Cover
Cover - USD ($) | 12 Months Ended | ||
Oct. 31, 2022 | Jan. 20, 2023 | Apr. 30, 2022 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Period End Date | Oct. 31, 2022 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2022 | ||
Current Fiscal Year End Date | --10-31 | ||
Entity File Number | 001-32491 | ||
Entity Registrant Name | COFFEE HOLDING CO., INC. | ||
Entity Central Index Key | 0001007019 | ||
Entity Tax Identification Number | 11-2238111 | ||
Entity Incorporation, State or Country Code | NV | ||
Entity Address, Address Line One | 3475 Victory Boulevard | ||
Entity Address, City or Town | Staten Island | ||
Entity Address, State or Province | NY | ||
Entity Address, Postal Zip Code | 10314 | ||
City Area Code | (718) | ||
Local Phone Number | 832-0800 | ||
Title of 12(b) Security | Common Stock, Par Value $0.001 Per Share | ||
Trading Symbol | JVA | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | No | ||
Entity Interactive Data Current | No | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 15,146,840 | ||
Entity Common Stock, Shares Outstanding | 5,708,599 | ||
Documents Incorporated by Reference [Text Block] | None | ||
ICFR Auditor Attestation Flag | false | ||
Auditor Firm ID | 688 | ||
Auditor Name | Marcum | ||
Auditor Location | New York, New York |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Oct. 31, 2022 | Oct. 31, 2021 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 2,515,873 | $ 3,696,275 |
Accounts receivable, net of allowances of $144,000 for 2022 and 2021 | 7,816,473 | 9,299,978 |
Inventories | 19,252,214 | 15,961,866 |
Due from broker | 818,892 | 725,000 |
Prepaid expenses and other current assets | 432,126 | 542,224 |
Prepaid and refundable income taxes | 866,155 | 75,952 |
TOTAL CURRENT ASSETS | 31,701,733 | 30,301,295 |
Building machinery and equipment, net | 3,199,790 | 2,662,628 |
Customer list and relationships, net of accumulated amortization of $279,883 and $237,131 for 2022 and 2021, respectively | 215,250 | 447,869 |
Trademarks and tradenames | 327,000 | 408,000 |
Non-compete, net of accumulated amortization of $99,000 and $69,300 for 2022 and 2021, respectively | 29,700 | |
Goodwill | 2,488,785 | |
Equity method investments | 354,444 | 402,245 |
Investment - other | 2,500,000 | 2,500,000 |
Right of use asset | 2,871,773 | 3,545,786 |
Deferred income tax assets - net | 1,073,187 | 77,394 |
Deposits and other assets | 449,348 | 449,225 |
TOTAL ASSETS | 42,692,525 | 43,312,927 |
CURRENT LIABILITIES: | ||
Accounts payable and accrued expenses | 3,814,864 | 5,047,640 |
Cash overdrafts | 876,148 | |
Due to broker | 1,523,563 | 708,321 |
Note payable – current portion | 4,200 | 4,200 |
Lease liability – current portion | 220,734 | 340,400 |
Income taxes payable | 416,449 | |
TOTAL CURRENT LIABILITIES | 6,439,509 | 6,517,010 |
Line of credit | 8,314,000 | 3,800,850 |
Lease liabilities | 3,136,006 | 3,299,784 |
Note payable – long term | 9,105 | 13,092 |
Deferred compensation payable | 243,238 | 311,872 |
TOTAL LIABILITIES | 18,141,858 | 13,942,608 |
Commitments and Contingencies (Note 8) | ||
Coffee Holding Co., Inc. stockholders’ equity: | ||
Preferred stock, par value $.001 per share; 10,000,000 shares authorized; none issued | ||
Common stock, par value $.001 per share; 30,000,000 shares authorized, 6,633,930 shares issued for 2022 and 2021; 5,708,599 shares outstanding for 2022 and 2021 | 6,634 | 6,634 |
Additional paid-in capital | 19,094,618 | 18,688,797 |
Retained earnings | 10,327,437 | 14,471,222 |
Less: Treasury stock, 925,331 common shares, at cost for 2022 and 2021 | (4,633,560) | (4,633,560) |
Total Coffee Holding Co., Inc. stockholders’ equity | 24,795,129 | 28,533,093 |
Non-controlling interest | (244,462) | 837,226 |
TOTAL EQUITY | 24,550,667 | 29,370,319 |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ 42,692,525 | $ 43,312,927 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Oct. 31, 2022 | Oct. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 144,000 | $ 144,000 |
Customer list and relationships, accumulated amortization | 279,883 | 237,131 |
Non-compete, accumulated amortization | $ 99,000 | $ 69,300 |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 30,000,000 | 30,000,000 |
Common stock, shares issued | 6,633,930 | 6,633,930 |
Common stock, shares outstanding | 5,708,599 | 5,708,599 |
Treasury stock, shares | 925,331 | 925,331 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Oct. 31, 2022 | Oct. 31, 2021 | |
Income Statement [Abstract] | ||
NET SALES | $ 65,706,879 | $ 63,922,402 |
COST OF SALES | 54,692,933 | 47,901,126 |
GROSS PROFIT | 11,013,946 | 16,021,276 |
OPERATING EXPENSES: | ||
Selling and administrative | 12,989,032 | 12,883,328 |
Goodwill and other impairment charges | 2,769,552 | 1,080,000 |
Officers’ salaries | 594,262 | 612,793 |
TOTAL | 16,352,846 | 14,576,121 |
(LOSS) INCOME FROM OPERATIONS | (5,338,900) | 1,445,155 |
OTHER INCOME (EXPENSE): | ||
Interest income | 14,094 | 7,658 |
Loss from equity method investment | (47,801) | (159,160) |
Interest expense | (225,043) | (85,796) |
TOTAL | (258,750) | (237,298) |
(LOSS) INCOME BEFORE INCOME TAX (BENEFIT) PROVISION | (5,597,650) | 1,207,857 |
Income Tax (benefit) provision | (995,793) | 340,180 |
NET (LOSS) INCOME BEFORE ADJUSTMENT FOR NON-CONTROLLING INTEREST IN SUBSIDIARY | (4,601,857) | 867,677 |
Plus: Net loss attributable to the non-controlling interest in subsidiary | 857,072 | 387,677 |
NET (LOSS) INCOME ATTRIBUTABLE TO COFFEE HOLDING CO., INC. | $ (3,744,785) | $ 1,255,354 |
Basic and diluted (loss) earnings per share | $ (0.66) | $ 0.22 |
Weighted average common shares outstanding: | ||
Basic and diluted | 5,708,599 | 5,575,453 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity - USD ($) | Common Stock [Member] | Treasury Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Noncontrolling Interest [Member] | Total |
Balance at Oct. 31, 2020 | $ 6,634 | $ (4,633,560) | $ 17,929,724 | $ 13,215,868 | $ 1,224,903 | $ 27,743,569 |
Balance, shares at Oct. 31, 2020 | 5,708,599 | 925,331 | ||||
Stock Compensation | 759,073 | 753,073 | ||||
Non-Controlling Interest | (387,677) | (387,677) | ||||
Net income (loss) | 1,255,354 | 1,255,354 | ||||
Balance at Oct. 31, 2021 | $ 6,634 | $ (4,633,560) | 18,688,797 | 14,471,222 | 837,226 | 29,370,319 |
Balance, shares at Oct. 31, 2021 | 5,708,599 | 925,331 | ||||
Stock Compensation | 405,821 | 405,821 | ||||
Non-Controlling Interest | (857,072) | (857,072) | ||||
Net income (loss) | (3,744,785) | (3,744,785) | ||||
Distributions to non-controlling interest | (554,616) | (554,616) | ||||
Inflow from non-controlling interest | 330,000 | 330,000 | ||||
Dividend to common shareholders | (399,000) | (399,000) | ||||
Balance at Oct. 31, 2022 | $ 6,634 | $ (4,633,560) | $ 19,094,618 | $ 10,327,437 | $ (244,462) | $ 24,550,667 |
Balance, shares at Oct. 31, 2022 | 5,708,599 | 925,331 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Oct. 31, 2022 | Oct. 31, 2021 | |
OPERATING ACTIVITIES: | ||
Net (loss) income | $ (4,601,857) | $ 867,677 |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 584,595 | 662,909 |
Impairment of goodwill, trademarks and tradenames | 2,569,785 | 1,080,000 |
Write-off of accounts receivable | 415,096 | |
Stock-based compensation | 405,821 | 759,073 |
Unrealized loss (gain) on commodities - net | 721,350 | (469,004) |
Loss on equity method investments | 47,801 | 159,160 |
Impairment of customer list and non-compete agreement | 199,767 | 321,651 |
Write down of obsolete inventory | 718,353 | |
Amortization of right of use asset | 674,013 | 350,871 |
Deferred income taxes | (995,793) | (177,801) |
Changes in operating assets and liabilities: | ||
Accounts receivable | 1,068,409 | (1,891,073) |
Inventories | (4,563,317) | 1,141,127 |
Prepaid expenses and other current assets | 110,098 | (51,978) |
Prepaid and refundable income taxes | (790,203) | 69,353 |
Deposits and other assets | (68,757) | (128,353) |
Accounts payable and accrued expenses | (1,232,776) | 2,011,543 |
Change in lease liability | (283,444) | (406,714) |
Income taxes payable | (416,449) | 411,078 |
Net cash (used in) provided by operating activities | (5,437,508) | 4,709,519 |
INVESTING ACTIVITIES: | ||
Purchases of other investment | (2,500,000) | |
Proceeds from sale of machinery and equipment | 113,166 | |
Purchases of building, machinery and equipment | (1,059,205) | (1,500,483) |
Net cash used in investing activities | (1,059,205) | (3,887,317) |
FINANCING ACTIVITIES: | ||
Advances under bank line of credit | 6,427,654 | 6,016,413 |
Cash overdraft | 876,148 | |
Principal payment on note payable | (3,987) | (5,075) |
Payment of dividend | (399,000) | |
Capital contributed by non-controlling interest | 330,000 | |
Principal payments under bank line of credit | (1,914,504) | (6,012,385) |
Net cash provided by (used in) financing activities | 5,316,311 | (1,047) |
NET (DECREASE) INCREASE IN CASH | (1,180,402) | 821,155 |
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR | 3,696,275 | 2,875,120 |
CASH AND CASH EQUIVALENTS, END OF YEAR | 2,515,873 | 3,696,275 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW DATA: | ||
Interest paid | 202,303 | 85,357 |
Income taxes paid | 1,327,039 | 35,120 |
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||
Initial recognition of operating lease right of use asset | 2,091,316 | |
Initial recognition of operating lease liabilities | 2,091,316 | |
Termination of operating lease right of use asset | 242,888 | |
Termination of operating lease liability | 242,888 | |
Distribution of inventory by non-controlling interest | $ 554,616 |
BUSINESS ACTIVITIES
BUSINESS ACTIVITIES | 12 Months Ended |
Oct. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BUSINESS ACTIVITIES | NOTE 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. The Company during the quarter ended April 30, 2022 had begun a restructuring process with its Generations subsidiary. As part of this restructuring approximately $ 550,000 330,000 718,353 415,096 On September 29, 2022, Coffee Holding Co., Inc, a Nevada corporation (the “Company”), entered into a Merger and Share Exchange Agreement (the “Merger Agreement”), by and among the Company, Delta Corp Holdings Limited, a Cayman Islands exempted company (“Pubco”), Delta Corp Holdings Limited, a company incorporated in England and Wales (“Delta”), CHC Merger Sub Inc., a Nevada corporation and wholly owned subsidiary of Pubco (“Merger Sub”), and each of the holders of ordinary shares of Delta as named therein (the “Sellers”). Upon the terms and subject to the conditions set forth in the Merger Agreement, Merger Sub will merge with and into the Company, with the Company surviving as a direct, wholly-owned subsidiary of Pubco (the “Merger”). As a result of the Merger, each issued and outstanding share of the Company common stock, $ 0.001 0.0001 Uncertainty Due to Geopolitical Events Due to Russia’s invasion of Ukraine, which began in February 2022, and the resulting sanctions and other actions against Russia and Belarus, there has been uncertainty and disruption in the global economy. Although Russia’s invasion of Ukraine did not have a material adverse impact on the Company’s revenue or other financial results for the year ended October 31, 2022, at this time the Company is unable to fully assess the aggregate impact will have on its business due to various uncertainties, which include, but are not limited to, the duration of the war, the war’s effect on the economy, its impact to the businesses of the Company’s customers, and actions that may be taken by governmental authorities related to the war. COFFEE HOLDING CO., INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OCTOBER 31, 2022 AND 2021 NOTE 1 - BUSINESS ACTIVITIES (cont’d): COVID-19 The global outbreak of COVID-19 was declared a pandemic by the World Health Organization and a national emergency by the U.S. government in March 2020 and has negatively affected the U.S. and global economies, disrupted global supply chains, resulted in significant travel and transport restrictions, mandated closures and stay-at-home orders, and created significant disruption of the financial markets. The continuing impact on the Company’s business including the decrease in our sales, the length and impact of stay-at-home orders and/or regional quarantines, labor shortages and employment trends, disruptions to supply chains, including its ability to obtain products from global suppliers, higher operating costs, the form and impact of economic stimulus and general overall economic instability, has contributed to and may continue to have a material adverse effect on the Company’s business, results of operations, financial condition and cash flows. At this time the full impact could not be fully determined. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Oct. 31, 2022 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BASIS OF PRESENTATION The consolidated financial statements include the accounts of the Company, Organic Products Trading Company, LLC (“OPTCO”), Sonofresco LLC (“SONO”), Comfort Foods, Inc. (“CFI”) and Generations Coffee Company, LLC (“GCC”). All inter-company balances and transactions have been eliminated in consolidation. USE OF ESTIMATES The preparation of the Company’s financial statements in conformity with accounting principles generally accepted in the United States of America (GAAP) requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Significant estimates include, depreciable lives for long-lived assets, and valuation of goodwill and indefinitely lived intangible assets impairment testing. These estimates may be adjusted as more current information becomes available, and any adjustment could have a significant impact on recorded amounts. CASH AND CASH EQUIVALENTS Cash and cash equivalents consists primarily of unrestricted cash on deposit and securities with an original maturity of 3 months or less at financial institutions and brokerage firms. COFFEE HOLDING CO., INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OCTOBER 31, 2022 AND 2021 NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d): 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: SCHEDULE OF ACCOUNTS RECEIVABLE 2022 2021 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 INVENTORIES Inventories are stated at the lower of cost (first in, first out basis) or net realizable value, including provisions for obsolescence commensurate with known or estimated exposures. There are no BUILDING, MACHINERY AND EQUIPMENT Building, machinery and equipment are recorded at cost and depreciated using the straight-line method over the estimated useful lives of the assets. Purchases of buildings, machinery and equipment and additions and betterments which substantially extend the useful life of an asset are capitalized at cost. Expenditures which do not materially prolong the normal useful life of an asset are charged to operations as incurred. The Company also provides for amortization of leasehold improvements which are depreciated over the shorter of the useful life of the improvement or the lease term. COFFEE HOLDING CO., INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OCTOBER 31, 2022 AND 2021 NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d): COMMODITIES HELD BY BROKER The commodities held at broker represent the market value of the Company’s trading account, which consists of option 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 level 1 investments recognized at fair value in the consolidated financial statements with current recognition of gains and losses on such positions. The Company’s accounting for options and futures contracts may impact earnings volatility in any particular period. We record all open contract positions on our consolidated balance sheets at fair value in the due from and due to broker line items and typically do not offset these assets and liabilities. The Company classifies its options and future contracts as trading securities and accordingly, unrealized holding gains and losses are included in the statement of operations as a component of cost of sales. The Company recorded realized and unrealized gains and losses on these contracts as follows: SCHEDULE OF REALIZED AND UNREALIZED GAINS AND LOSSES ON CONTRACTS 2022 2021 Year Ended October 31, 2022 2021 Gross realized gains $ 2,307,714 $ 1,392,949 Gross realized (losses) (1,683,401 ) (63,516 ) Unrealized (losses) gains (721,350 ) 469,004 Total $ (97,037 ) $ 1,798,437 CUSTOMER LIST AND RELATIONSHIPS Customer list and relationships consist of a specific customer lists and customer contracts obtained by the Company in the acquisition of OPTCO, Comfort Foods and Sonofresco which are being amortized on the straight-line method over their estimated useful life of twenty years. Amortization expense for the years ended October 31, 2022 and 2021 was $ 62,552 GOODWILL AND TRADEMARKS The Company has determined that its goodwill and trademarks, which consist of product lines, trade names and packaging designs have indefinite useful lives. Goodwill and trademarks are tested for impairment at least annually or when circumstances indicate that the carrying amount of goodwill or trademarks exceed fair value. For purposes of evaluating goodwill for impairment, the Company has determined it operates a single reporting unit. The Company performs its annual impairment test on October 31 of each year by first performing a qualitative assessment to determine if it is more likely than not that the carrying amounts exceed the fair values. Depending on the outcome of our qualitative assessment, we may perform a quantitative assessment to determine if the carrying amounts exceed the fair values on the COFFEE HOLDING CO., INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OCTOBER 31, 2022 AND 2021 NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d): assessment date. The Company quantitatively assessed the carrying amount of its goodwill in 2021 and 2022 due to its declining stock price. The most significant assumptions used in these impairment tests include the royalty rates using the relief from royalty method of testing trademarks, forecasted revenues and expenses, income tax rates and discounts and premiums built into our weighted average cost of capital to estimate future cash flows using an income approach. Due to the sustained decline in the price of the Company stock through the fourth quarter of 2022 and after the proposed Delta merger announcement, the Company determined that an impairment charge was necessary and recorded an impairment charge of $ 2,569,785 2,488,785 81,000 No 4 % as of October 31, 2021. For the year ended October 31, 2021, we recorded impairment charges on two of our trademarks as the carrying amount of these trademarks exceeded the respective fair values on the test date which were determined using the relief from royalty method. These impairments were due to a change in the estimated future revenues relating to these trademarks. The impairment charge amounted to $ 1,080,000 for the year ended October 31, 2021. SCHEDULE OF CONSOLIDATED STATEMENT OF INCOME Trademarks and tradenames Total Balance at November 1, 2020 $ 1,488,000 Impairment (1,080,000 ) Impairment $ ( 1,080,000 ) Balance at October 31, 2021 408,000 Impairment charge (81,000 ) Balance at October 31, 2022 $ 327,000 IMPAIRMENT OF LONG-LIVED ASSETS The Company assesses the impairment of long-lived assets used in operations, primarily buildings, machinery and equipment as well as intangible assets subject to amortization, when events and circumstances indicate that the carrying value amounts of these assets might not be recoverable. For purposes of evaluating the recoverability of buildings, machinery and equipment and amortizable intangible assets, the undiscounted cash flows estimated to be generated by those assets are compared to the carrying amounts of those assets. If and when the carrying amounts of the assets exceed the undiscounted cashflows, then the related assets will be written down to fair value, if less. During the year ended October 31, 2022 and 2021, the Company recorded $ 199,767 0 No ADVERTISING The Company expenses the cost of advertising and promotion as incurred. Advertising costs charged to operations totaled $ 42,001 67,643 COFFEE HOLDING CO., INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OCTOBER 31, 2022 AND 2021 NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d): INCOME TAXES The Company accounts for income taxes pursuant to the asset and liability method which requires deferred income tax assets and liabilities to be 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 laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. The income tax provision or benefit is the tax incurred for the period plus or minus the change during the period in deferred tax assets and liabilities. (LOSS) EARNINGS PER SHARE Basic (loss) earnings per common share was computed by dividing net (loss) income by the sum of the weighted-average number of common shares outstanding. Diluted (loss) earnings per common share is computed by dividing the net (loss) 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 Company has issued 1,000,000 The weighted average common shares outstanding used in the computation of basic and diluted (loss) earnings per share were 5,708,599 5,575,453 FAIR VALUE OF FINANCIAL INSTRUMENTS The carrying amounts of cash, accounts receivable, notes due to/(from) broker and accounts payable approximate fair value because of the short-term nature of these instruments. The carrying amount of the bank line of credit approximates fair value because the debt is based on current rates at which the Company could borrow funds with similar remaining maturities. Fair value estimates are made at a specific point in time, based on relevant market information about the financial instruments when available. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore, cannot be determined with precision. Changes in assumptions could significantly affect the estimates. The Company measures fair value as required by Accounting Standards Codification (“ASC”) Topic 820 “Fair Value Measurements and Disclosures” (“ASC Topic 820”). ASC Topic 820 defines fair value, establishes a framework and gives guidance regarding the methods used for measuring fair value, and expands disclosures about fair value measurements. ASC Topic 820 clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, there exists a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: A) Level 1 – unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access as of the measurement date. B) Level 2 – inputs other than quoted prices included within Level 1 that are directly observable for the asset or liability or indirectly observable through corroboration with observable market data. C) Level 3 – unobservable inputs for the asset or liability only used when there is little, if any, market activity for the asset or liability at the measurement date. The hierarchy requires the Company to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value. COFFEE HOLDING CO., INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OCTOBER 31, 2022 AND 2021 NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d): REVENUE RECOGNITION The Company recognizes revenue in accordance with the five-step model as prescribed by the Financial Accounting Standards Board (“FASB”) Accounting Codification (“ASC”) Topic 606 (“ASC 606”) in which the Company evaluates the transfer of promised goods or services and recognizes revenue when its customer obtains control of promised goods or services in an amount that reflects the consideration which the Company expects to be entitled to receive in exchange for those goods or services. To determine revenue recognition for the arrangements that the Company determines are within the scope of ASC 606, the Company performs the following five steps: (1) identify the contract(s) with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract and (5) recognize revenue when (or as) the entity satisfies a performance obligation. The following table presents revenues by product line for the years ended October 31, 2022 and 2021. SCHEDULE OF REVENUE 2022 2021 Green $ 27,210,883 $ 26,118,492 Packaged 38,495,996 37,803,910 Totals $ 65,706,879 $ 63,922,402 Revenues $ 65,706,879 $ 63,922,402 Revenue for these product lines is recognized upon shipment to the customer. SHIPPING AND HANDLING FEES AND COSTS Revenue earned from shipping and handling fees is reflected in net sales. Costs associated with shipping product to customers aggregating approximately $ 2,964,000 3,165,000 STOCK- BASED COMPENSATION Stock-based awards are accounted for as required by ASC Topic 718 “Compensation-Stock Compensation” (“ASC 718”). Under ASC 718 stock-based awards are valued at fair value on the date of grant, and that fair value is recognized over requisite service period. The Company accounts for forfeitures when they occur. CONCENTRATION OF RISK Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash deposits at financial institutions and brokerage firms. Accounts at each institution are insured by the Federal Deposit Insurance Corporation (FDIC) up to certain limits. At October 31, 2022 and 2021, the Company had approximately $ 625,000 2,224,000 The accounts at the brokerage firm contain cash and securities. Balances are insured up to $ 500,000 100,000 1,560,000 523,000 COFFEE HOLDING CO., INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OCTOBER 31, 2022 AND 2021 NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d): EQUITY METHOD OF ACCOUNTING Investee companies that are not consolidated, but over which the Company exercises significant influence, are accounted for under the equity method of accounting. Whether or not the Company exercises significant influence with respect to an Investee depends on an evaluation of several factors including, among others, representation on the Investee company’s board of directors and ownership level, which is generally a 20% to 50% interest in the voting securities of the Investee company The Company’s equity method investments consist of the following: (1) 20 100,000 15,178 9,213 56,601 71,779 (2) On October 15, 2020 the Company acquired a 49 139,250 3.45 480,413 139,250 500,000 32,622 149,947 297,843 330,466 INVESTMENTS - OTHER Investment – other represent investments made by the Company that do not qualify as equity method investments as the Company cannot exercise significant influence over the target. The Company accounts for these investments in accordance with ASC Topic 321 “Investments – Equity Securities” (“ASC 321”). In August 2021, the Company made an investment of $ 2,500,000 2,500,000 COFFEE HOLDING CO., INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OCTOBER 31, 2022 AND 2021 NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d): LEASES Leases are accounted for under ASC 842. The Company determines if an arrangement is or contains a lease at inception. The Company’s operating lease arrangement are comprised of real estate and facility leases. Right of use assets represent the Company’s right to use the underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Right of use assets and lease liabilities are recognized at the commencement date based on the present value of the lease payments over the lease term. As the Company’s leases do not provide an implicit rate and the implicit rate is not readily determinable, the Company estimates its incremental borrowing rate based on the information available at the measurement date in determining the present value of the lease payments. The present value of the lease payments was determined to be 5.00 |
INVENTORIES
INVENTORIES | 12 Months Ended |
Oct. 31, 2022 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | NOTE 3 - INVENTORIES Inventories at October 31, 2022 and 2021 consisted of the following: SCHEDULE OF INVENTORIES 2022 2021 Packed coffee $ 2,677,617 $ 2,705,356 Green coffee 14,847,708 10,890,091 Roaster parts 576,778 422,858 Packaging supplies 1,150,111 1,943,561 Totals $ 19,252,214 $ 15,961,866 Inventories $ 19,252,214 $ 15,961,866 COFFEE HOLDING CO., INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OCTOBER 31, 2022 AND 2021 |
BUILDING, MACHINERY AND EQUIPME
BUILDING, MACHINERY AND EQUIPMENT | 12 Months Ended |
Oct. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
BUILDING, MACHINERY AND EQUIPMENT | NOTE 4 – BUILDING, MACHINERY AND EQUIPMENT Building machinery and equipment at October 31, 2022 and 2021 consisted of the following: SCHEDULE OF MACHINERY AND EQUIPMENT Estimated 2022 2021 Improvements 15 30 $ 233,766 $ 233,766 Building 31 900,321 900,321 Machinery and equipment 7 7,730,098 8,441,382 Furniture and fixtures 7 1,184,387 1,082,022 10,048,572 10,657,491 Less, accumulated depreciation 6,848,782 7,994,863 $ 3,199,790 $ 2,662,628 Depreciation expense totaled $ 522,043 600,357 651,175 434,817 113,166 321,651 |
ACCOUNTS PAYABLE AND ACCRUED EX
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | 12 Months Ended |
Oct. 31, 2022 | |
Payables and Accruals [Abstract] | |
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | NOTE 5 – ACCOUNTS PAYABLE AND ACCRUED EXPENSES Accounts payable and accrued expenses at October 31, 2022 and 2021 consisted of the following: SCHEDULE OF ACCOUNTS PAYABLE AND ACCRUED EXPENSES 2022 2021 Accounts payable $ 2,637,051 $ 4,144,700 Purchase accruals 784,531 875,201 Other accruals 393,282 27,739 Totals $ 3,814,864 $ 5,047,640 |
LINE OF CREDIT
LINE OF CREDIT | 12 Months Ended |
Oct. 31, 2022 | |
Debt Disclosure [Abstract] | |
LINE OF CREDIT | NOTE 6 - LINE OF CREDIT On April 25, 2017 the Company and OPTCO (together with the Company, collectively referred to herein as the “Borrowers”) entered into an Amended and Restated Loan and Security Agreement (the “A&R Loan Agreement”) and Amended and Restated Loan Facility (the “A&R Loan Facility”) with Sterling National Bank (“Sterling”), which consolidated (i) the financing agreement between the Company and Sterling, dated February 17, 2009, as modified, (the “Company Financing Agreement”) and (ii) the financing agreement between Company, as guarantor, OPTCO and Sterling, dated March 10, 2015 (the “OPTCO Financing Agreement”), amongst other things. On March 17, 2022, the Company reached an agreement for a new loan modification agreement and credit facility which extended the maturity date to June 29, 2022 On June 28, 2022, the Company reached an agreement for a new loan modification agreement and credit facility with Webster Bank. The terms of the new agreement, among other things: (i) provided for a new maturity date of June 30, 2024 1.75 3.50 COFFEE HOLDING CO., INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OCTOBER 31, 2022 AND 2021 NOTE 6 - LINE OF CREDIT (cont’d): The Company is subject to certain covenants with respect to its line of credit agreement. The Company was not in compliance with the net profit and non-borrower affiliate covenants as of October 31, 2022. The Company requested a waiver from the lender and the waiver was granted and received on March 15, 2023. The lender also extended the due date of the October 31, 2022 financial statements until April 15, 2023. The loan agreement was also modified on March 15, 2023. The terms of the modification, among other things: (i) provides for a requirement for subordination agreements if necessary, and (ii) changes the terms of transactions with affiliates from a dollar limitation to allowable in the ordinary course of business, (iii) establishes a new covenant for a fixed charge coverage ratio. Each of the A&R Loan Facility and A&R Loan Agreement contains covenants, subject to certain exceptions, that place annual restrictions on the Borrowers’ operations, including covenants relating to debt restrictions, capital expenditures, indebtedness, minimum deposit restrictions, tangible net worth, net profit, leverage, employee loan restrictions, dividend and repurchase restrictions (common stock and preferred stock), and restrictions on intercompany transactions. The outstanding balance on the Company’s lines of credit were $ 8,314,000 3,800,850 |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Oct. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 7 - INCOME TAXES The Company’s provision/(benefit) for income taxes in 2022 and 2021 consisted of the following: SCHEDULE OF PROVISION FOR INCOME TAX 2022 2021 Current Federal $ - $ 427,210 State and local - 90,771 Total - 517,981 Deferred Federal (933,489 ) (50,451 ) State and local (62,304 ) (127,350 ) Total (995,793 ) (177,801 ) Income tax (benefit) $ (995,793 ) $ 340,180 COFFEE HOLDING CO., INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OCTOBER 31, 2022 AND 2021 NOTE 7 - INCOME TAXES (cont’d): A reconciliation of the difference between the expected income tax rate using the statutory U.S. federal tax rate and the Company’s effective tax rate is as follows: SCHEDULE OF EFFECTIVE INCOME TAX RATE 2022 2021 (Benefit) from provision for tax at the federal statutory rate $ (1,175,507 ) $ 253,650 Goodwill impairment 265,796 Other permanent differences 135,025 19,736 State and local tax, net of federal (221,107 ) 66,794 (Benefit from) provision for income taxes $ (995,793 ) $ 340,180 Effective income tax rate 18 % 28 % The tax effects of the temporary differences that give rise to the deferred tax assets and liabilities as of October 31, 2022 and 2021 are as follows: SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES 2022 2021 Deferred tax assets: Accounts receivable $ 34,547 $ 34,203 Unrealized loss 173,058 - Deferred rent 15,643 20,652 Deferred compensation 58,355 74,075 Net operating loss 547,570 57,576 Stock-based compensation 602,237 499,841 Inventory 107,298 77,579 Total deferred tax asset 1,538,708 763,926 Deferred tax liabilities: Intangible assets acquired 70,021 346,892 Unrealized gain - 111,068 Buildings, machinery and equipment 395,500 228,572 Total deferred tax liabilities 465,521 686,532 Net deferred tax asset $ 1,073,187 $ 77,394 A valuation allowance was not provided at October 31, 2022 or 2021. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. COFFEE HOLDING CO., INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OCTOBER 31, 2022 AND 2021 NOTE 7 - INCOME TAXES (cont’d): Based upon the level of historical taxable income and projections for future taxable income over the periods in which the deferred tax assets are expected to be deductible, management believes it is more likely than not the Company will realize the benefits of these deductible differences. The amount of the deferred tax asset considered realizable, however, could be reduced in the near term if estimates of future taxable income are reduced. As of October 31, 2022 and 2021, the Company did no no The Company files a U.S. federal income tax return and California, Colorado, Connecticut, Idaho, Kansas, Michigan, New Jersey, New York, New York City, Virginia, Texas, Rhode Island, South Carolina, and Oregon state tax returns. The Company’s federal income tax return is no longer subject to examination by the federal taxing authority for years before fiscal 2019. The Company’s California, Colorado and New Jersey and Texas income tax returns are no longer subject to examination by their respective taxing authorities for the years before fiscal 2019. The Company’s Oregon, New York, Kansas, South Carolina, Rhode Island, Connecticut and Michigan income tax returns are no longer subject to examination by their respective taxing authorities for the years before fiscal 2019. As of October 31, 2022, and 2021, the Company had cumulative net operating loss carryforwards of approximately $ 2,281,518 274,173 60,469 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Oct. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 8 - COMMITMENTS AND CONTINGENCIES CLASS ACTION COMPLAINT The Company was named as a defendant in a putative class action lawsuit filed in the United States District Court for the Northern District of Illinois (the “Court”) on or about December 21, 2020. The plaintiffs, Eileen Brodsky and Rhonda Diamond, purported to represent a class of individuals who purchased coffee products at Aldi, Inc. (“Aldi”), a supermarket chain, generally allege that Aldi sold private label coffee products manufactured by the Company and by Pan American Coffee Co., LLC (“Pan American”), which falsely described the number of cups of coffee that could be made from the amount of product purchased. Aldi and Pan American were also named as defendants in the action. The complaint asserted a variety of claims under New York and California consumer protection laws, and sought unspecified monetary damages, including disgorgement and restitution, as well as other forms of relief including class certification, declaratory and injunctive relief, attorneys’ fees, and interest. On September 28, 2021, the Court entered an order granting the Company’s motion to dismiss with prejudice (the “Dismissal Order”). In the Dismissal Order, the Court stated that no reasonable coffee drinker would be deceived by the Company’s packaging. The plaintiffs filed an appeal with the 7 th A significant customer of the Company was named as a defendant in a putative class action lawsuit filed in the United States District Court for the District of Massachusetts (the “Massachusetts District Court”) on or about February 2, 2021, concerning the labeling on private label coffee productions the Company sold to the customer. COFFEE HOLDING CO., INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OCTOBER 31, 2022 AND 2021 NOTE 8 - COMMITMENTS AND CONTINGENCIES (cont’d): The plaintiff, David Cohen, purporting to represent a class of individuals who purchased coffee products from our customer, generally allege that the customer sold private label coffee products manufactured by the Company which falsely described the number of cups of coffee that could be made from the amount of product purchased. The Company is not named as a defendant in the action, but has agreed to indemnify the customer for the costs and expenses incurred in defending the lawsuit and for any liability the customer may suffer as a result. The complaint asserts a variety of claims under Massachusetts consumer protection laws, and seeks unspecified monetary damages as well as other forms of relief including class certification, declaratory and injunctive relief, attorneys’ fees, and interest. The Company believes the allegations in the complaint are wholly without merit and that the claims asserted are legally deficient, and intends to vigorously support the customer in defending the action. On February 28, 2022, the Company and the plaintiff, in his individual capacity and not on behalf of a presumptive class, resolved the matter in principle and have reported the agreement in principle to the Massachusetts District Court. After the end of the period, the parties finalized the details of a settlement agreement. The final settlement amount was immaterial to the Company’s operations and results of operations. The Company has a 401(k) Retirement Plan, which covers all the full time employees who have completed one year of service and have reached their 21 st . Contributions to the plan aggregated $ 75,004 and $ 72,558 for the years ended October 31, 2022 and 2021, respectively. |
LEASES
LEASES | 12 Months Ended |
Oct. 31, 2022 | |
Leases | |
LEASES | NOTE 9 - LEASES The following summarizes the Company’s operating leases: SCHEDULE OF OPERATING LEASES 2022 2021 Right-of-use operating lease assets $ 2,871,773 $ 3,545,786 Current lease liability 220,734 340,400 Non-current lease liability 3,136,006 3,299,784 Total lease liability $ 3,356,740 $ 3,640,184 The amortization of the right-of-use asset for the years ended October 31, 2022 and 2021 was $ 674,013 350,871 Weighted average remaining lease term 11.4 Weighted average discount rate 4.9 % COFFEE HOLDING CO., INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OCTOBER 31, 2022 AND 2021 NOTE 9 – LEASES (cont’d): Maturities of lease liabilities by year for our operating leases are as follows: SCHEDULE OF MATURITY LEASE LIABILITY 2023 $ 623,696 2024 474,670 2025 354,528 2026 360,108 2027 367,788 Thereafter 2,333,300 Total lease payments $ 4,514,090 Less: imputed interest (1,157,350 ) Present value of operating lease liabilities $ 3,356,740 The aggregate cash payments under these leasing agreements was $ 426,271 442,118 In June 2021, the Company purchased a facility in Colorado for $ 900,321 242,888 In September 2021, the Company extended its headquarters lease in Staten Island, New York through September 2036. As a result, on the date of the modification the Company increased its right-of-use asset and lease liability by $ 2,025,316 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Oct. 31, 2022 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 10 - RELATED PARTY TRANSACTIONS The Company has engaged its 40 285,696 349,760 An employee of one of the top two vendors is a director of the Company. Purchases from that vendor totaled approximately $ 3,500,000 1,014,000 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 CEO. The deferred compensation payable represents the liability due to this employee of the Company upon his retirement. The deferred compensation liability at October 31, 2022 and 2021 was $ 243,238 311,872 0 |
STOCKHOLDERS_ EQUITY
STOCKHOLDERS’ EQUITY | 12 Months Ended |
Oct. 31, 2022 | |
Equity [Abstract] | |
STOCKHOLDERS’ EQUITY | NOTE 11 - STOCKHOLDERS’ EQUITY a. Treasury Stock b. Stock Options 1,000,000 5.43 1,000,000 666,383 The Company recorded $ 405,821 759,073 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Oct. 31, 2022 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 12 – SUBSEQUENT EVENTS The Company is subject to certain covenants with respect to its line of credit agreement. The Company was not in compliance with the net profit and non-borrower affiliate covenants as of October 31, 2022. The Company requested a waiver from the lender and the waiver was granted and received on March 15, 2023. The lender also extended the due date of the October 31, 2022 financial statements until April 15, 2023. The loan agreement was also modified on March 15, 2023. The terms of the modification, among other things: (i) provides for a requirement for subordination agreements if necessary, (ii) changes the terms of transactions with affiliates from a dollar limitation to allowable in the ordinary course of business and (iii) establishes a new covenant for a fixed charge coverage ratio. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Oct. 31, 2022 | |
Accounting Policies [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION The consolidated financial statements include the accounts of the Company, Organic Products Trading Company, LLC (“OPTCO”), Sonofresco LLC (“SONO”), Comfort Foods, Inc. (“CFI”) and Generations Coffee Company, LLC (“GCC”). All inter-company balances and transactions have been eliminated in consolidation. |
USE OF ESTIMATES | USE OF ESTIMATES The preparation of the Company’s financial statements in conformity with accounting principles generally accepted in the United States of America (GAAP) requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Significant estimates include, depreciable lives for long-lived assets, and valuation of goodwill and indefinitely lived intangible assets impairment testing. These estimates may be adjusted as more current information becomes available, and any adjustment could have a significant impact on recorded amounts. |
CASH AND CASH EQUIVALENTS | CASH AND CASH EQUIVALENTS Cash and cash equivalents consists primarily of unrestricted cash on deposit and securities with an original maturity of 3 months or less at financial institutions and brokerage firms. COFFEE HOLDING CO., INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OCTOBER 31, 2022 AND 2021 NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d): |
ACCOUNTS RECEIVABLE | 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: SCHEDULE OF ACCOUNTS RECEIVABLE 2022 2021 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 |
INVENTORIES | INVENTORIES Inventories are stated at the lower of cost (first in, first out basis) or net realizable value, including provisions for obsolescence commensurate with known or estimated exposures. There are no |
BUILDING, MACHINERY AND EQUIPMENT | BUILDING, MACHINERY AND EQUIPMENT Building, machinery and equipment are recorded at cost and depreciated using the straight-line method over the estimated useful lives of the assets. Purchases of buildings, machinery and equipment and additions and betterments which substantially extend the useful life of an asset are capitalized at cost. Expenditures which do not materially prolong the normal useful life of an asset are charged to operations as incurred. The Company also provides for amortization of leasehold improvements which are depreciated over the shorter of the useful life of the improvement or the lease term. COFFEE HOLDING CO., INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OCTOBER 31, 2022 AND 2021 NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d): |
COMMODITIES HELD BY BROKER | COMMODITIES HELD BY BROKER The commodities held at broker represent the market value of the Company’s trading account, which consists of option 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 level 1 investments recognized at fair value in the consolidated financial statements with current recognition of gains and losses on such positions. The Company’s accounting for options and futures contracts may impact earnings volatility in any particular period. We record all open contract positions on our consolidated balance sheets at fair value in the due from and due to broker line items and typically do not offset these assets and liabilities. The Company classifies its options and future contracts as trading securities and accordingly, unrealized holding gains and losses are included in the statement of operations as a component of cost of sales. The Company recorded realized and unrealized gains and losses on these contracts as follows: SCHEDULE OF REALIZED AND UNREALIZED GAINS AND LOSSES ON CONTRACTS 2022 2021 Year Ended October 31, 2022 2021 Gross realized gains $ 2,307,714 $ 1,392,949 Gross realized (losses) (1,683,401 ) (63,516 ) Unrealized (losses) gains (721,350 ) 469,004 Total $ (97,037 ) $ 1,798,437 |
CUSTOMER LIST AND RELATIONSHIPS | CUSTOMER LIST AND RELATIONSHIPS Customer list and relationships consist of a specific customer lists and customer contracts obtained by the Company in the acquisition of OPTCO, Comfort Foods and Sonofresco which are being amortized on the straight-line method over their estimated useful life of twenty years. Amortization expense for the years ended October 31, 2022 and 2021 was $ 62,552 |
GOODWILL AND TRADEMARKS | GOODWILL AND TRADEMARKS The Company has determined that its goodwill and trademarks, which consist of product lines, trade names and packaging designs have indefinite useful lives. Goodwill and trademarks are tested for impairment at least annually or when circumstances indicate that the carrying amount of goodwill or trademarks exceed fair value. For purposes of evaluating goodwill for impairment, the Company has determined it operates a single reporting unit. The Company performs its annual impairment test on October 31 of each year by first performing a qualitative assessment to determine if it is more likely than not that the carrying amounts exceed the fair values. Depending on the outcome of our qualitative assessment, we may perform a quantitative assessment to determine if the carrying amounts exceed the fair values on the COFFEE HOLDING CO., INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OCTOBER 31, 2022 AND 2021 NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d): assessment date. The Company quantitatively assessed the carrying amount of its goodwill in 2021 and 2022 due to its declining stock price. The most significant assumptions used in these impairment tests include the royalty rates using the relief from royalty method of testing trademarks, forecasted revenues and expenses, income tax rates and discounts and premiums built into our weighted average cost of capital to estimate future cash flows using an income approach. Due to the sustained decline in the price of the Company stock through the fourth quarter of 2022 and after the proposed Delta merger announcement, the Company determined that an impairment charge was necessary and recorded an impairment charge of $ 2,569,785 2,488,785 81,000 No 4 % as of October 31, 2021. For the year ended October 31, 2021, we recorded impairment charges on two of our trademarks as the carrying amount of these trademarks exceeded the respective fair values on the test date which were determined using the relief from royalty method. These impairments were due to a change in the estimated future revenues relating to these trademarks. The impairment charge amounted to $ 1,080,000 for the year ended October 31, 2021. SCHEDULE OF CONSOLIDATED STATEMENT OF INCOME Trademarks and tradenames Total Balance at November 1, 2020 $ 1,488,000 Impairment (1,080,000 ) Impairment $ ( 1,080,000 ) Balance at October 31, 2021 408,000 Impairment charge (81,000 ) Balance at October 31, 2022 $ 327,000 |
IMPAIRMENT OF LONG-LIVED ASSETS | IMPAIRMENT OF LONG-LIVED ASSETS The Company assesses the impairment of long-lived assets used in operations, primarily buildings, machinery and equipment as well as intangible assets subject to amortization, when events and circumstances indicate that the carrying value amounts of these assets might not be recoverable. For purposes of evaluating the recoverability of buildings, machinery and equipment and amortizable intangible assets, the undiscounted cash flows estimated to be generated by those assets are compared to the carrying amounts of those assets. If and when the carrying amounts of the assets exceed the undiscounted cashflows, then the related assets will be written down to fair value, if less. During the year ended October 31, 2022 and 2021, the Company recorded $ 199,767 0 No |
ADVERTISING | ADVERTISING The Company expenses the cost of advertising and promotion as incurred. Advertising costs charged to operations totaled $ 42,001 67,643 COFFEE HOLDING CO., INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OCTOBER 31, 2022 AND 2021 NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d): |
INCOME TAXES | INCOME TAXES The Company accounts for income taxes pursuant to the asset and liability method which requires deferred income tax assets and liabilities to be 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 laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. The income tax provision or benefit is the tax incurred for the period plus or minus the change during the period in deferred tax assets and liabilities. |
(LOSS) EARNINGS PER SHARE | (LOSS) EARNINGS PER SHARE Basic (loss) earnings per common share was computed by dividing net (loss) income by the sum of the weighted-average number of common shares outstanding. Diluted (loss) earnings per common share is computed by dividing the net (loss) 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 Company has issued 1,000,000 The weighted average common shares outstanding used in the computation of basic and diluted (loss) earnings per share were 5,708,599 5,575,453 |
FAIR VALUE OF FINANCIAL INSTRUMENTS | FAIR VALUE OF FINANCIAL INSTRUMENTS The carrying amounts of cash, accounts receivable, notes due to/(from) broker and accounts payable approximate fair value because of the short-term nature of these instruments. The carrying amount of the bank line of credit approximates fair value because the debt is based on current rates at which the Company could borrow funds with similar remaining maturities. Fair value estimates are made at a specific point in time, based on relevant market information about the financial instruments when available. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore, cannot be determined with precision. Changes in assumptions could significantly affect the estimates. The Company measures fair value as required by Accounting Standards Codification (“ASC”) Topic 820 “Fair Value Measurements and Disclosures” (“ASC Topic 820”). ASC Topic 820 defines fair value, establishes a framework and gives guidance regarding the methods used for measuring fair value, and expands disclosures about fair value measurements. ASC Topic 820 clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, there exists a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: A) Level 1 – unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access as of the measurement date. B) Level 2 – inputs other than quoted prices included within Level 1 that are directly observable for the asset or liability or indirectly observable through corroboration with observable market data. C) Level 3 – unobservable inputs for the asset or liability only used when there is little, if any, market activity for the asset or liability at the measurement date. The hierarchy requires the Company to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value. COFFEE HOLDING CO., INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OCTOBER 31, 2022 AND 2021 NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d): |
REVENUE RECOGNITION | REVENUE RECOGNITION The Company recognizes revenue in accordance with the five-step model as prescribed by the Financial Accounting Standards Board (“FASB”) Accounting Codification (“ASC”) Topic 606 (“ASC 606”) in which the Company evaluates the transfer of promised goods or services and recognizes revenue when its customer obtains control of promised goods or services in an amount that reflects the consideration which the Company expects to be entitled to receive in exchange for those goods or services. To determine revenue recognition for the arrangements that the Company determines are within the scope of ASC 606, the Company performs the following five steps: (1) identify the contract(s) with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract and (5) recognize revenue when (or as) the entity satisfies a performance obligation. The following table presents revenues by product line for the years ended October 31, 2022 and 2021. SCHEDULE OF REVENUE 2022 2021 Green $ 27,210,883 $ 26,118,492 Packaged 38,495,996 37,803,910 Totals $ 65,706,879 $ 63,922,402 Revenues $ 65,706,879 $ 63,922,402 Revenue for these product lines is recognized upon shipment to the customer. |
SHIPPING AND HANDLING FEES AND COSTS | SHIPPING AND HANDLING FEES AND COSTS Revenue earned from shipping and handling fees is reflected in net sales. Costs associated with shipping product to customers aggregating approximately $ 2,964,000 3,165,000 |
STOCK- BASED COMPENSATION | STOCK- BASED COMPENSATION Stock-based awards are accounted for as required by ASC Topic 718 “Compensation-Stock Compensation” (“ASC 718”). Under ASC 718 stock-based awards are valued at fair value on the date of grant, and that fair value is recognized over requisite service period. The Company accounts for forfeitures when they occur. |
CONCENTRATION OF RISK | CONCENTRATION OF RISK Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash deposits at financial institutions and brokerage firms. Accounts at each institution are insured by the Federal Deposit Insurance Corporation (FDIC) up to certain limits. At October 31, 2022 and 2021, the Company had approximately $ 625,000 2,224,000 The accounts at the brokerage firm contain cash and securities. Balances are insured up to $ 500,000 100,000 1,560,000 523,000 COFFEE HOLDING CO., INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OCTOBER 31, 2022 AND 2021 NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d): |
EQUITY METHOD OF ACCOUNTING | EQUITY METHOD OF ACCOUNTING Investee companies that are not consolidated, but over which the Company exercises significant influence, are accounted for under the equity method of accounting. Whether or not the Company exercises significant influence with respect to an Investee depends on an evaluation of several factors including, among others, representation on the Investee company’s board of directors and ownership level, which is generally a 20% to 50% interest in the voting securities of the Investee company The Company’s equity method investments consist of the following: (1) 20 100,000 15,178 9,213 56,601 71,779 (2) On October 15, 2020 the Company acquired a 49 139,250 3.45 480,413 139,250 500,000 32,622 149,947 297,843 330,466 |
INVESTMENTS - OTHER | INVESTMENTS - OTHER Investment – other represent investments made by the Company that do not qualify as equity method investments as the Company cannot exercise significant influence over the target. The Company accounts for these investments in accordance with ASC Topic 321 “Investments – Equity Securities” (“ASC 321”). In August 2021, the Company made an investment of $ 2,500,000 2,500,000 COFFEE HOLDING CO., INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OCTOBER 31, 2022 AND 2021 NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d): |
LEASES | LEASES Leases are accounted for under ASC 842. The Company determines if an arrangement is or contains a lease at inception. The Company’s operating lease arrangement are comprised of real estate and facility leases. Right of use assets represent the Company’s right to use the underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Right of use assets and lease liabilities are recognized at the commencement date based on the present value of the lease payments over the lease term. As the Company’s leases do not provide an implicit rate and the implicit rate is not readily determinable, the Company estimates its incremental borrowing rate based on the information available at the measurement date in determining the present value of the lease payments. The present value of the lease payments was determined to be 5.00 |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Oct. 31, 2022 | |
Accounting Policies [Abstract] | |
SCHEDULE OF ACCOUNTS RECEIVABLE | SCHEDULE OF ACCOUNTS RECEIVABLE 2022 2021 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 |
SCHEDULE OF REALIZED AND UNREALIZED GAINS AND LOSSES ON CONTRACTS | The Company recorded realized and unrealized gains and losses on these contracts as follows: SCHEDULE OF REALIZED AND UNREALIZED GAINS AND LOSSES ON CONTRACTS 2022 2021 Year Ended October 31, 2022 2021 Gross realized gains $ 2,307,714 $ 1,392,949 Gross realized (losses) (1,683,401 ) (63,516 ) Unrealized (losses) gains (721,350 ) 469,004 Total $ (97,037 ) $ 1,798,437 |
SCHEDULE OF CONSOLIDATED STATEMENT OF INCOME | SCHEDULE OF CONSOLIDATED STATEMENT OF INCOME Trademarks and tradenames Total Balance at November 1, 2020 $ 1,488,000 Impairment (1,080,000 ) Impairment $ ( 1,080,000 ) Balance at October 31, 2021 408,000 Impairment charge (81,000 ) Balance at October 31, 2022 $ 327,000 |
SCHEDULE OF REVENUE | The following table presents revenues by product line for the years ended October 31, 2022 and 2021. SCHEDULE OF REVENUE 2022 2021 Green $ 27,210,883 $ 26,118,492 Packaged 38,495,996 37,803,910 Totals $ 65,706,879 $ 63,922,402 Revenues $ 65,706,879 $ 63,922,402 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 12 Months Ended |
Oct. 31, 2022 | |
Inventory Disclosure [Abstract] | |
SCHEDULE OF INVENTORIES | Inventories at October 31, 2022 and 2021 consisted of the following: SCHEDULE OF INVENTORIES 2022 2021 Packed coffee $ 2,677,617 $ 2,705,356 Green coffee 14,847,708 10,890,091 Roaster parts 576,778 422,858 Packaging supplies 1,150,111 1,943,561 Totals $ 19,252,214 $ 15,961,866 Inventories $ 19,252,214 $ 15,961,866 |
BUILDING, MACHINERY AND EQUIP_2
BUILDING, MACHINERY AND EQUIPMENT (Tables) | 12 Months Ended |
Oct. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
SCHEDULE OF MACHINERY AND EQUIPMENT | Building machinery and equipment at October 31, 2022 and 2021 consisted of the following: SCHEDULE OF MACHINERY AND EQUIPMENT Estimated 2022 2021 Improvements 15 30 $ 233,766 $ 233,766 Building 31 900,321 900,321 Machinery and equipment 7 7,730,098 8,441,382 Furniture and fixtures 7 1,184,387 1,082,022 10,048,572 10,657,491 Less, accumulated depreciation 6,848,782 7,994,863 $ 3,199,790 $ 2,662,628 |
ACCOUNTS PAYABLE AND ACCRUED _2
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Tables) | 12 Months Ended |
Oct. 31, 2022 | |
Payables and Accruals [Abstract] | |
SCHEDULE OF ACCOUNTS PAYABLE AND ACCRUED EXPENSES | Accounts payable and accrued expenses at October 31, 2022 and 2021 consisted of the following: SCHEDULE OF ACCOUNTS PAYABLE AND ACCRUED EXPENSES 2022 2021 Accounts payable $ 2,637,051 $ 4,144,700 Purchase accruals 784,531 875,201 Other accruals 393,282 27,739 Totals $ 3,814,864 $ 5,047,640 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Oct. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
SCHEDULE OF PROVISION FOR INCOME TAX | The Company’s provision/(benefit) for income taxes in 2022 and 2021 consisted of the following: SCHEDULE OF PROVISION FOR INCOME TAX 2022 2021 Current Federal $ - $ 427,210 State and local - 90,771 Total - 517,981 Deferred Federal (933,489 ) (50,451 ) State and local (62,304 ) (127,350 ) Total (995,793 ) (177,801 ) Income tax (benefit) $ (995,793 ) $ 340,180 |
SCHEDULE OF EFFECTIVE INCOME TAX RATE | A reconciliation of the difference between the expected income tax rate using the statutory U.S. federal tax rate and the Company’s effective tax rate is as follows: SCHEDULE OF EFFECTIVE INCOME TAX RATE 2022 2021 (Benefit) from provision for tax at the federal statutory rate $ (1,175,507 ) $ 253,650 Goodwill impairment 265,796 Other permanent differences 135,025 19,736 State and local tax, net of federal (221,107 ) 66,794 (Benefit from) provision for income taxes $ (995,793 ) $ 340,180 Effective income tax rate 18 % 28 % |
SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES | The tax effects of the temporary differences that give rise to the deferred tax assets and liabilities as of October 31, 2022 and 2021 are as follows: SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES 2022 2021 Deferred tax assets: Accounts receivable $ 34,547 $ 34,203 Unrealized loss 173,058 - Deferred rent 15,643 20,652 Deferred compensation 58,355 74,075 Net operating loss 547,570 57,576 Stock-based compensation 602,237 499,841 Inventory 107,298 77,579 Total deferred tax asset 1,538,708 763,926 Deferred tax liabilities: Intangible assets acquired 70,021 346,892 Unrealized gain - 111,068 Buildings, machinery and equipment 395,500 228,572 Total deferred tax liabilities 465,521 686,532 Net deferred tax asset $ 1,073,187 $ 77,394 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Oct. 31, 2022 | |
Leases | |
SCHEDULE OF OPERATING LEASES | The following summarizes the Company’s operating leases: SCHEDULE OF OPERATING LEASES 2022 2021 Right-of-use operating lease assets $ 2,871,773 $ 3,545,786 Current lease liability 220,734 340,400 Non-current lease liability 3,136,006 3,299,784 Total lease liability $ 3,356,740 $ 3,640,184 Weighted average remaining lease term 11.4 Weighted average discount rate 4.9 % |
SCHEDULE OF MATURITY LEASE LIABILITY | Maturities of lease liabilities by year for our operating leases are as follows: SCHEDULE OF MATURITY LEASE LIABILITY 2023 $ 623,696 2024 474,670 2025 354,528 2026 360,108 2027 367,788 Thereafter 2,333,300 Total lease payments $ 4,514,090 Less: imputed interest (1,157,350 ) Present value of operating lease liabilities $ 3,356,740 |
BUSINESS ACTIVITIES (Details Na
BUSINESS ACTIVITIES (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Apr. 30, 2022 | Oct. 31, 2022 | Oct. 31, 2021 | Sep. 29, 2022 | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Restructuring costs | $ 550,000 | |||
Cash | 330,000 | |||
Write-down of obsolete inventory | 718,353 | $ 718,353 | ||
Write-off of accounts receivable | $ 415,096 | $ 415,096 | ||
Common stock, par value | $ 0.001 | $ 0.001 | ||
Pubco [Member] | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Common stock, par value | $ 0.0001 | |||
Merger Agreement [Member] | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Common stock, par value | $ 0.001 |
SCHEDULE OF ACCOUNTS RECEIVABLE
SCHEDULE OF ACCOUNTS RECEIVABLE (Details) - USD ($) | Oct. 31, 2022 | Oct. 31, 2021 |
Accounting Policies [Abstract] | ||
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 |
SCHEDULE OF REALIZED AND UNREAL
SCHEDULE OF REALIZED AND UNREALIZED GAINS AND LOSSES ON CONTRACTS (Details) - USD ($) | 12 Months Ended | |
Oct. 31, 2022 | Oct. 31, 2021 | |
Accounting Policies [Abstract] | ||
Gross realized gains | $ 2,307,714 | $ 1,392,949 |
Derivative, Gain, Statement of Income or Comprehensive Income [Extensible Enumeration] | COST OF SALES | COST OF SALES |
Gross realized (losses) | $ (1,683,401) | $ (63,516) |
Derivative, Loss, Statement of Income or Comprehensive Income [Extensible Enumeration] | COST OF SALES | COST OF SALES |
Unrealized (losses) gains | $ (721,350) | $ 469,004 |
Total | $ (97,037) | $ 1,798,437 |
SCHEDULE OF CONSOLIDATED STATEM
SCHEDULE OF CONSOLIDATED STATEMENT OF INCOME (Details) - USD ($) | 12 Months Ended | |
Oct. 31, 2022 | Oct. 31, 2021 | |
Accounting Policies [Abstract] | ||
Beginning balance | $ 408,000 | $ 1,488,000 |
Impairment | (81,000) | $ (1,080,000) |
Impairment, Intangible Asset, Indefinite-Lived (Excluding Goodwill), Statement of Income or Comprehensive Income [Extensible Enumeration] | Selling and administrative | |
Ending balance | $ 327,000 | $ 408,000 |
SCHEDULE OF REVENUE (Details)
SCHEDULE OF REVENUE (Details) - USD ($) | 12 Months Ended | |
Oct. 31, 2022 | Oct. 31, 2021 | |
Revenues | $ 65,706,879 | $ 63,922,402 |
Green Coffee [Member] | ||
Revenues | 27,210,883 | 26,118,492 |
Packaged Coffee [Member] | ||
Revenues | $ 38,495,996 | $ 37,803,910 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 12 Months Ended | |||
Oct. 15, 2020 | Oct. 31, 2022 | Oct. 31, 2021 | Aug. 31, 2021 | |
Property, Plant and Equipment [Line Items] | ||||
Reserves for inventory obsolescence | $ 0 | $ 0 | ||
Amortization expense | 62,552 | 62,552 | ||
Impairment of Intangible Assets, Finite-Lived | 2,569,785 | $ 1,080,000 | ||
Goodwill impairment charge | 265,796 | |||
Reporting Unit, Percentage of Fair Value in Excess of Carrying Amount | 4% | |||
Impairment of Intangible Assets, Indefinite-Lived (Excluding Goodwill) | 81,000 | $ 1,080,000 | ||
Impairment of long-lived assets | 199,767 | 0 | ||
Advertising costs | $ 42,001 | $ 67,643 | ||
Anti-dilutive diluted earnings per share | 1,000,000 | |||
Weighted average common shares outstanding: basic and diluted | 5,708,599 | 5,575,453 | ||
Selling and administrative expense | $ 12,989,032 | $ 12,883,328 | ||
Cash excess of FDIC insured limits | 625,000 | 2,224,000 | ||
Cash, SIPC insured amount | 100,000 | |||
Cash excess of SIPC insured limits | 1,560,000 | 523,000 | ||
Investments | $ 2,500,000 | |||
Loss on equity method investments | (47,801) | (159,160) | ||
Equity method investments | 354,444 | 402,245 | ||
Other investments | $ 2,500,000 | $ 2,500,000 | ||
Lease payment, percent | 5% | 5% | ||
Healthwise Gourmet Coffees LLC [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Investments | $ 100,000 | |||
Loss on equity method investments | 15,178 | $ 9,213 | ||
Equity method investments | 56,601 | 71,779 | ||
Jordre well LLC [Member]. | ||||
Property, Plant and Equipment [Line Items] | ||||
Investments | $ 480,413 | 297,843 | 330,466 | |
Loss on equity method investments | $ 32,622 | 149,947 | ||
Number of common stock shares issued, shares | 139,250 | |||
Share price | $ 3.45 | |||
Revenue | $ 500,000 | |||
Investee Entity [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Equity method description | Investee depends on an evaluation of several factors including, among others, representation on the Investee company’s board of directors and ownership level, which is generally a 20% to 50% interest in the voting securities of the Investee company | |||
Healthwise Gourmet Coffees LLC [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Equity method investment, ownership percentage | 20% | |||
Jordre well LLC [Member]. | ||||
Property, Plant and Equipment [Line Items] | ||||
Equity method investment, ownership percentage | 49% | |||
Maximum [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Cash, SIPC insured amount | $ 500,000 | |||
Shipping and Handling [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Selling and administrative expense | 2,964,000 | 3,165,000 | ||
Machinery and Equipment [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Impairment of long-lived assets | 0 | $ 0 | ||
Trademarks and Trade Names [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Impairment of Intangible Assets, Finite-Lived | 81,000 | |||
Goodwill impairment charge | 0 | |||
Goodwill [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Impairment of Intangible Assets, Finite-Lived | $ 2,488,785 |
SCHEDULE OF INVENTORIES (Detail
SCHEDULE OF INVENTORIES (Details) - USD ($) | Oct. 31, 2022 | Oct. 31, 2021 |
Inventories | $ 19,252,214 | $ 15,961,866 |
Packed Coffee [Member] | ||
Inventories | 2,677,617 | 2,705,356 |
Green Coffee [Member] | ||
Inventories | 14,847,708 | 10,890,091 |
Roaster Parts [Member] | ||
Inventories | 576,778 | 422,858 |
Packaging Supplies [Member] | ||
Inventories | $ 1,150,111 | $ 1,943,561 |
SCHEDULE OF MACHINERY AND EQUIP
SCHEDULE OF MACHINERY AND EQUIPMENT (Details) - USD ($) | 12 Months Ended | |
Oct. 31, 2022 | Oct. 31, 2021 | |
Property, Plant and Equipment [Line Items] | ||
Improvements | $ 233,766 | $ 233,766 |
Building | 900,321 | 900,321 |
Machinery and equipment | 7,730,098 | 8,441,382 |
Furniture and fixtures | 1,184,387 | 1,082,022 |
Property plant and equipment gross | 10,048,572 | 10,657,491 |
Less, accumulated depreciation | 6,848,782 | 7,994,863 |
Property plant and equipment net | $ 3,199,790 | $ 2,662,628 |
Improvements [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life | 15 years | |
Improvements [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life | 30 years | |
Building [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life | 31 years | |
Machinery and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life | 7 years | |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life | 7 years |
BUILDING, MACHINERY AND EQUIP_3
BUILDING, MACHINERY AND EQUIPMENT (Details Narrative) - USD ($) | 12 Months Ended | |
Oct. 31, 2022 | Oct. 31, 2021 | |
Property, Plant and Equipment [Line Items] | ||
Depreciation | $ 522,043 | $ 600,357 |
Proceeds from sale of machinery and equipment | 113,166 | |
Machinery and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Sale of property plant and equipment | 651,175 | |
Property plant and equipment disposals | 434,817 | |
Operating expenses loss | $ 321,651 |
SCHEDULE OF ACCOUNTS PAYABLE AN
SCHEDULE OF ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Details) - USD ($) | Oct. 31, 2022 | Oct. 31, 2021 |
Payables and Accruals [Abstract] | ||
Accounts payable | $ 2,637,051 | $ 4,144,700 |
Purchase accruals | 784,531 | 875,201 |
Other accruals | 393,282 | 27,739 |
Totals | $ 3,814,864 | $ 5,047,640 |
LINE OF CREDIT (Details Narrati
LINE OF CREDIT (Details Narrative) - USD ($) | Jun. 28, 2022 | Mar. 17, 2022 | Oct. 31, 2022 | Oct. 31, 2021 |
Debt Instrument [Line Items] | ||||
Line of credit | $ 8,314,000 | $ 3,800,850 | ||
New loan modification agreement and credit facility [Member] | ||||
Debt Instrument [Line Items] | ||||
Line of credit expire date | Jun. 30, 2024 | Jun. 29, 2022 | ||
New loan modification agreement and credit facility [Member] | London Interbank Offered Rate (LIBOR) [Member] | ||||
Debt Instrument [Line Items] | ||||
Line of credit facility, interest rate during period | 1.75% | |||
New loan modification agreement and credit facility [Member] | London Interbank Offered Rate (LIBOR) [Member] | Maximum [Member] | ||||
Debt Instrument [Line Items] | ||||
Line of credit facility, interest rate during period | 3.50% |
SCHEDULE OF PROVISION FOR INCOM
SCHEDULE OF PROVISION FOR INCOME TAX (Details) - USD ($) | 12 Months Ended | |
Oct. 31, 2022 | Oct. 31, 2021 | |
Current | ||
Federal | $ 427,210 | |
State and local | 90,771 | |
Total | 517,981 | |
Deferred | ||
Federal | (933,489) | (50,451) |
State and local | (62,304) | (127,350) |
Total | (995,793) | (177,801) |
Income tax (benefit) | $ (995,793) | $ 340,180 |
SCHEDULE OF EFFECTIVE INCOME TA
SCHEDULE OF EFFECTIVE INCOME TAX RATE (Details) - USD ($) | 12 Months Ended | |
Oct. 31, 2022 | Oct. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||
(Benefit) from provision for tax at the federal statutory rate | $ (1,175,507) | $ 253,650 |
Goodwill impairment | 265,796 | |
Other permanent differences | 135,025 | 19,736 |
State and local tax, net of federal | (221,107) | 66,794 |
Income tax (benefit) | $ (995,793) | $ 340,180 |
Effective income tax rate | 18% | 28% |
SCHEDULE OF DEFERRED TAX ASSETS
SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES (Details) - USD ($) | Oct. 31, 2022 | Oct. 31, 2021 |
Deferred tax assets: | ||
Accounts receivable | $ 34,547 | $ 34,203 |
Unrealized loss | 173,058 | |
Deferred rent | 15,643 | 20,652 |
Deferred compensation | 58,355 | 74,075 |
Net operating loss | 547,570 | 57,576 |
Stock-based compensation | 602,237 | 499,841 |
Inventory | 107,298 | 77,579 |
Total deferred tax asset | 1,538,708 | 763,926 |
Deferred tax liabilities: | ||
Intangible assets acquired | 70,021 | 346,892 |
Unrealized gain | 111,068 | |
Buildings, machinery and equipment | 395,500 | 228,572 |
Total deferred tax liabilities | 465,521 | 686,532 |
Net deferred tax asset | $ 1,073,187 | $ 77,394 |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) - USD ($) | 12 Months Ended | |
Oct. 31, 2022 | Oct. 31, 2021 | |
Operating Loss Carryforwards [Line Items] | ||
Unrecognized tax benefits | $ 0 | $ 0 |
Accrued interest or penalties | 0 | 0 |
Net operating loss carryforwards | 2,281,518 | $ 274,173 |
Internal Revenue Service (IRS) [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating loss carryforwards annual limitation | $ 60,469 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) | 12 Months Ended | |
Oct. 31, 2022 | Oct. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Retirement benefits, description | The Company has a 401(k) Retirement Plan, which covers all the full time employees who have completed one year of service and have reached their 21st birthday. The Company matches 100% of the aggregate salary reduction contribution up to the first 3% of compensation and 50% of aggregate contribution of the next 2% of compensation | |
Aggregate contribution of retirement plan | $ 75,004 | $ 72,558 |
SCHEDULE OF OPERATING LEASES (D
SCHEDULE OF OPERATING LEASES (Details) - USD ($) | Oct. 31, 2022 | Oct. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 |
Leases | ||||
Right-of-use operating lease assets | $ 2,871,773 | $ 3,545,786 | $ 2,025,316 | $ 242,888 |
Current lease liability | 220,734 | 340,400 | ||
Non-current lease liability | 3,136,006 | 3,299,784 | ||
Total lease liability | $ 3,356,740 | $ 3,640,184 | ||
Operating lease weighted average remaining lease term | 11 years 4 months 24 days | |||
Operating lease weighted average discount rate percent | 4.90% |
SCHEDULE OF MATURITY LEASE LIAB
SCHEDULE OF MATURITY LEASE LIABILITY (Details) - USD ($) | Oct. 31, 2022 | Oct. 31, 2021 |
Leases | ||
2023 | $ 623,696 | |
2024 | 474,670 | |
2025 | 354,528 | |
2026 | 360,108 | |
2027 | 367,788 | |
Thereafter | 2,333,300 | |
Total lease payments | 4,514,090 | |
Less: imputed interest | (1,157,350) | |
Present value of operating lease liabilities | $ 3,356,740 | $ 3,640,184 |
LEASES (Details Narrative)
LEASES (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Jun. 30, 2021 | Oct. 31, 2022 | Oct. 31, 2021 | Sep. 30, 2021 | |
Leases | ||||
Amortization of right-of-use asset | $ 674,013 | $ 350,871 | ||
Cash payments for lease | 426,271 | 442,118 | ||
Payments to acquired assets | $ 900,321 | |||
Right-of-use asset and lease liability | $ 242,888 | $ 2,871,773 | $ 3,545,786 | $ 2,025,316 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | 12 Months Ended | |
Oct. 31, 2022 | Oct. 31, 2021 | |
Contract labor expense | $ 285,696 | $ 349,760 |
Purchases from related party vendor | 3,500,000 | |
Accounts payable to related party vendor | 1,014,000 | |
Deferred compensation liability classified non current | 243,238 | 311,872 |
Deferred compensation expenses | $ 0 | $ 0 |
Generations Coffee Company LLC [Member]. | ||
Related party transaction percentage | 40% |
STOCKHOLDERS_ EQUITY (Details N
STOCKHOLDERS’ EQUITY (Details Narrative) - USD ($) | 12 Months Ended | ||
Oct. 31, 2022 | Oct. 31, 2021 | Apr. 19, 2019 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Number of option are exercisable | 1,000,000 | 666,383 | |
Stock-based compensation | $ 405,821 | $ 759,073 | |
2013 Plan [Member] | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Share based compensation arrangement by share based payment award number of shares authorized | 1,000,000 | ||
Share based compensation arrangement by share based payment award options outstanding weighted average exercise price | $ 5.43 |