Cover
Cover - shares | 3 Months Ended | |
Jan. 31, 2024 | Mar. 17, 2024 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Jan. 31, 2024 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2024 | |
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 $0.001 per share | |
Trading Symbol | JVA | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 5,708,599 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Jan. 31, 2024 | Oct. 31, 2023 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 2,407,863 | $ 2,733,977 |
Accounts receivable, net of allowances of $144,000 for 2024 and 2023 | 8,070,427 | 7,983,032 |
Receivable from sale of investment | 450,000 | 3,150,000 |
Inventories | 17,012,265 | 18,986,539 |
Due from broker | 902,120 | 345,760 |
Prepaid expenses and other current assets | 493,519 | 413,752 |
Prepaid and refundable income taxes | 310,906 | 365,876 |
TOTAL CURRENT ASSETS | 29,647,100 | 33,978,936 |
Building, machinery and equipment, net | 3,347,607 | 3,494,450 |
Customer list and relationships, net of accumulated amortization of $318,008 and $310,383 for 2024 and 2023, respectively | 177,125 | 184,750 |
Trademarks and tradenames | 327,000 | 327,000 |
Equity method investments | 33,652 | 39,676 |
Right of use asset | 2,655,799 | 2,696,159 |
Deferred income tax assets - net | 1,254,056 | 1,341,407 |
Deposits and other assets | 136,162 | 129,523 |
TOTAL ASSETS | 37,578,501 | 42,191,901 |
CURRENT LIABILITIES: | ||
Accounts payable and accrued expenses | 4,446,339 | 5,206,442 |
Line of credit | 4,700,000 | 9,620,000 |
Due to broker | 1,031,605 | 292,407 |
Note payable – current portion | 4,200 | 4,200 |
Lease liability – current portion | 563,474 | 255,625 |
TOTAL CURRENT LIABILITIES | 10,745,618 | 15,378,674 |
Lease liabilities | 2,637,535 | 2,974,579 |
Note payable – long term | 2,071 | 3,034 |
Deferred compensation payable | 127,162 | 120,523 |
TOTAL LIABILITIES | 13,512,386 | 18,476,810 |
Commitments and Contingencies | ||
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 2024 and 2023; 5,708,599 shares outstanding for 2024 and 2023 | 6,634 | 6,634 |
Additional paid-in capital | 19,094,618 | 19,094,618 |
Retained earnings | 9,842,885 | 9,491,861 |
Less: Treasury stock, 925,331 common shares, at cost for 2024 and 2023 | (4,633,560) | (4,633,560) |
Total Coffee Holding Co., Inc. Stockholders’ Equity | 24,310,577 | 23,959,553 |
Noncontrolling interest | (244,462) | (244,462) |
TOTAL EQUITY | 24,066,115 | 23,715,091 |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ 37,578,501 | $ 42,191,901 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) | Jan. 31, 2024 | Oct. 31, 2023 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 144,000 | $ 144,000 |
Customer list and relationships, accumulated amortization | $ 318,008 | $ 310,383 |
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 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | |
Jan. 31, 2024 | Jan. 31, 2023 | |
Income Statement [Abstract] | ||
NET SALES | $ 19,540,402 | $ 18,326,114 |
COST OF SALES | 16,060,103 | 16,005,814 |
GROSS PROFIT | 3,480,299 | 2,320,300 |
OPERATING EXPENSES: | ||
Selling and administrative | 2,690,047 | 2,941,437 |
Officers’ salaries | 173,341 | 179,888 |
TOTAL | 2,863,388 | 3,121,325 |
INCOME (LOSS) FROM OPERATIONS | 616,911 | (801,025) |
OTHER INCOME (EXPENSE): | ||
Interest income | 7 | 3,107 |
Loss from equity method investments | (6,024) | (5,017) |
Other income | 234,041 | |
Interest expense | (117,533) | (130,459) |
TOTAL | (123,550) | 101,672 |
INCOME (LOSS) BEFORE INCOME TAX PROVISION (BENEFIT) AND NON-CONTROLLING INTEREST IN SUBSIDIARY | 493,361 | (699,353) |
Income Tax provision (benefit) | 142,337 | (167,250) |
NET INCOME (LOSS) BEFORE ADJUSTMENT FOR NON-CONTROLLING INTEREST IN SUBSIDIARY | 351,024 | (532,103) |
Less: Net income attributable to the non-controlling interest in subsidiary | ||
NET INCOME (LOSS) ATTRIBUTABLE TO COFFEE HOLDING CO., INC. | $ 351,024 | $ (532,103) |
Basic (loss) income earnings per share | $ 0.06 | $ (0.09) |
Diluted (loss) income earnings per share | $ 0.06 | $ (0.09) |
Weighted average common shares outstanding basic | 5,708,599 | 5,708,599 |
Weighted average common shares outstanding diluted | 5,708,599 | 5,708,599 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($) | Common Stock [Member] | Treasury Stock, Common [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Noncontrolling Interest [Member] | Total |
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 | ||||
Net income (loss) | (532,103) | (532,103) | ||||
Balance at Jan. 31, 2023 | $ 6,634 | $ (4,633,560) | 19,094,618 | 9,795,334 | (244,462) | 24,018,564 |
Balance, shares at Jan. 31, 2023 | 5,708,599 | 925,331 | ||||
Balance at Oct. 31, 2023 | $ 6,634 | $ (4,633,560) | 19,094,618 | 9,491,861 | (244,462) | 23,715,091 |
Balance, shares at Oct. 31, 2023 | 5,708,599 | 925,331 | ||||
Net income (loss) | 351,024 | 351,024 | ||||
Balance at Jan. 31, 2024 | $ 6,634 | $ (4,633,560) | $ 19,094,618 | $ 9,842,885 | $ (244,462) | $ 24,066,115 |
Balance, shares at Jan. 31, 2024 | 5,708,599 | 925,331 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Jan. 31, 2024 | Jan. 31, 2023 | |
OPERATING ACTIVITIES: | ||
Net income (loss) | $ 351,024 | $ (532,103) |
Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 154,468 | 140,188 |
Unrealized loss (gain) on commodities | 182,838 | (772,021) |
Loss on equity method investments | 6,024 | 5,017 |
Amortization of right to use asset | 82,322 | 79,663 |
Deferred income taxes | 87,351 | (167,250) |
Changes in operating assets and liabilities: | ||
Accounts receivable | 2,612,605 | 915,609 |
Inventories | 1,974,274 | 2,555,433 |
Prepaid expenses and other current assets | (79,767) | 111,636 |
Prepaid and refundable income taxes | 54,970 | |
Lease liability | (71,157) | (67,699) |
Deposits and other assets | ||
Accounts payable and accrued expenses | (760,103) | 535,039 |
Net cash provided by operating activities | 4,594,849 | 2,803,512 |
INVESTING ACTIVITIES: | ||
Purchases of machinery and equipment | (202,018) | |
Net cash used in investing activities | (202,018) | |
FINANCING ACTIVITIES: | ||
Advances under bank line of credit | 14,404 | 914,782 |
Cash overdraft | (876,148) | |
Principal payments on note payable | (963) | (1,373) |
Principal payments under bank line of credit | (4,934,404) | (900,000) |
Net cash used in financing activities | (4,920,963) | (862,739) |
NET (DECREASE) INCREASE IN CASH | (326,114) | 1,738,755 |
CASH, BEGINNING OF PERIOD | 2,733,977 | 2,515,873 |
CASH, END OF PERIOD | 2,407,863 | 4,254,628 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW DATA: | ||
Interest paid | 141,945 | 121,019 |
Income taxes paid | ||
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||
Initial recognition of operating lease right of use asset | $ 41,962 | $ 40,797 |
BUSINESS ACTIVITIES
BUSINESS ACTIVITIES | 3 Months Ended |
Jan. 31, 2024 | |
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 also manufactures and sells coffee roasters. 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. On September 29, 2022, 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 Going Concern As of October 31, 2023, the Company’s line of credit of $ 9.6 4.7 COFFEE HOLDING CO., INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS JANUARY 31, 2024 (UNAUDITED) |
BASIS OF PRESENTATION AND SIGNI
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICY | 3 Months Ended |
Jan. 31, 2024 | |
Accounting Policies [Abstract] | |
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICY | NOTE 2 - BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICY The Company’s fiscal year ends on October 31, of each calendar year. The accompanying interim condensed consolidated financial statements are unaudited and have been prepared on substantially the same basis as our annual consolidated financial statements for the fiscal year ended October 31, 2023. In the opinion of the Company’s management, these interim condensed consolidated financial statements reflect all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair statement of our financial position, results of operations and cash flows for the periods presented. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from these estimates. The October 31, 2023 year-end condensed consolidated balance sheet data in this document was derived from audited consolidated financial statements. These condensed consolidated financial statements and notes included in this quarterly report on Form 10-Q does not include all disclosures required by U.S. generally accepted accounting principles (“U.S. GAAP”) and should be read in conjunction with the Company’s audited consolidated financial statements as of and for the year ended October 31, 2023 and notes thereto included in the Company’s fiscal 2023 Annual Report on Form 10-K, filed with the Securities and Exchange Commission (“SEC”) on February 9, 2024 (the “2023 10-K”). The results of operations and cash flows for the interim periods included in these condensed consolidated financial statements are not necessarily indicative of the results to be expected for any future period or the entire fiscal year. The condensed consolidated financial statements include the accounts of the Company, the Company’s subsidiaries, Organic Products Trading Company, LLC (“OPTCO”), Sonofresco, LLC (“SONO”), Comfort Foods, Inc. (“CFI”) 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 Significant Accounting Policies The significant accounting policies used in the preparation of these condensed consolidated financial statements are disclosed in our 2023 10-K, and there have been no changes to the Company’s significant accounting policies during the three months ended January 31, 2024. 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. COFFEE HOLDING CO., INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS JANUARY 31, 2024 (UNAUDITED) NOTE 2 - BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICY (cont’d): Recent Accounting Pronouncements The Company follows the FASB Accounting Standard Update (ASU) 2016-13 Financial Instruments – Credit Losses (Topic 326). This guidance requires entities to use a current expected credit loss impairment model rather than incurred losses. The Company considers factors such as credit quality, age of balances, historical experience and current and future economic conditions that may affect the Company’s expectation of collectability in determining allowance for credit losses. The standard became effective for the Company on November 1, 2023. The adoption of this new guidance did not have a material impact on the Company’s consolidated financial statements and related disclosures. Recent Accounting Pronouncements – Not Yet Adopted In October 2023, the FASB issued Accounting Standards Update (“ASU”) 2023-06, “Disclosure Improvements – Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative.” This standard affects a wide variety of Topics in the Codification. The effective date for each amendment will be the date on which the SEC’s removal of that related disclosure from Regulation S-X or Regulation S-K becomes effective. Early adoption is prohibited. The Company does not expect the adoption of this standard to have a material impact on the Company’s consolidated financial statements and related disclosures. In November 2023, the FASB issued ASU 2023-07, “Segment Reporting – Improving Reportable Segment Disclosures (Topic 280).” The standard is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant expenses. The standard requires disclosure to include significant segment expenses that are regularly provided to the CODM, a description of other segment items by reportable segment, and any additional measures of a segment’s profit or loss used by the CODM when deciding how to allocate resources. The standard also requires all annual disclosures currently required by ASC Topic 280 to be included in interim periods. This standard is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted and requires retrospective application to all prior periods presented in the financial statements. The Company is currently evaluating the impact of this standard on its consolidated financial statements and related disclosures. In December 2023, the FASB issued ASU 2023-09, “Improvements to Income Tax Disclosures,” a final standard on improvements to income tax disclosures, The standard requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid. The standard is effective for fiscal years beginning after December 15, 2024, with early adoption permitted and should be applied prospectively. The Company is currently evaluating the impact of this standard on its consolidated financial statements and related disclosures. COFFEE HOLDING CO., INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS JANUARY 31, 2024 (UNAUDITED) NOTE 2 - BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICY (cont’d): The following table presents revenues by product line in the three months ended January 31, 2024 and 2023 SCHEDULE OF REVENUE January 31, 2024 January 31, 2023 Green $ 7,479,202 $ 7,658,947 Packaged 12,061,200 10,667,167 Totals $ 19,540,402 $ 18,326,114 Revenues $ 19,540,402 $ 18,326,114 |
INVENTORIES
INVENTORIES | 3 Months Ended |
Jan. 31, 2024 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | NOTE 3 - INVENTORIES Inventories at January 31, 2024 and October 31, 2023 consisted of the following: SCHEDULE OF INVENTORIES January 31,2024 October 31,2023 Packed coffee $ 3,261,524 $ 3,582,935 Green coffee 11,459,519 13,151,993 Roasters and parts 528,945 537,108 Packaging supplies 1,762,277 1,714,503 Totals $ 17,012,265 $ 18,986,539 Inventories $ 17,012,265 $ 18,986,539 |
COMMODITIES HELD BY BROKER
COMMODITIES HELD BY BROKER | 3 Months Ended |
Jan. 31, 2024 | |
Broker-Dealer [Abstract] | |
COMMODITIES HELD BY BROKER | NOTE 4 - 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 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. 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. COFFEE HOLDING CO., INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS JANUARY 31, 2024 (UNAUDITED) NOTE 4 - COMMODITIES HELD BY BROKER (cont’d): 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. The Company recorded realized and unrealized gains and losses respectively, on these contracts as follows: SCHEDULE OF REALIZED AND UNREALIZED GAINS AND LOSSES ON CONTRACTS 2024 2023 Three Months Ended January 31, 2024 2023 Gross realized gains $ 567,694 $ 128,925 Gross realized losses (34,823 ) (666,050 ) Unrealized gain (loss) (182,836 ) 772,021 Total $ 350,035 $ 234,896 Gain (Loss) on Investments $ 350,035 $ 234,896 |
LINE OF CREDIT
LINE OF CREDIT | 3 Months Ended |
Jan. 31, 2024 | |
Debt Disclosure [Abstract] | |
LINE OF CREDIT | NOTE 5 - 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 (later acquired by Webster Bank N.A.) (“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 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 fixed charge coverage ratio, debt to tangible net worth and tangible net worth. The Company, as of January 31, 2024, the Company was in compliance will all covenants. The Company as of October 31, 2023 has failed to comply with one of these covenants and resulted in an event of default under the loan agreement. The lender has various defenses that it can apply against the Company, which includes up to and calling the line of credit. There is no guarantee that the lender will not issue a waiver or not call the line of credit. The outstanding balance on the Company’s lines of credit were $ 4,700,000 9,620,000 COFFEE HOLDING CO., INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS JANUARY 31, 2024 (UNAUDITED) |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Jan. 31, 2024 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 6 - 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. As of January 31, 2024 and October 31, 2023 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, 2024 and October 31, 2023, 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, Connecticut, Florida, Idaho, Illinois, Kansas, Louisiana, Michigan, Massachusetts, Montana, New Jersey, New York, New York City, Oregon, Pennsylvania, Rhode Island, South Carolina, Tennessee, Texas and Virginia 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 2020. The Company’s California, Colorado, New Jersey and Texas income tax returns are no longer subject to examination by their respective taxing authorities for the years before fiscal 2020. 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 2020. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 3 Months Ended |
Jan. 31, 2024 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | NOTE 7 - 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 5,708,599 1,000,000 COFFEE HOLDING CO., INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS JANUARY 31, 2024 (UNAUDITED) |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Jan. 31, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 8 – COMMITMENTS AND CONTINGENCIES Legal Proceedings The Company and its subsidiaries are not involved in any pending proceedings other than ordinary routine litigation incidental to their business. Management believes none of these proceedings, if determined adversely, would have a material effect on the business or financial condition of the Company or its subsidiaries. |
LEASES
LEASES | 3 Months Ended |
Jan. 31, 2024 | |
Leases | |
LEASES | NOTE 9 - LEASES The following summarizes the Company’s operating leases: SCHEDULE OF OPERATING LEASES 2024 2023 Right-of-use operating lease assets $ 2,655,799 $ 2,832,907 Current lease liability 563,474 186,879 Non-current lease liability 2,637,535 3,142,959 Total lease liability $ 3,201,009 $ 3,329,838 The amortization of the right-of-use asset for the three months ended January 31, 2024 and 2023 was $ 82,322 79,663 Weighted average remaining lease term 10.0 Weighted average discount rate 4.9 % Maturities of lease liabilities by year for our operating leases are as follows: SCHEDULE OF MATURITY LEASE LIABILITY 2024 $ 697,345 2025 400,868 2026 376,683 2027 367,788 2028 305,648 Thereafter 2,027,652 Total lease payments $ 4,175,984 Less: imputed interest (974,975 ) Present value of operating lease liabilities $ 3,201,009 In December 2023, the Company extended its lease at its subsidiary Sonofresco in Washington through December 2023. As a result, on the date of the modification the Company increased its right-of-use asset and lease liability by $ 41,962 COFFEE HOLDING CO., INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS JANUARY 31, 2024 (UNAUDITED) |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended |
Jan. 31, 2024 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 10 – RELATED PARTY TRANSACTIONS The Company has engaged its 40 0 56,851 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 January 31, 2024 and October 31, 2023 was $ 127,162 120,523 0 |
STOCKHOLDERS_ EQUITY
STOCKHOLDERS’ EQUITY | 3 Months Ended |
Jan. 31, 2024 | |
Equity [Abstract] | |
STOCKHOLDERS’ EQUITY | NOTE 11 - STOCKHOLDERS’ EQUITY a. Treasury Stock b. Stock Options 1,000,000 5.43 942,000 No |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Jan. 31, 2024 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 12 – 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. |
BASIS OF PRESENTATION AND SIG_2
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICY (Policies) | 3 Months Ended |
Jan. 31, 2024 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Significant Accounting Policies The significant accounting policies used in the preparation of these condensed consolidated financial statements are disclosed in our 2023 10-K, and there have been no changes to the Company’s significant accounting policies during the three months ended January 31, 2024. |
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. COFFEE HOLDING CO., INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS JANUARY 31, 2024 (UNAUDITED) NOTE 2 - BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICY (cont’d): |
Recent Accounting Pronouncements | Recent Accounting Pronouncements The Company follows the FASB Accounting Standard Update (ASU) 2016-13 Financial Instruments – Credit Losses (Topic 326). This guidance requires entities to use a current expected credit loss impairment model rather than incurred losses. The Company considers factors such as credit quality, age of balances, historical experience and current and future economic conditions that may affect the Company’s expectation of collectability in determining allowance for credit losses. The standard became effective for the Company on November 1, 2023. The adoption of this new guidance did not have a material impact on the Company’s consolidated financial statements and related disclosures. Recent Accounting Pronouncements – Not Yet Adopted In October 2023, the FASB issued Accounting Standards Update (“ASU”) 2023-06, “Disclosure Improvements – Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative.” This standard affects a wide variety of Topics in the Codification. The effective date for each amendment will be the date on which the SEC’s removal of that related disclosure from Regulation S-X or Regulation S-K becomes effective. Early adoption is prohibited. The Company does not expect the adoption of this standard to have a material impact on the Company’s consolidated financial statements and related disclosures. In November 2023, the FASB issued ASU 2023-07, “Segment Reporting – Improving Reportable Segment Disclosures (Topic 280).” The standard is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant expenses. The standard requires disclosure to include significant segment expenses that are regularly provided to the CODM, a description of other segment items by reportable segment, and any additional measures of a segment’s profit or loss used by the CODM when deciding how to allocate resources. The standard also requires all annual disclosures currently required by ASC Topic 280 to be included in interim periods. This standard is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted and requires retrospective application to all prior periods presented in the financial statements. The Company is currently evaluating the impact of this standard on its consolidated financial statements and related disclosures. In December 2023, the FASB issued ASU 2023-09, “Improvements to Income Tax Disclosures,” a final standard on improvements to income tax disclosures, The standard requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid. The standard is effective for fiscal years beginning after December 15, 2024, with early adoption permitted and should be applied prospectively. The Company is currently evaluating the impact of this standard on its consolidated financial statements and related disclosures. COFFEE HOLDING CO., INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS JANUARY 31, 2024 (UNAUDITED) NOTE 2 - BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICY (cont’d): The following table presents revenues by product line in the three months ended January 31, 2024 and 2023 SCHEDULE OF REVENUE January 31, 2024 January 31, 2023 Green $ 7,479,202 $ 7,658,947 Packaged 12,061,200 10,667,167 Totals $ 19,540,402 $ 18,326,114 Revenues $ 19,540,402 $ 18,326,114 |
BASIS OF PRESENTATION AND SIG_3
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICY (Tables) | 3 Months Ended |
Jan. 31, 2024 | |
Accounting Policies [Abstract] | |
SCHEDULE OF REVENUE | The following table presents revenues by product line in the three months ended January 31, 2024 and 2023 SCHEDULE OF REVENUE January 31, 2024 January 31, 2023 Green $ 7,479,202 $ 7,658,947 Packaged 12,061,200 10,667,167 Totals $ 19,540,402 $ 18,326,114 Revenues $ 19,540,402 $ 18,326,114 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 3 Months Ended |
Jan. 31, 2024 | |
Inventory Disclosure [Abstract] | |
SCHEDULE OF INVENTORIES | Inventories at January 31, 2024 and October 31, 2023 consisted of the following: SCHEDULE OF INVENTORIES January 31,2024 October 31,2023 Packed coffee $ 3,261,524 $ 3,582,935 Green coffee 11,459,519 13,151,993 Roasters and parts 528,945 537,108 Packaging supplies 1,762,277 1,714,503 Totals $ 17,012,265 $ 18,986,539 Inventories $ 17,012,265 $ 18,986,539 |
COMMODITIES HELD BY BROKER (Tab
COMMODITIES HELD BY BROKER (Tables) | 3 Months Ended |
Jan. 31, 2024 | |
Broker-Dealer [Abstract] | |
SCHEDULE OF REALIZED AND UNREALIZED GAINS AND LOSSES ON CONTRACTS | The Company recorded realized and unrealized gains and losses respectively, on these contracts as follows: SCHEDULE OF REALIZED AND UNREALIZED GAINS AND LOSSES ON CONTRACTS 2024 2023 Three Months Ended January 31, 2024 2023 Gross realized gains $ 567,694 $ 128,925 Gross realized losses (34,823 ) (666,050 ) Unrealized gain (loss) (182,836 ) 772,021 Total $ 350,035 $ 234,896 Gain (Loss) on Investments $ 350,035 $ 234,896 |
LEASES (Tables)
LEASES (Tables) | 3 Months Ended |
Jan. 31, 2024 | |
Leases | |
SCHEDULE OF OPERATING LEASES | The following summarizes the Company’s operating leases: SCHEDULE OF OPERATING LEASES 2024 2023 Right-of-use operating lease assets $ 2,655,799 $ 2,832,907 Current lease liability 563,474 186,879 Non-current lease liability 2,637,535 3,142,959 Total lease liability $ 3,201,009 $ 3,329,838 Weighted average remaining lease term 10.0 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 2024 $ 697,345 2025 400,868 2026 376,683 2027 367,788 2028 305,648 Thereafter 2,027,652 Total lease payments $ 4,175,984 Less: imputed interest (974,975 ) Present value of operating lease liabilities $ 3,201,009 |
BUSINESS ACTIVITIES (Details Na
BUSINESS ACTIVITIES (Details Narrative) - USD ($) | Mar. 06, 2024 | Jan. 31, 2024 | Oct. 31, 2023 | Sep. 29, 2022 |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Common stock, par value | $ 0.001 | $ 0.001 | ||
Line of credit | $ 4,700,000 | $ 9,620,000 | ||
Subsequent Event [Member] | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Line of credit | $ 4,700,000 | |||
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 REVENUE (Details)
SCHEDULE OF REVENUE (Details) - USD ($) | 3 Months Ended | |
Jan. 31, 2024 | Jan. 31, 2023 | |
Revenues | $ 19,540,402 | $ 18,326,114 |
Green Coffee [Member] | ||
Revenues | 7,479,202 | 7,658,947 |
Packaged Coffee [Member] | ||
Revenues | $ 12,061,200 | $ 10,667,167 |
BASIS OF PRESENTATION AND SIG_4
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICY (Details Narrative) | Jan. 31, 2024 |
Generations Coffee Company LLC [Member] | |
Equity method investment, ownership percentage | 60% |
SCHEDULE OF INVENTORIES (Detail
SCHEDULE OF INVENTORIES (Details) - USD ($) | Jan. 31, 2024 | Oct. 31, 2023 |
Inventories | $ 17,012,265 | $ 18,986,539 |
Packed Coffee [Member] | ||
Inventories | 3,261,524 | 3,582,935 |
Green Coffee [Member] | ||
Inventories | 11,459,519 | 13,151,993 |
Roaster and Parts [Member] | ||
Inventories | 528,945 | 537,108 |
Packaging Supplies [Member] | ||
Inventories | $ 1,762,277 | $ 1,714,503 |
SCHEDULE OF REALIZED AND UNREAL
SCHEDULE OF REALIZED AND UNREALIZED GAINS AND LOSSES ON CONTRACTS (Details) - USD ($) | 3 Months Ended | |
Jan. 31, 2024 | Jan. 31, 2023 | |
Broker-Dealer [Abstract] | ||
Gross realized gains | $ 567,694 | $ 128,925 |
Gross realized losses | (34,823) | (666,050) |
Unrealized gain (loss) | (182,836) | 772,021 |
Gain (Loss) on Investments | $ 350,035 | $ 234,896 |
LINE OF CREDIT (Details Narrati
LINE OF CREDIT (Details Narrative) - USD ($) | Jun. 28, 2022 | Mar. 17, 2022 | Jan. 31, 2024 | Oct. 31, 2023 |
Debt Instrument [Line Items] | ||||
Line of credit | $ 4,700,000 | $ 9,620,000 | ||
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 Interbanks 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 Interbanks Offered Rate LIBOR [Member] | Maximum [Member] | ||||
Debt Instrument [Line Items] | ||||
Line of credit facility, interest rate during period | 3.50% |
EARNINGS PER SHARE (Details Nar
EARNINGS PER SHARE (Details Narrative) - shares | 3 Months Ended | 6 Months Ended | |
Jan. 31, 2024 | Jan. 31, 2023 | Apr. 30, 2019 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Weighted average common shares outstanding basic | 5,708,599 | 5,708,599 | |
Weighted average common shares outstanding diluted | 5,708,599 | 5,708,599 | |
Share-Based Payment Arrangement, Option [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share, amount | 1,000,000 |
SCHEDULE OF OPERATING LEASES (D
SCHEDULE OF OPERATING LEASES (Details) - USD ($) | Jan. 31, 2024 | Oct. 31, 2023 | Jan. 31, 2023 |
Leases | |||
Right-of-use operating lease assets | $ 2,655,799 | $ 2,696,159 | $ 2,832,907 |
Current lease liability | 563,474 | 255,625 | 186,879 |
Non-current lease liability | 2,637,535 | $ 2,974,579 | 3,142,959 |
Total lease liability | $ 3,201,009 | $ 3,329,838 | |
Operating lease weighted average remaining lease term | 10 years | 10 years | |
Operating lease weighted average discount rate percent | 4.90% | 4.90% |
SCHEDULE OF MATURITY LEASE LIAB
SCHEDULE OF MATURITY LEASE LIABILITY (Details) - USD ($) | Jan. 31, 2024 | Jan. 31, 2023 |
Leases | ||
2024 | $ 697,345 | |
2025 | 400,868 | |
2026 | 376,683 | |
2027 | 367,788 | |
2028 | 305,648 | |
Thereafter | 2,027,652 | |
Total lease payments | 4,175,984 | |
Less: imputed interest | (974,975) | |
Present value of operating lease liabilities | $ 3,201,009 | $ 3,329,838 |
LEASES (Details Narrative)
LEASES (Details Narrative) - USD ($) | 3 Months Ended | ||
Jan. 31, 2024 | Jan. 31, 2023 | Oct. 31, 2023 | |
Amortization of right-of-use asset | $ 82,322 | $ 79,663 | |
Operating right-of-use asset | 2,655,799 | 2,832,907 | $ 2,696,159 |
Operating lease liability | 3,201,009 | $ 3,329,838 | |
Sonofresco LLC [Member] | |||
Operating right-of-use asset | 41,962 | ||
Operating lease liability | $ 41,962 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | 3 Months Ended | ||
Jan. 31, 2024 | Jan. 31, 2023 | Oct. 31, 2023 | |
Contract labor expense | $ 0 | $ 56,851 | |
Deferred compensation payable | 127,162 | $ 120,523 | |
Deferred compensation expenses | $ 0 | $ 0 | |
Generation Coffee Company LLC [Member] | |||
Related party transaction percentage | 40% |
STOCKHOLDERS_ EQUITY (Details N
STOCKHOLDERS’ EQUITY (Details Narrative) - 2013 Equity Compensation Plan [Member] - $ / shares | 3 Months Ended | 12 Months Ended | |
Apr. 19, 2019 | Jan. 31, 2024 | Oct. 31, 2023 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Number of options granted | 1,000,000 | 0 | 0 |
Exercise price | $ 5.43 | ||
Stock options outstanding, number | 942,000 | ||
Number of options forfeited or expired | 0 | 0 |