodity prices fell, resulting in a positive impact on our net income.

LIQUIDITY AND CAPITAL RESOURCES

At January 31, 2012, we had total assets of $1,832,849, consisting of current assets of $1,056,946, including cash of $835,878, prepaid expenses and other current assets of $221,068 and long-term assets including property and equipment of $9,903 and license agreement of $766,000. This compares to total assets of $861,185 on January 31, 2011.

At January 31, 2012, we had total liabilities consisting solely of current liabilities of $88,483 and $71,997 as of January 31, 2011. Current liabilities included $51,275 of notes payable in connection with the amended license agreement with Marley Coffee, discussed in Note 4 of the Footnotes to the Financial Statements, and $37,208 of accounts payable.

At January 31, 2012, we had working capital of $986,463 and a total accumulated deficit of $3,040,865.

For the fiscal year ended January 31, 2012, although we generated sales of approximately of $402,700, we had a net loss of $2,466,039. We believe that we will have sufficient capital to continue our business operations for the next 12 months with receipts from sales generated and funds that we raised in the private placement with Straight Path Capital in 2011. However, we have never generated net income through the sale of our products and can make no assurances that net income will develop in the future, if at all.

Our ability to meet our obligations in the ordinary course of business is dependent upon our ability to sell our products directly to end-users and through distributors, establish profitable operations through increased sales and decreased expenses, and obtain additional funds when needed. Management intends to increase sales by increasing our product offerings, expanding our direct sales force and expanding our distributor relationships both domestically and internationally.

There can be no assurance that we will be able to increase sales, reduce expenses, or obtain additional financing, if necessary, at a level to meet our current obligations. As a result, the opinion we have received from our independent registered public accounting firm on our consolidated financial statements contains an explanatory paragraph stating that there is a substantial doubt regarding our ability to continue as a going concern.

The accompanying financial statements have been prepared on a going concern basis that contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The financial statements do not include adjustments relating to the recoverability of recorded asset amounts or the amounts or classification of liabilities that might be necessary should we be unable to continue as a going concern.

Cash Requirements For Next 12 Months

During the next 12 months, we estimate our required funding expenditures to be $595,000 consisting of $345,000 in Marketing and Advertising Costs and $250,000 in General and Marketing Costs.

From time to time, we may attempt to raise capital through either equity or debt offerings. Our capital requirements will depend on many factors, including, among other things, the rate at which our business grows, with corresponding demands for working capital and expansion capacity. We could be required, or may elect, to seek additional funding through public or private equity, debt financing or bank financing. However, a credit facility, or additional funds through public or private equity or other debt financing, may not be available on terms acceptable to us or at all, or that any such financing activity would not be dilutive to our stockholders. Without additional funds and/or increased revenues, we may not have enough cash or financial resources to operate for the next twelve months.

Obligation to Issue Additional Shares

MCL currently beneficially owns 3,000,000 restricted shares of our Common Stock pursuant to our obligation in the License Agreement to issue a total of 10,000,000 restricted share of our Common Stock to MCL in annual installments of 1,000,000 share installments on March 31 of each year through March 31, 2019. As such, the License Agreement obligates us to issue MCL an additional 7,000,000 shares. The securities issued to MCL under the License Agreement were offered and sold in reliance upon exemptions from registration pursuant to Section 4(2) under the Securities Act, and thus have not been registered under the Securities Act.

Consolidated Cash Flows

We had net cash flows used in operating activities of $1,479,739 for the fiscal year ended January 31, 2012, which was mainly due to $2,466,039 of net loss and an increase in prepaid expenses and other current assets of $47,280 offset by $939,317 of stock issued for services and accounts payable of $13,147.

We had net cash provided by financing activities of $2,324,839 for the fiscal year ended January 31, 2012, of which $2,460,000 was from the sale of common stock attributable to the Investment by Straight Path.

Off Balance Sheet Arrangements:

None.

Critical Accounting Policies

Our discussion and analysis of our financial condition and results of operations are based on our financial statements, which have been prepared in accordance with accounting principles generally accepted in the U.S. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. We believe the following critical accounting policies affect our most significant judgments and estimates used in preparation of our financial statements.

Stock-Based Compensation. On January 1, 2006, we adopted the provisions of Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 718 which establishes accounting for equity instruments exchanged for employee service. We utilize the Black-Scholes option pricing model to estimate the fair value of employee stock based compensation 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.

We estimated volatility by considering historical stock volatility. We have opted to use the simplified method for estimating the expected term of stock options equal to the midpoint between the vesting period and the contractual term.

Revenue Recognition. All revenue is recognized when persuasive evidence of an arrangement exists, the service or sale is complete, the price is fixed or determinable and ability to collect is reasonably assured. Revenue is derived from the sale of coffee products and is recognized on a gross basis upon shipment. The Company utilizes a third party for the production and fulfillment of orders placed by customers. Customers order directly from the Company and accordingly, the Company acts as a principal, takes title to the products, and has the risks and rewards of ownership, such as the risk of loss for collection, delivery and returns.

Impairment of Long-Lived Assets. Long-lived assets consist of a license agreement that was recorded at the estimated cost to acquire the asset (See Note
3). 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, 2012 or 2011.

Recently Issued Accounting Pronouncements

In September 2011, the FASB issued ASU 2011-08, Goodwill and Other (Topic 350):
Testing Goodwill and Other Assets for Impairment, which simplifies goodwill and other asset impairment tests. The new guidance states that a qualitative assessment may be performed to determine whether further impairment testing is necessary and is effective beginning fiscal years and interim periods beginning after December 15, 2011. The Company is evaluating the impact of adopting this ASU on the Company's financial position or results of operations.

Other accounting standards and exposure drafts, such as exposure drafts related to revenue recognition, lease accounting, loss contingencies, comprehensive income and fair value measurements, that have been issued or proposed 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