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Item 9A. Controls and Procedures

2023-03-17 compared with 2023-03-17 · 837 added, 794 removed, 326 unchanged (83% of the section changed)

AND PROCEDURES (restated)

Evaluation of Disclosure

Controls and Procedures.

Management, which includes our President, Chief Executive Officer and Chief Financial Officer, has evaluated

the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act

of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report.

Based upon that evaluation,

our President, Chief Executive Officer and Chief Financial Officer concluded that the disclosure controls and procedures were not effective.

We specifically identified a combination of control deficiencies relating to the accuracy and completeness of our accounting for stock-based

compensation awards, inventories at one of our subsidiaries, and intercompany eliminations, which constitute material weaknesses in internal

control over financial reporting.

Notwithstanding such material weaknesses, we believe the financial information presented herein is materially

correct and fairly presents the financial position and operating results of the fiscal year ended October 31, 2020 in accordance with

Report on Internal Control Over Financial Reporting .

Management is responsible for establishing and maintaining

adequate internal control over financial reporting.

Our internal control system is a process designed to provide reasonable assurance

to our management and Board of Directors regarding the preparation and fair presentation of published financial statements.

internal control over financial reporting includes policies and procedures that pertain to the maintenance of records that, in

reasonable detail, accurately and fairly reflect transactions and dispositions of assets, provide reasonable assurances that transactions

are recorded as necessary to permit preparation of financial statements in accordance with U.S.

GAAP, and that receipts and expenditures

are being made only in accordance with authorizations of our management and the directors, and provide reasonable assurance regarding

prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect

on our financial statements.

of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Also, projections

of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes

in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

management assessed the effectiveness of its internal control over financial reporting as of October 31, 2020.

In making this

assessment, management used the criteria set forth by the 2013 Committee of Sponsoring Organizations of the Treadway Commission

in Internal Control-Integrated Framework.

upon the assessment, our management concluded that our internal control over financial reporting was not effective as of October 31,

During the years ended October 31, 2020 and 2019, our controls were inadequate to prevent and detect misstatements of stock based

compensation awards and quantities of inventory at one of our subsidiaries.

Additionally, on January 24,

2023, we concluded, after discussion with management, that our financial statements inaccurately accounted for certain intercompany

eliminations in our consolidated statements of operations for the fiscal year ended October 31, 2020 and 2019.

As a result, we

determined that there was an overstatement of net sales and cost of sales in the consolidated statement of operations of

approximately $8.3 million and $9.9 million in our financial statements during the fiscal years ended October 31, 2020 and 2019,

respectively which required a restatement of the previously issued financial statements for the fiscal years ended October 31, 2020

This was due to inadequate design and implementation of controls to evaluate and monitor the presentation and compliance with

accounting principles generally accepted in the United States of America related to the statement of operations.

management has determined that this control deficiency constituted a material weakness and, as a result, as part of the restatement,

management concluded that, as of October 31, 2020, our internal control over financial reporting was not effective.

A material weakness is a control

deficiency or combination of deficiencies in internal control, such that there is a reasonable possibility that a material misstatement

of the entity’s financial statements will not be prevented or detected and corrected on a timely basis.

Plan for the Material Weaknesses

remediate the material weaknesses identified above, we are initiating controls and procedures in order to:

the importance of a strong control environment, to emphasize the technical requirements for controls that are designed, implemented

and operating effectively and to set the appropriate expectations on internal controls through establishing the related policies

and procedures;

Evaluation of Disclosure Controls and Procedures.

Management, which includes our President, Chief Executive Officer and Chief Financial Officer, has evaluated the

effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of

1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report.

Based upon that evaluation, our

President, Chief Executive Officer and Chief Financial Officer concluded that the disclosure controls and procedures were not effective

for the reasons stated below.

We believe the financial information presented herein is materially correct and fairly presents the financial

position and operating results of the fiscal year ended October 31, 2021 in accordance with U.S.

Management Report on Internal Control Over Financial

Our management is responsible for establishing and maintaining adequate internal control over

our financial reporting.

Internal control over financial reporting is defined in Rules 13a-15(f) and 15d-15(f) promulgated under the Securities

and Exchange Act of 1934 as a process designed by, or under the supervision of, our executive management and effected by our board of

directors, to provide reasonable assurance regarding the reliability of financial reporting and the preparations of financial statements

for external purposes in accordance with U.S.

Based on this assessment, our management has determined that our internal control

over financial reporting was not effective as of October 31, 2021 and the periods covered under this Annual Report on Form 10-K due to

the material weaknesses described below.

A material weakness is a control deficiency or combination of deficiencies in internal control,

such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented

or detected and corrected on a timely basis.

the year ended October 31, 2020, our controls were inadequate to prevent and detect misstatements of stock based compensation awards

and quantities of inventory at one of our subsidiaries.

Management has determined that this is a control deficiency that constitutes

a material weakness.

the year ended October 31, 2021, we identified inappropriate system access controls over the financial reporting system.

These controls

were not designed to prevent or detect unauthorized changes to source information, or implement an appropriate level of segregation of

duties which ultimately led us to conclude that this was a material weakness.

during the year ended October 31, 2021, we determined that we lacked adequate controls with respect to identifying and accounting for

material contracts.

This was evidenced by our failure to properly identify and account for a material lease amendment.

Accordingly, management

has determined that this is a control deficiency that constitutes a material weakness.

during the year ended October 31, 2021, we determined that we lacked adequate controls with respect to physical custody of certain hardware,

electronic and hard copy records of Generations Coffee and its component operation known as Steep and Brew following the Company relocation

or vacating of certain premises used in the operations of that business unit.

Accordingly, management has determined that this is a control

deficiency that constitutes a material weakness.

Additionally, on January 24, 2023, we concluded, after discussion with management, that our financial statements

inaccurately accounted for certain intercompany eliminations in our consolidated statements of operations for the fiscal year ended October

As a result, we determined that there was an overstatement

of net sales and cost of sales in the consolidated statement of operations of approximately $8.3 million in our financial statements during

the fiscal year ended October 31, 2020 which required a restatement of the previously issued financial statements for the fiscal year

ended October 31, 2020.

This was due to inadequate design and implementation of controls to evaluate and monitor the presentation and

compliance with accounting principles generally accepted in the United States of America related to the statement of operations.

management has determined that this control deficiency constituted a material weakness and, as a result, as part of the restatement, management

concluded that, as of October 31, 2020, our internal control over financial reporting was not effective.

Notwithstanding

these material weaknesses, management has concluded that our audited financial statements included in the fiscal year 2021 form 10-K/A

are fairly stated in all material respects in accordance with GAAP for each of the periods.

Plan for the Material Weakness (as restated).

remediate the material weakness identified above, we are initiating controls and procedures in order to:

control owners concerning the principles and requirements of each control, with a focus on

those related to user access to our financial reporting systems impacting financial reporting;

and maintaining documentation to promote knowledge transfer upon personnel and function changes;

enhanced controls and reviews related to our financial reporting systems;

an in-depth analysis of who should have access to perform key functions within our financial

reporting system that impact financial reporting and redesigning aspects of the system to

better allow the access rights to be implemented;

● cross referencing analysis to be completed on a quarterly basis;

● Implementing additional levels of internal review of financial statements and any adjustments made thereto.

material weaknesses identified above will not be considered remediated until our remediation efforts have been fully implemented and

we have concluded that these controls are operating effectively.

the processes for documenting and alerting key personnel, including our board members, officers, auditors and outside accountants,

of non-reoccurring events related to stock-based compensation awards to ensure such events are timely and adequately recorded

and communicated to the appropriate parties;

have replaced and hired new employees in the accounting department at the subsidiary where the inventory analysis

issue occurred and have made upgrades to the computer systems at the subsidiary.

Further, we hired a new director

of finance at the subsidiary that is responsible for overseeing inventory counts and we are enhancing controls in the

inventory business process over (i) inventory count procedures by requiring more frequent physical audits of our inventory,

and (ii) review of inventory adjustments and approvals.

material weaknesses identified above will not be considered remediated until our remediation efforts have been fully implemented

and we have concluded that these controls are operating effectively.

does not expect that our internal control over financial reporting will prevent or detect all errors and all fraud.

A control system,

no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control systems

Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls

must be considered relative to their costs.

Because of the inherent limitations in a cost-effective control system, no evaluation of

internal control over financial reporting can provide absolute assurance that misstatements due to error or fraud will not occur or that

all control issues and instances of fraud, if any, have been or will be detected.

system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of

the control systems are met.

Further, the design of a control system must reflect the fact that there are resource constraints,

and the benefits of controls must be considered relative to their costs.

Because of the inherent limitations in a cost-effective

control system, no evaluation of internal control over financial reporting can provide absolute assurance that misstatements due

to error or fraud will not occur or that all control issues and instances of fraud, if any, have been or will be detected.

in Control Over Financial Reporting.

Other than the material weaknesses as described above, based on the evaluation of our management we believe that there

were no changes in our internal control over financial reporting that occurred during the quarter ended October 31, 2021 that have materially

affected, or are reasonably likely to materially affect, our internal control over financial reporting.

In light of the restatement of our financial statements included in this Amended Form 10-K/A, we plan to enhance

our existing monitoring and review controls over the preparation of financial statements.

During the fiscal year ending October 31, 2020, we continued to implement procedures

to review and document all corporate actions related to stock-based compensation awards.

There have been no additional changes

in our internal control over financial reporting identified in connection with the evaluation that occurred during our last fiscal

quarter that has materially affected, or that is reasonably likely to materially affect, our internal control over financial reporting.

Report of the Registered Public Accounting Firm.

This annual report does not include an attestation report of our registered

public accounting firm regarding internal control over financial reporting.

Management’s report was not subject to attestation

by our registered public accounting firm pursuant to the Dodd-Frank Wall Street Protection Act that permits us to provide only management’s

report in this annual report.

REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

annual report does not include an attestation report of our registered public accounting firm regarding internal control over

financial reporting.

Management’s report was not subject to attestation by our registered public accounting firm pursuant

to the Dodd-Frank Wall Street Protection Act that permits us to provide only management’s report in this annual report.

EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

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of Documents filed as part of this Report

financial statements and related notes, together with the report of Marcum LLP appear at pages F-1 through F-24 following the Exhibit

List as required by Part II, Item 8 “Financial Statements and Supplementary Data” of this Form 10-K/A.

financial statements and related notes, together with the report of Marcum LLP appear at pages F-1 through F-24 following the

Exhibit List as required by Part II, Item 8 “Financial Statements and Supplementary Data” of this Form 10-K.

Statement Schedules

Company has filed with this report or incorporated by reference herein certain exhibits as specified below pursuant to Rule 12b-32 under

the Exchange Act.

Agreement and Plan of Merger, dated October 31, 1997, by and among Transpacific International Group Corp.

Exhibits (restated)

Company has filed with this report or incorporated by reference herein certain exhibits as specified below pursuant to Rule 12b-32

under the Exchange Act.

and Plan of Merger, dated October 31, 1997, by and among Transpacific International Group Corp.

and Coffee Holding Co., Inc.

(incorporated herein by reference to Exhibit 2 to Post-Effective Amendment No.

1 to the Company’s Registration Statement on Form SB-2 filed on November 10, 1997 (File No.

1 to the Company’s Registration Statement

on Form SB-2 filed on November 10, 1997 (File No.

333-00588-NY)).

Asset Purchase Agreement, dated February 4, 2004, by and between Coffee Holding Co., Inc.

and Premier Roasters LLC (incorporated herein by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed on February 20, 2004 (File No.

Purchase Agreement, dated February 4, 2004, by and between Coffee Holding Co., Inc.

and Premier Roasters LLC (incorporated

herein by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed on February 20, 2004 (File No.

333-00588-NY)).

Amended and Restated Articles of Incorporation of the Company (incorporated herein by reference to Exhibit 3.1 to the Company’s Registration Statement on Form 8-A the “2005 Registration Statement” filed on May 2, 2005 (File No.

Amended and Restated Bylaws of the Company (incorporated herein by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed February 25, 2019).

Form of Stock Certificate of the Company (incorporated herein by reference to the Company’s Registration Statement on Form SB-2 filed on June 24, 2004 (Registration No.

and Restated Articles of Incorporation of the Company (incorporated herein by reference to Exhibit 3.1 to the Company’s

Registration Statement on Form 8-A the “2005 Registration Statement” filed on May 2, 2005 (File No.

and Restated Bylaws of the Company (incorporated herein by reference to Exhibit 3.1 to the Company’s Current Report

on Form 8-K filed February 25, 2019).

of Stock Certificate of the Company (incorporated herein by reference to the Company’s Registration Statement on Form

SB-2 filed on June 24, 2004 (Registration No.

333-116838)).

Description of Capital Stock.***

Loan and Security Agreement, dated February 17, 2009, by and between Sterling National Bank and Coffee Holding Co., Inc.

(incorporated herein by reference to Exhibit 10.21 to the Company’s Current Report on Form 8-K filed on February 23, 2009 (File No.

Lease, dated February 4, 2004, by and between Coffee Holding Co., Inc.

and the City of La Junta, Colorado (incorporated herein by reference to Exhibit 10.12 to Amendment No.

1 to the Company’s Registration Statement on Form SB-2/A filed on August 12, 2004 (Registration No.

and Security Agreement, dated February 17, 2009, by and between Sterling National Bank and Coffee Holding Co., Inc.

(incorporated

herein by reference to Exhibit 10.21 to the Company’s Current Report on Form 8-K filed on February 23, 2009 (File No.

dated February 4, 2004, by and between Coffee Holding Co., Inc.

and the City of La Junta, Colorado (incorporated herein by

reference to Exhibit 10.12 to Amendment No.

1 to the Company’s Registration Statement on Form SB-2/A filed on August

12, 2004 (Registration No.

333-116838)).

Trademark License Agreement, dated February 4, 2004, between Del Monte Corporation and Coffee Holding Co., Inc.

(incorporated herein by reference to Exhibit 10.13 to the Company’s Quarterly Report on Form 10-QSB/A for the quarter ended April 30, 2004 filed on August 26, 2004 (File No.

333-00588-NY)) as amended by that First Amendment to Trademark License Agreement, dated January 4, 2013.

First Amendment to Trademark License Agreement, dated January 4, 2013, by and between Del Monte Corporation and Coffee Holding Co., Inc.

Certain portions of Exhibit 10.4 are omitted based upon approval of the Company’s request for confidential treatment through January 28, 2023.

The omitted portions were filed separately with the SEC on a confidential basis (incorporated herein by reference to Exhibit 10.4 to the Company’s Annual Report on Form 10-K for the year ended October 31, 2012 filed on January 28, 2013 (File No.

Amended and Restated Employment Agreement, dated April 11, 2008, by and between Coffee Holding Co., Inc.

and Andrew Gordon (incorporated herein by reference to Exhibit 10.14 of the Company’s Current Report on Form 8-K filed on April 16, 2008 (File No.

Amended and Restated Employment Agreement, dated April 11, 2008, by and between Coffee Holding Co., Inc.

and David Gordon (incorporated herein by reference to Exhibit 10.15 of the Company’s Current Report on Form 8-K filed on April 16, 2008 (File No.

Coffee Holding Co., Inc.

Non-Qualified Deferred Compensation Plan (incorporated herein by reference to Exhibit 10.19 of the Company’s Quarterly Report on Form 10-QSB filed on June 14, 2005 (File No.

Contract of Sale, dated April 14, 2009, by and between Coffee Holding Co., Inc.

and 4401 1st Ave LLC (incorporated herein by reference to Exhibit 10.7 to the Company’s Annual Report on Form 10-K filed on January 28, 2010 (File No.

First Amendment to Loan and Security Agreement between Coffee Holding Co., Inc.

and Sterling National Bank, dated July 23, 2010 (incorporated herein by reference to Exhibit 103 to the Company’s Annual Report on Form 10-K filed on January 31, 2011 (File No.

Placement Agency Agreement, dated as of September 27, 2011, by and among the Company, the selling stockholders named therein, Roth Capital Partners, LLC and Maxim Group, LLC (incorporated herein by reference to Exhibit 10.1 to the Company’s Report on Form 8-K filed on September 27, 2011 (File No.

Subscription Agreement, dated as of September 27, 2011, by and between the Company, the selling stockholders named therein and each of the purchasers identified on the signature pages thereto (incorporated herein by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on September 27, 2011 (File No.

2013 Equity Compensation Plan (incorporated by reference to Annex A of the Company’s Definitive Proxy Statement filed on February 28, 2013 (File No.

Loan Modification Agreement, dated as of May 10, 2013, by and between Sterling National Bank and Coffee Holding Co., Inc.

(incorporated herein by reference to Exhibit 10.11 to the Company’s Annual Report on Form 10-K filed on January 24, 2014 (File No.

Loan Modification Agreement, dated March 10, 2015, by and between Sterling National Bank and Coffee Holding Co., Inc.

(incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on March 31, 2015).

Loan Agreement, dated March 10, 2015, by and between Sterling National Bank and Organic Products Trading Company LLC (incorporated herein by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on March 31, 2015).

Security Agreement, dated March 10, 2015, by and between Sterling National Bank and Coffee Holding Co., Inc.

(incorporated herein by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on March 31, 2015).

Guarantee, dated March 10, 2015, by Coffee Holding Co., Inc.

(incorporated herein by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed on March 31, 2015).

Amended and Restated Loan and Security Agreement, dated April 25, 2017, by and among Coffee Holding Co., Inc., Organic Products Trading Company LLC and Sterling National Bank (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on April 28, 2017).

Guaranty Agreement, dated April 25, 2017, made by each of Sonofresco and Comfort Foods in favor of Sterling National Bank (incorporated herein by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on April 28, 2017).

Lease, dated December 6, 2000, by and between Comfort Foods, Inc.

License Agreement, dated February 4, 2004, between Del Monte Corporation and Coffee Holding Co., Inc.

(incorporated herein

by reference to Exhibit 10.13 to the Company’s Quarterly Report on Form 10-QSB/A for the quarter ended April 30, 2004

filed on August 26, 2004 (File No.

333-00588-NY)) as amended by that First Amendment to Trademark License Agreement, dated

January 4, 2013.

Amendment to Trademark License Agreement, dated January 4, 2013, by and between Del Monte Corporation and Coffee Holding Co.,

Certain portions of Exhibit 10.4 are omitted based upon approval of the Company’s request for confidential treatment

through January 28, 2023.

The omitted portions were filed separately with the SEC on a confidential basis (incorporated herein

by reference to Exhibit 10.4 to the Company’s Annual Report on Form 10-K for the year ended October 31, 2012 filed on

January 28, 2013 (File No.

and Restated Employment Agreement, dated April 11, 2008, by and between Coffee Holding Co., Inc.

and Andrew Gordon (incorporated

herein by reference to Exhibit 10.14 of the Company’s Current Report on Form 8-K filed on April 16, 2008 (File No.

and Restated Employment Agreement, dated April 11, 2008, by and between Coffee Holding Co., Inc.

and David Gordon (incorporated

herein by reference to Exhibit 10.15 of the Company’s Current Report on Form 8-K filed on April 16, 2008 (File No.

Holding Co., Inc.

Non-Qualified Deferred Compensation Plan (incorporated herein by reference to Exhibit 10.19 of the Company’s

Quarterly Report on Form 10-QSB filed on June 14, 2005 (File No.

of Sale, dated April 14, 2009, by and between Coffee Holding Co., Inc.

and 4401 1st Ave LLC (incorporated herein by reference

to Exhibit 10.7 to the Company’s Annual Report on Form 10-K filed on January 28, 2010 (File No.

Amendment to Loan and Security Agreement between Coffee Holding Co., Inc.

and Sterling National Bank, dated July 23, 2010

(incorporated herein by reference to Exhibit 103 to the Company’s Annual Report on Form 10-K filed on January 31, 2011

Agency Agreement, dated as of September 27, 2011, by and among the Company, the selling stockholders named therein, Roth Capital

Partners, LLC and Maxim Group, LLC (incorporated herein by reference to Exhibit 10.1 to the Company’s Report on Form

8-K filed on September 27, 2011 (File No.

Agreement, dated as of September 27, 2011, by and between the Company, the selling stockholders named therein and each of

the purchasers identified on the signature pages thereto (incorporated herein by reference to Exhibit 10.2 to the Company’s

Current Report on Form 8-K filed on September 27, 2011 (File No.

Equity Compensation Plan (incorporated by reference to Annex A of the Company’s Definitive Proxy Statement filed on

February 28, 2013 (File No.

Modification Agreement, dated as of May 10, 2013, by and between Sterling National Bank and Coffee Holding Co., Inc.

(incorporated

herein by reference to Exhibit 10.11 to the Company’s Annual Report on Form 10-K filed on January 24, 2014 (File No.

Modification Agreement, dated March 10, 2015, by and between Sterling National Bank and Coffee Holding Co., Inc.

(incorporated

herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on March 31, 2015).

Agreement, dated March 10, 2015, by and between Sterling National Bank and Organic Products Trading Company LLC (incorporated

herein by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on March 31, 2015).

Agreement, dated March 10, 2015, by and between Sterling National Bank and Coffee Holding Co., Inc.

(incorporated herein by

reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on March 31, 2015).

dated March 10, 2015, by Coffee Holding Co., Inc.

(incorporated herein by reference to Exhibit 10.4 to the Company’s

Current Report on Form 8-K filed on March 31, 2015).

and Restated Loan and Security Agreement, dated April 25, 2017, by and among Coffee Holding Co., Inc., Organic Products Trading

Company LLC and Sterling National Bank (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report

on Form 8-K filed on April 28, 2017).

Agreement, dated April 25, 2017, made by each of Sonofresco and Comfort Foods in favor of Sterling National Bank (incorporated

herein by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on April 28, 2017).

dated December 6, 2000, by and between Comfort Foods, Inc.

and One Clark Street North Andover LLC.

(incorporated herein by reference to Exhibit 10.20 to the Company’s Annual Report on Form 10-K filed January 29, 2018).

Second Amendment to Lease, dated March 23, 2017, by and between Coffee Holding Co., Inc.

and 25 COMM NAM, LLC (incorporated herein by reference to Exhibit 10.21 to the Company’s Annual Report on Form 10-K filed January 29, 2018).

Loan Modification Agreement and Waiver, dated March 23, 2018, by and by and among Coffee Holding Co., Inc., Organic Products Trading Company LLC and Sterling National Bank (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on March 27, 2018).

Form of Incentive Stock Option Agreement to the Company’s 2013 Equity Compensation Plan (incorporated herein by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed June 29, 2019).

Form of Non-Qualified Stock Option Award Agreement to the Company’s 2013 Equity Compensation Plan (incorporated herein by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q filed June 29, 2019).

Loan Modification Agreement and Waiver, dated March 13, 2020, by and among Coffee Holding Co., Inc., Organic Products Trading Company LLC and Sterling National Bank (incorporated herein by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed on March 16, 2020).

Lease, dated September 22, 2021, by and between Coffee Holding Co., Inc.

and Our Two Buddies, LLC, TANJ Properties, LLC and VGM Realty Services, LLC.

(incorporated herein by

reference to Exhibit 10.20 to the Company’s Annual Report on Form 10-K filed January 29, 2018).

Amendment to Lease, dated March 23, 2017, by and between Coffee Holding Co., Inc.

and 25 COMM NAM, LLC (incorporated herein

by reference to Exhibit 10.21 to the Company’s Annual Report on Form 10-K filed January 29, 2018).

Modification Agreement and Waiver, dated March 23, 2018, by and by and among Coffee Holding Co., Inc., Organic Products Trading

Company LLC and Sterling National Bank (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report

on Form 8-K filed on March 27, 2018).

of Incentive Stock Option Agreement to the Company’s 2013 Equity Compensation Plan (incorporated herein by reference

to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed June 29, 2019).

of Non-Qualified Stock Option Award Agreement to the Company’s 2013 Equity Compensation Plan (incorporated herein by

reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q filed June 29, 2019).

Modification Agreement and Waiver, dated March 13, 2020, by and among Coffee Holding Co., Inc., Organic Products Trading Company LLC

and Sterling National Bank (incorporated herein by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed

on March 16, 2020).

List of Significant Subsidiaries.***

Consent of Marcum LLP*

Principal Executive Officer and Principal Financial Officer’s Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*

Principal Executive Officer and Principal Financial Officer’s Certification furnished pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**

Executive Officer and Principal Financial Officer’s Certification pursuant to Section 302 of the Sarbanes-Oxley Act

Executive Officer and Principal Financial Officer’s Certification furnished pursuant to Section 906 of the Sarbanes-Oxley

Act of 2002.**

Instance Document.

5 unchanged sentences

Filed herewith

*** Previously Filed

FORM 10-K SUMMARY

accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant caused this report to be signed on its behalf

by the undersigned, thereunto duly authorized on March 16, 2023 .

accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant caused this report to be signed on

its behalf by the undersigned, thereunto duly authorized on March 16, 2023 .

HOLDING CO., INC.

1 unchanged sentence

Chief Executive Officer

accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities

and on the dates indicated.

President, Chief Executive Officer, Chief Financial Officer,

Treasurer and Director

March 16, 2023

(principal executive officer and principal financial and

accounting officer)

accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in

the capacities and on the dates indicated.

Chief Executive Officer, Chief Financial Officer, Treasurer and Director

executive officer and principal financial and accounting officer)

Vice President – Operations, Secretary and Director

March 16, 2023

Gerard DeCapua

March 16, 2023

Barry Knepper

March 16, 2023

George Thomas

3 unchanged sentences

TO CONSOLIDATED FINANCIAL STATEMENTS

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

CONSOLIDATED BALANCE SHEETS AS OF OCTOBER 31, 2021 AND 2020

CONSOLIDATED STATEMENTS OF OPERATIONS - YEARS ENDED OCTOBER 31, 2021 AND 2020

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY - YEARS ENDED OCTOBER 31, 2021 AND 2020

CONSOLIDATED STATEMENTS OF CASH FLOWS - YEARS ENDED OCTOBER 31, 2021 AND 2020

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

BALANCE SHEETS AS OF OCTOBER 31, 2020 AND 2019

STATEMENTS OF OPERATIONS - YEARS ENDED OCTOBER 31, 2020 AND 2019 (restated)

STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY - YEARS ENDED OCTOBER 31, 2020 AND 2019

STATEMENTS OF CASH FLOWS - YEARS ENDED OCTOBER 31, 2020 AND 2019

TO CONSOLIDATED FINANCIAL STATEMENTS (restated)

OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

the Shareholders and Board of Directors of

3 unchanged sentences

(the “Company”) as of October

and 2020, the related consolidated statements of operations, changes in stockholders’ equity and cash flows for each of the two

years in the period ended October 31, 2021, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of October

31, 2021 and 2020 and the results of its operations and its cash flows for each of the two years in the period ended October 31, 2021,

in conformity with accounting principles generally accepted in the United States of America.

31, 2020 and 2019, the related consolidated statements of operations, changes in stockholders’ equity and cash flows

for each of the two years in the period ended October 31, 2020, and the related notes (collectively referred to as the “financial

statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position

of the Company as of October 31, 2020 and 2019, and the results of its operations and its cash flows for each of the two years

in the period ended October 31, 2020, in conformity with accounting principles generally accepted in the United States of America.

Restatement of Financial Statements

As discussed in Note 3 to the financial statements,

the accompanying consolidated statements of operations for the years ended October 31, 2020 and 2019 and Note 10 have been restated.

in Accounting Principle

discussed in Note 2 to the consolidated financial statements, the Company has changed its method of accounting for leases in 2020

due to the adoption of the guidance in ASC Topic 842, Leases using the modified retrospective approach.

financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s

financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board

(United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S.

securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audits to obtain

reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits,

we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion

on the effectiveness of the Company’s internal control over financial reporting.

Our responsibility is to express an opinion on

the Company’s financial statements based on our audits.

We are a public accounting firm registered with the Public Company

Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company

in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission

and the PCAOB.

conducted our audit s in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the

audit s to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether

due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over

financial reporting.

As part of our audit s we are required to obtain an understanding of internal control over financial

reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial

Accordingly, we express no such opinion.

audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error

or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding

the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant

estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits

provide a reasonable basis for our opinion.

critical audit matter communicated below is a matter arising from the current period audit of the financial statements that were communicated

or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial

statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of the critical audit matter

does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit

matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

of goodwill and indefinite lived intangible assets

of the Matter

discussed in Note 2 to the consolidated financial statements, 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 than likely than not that the carrying amounts exceed the fair

Depending on the outcome of the qualitative assessment, the Company may perform a quantitative assessment to determine if the

carrying amounts exceed the fair values on the assessment date.

The quantitative annual assessment of indefinite lived intangible assets

was performed at the asset level by the Company as of October 31, 2021 and the quantitative annual assessment of goodwill was performed

at the reporting unit level, for which the Company has determined it operates as one single reporting unit, as of October 31, 2021.

significant estimates and assumptions in these assessments include the royalty rate, projected future cash flows, and the discount rate.

identified the Company’s impairment of goodwill and indefinite lived intangible assets as a critical audit matter.

Evaluating the

Company’s assumptions in determining whether there was an impairment over goodwill and indefinite lived intangible assets required

a high degree of complex auditor judgment.

We Addressed the Matter in Our Audit

audit procedures related to accounting for impairment of goodwill and indefinite lived intangible assets to address this critical audit

matter included the following:

gained an understanding of the Company’s process to identify and account for impairment of goodwill and indefinite lived intangible

tested management’s process for developing the fair value estimates.

evaluated the appropriateness of the valuation models used in management’s estimates.

tested the completeness accuracy and relevance of underlying data used in the models.

evaluated the reasonableness of the assumptions used by management.

involved valuation professionals with specialized skills and knowledge when performing audit procedures to evaluate the reasonableness

of management’s estimates and assumptions related to the selection of revenue growth rates, discount rates and royalty rates.

have served as the Company’s auditor from 2013 to 2021 and subsequently reappointed as the Company’s auditor in 2022.

York, New York

March 16, 2023

audit s included performing procedures to assess the risks of material misstatement of the financial statements, whether

due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis,

evidence regarding the amounts and disclosures in the financial statements.

Our audit s also included evaluating the accounting

principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial

We believe that our audit s provides a reasonable basis for our opinion.

have served as the Company’s auditor since 2013 .

16, 2021, except for the effects of the restatement disclosed in Notes 3 and 10, as to which

the date is March 16, 2023

HOLDING CO., INC.

2 unchanged sentences

31, 2020 AND 2019

and cash equivalents

receivable, net of allowances of $ 144,000 for 2020 and 2019

2 unchanged sentences

CURRENT ASSETS

machinery and equipment, net

and equipment, at cost, net of accumulated depreciation of $ 7,610,864 and $ 6,931,913 for 2020 and 2019, respectively

list and relationships, net of accumulated amortization of $ 194,379 and $ 151,627 for 2020 and 2019, respectively

2 unchanged sentences

method investments

income tax assets - net

income tax asset

and other assets

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CURRENT LIABILITIES

income tax liabilities - net

income tax liabilities

Line of credit

payable – long term

compensation payable

and Contingencies (Note 8)

and Contingencies

STOCKHOLDERS’

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stock, par value $ .001 per share;

30,000,000 shares authorized, 6,633,930 shares issued for 2021 and 2020;

5,708,599 shares outstanding

for 2021 and 2020

30,000,000 shares authorized, 6,633,930 and 6,494,680 shares issued for 2020 and 2019;

and 5,569,349 shares outstanding for 2020 and 2019

paid-in capital

4 unchanged sentences

Stockholders’ Equity

Non-controlling

Noncontrolling

LIABILITIES AND STOCKHOLDERS’ EQUITY

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ENDED OCTOBER 31, 2020 AND 2019

OF SALES (which includes purchases of approximately $ 3.1 million and $ 5.3 million in fiscal years 2021 and 2020, respectively, from

a related party)

(As restated)

OF SALES (which includes purchases of approximately $ 5.3 million and $ 8.3 million in fiscal years 2020 and 2019, respectively,

from a related party)

and administrative

Trademark impairment

(LOSS) FROM OPERATIONS

INCOME FROM OPERATIONS

INCOME (EXPENSE):

from equity method investment

on forgiveness of PPP loan

(LOSS) BEFORE PROVISION FOR (BENEFIT FROM) FOR INCOME TAXES AND NON-CONTROLLING INTEREST IN SUBSIDIARY

for (benefit from) for income taxes

INCOME (LOSS) BEFORE NON-CONTROLLING INTEREST IN SUBSIDIARY

Net loss attributable to the non-controlling interest in subsidiary

INCOME (LOSS) ATTRIBUTABLE TO COFFEE HOLDING CO., INC.

and diluted earnings (loss) per share

average common shares outstanding:

INCOME BEFORE PROVISION FOR INCOME TAXES AND NON-CONTROLLING INTEREST IN SUBSIDIARY

provision for income taxes

(LOSS) INCOME BEFORE NON-CONTROLLING INTEREST IN SUBSIDIARY

Net loss (income) attributable to the non-controlling interest in subsidiary

(LOSS) ATTRIBUTABLE TO COFFEE HOLDING CO., INC.

and diluted (loss) per share

Weighted average

common shares outstanding:

Notes to Consolidated Financial Statements

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$ ( 4,633,560 )

issuance-equity investment

Non-Controlling

1 unchanged sentence

$ ( 4,633,560 )

issuance equity investment

Non-Controlling

6 unchanged sentences

ENDED OCTOBER 31, 2020 AND 2019

income (loss)

(loss) income

$ ( 336,044 )

to reconcile net income (loss) to net cash provided by (used in) operating activities:

to reconcile net (loss) income to net cash provided by (used in) operating activities:

and amortization

of trademarks and tradenames

(gain) loss on commodities - net

loss (gain) on commodities

on equity method investments

on disposal of machinery and equipment

of right of use asset

of right to use asset

in operating assets and liabilities:

2 unchanged sentences

and refundable income taxes

and other assets

payable and accrued expenses

1 unchanged sentence

in lease liability

and other assets

taxes payable

cash provided by operating activities

of other investment

cash provided by (used in) operating activities

( 2,148,616 )

of funds from deferred compensation plan

from sale of machinery and equipment

of building, machinery and equipment

( 1,500,483 )

of machinery and equipment

cash used in investing activities

( 3,887,317 )

under bank line of credit

2 unchanged sentences

( 4,512,050 )

cash (used in) provided by financing activities

( 3,375,358 )

cash used in financing activities

INCREASE (DECREASE) IN CASH

( 2,208,828 )

INCREASE IN CASH

AND CASH EQUIVALENTS, BEGINNING OF YEAR

AND CASH EQUIVALENTS, END OF YEAR

BEGINNING OF YEAR

Notes to Consolidated Financial Statements

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DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:

October 15, 2020 Coffee Holding Company acquired an equity method investment through a contribution of shares in Jordre Well, LLC

October 15, 2020 Coffee Holding Company acquired an equity interest in Jordre Well, LLC in exchange for 139,250 shares:

recognition of operating lease right of use asset

recognition of operating lease liabilities

of operating lease right of use asset

of operating lease liability

and equipment acquired through financing

6 unchanged sentences

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:

(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”)

Green Coffee:

unroasted raw beans imported from around the world and sold to large and small roasters and coffee shop operators;

unroasted raw beans imported from around the world and sold to large and small roasters and coffee shop

Label Coffee:

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eight proprietary and licensed brand names in different segments of the market.

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

The Company’s unprocessed green coffee, 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.

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.

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.

Due to Geopolitical Events

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 the Russian was against Ukraine did not have a material

adverse impact on the Company’s revenue or other financial results for the year ended October 31, 2021, at this time the Company

is unable to fully assess the aggregate impact the Russian was against Ukraine 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.

NOTES TO CONSOLIDATED FINANCIAL

OCTOBER 31, 2021 AND 2020

NOTE 1 - BUSINESS ACTIVITIES

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.

global outbreak of COVID-19 was declared a pandemic by the World Health Organization and a national emergency by the U.S.

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.

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

At this time the full impact could not be fully determined.

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

During the third quarter the Company received an unsecured loan in the amount of $ 634,400 (the “PPP

Loan”) under the Paycheck Protection Program (the “PPP”) which was established under the Coronavirus Aid, Relief

and Economic Security Act (“the CARES Act”).

Under the CARES Act, loan forgiveness is available for the

sum of documented payroll costs, covered rent payments and covered utilities during the measurement period beginning on the date

of first disbursement of the PPP Loans.

For purposes of the CARES Act, payroll costs exclude compensation of an individual employee

in excess of $ 100,000 , prorated annually.

Not more than 40 % of the forgiven amount can be attributable to non-payroll costs.

The receipt of these funds, and the forgiveness of the loan attendant to these funds, is dependent on the Company having

initially qualified for the PPP Loans and qualifying for the forgiveness of the PPP Loans based on its future adherence to the

forgiveness criteria.

COFFEE HOLDING CO., INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

OCTOBER 31, 2020 AND 2019

NOTE 1 - BUSINESS ACTIVITIES (cont’d):

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 determined.

2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES :

OF PRESENTATION :

consolidated financial statements include the accounts of the Company, Organic Products Trading Company, LLC (“OPTCO”), Sonofresco

LLC (“SONO”), Comfort Foods, Inc.

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.

All significant inter-company balances and transactions have been eliminated in consolidation.

OF ESTIMATES :

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.

estimates include, depreciable lives for long-lived assets, and valuation of goodwill and indefinitely lived intangible assets.

estimates may be adjusted as more current information becomes available, and any adjustment could have a significant impact on recorded

AND CASH EQUIVALENTS :

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.

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 allowance for uncollectible accounts receivable and reserves, inventory obsolescence, depreciation,

intangible asset valuations and useful lives, taxes, contingencies, and valuation of financial instruments.

These estimates may

be adjusted as more current information becomes available, and any adjustment could have a significant impact on recorded amounts.

consists primarily of unrestricted cash on deposit at financial institutions and brokerage firms.

HOLDING CO., INC.

4 unchanged sentences

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 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

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.

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

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:

7 unchanged sentences

There are no reserves for obsolescence as of October 31, 2020 and 2019.

MACHINERY AND EQUIPMENT :

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

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.

AND EQUIPMENT :

and equipment are recorded at cost and depreciated using the straight-line method over the estimated useful lives of the assets.

Purchases of 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

The Company also provides for amortization of leasehold improvements.

HOLDING CO., INC.

4 unchanged sentences

HELD BY BROKER :

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

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.

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 and not reflected as a net amount as a separate component of stockholders’

Company recorded realized and unrealized gains and losses on these contracts as follows:

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 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 increase earnings volatility in any particular

Company has open position contracts held by the broker, which are summarized as follows:

OF COMMODITIES HELD BY BROKER

$ ( 164,475 )

due (to) from broker

$ ( 452,325 )

Company classifies its options and future contracts as trading securities and accordingly, unrealized holding gains and losses

are included in earnings.

October 31, 2020, the Company held 48 futures contracts (generally with terms of three to four months ) for the purchase of 1,800,000

pounds of green coffee at a weighted average price of $ 1.158 per pound.

The fair market value of coffee applicable to such contracts

was $ 1.044 per pound at that date.

October 31, 2019, the Company held 124 futures contracts (generally with terms of three to four months ) for the purchase of 4,650,000

pounds of green coffee at a weighted average price of $ .986 per pound.

The fair market value of coffee applicable to such contracts

was $ 1.02 per pound at that date.

in cost of sales for the years ended October 31, 2020 and 2019, 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

3 unchanged sentences

( 1,451,761 )

gains (losses)

( 2,642,537 )

notional amount of open future and option contracts was approximately $ 1,712,000 as of October 31, 2021.

LIST AND RELATIONSHIPS :

list and relationships consist of a specific customer lists and customer contracts obtained by the Company in the acquisition of OPTCO,

Comfort Foods, Sonofresco and Steep & Brew 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, 2021 and 2020 was $ 67,522 , respectively.

(losses) gains

$ ( 326,122 )

$ ( 1,211,644 )

HOLDING CO., INC.

4 unchanged sentences

AND TRADEMARKS :

Company has determined that its goodwill and trademarks, which consist of product lines, trade names and packaging designs have an indefinite

Goodwill and trademarks are not amortized but are tested for impairment at least annually or upon the occurrence of an event

or when circumstances indicate that the carrying amount of goodwill and trademarks is greater than its fair value.

For purposes of evaluating

goodwill for impairment, the Company has determined it operates as one single reporting unit based on the Company’s internal reporting

structure, the level at which discrete financial information is available and for which operating results are reviewed.

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 assessment date.

The most significant assumptions used

in these impairment tests were the royalty rates, the projections used to determine the future cashflows, and the discount rate applied

to those future cashflows.

For the years ending October 31, 2021 and 2020, no impairment charges were recorded to the carrying value

of goodwill and the reporting unit has a fair value in excess of its carrying value by approximately 4 %

as of October 31, 2021.

For the year ended October 31, 2021, we recorded impairment 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 a relief from royalty method.

These impairments were due to a change in the estimated future revenues relating to these trademarks.

The impairment expense totaled

$ 1,080,000 for the year ended October 31, 2021.

OF CONSOLIDATED STATEMENT OF INCOME

and tradenames

at November 1, 2019

at October 31, 2020

( 1,080,000 )

at October 31, 2021

OF LONG-LIVED ASSETS :

Company assesses the impairment of long-lived assets used in operations, primarily buildings, machinery and equipment as well as purchased

intangible assets subject to amortization, when events and circumstances indicate that the carrying value of these assets might not be

For purposes of evaluating the recoverability of buildings, machinery and equipment and amortizing intangible assets, the

undiscounted cash flows estimated to be generated by those assets are compared to the carrying amount of those assets.

If and when the

carrying values of the assets exceed the undiscounted cashflows, then the related assets will be written down to fair value.

year ended October 31, 2021 and 2020, no impairment charges were recorded against buildings, machinery, and equipment or amortizing intangible

Company has determined that its goodwill and trademarks, which consist of product lines, trade names and packaging designs have

an indefinite useful life.

The value of the goodwill and trademarks was allocated based on an independent valuation.

and trademarks are not amortized but are assigned to a specific reporting unit or asset class and tested for impairment at least

annually or upon the occurrence of an event or when circumstances indicate that the reporting unit’s carrying amount of

goodwill and trademarks is greater than its fair value.

As of October 31, 2020 and 2019, the Company has determined by using a

qualitative assessment that an impairment did not exist.

LIST AND RELATIONSHIPS :

list and relationships consist of a specific customer lists and customer contracts obtained by the Company in the acquisition

of OPTCO, Comfort Foods, Sonofresco and Steep & Brew which are being amortized on the straight-line method over their estimated

useful life of twenty years .

ADVERTISING :

3 unchanged sentences

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.

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.

earnings per common share were computed by dividing net income by the sum of the weighted-average number of common shares outstanding.

1 unchanged sentence

plus the dilutive effect of common shares issuable upon exercise of potential sources of dilution.

The Company has issued 1,000,000 options

that are outstanding which have not been included in the calculation of diluted earnings per share because they were anti-dilutive for year ended October 31, 2020 and they were out of the money for the year ended October 31,

The Company has issued 1,000,000

options as of October 31, 2019, they have not been included in the calculation of diluted earnings per share because of their

anti-dilutive value for the years presented in this financial statement.

weighted average common shares outstanding used in the computation of basic and diluted earnings per share were 5,575,453 and

6 unchanged sentences

VALUE OF FINANCIAL INSTRUMENTS :

carrying amounts of cash, accounts receivable, notes due to/(from) broker , accounts payable approximate fair value

carrying amounts of cash, accounts receivable, notes receivable, accounts payable and accrued expenses 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.

The carrying amount of the bank line of credit borrowings 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.

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:

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.

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

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.

hierarchy requires the Company to use observable market data, when available, and to minimize the use of unobservable inputs when determining

RECOGNITION :

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:

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.

Company recognizes revenue in accordance with the five-step model as prescribed by ASU 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

To determine revenue recognition for the arrangements that the Company determines are within the scope of ASU 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.

See Note 10 for revenue disaggregated

by product line.

PROTECTION PROGRAM :

July 22, 2020, the Company received loan proceeds of $ 634,400 under the Paycheck Protection Program (“PPP”).

which was established under the Coronavirus Aid, Relief and Economic Security Act (“the CARES Act”), provides for

loans to qualifying businesses for amounts up to 2.5 times certain average monthly payroll expenses of the qualifying business.

The loan and accrued interest, or a portion thereof, may be forgiven after 24 weeks so long as the borrower uses the loan proceeds

for eligible purposes including payroll, benefits, rent, mortgage interest and utilities, and maintains its payroll levels, as

defined by the PPP.

At least 60% of the amount forgiven must be attributable to payroll costs, as defined by the PPP.

PPP loan matures five years from the date of the first disbursement of proceeds to the Company and accrues interest at a fixed

Payments are deferred for at least the first six months and payable in 54 equal consecutive monthly installments of

principal and interest commencing upon expiration of the deferral period of the PPP loan date.

GAAP does not contain authoritative accounting standards for forgivable loans provided by governmental entities to a for-profit

Absent authoritative accounting standards, interpretative guidance issued and commonly applied by financial statement

preparers allows for the selection of accounting policies amongst acceptable alternatives.

Based on facts and circumstances outlined

below, the Company determined it most appropriate to account for the PPP loan proceeds as an in-substance government grant by

analogy to International Accounting Standards 20 (“IAS 20”), Accounting for Government Grants and Disclosure of Government

Under the provisions of IAS 20, “a

HOLDING CO., INC.

3 unchanged sentences

2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d):

following table presents revenues by product line for the years ended October 31, 2021 and 2020.

SCHEDULE OF REVENUE

(As restated)

for these product lines is recognized upon shipment to the customer.

AND HANDLING FEES AND COSTS :

earned from shipping and handling fees is reflected in net sales.

Costs associated with shipping product to customers aggregating approximately

$ 3,165,000 and $ 2,780,000 for the years ended October 31, 2021 and 2020, respectively, is included in selling and administrative expenses.

PROTECTION PROGRAM :

July 22, 2020, the Company received loan proceeds of $ 634,400 under the Paycheck Protection Program (“PPP”).

The PPP, which

was established under the Coronavirus Aid, Relief and Economic Security Act (“the CARES Act”), provides for loans to qualifying

businesses for amounts up to 2.5 times certain average monthly payroll expenses of the qualifying business.

The loan and accrued interest,

or a portion thereof, may be forgiven after 24 weeks so long as the borrower uses the loan proceeds for eligible purposes including payroll,

benefits, rent, mortgage interest and utilities, and maintains its payroll levels, as defined by the PPP.

At least 60% of the amount

forgiven must be attributable to payroll costs, as defined by the PPP .

PPP loan was set to mature in five years from the date of the first disbursement of proceeds to the Company and accrued interest at a

fixed rate of 1 %.

Payments were deferred for at least the first six months and payable in 54 equal consecutive monthly installments of

principal and interest commencing upon expiration of the deferral period of the PPP loan date.

GAAP does not contain authoritative accounting standards for forgivable loans provided by governmental entities to a for-profit entity.

Absent authoritative accounting standards, interpretative guidance issued and commonly applied by financial statement preparers allows

for the selection of accounting policies amongst acceptable alternatives.

Based on facts and circumstances outlined below, the Company

determined it most appropriate to account for the PPP loan proceeds as an in-substance government grant by analogy to International Accounting

Standards 20 (“IAS 20”), Accounting for Government Grants and Disclosure of Government Assistance.

Under the provisions of

IAS 20, “a forgivable loan from the government is treated as a government grant when there is reasonable assurance that the entity

will meet the terms for forgiveness of the loan.” IAS 20 does not define “reasonable assurance”, however, based on

certain interpretations, it is analogous to “probable” as defined in Financial Accounting Standards Board (“FASB”)

ASC 450-20-20 under U.S.

GAAP, which is the definition the Company has applied to its expectations of PPP loan forgiveness.

20, government grants are recognized in earnings on a systematic basis over the periods in which the Company recognizes costs for which

the grant is intended to compensate (i.e.

loan from the government is treated as a government grant when there is reasonable assurance that the entity will meet the terms

for forgiveness of the loan.” IAS 20 does not define “reasonable assurance”, however, based on certain interpretations,

it is analogous to “probable” as defined in FASB ASC 450-20-20 under U.S.

GAAP, which is the definition the Company

has applied to its expectations of PPP loan forgiveness.

Under IAS 20, government grants are recognized in earnings on a systematic

basis over the periods in which the Company recognizes costs for which the grant is intended to compensate (i.e.

qualified expenses).

Further, IAS 20 permits for the recognition in earnings either separately

under a general heading such as other income, or as a reduction of

Further, IAS 20 permits for the recognition in earnings either separately under a general heading such as other income, or as

a reduction of the related expenses.

The Company has elected to recognize government grant income separately within other income

to present a more clear distinction in its financial statements between its operating income and the amount of net income resulting

from the PPP loan and subsequent expected forgiveness.

The Company believes this presentation method promotes greater comparability

amongst all period presented.

following table provided the balance and activity related to the PPP Loan:

SCHEDULE OF PAYCHECK PROTECTION PROGRAM

expenses incurred to date

government grant income

HOLDING CO., INC.

3 unchanged sentences

2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d):

related expenses.

The Company has elected to recognize government grant income separately within other income to present a more clear

distinction in its financial statements between its operating income and the amount of net income resulting from the PPP loan and subsequent

expected forgiveness.

The Company believes this presentation method promotes greater comparability amongst all period presented.

following table provided the balance and activity related to the PPP Loan as of October 31, 2020:

OF PAYCHECK PROTECTION PROGRAM

expenses incurred to date

government grant income

PPP loan was formally forgiven during fiscal year ended October 31, 2021.

BASED COMPENSATION :

awards are accounted for as required by ASC Topic 718 “Compensation-Stock Compensation” (“ASC 718”).

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.

AND HANDLING FEES AND COSTS :

earned from shipping and handling fees is reflected in net sales.

Costs associated with shipping product to customers aggregating

approximately $ 2,780,000 and $ 3,214,000 for the years ended October 31, 2020 and 2019, respectively, is included in selling and

administrative expenses.

CONCENTRATION

instruments that potentially subject the Company to concentrations of credit risk consist principally of cash deposits at financial institutions

and brokerage firms.

instruments that potentially subject the Company to concentrations of credit risk consist principally of cash deposits at financial

institutions and brokerage firms.

at each institution are insured by the Federal Deposit Insurance Corporation (FDIC) up to certain limits.

At October 31, 2021 and 2020,

the Company had approximately $ 2,224,000 and $ 816,000 in excess of FDIC insured limits, respectively.

At October 31, 2020

and 2019, the Company had approximately $ 816,000 and $ 1,490,000 in excess of FDIC insured limits, respectively.

accounts at the brokerage firm contain cash and securities.

Balances are insured up to $ 500,000 , with a limit of $ 100,000 for cash, by

the Securities Investor Protection Corporation (SIPC).

At October 31, 2021 and 2020, the Company had approximately $ 523,000 and $ 1,421,000

in excess of SIPC insured limits, respectively.

Balances are insured up to $ 500,000 , with a limit of $ 100,000 for

cash, by the Securities Investor Protection Corporation (SIPC).

At October 31, 2020 and 2019, the Company had approximately $ 1,421,000

and $ 706,000 in excess of SIPC insured limits, respectively.

RECLASSIFICATION :

amounts in the prior year financial statements have been reclassified to conform to the current year’s presentation.

These reclassification

adjustments had no effect on the Company’s previously reported net income.

HOLDING CO., INC.

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

31, 2021 AND 2020

2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d):

reclassification adjustments had no effect on the Company’s previously reported net income.

METHOD OF ACCOUNTING :

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 .

Under the equity method of accounting, an Investee company’s

accounts are not reflected within the Company’s consolidated Balance Sheets and consolidated Statements of Operations;

the Company’s share of the earnings or losses of the Investee company is reflected in the caption “Loss from equity method

investments” in the consolidated

of Operations.

The Company’s carrying value in an equity method Investee company is reflected in the caption “Equity method

investments” in the Company’s consolidated Balance Sheets.

Company’s equity method investments consist of the following:

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.

Under the equity method of accounting,

an Investee company’s accounts are not reflected within the Company’s Consolidated Balance Sheets and Consolidated

Statements of Income;

however, the Company’s share of the earnings or losses of the Investee company is reflected in the

caption “Loss from equity method investments” in the Consolidated Statements of Income.

The Company’s carrying

value in an equity method Investee company is reflected in the caption “Equity method investments” in the Company’s

Consolidated Balance Sheets.

Company’s investment in a company that is accounted for on the equity method of accounting consist of the following:

20 % interest in Healthwise Gourmet Coffees, LLC, a distributor of low acidity coffees.

The initial investment in this company amounted

The investments in this company amounted

to $ 100,000 .

The loss recognized amounted to $ 5,016 and $ 3,769 for the years ended October 31, 2020 and 2019, respectively.

The carrying amount

of this investment as presented on our consolidated balance sheet at October 31, 2021 and 2020 was $ 71,779 and $ 80,992 , respectively.

On October 15, 2020 the Company acquired a 49 % interest in Jordre Well LLC, a company that will produce CBD infused products.

The investment

was made in 139,250 shares of the Company’s common stock.

The price of the stock on October 15, 2020 was $ 3.45 for an initial investment

of $ 480,413 .

An additional 139,250 shares of the Company’s common stock will be transferred if Jordre Well LLC generates $ 500,000

in revenue from the sale of its newly created brands.

Through October 31, 2020 there was no operational activity.

The loss recognized

amounted to $ 149,947 for the year ended October 31, 2021.

The carrying amount of this investment as presented on our consolidated balance sheet

at October 31, 2021 and 2020 was $ 330,466 and $ 480,413 .

– 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 in an entity that

hold investments in the plant-based protein drink manufacturing industry.

The Company has determined they do not have significant influence

over the investee.

Pursuant to ASC 321, the Company has elected an alternate measurement to account for this investment at cost less

any impairment with adjustments to fair value if there are observable price changes.

As of October 31, 2021, no such price changes and

investments-other was $ 2,500,000 on the accompanying consolidated balance sheet.

net value of this investment as presented on our consolidated balance sheet at October 31, 2020 and 2019 was $ 80,992 and $ 86,008 ,

respectively.

(2) On October 15, 2020 the Company acquired a 49 % interest in Jordre Well LLC, a company that will produce CBD

infused products.

The investment was made in newly issued stock.

The Company issued 139,250 shares to be paid at closing.

price of the stock on October 15, 2020 was $ 3.45 for a value of $ 480,413 .

As of October 31, 2020 there was no activity.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

AFFECTING THE COMPANY :

Effective November 1, 2019, the Company

adopted ASC Topic 842, Leases (“ASC 842”).

The new guidance increases transparency by requiring the recognition of right to

use assets and lease liabilities on the statement of financial condition.

The recognition of these lease assets and lease liabilities

represents a change from previous US GAAP requirement, which did not require lease assets and lease liabilities to be recognized for most

operating leases.

The recognition, measurement and presentation

of expenses and cash flows arising from a lease, have not significantly changed from previous US GAAP requirements.

On November 1, 2019, the effective date

of ASC 842, existing leases of the Company were required to be recognized and measured.

Additionally any leases entered into during the

year were also required to recognized and measured.

In applying ASC 842, the Company made an accounting policy election not to recognize

the right of use assets and lease liabilities relating to short-term leases.

Implementation of ASC 842 included an analysis of contracts,

including real estate leases and service contracts to identify embedded leases, to determine the initial recognition of the right to use

assets and lease liabilities, which required subjective assessment over the determination of the associated discount rates to apply in

determining the lease liabilities.

HOLDING CO., INC.

3 unchanged sentences

2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d):

Effective November 1, 2019, the Company

adopted ASC Topic 842, Leases (“ASC 842”).

The guidance requires the recognition of right to use assets and lease liabilities

on the statement of financial condition.

November 1, 2019, the effective date of ASC 842, existing leases of the Company were required to be recognized and measured.

any leases entered into during the year were also required to recognized and measured.

In applying ASC 842, the Company made an accounting

policy election not to recognize the right of use assets and lease liabilities relating to short-term leases.

Implementation of ASC 842

included an analysis of contracts, including real estate leases and service contracts to identify embedded leases, to determine the initial

recognition of the right to use assets and lease liabilities, which required subjective assessment over the determination of the associated

discount rates to apply in determining the lease liabilities.

standard provides a number of transition practical expedients, which the Company has elected, including:

The new standard provides a number of transition

practical expedients, which the Company has elected, including:

A “package of three” expedients that must be taken together and allow entities to (1) not reassess whether existing contracts

1 unchanged sentence

An implementation expedient which allows the requirements of the standard in the period of adoption with no restatement of prior periods.

adoption of ASC 842 resulted in the recording of operating lease right of use assets of $ 2,512,022 and operating lease liabilities of

$ 2,705,484 at November 1, 2019.

Company implemented ASC 842 using the modified retrospective approach.

In addition, at November 1, 2019, there was no impact to stockholder’s

equity upon adoption.

Company determines if an arrangement is or contains a lease at inception.

7 unchanged sentences

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 using a 4.75 %

incremental borrowing rate for in place leases as of October 31, 2020 and 5.00 %

for new leases and lease amendments that occurred during fiscal year 2021.

Right of use assets also exclude lease incentives.

The present value of the lease payments was determined using a 4.75 % incremental borrowing rate.

Right of use assets also exclude lease

Company presents the amortization of its right to use assets and payments of related lease liabilities originating in connection with

operating leases as an adjustment to reconcile net income or loss to net cash generated or used in operating activities and an operating

cash outflow, respectively within the operating section of the statement of cash flows.

3 - RESTATEMENT:

Company is restating its consolidated statement of operations for the years ended October 31, 2020 and 2019 to correct its accounting

for certain intercompany transactions that should have been eliminated in consolidation.

The restatement is being made in accordance

with ASC 250, “Accounting Changes and Error Corrections.” The disclosure provision of ASC 250 requires a company that corrects

an error to disclose that its previously issued financial statements have been restated, a description of the nature of the error, the

effect of the correction on each financial statement line item and any per share amount affected for each prior period presented, and

the cumulative effect on retained earnings in the statement of financial position as of the beginning of each period presented.

HOLDING CO., INC.

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

31, 2020 AND 2019

NOTE 3 – RESTATEMENT (cont’d):

effects of the adjustment on the Company’s previously issued October 31, 2020 and 2019 consolidated statement is summarized as

Consolidated Statement of Operations for the years ended October 31, 2020 and 2019.

SCHEDULE OF ERROR CORRECTIONS AND PRIOR PERIOD ADJUSTMENTS

Reported October 31, 2020

$ ( 8,303,862 )

Cost of Sales

$ ( 61,256,926 )

$ ( 52,953,064 )

Reported October 31, 2019

$ ( 9,859,897 )

Cost of Sales

$ ( 70,708,100 )

$ ( 60,848,203 )

4 - INVENTORIES :

1 unchanged sentence

SCHEDULE OF INVENTORIES

4 – BUILDING, MACHINERY AND EQUIPMENT :

machinery and equipment at October 31, 2021 and 2020 consisted of the following:

SCHEDULE OF MACHINERY AND EQUIPMENT

and equipment

accumulated depreciation

5 – EQUITY METHOD INVESTMENT :

October 15, 2020, The Ideation Lab, LLC (“TIL”), Jordre Well, LLC (“Jordre Well”), an entity created by

TIL and the Company entered into a Contribution and Equity Purchase Agreement.

TIL contributed 100 % of its assets to Jordre

Well in exchange for 100 common units.

TIL, immediately following the contribution, sold 49 common units of Jordre

Well to the Company for up to 278,500 shares of the Company’s common stock, payable as follows:

(a) 139,250 shares of the

Company’s common stock on October 15, 2020 and (b) an additional 139,250 shares of its common stock when Jordre Well generates

$ 500,000 in revenue from the sale of its newly created brands.

This was accounted for as an equity method investment.

HOLDING CO., INC.

2 unchanged sentences

31, 2020 AND 2019

4 – BUILDING, MACHINERY AND EQUIPMENT (cont’d):

expense totaled $ 600,357 and

$ 678,951 for

the years ended October 31, 2021 and 2020, respectively.

In October 2021 the Company sold $ 651,175

of machinery and equipment with a carrying value

at disposal for $ 113,166 of proceeds and

recognized a loss on disposal of $ 321,651

recorded as a component of operating expenses

for the year ended October 31, 2021.

5 – ACCOUNTS PAYABLE AND ACCRUED EXPENSES :

payable and accrued expenses at October 31, 2021 and 2020 consisted of the following:

OF ACCOUNTS PAYABLE AND ACCRUED EXPENSES

6 - MACHINERY AND EQUIPMENT :

and equipment at October 31, 2020 and 2019 consisted of the following:

SCHEDULE OF MACHINERY AND EQUIPMENT

and equipment

plant and equipment gross

accumulated depreciation

plant and equipment net

expense totaled $ 678,951 and $ 680,085 for the years ended October 31, 2020 and 2019, respectively.

7 - LINE OF CREDIT :

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.

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.

March 13, 2020, the Company reached an agreement for a new loan modification agreement and credit facility with Sterling.

the new agreement, among other things:

(i) provides for a new maturity date of March 31, 2022 and (ii) decreases the interest rate per

annum to LIBOR plus 1.75 % (with such interest rate not to be lower than 3.50 %).

All other terms of the A&R Loan Agreement and A&R

Loan Facility remain substantially the same.

terms of the new agreement, among other things:

(i) provides for a new maturity date of March 31, 2022 and (ii) decreases the

interest rate per annum to LIBOR plus 1.75 % (with such interest rate not to be lower than 3.50 %).

All other terms of the A7R Loan

Agreement and A&R Loan Facility remain the same.

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 Company was in compliance with all covenants

as of October 31, 2020 and October 31, 2019.

of the A&R Loan Facility and the A&R Loan Agreement is secured by all tangible and intangible assets of the Company.

than as amended and restated by the A&R Loan Agreement, the Company Financing Agreement and the OPTCO Financing Agreement

remains in full force and effect.

of October 31, 2020 and October 31, 2019, the outstanding balance under the bank line of credit was $ 3,796,822 and $ 7,167,740 ,

respectively.

HOLDING CO., INC.

2 unchanged sentences

31, 2020 AND 2019

NOTE 6 - LINE OF

CREDIT (cont’d):

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 Company was in compliance with all covenants as of October 31,

2021 and October 31, 2020.

The outstanding balance on the Company’s lines of credit were $ 3,800,850 and $ 3,796,822 as of October

31, 2021 and October 31, 2020, respectively.

Interest expense recorded for the years ended October 31, 2021 and 2020 were $ 85,359 and

$ 184,045 , respectively.

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.

The facility has been approved for a two year extension and the related documents are currently being prepared.

All other terms of the A&R Loan Agreement and A&R Loan Facility remain the same.

June 28, 2022, the Company reached an agreement for a new loan modification agreement and credit facility with Webster Bank.

of the new agreement, among other things:

(i) provided for a new maturity date of June 30, 2024, and (ii) changed the interest rate per

annum to SOFR plus 1.75% (with such interest rate not to be lower than 3.50%).

All other terms of the A&R Loan Agreement and A&R

Loan Facility remain the same.

Company is classifying the line of credit as non current.

The financing agreement was refinanced on June 28, 2022, post balance

sheet date, but prior to re-issuance date of March 16, 2023.

The maturity date was extended to June

As disclosed in Note 12, the Company was not in compliance with certain affirmative and negative covenants

stated in the loan agreement including a requirement to furnish the lender with audited financial statements for the year ended

October 31, 2022 within 120 days of that reporting date.

The lender waived the violations and extended the due for delivery of the

October 31, 2022 financial statements date to April 15, 2023 in connection with the ninth amendment and restatement to the loan

agreement which is also disclosed in Note 12.

8 - INCOME TAXES :

Company’s provision/(benefit) for income taxes in 2021 and 2020 consisted of the following:

OF PROVISION FOR INCOME TAX

tax expense/(benefit)

Company’s (benefit)/provision for income taxes in 2020 and 2019 consisted of the following:

SCHEDULE OF PROVISION FOR INCOME TAX

tax (benefit)/expense

reconciliation of the difference between the expected income tax rate using the statutory U.S.

1 unchanged sentence

effective tax rate is as follows:

OF EFFECTIVE INCOME TAX RATE

for (Benefit) from tax at the federal statutory rate

SCHEDULE OF EFFECTIVE INCOME TAX RATE

tax at the federal statutory rate

permanent differences

and local tax, net of federal

for (benefit from) income taxes

provision for income taxes

income tax rate

4 unchanged sentences

8 - INCOME TAXES (cont’d):

tax effects of the temporary differences that give rise to the deferred tax assets and liabilities as of October 31, 2021 and 2020 are

OF DEFERRED TAX ASSETS AND LIABILITIES

tax effects of the temporary differences that give rise to the deferred tax assets and liabilities as of October 31, 2020 and

2019 are as follows:

SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES

operating loss

deferred tax asset

tax liabilities:

tax liability:

assets acquired

machinery and equipment

deferred tax liabilities

deferred tax assets (liabilities)

$ ( 100,407 )

valuation allowance was not provided at October 31, 2020 or 2019.

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.

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.

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.

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.

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.

of October 31, 2020 and 2019, the Company did no t 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 October 31, 2021 and 2020, the Company

had no accrued interest or penalties related to income taxes.

The Company currently has no federal or state tax examinations in progress.

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 2018.

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 2018.

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 2018.

of October 31, 2021, and 2020, the Company had cumulative net operating loss carryforwards of approximately $ 274,173 and $ 334,642 respectively,

which begin to expire in 2038.

In accordance with Section 382 of the Internal Revenue code, the usage of the Company’s net operating

loss carryforwards is subject to an annual limitation of $ 60,469 .

These net operating loss carryforwards may be further limited in the

event of a change in ownership.

The Company’s

practice is to recognize interest and/or penalties related to income tax matters in income tax expense.

As of October 31, 2020

and 2019, the Company had no accrued interest or penalties related to income taxes.

The Company currently has no federal or state

tax examinations in progress.

HOLDING CO., INC.

2 unchanged sentences

31, 2020 AND 2019

8 - INCOME TAXES (cont’d):

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 2017.

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 2016.

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

March 27, 2020 Congress enacted the CARES Act (Coronavirus Aid, Relief and Economic Security Act).

The Act provides numerous tax

provisions and other stimulus measures, including temporary changes regarding prior and future operation losses, temporary changes

to prior and future limitations on interest deductions, temporary suspension of certain payment requirements for the employer

portion of Social Security taxes, technical corrections to prior tax legislation for tax depreciation of certain qualified improvement

property and enhanced recoverability of AMT tax credits.

The Company is currently evaluating the impact of the CARES Act, but

at present does not expect any impact.

of October 31, 2020, and 2019, the Company had cumulative net operating loss carryforwards of approximately $ 334,642 and $ 395,111

respectively, which begin to expire in 2038 .

In accordance with Section 382 of the Internal Revenue code, the usage of the Company’s

net operating loss carryforwards is subject to an annual limitation of $ 60,469 .

These net operating loss carryforwards may be

may be further limited in the event of a change in ownership.

9 - COMMITMENTS AND CONTINGENCIES :

1 unchanged sentence

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 us 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

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”).

The plaintiffs filed an appeal with the 7 th Circuit Court of Appeals (the “Appeal”).

After the Appeal was filed, the Company and the plaintiffs’ settled the matter during mediation in late January 2022 and the Appeal

was dismissed.

District of Illinois on or about December 21, 2020.

The plaintiffs, Eileen Brodsky and Rhonda Diamond, purporting 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 us 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

are also named as defendants in the action.

The complaint asserts a variety of claims under New York and California consumer protection

laws, and seeks 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.

The Company believes the allegations

in the complaint are wholly without merit and that the claims asserted are legally deficient, and the company intends to vigorously

defend the action.

As of the filing of this Form 10-K, the Company has not been served with the complaint.

Therefore, the Company

is unable to predict the ultimate outcome of this lawsuit.

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 we sold to the customer.

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.

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 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 .

Contributions to the plan aggregated $ 72,558 and $ 81,384 for the years ended October 31, 2021 and 2020, respectively.

Court for the District of Massachusetts on or about February 2, 2021, concerning the labeling on private label coffee productions

we sold to the customer.

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.

As of the filing of this Form 10-K, the Company is unable to predict the ultimate outcome of this lawsuit.

HOLDING CO., INC.

2 unchanged sentences

31, 2020 AND 2019

9 - COMMITMENTS AND CONTINGENCIES (cont’d):

February 2004, the Company entered into a lease for office and warehouse space in La Junta City, Colorado.

This lease, which is

at a monthly rental of $ 8,341 beginning January 2005, expires on January 31, 2024 .

Operating lease costs amounted to $ 95,504

for the years ended October 31, 2020 and 2019.

October 2008, the Company entered into a lease for office and warehouse space in Staten Island, NY.

This lease, which is at a

monthly rental beginning November 2008, expires on October 31, 2023 and includes annual rent increases.

Operating lease costs

amounted to $ 175,640 and $ 143,171 for the years ended October 31, 2020 and 2019, respectively.

The Company also

uses a variety of independent, bonded commercial warehouses to store its green coffee beans.

March 2015, the Company entered into a lease for office space in Vancouver, WA.

This lease, which is at a monthly rental beginning

April 1, 2015, expired on March 31, 2017.

The lease was extended, effective as of April 1, 2017 and expiring on March 31, 2019 .

The lease was extended, effective as of April 1, 2019 and expiring on March 31, 2021 .

Operating lease costs amounted to

$ 41,150 and $ 39,960 for the years ended October 31, 2020 and 2019, respectively.

December 2016, the Company entered into a lease for office and warehouse space in Burlington, WA.

This lease, which is at a monthly

rental beginning December 1, 2017, expired on December 31, 2018 .

The lease was extended, effective January 1, 2019 and expiring

on December 31, 2020 .

The lease was extended, effective January 1, 2021 and expiring on December 21, 2021 .

Operating lease

costs amounted to $ 32,924 and $ 47,143 for the years ended October 31, 2020 and 2019, respectively.

April 2017, the Company entered into a lease for office and warehouse space in North Andover, MA.

This lease, which is at a monthly

rental beginning April 1, 2017, expires on May 31, 2028 and includes charges for common areas and utilities.

Operating lease

costs amounted to $ 235,710 and $ 233,754 for the years ended October 31, 2020 and 2019, respectively.

April 2018, the Company through its joint venture Generations Coffee Company, LLC entered into a lease for office and warehouse

space in Madison, WI.

This lease, which is at a monthly rental beginning April 1, 2018, expires on September 30, 2024 and includes

charges for common areas and utilities.

Operating lease costs amounted to $ 169,244 and $ 117,149 for the years ended

October 31, 2020 and 2019, respectively.

HOLDING CO., INC.

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

31, 2020 AND 2019

9 - COMMITMENTS AND CONTINGENCIES (cont’d):

lease assets and liabilities are recognized at the lease commencement date.

Operating lease liabilities represent the present

value of lease payments not yet paid.

Operating lease assets represent our right to use an underlying asset and are based upon

the operating lease liabilities adjusted for prepayments or accrued lease payments, initial direct costs, lease incentives, and

impairment of operating lease assets.

To determine the present value of lease payments not yet paid, we use the Company’s

cost of capital based on existing debt instruments.

Our material leases typically contain rent escalations over the lease term.

We recognize expense for these leases on a straight-line basis over the lease term.

Total operating lease costs for the

year ended October 31, 2020 was $ 750,172 , of which, $ 131,730 was included within cost of goods sold and $ 618,442

was recorded in the selling and administrative expenses.

The aggregate cash payments under these leasing agreements was $ 597,945

for the year ended October 31, 2020.

following summarizes the Company’s operating leases:

OF OPERATING LEASE LIABILITY

SCHEDULE OF OPERATING LEASES

operating lease assets

1 unchanged sentence

lease liability

amortization of the right-of-use asset for the years ended October 31, 2021 and 2020 was $ 350,871 and $ 397,794 , respectively.

average remaining lease term

average discount rate

remaining lease term

of lease liabilities by year for our operating leases are as follows:

OF MATURITY LEASE LIABILITY

SCHEDULE OF MINIMUM FUTURE LEASE PAYMENTS

lease payments

imputed interest

( 1,140,793 )

value of operating lease liabilities

aggregate cash payments under these leasing agreements was $ 442,118 for the year ended October 31, 2021.

June 2021, the Company purchased a facility in Colorado for $ 900,321 that it was previously leasing.

On the date of purchase, the Company

wrote off the carrying value of the right-of-use asset and lease liability associated with this facility of $ 242,888 .

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 $ 2,091,316 .

(K) RETIREMENT PLAN:

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 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.

Contributions

to the plan aggregated $ 81,384 and $ 89,577 for the years ended October 31, 2020 and 2019, respectively.

HOLDING CO., INC.

2 unchanged sentences

31, 2020 AND 2019

10 - ECONOMIC DEPENDENCY restated):

Approximately

26 % of the Company’s sales were derived from six customers during the year ended October 31, 2020.

These customers also

accounted for approximately $ 2,076,000 or 28 % of the Company’s accounts receivable balance at October 31, 2020.

Approximately

22 % of the Company’s sales were derived from five customers during the year ended October 31, 2019.

These customers also

accounted for approximately $ 3,109,000 or 33 % of the Company’s accounts receivable balance at October 31, 2019.

Concentration

of credit risk with respect to other trade receivables is limited due to the short payment terms generally extended by the Company,

by ongoing credit evaluations of customers, and by maintaining an allowance for doubtful accounts and other allowances that management

believes will adequately provide for credit losses.

the year ended October 31, 2020, approximately 27 % of the Company’s purchases were from six vendors.

These vendors accounted

for approximately $ 468,000 of the Company’s accounts payable at October 31, 2020.

For the year ended October 31, 2019, approximately

28 % of the Company’s purchases were from six vendors.

These vendors accounted for approximately $ 1,005,000 of the Company’s

accounts payable at October 31, 2019.

Management does not believe the loss of any one vendor would have a material adverse effect

of the Company’s operations due to the availability of many alternate suppliers.

following table presents revenues by product line for the years ended October 31, 2020 and 2019.

SCHEDULE OF REVENUES BY PRODUCT LINE

(As previously reported)

2020 (restated)

2019 (restated)

11 - RELATED PARTY TRANSACTIONS :

Company has engaged its 40 %

partner in Generation Coffee Company, LLC as an outside contractor (the “Partner”).

Included in contract labor expense and purchases,

which are components of cost of sales, are expenses incurred from the Partner during the years ended October 31, 2021 and 2020 of

and $ 380,838 ,

respectively.

Company has engaged its 40 % partner in Generation Coffee Company, LLC as an outside contractor (the “Partner”).

in contract labor expense, which is a component of cost of sales, are expenses incurred from the Partner during the years ended

October 31, 2020 and 2019 of $ 380,838 and $ 401,227 , respectively.

employee of one of the top two vendors is a director of the Company.

Purchases from that vendor totaled approximately $ 3,100,000 and

$ 5,300,000 for the years ended October 31, 2021 and 2020, respectively.

The corresponding accounts payable balance to this vendor was

approximately $ 411,000 and $ 0 at October 31, 2021 and 2020, respectively.

Purchases from that vendor totaled approximately $ 5,300,000

and $ 8,300,000 for the years ended October 31, 2020 and 2019, respectively.

The corresponding accounts payable balance to this

vendor was approximately $ 0 and $ 840,000 at October 31, 2020 and 2019, respectively.

January 2005, the Company established the “Coffee Holding Co., Inc.

2 unchanged sentences

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, 2021 and 2020 was $ 311,872

Within the plan guidelines, this employee is deferring a portion

of his current salary and bonus.

The deferred compensation payable represents the liability due to an officer of the Company.

The deferred compensation liability at October 31, 2020 and 2019 was $ 276,548 and $ 378,453 , respectively.

Deferred compensation

expenses included in officers’ salaries were $ 0 during the years ended October 31, 2020 and 2019, respectively.

HOLDING CO., INC.

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

31, 2020 AND 2019

respectively.

Deferred compensation expenses included in officers’ salaries were $ 0

during the years ended October 31, 2021 and 2020,

respectively as no amounts were contributed to this plan during the years ended October 31, 2021 and 2020.

12 - STOCKHOLDERS’ EQUITY :

The Company utilizes the cost method of accounting for treasury stock.

The cost of reissued shares is determined under

the last-in, first-out method.

The Company did not purchase any shares during the years ended October 31, 2021 and 2020.

The Company has an incentive stock plan, the 2013 Equity Compensation Plan (the “2013 Plan”), and on April

19, 2019, has granted 1,000,000

stock options to employees, officers and

non-employee directors from the 2013 Plan each with an exercise price of $ 5.43 .

Options granted under the 2013 Plan may be Incentive Stock Options or Nonqualified Stock Options, as determined by the Administrator

at the time of grant.

No options were granted, forfeited or expired during the years ended October 31, 2021 and 2020.

As of October

31, 2021, 666,383 options are exercisable.

The cost of reissued shares is determined

under the last-in, first-out method.

The Company did no t purchase any shares during the years ended October 31, 2020 and 2019.

The Company has an incentive stock plan, the 2013 Equity Compensation Plan (the “2013 Plan”), and on

April 19, 2019, has granted stock options to employees, officers and non-employee directors from the 2013 Plan.

Options granted

under the 2013 Plan may be Incentive Stock Options or Nonqualified Stock Options, as determined by the Administrator at the

time of grant.

As of January 31, 2020, the Board of Directors approved 1,000,000 options.

the year ended October 31, 2019, the Company granted stock option awards to five board members to purchase an aggregate 59,000

shares of the Company’s common stock at $ 5.43 per share.

stock options have an expected term of six years and will vest over a twelve month service period.

stock options have an aggregate grant date fair value of approximately $ 233,050 .

The Company also granted stock option awards

to certain officers and employees to purchase an aggregate of 941,000 shares of the Company’s common stock at an exercise

price of $ 5.43 per share.

The stock options have an expected term of six years and will vest over a three year service period.

These stock options have an aggregate grant date fair value of approximately $ 2,277,220 .

following table represents stock option activity for the year ended October 31, 2020:

SUMMARY OF STOCK OPTION ACTIVITY

October 31, 2019

October 31, 2020

Balance October

October 31, 2019

Company recorded $ 868,477 and $ 476,899 of stock-based compensation during the years ended October 31, 2020 and 2019, respectively.

The weighted average remaining contractual life of the outstanding options as of October 31, 2021 is 0.5 years.

unrecognized stock compensation expense as of October 31, 2020 was approximately $ 1,164,894 .

Our common stock is traded on the Nasdaq Capital Market.

As of October 31, 2021 we had 30,000,000 shares of our $ 0.001

par value common stock authorized, with 6,633,930 and 5,708,599 shares issued and outstanding, respectively.

Preferred Stock.

We are authorized to issue up

to 10,000,000 shares of preferred stock, par value $ 0.001 per share, with such designations, rights, and preferences as may be determined

from time to time by our board of directors.

As of October 31, 2021, no shares of our preferred stock were outstanding.

HOLDING CO., INC.

2 unchanged sentences

31, 2020 AND 2019

13 - FAIR VALUE MEASUREMENTS :

value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market

participants at the measurement date, not adjusted for transaction costs.

The guidance also establishes a fair value hierarchy

that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels giving the highest priority

to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs

(Level 3) as described below:

1 Inputs – Unadjusted quoted prices in active markets for identical assets or liabilities that are accessible by the Company;

2 Inputs – Quoted prices in markets that are not active or financial instruments for which all significant inputs are observable,

either directly or indirectly;

3 Inputs – Unobservable inputs for the asset or liability including significant assumptions of the Company and other market

participants.

Company determines fair values for its investment assets as follows:

at fair value consist of commodity securities and deferred compensation plan assets.

Company maintains a deferred compensation plan.

The fair value of the plan assets are classified within Level 1 as the assets

are valued using quoted prices in active markets.

The assets are included with Deposits and other assets in the accompanying balance

Additional information related to the Company’s deferred compensation plan is disclosed in Note 11.

Company’s commodity securities are classified within Level 2 and include coffee futures and options contracts.

fair value, the Company utilizes the market approach valuation technique for the coffee futures and options contracts.

uses Level 2 inputs that are based on market data of similar instruments that are in observable markets.

All commodities on the

balance sheet are recorded at fair value with changes in fair value included in earnings.

following tables present the Company’s assets and liabilities that are measured at fair value on a recurring basis and are

categorized using the fair value hierarchy.

HOLDING CO., INC.

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

31, 2020 AND 2019

13 - FAIR VALUE MEASUREMENTS (cont’d):

SCHEDULE OF ASSETS AND LIABILITIES MEASURED AT FAIR VALUE

Value Measurements as of October 31, 2020

$ ( 452,325 )

Value Measurements as of October 31, 2019

14 - SUBSEQUENT EVENTS :

January 2022, the Board of Directors approved a special dividend $ 0.073 per share of our outstanding common stock.

The dividend was paid

on February 21, 2022 to stockholders of record at the close of business on February 10, 2022.

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.

All other terms of the A&R Loan Agreement and A&R Loan Facility remain the same.

June 28, 2022, the Company reached an agreement for a new loan modification agreement and credit facility with Webster Bank.

of the new agreement, among other things:

(i) provided for a new maturity date of June 30, 2024, and (ii) changed the interest rate per

annum to SOFR plus 1.75 % (with such interest rate not to be lower than 3.50%).

All other terms of the A&R Loan Agreement and A&R

Loan Facility remain the same.

is subject to certain covenents with respect to it’s 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.

Company during the quarter ended April 30, 2022 has begun a restructuring process with its Generations subsidiary.

As part of this restructuring

approximately $ 550,000 of its inventory was sold to the joint venture partner for $ 330,000 in cash and the balance was treated as a distribution

to the non-controlling interest.

As part of the restructuring process, the Company recorded a write-down of obsolete inventory of $ 718,353

and a write-off of accounts receivable of $ 415,096 .

September 29, 2022, we 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 JVA surviving as a direct,

wholly-owned subsidiary of Pubco (the “Merger”).

As a result of the Merger, each issued and outstanding share of our common

stock will be cancelled and converted for the right of the holder thereof to receive one ordinary share, par value $ 0.0001 of Pubco (the

“Pubco Ordinary Shares”).

Company evaluates events that have occurred after the balance sheet date but before the financial statements are issued.

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 consolidated financial statements.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K/A

Item 9A. Controls and Procedures