Coffee Holding (JVA) 10-Q 11 Mar 16 2016 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Jan. 31, 2016	Mar. 04, 2016
Document And Entity Information
Entity Registrant Name	COFFEE HOLDING CO INC
Entity Central Index Key	1,007,019
Document Type	10-Q
Document Period End Date	Jan. 31, 2016
Amendment Flag	false
Current Fiscal Year End Date	--10-31
Is Entity a Well-known Seasoned Issuer?	No
Is Entity a Voluntary Filer?	No
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		6,162,207
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2,016

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS - USD ($)	Jan. 31, 2016	Oct. 31, 2015
CURRENT ASSETS:
Cash	$ 5,927,324	$ 3,853,816
Accounts receivable, net of allowances of $144,000 for 2016 and 2015	11,271,047	10,968,237
Inventories	11,880,135	13,862,818
Prepaid green coffee	573,580	620,452
Prepaid expenses and other current assets	245,262	256,202
Prepaid income taxes	1,176,727	1,434,577
Refund receivable	613,438	0
Deferred income tax asset	376,973	997,720
TOTAL CURRENT ASSETS	32,064,486	31,993,822
Machinery and equipment, at cost, net of accumulated depreciation of $4,374,784 and $4,241,256 for 2016 and 2015, respectively	1,926,403	1,845,000
Customer list and relationships, net of accumulated amortization of $43,125 and $41,250 for the periods ended January 31, 2016 and 2015, respectively	106,875	108,750
Trademarks	180,000	180,000
Goodwill	440,000	440,000
Equity method investments	96,114	96,571
Deposits and other assets	580,248	610,499
TOTAL ASSETS	35,394,126	35,274,642
CURRENT LIABILITIES:
Accounts payable and accrued expenses	5,178,604	4,021,389
Line of credit	4,154,121	5,554,121
Due to broker	482,284	483,835
Income taxes payable	250	0
TOTAL CURRENT LIABILITIES	9,815,259	10,059,345
Deferred income tax liabilities	106,473	92,370
Deferred rent payable	224,345	222,055
Deferred compensation payable	452,248	482,499
TOTAL LIABILITIES	10,598,325	10,856,269
STOCKHOLDERS EQUITY:
Preferred stock, par value $.001 per share; 10,000,000 shares authorized; no shares issued and outstanding	0	0
Common stock, par value $.001 per share; 30,000,000 shares authorized, 6,456,316 shares issued; 6,162,207 shares outstanding for the periods ended January 31 2016 and 2015, respectively	6,456	6,456
Additional paid-in capital	15,904,109	15,904,109
Retained earnings	10,105,509	9,665,940
Less: Treasury stock, 294,109 common shares, at cost for 2016 and 2015	(1,494,712)	(1,494,712)
Total Coffee Holding Co., Inc. Stockholders Equity	24,521,362	24,081,793
Noncontrolling interest	274,439	336,580
TOTAL EQUITY	24,795,801	24,418,373
TOTAL LIABILITIES AND STOCKHOLDERS EQUITY	$ 35,394,126	$ 35,274,642

CONSOLIDATED BALANCE SHEETS (Pa

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($)	Jan. 31, 2016	Oct. 31, 2015
ASSETS:
Allowances for doubtful accounts	$ 144,000	$ 144,000
Accumulated Depreciation	4,374,784	4,241,256
Customer list and relationships, accumulated amortization	$ 43,125	$ 41,250
STOCKHOLDERS EQUITY:
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock shares authorized	10,000,000	10,000,000
Preferred stock shares issued	0	0
Preferred stock shares outstanding	0	0
Common stock, par value	$ 0.001	$ 0.001
Common stock shares authorized	30,000,000	30,000,000
Common stock shares issued	6,456,316	6,456,316
Common stock shares outstanding	6,162,207	6,162,207
Treasury Stock, Shares	294,109	294,109

CONSOLIDATED STATEMENTS OF INCO

CONSOLIDATED STATEMENTS OF INCOME - USD ($)	3 Months Ended
	Jan. 31, 2016	Jan. 31, 2015
Consolidated Statements Of Income
NET SALES	$ 22,805,397	$ 38,405,979
COST OF SALES (which include purchases of approximately $3.5 million and $9.8 million for the three months ended January 31, 2016 and 2015, respectively, from a related party)	20,154,348	36,484,535
GROSS PROFIT	2,651,049	1,921,444
OPERATING EXPENSES:
Selling and administrative	1,676,960	1,666,357
Officers' salaries	163,850	152,735
TOTALS	1,840,810	1,819,092
INCOME FROM OPERATIONS	810,239	102,352
OTHER INCOME (EXPENSE):
Interest income	10,012	8,297
(Loss) Gain from equity method investments	(456)	715
Interest expense	(39,803)	(53,979)
TOTAL	(30,247)	(44,967)
INCOME BEFORE PROVISION FOR INCOME TAXES AND NON-CONTROLLING INTEREST IN SUBSIDIARY	779,992	57,385
Provision (Benefit) for income taxes	302,564	(31,104)
NET INCOME BEFORE NON-CONTROLLING INTEREST IN SUBSIDIARY	477,428	88,489
Less: net income attributable to the non-controlling interest in subsidiary	(37,859)	(16,688)
NET INCOME ATTRIBUTABLE TO COFFEE HOLDING CO., INC.	$ 439,569	$ 71,801
Basic and diluted earnings per share	$ 0.07	$ 0.01
Weighted average common shares outstanding:
Basic and diluted	6,162,207	6,215,894

CONSOLIDATED STATEMENTS OF INC5

CONSOLIDATED STATEMENTS OF INCOME (Parenthetical) - USD ($) $ in Millions	3 Months Ended
	Jan. 31, 2016	Jan. 31, 2015
Consolidated Statements Of Income
Related party costs	$ 3.5	$ 9.8

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	3 Months Ended
	Jan. 31, 2016	Jan. 31, 2015
OPERATING ACTIVITIES:
Net income	$ 477,428	$ 88,489
Adjustments to reconcile net income to net cash provided (used in) by operating activities:
Depreciation and amortization	135,402	145,673
Unrealized (gain) loss on commodities	(1,551)	1,361,809
Loss (Gain) on equity method investments	457	(715)
Deferred rent	2,290	3,104
Deferred income taxes	634,850	(490,500)
Changes in operating assets and liabilities:
Accounts receivable	(302,810)	(5,875,323)
Inventories	1,982,683	1,647,264
Prepaid expenses and other current assets	10,940	(8,558)
Prepaid green coffee	46,872	248,704
Prepaid and refundable income taxes	257,850	(135,187)
Refund receivable	(613,438)	0
Accounts payable and accrued expenses	1,157,215	(272,203)
Income taxes payable	250	143,258
Net cash provided by (used in) operating activities	3,788,438	(3,144,185)
INVESTING ACTIVITIES:
Purchases of machinery and equipment	(214,930)	(38,473)
Net cash used in investing activities	(214,930)	(38,473)
FINANCING ACTIVITIES:
Advances under bank line of credit	600,000	5,000,000
Principal payments under bank line of credit	(2,000,000)	(2,000,000)
Payment of dividend	(100,000)	(80,000)
Net cash (used in) provided by financing activities	(1,500,000)	2,920,000
NET INCREASE (DECREASE) IN CASH	2,073,508	(262,658)
CASH, BEGINNING OF PERIOD	3,853,816	3,782,639
CASH, END OF PERIOD	5,927,324	3,519,981
SUPPLEMENTAL DISCLOSURE OF CASH FLOW DATA:
Interest paid	72,463	46,479
Income taxes paid	$ 23,052	$ 453,205

1. BUSINESS ACTIVITIES

1. BUSINESS ACTIVITIES	3 Months Ended
	Jan. 31, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract]
1. BUSINESS ACTIVITIES	Coffee Holding Co., Inc. (the “Company”) conducts wholesale coffee operations, including manufacturing, roasting, packaging, marketing and distributing roasted and blended coffees for private labeled accounts and its own brands, and it sells green coffee. The Company’s core product, coffee, can be summarized and divided into three product categories (“product lines”) as follows: Wholesale Green Coffee: Private Label Coffee: Branded Coffee: The Company’s private label and branded coffee sales are primarily to customers that are located throughout the United States with limited sales in Canada and certain countries in Asia. Such customers include supermarkets, wholesalers, and individually-owned and multi-unit retailers. The Company’s unprocessed green coffee, which includes over 90 specialty coffee offerings, is sold primarily to specialty gourmet roasters and to coffee shop operators in the United States with limited sales in Australia, Canada, England and China. The Company’s wholesale green, private label, and branded coffee product categories generate revenues and cost of sales individually but incur selling, general and administrative expenses in the aggregate. There are no individual product managers and discrete financial information is not available for any of the product lines. The Company’s product portfolio is used in one business and it operates and competes in one business activity and economic environment. In addition, the three product lines share customers, manufacturing resources, sales channels, and marketing support. Thus, the Company considers the three product lines to be one single reporting segment.

2. BASIS OF PRESENTATION

2. BASIS OF PRESENTATION	3 Months Ended
	Jan. 31, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract]
2. BASIS OF PRESENTATION	The following (a) condensed consolidated balance sheet as of October 31, 2015, which has been derived from audited financial statements, and (b) the unaudited interim condensed financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles (“U.S. GAAP”) have been condensed or omitted pursuant to those rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading. It is suggested that these condensed consolidated financial statements be read in conjunction with the consolidated financial statements and the notes thereto included in the Company’s latest shareholders’ annual report on Form 10-K filed with the SEC on January 26, 2016 for the fiscal year ended October 31, 2015 (“Form 10-K”). In the opinion of management, all adjustments (which include normal and recurring nature adjustments) necessary to present a fair statement of the Company’s financial position as of January 31, 2016, and results of operations for the three months ended January 31, 2016 and the cash flows for the three months ended January 31, 2016 as applicable, have been made. The results of operations for the three months ended January 31, 2016 are not necessarily indicative of the operating results for the full fiscal year or any future periods. The condensed consolidated financial statements include the accounts of the Company, the Company’s subsidiary, Organic Products Trading Company, LLC (“OPTCO”) and Generations Coffee Company, LLC (“GCC”), the entity formed as a result of the Company’s joint venture with Caruso’s Coffee, Inc. The Company owns a 60% equity interest in GCC. All significant inter-company transactions and balances have been eliminated in consolidation.

3. RECENTLY ISSUED ACCOUNTING P

3. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS AFFECTING THE COMPANY	3 Months Ended
	Jan. 31, 2016
Accounting Changes and Error Corrections [Abstract]
3. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS AFFECTING THE COMPANY	In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (ASU) No. 2014-09, (“ASU 2014-09”) “Revenue from Contracts with Customers,” which requires an entity to recognize revenue representing the transfer of promised goods or services to customers in an amount that reflects the consideration which the company expects to receive in exchange for those goods or services. ASU 2014-09 is intended to establish principles for reporting useful information to users of financial statements about the nature, amount, timing and uncertainty of revenues and cash flows arising from the entity’s contracts with customers. ASU 2014-09 will replace most existing revenue recognition guidance in GAAP when it becomes effective. The original standard was effective for the Company on January 1, 2017, however, in April 2015, the FASB proposed a one-year deferral of this standard with a new effective date for the Company of January 1, 2018. Early application is not permitted. The Company is currently evaluating the effect that ASU 2014-09 will have on its condensed consolidated financial statements and related disclosures. In July 2015, the FASB issued ASU 2015-11, “Inventory (Topic 330): Simplifying the Measurement of Inventory,” which applies to inventory that is measured using first-in, first-out (“FIFO”) or average cost. Under the updated guidance, an entity should measure inventory that is within scope at the lower of cost and net realizable value, which is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. Subsequent measurement is unchanged for inventory that is measured using last-in, last-out (“LIFO”). This ASU is effective for annual and interim periods beginning after December 15, 2016, and should be applied prospectively with early adoption permitted at the beginning of an interim or annual reporting period. The Company is currently evaluating the impact of adopting this guidance. The FASB issued ASU 2016-02, Leases (Topic 842). ASU 2016-02 requires that a lessee recognize the assets and liabilities that arise from operating leases. A lessee should recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. In transition, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. Public business entities should apply the amendments in ASU 2016-02 for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years (i.e., January 1, 2019, for a calendar year entity). Nonpublic business entities should apply the amendments for fiscal years beginning after December 15, 2019 (i.e., January 1, 2020, for a calendar year entity), and interim periods within fiscal years beginning after December 15, 2020. Early application is permitted for all public business entities and all nonpublic business entities upon issuance. The adoption of this standard is not expected to have a material impact on the Company’s consolidated financial position and results of operations.

4. PREPAID GREEN COFFEE

4. PREPAID GREEN COFFEE	3 Months Ended
	Jan. 31, 2016
Notes to Financial Statements
4. PREPAID GREEN COFFEE	The balance represents advance payments made by OPTCO to several coffee growing cooperatives for the purchase of green coffee. Interest is charged to the cooperatives for these advances. Interest earned was $10,012 and $8,297 for the three months ended January 31, 2016 and 2015, respectively. The prepaid coffee balance was $573,580 at January 31, 2016 and $620,452 at October 31, 2015.

5. ACCOUNTS RECEIVABLE

5. ACCOUNTS RECEIVABLE	3 Months Ended
	Jan. 31, 2016
Notes to Financial Statements
5. ACCOUNTS RECEIVABLE	Trade accounts receivable are stated at the amount the Company expects to collect. The Company maintains allowances for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments. Management considers the following factors when determining the collectability of specific customer accounts: customer credit-worthiness, past transaction history with the customer, current economic industry trends, and changes in customer payment terms. Past due balances over 60 days and other higher risk amounts are reviewed individually for collectability. If the financial condition of the Company’s customers were to deteriorate, adversely affecting their ability to make payments, additional allowances would be required. Based on management’s assessment, the Company provides for estimated uncollectible amounts through a charge to earnings and a credit to a valuation allowance. Balances that remain outstanding after the Company has used reasonable collection efforts are written off through a charge to the valuation allowance and a credit to accounts receivable. The reserve for sales discounts represents the estimated discount that customers will take upon payment. The reserve for other allowances represents the estimated amount of returns, slotting fees and volume based discounts estimated to be incurred by the Company from its customers. The allowances are summarized as follows: January 31, October 31, 2016 2015 Allowance for doubtful accounts $ 65,000 $ 65,000 Reserve for other allowances 35,000 35,000 Reserve for sales discounts 44,000 44,000 Totals $ 144,000 $ 144,000

6. INVENTORIES

6. INVENTORIES	3 Months Ended
	Jan. 31, 2016
Inventory Disclosure [Abstract]
6. INVENTORIES	Inventories at January 31, 2016 and October 31, 2015 consisted of the following: January 31, 2016 October 31, 2015 Packed coffee $ 1,381,908 $ 1,441,451 Green coffee 9,654,637 11,730,006 Packaging supplies 843,590 691,361 Totals $ 11,880,135 $ 13,862,818

7. COMMODITIES HELD BY BROKER

7. COMMODITIES HELD BY BROKER	3 Months Ended
	Jan. 31, 2016
Notes to Financial Statements
7. COMMODITIES HELD BY BROKER	The Company has used, and intends to continue to use in a limited capacity, short term coffee futures and options contracts primarily for the purpose of partially hedging and minimizing the effects of changing green coffee prices and to reduce our cost of sales. The commodities held at broker represent the market value of the Company’s trading account, which consists of options and future contracts for coffee held with a brokerage firm. The Company uses 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 condensed consolidated financial statements with current recognition of gains and losses on such positions. The Company's accounting for options and futures contracts may increase earnings volatility in any particular period. The Company has open position contracts held by the broker, which are summarized as follows: January 31, 2016 October 31, 2015 Option Contracts 47,625 (134,613 ) Future Contracts (529,909 ) (349,222 ) Total Commodities (482,284 ) (438,835 ) The Company classifies its options and future contracts as trading securities and accordingly, unrealized holding gains and losses are included in earnings and not reflected as a net amount as a separate component of stockholders’ equity. At January 31, 2016, the Company held 100 futures contracts (generally with terms of three to four months) for the purchase of 3,750,000 pounds of green coffee at a weighted average price of $1.19 per pound. The fair market value of coffee applicable to such contracts was $1.16 per pound at that date. At October 31, 2015, the Company held 38 futures contracts (generally with terms of three to four months) for the purchase of 1,425,000 pounds of green coffee at a weighted average price of $1.23 per pound. The fair market value of coffee applicable to such contracts was $1.21 per pound at that date. At October 31, 2015, the Company held 20 options covering an aggregate of 750,000 pounds of green coffee beans at $1.25 per pound. The fair market value of these options, which was obtained from observable market data of similar instruments was $42,750. The Company recorded realized and unrealized gains and losses respectively, on these contracts as follows: Three Months Ended January 31, 2016 2015 Gross realized gains $ 120,599 $ 645,598 Gross realized losses (532,372 ) (980,681 ) Unrealized (loss) gain 1,551 (1,361,809 ) Total $ (410,222 ) $ (1,696,892 )

8. LINE OF CREDIT

8. LINE OF CREDIT	3 Months Ended
	Jan. 31, 2016
Debt Disclosure [Abstract]
8. LINE OF CREDIT	On March 10, 2015, the Company entered into a loan modification agreement (the “Modification Agreement”) with its lender Sterling National Bank (“Sterling”) which modified the terms of the financing agreement with Sterling previously entered into on February 17, 2009 (the “Financing Agreement”). Prior to the Modification Agreement, the Financing Agreement, as amended, provided for a credit facility in which the Company had a revolving line of credit for a maximum of $7,000,000 (the “Loan Facility”). On February 3, 2011, the Company amended the Financing Agreement to create a sublimit within the revolving line of credit in the form of a $300,000 term loan for the benefit of GCC. The Financing Agreement was set to expire on March 31, 2015. Pursuant to the Modification Agreement, the Financing Agreement was modified to, among other things, (i) extend the term of the Financing Agreement until February 28, 2017; (ii) increase the maximum amount of the Loan Facility from $7,000,000 to $9,000,000; (iii) reduce the interest rate on the average unpaid balance of the line of credit from an interest rate equal to a per annum reference rate of 3.75% to an interest rate per annum equal to the Wall Street Journal Prime Rate; and (iv) require the Company to pay, upon the occurrence of certain termination events, a prepayment premium of 0.50% of the maximum amount of the credit facility in effect as of the date of the termination event. Other than as described above, the Financing Agreement remains in full force and effect. Pursuant to the Modification Agreement, the Company is able to draw on the loan Facility up to an amount of 85% of eligible accounts receivable and 25% of eligible inventory consisting of green coffee beans and finished coffee not to exceed $1,000,000. The Loan Facility is secured by all tangible and intangible assets of the Company. The Loan Facility contains covenants that place annual restrictions on our operations, including covenants related to debt restrictions, capital expenditures, minimum deposit restrictions, tangible net worth, net profit, leverage, employee loan restrictions, distribution restrictions (common stock and preferred stock), dividend restrictions, and restrictive transactions. The Loan Facility also requires that the Company maintain a minimum working capital at all times. The Company was in compliance with all required financial covenants at January 31, 2016 and October 31, 2015. As of January 31, 2016 and October 31, 2015, the outstanding balance under the bank line of credit was $2,317,121 and $4,317,121, respectively. Also on March 10, 2015, the Company, as guarantor, and OPTCO (the “Borrower”), as borrower, entered into a new loan facility agreement with Sterling. The new loan facility is a revolving line of credit for a maximum of $3,000,000 (the “New Loan Facility”). The New Loan Facility terminates on February 28, 2017. The Borrower is able to draw on the New Loan Facility at an amount up to 85% of eligible accounts receivable, not to exceed 25% of all accounts of the Borrower. The New Loan Facility is payable monthly in arrears on the average unpaid balance of the line of credit at an interest rate per annum equal to the Wall Street Journal Prime Rate (currently 3.25%). The New Loan Facility is secured by all tangible and intangible assets of the Company. In connection with the New Loan Facility, the Company entered into a security agreement with Sterling and provided Sterling with a guarantee of the Borrower’s obligations. As of January 31, 2016 and October 31, 2015, the outstanding balance under the New Loan Facility was $1,837,000 and $1,237,000, respectively.

9. INCOME TAXES

9. INCOME TAXES	3 Months Ended
	Jan. 31, 2016
Income Tax Disclosure [Abstract]
9. INCOME TAXES	The Company accounts for The Company adopted FASB authoritative guidance for accounting for uncertainty in income taxes. As of January 31, 2016 and October 31, 2015, the Company did not have any unrecognized tax benefits or open tax positions. The Company’s practice is to recognize interest and/or penalties related to income tax matters in income tax expense. As of January 31, 2016 and October 31, 2015, the Company had no accrued interest or penalties related to income taxes. The Company currently has no federal or state tax examinations in progress. The Company files a U.S. federal income tax return and California, Colorado, New Jersey, New York, Kansas, Oregon, Rhode Island, South Carolina, Rhode Island, Virginia, Connecticut, Michigan and Texas state tax returns. The Company’s federal income tax return is no longer subject to examination by the federal taxing authority for the years before fiscal 2013. The Company’s California, Colorado and New Jersey income tax returns are no longer subject to examination by their respective taxing authorities for the years before fiscal 2009. The Company’s Oregon and New York income tax returns are no longer subject to examination by their respective taxing authorities for the years before fiscal 2010.

10. EARNINGS PER SHARE

10. EARNINGS PER SHARE	3 Months Ended
	Jan. 31, 2016
Earnings Per Share [Abstract]
10. EARNINGS PER SHARE	The Company presents “basic” and “diluted” earnings per common share pursuant to the provisions included in the authoritative guidance issued by FASB, “Earnings per Share,” and certain other financial accounting pronouncements. Basic earnings per common share were computed by dividing net income by the sum of the weighted-average number of common shares outstanding. Diluted earnings per common share is computed by dividing the net income by the weighted-average number of common shares outstanding plus the dilutive effect of common shares issuable upon exercise of potential sources of dilution. The weighted average common shares outstanding used in the computation of basic and diluted earnings per share were 6,162,207 and 6,215,894 for the three months ended January 31, 2016 and 2015, respectively.

11. ECONOMIC DEPENDENCY

11. ECONOMIC DEPENDENCY	3 Months Ended
	Jan. 31, 2016
Risks and Uncertainties [Abstract]
11. ECONOMIC DEPENDENCY	Approximately 38% of the Company’s sales were derived from one customer during the three months ended January 31, 2016. This customer also accounted for approximately $3,942,000 of the Company’s accounts receivable balance at January 31, 2016. Approximately 65% of the Company’s sales were derived from one customer during the three months ended January 31, 2015. This customer also accounted for approximately $14,730,000 of the Company’s accounts receivable balance at January 31, 2015. Concentration of credit risk with respect to other trade receivables is limited due to the short payment terms generally extended by the Company, by ongoing credit evaluations of customers, and by maintaining an allowance for doubtful accounts that management believes will adequately provide for credit losses. For the three months ended January 31, 2016, approximately 52% of the Company’s purchases were from four vendors. These vendors accounted for approximately $3,348,000 of the Company’s accounts payable at January 31, 2016. For the three months ended January 31, 2015, approximately 64% of the Company’s purchases were from four vendors. These vendors accounted for approximately $5,755,000 of the Company’s accounts payable at January 31, 2015. Management does not believe the loss of any one vendor would have a material adverse effect of the Company’s operations due to the availability of many alternate suppliers.

12. RELATED PARTY TRANSACTIONS

12. RELATED PARTY TRANSACTIONS	3 Months Ended
	Jan. 31, 2016
Related Party Transactions [Abstract]
12. RELATED PARTY TRANSACTIONS	The Company has engaged its 40% partner in GCC as an outside contractor (the “Partner”). Included in contract labor expense are expenses incurred from the Partner during the three months ended January 31, 2016 and 2015 of $75,018 and $85,239, respectively, for the processing of finished goods. An employee of one of the top four vendors is a director of the Company. Purchases from that vendor totaled approximately $3,533,000 and $9,800,000 for the three months ended January 31, 2016 and 2015, respectively. The corresponding accounts payable balance to this vendor was approximately $1,110,000 and $1,449,000 at January 31, 2016 and 2015, respectively. In January 2005, the Company established the “Coffee Holding Co., Inc. Non-Qualified Deferred Compensation Plan.” Currently, there is only one participant in the plan: Andrew Gordon, the Company’s Chief Executive Officer. Within the plan guidelines, this employee is deferring a portion of his current salary and bonus. The assets are held in a separate trust. The deferred compensation payable represents the liability due to an officer of the Company. The assets are included in the Deposits and other assets in the accompanying balance sheets. The deferred compensation asset and liability at January 31, 2016 and October 31, 2015 were $452,248 and $482,499, respectively.

13. STOCKHOLDERS' EQUITY

13. STOCKHOLDERS' EQUITY	3 Months Ended
	Jan. 31, 2016
Equity [Abstract]
13. STOCKHOLDERS' EQUITY	a. Treasury Stock b. Share Repurchase Program.

15. SUBSEQUENT EVENTS

15. SUBSEQUENT EVENTS	3 Months Ended
	Jan. 31, 2016
Subsequent Events [Abstract]
15. SUBSEQUENT EVENTS	The Company evaluates events that have occurred after the balance sheet date but before the financial statements are issued. Based upon the evaluation, the Company did not identify any recognized or non-recognized subsequent events that would have required further adjustment or disclosure in the condensed consolidated financial statements.

5. ACCOUNTS RECEIVABLE (Tables)

5. ACCOUNTS RECEIVABLE (Tables)	3 Months Ended
	Jan. 31, 2016
Accounts Receivable Tables
Schedule of Accounts Receivable	January 31, October 31, 2016 2015 Allowance for doubtful accounts $ 65,000 $ 65,000 Reserve for other allowances 35,000 35,000 Reserve for sales discounts 44,000 44,000 Totals $ 144,000 $ 144,000

6. INVENTORIES (Tables)

6. INVENTORIES (Tables)	3 Months Ended
	Jan. 31, 2016
Inventory Disclosure [Abstract]
Schedule of inventories	January 31, 2016 October 31, 2015 Packed coffee $ 1,381,908 $ 1,441,451 Green coffee 9,654,637 11,730,006 Packaging supplies 843,590 691,361 Totals $ 11,880,135 $ 13,862,818

7. COMMODITIES HELD BY BROKER (

7. COMMODITIES HELD BY BROKER (Tables)	3 Months Ended
	Jan. 31, 2016
Commodities Held By Broker Tables
Schedule of Commodities held by Broker	January 31, 2016 October 31, 2015 Option Contracts 47,625 (134,613 ) Future Contracts (529,909 ) (349,222 ) Total Commodities (482,284 ) (438,835 )
Schedule of realized and unrealized gains and losses	Three Months Ended January 31, 2016 2015 Gross realized gains $ 120,599 $ 645,598 Gross realized losses (532,372 ) (980,681 ) Unrealized (loss) gain 1,551 (1,361,809 ) Total $ (410,222 ) $ (1,696,892 )

4. PREPAID GREEN COFFEE (Detail

4. PREPAID GREEN COFFEE (Details Narrative) - USD ($)	3 Months Ended
	Jan. 31, 2016	Jan. 31, 2015	Oct. 31, 2015
Prepaid Green Coffee Details Narrative
Interest income	$ 10,012	$ 8,297
Prepaid green coffee	$ 573,580		$ 620,452

5. ACCOUNTS RECEIVABLE (Details

5. ACCOUNTS RECEIVABLE (Details) - USD ($)	Jan. 31, 2016	Oct. 31, 2015
Accounts Receivable Details
Allowance for doubtful accounts	$ 65,000	$ 65,000
Reserve for other allowances	35,000	35,000
Reserve for sales discounts	44,000	44,000
Totals	$ 144,000	$ 144,000

6. INVENTORIES (Details)

6. INVENTORIES (Details) - USD ($)	Jan. 31, 2016	Oct. 31, 2015
Packaging supplies	$ 843,590	$ 691,361
Totals	11,880,135	13,862,818
Packed Coffee
Inventory - Coffee	1,381,908	1,441,451
Green Coffee
Inventory - Coffee	$ 9,654,637	$ 11,730,006

7. COMMODITIES HELD BY BROKER27

7. COMMODITIES HELD BY BROKER (Details) - USD ($)	Jan. 31, 2016	Oct. 31, 2015
Commodities Held By Broker Details
Option Contracts	$ 47,625	$ (134,613)
Future Contracts	(529,909)	(349,222)
Total Commodities	$ (482,284)	$ (438,835)

7. COMMODITIES HELD BY BROKER28

7. COMMODITIES HELD BY BROKER (Details 1) - USD ($)	3 Months Ended
	Jan. 31, 2016	Jan. 31, 2015
Commodities Held By Broker Details 1
Gross realized gains	$ 120,599	$ 645,598
Gross realized losses	(532,372)	(980,681)
Unrealized (loss) gains	1,551	(1,361,809)
Total	$ (410,222)	$ (1,696,892)

8. LINE OF CREDIT (Details Narr

8. LINE OF CREDIT (Details Narrative) - USD ($)	Jan. 31, 2016	Oct. 31, 2015
Line Of Credit Details Narrative
Bank line of credit	$ 2,317,121	$ 4,317,121

12. RELATED PARTY TRANSACTIONS

12. RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($)	3 Months Ended
	Jan. 31, 2016	Jan. 31, 2015	Oct. 31, 2015
Related Party Transactions Details Narrative
Contract labor expense from partner	$ 75,018	$ 85,239
Purchases from top vendor	3,533,000	9,800,000
Top vendor accounts payable	1,110,000	$ 1,449,000
Deferred compensation asset and liability	$ 452,248		$ 482,499