þ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Nevada | 11–2238111 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
3475 Victory Boulevard, Staten Island, New York | 10314 |
(Address of principal executive offices) | (Zip Code) |
Large accelerated filer | o | Accelerated filer | o |
Non-accelerated filer | o | Smaller reporting company | þ |
PART I | Pages | |||
3 | ||||
15 | ||||
21 | ||||
PART II | ||||
22 | ||||
22 | ||||
22 | ||||
22 | ||||
22 | ||||
22 | ||||
22 |
July 31, 2015 | October 31, 2014 | |||||||
(Unaudited) | ||||||||
- ASSETS - | ||||||||
CURRENT ASSETS: | ||||||||
Cash | $ | 3,315,177 | $ | 3,782,639 | ||||
Accounts receivable, net of allowances of $144,000 for 2015 and 2014 | 11,995,756 | 15,419,860 | ||||||
Inventories | 12,444,317 | 15,210,153 | ||||||
Prepaid green coffee | 1,014,911 | 467,155 | ||||||
Prepaid expenses and other current assets | 289,151 | 260,112 | ||||||
Prepaid and refundable income taxes | 1,434,577 | 759 | ||||||
Deferred income tax asset | 1,442,747 | 343,657 | ||||||
TOTAL CURRENT ASSETS | 31,936,636 | 35,484,335 | ||||||
Machinery and equipment, at cost, net of accumulated depreciation of $4,106,177 and $3,704,802 for 2015 and 2014, respectively | 1,939,477 | 1,991,094 | ||||||
Customer list and relationships, net of accumulated amortization of $39,375 and $33,750 for 2015 and 2014, respectively | 110,625 | 116,250 | ||||||
Trademarks | 180,000 | 180,000 | ||||||
Goodwill | 440,000 | 440,000 | ||||||
Equity method investments | 97,242 | 97,404 | ||||||
Deposits and other assets | 605,478 | 643,549 | ||||||
TOTAL ASSETS | $ | 35,309,458 | $ | 38,952,632 | ||||
- LIABILITIES AND STOCKHOLDERS’ EQUITY - | ||||||||
CURRENT LIABILITIES: | ||||||||
Accounts payable and accrued expenses | $ | 5,600,015 | $ | 8,693,100 | ||||
Line of credit | 4,268,458 | 2,498,458 | ||||||
Due to broker | 476,661 | 484,924 | ||||||
Income taxes payable | _- | 331,051 | ||||||
TOTAL CURRENT LIABILITIES | 10,345,134 | 12,007,533 | ||||||
Deferred income tax liabilities | 114,747 | 165,157 | ||||||
Deferred rent payable | 218,951 | 209,640 | ||||||
Deferred compensation payable | 477,478 | 515,549 | ||||||
TOTAL LIABILITIES | 11,156,310 | 12,897,879 | ||||||
STOCKHOLDERS’ EQUITY: | ||||||||
Coffee Holding Co., Inc. stockholders’ equity: | ||||||||
Preferred stock, par value $.001 per share; 10,000,000 shares authorized; no shares issued and outstanding | - | - | ||||||
Common stock, par value $.001 per share; 30,000,000 shares authorized, 6,456,316 shares issued; 6,215,894 shares outstanding for periods ended July 31, 2015 and 2014, respectively | 6,456 | 6,456 | ||||||
Additional paid-in capital | 15,904,109 | 15,904,109 | ||||||
Retained earnings | 9,237,571 | 11,079,168 | ||||||
Less: Treasury stock, 240,422 common shares, at cost for 2015 and 2014 | (1,267,862 | ) | (1,267,862 | ) | ||||
Total Coffee Holding Co., Inc. Stockholders’ Equity | 23,880,274 | 25,721,871 | ||||||
Non-controlling interest | 272,874 | 332,882 | ||||||
TOTAL EQUITY | 24,153,148 | 26,054,753 | ||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 35,309,458 | $ | 38,952,632 |
April 30, 2016 | October 31, 2015 | |||||||
(Unaudited) | ||||||||
- ASSETS - | ||||||||
CURRENT ASSETS: | ||||||||
Cash | $ | 3,198,097 | $ | 3,853,816 | ||||
Accounts receivable, net of allowances of $144,000 for 2015 and 2014 | 11,318,009 | 10,968,237 | ||||||
Inventories | 12,333,449 | 13,862,818 | ||||||
Prepaid green coffee | 344,439 | 620,452 | ||||||
Prepaid expenses and other current assets | 273,395 | 256,202 | ||||||
Prepaid income taxes | 931,727 | 1,434,577 | ||||||
Due from broker | 205,253 | - | ||||||
Deferred income tax asset | 53,595 | 997,720 | ||||||
TOTAL CURRENT ASSETS | 28,657,964 | 31,993,822 | ||||||
Machinery and equipment, at cost, net of accumulated depreciation of $4,516,493 and $4,241,256 for 2016 and 2015, respectively | 1,839,981 | 1,845,000 | ||||||
Customer list and relationships, net of accumulated amortization of $45,000 and $41,250 for 2016 and 2015, respectively | 105,000 | 108,750 | ||||||
Trademarks | 180,000 | 180,000 | ||||||
Goodwill | 440,000 | 440,000 | ||||||
Equity method investment | 96,327 | 96,571 | ||||||
Deposits and other assets | 601,993 | 610,499 | ||||||
TOTAL ASSETS | $ | 31,921,265 | $ | 35,274,642 | ||||
- LIABILITIES AND STOCKHOLDERS’ EQUITY - | ||||||||
CURRENT LIABILITIES: | ||||||||
Accounts payable and accrued expenses | $ | 3,271,416 | $ | 4,021,389 | ||||
Line of credit | 2,654,121 | 5,554,121 | ||||||
Due to broker | - | 483,835 | ||||||
Income taxes payable | 500 | - | ||||||
TOTAL CURRENT LIABILITIES | 5,926,037 | 10,059,345 | ||||||
Deferred income tax liabilities | 20,995 | 92,370 | ||||||
Deferred rent payable | 226,636 | 222,055 | ||||||
Deferred compensation payable | 489,826 | 482,499 | ||||||
TOTAL LIABILITIES | 6,663,494 | 10,856,269 | ||||||
STOCKHOLDERS’ EQUITY: | ||||||||
Coffee Holding Co., Inc. stockholders’ equity: | ||||||||
Preferred stock, par value $.001 per share; 10,000,000 shares authorized; no shares issued and outstanding | - | - | ||||||
Common stock, par value $.001 per share; 30,000,000 shares authorized, 6,456,316 shares issued; 6,068,119 and 6,162,207 shares outstanding at April 30, 2016 and October 31, 2015, respectively | 6,456 | 6,456 | ||||||
Additional paid-in capital | 15,904,109 | 15,904,109 | ||||||
Retained earnings | 10,936,310 | 9,665,940 | ||||||
Less: Treasury stock, 388,197 and 294,109 common shares, at cost for six months ended April 30, 2016 and 2015, respectively | (1,881,031 | ) | (1,494,712 | ) | ||||
Total Coffee Holding Co., Inc. Stockholders’ Equity | 24,965,844 | 24,081,793 | ||||||
Non-controlling interest | 291,927 | 336,580 | ||||||
TOTAL EQUITY | 25,257,771 | 24,418,373 | ||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 31,921,265 | $ | 35,274,642 |
Nine Months Ended July 31, | Three Months Ended July 31, | |||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
NET SALES | $ | 95,708,890 | $ | 79,373,667 | $ | 27,039,857 | $ | 26,628,571 | ||||||||
COST OF SALES (Including $17.9 and $13.2 million of related party costs for the nine months ended July 31, 2015 and 2014, respectively. Including $3.0 and $4.1 million for the three months ended July 31, 2015 and 2014, respectively.) | 92,816,224 | 68,239,903 | 24,991,366 | 23,574,095 | ||||||||||||
GROSS PROFIT (LOSS) | 2,892,666 | 11,133,764 | 2,048,491 | 3,054,476 | ||||||||||||
OPERATING EXPENSES: | ||||||||||||||||
Selling and administrative | 5,286,993 | 5,094,939 | 1,723,158 | 1,656,789 | ||||||||||||
Officers’ salaries | 489,435 | 459,300 | 163,850 | 159,100 | ||||||||||||
TOTALS | 5,776,428 | 5,554,239 | 1,887,008 | 1,815,889 | ||||||||||||
(LOSS) INCOME FROM OPERATIONS | (2,883,762 | ) | 5,579,525 | 161,483 | 1,238,587 | |||||||||||
OTHER INCOME (EXPENSE) | ||||||||||||||||
Interest income | 26,302 | 32,064 | 13,074 | 12,769 | ||||||||||||
(Loss) income from equity investment | (162 | ) | (847 | ) | (610 | ) | (759 | ) | ||||||||
Interest expense | (153,768 | ) | (42,340 | ) | (35,156 | ) | (16,271 | ) | ||||||||
TOTALS | (127,628 | ) | (11,123 | ) | (22,692 | ) | (4,261 | ) | ||||||||
(LOSS) INCOME BEFORE INCOME TAXES AND NON-CONTROLLING INTEREST IN SUBSIDIARY | (3,011,390 | ) | 5,568,402 | 138,791 | 1,234,326 | |||||||||||
(Benefit) provision for income taxes | (1,189,785 | ) | 2,114,905 | 40 | 450,952 | |||||||||||
NET (LOSS) INCOME BEFORE NON-CONTROLING INTEREST IN SUBSIDIARY | (1,821,605 | ) | 3,453,497 | 138,751 | 783,374 | |||||||||||
Less: net (income) loss attributable to the non-controlling interest | (19,992 | ) | (61,590 | ) | 411 | (24,427 | ) | |||||||||
NET (LOSS) INCOME ATTRIBUTABLE TO COFFEE HOLDING CO., INC. | $ | (1,841,597 | ) | $ | 3,391,907 | $ | 139,162 | $ | 758,947 | |||||||
Basic (loss) earnings per share | $ | (.30 | ) | $ | .53 | $ | .02 | $ | .12 | |||||||
Diluted (loss) earnings per share | $ | (.30 | ) | $ | .51 | $ | .02 | $ | .11 | |||||||
Weighted average common shares outstanding: | ||||||||||||||||
Basic | 6,215,894 | 6,362,933 | 6,215,894 | 6,344,487 | ||||||||||||
Diluted | 6,215,894 | 6,629,933 | 6,215,894 | 6,611,487 |
Six Months Ended April 30, | Three Months Ended April 30, | |||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
NET SALES | $ | 44,212,334 | $ | 68,669,033 | $ | 21,406,939 | $ | 30,263,054 | ||||||||
COST OF SALES (including $5.6 and $14.9 million of related party costs for the six months ended April 30, 2016 and 2015, respectively. Including $2.0 and $5.1 million for the three months ended April 30, 2016 and 2015, respectively.) | 38,251,840 | 67,824,859 | 18,097,486 | 31,340,321 | ||||||||||||
GROSS PROFIT (LOSS) | 5,960,494 | 844,174 | 3,309,453 | (1,077,267 | ) | |||||||||||
OPERATING EXPENSES: | ||||||||||||||||
Selling and administrative | 3,466,440 | 3,563,835 | 1,789,489 | 1,897,480 | ||||||||||||
Officers’ salaries | 327,700 | 325,585 | 163,850 | 172,850 | ||||||||||||
TOTAL | 3,794,140 | 3,889,420 | 1,953,339 | 2,070,330 | ||||||||||||
INCOME (LOSS) FROM OPERATIONS | 2,166,354 | (3,045,246 | ) | 1,356,114 | (3,147,597 | ) | ||||||||||
OTHER INCOME (EXPENSE) | ||||||||||||||||
Interest income | 21,000 | 13,228 | 10,988 | 4,930 | ||||||||||||
(Loss) gain from equity method investment | (244 | ) | 448 | 212 | (267 | ) | ||||||||||
Interest expense | (73,473 | ) | (118,612 | ) | (33,670 | ) | (64,633 | ) | ||||||||
TOTAL | (52,717 | ) | (104,936 | ) | (22,470 | ) | (59,970 | ) | ||||||||
INCOME (LOSS) BEFORE PROVISION FOR INCOME TAXES AND NON-CONTROLLING INTEREST IN SUBSIDIARY | 2,113,637 | (3,150,182 | ) | 1,333,644 | (3,207,567 | ) | ||||||||||
Provision (benefit) for income taxes | 787,920 | (1,189,825 | ) | 485,356 | (1,158,721 | ) | ||||||||||
NET INCOME (LOSS) BEFORE NON-CONTROLLING INTEREST IN SUBSIDIARY | 1,325,717 | (1,960,357 | ) | 848,288 | (2,048,846 | ) | ||||||||||
Less: Net (income) attributable to the non-controlling interest | (55,347 | ) | (20,402 | ) | (17,487 | ) | (3,714 | ) | ||||||||
NET INCOME (LOSS) ATTRIBUTABLE TO COFFEE HOLDING CO., INC. | $ | 1,270,370 | $ | (1,980,759 | ) | $ | 830,801 | $ | (2,052,560 | ) | ||||||
Basic and diluted earnings (loss) per share | $ | .21 | $ | (.32 | ) | $ | .14 | $ | (.33 | ) | ||||||
Weighted average common shares outstanding: | ||||||||||||||||
Basic and diluted | 6,148,039 | 6,215,894 | 6,133,557 | 6,215,894 |
2015 | 2014 | 2016 | 2015 | |||||||||||||
OPERATING ACTIVITIES: | ||||||||||||||||
Net (loss) income | $ | (1,821,605 | ) | $ | 3,453,497 | |||||||||||
Adjustments to reconcile net (loss) income to net cash used in operating activities: | ||||||||||||||||
Net income (loss) | $ | 1,325,717 | $ | (1,960,357 | ) | |||||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||||||
Depreciation and amortization | 408,436 | 436,277 | 278,987 | 274,022 | ||||||||||||
Unrealized gain on commodities | (8,263 | ) | (1,211,540 | ) | (689,088 | ) | (489,696 | ) | ||||||||
Loss on equity method investments | 162 | 847 | ||||||||||||||
Loss (gain) loss on equity method investment | 244 | (448 | ) | |||||||||||||
Deferred rent | 9,311 | 11,084 | 4,581 | 6,206 | ||||||||||||
Deferred income taxes | (1,149,500 | ) | 1,311,000 | 872,750 | (1,143,650 | ) | ||||||||||
Changes in operating assets and liabilities: | ||||||||||||||||
Accounts receivable | 3,424,104 | (1,001,691 | ) | (349,772 | ) | 2,263,522 | ||||||||||
Inventories | 2,765,836 | (3,588,269 | ) | 1,529,369 | 2,536,227 | |||||||||||
Prepaid expenses and other current assets | (29,039 | ) | (77,445 | ) | (17,193 | ) | 82,747 | |||||||||
Prepaid green coffee | (547,756 | ) | (85,044 | ) | 276,013 | 346,043 | ||||||||||
Prepaid and refundable income taxes | (1,433,818 | ) | 201,800 | 502,850 | (1,387,393 | ) | ||||||||||
Deposits and other assets | 15,833 | - | ||||||||||||||
Accounts payable and accrued expenses | (3,093,085 | ) | (1,256,666 | ) | (749,970 | ) | (3,215,641 | ) | ||||||||
Income taxes payable | (331,051 | ) | 700 | 500 | (331,051 | ) | ||||||||||
Net cash used in operating activities | (1,806,268 | ) | (1,805,450 | ) | ||||||||||||
Net cash provided by (used in) operating activities | 3,000,821 | (3,019,469 | ) | |||||||||||||
INVESTING ACTIVITIES: | ||||||||||||||||
Purchases of machinery and equipment | (351,194 | ) | (398,847 | ) | (270,221 | ) | (341,337 | ) | ||||||||
Net cash used in investing activities | (351,194 | ) | (398,847 | ) | (270,221 | ) | (341,337 | ) | ||||||||
FINANCING ACTIVITIES: | ||||||||||||||||
Advances under bank line of credit | 9,272,578 | 3,551,522 | 600,000 | 9,272,578 | ||||||||||||
Principal payments under bank line of credit | (7,502,578 | ) | (1,280,704 | ) | (3,500,000 | ) | (6,000,000 | ) | ||||||||
Purchase of treasury stock | - | (660,778 | ) | (386,319 | ) | - | ||||||||||
Payment of dividend | (80,000 | ) | (52,000 | ) | (100,000 | ) | (80,000 | ) | ||||||||
Net cash provided by financing activities | 1,690,000 | 1,558,040 | ||||||||||||||
Net cash (used in) provided by financing activities | (3,386,319 | ) | 3,192,578 | |||||||||||||
NET DECREASE IN CASH | (467,462 | ) | (646,257 | ) | (655,719 | ) | (168,228 | ) | ||||||||
CASH, BEGINNING OF PERIOD | 3,782,639 | 4,035,669 | 3,853,816 | 3,782,639 | ||||||||||||
CASH, END OF PERIOD | $ | 3,315,177 | $ | 3,389,412 | $ | 3,198,097 | $ | 3,614,411 | ||||||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW DATA: | ||||||||||||||||
Interest paid | $ | 81,276 | $ | 112,585 | ||||||||||||
Income taxes paid | $ | 25,008 | $ | 1,641,197 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW DATA: | ||||||||
Interest paid | $ | 152,765 | $ | 37,513 | ||||
Income taxes paid | $ | 1,647,668 | $ | 715,000 |
July 31, | October 31, | April 30, | October 31, | |||||||||||||
2015 | 2014 | 2016 | 2015 | |||||||||||||
Allowance for doubtful accounts | $ | 65,000 | $ | 65,000 | $ | 65,000 | $ | 65,000 | ||||||||
Reserve for other allowances | 35,000 | 35,000 | 35,000 | 35,000 | ||||||||||||
Reserve for sales discounts | 44,000 | 44,000 | 44,000 | 44,000 | ||||||||||||
Totals | $ | 144,000 | $ | 144,000 | $ | 144,000 | $ | 144,000 |
April 30, 2016 | October 31, 2015 | |||||||
Packed coffee | $ | 1,815,454 | $ | 1,441,451 | ||||
Green coffee | 9,766,891 | 11,730,006 | ||||||
Packaging supplies | 751,104 | 691,361 | ||||||
Totals | $ | 12,333,449 | $ | 13,862,818 |
July 31, 2015 | October 31, 2014 | |||||||
Packed coffee | $ | 1,517,604 | $ | 1,578,248 | ||||
Green coffee | 10,172,904 | 12,987,257 | ||||||
Packaging supplies | 753,809 | 644,648 | ||||||
Totals | $ | 12,444,317 | $ | 15,210,153 |
April 30, 2016 | October 31, 2015 | |||||||
Option Contracts | 2,647 | (134,613 | ) | |||||
Future Contracts | 202,606 | (349,222 | ) | |||||
Total Commodities | 205,253 | (483,835 | ) |
July 31, 2015 | October 31, 2014 | |||||||
Option Contracts | 19,399 | (217,624 | ) | |||||
Future Contracts | (496,060 | ) | (267,300 | ) | ||||
Total Commodities | (476,661 | ) | (484,924 | ) |
Three Months Ended April 30, | ||||||||
2016 | 2015 | |||||||
Gross realized gains | $ | 445,314 | $ | 52,670 | ||||
Gross realized losses | (368,745 | ) | (5,259,865 | ) | ||||
Unrealized gain (losses) | 687,536 | 1,851,504 | ||||||
Total | $ | 764,105 | $ | (3,355,691 | ) |
Six Months Ended April 30, | ||||||||
2016 | 2015 | |||||||
Gross realized gains | $ | 565,912 | $ | 698,267 | ||||
Gross realized losses | (901,128 | ) | (6,240,545 | ) | ||||
Unrealized gains | 689,088 | 489,695 | ||||||
Total | $ | 353,872 | $ | (5,052,583 | ) |
Three Months Ended July 31, | ||||||||
2015 | 2014 | |||||||
Gross realized gains | $ | 293,439 | $ | 1,165,014 | ||||
Gross realized losses | (175,280 | ) | (824,285 | ) | ||||
Unrealized losses | (481,433 | ) | 38,437 | |||||
Total | $ | (363,274 | ) | $ | 379,166 |
Nine Months Ended July 31, | ||||||||
2015 | 2014 | |||||||
Gross realized gains | $ | 991,706 | $ | 3,321,023 | ||||
Gross realized losses | (6,415,825 | ) | (1,796,474 | ) | ||||
Unrealized gains | 8,263 | 1,211,540 | ||||||
Total | $ | (5,415,856 | ) | $ | 2,736,089 |
a. | Treasury Stock. The Company utilizes the cost method of accounting for treasury stock. The cost of reissued shares is determined under the last-in, first-out method. The Company purchased 94,088 shares for $386,319 during the three months ended April 30, 2016. The Company purchased 53,687 shares for $226,850 during the year ended October 31, 2015. |
b. | Share Repurchase Program. On January 24, 2014, the Company announced that the Board of Directors had approved a share repurchase program (the “2014 Share Repurchase Program”) pursuant to which the Company may repurchase up to $1 million of its outstanding shares of common stock from time to time on the open market and in privately negotiated transactions subject to market conditions, share price and other factors. The 2014 Share Repurchase Program may be discontinued or suspended at any time. As of April 30, 2016, pursuant to the terms of the 2014 Share Repurchase Program, the Company had repurchased 156,415 shares of outstanding common stock in an amount equal in value to $995,729. On September 29, 2015, the Company announced that the Board of Directors had approved a share repurchase program (the “2015 Share Repurchase Program”) pursuant to which the Company may repurchase up to $2 million of the outstanding common stock from time to time on the open market and in privately negotiated transactions subject to market conditions, share price and other factors. The timing and amount of any shares repurchased will be determined based on the Company’s evaluation of market conditions and other factors. The 2015 Share Repurchase Program may be discontinued or suspended at any time. Pursuant to the terms of the 2015 Share Repurchase Program, the Company purchased 94,088 shares during the three months ended April 30, 2016 for $386,319. Also pursuant to the terms of the 2015 Share Repurchase Program, the Company had repurchased 53,687 shares of outstanding common stock in an amount equal in value to $226,850 during the year ended October 31, 2015. The Company did not repurchase any shares of common stock during the three months ended January 31, 2016. |
● | our dependency on a single commodity could affect our revenues and profitability; |
● | our success in expanding our market presence in new geographic regions; |
● | the effectiveness of our hedging policy may impact our profitability; |
● | the success of our joint ventures; |
● | our success in implementing our business strategy or introducing new products; |
● | our ability to attract and retain customers; |
● | ||
our ability to obtain additional financing; |
● | ||
the effects of competition from other coffee manufacturers and other beverage alternatives; |
● | the impact to the operations of our Colorado facility; |
● | general economic conditions and conditions which affect the market for coffee; |
● | the macro global economic environment; |
● | our ability to maintain and develop our brand recognition; |
● | the impact of rapid or persistent fluctuations in the price of coffee beans; |
● | fluctuations in the supply of coffee beans; |
● | the volatility of our common stock; and |
● | other risks which we identify in future filings with the |
● | the sale of wholesale specialty green coffee; |
● | the roasting, blending, packaging and sale of private label coffee; and |
● | the roasting, blending, packaging and sale of our |
● | the level of marketing and pricing competition from existing or new competitors in the coffee industry; |
● | our ability to retain existing customers and attract new customers; |
● | our hedging policy; |
● | fluctuations in purchase prices |
● | our ability to manage inventory and fulfillment operations and maintain gross margins. |
● | We recognize revenue in accordance with the relevant authoritative guidance. Revenue is recognized at the point title and risk of ownership transfers to its customers which is upon the shippers taking possession of the goods because |
● | Our allowance for doubtful accounts is maintained to provide for losses arising from customers’ inability to make required payments. If there is deterioration of our customers’ credit worthiness and/or there is an increase in the length of time that the receivables are past due greater than the historical assumptions used, additional allowances may be required. For example, every additional |
● | Inventories are stated at lower of cost (determined on a first-in, first-out basis) or market. Based on our assumptions about future demand and market conditions, inventories are subject to be written-down to market value. If our assumptions about future demand change and/or actual market conditions are less favorable than those projected, additional write-downs of inventories may be required. Each additional |
● | The commodities held at broker represent the market value of the Company’s trading account, which consists of option and futures contracts for coffee held with a brokerage firm. We use options and futures contracts, which are not designated or qualifying as hedging instruments, to partially hedge the effects of fluctuations in the price of green coffee beans. Options and futures contracts are recognized at fair value in the consolidated financial statements with current recognition of gains and losses on such positions. We classify options and futures contracts as trading securities and accordingly, unrealized holding gains and losses are included in earnings. We record realized and unrealized gains and losses in our cost of sales in the statement of operations/income. |
● | We account for income taxes in accordance with the relevant authoritative guidance. Deferred tax assets and liabilities are computed for temporary differences between the financial statement and tax basis of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred tax assets are reflected on the balance sheet when it is determined that it is more likely than not that the asset will be realized. Accordingly, our net deferred tax asset as of |
● | Our goodwill consists of the cost in excess of the fair market value of the acquired net assets of |
April 30, 2016 | ||||
Customer list and relationships, net | $ | 105,000 | ||
Trademarks | 180,000 | |||
Goodwill | 440,000 | |||
$ | 725,000 |
Customer list and relationships, net | $ | 110,625 | ||
Trademarks | 180,000 | |||
Goodwill | 440,000 | |||
Total | $ | 730,625 |
Period | (a) Total Number of Shares (or Unites) Purchased | (b) Average Price Paid per Share (or Unit) | (c) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs | (d) Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs (2) | ||||||||||||
February 1, 2016 to February 29, 2016 | 0 | - | - | - | ||||||||||||
March 1, 2016 to March 31, 2016 | 43,989 | $ | 3.95 | 43,989 | $ | 1,599,529 | ||||||||||
April 1, 2016 to April 30, 2016 | 50,099 | $ | 4.25 | 50,099 | $ | 1,386,831 | ||||||||||
Total | 94,088 | $ | 4.11 | 94,088 | $ | 1,386,831 |
(1) | On September 29, 2015, we announced that the Board of Directors had approved a share repurchase program (the “2015 Share Repurchase Program”) pursuant to which we may repurchase up to $2 million of our outstanding common stock from time to time on the open market and in privately negotiated transactions subject to market conditions, share price and other factors. The Share Repurchase Program may be discontinued or suspended at any time. |
(2) | Dollar amount reflects the value of shares purchased previously pursuant to the 2015 Share Repurchase Program during the fiscal quarter ended October 31, 2015. |
Principal Executive Officer and Principal Financial Officer's Certification furnished pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | ||
Principal Executive Officer and Principal Financial Officer's Certification furnished pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
Coffee Holding Co., Inc. | |||
Date: | By: | /s/ Andrew Gordon | |
Andrew Gordon President | |||
Chief Executive Officer and Chief Financial Officer | |||