Jamba Juice 2007 Annual Report Download

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Table of Contents
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¨¨ 
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  
  

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

Units, consisting of one share of Common Stock, par value
$0.001 per share, and one Common Stock Purchase Warrant The NASDAQ Stock Market LLC
Common Stock, par value $.001 per share The NASDAQ Stock Market LLC
Common Stock Purchase Warrants The NASDAQ Stock Market LLC


Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ¨ No x
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ¨ No x
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to the filing
requirements for the past 90 days. Yes x No ¨
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to
the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer
and large accelerated filer” in Rule 12b-2 of the Exchange Act (check one):
Large accelerated filer ¨ Accelerated filer x Non-accelerated filer ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ¨ No x
The aggregate market value of the registrant’s common stock, $0.001 par value per share, held by non-affiliates of the registrant as of June 30, 2006 was
$140,916,065.40 (based upon the closing sales price of registrant’s common stock on such date). For purposes of this disclosure, shares of common stock
held by persons who held more than 5% of the outstanding shares of common stock and shares held by officers and directors of the registrant have been
excluded in that such persons may be deemed to be affiliates. This determination of affiliate status is not necessarily a conclusive determination for other
purposes.
The number of shares of common stock of Jamba, Inc. issued and outstanding as of March 28, 2007 was 52,019,116.

Portions of the Proxy Statement for the 2007 Annual Meeting of Stockholders (the “Proxy Statement”), to be filed within 120 days of the end of the fiscal
year ended January 9, 2007, are incorporated by reference in Part III hereof. Except with respect to information specifically incorporated by reference in this
Form 10-K, the Proxy Statement is not deemed to be filed as part hereof.

Table of contents

  • Page 1
    ...No.) 1700 17th Street, San Francisco, California 94103 (Tddress of principal executive offices) Registrant's telephone number, including area code: (415) 865-1100 Securities registered pursuant to Section 12(b) of the Tct: Units, consisting of one share of Common Stock, par value $0.001 per share...

  • Page 2
    ... 14. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE EXECUTIVE COMPENSATION SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE PRINCIPAL ACCOUNTING FEES AND SERVICES 149 149...

  • Page 3
    ... extent required by applicable laws ...annual report ("Form 10-K") as the "Company," "we," "us" and "our." References herein to fiscal 2005 and fiscal 2006 of Jamba, Inc. mean the period from January 6, 2005 (inception) to December 31, 2005 and the fiscal year from January 11, 2006 to January 9, 2007...

  • Page 4
    ...to-order fruit smoothies, squeezed-to-order juices, blended beverages and healthy snacks, became a wholly owned subsidiary of the Company. Jamba Juice Company was originally founded as Juice Club and opened its first store in San Luis Obispo, California in April 1990. Jamba Juice Company opened its...

  • Page 5
    ...83 nontraditional Jamba Juice store locations. All Jamba Juice stores are designed to provide a highly interactive Jamba experience to attract customers, including the enticing aroma of fresh fruit, vegetables, and wheatgrass, the high-energy sounds of whirring blenders, and team members calling out...

  • Page 6
    ... three current and three expired or terminated multi-unit license agreements. As of January 9, 2007, two of the three multi-unit area developers had contractual commitments to open new franchise stores in their respective territories. Specifically, the area developer in parts of Northern California...

  • Page 7
    ...of new stores and increasing same store revenue. Development of New Stores We believe we have significant market expansion opportunities both nationwide and internationally. For fiscal 2006, Jamba Juice Company opened 43 new Company Stores, closed three locations and acquired one franchise location...

  • Page 8
    ...values. We train members to deliver a high-quality customer experience and we provide team members with financial incentives and opportunities for advancement when they fulfill service expectations. Supported by the "theater" of the fully displayed production process, we believe that the Jamba Juice...

  • Page 9
    ... new markets we must communicate the Jamba Juice story, the benefits of our products and our usage occasions. Emotional connections are developed as the messages are delivered consistently and with a freshness that appeals to consumers. We augment our in-store communications with small promotional...

  • Page 10
    ...is highly competitive and fragmented. Restaurants compete based on a number of factors, including quality, price-value relationships, customer service, name recognition, employee hiring and retention and location. We compete with a variety of purveyors of quick, convenient food and beverage products...

  • Page 11
    ... would increase our labor cost. We are also subject to various laws and regulations relating to our current and any future franchise operations. See "Risk Factors-Risks Associated with Jamba, Inc.'s Business and Industry-Governmental regulation may adversely affect our ability to open new stores or...

  • Page 12
    ... domain names, including "jamba.com" and "jambajuice.com." Trademarks and Domain Names The Company owns and/or has applied to register numerous trademarks and service marks in the United States and 50 additional countries throughout Research and Development Our research and development efforts...

  • Page 13
    ... Manager. From 1995 to 1999 he was with Viacom in New York City, New York as Vice President of Product and Brand Marketing. Prior to that, he was with The Walt Disney Company as Director of Merchandise. Russell Testa, age 50 Mr. Testa has been Senior Vice President, Human Resources of Jamba Juice...

  • Page 14
    ...agreement. We consider our employee relations to be good. We place a priority on staffing our stores and support center positions with skilled team members who embrace our culture and invest in training programs to ensure the quality of our store operations. Tvailable Information Our Annual Reports...

  • Page 15
    ... in our revenue and profit margins. We compete with many well-established companies, food service and otherwise, on the basis of taste, quality and price of product offered, customer service, atmosphere, location and overall guest experience. We compete with other smoothie and juice bar retailers...

  • Page 16
    ... close some stores. If we react to negative publicity by changing our menu or other key aspects of the Jamba Juice experience, we may lose customers who do not accept those changes, and may not be able to attract enough new customers to produce the revenue needed to make our stores profitable...

  • Page 17
    ... results unpredictable. There were 373 Company Stores and 222 Franchise Stores open as of January 9, 2007. We plan to increase the number of our stores in the future. This growth strategy and the substantial investment associated with the development of each new store may cause our operating results...

  • Page 18
    ... to meet the needs of our operations. Our failure to manage our growth effectively could harm our business and operating results. New stores, once opened, may not be profitable, and the increases in average store revenue and comparable store revenue that we have experienced in the past may not be...

  • Page 19
    ... operating costs at our newly opened stores, which are often materially greater during the first several months of operation; labor availability and wages of store management and team members; profitability of our stores, especially in new markets; changes in comparable store revenue and customer...

  • Page 20
    ...transactions. All of our leases require a fixed annual rent, although some require the payment of additional rent if store revenue exceeds a negotiated amount. Generally, our leases are "net" leases, which require us to pay all of the cost of insurance, taxes, maintenance and utilities. We generally...

  • Page 21
    ... practices in the food industry. Establishments operating in the quick-service and fast-casual segments have been a particular focus. For example, the New York City Board of Health has adopted a regulation requiring that restaurants that make calorie information publicly available must include...

  • Page 22
    ...relating to corporate governance and public disclosure, including the Sarbanes-Oxley Act of 2002, new SEC regulations, PCAOB and NASDAQ Stock Market rules. In particular, Section 404 of the Sarbanes-Oxley Act of 2002 requires management to annually review and evaluate of our internal control systems...

  • Page 23
    ...The Company's corporate headquarters is located at 1700 17 th Street, San Francisco, California. This facility is occupied under a lease for approximately 30,000 square feet, at a cost of approximately $498,000 per year and has been extended to expire on March 31, 2007, and on a month-to-month basis...

  • Page 24
    ... currently serves its customers through a combination of Company Stores and Franchise Stores in 23 different states, the District of Columbia and the Bahamas. Store Count as of January 9, 2007 Franchise Company Stores Stores Total Arizona California Colorado Illinois Indiana Minnesota New York...

  • Page 25
    ... of preferred shares previously authorized, resulted in an increase of the total number of authorized shares of capital stock from 71,000,000 to 151,000,000 and (ii) change the Company's name from "Services Acquisition Corp. International" to "Jamba, Inc." The proposal was approved by 14,521,304...

  • Page 26
    ...common stock at an exercise price of $6.00. The Jamba, Inc. warrants will expire at 5:00 p.m., New York City time, on June 28, 2009, or earlier upon redemption. The closing price per share of Jamba, Inc. common stock, warrants and units as reported on the NASDAQ Global Market on March 28, 2007, was...

  • Page 27
    ... stockholder return since June 30, 2005 with the cumulative total return of (i) the Nasdaq National Market and (ii) the Russell 2000 Index. The graph assumes that the value of the investment in our common stock and each index (including reinvestment of dividends) was $100 on July 28, 2005. 7/28...

  • Page 28
    ... Data Fiscal Year Ended January 9, 2007 Period from January 1, 2006 to January 10, 2006 Period from January 6, 2005 (inception) to December 31, 2005 Revenue: Company stores Franchise and other revenue Total revenue Operating expenses: Cost of sales Labor costs Occupancy costs Store operating...

  • Page 29
    ...and franchise average revenue per store includes the lower yielding Zuka Juice franchise stores acquired by Jamba Juice Company in 1999. These Zuka Juice franchises are often lower yielding as they are frequently in secondary locations and less desirable markets and many do not meet our current real...

  • Page 30
    ... Statements of Operations Data: Revenue: Company stores Franchise and other revenue Total revenue Operating expenses: Cost of sales Labor costs Occupancy costs Store operating expense Depreciation and amortization General and administrative expense Store pre-opening expense Other operating expense...

  • Page 31
    ... franchise average revenue per store include the lower yielding Zuka Juice franchise stores acquired by Jamba Juice Company in 1999. These Zuka Juice franchises are often lower yielding as they are frequently in secondary locations and less desirable markets and many do not meet Jamba Juice Company...

  • Page 32
    ... period of comparable revenue versus the prior year. Average system-wide revenue per store and system-wide comparable revenue growth are non-GAAP financial measures that include revenue at all Jamba Juice Company-owned and franchiseowned locations. Franchise store revenue and average franchise store...

  • Page 33
    ... forward as Jamba, Inc. During the transition, from the time we announced the Merger to closing, we opened 41 Company stores and 24 franchised locations, we invested in additional resources to increase our brand presence and brought Jamba Juice to new venues such as Safeway and Target stores. In 33

  • Page 34
    ...and fees from franchised locations represented 95.5% and 4.5% of total revenue, respectively. Revenue is primarily from smoothie and juice sales and for fiscal 2006 was $23.1 million, which includes only six weeks of Jamba Juice Company results. The number of Company Stores as of January 9, 2007 was...

  • Page 35
    ... expenses. Store pre-opening costs are largely costs incurred for training new store personnel and pre-opening marketing. Store pre-opening costs for fiscal 2006 were $0.3 million, or 1.2% of total revenue. Other operating expenses consist primarily of franchise support expenses, losses on...

  • Page 36
    ..., selecting the target business, and structuring, negotiating and consummating the merger. Commencing on July 6, 2005 and ending upon the acquisition of Jamba Juice Company, we incurred a fee of $4,875 per month for office space and certain other additional services from SB Management Corp., an...

  • Page 37
    ... Period is comprised of fruit, dairy, and other products used to make smoothies and juices, as well as paper products. As a percentage of Company Store revenue, these costs were 25.6% compared to 25.0% for fiscal 2006. Labor costs consist of store management salaries and bonuses, hourly team member...

  • Page 38
    ... are largely costs incurred for training new store personnel and pre-opening marketing. Jamba Juice Company opened 18 stores during the 22 Week Period. Store pre-opening costs for the 22 Week Period were $1.0 million. Other operating expenses consist primarily of franchise support expenses, losses...

  • Page 39
    ...of each such store's license agreement. Under the terms of the agreement, Whole Foods Market may elect to close any of its Jamba Juice Company Stores upon notice to Jamba Juice Company. Upon closure of a location, Whole Foods Market is obligated to pay a termination fee per store, which varies based...

  • Page 40
    ... million for consultants and external services. The higher bonuses for support center employees are based on Jamba Juice Company's profit performance versus its budgeted annual operating plan, comparable store revenue, and personal goals. These cost increases were partially offset by $0.3 million...

  • Page 41
    ...growth and a 2.2% increase in comparable store revenue. During fiscal 2005, Jamba Juice Company recognized $0.7 million in franchise revenue for the recognition of deferred development fees. These increases were partially offset by a $1.2 million decrease in revenue related to franchise support fees...

  • Page 42
    ... during the period Jamba Juice Company purchased eight of the stores that it had previously been managing for a franchisee. There was also lower revenue from territory fees, partially as a result of a greater emphasis on Company Stores and lower increase in net new franchise stores opened in fiscal...

  • Page 43
    ...costs associated with Jamba Juice Company's support center in San Francisco, bonuses, legal fees, and professional fees. General and administrative expenses increased 7.9% year-over-year to $25.1 million in fiscal 2005 from $23.3 million in fiscal 2004, and decreased as a percentage of total revenue...

  • Page 44
    ...current Jamba Juice Company line of credit. Other than normal operating expenditures, cash requirements for fiscal 2007 are expected to consist primarily of capital expenditures for new Company Stores and the remodeling and refurbishment of existing Company Stores. For the remainder of calendar year...

  • Page 45
    ... and deliver specified products to both Company Stores and Franchise Stores. While the Company does have multi-year pricing agreements with its two frozen yogurt suppliers and with its supplier of liquid dairy products and soy milk, none of these agreements have guaranteed volume commitments. The...

  • Page 46
    ... Company's recent change of fiscal year, going forward we expect to realize significant portions of our revenue during the second and third quarters of the fiscal year, which align with the warmer Summer season. In addition, quarterly results are affected by the timing of the opening of new stores...

  • Page 47
    ... a weighted average cost of capital. Management of the Company estimates future cash flows based on its experience and knowledge of the market in which the closed store is located and, when necessary, uses real estate brokers. However, these estimates project future cash flows several years into...

  • Page 48
    ...tax assets or changes in the income tax provision may affect its annual effective income tax rate. Stock-Based Compensation The Company grants stock options for a fixed number of shares to certain employees and directors with an exercise price based on an average of the closing price of the Company...

  • Page 49
    ... plans to pay dividends, it would use a rate for its current valuation. The expected term was determined to be the remaining contractual life of the option or derivative of 3.5 years as of January 9, 2007 and 4.5 years as of January 10, 2006 and December 31, 2005. Due to its limited trading history...

  • Page 50
    ...an entity's accounting policy regarding the presentation of taxes assessed by a governmental authority that are directly imposed on a revenue-producing transaction between a seller and a customer including sales, use, value-added, and some excise taxes. The Company presents such taxes on a net basis...

  • Page 51
    ... to change consumer prices with every move up or down of the commodity market, but to take a longer term view of managing margins and the value perception of its products in the eyes of its customers. Management's objective is to maximize the Company's revenue through increased customer frequency...

  • Page 52
    ... could be required to be settled in stock that requires registration. The Company is required to mark these instruments to market as of the end of each reporting period and to recognize the change in fair value in our consolidated statements of operations. The Company's stock price has been...

  • Page 53
    ... REGISTERED PUBLIC TCCOUNTING FIRM To the Board of Directors and Stockholders of Jamba, Inc. San Francisco, California We have audited the accompanying consolidated balance sheets of Jamba, Inc. (formerly Services Acquisition Corp. International) and subsidiary (the "Company") as of January 9, 2007...

  • Page 54
    ... REPORT OF INDEPENDENT REGISTERED PUBLIC TCCOUNTING FIRM To the Board of Directors and Stockholders of Jamba, Inc., We have audited the accompanying balance sheet of Jamba, Inc. as of December 31, 2005 and the related statements of operations, stockholders' equity, and cash flows for the period...

  • Page 55
    ... and health self-insurance reserves Accrued store value cards Litigation settlement payable Other accrued expenses Income taxes payable Derivative liabilities Total current liabilities Deferred franchise revenue Deferred income tax Deferred rent and other long-term liabilities Commitments and...

  • Page 56
    ... Fiscal Year Ended (Dollars in thousands, except share and per share amounts) January 9, 2007 January 1, 2006 to January 10, 2006 For the Period January 6, 2005 (inception) to December 31, 2005 Revenue: Company stores Franchise and other revenue Total revenue Operating expenses: Cost of sales...

  • Page 57
    ... shares in private placement Private placement fees Reclass of common stock subject to redemption Exercise of warrants Stock-based compensation expense Assumption of Jamba Juice Company options and warrants at fair value Net loss Balance as of January 9, 2007 - 3,750,000 15,000,000 $ - 4 $ - 25...

  • Page 58
    ... Deferred income taxes (Gain) loss on derivative liabilities Changes in operating assets and liabilities: Receivables, net Inventories Prepaid expenses and other current assets Other long-term assets Accounts payable Accrued compensation and benefits Accrued store value cards Litigation settlement...

  • Page 59
    ...value of these investments is reported in other long-term assets, and the Company's equity in the net income and losses of these investments is reported in store operating expenses. Fiscal Year End-On November 29, 2006, Jamba, Inc.'s board of directors approved a change to the Company's fiscal year...

  • Page 60
    ... in "Workers' compensation and health self-insurance reserves" in the consolidated balance sheets and was $2.5 million as of January 9, 2007. Cash and Cash Equivalents -The Company considers all highly liquid instruments with maturities of three months or less when purchased to be cash equivalents...

  • Page 61
    ... against current operations for an amount equal to the difference between the carrying value and the assets fair value. The fair value of the store's long-lived assets is estimated using the discounted future cash flows of the assets based upon a rate that approximates our weighted-average cost of...

  • Page 62
    ... subletting properties or through favorable lease terminations, discounted using a weighted-average cost of capital. Management of the Company estimates future cash flows based on their experience and knowledge of the market in which the closed store is located and, when necessary, uses real estate...

  • Page 63
    ...-unit development agreements specify the number of stores to be opened. Any changes to the specific number of stores would be stated in a subsequent contractual agreement (see Note 3). The Company charges an initial franchise fee for providing operational materials, new store opening planning, and...

  • Page 64
    ... preferences, as may be determined from time to time by the Board of Directors. Stock-Based Compensation -Stock options for a fixed number of shares are granted to certain employees and directors with an exercise price based on an average of the closing price of the Company's common stock for 64

  • Page 65
    ... Company's consolidated balance sheets and the unrealized changes in the values of these derivatives are shown in the Company's consolidated statements of operations as "Gain (loss) on derivative liabilities." These warrants are freely traded on the NASDAQ Global Market, consequently, the fair value...

  • Page 66
    ... plans to pay dividends, it would use a rate for its current valuation. The expected term was determined to be the remaining contractual life of the option or derivative of 3.5 years as of January 9, 2007 and 4.5 years as of January 10, 2006 and December 31, 2005. Due to its limited trading history...

  • Page 67
    ...an entity's accounting policy regarding the presentation of taxes assessed by a governmental authority that are directly imposed on a revenue-producing transaction between a seller and a customer including sales, use, value-added, and some excise taxes. The Company presents such taxes on a net basis...

  • Page 68
    ...to equity holders Cash held in escrow Fair value of Jamba Juice Company warrants assumed Fair value of Jamba Juice Company stock options assumed Acquisition-related transaction costs Total purchase price The following payments were made pursuant to the Merger Agreement: $ 218,816 21,875 2,323 1,946...

  • Page 69
    ...Current liabilities Accrued store value cards Deferred income tax liabilities, net Other long-term liabilities Total purchase price $ 18,043 81,548 93,773 172,200 5,344 2,863 (45,239) (14,830) (58,171) (3,780) $251,751 Trademarks All of Jamba Juice Company's products are sold under the Jamba Juice...

  • Page 70
    ... Date, Jamba Juice Company had an outstanding balance of $17.7 million in accrued store value cards, which have been adjusted to fair value by discounting the projected cash flows to present value, which are calculated as the costs to service deferred revenue, plus an estimated profit margin of...

  • Page 71
    ..., Jamba Juice Company, has entered into multi-unit license agreements with area developers to develop stores in certain geographic regions. Under typical multi-unit license agreements, the area developer generally pays 1/2 of the initial nonrefundable fee multiplied by each store to be developed as...

  • Page 72
    ... Whole Foods Markets with employees of Whole Foods Market operating the stores. As of January 9, 2007, two of the three current multi-area developers have contractual commitments to open, cumulatively, 21 new franchise stores. The Company generally executes franchise agreements for each store that...

  • Page 73
    ... follows (in thousands): January 9, 2007 Nonamortizable intangible assets: Trademarks and trade names Amortizable intangible assets: Favorable leases Franchise agreements Employment/nonsolicitation agreements Total amortizable intangible assets Total nonamortizable and amortizable intangible assets...

  • Page 74
    ... not close any stores. The following is a reconciliation of the store closure accrual (in thousands): January 9, 2007 Assumed from Jamba Juice Company Payments on liability Balance $ 534 (18) $ 516 Loss on Disposal of Other Assets -During fiscal 2006, the Company wrote off the net book value of...

  • Page 75
    ... information for the Company's equity investments in JJC Florida, LLC and JJC Hawaii, LLC as of and for the year ended January 9, 2007 (in thousands): January 9, 2007 Current assets Non-current assets Current liabilities Non-current liabilities and members' equity Revenue Gross profit Net loss...

  • Page 76
    ... expenditures in excess of $35 million in any year. Jamba Juice Company obtained a waiver from its financial institution in regards to its merger agreement with the Company. There was no outstanding balance on the Line as of January 9, 2007. Additional borrowing availability of $32.2 million was...

  • Page 77
    ...): January 9, 2007 January 10, 2006 December 31, 2005 Net operating losses Reserves and accruals Deferred franchise revenue Class action payable Other Total current deferred tax asset Net operating losses Deferred rent Tax credit attributes Basis difference in intangibles Stock-based compensation...

  • Page 78
    ... Plans as of January 9, 2007, and changes during the year then ended is presented below (shares and dollars in thousands): WeightedTverage Exercise Price WeightedTverage Contractual Term Number of Options Tggregate Intrinsic Value Options granted Options assumed from Jamba Juice Company Options...

  • Page 79
    ...warrant activity as of January 9, 2007, and changes during the year then ended is presented below (shares in thousands): Number of Warrants WeightedTverage Exercise Price Warrants outstanding as of January 11, 2006 Warrants assumed from Jamba Juice Company Warrants exercised Warrants outstanding as...

  • Page 80
    ...supplier for certain fruits for a 15-year term ending in 2024 for commitments to purchase a minimum level of fruit totaling $32.2 million. The Company has not made significant purchases under this agreement during fiscal 2006. 16. RELTTED-PTRTY TRTNSTCTIONS The Company's current Chairman and former...

  • Page 81
    ... QUTRTERLY INFORMTTION Quarter Ended March 31, 2006 (1) June 30, 2006 September 30, 2006 January 9, 2007 Total revenue Gross profit (loss) Income (loss) from operations Other income (expense) Net income (loss) Basic income per share Diluted income per share $ - - (174) (59,084) (59,297) (2.82...

  • Page 82
    Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC TCCOUNTING FIRM To the Board of Directors and Stockholders of Jamba Juice Company and Subsidiary: We have audited the accompanying consolidated balance sheets of Jamba Juice Company and subsidiary (the "Company") as of November 28, 2006, ...

  • Page 83
    ...: Accounts payable Accrued compensation and benefits Workers' compensation and health self-insurance reserves Accrued store value cards Line of credit note payable Current portion of litigation settlement payable Other accrued expenses Total current liabilities Deferred franchise revenue Line of...

  • Page 84
    ... 27, 2006 (52 weeks) Fiscal Year Ended June 28, 2005 (52 weeks) Fiscal Year Ended June 29, 2004 (53 weeks) Revenue: Company stores Franchise and other revenue Total revenue Operating expenses: Cost of sales Labor costs Occupancy costs Store operating expense Depreciation and amortization General...

  • Page 85
    ... in thousands) Common Stock Shares Tdditional Paid-In Capital from Stock Sales Total Common Tccumulated Deficit Stockholders' Deficit Balance as of June 24, 2003 Issuance of common stock Redeemable preferred stock accretion Other Repayment of note receivable Net income Balance as of June 29...

  • Page 86
    ... rent and other Deferred income taxes Changes in operating assets and liabilities: Receivables, net of allowance Inventories Prepaid expenses and other current assets Other long-term assets Accounts payable Accrued compensation and benefits Accrued store value cards Litigation settlement payable...

  • Page 87
    ... POLICIES Business-Jamba Juice Company is a leading retailer of premium quality blended-to-order fruit smoothies, squeezed-to-order juices, blended beverages, and healthy snacks. Jamba Juice Company offers a wide variety of fresh blended-to-order smoothies, fresh-squeezed juices, baked goods...

  • Page 88
    ... losses in Jamba Juice Company's existing accounts receivable. Inventories -Inventories include only the purchase cost and are stated at the lower of cost or market. Cost is determined using the first-in, first-out method. Inventories consist of food, beverages, and available-for-sale promotional...

  • Page 89
    ... through subletting properties or through favorable lease terminations, discounted using a weightedaverage cost of capital. Jamba Juice Company estimates future cash flows based on its experience and knowledge of the market in which the closed store is located and, when necessary, uses real estate...

  • Page 90
    ... development agreements specify the number of stores to be opened. Any changes to the specific number of stores would be stated in a subsequent contractual agreement (see Note 2). Jamba Juice Company charges an initial franchise fee for providing operational materials, new store opening planning...

  • Page 91
    ... than not that a deferred tax asset will be not realized. Employee Stock Options -Stock options for a fixed number of shares are granted to certain employees and directors with an exercise price equal to or greater than the fair market value of Jamba Juice Company's common stock at the date of grant...

  • Page 92
    ...Whole Foods Market in which employees of Whole Foods Market are operating the stores. As of November 28, 2006, three of the four current multi-area developers have contractual commitments to open, cumulatively, 24 new franchise stores. Jamba Juice Company generally executes franchise agreements for...

  • Page 93
    ..., JJC Florida reimbursed Jamba Juice Company $1,114,000 and $1,216,000 for the 22 Week Period and fiscal 2006, respectively, for managing and operating these stores, which is reported as franchise and other revenue. In connection with entering into the Management Agreement, JJC Florida's development...

  • Page 94
    ..., saturation of markets due to proximity of other stores, general economic conditions and other trends. Store Closures -During the 22 Week Period and fiscal 2006, 2005 and 2004, Jamba Juice Company closed one, three, two, and one stores, respectively. Jamba Juice Company recorded losses related to...

  • Page 95
    ... 28, 2006. During fiscal year 2004, Jamba Juice Company invested an additional $2 million in JJC Florida, LLC as part of an amendment to its original Franchise Agreement and License Agreement. Under the amendment, profits and losses are to be allocated to the members in proportion to their cash...

  • Page 96
    ... Jamba Juice Company leases its office, retail stores and some equipment under operating leases, with terms expiring through 2016. Most store leases contain renewal options of up to 10 years and provide for payment of common area operating expenses and real estate taxes. Rental expense, net...

  • Page 97
    ... expenditures in excess of $35 million in any year. Jamba Juice Company has obtained a waiver from its financial institution in regards to its merger agreement with Services Acquisition Corp. International. The outstanding balance on the Line was $15.9 million, $10.8 million, and $13.0 million...

  • Page 98
    ...June 30, 2004 Statutory federal rate State income taxes less federal benefit Change in valuation allowance Tax credit attributes Reconciliation of deferred tax assets Reconciliation of current payable Meals and entertainment Stock options Capitalized transaction costs Prior year true up Others 34...

  • Page 99
    ... Board Opinion No. 20, Accounting Changes , modified its accounting for the accretion of its convertible redeemable preferred stock to conform to Securities and Exchange Commission ("SEC") public company reporting requirements. Previously, Jamba Juice Company did not accrete the carrying value...

  • Page 100
    ... certain net asset to certain net liability ratios, both as defined by Section 500 of the California Corporations Code. ...Stock may elect, at any time after September 1, 2003, to have Jamba Juice Company redeem all of the then-outstanding shares of the applicable Series at the original purchase price...

  • Page 101
    ... the plans, Jamba Juice Company reserved 10,600,000 shares of common stock for granting of stock options. Options were granted at an exercise price equal to or greater than the fair market value of the Company's common stock at the date of the grant and are exercisable for up to 10 years from the...

  • Page 102
    ... board of directors of Jamba Juice Company approved accelerated stock option vesting for certain level of employees upon a change of control. The accelerated vesting applies to all Jamba Juice Company option holders who are District Managers, Support Center Managers, Department or Regional Directors...

  • Page 103
    ..., $0.6 million, $0.4 million, and $0.1 million, respectively, to the plan. 14. OTHER COMMITMENTS TND CONTINGENCIES Litigation Related -Since fiscal year 2000, Jamba Juice Company had been involved in five related lawsuits with its corporate support center landlord and related parties. Four of these...

  • Page 104
    ... law, to current and former employees designated as "General Manager" and "Assistant General Manager." Jamba Juice Company agreed to pay $3.0 million plus payroll taxes to the class and its representatives ratably over a five-year period beginning in fiscal 2004. The net present value of this...

  • Page 105
    ...-(continued) consulting payments of $150,000 per year. In addition, Jamba Juice Company reimburses Mr. Perron for business related expenses. Jamba Juice Company also recorded $3.4 million receivable from Jamba, Inc. as of November 28, 2006 for reimbursement of transaction costs related to the...

  • Page 106
    ..., net OTHER ASSETS TOTAL ASSETS LITBILITIES TND MEMBERS' EQUITY CURRENT LIABILITIES Accounts payable Affiliated payable Accrued liabilities TOTAL CURRENT LIABILITIES DEFERRED RENT DEFERRED TENANT ALLOWANCES TOTAL LIABILITIES COMMITMENTS AND CONTINGENCIES (NOTE 4) MEMBERS' EQUITY TOTAL LIABILITIES...

  • Page 107
    ... NET REVENUES COST OF GOODS SOLD STORE OPERATING EXPENSE: Payroll and related benefits Occupancy Royalty, consulting and service fees to affiliates Marketing and promotion Depreciation and amortization Other TOTAL STORE OPERATING EXPENSE STORE INCOME BEFORE GENERAL, ADMINISTRATIVE AND DEVELOPMENT...

  • Page 108
    Table of Contents JJC FLORIDT, LLC (UNTUDITED ) STTTEMENT OF CHTNGES IN MEMBERS' EQUITY FOR THE YETR E NDED DECEMBER 12, 2006 Jamba Juice Company Juice Partners Florida, LLC Total BALANCES, DECEMBER 13, 2005 NET LOSS BALANCES, DECEMBER 12, 2006 (463,804) (84,158) $ (547,962) 1,658,001 (45,715...

  • Page 109
    ... to reconcile net loss to net cash used in operating activities: Depreciation and amortization Changes in assets and liabilities: Increase in receivables Decrease in inventories Decrease in prepaid expenses and other assets Increase in accounts payable Increase in affiliated payable Increase in...

  • Page 110
    ... the State of Florida under an exclusive development and licensing agreement (the "License Agreement") with JJC (Note 4). The Company offers a wide variety of fresh blended-to-order smoothies, fresh-squeezed juices, baked goods and snacks through retail stores. The Company manages its operations by...

  • Page 111
    ... in cost of sales, which subjects the Company to a concentration of business risk. If this supplier had operational problems or ceased making product available to the Company, operations could be adversely affected. NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation During...

  • Page 112
    ... useful lives or the related lease term, which is generally 10 years, commencing the month after the asset is placed in service. The costs of repair and maintenance are expensed when incurred, while expenditures for refurbishments and improvements that significantly add to the productive capacity...

  • Page 113
    ... ) NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Pre-opening Costs Pre-opening costs include certain costs incurred to establish a new store location and costs incurred in connection with the start-up of its operations. The Company records pre-opening expenses in accordance with...

  • Page 114
    ... $1,219,675, were included in accrued liabilities. Territorial Fees Pursuant to the License Agreement, the Company paid a territorial fee of $125,000 in 2000 to JJC for the development of the first ten Jamba Juice stores in Florida. According to the License Agreement, the Company is 114

  • Page 115
    ...) Territorial Fees (continued) also required to pay JJC a front-end fee, the amount of which is determined by the total number of Jamba Juice stores in Florida and Hawaii combined. The Hawaii Jamba Juice stores are owned and operated by JJC Hawaii, LLC, a Hawaii limited liability company and...

  • Page 116
    ... management, store development, marketing, human resources, and training are to be provided to the Company in return for a management fee. The agreement also provides for certain management and development consulting services to be provided to CPH by the Company. This agreement was terminated...

  • Page 117
    Table of Contents JJC FLORIDT, LLC CONTENTS: REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS 118 119 120 FINANCIAL STATEMENTS: Balance Sheets Statements of Operations Statements of Changes in Members' Equity 121 122 123 - 131 Statements of Cash Flows Notes to Financial Statements 117

  • Page 118
    ... CERTIFIED PUBLIC TCCOUNTTNTS The Board of Directors and Members of JJC Florida, LLC: We have audited the accompanying balance sheet of JJC Florida, LLC (the "Company") as of December 13, 2005 and the related statements of operations, changes in members' equity and cash flows for the fiscal year...

  • Page 119
    ..., net OTHER ASSETS TOTAL ASSETS LITBILITIES TND MEMBERS' EQUITY CURRENT LIABILITIES Accounts payable Affiliated payable Accrued liabilities TOTAL CURRENT LIABILITIES DEFERRED RENT DEFERRED TENANT ALLOWANCES TOTAL LIABILITIES COMMITMENTS AND CONTINGENCIES (NOTE 4) MEMBERS' EQUITY TOTAL LIABILITIES...

  • Page 120
    ... OF OPERTTIONS FOR THE YETR ENDED DECEMBER 13, 2005 2005 NET REVENUES COST OF GOODS SOLD STORE OPERATING EXPENSE: Payroll and related benefits Occupancy Royalty, consulting and service fees to affiliates Marketing and promotion Depreciation and amortization Other $ 6,639,369 1,911,393 2,406,359...

  • Page 121
    ... JJC FLORIDT, LLC STTTEMENTS OF CHTNGES IN M EMBERS' EQUITY FOR THE YETR ENDED D ECEMBER 13, 2005 Juice Partners Florida, LLC Jamba Juice Company Total BALANCES, DECEMBER 28, 2004 MEMBERS' CONTRIBUTIONS NET LOSS BALANCES, DECEMBER 13, 2005 (155,471) 500,000 (808,333) 1,591,254 483,553 (416,806...

  • Page 122
    ... ACTIVITIES: Net loss Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization Changes in assets and liabilities: Increase in receivables Decrease in inventories Increase in prepaid expenses and other assets Decrease in accounts payable Increase in...

  • Page 123
    ... the State of Florida under an exclusive development and licensing agreement (the "License Agreement") with JJC (Note 4). The Company offers a wide variety of fresh blended-to-order smoothies, fresh-squeezed juices, baked goods and snacks through retail stores. The Company manages its operations by...

  • Page 124
    ... cost of sales, which potentially subjects the Company to a concentration of business risk. If this supplier had operational problems or ceased making product available to the Company, operations could be adversely affected. NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation...

  • Page 125
    ... useful lives or the related lease term, which is generally 10 years, commencing the month after the asset is placed in service. The costs of repair and maintenance are expensed when incurred, while expenditures for refurbishments and improvements that significantly add to the productive capacity...

  • Page 126
    ... NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Pre-opening Costs Pre-opening costs include certain costs incurred to establish a new store location and costs incurred in connection with the start-up of its operations. The Company records pre-opening expenses in accordance with...

  • Page 127
    ... Board Opinion No. 20, Accounting Changes and SFAS No. 3, Reporting Accounting Changes in Interim Financial Statements. SFAS 154 changes the requirements for the accounting for and reporting of changes in accounting principles. The statement requires the retroactive application to prior periods...

  • Page 128
    ...approximately $741,000, were included in accrued liabilities. Territorial Fees Pursuant to the License Agreement, the Company paid a territorial fee of $125,000 in 2000 to JJC for the development of the first ten Jamba Juice stores in Florida. According to the License Agreement, the Company is 128

  • Page 129
    ...expensed as pre-opening costs. Marketing Requirement Based on the License Agreement, the Company was originally committed to spend a minimum of 1.5 percent of Net Revenues, as defined, on marketing and promotions in the State of Florida. The License Agreement also required the Company to contribute...

  • Page 130
    ... and/or support such as accounting, payroll administration, executive management, store development, marketing, human resources, and training are to be provided to the Company in return for a management fee. The agreement also provides for certain management and development consulting services to be...

  • Page 131
    ... EVENT The Company entered into a management agreement with JJC on June 28, 2005. This agreement called for JJC to hire all of the store employees as well as the Company's two district managers and one marketing manager. On December 14, 2005, JJC hired the store team members of the Company. 131

  • Page 132
    Table of Contents JJC FLORIDT, LLC FINTNCITL STTTEMENTS DECEMBER 14, 2004 (U 132 NTUDITED )

  • Page 133
    Table of Contents JJC FLORIDT, LLC CONTENTS: FINANCIAL STATEMENTS: Balance Sheet 134 Statement of Operations 135 136 137 Statement of Changes in Members' Equity Statement of Cash Flows Notes to Financial Statements 133 138 - 145

  • Page 134
    ... EQUIPMENT, net OTHER ASSETS TOTAL ASSETS LITBILITIES TND MEMBERS' EQUITY CURRENT LIABILITIES Accounts payable Affiliated payable Accrued liabilities TOTAL CURRENT LIABILITIES DEFERRED RENT TOTAL LIABILITIES COMMITMENTS AND CONTINGENGIES (NOTE 4) MEMBERS' EQUITY TOTAL LIABILITIES AND MEMBERS' EQUITY...

  • Page 135
    ... ) 2004 NET REVENUES COST OF GOODS SOLD STORE OPERATING EXPENSE: Payroll and related benefits Occupancy Royalty, consulting and service fees to affiliates Marketing and promotion Depreciation and amortization Other $ 4,623,078 1,299,084 1,764,155 613,604 231,147 307,044 TOTAL STORE OPERATING...

  • Page 136
    ...STTTEMENT OF CHTNGES IN M EMBERS' EQUITY (DEFICIT) FOR THE YETR E NDED DECEMBER14, 2004 (U NTUDITED ) Juice Partners Florida, LLC Jamba Juice Company Total BALANCES, DECEMBER 23, 2003 MEMBERS' CONTRIBUTIONS NET LOSS BALANCES, DECEMBER 14, 2004 567,289 250,000 29,856 2,000,000 (438,602) $ 1,591...

  • Page 137
    ...: Net loss Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization Changes in assets and liabilities: Decrease (increase) in receivables (Increase) decrease in inventories (Increase) decrease in prepaid expenses and other assets Increase in accounts...

  • Page 138
    ... the State of Florida under an exclusive development and licensing agreement (the "License Agreement") with JJC (Note 4). The Company offers a wide variety of fresh blended-to-order smoothies, fresh-squeezed juices, baked goods and snacks through retail stores. The Company manages its operations by...

  • Page 139
    .... Inventories Inventories include only the purchase cost and are stated at lower of cost of market. Cost is determined using the first-in, first-out method (FIFO). Inventories consist of food, beverages and available for sale promotional products. Property and Equipment Furniture, fixtures...

  • Page 140
    ... requires costs of start-up activities and organization costs to be expensed as incurred. Marketing and Promotion All marketing and promotion costs are expensed as incurred. Marketing and promotion costs amounted to $307,044 as of December 14, 2004. Income Taxes Income or loss for tax reporting...

  • Page 141
    ...will be recognized as current-period charges. In addition, the Statement requires that allocation of fixed production overheads to the costs of conversion be based on the normal capacity of the production facilities. This Statement will be effective for the Company for inventory costs incurred on or...

  • Page 142
    ... approximately $407,000 were included in accrued liabilities. Territorial Fees Pursuant to the License Agreement, the Company paid a territorial fee of $125,000 in 2000 to JJC for the development of the first ten Jamba Juice stores in Florida. According to the License Agreement, the Company is 142

  • Page 143
    ... expensed as pre-opening costs. Marketing Requirement Based on the License Agreement, the Company was originally committed to spend a minimum of 1.5 percent of Net Sales, as defined, on marketing and promotions in the State of Florida. The License Agreement also required the Company to contribute...

  • Page 144
    ... and/or support such as accounting, payroll administration, executive management, store development, marketing, human resources, and training are to be provided to the Company in return for a management fee. The agreement also provides for certain management and development consulting services to be...

  • Page 145
    ... EVENT The Company entered into a management agreement with JJC on June 28, 2005. This agreement called for JJC to hire all of the store employees as well as the Company's two district managers and one marketing manager. On December 14, 2005, JJC hired the store team members of the Company. 145

  • Page 146
    ... affect, the Company's internal control over financial reporting: Upon the Company's acquisition of Jamba Juice Company, the Company's management team, accounting functions, board of directors and related committees and charters, corporate governance policies, auditors and the Company's four then...

  • Page 147
    ... new audit committee charter and other board committee charters were adopted and various corporate governance policies were implemented. The Company implemented significant business processes, much of which were from Jamba Juice Company, addressing financial reporting, accounting close, revenue and...

  • Page 148
    ...benefits of controls must be considered relative to their costs. Our disclosure controls and procedures have been designed to provide reasonable assurance of achieving their objectives.... control issues, if any, within the Company, have been detected. ITEM 9B. OTHER INFORMTTION Not Applicable. 148

  • Page 149
    ... 14A under the Exchange Act no later than 120 days after the end of the Company's 2006 fiscal year. ITEM 14. PRINCIPTL TCCOUNTING FEES TND SERVICES The information required by Item 14 is incorporated herein by reference from the Company's 2007 Proxy Statement to Stockholders to be filed pursuant...

  • Page 150
    ... Statements of Cash Flows Notes to Financial Statements Report of Independent Registered Public Accounting Firm-JJC Florida, LLC for the fiscal year ended December 13, 2005 Balance Sheets Statements of Operations Statements of Changes in Members' Equity Statements of Cash Flows Notes to Financial...

  • Page 151
    ... to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of San Francisco, State of California, on the 2 nd day of April, 2007. JAMBA, INC. By...

  • Page 152
    Table of Contents EXHIBIT INDEX Exhibit Filed Number Description Form File No. Exhibit Filing Date Herewith 2.1 Agreement and Plan of Merger by and among Services Acquisition Corp International, JJC Acquisition Company and Jamba Juice Company, dated as of March 6, 2006. 8-K 001-32552 10...

  • Page 153
    ... for the property located at 6475 Christie Avenue, Emeryville, CA 94608, by and between Jamba Juice Company and Bay Center Office, LLC dated July 28, 2006. Real Property Lease for the property located at 1700 17th Street, San Francisco, CA, 94103, by and between Jamba Juice Company and Henry Shweid...

  • Page 154
    ... Stock Option Agreement under the 2006 Plan.** Non-employee Director Compensation Policy.** Form of Securities Purchase Agreement between Services Acquisition Corp. International and investors, as amended. Form of Registration Rights Agreement between Services Acquisition Corp. International...

  • Page 155
    ...(or portions thereof) has been filed separately with the Securities and Exchange Commission pursuant to an application for confidential treatment. The confidential portions of this exhibit have been omitted and are marked by an asterisk. Management contract, or compensatory plan or arrangement. 155

  • Page 156
    ... as of the 1st day of October 2004, by and between Jamba Juice Company, a California corporation ("JJC"), and Southwest Traders Inc, a California limited liability company ("Distributor") with respect to the following facts: A. JJC is an operator and franchiser of retail smoothie and juice stores...

  • Page 157
    ... to arrive prepared to deliver Orders within two (2) hours of the scheduled delivery time. "Distribution Territory" shall mean the States of California, Arizona, Nevada, Colorado, Utah, Idaho, New Mexico, Wyoming, Oklahoma, and Texas. "Franchised or Licensed Store " shall mean a store operated by an...

  • Page 158
    ...the total number of items in an Order. "Slow Inventory " shall mean Products that move five Full Cases or less within a 30-day period. "Stores" shall mean, individually or collectively, Company Stores and/or Franchised or Licensed Stores, as the context so permits or requires. "Supply" or "Supplying...

  • Page 159
    .... No changes shall be made to any of these provisions without the prior written approval of the JJC Chief Financial Officer or the JJC Director, Supply Chain Management. Distributor agrees to offer the same pricing and discounts it provides to JJC to each of the Franchised or Licensed Stores. 4

  • Page 160
    ... Distributors responsibility to review the information for accuracy and to report any discrepancies within three Business Days of receipt of directed pricing. All pricing for that month shall remain fixed with no variability in an effort to ensure consistent cost of goods and invoice accuracy. All...

  • Page 161
    ... a Store's delivery commitment, as long as the change does not adversely affect the Store. 4.4 Pricing Information . (a) Directed Pricing Worksheet . On or before the twentieth (20) th day of each Month, JJC shall provide the Distributor with "directed pricing" for the up-coming months order guide...

  • Page 162
    ... each Store a copy of the order guide by the first day of each Month. (c) Pricing by Landed FOB points . Pricing will be based upon the following FOB points and will only be changed with written authorization from the Manager of Supply Chain & Logistics: Temecula, California; Sacramento, California...

  • Page 163
    ... number for placing Orders and for responding to customer service issues. 6.4 Customer Service Matters . If requested by JJC, Distributor agrees to develop a computer based ordering system that is compatible with each Store and JJC's corporate office computer network during the term of the Agreement...

  • Page 164
    ... 12 hours a day by a toll-free 800 number pager. Response time will be within two (2) hours Monday through Friday, between 8:00 a.m. and 6 p.m., and within four (4) hours on weekends, after hours, and holidays. Distributor shall provide Jamba Juice Company corporate offices restricted remote...

  • Page 165
    ... the Store opening. Distributor shall inspect all new Store locations prior to accepting the Store's opening Order and notify JJC Manager of Supply Chain and Logistics if a delivery surcharge is applicable. 6.8 Off-Day Delivery/Emergency Orders . Off-Day Delivery/Emergency Orders. Stores may request...

  • Page 166
    ... Store incurs to cover the shortage. The Incremental Product Cost will be limited to a maximum usage of a normal 24-hour period. (c) Expedited Orders . If the Distributor has run out of product at the Distribution facility due to poor inventory management, inadequate safety stocks, etc. it is Jamba...

  • Page 167
    ... a customer service representative for the JJC account. The Distributor will provide JJC store management with a list of contact telephone numbers to reach someone after hours or for emergencies. 7.5 No substitutions . will not be permitted without the prior approval of JJC. The purchase price for...

  • Page 168
    ... any study, plan, report or data pertaining to JJC, any information about JJC's products, methods of doing business, profit or sales, information about markets, information about customers, and all other matters concerning JJC's business methods, and information that Distributor develops, assists in...

  • Page 169
    ...) any distribution services in any geographic area to companies (each, a "Direct JJC Competitor") operating multiple-unit restaurants (whether company owned, licensed and/or franchised) consisting of more than ten units and whose sales from its fresh juice and/or blended smoothies are in excess...

  • Page 170
    ... by the Distributor. (c) Notice of New Products . JJC will provide at least twenty-four (24) hours from the time of receipt at Distributor's warehouse(s) of any new Product before such new Product is required to be picked for delivery. (d) Risk of Loss . All Inventory held by Distributor is the...

  • Page 171
    ...30) days of the termination of this Agreement. Payment terms for the options are net fifteen (15) days upon credit approval, unless different arrangements are agreed upon in writing. JJC's total financial exposure for each Product stocked shall be limited to the greater of (i) Inventory balances not...

  • Page 172
    ... or commission, that may be committed or suffered by Distributor or any of its officers, directors, shareholders, agents, licensees, franchisees, agents, or employees (each an "Indemnified Party") in connection with Distributor's performance of this Agreement, including, without limitation, in...

  • Page 173
    ... shall be written by an insurance company acceptable to JJC and naming Jamba Juice Company, their franchise and licensee partners, as coinsured on such policy, with proof of such insurance provided to JJC within thirty (30) days of Agreement date. Any such policy shall include a provision for thirty...

  • Page 174
    ...Base Fuel Target Costs, then for the Month under review, a fuel surcharge or credit shall be applied, as the case may be, by [****] for each [****] increase or decrease in such average fuel cost per gallon as compared to the Base Fuel Target Costs. If extraordinary increases or decreases in taxes or...

  • Page 175
    ... to established Jamba Metrics 4. On Time Delivery Deliveries without complaint Unit Fill Rates: Critical & Non-critical Perfect Order Rate Inventory Accuracy Monthly Inventory on-hand and valuation report. Quarterly Drop Size Report-average number of cases delivered per store, per week...

  • Page 176
    ... by JJC, and have a copy of the audit report sent to JJC's Manager of Supply Chain and Logistics annually. A copy of a current report must be sent to JJC's Manager of Supply Chain and Logistics within sixty (60) days of the date this Agreement commences. Failure to score a minimum of 850 through...

  • Page 177
    ... of the arbitrator(s), within such fourteen-day (14) period, the sole arbitrator(s) may proceed and hear alone. 2. 3. A hearing on the matter to be arbitrated shall take place before the arbitrator(s) in San Francisco, California, at the time and place selected by the arbitrator(s). The...

  • Page 178
    ... Director, Supply Chain Management Jamba Juice Company 1700 17th Street San Francisco, CA 94103-5136 Fax: (415) 487-1143 Joe O'Neill Chief Financial Officer With copy to: Jamba Juice Company 1700 17th Street San Francisco, CA 94103-5136 Fax: (415) 487-1143 All notices shall be deemed delivered...

  • Page 179
    ... to provide annual audited and/or reviewed financial reports to the other party. Additionally, Distributor and JJC agree to notify each other within thirty (30) days of an audit report, if either party's financial condition materially declines from the previous report. 34. COMPLETE AGREEMENT OF THE...

  • Page 180
    ... any subsequent Default or nullify the effectiveness of that term or condition. 41. PUBLICITY . No promotional material, advertising, or notice to any third party (whether written or oral) concerning this Agreement shall be issued, given, or otherwise disseminated without the prior approval of JJC...

  • Page 181
    The parties hereto have executed this Agreement as of the day and year first above written SOUTHWEST TRADERS, INC. By: /s/ Ken Smith Ken Smith, President JAMBA JUICE COMPANY By: /s/ Anne Kimball Anne Kimball, Director of Supply Chain Management By: /s/ Joe O'Neill Joe O'Neill, CFO 26

  • Page 182
    ... CONFIDENTIAL TREATMENT HAS BEEN RECUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH MOUNTS THE INFORMATION SUBJECT TO THE CONFIDENTIALITY RECUEST. OMISSIONS ARE DESIGNATED AS [****]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION...

  • Page 183
    ...to a Permitted Exception with 16 months of the date of the Distribution Agreement. 2. Distributor agrees that: FOB Tolleson, AZ: All stores currently serviced out of FOB Tolleson, AZ will continue to receive pricing based on FOB Temecula, CA through December 31, 2007. Reduction of Mark-up percent...

  • Page 184
    ...COPY FILED HEREWITH MOUNTS THE INFORMATION SUBJECT TO THE CONFIDENTIALITY RECUEST. OMISSIONS ARE DESIGNATED AS [****]. A COMPLETE VERSION... [****] business prior to January 1, 2007, then the additional reduction of [****] will be waived and we will revert to the original mark-up schedule for 2007. 3....

  • Page 185
    In Witness Whereof, the parties have executed this Amendment as of the date first written above. SOUTHWEST TRADERS, INC. By: /s/ Ken Smith Ken Smith, President JAMBA JUICE COMPANY By: /s/ Anne Kimball Anne Kimball, Director of Supply Chain Management By: /s/ Don Breen Don Breen, CFO 3

  • Page 186
    ..., an employee who is also serving as an officer or director of the Company or of an Affiliate), designated by the Administrator to be eligible to be granted one or more Stock Rights under the Plan. Fair Market Value of a Share of Common Stock means: (1) If the Common Stock is listed on a national...

  • Page 187
    ... the close of trading in the over-the-counter market for the trading day that is the applicable date; and (3) If the Common Stock is neither listed on a national securities exchange nor traded in the over-the-counter market, such value as the Administrator, in good faith, shall determine. ISO means...

  • Page 188
    ... Shares that were subject to the Stock Right or portion thereof, and not the net number of Shares actually issued. (b) 4. ADMINISTRATION OF THE PLAN. The Administrator of the Plan will be the Board of Directors, except to the extent the Board of Directors delegates its authority to the Committee...

  • Page 189
    ... Participant at or prior to the time of the execution of the Agreement evidencing such Stock Right. ISOs may be granted only to Employees. Non-Qualified Options, Stock Grants and Stock-Based Awards may be granted to any Employee, director or consultant of the Company or an Affiliate. The granting of...

  • Page 190
    ...exercisable in installments over a period of months or years, or upon the occurrence of certain conditions or the attainment of stated goals or events. Option Conditions : Exercise of any Option may be conditioned upon the Participant's execution of a Share purchase agreement in form satisfactory to...

  • Page 191
    ... on Yearly Exercise: The Option Agreements shall restrict the amount of ISOs which may become exercisable in any calendar year (under this or any other ISO plan of the Company or an Affiliate) so that the aggregate Fair Market Value (determined at the time each ISO is granted) of the stock with...

  • Page 192
    ... Plan or the Option Agreement. Payment of the purchase price for the Shares as to which such Option is being exercised shall be made (a) in United States dollars in cash or by check, or (b) at the discretion of the Administrator, through delivery of shares of Common Stock having a Fair Market Value...

  • Page 193
    ... or by check, or (b) at the discretion of the Administrator, through delivery of shares of Common Stock held for at least six months and having a Fair Market Value equal as of the date of acceptance of the Stock Grant or Stock Based-Award to the purchase price of the Stock Grant or Stock-Based Award...

  • Page 194
    ... void. 13. EFFECT ON OPTIONS OF TERMINATION OF SERVICE OTHER THAN "FOR CAUSE" OR DEATH OR DISABILITY. Except as otherwise provided in a Participant's Option Agreement, in the event of a termination of service (whether as an employee, director or consultant) with the Company or an Affiliate before...

  • Page 195
    .... Except as required by law or as set forth in a Participant's Option Agreement, Options granted under the Plan shall not be affected by any change of a Participant's status within or among the Company and any Affiliates, so long as the Participant continues to be an employee, director or consultant...

  • Page 196
    ... the definition in this Plan with respect to that Participant. c. d. 15. EFFECT ON OPTIONS OF TERMINATION OF SERVICE FOR DISABILITY. Except as otherwise provided in a Participant's Option Agreement: a. A Participant who ceases to be an employee, director or consultant of the Company or of an...

  • Page 197
    ... or consultant or, if earlier, within the originally prescribed term of the Option. 17. EFFECT OF TERMINATION OF SERVICE ON UNACCEPTED STOCK GRANTS. In the event of a termination of service (whether as an employee, director or consultant) with the Company or an Affiliate for any reason before the...

  • Page 198
    ... Agreement, the following rules apply if the Participant's service (whether as an employee, director or consultant) with the Company or an Affiliate is terminated "for cause": a. All Shares subject to any Stock Grant shall be immediately subject to repurchase by the Company at the purchase price...

  • Page 199
    ... approved by the Administrator, the cost of which examination shall be paid for by the Company. 21. EFFECT ON STOCK GRANTS OF DEATH WHILE AN EMPLOYEE, DIRECTOR OR CONSULTANT. Except as otherwise provided in a Participant's Stock Grant Agreement, the following rules apply in the event of the death...

  • Page 200
    ... with or acquired by another entity in a merger, sale of all or substantially all of the Company's assets other than a transaction to merely change the state of incorporation (a "Corporate Transaction"), the Administrator or the board of directors of any entity assuming the obligations of the...

  • Page 201
    ... or acquiring entity; or (ii) terminate all Stock Grants in exchange for a cash payment equal to the excess of the Fair Market Value of the Shares subject to such Stock Grants over the purchase price thereof, if any. In addition, in the event of a Corporate Transaction, the Administrator may waive...

  • Page 202
    ... fractional shares shall be issued under the Plan and the person exercising a Stock Right shall receive from the Company cash in lieu of such fractional shares equal to the Fair Market Value thereof. 27. CONVERSION OF ISOs INTO NON-QUALIFIED OPTIONSk TERMINATION OF ISOs. The Administrator, at the...

  • Page 203
    ... stock is sold, these holding period requirements do not apply and no Disqualifying Disposition can occur thereafter. 30. TERMINATION OF THE PLAN. The Plan will terminate on 10 years after adoption, the date which is ten years from the earlier of the date of its adoption by the Board of Directors...

  • Page 204
    Exhibit 21.1 Name of Company Jurisdiction of Incorporation Jamba Juice Company California

  • Page 205
    ... 9, 2007 and January 10, 2006 and for the year ended January 9, 2007 and the period from January 1, 2006 to January 10, 2006 appearing in this Annual Report on Form 10-K of Jamba, Inc. for the fiscal year ended January 9, 2007. /s/ Deloitte & Touche LLP han Francisco, California April 2, 2007

  • Page 206
    ... for the period from June 28, 2006 to November 28, 2006 and for each of the three fiscal years in the period ended June 27, 2006, appearing in this Annual Report on Form 10-K of Jamba, Inc. for the fiscal year ended January 9, 2007. /s/ Deloitte & Touche LLP han Francisco, California April 2, 2007

  • Page 207
    ... March 23, 2006, except for notes 1, 11, and 13, which are dated August 1, 2006 appearing in this Annual Report on Form 10-K of Jamba, Inc. (formerly hervices Acquisition Corp. International) for fiscal year ended January 9, 2007. /s/ Rothstein, Kass & Company, P.C. Roseland, New Jersey March 30...

  • Page 208
    ... and Registration htatement No. 333139128 on Form h-8, of our report dated June 9, 2006, appearing in this Annual Report on Form 10-K of Jamba, Inc. (formerly hervices Acquisition Corp. International) for fiscal year ended January 9, 2007. /s/ Morrison, Brown, Argiz and Farra, LLP Miami, FL April...

  • Page 209
    ...reviewed this annual repurt un Furm 10-K uf Jamba... change in the registrant's internal...management ur uther empluyees whu have a significant rule in the registrant's internal cuntrul uver financial repurting. /s/ Paul E. Claytun Paul E. Claytun Chief Executive Officer and President Date: April 2, 2007

  • Page 210
    ...information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. /s/ Donald D. Breen Donald D. Breen Senior Vice President and Chief Financial Officer Date: April 2, 2007

  • Page 211
    ...The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. /s/ Paul E. Clayton Paul E. Clayton Chief Executive Officer and President Date: April 2, 2007 A signed original of this written statement required by...

  • Page 212
    ... in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. /s/ Donald D. Breen Donald D. Breen Senior Vice President and Chief Financial Officer Date: April 2, 2007 P signed original of this written statement required by Section...