As used in this Quarterly Report, the terms "we," "us," "our" and "Company" mean Jammin Java Corp., unless otherwise indicated. This information should be read in conjunction with the interim unaudited financial statements and the notes thereto included in this Quarterly Report on Form 10-Q, and the audited financial statements and notes thereto and Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations contained in our Annual Report on Form 10-K for the year ended January 31, 2012.

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains "forward-looking statements" as defined in Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended, which involve risks and uncertainties, as well as assumptions that, if they never materialize or prove incorrect, could cause the results of Jammin Java Corp. (the "Company," "Jammin Java", "we", "us" or "our" ) to differ materially and adversely from those expressed or implied by such forward-looking statements. Such forward-looking statements include any statements, predictions and expectations regarding our earnings, revenue, sales and operations, operating expenses, anticipated cash needs, capital requirements and capital expenditures, needs for additional financing, use of working capital, plans for future products, services and distribution channels, anticipated growth strategies, planned capital raises, ability to attract and maintain distributors and customers, sources of net revenue, anticipated trends and challenges in our business and the markets in which we operate, the impact of economic and industry conditions on our customers and our business, customer demand, our competitive position, the outcome of any litigation against us, critical accounting policies, the impact of recent accounting pronouncements, the time-frame in which we expect to file tax returns, statements pertaining to financial items, plans, strategies, expectations or objectives of management for future operations, our financial condition or prospects, and any other statement that is not historical fact. Forward-looking statements are often identified by the use of words such as "may," "might," "will," "intend," "should," "could," "can," "would," "continue," "expect," "believe," "anticipate," "estimate," "predict," "potential," "plan," "seek" and similar expressions and variations or the negativities of these terms or other comparable terminology. These forward-looking statements are based on the beliefs and assumptions of our management based upon information currently available to management. Such forward looking statements are subject to risks, uncertainties and other factors that could cause actual results and the timing of certain events to differ materially and adversely from future results expressed or implied from such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those identified under "Risk Factors" in our Annual Report on Form 10-K for the year ended January 31, 2012 (the "2012 Form 10-K") filed with the Securities and Exchange Commission (the "SEC"). Such forward-looking statements speak only as of the date of this report. We undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements for any reason except as otherwise required by law.

Overview

Jammin Java, doing business as Marley Coffee, is a United States-based company that provides sustainably grown, ethically- farmed and artisan roasted gourmet coffee through multiple United States and international distribution channels. We intend to develop a significant share of these markets and achieve a leadership position by capitalizing on the global recognition of the Marley brand name. Through a licensing agreement, the Company has the worldwide right to use certain intellectual property rights in and to the late reggae performer, Robert Nesta Marley, professionally known as Bob Marley, including the name "Marley Coffee" and reasonably similar variations thereof.

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. The Company also has the right to distribute tea and instant coffee products.

Critical Accounting Policies

The unaudited interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America which require us to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the unaudited financial statements and revenues and expenses during the periods reported. Actual results could differ from those estimates. Information with respect to our critical accounting policies which we believe could have the most significant effect on our reported results and require subjective or complex judgments by management is contained on pages 16 and 17 in Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations, of our Annual Report on Form 10-K for the year ended January 31, 2012. We believe that for the nine months ended October 31, 2012, there have been no material changes to this information.

Recent Accounting Pronouncements

For the three month period ended October 31, 2012, there were no accounting standards or interpretations issued that are expected to have a material impact on our financial position, operations or cash flows.

Revenue Channels

We believe the key to our growth is a multichannel distribution and sales strategy. Since August 2011, we have been introducing a wide variety of coffee products through multiple distribution channels using the Marley Coffee brand name. The main channels of revenue for the Company are now and are expected to continue to be United States and international grocery retail, online retail, office coffee services (OCS), foodservice, vending and automated retailing. Within these channels, we have transitioned from a company that only provided 12 oz. whole bean bags of coffee to a mix of products. Today, the Company offers Marley Coffee Organic Ground and Marley Coffee Jamaica Blue Mountain® Ground coffees; compostable Single-Serve Pods for Bunn and other pod-based home and office brewers; Marley Coffee RealCup™; compatible cartridges for use in most models of Keurig's popular K-Cup brewing system; and 2.5 oz. frac packs and 2lbs bags mainly used for food service.

Geographically, we initially focused on retail grocery sales and marketing on West Coast and Southwest portions of the United States and Western Canada. During the past few months, we have expanded distributor relationships in the Midwest and Northeast regions of the United States. We expect our ongoing discussions with retailers will enable us to place our products in more chains throughout the year and we continue to seek to expand our product placement with grocery retailers and distributors throughout the United States and internationally.

During the nine months ended October 31, 2012, we added two additional revenue channels: Marley Coffee branded vending solutions and Marley Coffee branded Bike Cafés.

Branded Vending & Foodservice. AVT, Inc. ("AVT") and Seaga Manufacturing, Inc., both leading developers of vending and self-service retail equipment, have created Marley Coffee branded coffee vending machines designed to target college campuses, traditional retail locations, high-density traffic areas such as theaters and hotels and traditional foodservice vendors. Several large retailers have already inquired about these new vending machines and we expect to begin seeing revenue from sales of AVT machines during the next fiscal year.

Seaga has created two Marley Coffee branded vending solutions for the OCS, vending and foodservice marketplaces: one designed for larger, high traffic environments; and another, an automatic table-top vending machine for small and medium traffic locations. National Coffee Service & Vending ("NCS&V"), a current Marley Coffee sales agent for office coffee service, also will continue to distribute the Marley Coffee branded vending solutions for the OCS.

Marley Coffee BikeCaffe Mobile Franchise Concept. Marley Coffee branded BikeCaffe Coffee Bike, found in select cities in the U.S. and Europe, are a new approach to serving coffee to customers. These three-wheeled, geared bikes are environmentally-friendly, full-service cafes that roll from location to location. Bike Caffe franchises are available to Marley Coffee branded bikes that will sell coffee drinks exclusively featuring Marley Coffee beans.

RESULTS OF OPERATIONS

Comparison of the Three and Nine Months Ended October 31, 2012 and 2011

Sales Revenue. Sales revenues for the three and nine months ended October 31, 2012 were $536,055 and $1,405,154, respectively, which represent increases of $409,269 and $1,206,671 from the three and nine months ended October 31, 2011, respectively. These increases were primarily the result of the Company's implementation of its multichannel distribution and sales strategy.

Cost of Sales. Cost of sales for the three and nine months ended October 31, 2012 were $382,741 and $1,110,002, respectively, which represent increases of $286,510 and $944,296 from the three and nine months ended October 31, 2011, respectively. The increase in the cost of sales correlated with the Company's revenue growth.

Compensation and Benefit Expenses. Compensation and benefits for the three months and nine months ended October 31, 2012, were $567,668 and $1,778,397, respectively, which represent increases of $88,669 and $1,299,398 from the three and nine months ended October 31, 2011, respectively. The increase was a result of stock compensation expenses and executive officer payroll.

Selling and Marketing Expenses. Selling and marketing expenses for the three and nine months ended October 31, 2012, were $191,566 and $494,338, respectively, which represent increases of $130,994 and $363,542 from the three and nine months ended October 31, 2011, respectively. The increase was principally the result of expenses related to the ramping-up of the Company's sales and marketing operations.

General and Administrative Expenses. General and administrative expenses for the three and nine months ended October 31, 2012, were $237,774 and $731,546, respectively, which represent decreases of $148,718 and $253,022 from the three and nine months ended October 31, 2011, respectively. The decrease was principally the result of decreased legal fees. General and administrative expenses consisted primarily of professional fees and other corporate reporting expenses.

Net Loss. We incurred a net loss of $944,742 and $2,825,153 for the three and nine months ended October 31, 2012, respectively, compared to $894,636 and $1,559,847 for the three and nine months ended October 31, 2011, respectively. The principal reasons for the increased net loss are: (i) sales of the Company's products have not caught-up with the expenses involved in connection with putting in place the Company's multichannel distribution and sales plan; (ii) compensation expenses necessary to incentivize management; (iii) selling expenses incurred in connection with raising necessary working capital; and (iv) professional fees, including those necessary to comply with rules and regulations applicable to a U.S. public reporting company.

LIQUIDITY AND CAPITAL RESOURCES

Since our inception, we have financed our operations primarily through the issuance of our common stock.

The following table presents details of our working capital and cash and cash equivalents:

                   October 31, 2012       October 31, 2011       Increase / (Decrease)
Working Capital   $         (299,697 )   $        1,382,990     $            (1,682,687 )
Cash              $            9,061     $        1,294,934     $            (1,285,873 )

At October 31, 2012, we had total assets of $1,442,252 and total liabilities of $922,925. Our current sources of liquidity include our existing cash and cash equivalents, cash from operations, amounts under our Credit Agreement (hereinafter defined) and funds generated as a result of the sale of our shares of common stock under the investment and securities purchase agreements with Fairhills Capital Offshore, Ltd. For the nine months ended October 31, 2012, although we generated sales of $1,405,154, we had a net loss of $2,825,153.

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.

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.

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 January 31, 2012 financial statements contains an explanatory paragraph stating that there is a substantial doubt regarding our ability to continue as a going concern.

In addition, following an event of default under our Credit Agreement, our lender will have the right to foreclose upon and sell, or otherwise transfer, the collateral granted to them to secure any indebtedness under the Credit Agreement, which collateral includes substantially all of our assets. If the indebtedness under the Credit Agreement were to be accelerated, we cannot assure you that our assets would be sufficient to repay in full our debt. A loss of our collateral, including our Trademarks, will have material adverse effect on our operations, our business and financial condition.

Our existing financing arrangements also currently impose restrictions on raising capital outside of those arrangements. Under the terms of our Credit Agreement, we are prohibited from incurring any indebtedness outside of the Credit Agreement unless approved by our lender) and we may not be able to borrow additional amounts under the terms of the Credit Agreement. Under the terms of the Registration Rights Agreement that we have entered into with Fairhills Capital Offshore, Ltd., a Cayman Islands company ("Fairhills Capital"), we also are prohibited from selling any other securities under our registration statement relating to the Fairhills Capital investment and from filing any other registration statement for other securities until 30 days after the Fairhills Capital registration statement is declared effective. Under certain circumstances, we also may be restricted from engaging in certain types of securities offerings after such 30-day period and during such time as the Fairhills Capital registration statement remains effective and outstanding.

During the next 12 months, we estimate our funding requirements to be $1,400,000 consisting of $300,000 in selling and marketing expenses and $1,100,000 in general and administrative expenses. Notwithstanding the sources of liquidity described below under the captions "Contractual and Other Obligations", we believe that the Company will require additional funding to continue our business operations for the next 12 months. We have not yet generated net income through the sale of our products and make no assurances that net income will be generated in the future. In light of our current limitations to draw funds beyond the $350,000 limitation of our Credit Facility, as discussed below, and to the extent we are unable to raise sufficient additional funds necessary to meet our intended funding plan for the next 12 months, we will remain flexible in the implementation of our business strategy and will revise downward our funding requirements and further reduce our selling and marketing and our general and administrative expenses to a level that is in line with our financial means but consistent with our vision.

Cash Flows



                                                        Nine Months Ended
                                             October 31, 2012       October 31, 2011
Net cash used in operating activities       $         (997,821 )   $       (1,034,990 )
Net cash used in investing activities       $          (28,948 )   $           (9,217 )
Net cash provided by financing activities   $          199,952     $        2,336,674

Operating Activities

Compared to the corresponding period in 2011, net cash used in operating activities decreased by approximately $37,169 for the nine month period ended October 31, 2012. The decrease was primarily due to our net loss of $2,825,153, higher utilization of cash resources for payment of operating liabilities such as accounts payable, pre-paid expenses and other current assets, and other current liabilities. The impact of such decrease was partially offset by an increase of $322,284 in accounts receivable; $1,016,460 of stock compensation expenses; and an increase in accounts payable of $444,626.

Investing Activities

Compared to the corresponding period in fiscal 2011, net cash used in investing activities increased by approximately $19,731 due primarily from the purchase of computer equipment.

Financing Activities

Compared to the corresponding period in fiscal 2011, net cash provided by financing activities decreased by approximately $2,136,722 for the nine months October 31, 2011 primarily because the Company's capital-raising activities decreased in 2012.

Contractual and Other Obligations

We rely on our 2012 Trademarks License Agreement with MCL, our roasting agreements with Canterbury Coffee Corporation ("Canterbury") and European Roasterie, Inc. /National Coffee Roasters (NCR) ("European Roasterie") (collectively, the "Roasting Agreements") and our exclusive sales and marketing agreement with National Coffee Service & Vending ("NCSV") for our operations and revenue. We anticipate generating revenue solely as a result of the sale of coffee bearing the Trademarks, sourced primarily under our Roasting Agreement with Canterbury and European Roasterie and which we distribute primarily through the NCSV Agreement.

Accordingly, if the 2012 Trademarks License Agreement, the Roasting Agreements, or the NCSV Agreement were terminated or not renewed, our operations could be adversely effected, our revenues (if any), could be adversely affected and we could be forced to curtail or abandon our operations, causing any investment in the Company to decline in value or become worthless.

2012 Trademarks License Agreement

On September 13, 2012, the Company entered into a new Trademark License Agreement with Fifty Six Hope Road which superseded and replaced the MCL Trademarks License Agreement (the "2012 Trademarks License Agreement"), with an effective date of August 7, 2012. Pursuant to the 2012 Trademarks License Agreement, Fifty Six Hope Road granted to the Company a worldwide, exclusive, non-transferable license to utilize the Trademarks in connection with (i) the manufacturing, advertising, promotion, sale, offering for sale and distribution of coffee in all its forms and derivations, regardless of portions sizes or packaging (the "Exclusive Licensed Products") and (ii) coffee roasting services, coffee production services and coffee sales, supply, distribution and support services, provided however that the Company may not open retail coffee houses under the Trademarks. In addition, Fifty Six Hope Road granted the Company the right to use the Trademarks on advertising and promotional materials that pertain solely to the sale of coffee cups, coffee mugs, coffee glasses, saucers, milk steamers, machines for brewing coffee, espresso and/or cappuccino, grinders, water treatment products, tea products, chocolate products, and ready-to-use (instant) coffee products (the "Non-Exclusive Licensed Products", and together with the Exclusive Licensed Products, the "Licensed Products"). The Licensed Products may be sold by the Company pursuant to the 2012 Trademark License Agreement through all channels of distribution, provided that, subject to certain exceptions, the Company cannot sell the Licensed Products by direct marketing methods (other than the Company's website), including television, infomercials or direct mail without the prior written consent of Fifty Six Hope Road. In return, the Company agreed to pay royalties to Fifty Six Hope Road in an amount equal to 3% of the net sales of all Licensed Products. In addition, such royalty payments are to be deferred during the first 20 months of the term of the 2012 Trademark License Agreement, and such deferred payments shall be paid on a quarterly-basis thereafter. At October 31, 2012, $15,827 has been accrued for such royalty fees.

In connection with the execution of the 2012 Trademark License Agreement, the Company and MCL entered into a letter agreement dated as of September 13, 2012 (the "MCL Termination Agreement") terminating the MCL Trademarks License Agreement. Pursuant to the MCL Termination Agreement; MCL waived the 30-day notice requirement for termination thereunder. The MCL Termination Agreement stated that all of the Company's obligations under the MCL Trademarks License Agreement were terminated except that the Company remains obligated to: (i) issue to MCL the 1million shares of its common stock which were due to MCL on the March 31, 2012 anniversary of the MCL Trademarks License Agreement and (ii) repay the remaining outstanding debt obligation ($19,715) in monthly installments with the final installment to be paid in February 2013.

Supply and Toll Agreement with Canterbury Coffee Corporation

In January 2012, we entered into a Roasting Agreement with Canterbury which is terminable by either party on 30-days' written notice. Pursuant to the Roasting Agreement, we provide Canterbury with pre-made bags bearing our logo and the Trademarks licensed through the 2012 Trademark License Agreement. Canterbury obtains the beans and other ingredients for, roasts, prepares and packages the coffee beans for our products and packages them in the bags which we provide to Canterbury. Under the Roasting Agreement, we are responsible for carrying out sales and marketing for our products, provided that Canterbury pays the actual shipping costs to our licensed distributors and customers and receives the gross proceeds from the sale of our products. We receive the net difference between the total cost of production and shipping of our products and the amount that Canterbury receives from the sale of such products to our distributors and customers.

Supply and Toll Agreement with European Roasterie, Inc.

We operate with European Roasterie under an oral contract with substantially similar terms to those of the roasting agreement with Canterbury. The Company provides these NCR with our desired taste profiles for various Company products, as well as related packaging and marketing materials, and NCR is responsible for sourcing and supplying the roasted beans for those products in quantities the Company orders from time to time. We are responsible for carrying out sales and marketing for our products. NCR handles shipping to our distributors and customers and receives the gross proceeds from the sale of our products, and we receive the net difference between the total cost of production and shipping of our products and the amount that NCR receives from the sale of such products to our distributors and customers. Pricing is subject to change based on prevailing market prices, with 30 days' written notice. We bear all of the cost of bad debts or uncollectable accounts.

Sales and Marketing Agreement with National Coffee Service & Vending

On April 25, 2011, we 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 therein, on sales fulfilled by NCSV.

Credit Agreement

On July 19, 2012, we entered into a credit agreement with TCA Global Credit Master Fund, LP, a Cayman Islands limited partnership ("TCA"), effective June 29, 2012 (the "Credit Agreement"). Pursuant to the Credit Agreement, TCA agreed to loan the Company up to $2 million for working capital purposes, based on the amount of eligible accounts receivable the Company provides to secure the repayment of the amounts borrowed. As of October 31, 2012, there were no eligible accounts receivables to secure payment of the amounts borrowed under the Credit Agreement.

On July 19, 2012, we borrowed $350,000 pursuant to the Credit Agreement, evidenced by a revolving note (the "Revolving Note"), the repayment of which is secured by a security interest in substantially all of our assets in favor of TCA, including the Trademarks. The Revolving Note bears interest at the rate of 12% per annum (18% per annum upon a default) and is due and payable on July 18, 2013. After cash expenses, but not counting the cost of the Fee Facility Shares discussed below, the Company's net amount of cash received at the Closing on July 19, 2012 was $292,425 (the "Initial Funding").

We may prepay the Revolving Note, in whole or in part, provided that we pay the then outstanding amount of such note plus 5% for repayments up until 180 days following July 19, 2012, plus the then outstanding amount on the Revolving Note plus 2.5% for repayments subsequent to 180 days following July 19, 2012.

Upon an event of default under the Credit Agreement or the Revolving Note, TCA may convert all or any portion of the outstanding principal, interest and all other amounts due under the Revolving Note into shares of our common stock at a conversion price equal to 85% of its lowest daily volume weighted average price during the five (5) trading days immediately prior to the conversion date, in each case subject to TCA not being able to beneficially own more than 4.99% of outstanding common stock upon any conversion. Because the conversion feature of the Revolving Note requires the Company to issue a variable number of shares for settlement, the Revolving Note is deemed to be a derivative liability and reflected as debt on the Company's balance sheet with a discount valued at $59,850, under the caption "Liabilities and Stockholders' Equity - Current Liabilities - Secured promissory note - net of discount of $59,850 and $0, respectively".

We also agreed to pay TCA various fees during the term of the Credit Agreement, including a $1,500 asset monitoring fee (which increases as additional amounts are borrowed under the Credit Agreement) due each quarter that the Credit . . .