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Item 9A. Controls and Procedures

2023-03-29 compared with 2022-01-31 · 1082 added, 556 removed, 525 unchanged (76% of the section changed)

2 unchanged sentences

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.

upon that evaluation, our President, Chief Executive Officer and Chief Financial Officer concluded that the disclosure controls and procedures

were effective.

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.

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

Based upon that evaluation, our President, Chief Executive Officer and Chief Financial Officer concluded that the disclosure

controls and procedures were not effective.

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, 2022 in accordance with U.S.

Report on Internal Control Over Financial Reporting .

11 unchanged sentences

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.

Accordingly, management has determined that this control deficiency constituted

a material weakness.

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

1 unchanged sentence

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.

Accordingly, management has determined that this control deficiency constituted

a material weakness.

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

2 unchanged sentences

Accordingly, management

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

has determined that this was a control deficiency that constituted 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 constituted 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 31, 2020.

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.

Accordingly, management has determined that this control deficiency constituted a material weakness.

Further, during the year ended October 31, 2022, we concluded that we lacked

adequate controls with respect to the preparation and review of journal entries and account reconciliations during the

year-end financial statement closing process.

Accordingly, management has determined that this control deficiency constituted a material

Notwithstanding

2 unchanged sentences

Plan for the Material Weakness

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;

remediate the material weaknesses 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.

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;

referencing analysis to be completed on a quarterly basis;

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

9 unchanged sentences

in Control Over Financial Reporting.

Except 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.

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, 2022 that have materially affected, or are reasonably

likely to materially affect, our internal control over financial reporting.

Report of the Registered Public Accounting Firm .

6 unchanged sentences

EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

required by this item is incorporated by reference to our Proxy Statement for the 2022 Annual Meeting of Stockholders.

About our Board of Directors and Management

Held With Coffee Holding

Chief Executive Officer, Chief Financial Officer, Treasurer and Director

Vice President — Operations, Secretary and Director

As of March 23, 2023

principal occupation and business experience of each director are set forth below.

Unless otherwise indicated, each of the following

persons has held his present position for at least the last five years.

Gordon has been the Chief Executive Officer, President, Treasurer and a director of Coffee Holding since 1997 and its Chief Financial

Officer since November 2004.

He is responsible for managing Coffee Holding’s overall business and has worked for Coffee Holding

for over 36 years, previously as a Vice President from 1993 to 1997.

Gordon has worked in all capacities of Coffee Holding’s

business and serves as the direct contact with its major private label accounts.

Gordon received his Bachelor of Business Administration

degree from Emory University.

He is the brother of David Gordon.

Through his experience as President and Chief Executive Officer of the

Company, as well as his over 35 years of service with the Company, Mr.

Gordon has demonstrated the requisite qualifications and skills

necessary to serve as an effective director.

We believe Mr.

Gordon’s extensive experience with, and institutional knowledge of,

Coffee Holding and the industry is an integral contribution to Coffee Holding’s current successes and its ability to grow and flourish

in the industry.

Dwyer has served as a director of Coffee Holding since 1998.

Dwyer was the Chief Executive Officer at Rothfos Corporation

until 2022, a green coffee bean supplier, and prior to that, had been a senior coffee trader at Rothfos, since 1995.

Dwyer was responsible

for our account with Rothfos.

We paid Rothfos approximately $3.5 million for green coffee purchases in fiscal 2021.

All purchases were

made on arms’ length terms.

We believe that Mr.

Dwyer’s experience with the coffee industry will enable him to provide the

Board with beneficial insight for Coffee Holding’s business development and strategy.

Dwyer serves on the board of directors

of the National Coffee Association.

Knepper has served as a director of Coffee Holding since 2005.

From July 2004 to the present, Mr.

Knepper has been the President

and Chief Executive Officer of CFO Business Solutions, a management consulting firm.

Knepper was the Chief Financial Officer for

TruFoods Corporation, a growth oriented franchise management company from April 2001 through June 2004.

From January 2000 through March

2001, he was the Chief Financial Officer of Offline Entertainment, an early stage television and motion picture production company.

1982 through 1999, he served as the Chief Financial Officer of Unitel Video, Inc., a formerly publicly-traded nationwide high tech service

company in the television, film and new media fields.

We believe that Mr.

Knepper’s diversified financial, accounting and business

expertise provide him with the qualifications and skills to serve as a director.

DeCapua has served as a director of Coffee Holding since 1997.

DeCapua has had his own law practice in Rockville Centre,

New York since 1986.

DeCapua received his law degree from Pace University.

We believe that Mr.

DeCapua’s legal experience brings

significant knowledge regarding the legal issues Coffee Holding faces and provide him with the skills and qualifications to serve as

Thomas has served as a director of Coffee Holding since February 2016.

Thomas has over 38 years of domestic and international

corporate business experience in top management positions.

Since February 2007, Mr.

Thomas has served as a Principal at Radix Consulting

Corporation, a consulting firm which provides specialized advice in the field of electronic payments.

From 1981 through 2007, Mr.

served in a number of positions at The Clearing House Payments Company L.L.C., a limited liability company which operates electronic

payment systems, including such positions as Executive Vice President of the Payments Services Division, President of the Electronic

Payments Network, Senior Vice President of Business Development and Information Technology and Vice President of Technical Services and

Systems Development.

Since 2007, Mr.

Thomas has served as a director of eGistics, Inc., a provider of cloud-based document and data management

solutions which was acquired by Top Image Systems, Ltd.

We believe that Mr.

Thomas’ financial and business experience

provide him with the qualifications and skills to serve as a director.

Gordon has been the Executive Vice President — Operations, Secretary and a director of Coffee Holding since 1995.

responsible for managing all aspects of Coffee Holding’s roasting and blending operations, including quality control, and has worked

for Coffee Holding for 39 years, previously as an Operating Manager from 1989 to 1995.

He is a charter member of the Specialty Coffee

Association of America, or SCAA.

Gordon attended Baruch College in New York City.

He is the brother of Andrew Gordon.

38 years of service with the Company, Mr.

Gordon has demonstrated the requisite qualifications and skills necessary to serve as an effective

We believe Mr.

Gordon’s extensive institutional knowledge and leadership are invaluable to Coffee Holding’s current

and future successes.

Gordon’s leadership, as demonstrated by the launch of the Specialty Green segment of the business as

well as the founding of the SCAA, is a valuable resource for Coffee Holding’s business development and future strategy.

Rotelli has served as a director of Coffee Holding since 2005.

Rotelli has over 40 years of experience in the green coffee

industry business consisting of procurement from growing countries, every aspect of traffic and warehousing, quality analysis, and knowledge

of both suppliers and competitors.

Rotelli is currently the Vice President of L.J.

Cooper Company, one of the largest green coffee

brokers and agents in North America.

He is also a director of the Green Coffee Association.

Rotelli’s industry and business

experience provides the Board with valuable expertise within the coffee industry as well as beneficial relationships that can help form

new beneficial relationships for Coffee Holding.

Relationships

Gordon and David Gordon are brothers.

Other than Messrs.

Gordon, there are no family relationships among any of the directors or executive

Board oversees our business and monitors the performance of our management.

In accordance with our corporate governance procedures, the

Board does not involve itself in the day-to-day operations of Coffee Holding.

Our executive officers and management oversee our day-to-day

Our directors fulfill their duties and responsibilities by attending meetings of the Board, which are usually held on a quarterly

Our directors also discuss business and other matters with other key executives and our principal external advisers (legal counsel,

auditors, financial advisors and other consultants).

Board held six meeting during the fiscal year ended October 31, 2022 and acted by written consent on one occasion.

Each director serving

during the fiscal year ended October 31, 2022 attended at least 75 percent of the meetings of the Board, plus meetings of committees

on which that particular director served during the fiscal year ended October 31, 2022.

Holding is committed to establishing and maintaining high standards of corporate governance.

Our executive officers and the Board have

worked together to construct a comprehensive set of corporate governance initiatives that we believe will serve the long-term interests

of our stockholders and employees.

We believe these initiatives comply fully with the Sarbanes-Oxley Act of 2002 and the rules and regulations

of the SEC adopted thereunder.

In addition, we believe our corporate governance initiatives fully comply with the rules of the Nasdaq

Stock Market LLC (“Nasdaq”).

The Board will continue to evaluate, and improve upon as appropriate, our corporate governance

principles and policies.

Leadership Structure and Role in Risk Oversight

Gordon serves as both our principal executive officer and chairman at the pleasure of the Board.

The directors have determined that Mr.

Gordon’s experience in our industry and in corporate transactions, and his personal commitment to Coffee Holding as an investor

and employee, make him uniquely qualified to supervise our operations and to execute our business strategies.

The Board is also cognizant

of Coffee Holding’s relatively small size compared to its publicly traded competitors.

We do not have a lead independent director.

Management’s activities are monitored by standing committees of the Board, principally the Audit Committee, the Compensation Committee

and the Nominating and Corporate Governance Committee.

Each of these committees is comprised solely of independent directors.

reasons, the Board deems this leadership structure appropriate for us.

Board has adopted a Code of Conduct and Ethics that applies to each of our directors, officers and employees.

The Code of Conduct and

Ethics sets forth our policies and expectations on a number of topics, including:

responsibility regarding both personal and business affairs, including transactions with Coffee Holding;

conduct, including ethical behavior and outside employment and other activities;

transactions, including separate identities and usurpation of corporate opportunities;

and accuracy of Coffee Holding’s records;

with laws, including insider trading compliance;

of confidential information relating to our business and that of our clients;

safeguarding and proper use of our assets and institutional property;

administration and enforcement;

investigating and resolving of all code violations;

training, certification of compliance and maintenance of code-related records.

Audit Committee of our Board reviews the Code of Conduct and Ethics on a regular basis, and will propose or adopt additions or amendments

to the Code of Conduct and Ethics as appropriate.

The Code of Conduct and Ethics is available on our website at www.coffeeholding.com

under “Investor Relations - Corporate Governance.” A copy of the Code of Conduct and Ethics may also be obtained free

of charge by sending a written request to:

Gordon, Secretary

Holding Co., Inc.

Victory Boulevard

Island, NY 10314

intend to satisfy the disclosure requirement under Section 5.05(c) of Form 8-K regarding an amendment to, or waiver from, a provision

of our Code of Ethics by posting such information on our website.

Board currently consists of seven directors, four of whom our Board has determined are independent directors.

The standards relied on

by the Board in affirmatively determining whether a director is “independent,” in compliance with Nasdaq’s rules, are

comprised of those objective standards set forth in the rules promulgated by Nasdaq.

The Board is responsible for ensuring that independent

directors do not have a relationship that, in the opinion of the Board, would interfere with the exercise of independent judgment in

carrying out the responsibilities of a director.

Board has determined that Gerard DeCapua, Barry Knepper, John Rotelli and George F.

Thomas, comprising a majority of the Board, are “independent”

directors under Nasdaq’s rules.

rules, as well as SEC rules, impose additional independence requirements for all members of the Audit Committee.

Specifically, in addition

to the “independence” requirements discussed above, “independent” audit committee members must:

(1) not accept,

directly or indirectly, any consulting, advisory, or other compensatory fees from Coffee Holding or any subsidiary of Coffee Holding

other than in the member’s capacity as a member of the Board and any Board committee;

(2) not be an affiliated person of Coffee

Holding or any subsidiary of Coffee Holding;

and (3) not have participated in the preparation of the financial statements of Coffee Holding

or any current subsidiary of Coffee Holding at any time during the past three years.

In addition, Nasdaq’s rules require that all

audit committee members be able to read and understand fundamental financial statements, including Coffee Holding’s balance sheet,

income statement, and cash flow statement.

The Board believes that the current members of the Audit Committee meet these additional standards.

at least one member of the Audit Committee must be financially sophisticated, in that he or she has past employment experience in finance

or accounting, requisite professional certification in accounting, or any other comparable experience or background which results in

the individual’s financial sophistication, including but not limited to being or having been a chief executive officer, chief financial

officer, other senior officer with financial oversight responsibilities.

Additionally, the SEC requires that Coffee Holding disclose

whether the Audit Committee has, and will continue to have, at least one member who is a “financial expert.” The Board has

determined that Barry Knepper meets the SEC’s definition of an audit committee financial expert.

Board of Coffee Holding has established the following committees:

The Audit Committee oversees and monitors our financial reporting process and internal control system, reviews and

evaluates the audit performed by our registered independent public accountants and reports to the Board any substantive issues found

during the audit.

The Audit Committee is directly responsible for the appointment, compensation and oversight of the work of our registered

independent public accountants.

The Audit Committee reviews and approves all transactions with affiliated parties.

The Board has adopted

a written charter for the Audit Committee, which is available on our website at www.coffeeholding.com under “Investor Relations

- Corporate Governance.” All members of the Audit Committee are independent directors as defined under Nasdaq’s listing standards.

Gerard DeCapua, Barry Knepper and George F.

Thomas serve as members of the Audit Committee with Barry Knepper serving as its chairman.

The Board has determined that Barry Knepper qualifies as an audit committee financial expert as that term is defined by SEC regulations.

The Audit Committee held six meetings during the fiscal year ended October 31, 2022, and acted by written consent on two occasions.

The Compensation Committee provides advice and makes recommendations to the Board in the areas of employee salaries,

benefit programs and director compensation.

The Compensation Committee also reviews the compensation of the President and Chief Executive

Officer of Coffee Holding and makes recommendations in that regard to the Board as a whole.

The Board has adopted a written charter for

the Compensation Committee, which is available on our website at www.coffeeholding.com under “Investor Relations - Corporate

Governance.” All members of the Compensation Committee are independent directors as defined under Nasdaq’s listing standards.

Barry Knepper, John Rotelli and George F.

Thomas serve as members of the Compensation Committee, with John Rotelli serving as its chairman.

The Compensation Committee acted by written consent once during the fiscal year ended October 31, 2022.

and Corporate Governance Committee.

The Nominating and Corporate Governance Committee nominates individuals to be elected to

the full Board by our stockholders.

The Nominating and Corporate Governance Committee considers recommendations from stockholders if

submitted in a timely manner in accordance with the procedures set forth in Article II, Section 11 of our Bylaws and applies the same

criteria to all persons being considered.

All members of the Nominating and Corporate Governance Committee are independent directors

as defined under the Nasdaq listing standards.

Gerard DeCapua, John Rotelli and George F.

Thomas serve as members of the Nominating and

Corporate Governance Committee, with Gerard DeCapua serving as its chairman.

The Board has adopted a written charter for the Nominating

and Corporate Governance Committee, which is available on our website at www.coffeeholding.com under “Investor Relations

- Corporate Governance.” The Nominating and Corporate Governance Committee acted by written consent once during the fiscal year

ended October 31, 2022.

are no minimum qualifications that must be met by a Nominating and Corporate Governance Committee-recommended nominee.

It is the policy

of the Nominating and Corporate Governance Committee to recommend individuals as director nominees who have the highest personal and

professional integrity, who have demonstrated exceptional ability and judgment and who will be most effective, in conjunction with the

other members of the Board, in collectively serving the long-term interests of our stockholders.

Communication with the Board of Directors and Attendance at Annual Meetings

Board maintains a process for stockholders to communicate with the Board and its committees.

Stockholders of Coffee Holding and other

interested persons may communicate with the Board or the chairperson of the Audit Committee, Compensation Committee or Nominating and

Corporate Governance Committee by writing to the Secretary of Coffee Holding at 3475 Victory Boulevard, Staten Island, NY 10314.

communications that relate to matters that are within the scope of the responsibilities of the Board will be presented to the Board no

later than the next regularly scheduled meeting.

Communications that relate to matters that are within the responsibility of one of the

Board committees will be forwarded to the chairperson of the appropriate committee.

Communications that relate to ordinary business matters

that are not within the scope of the Board’s responsibilities, such as customer complaints, will be forwarded to the appropriate

Solicitations, junk mail and obviously frivolous or inappropriate communications will not be forwarded, but will be made available

to any director who wishes to review them.

are expected to prepare themselves for and attend all Board meetings, the Annual Meeting of Stockholders and the meetings of the committees

on which they serve, with the understanding that, on occasion, a director may be unable to attend a meeting.

All of our directors who

served as directors during the 2022 fiscal year attended the 2022 Annual Meeting of Stockholders.

summary compensation table below summarizes information concerning compensation for the fiscal years ended October 31, 2022 and 2021

of the individuals who served as President, Chief Executive Officer, Chief Financial Officer and Treasurer (Andrew Gordon) and Executive

Vice President — Operations and Secretary (David Gordon).

We refer to these individuals as the “Named Executive Officers.”

COMPENSATION TABLE

following table sets forth information with respect to the compensation of our Named Executive Officers for services in all capacities

to us and our subsidiaries.

Name and Principal Position

Compensation (4)

Andrew Gordon,

President, Chief Executive Officer, Chief Financial Officer and Treasurer

David Gordon,

Executive Vice President –

Operations and Secretary

figures shown represent amounts earned for the fiscal year, whether or not actually paid during such year.

option awards represent the grant date fair value of the awards pursuant to FASB ASC Topic 718, as described in Note 12 “Stockholders’

Equity” in the Notes to the Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended October

the amount of interest accrued on defined contribution deferred compensation balances at a rate in excess of 120% of the applicable

federal mid-term rate under section 1274(d) of the Internal Revenue Code of 1986 (the “Code”) and dividends or dividend

equivalents on balances denominated in Coffee Holding common stock in excess of the dividends paid to stockholders generally during

the fiscal year.

Named Executive Officers participate in certain group life, health, disability insurance and medical reimbursement plans, not disclosed

in the Summary Compensation Table, that are generally available to salaried employees and do not discriminate in scope, terms and

The figures shown for Andrew Gordon include $10,641 and $10,603 in employer contributions to the 401(k) plan for 2022

and 2021, respectively;

life insurance premiums of $0 and $816 for 2022 and 2021, respectively, business car expenses of $24,460

and $9,126 for 2022 and 2021, respectively, and health insurance premiums of $24,270 and $21,885 for 2022 and 2021, respectively.

The figures shown for David Gordon include $12,655 and $7,368 for a business car expenses in 2022 and 2021, respectively;

and $7,676 in employer contributions to the 401(k) plan for 2022 and 2021, respectively, life insurance premiums of $3,000 and $3,000

for 2022 and 2021, respectively, and health insurance premiums of $60,803 and $53,257 for 2022 and 2021, respectively.

to Summary Compensation Table

Compensation Committee has responsibility for establishing, implementing and monitoring adherence with our compensation philosophy.

that regard, the Compensation Committee provides advice and makes recommendations to the JVA Board in the areas of employee salaries

and benefit programs.

The Compensation Committee ensures that the total compensation paid to our executive leadership team is fair and

Generally, the types of compensation and benefits provided to members of the executive leadership team, including the Named

Executive Officers, are similar to those provided to our other officers and employees.

compensation program for Named Executive Officers consists generally of base salary and annual bonuses.

These elements are intended to

provide an overall compensation package that is commensurate with our financial resources, that is appropriate to assure the retention

of experienced management personnel, and that aligns their financial interests with those of our stockholders.

We pay our Named Executive

Officers commensurate with their experience and responsibilities.

Each of our Named Executive Officers receives a base salary to compensate him for services performed during the year.

The base salaries of our Named Executive Officers are established annually by the JVA Board upon recommendation by the Compensation Committee.

When determining the base salary for each of our Named Executive Officers, the Compensation Committee considers the performance of the

Named Executive Officer, the duties of the Named Executive Officer, the experience of the Named Executive Officer in his position and

salary levels of the companies in our peer group.

Salary levels are also intended to reflect our financial performance.

We have entered

into employment agreements with each of the Named Executive Officers that provide for minimum annual base salaries.

The Named Executive

Officers are eligible for annual increases in their base salaries as a result of company performance, individual performance and any

added responsibility since their last salary increase.

Our Named Executive Officers are eligible to receive annual cash bonuses.

These bonuses are intended to reward the achievement

of corporate goals and individual performance objectives.

The bonus levels are intended to be competitive with those typically paid by

the companies in our peer group and commensurate with the Named Executive Officers’ successful execution of duties and responsibilities.

Compensation.

At the 2013 Annual Meeting of Stockholders, our stockholders approved the 2013 Equity Compensation Plan.

the 2013 Equity Compensation Plan, we provide our employees, including our Named Executive Officers, with equity incentives that help

align their interests with those of our stockholders by tying the value delivered to our Named Executive Officers to the value of our

shares of common stock.

We also believe that stock option grants to our Named Executive Officers provide them with long-term incentives

that will aid in retaining executive talent by providing opportunities to be compensated through the Company’s performance and

rewarding executives for creating shareholder value over the long-term.

the years ended October 31, 2022, and October 31, 2021 we did not grant any stock option awards to the Named Executive Officers.

the year ended October 31, 2019, we granted stock option awards to the Named Executive Officers to purchase an aggregate of 630,000 shares

of common stock at an exercise price of $5.43 per share.

The stock options are fully vested.

Implementation

for Fiscal Year 2022

the 2022 fiscal year, Andrew Gordon received a base salary of $323,863 and did not receive an annual bonus.

David Gordon received a base

salary of $270,400 and did not receive an annual bonus.

stated above, on April 18, 2019, Andrew Gordon was granted a stock option to purchase 349,000 shares of common stock, and David Gordon

was granted a stock option to purchase 281,000 shares of common stock.

The stock options have an exercise price of $5.43 and are completely

Decision-Making Policies and Procedures

Decision-Making

and Policy-Making.

As a Nasdaq listed company, we must observe governance standards that require executive officer compensation

decisions to be made by the independent director members of our Board or by a committee of independent directors.

Consistent with these

requirements, our Board has established a Compensation Committee all of whose members are independent directors.

Compensation Committee provides advice and makes recommendations to our Board in the areas of employee salaries and benefit programs.

Compensation may consist of three components:

(1) base salary;

and (3) long-term incentives ( e.g., deferred compensation

and fringe benefits).

Compensation Committee generally meets at least once each year or acts by written consent.

It considers the expectations of the Chief

Executive Officer with respect to his own compensation and his recommendations with respect to the compensation of more junior executive

officers, as well as empirical data on compensation practices at peer group companies.

The Compensation Committee does not delegate its

duties to others.

have entered into employment agreements with Andrew Gordon to secure his continued service as President, Chief Executive Officer, Chief

Financial Officer and Treasurer and with David Gordon to secure his continued service as Executive Vice President — Operations

and Secretary.

These employment agreements have rolling five-year terms that began on May 6, 2005.

These agreements may be converted

to a fixed five-year term by the decision of our Board or the executive.

These agreements provide for minimum annual salaries, discretionary

cash bonuses, and participation on generally applicable terms and conditions in other compensation and fringe benefit plans.

The employment

agreements also guarantee customary corporate indemnification and errors and omissions insurance coverage throughout the employment term

and thereafter for so long as the executives are subject to liability for such service to the extent permissible by the Nevada Revised

terms of the employment agreements provide that each executive will be entitled to severance benefits if his employment is terminated

without “cause” or if he resigns for “good reason” or following a “change in control” (as such terms

will be defined in the employment agreements) equal to the value of the cash compensation and fringe benefits that he would have received

if he had continued working for the remaining unexpired term of the agreement.

The employment agreements also provide uninsured disability

During the term of the employment agreements and, in case of discharge with “cause” or resignation without “good

reason,” for a period of one year thereafter, the executives are subject to (1) restrictions on competition with us;

and (2) restrictions

on the solicitation of our customers and employees.

For all periods during and after the term of the employment agreements, the executives

are subject to nondisclosure and restrictions relating to our confidential information and trade secrets.

employment agreements provide that in the event either executive terminates employment in connection with a change in control under circumstances

entitling him to severance benefits, and it is determined that the executive would be subject to a 20% excise tax imposed by Section

4999 of the Code which applies to certain “excess parachute payments” (the “Excise Tax”), we will pay the executive

a “Tax Indemnity Payment” such that the net amount received by the executive after payment of such Excise Tax, and any federal,

Medicare and state and local income taxes and Excise Tax upon the Tax Indemnity Payment, will be equal to the payments the executive

would have retained had there been no Excise Tax.

The effect of this provision is that we, and not the executives, bear the financial

cost of the Excise Tax.

In accordance with Section 280G of the Code, we cannot claim a federal income tax deduction for payments subject

to the Excise Tax, including the Tax Indemnity Payment.

Payments Upon a Change of Control

the 2013 Equity Compensation Plan, in the event of a change in control (as defined in the 2013 Equity Compensation Plan), the Compensation

Committee may, at the time of the grant of an award provide for, among other things, the (i) accelerating or extending the time periods

for exercising, vesting in, or realizing gain from any award, (ii) eliminating or modifying the performance or other conditions of an

award, or (iii) providing for the cash settlement of an award for an equivalent cash value, as determined by the Compensation Committee.

The Compensation Committee may, in its discretion and without the need for the consent of any recipient of an award, also take one or

more of the following actions contingent upon the occurrence of a change in control:

(a) cause any or all outstanding options and stock

appreciation rights to become immediately exercisable, in whole or in part;

(b) cause any other awards to become non-forfeitable, in

whole or in part;

(d) cancel any award of restricted

stock, restricted stock units, performance shares or performance units in exchange for a similar award of the capital stock of any successor

(e) redeem any restricted stock, restricted stock unit, performance share or performance unit for cash and/or other substitute

consideration with a value equal to the fair market value of an unrestricted share of our common stock on the date of the change in control;

(f) cancel any option or stock appreciation right in exchange for cash and/or other substitute consideration based on the value of our

common stock on the date of the change in control , and cancel any option or stock appreciation right without any payment if its

exercise price exceeds the value of our common stock on the date of the change in control;

or (g) make such other modifications, adjustments

or amendments to outstanding awards as the Compensation Committee deems necessary or appropriate.

To date, there have been 689,000 options

granted under the 2013 Equity Compensation Plan to the Named Executive Officers.

than the severance benefits described under “Employment Agreements” and the potential payments described under “Potential

Payments Upon a Change of Control” above, we do not maintain contracts, agreements, plans or arrangements that provide for payments

to the Named Executive Officers at, following, or in connection with any termination of employment.

Compensation Plan for Executive Officers

January 2005, we established the Coffee Holding Co., Inc.

Non-Qualified Deferred Compensation Plan for Named Executive Officers.

Andrew Gordon is the only participant in the plan.

Each Named Executive Officer who participates in the plan may defer receipt of all

or a portion of his annual cash compensation received from Coffee Holding.

The deferred amounts are allocated to a deferral account and

credited with interest according to the investment classifications made available by the JVA Board.

The plan is an unfunded, non-qualified

plan that provides for distribution of the amounts deferred to participants or their designated beneficiaries upon the occurrence of

certain events.

The amounts deferred, and related investment earnings, are held in a corporate account for the benefit of participating

Named Executive Officers until such amounts are distributed pursuant to the terms of the plan.

Equity Awards at Fiscal Year-End

following table sets forth information regarding outstanding stock options awarded to each of our Named Executive Officers as of October

Number of Securities

Underlying Unexercised Options

Unexercisable

Andrew Gordon

Compensation Plan Information

following table sets forth information regarding outstanding stock options and rights and shares reserved for future issuance under our

existing equity compensation plans as of October 31, 2022.

Plan Category

Number of securities to be issued upon exercise of outstanding options, warrants and rights

Weighted-average exercise price of outstanding options, warrants and rights

(Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column(a))

Equity compensation plans approved by stockholders (1)

Equity compensation plans not approved by stockholders

outstanding stock options granted to current or former employees and directors of the Company pursuant to its 2013 Equity Compensation

directors receive $800 per Board meeting and committee meeting attended in person and $400 per each JVA Board meeting and committee meeting

attended telephonically.

Non-employee directors are also reimbursed for travel expenses and other out-of-pocket costs incurred in connection

with attendance at Board and committee meetings.

directors’ meeting and committee fees for the fiscal year ended October 31, 2022 were $15,200.

We do not compensate our employee

directors for service as directors.

Directors are also entitled to the protection of certain indemnification provisions in our Amended

and Restated Articles of Incorporation and Bylaws.

following table sets forth information regarding compensation earned by our non-employee directors during the 2022 fiscal year.

COMPENSATION TABLE

Options (2)(3)

All Other Compensation ($)

Gerard DeCapua

Barry Knepper

fees earned during the fiscal year, whether such fees were paid currently or deferred.

option awards represent the grant date fair value of the awards pursuant to FASB ASC Topic 718, as described in Note 12 “Stockholders’

Equity” in the Notes to the Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended October

31, 2022, to which reference is hereby made.

total number of shares of common stock covered by stock options held by each non-employee director at October 31, 2022 were as follows:

Gerard DeCapua

Barry Knepper

OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

required by this item is incorporated by reference to our Proxy Statement for the 2022 Annual Meeting of Stockholders.

Ownership of Certain Beneficial Owners and Management of JVA

following table shows the number of shares of Coffee Holding’s common stock, par value $0.001 per share, beneficially owned by

(i) each person known to be the owner of 5% or more of our common stock, (ii) each director and nominee, (iii) the Named Executive Officers

identified in the Summary Compensation Table included elsewhere in this proxy statement and (iv) all directors and executive officers

of Coffee Holding as a group, as of March 15, 2023.

The percent of common stock outstanding was based on a total of 5,708,599 shares

of Coffee Holding’s common stock outstanding as of January 27, 2023.

Except as otherwise indicated, each person shown in the table

has sole voting and investment power with respect to the shares of common stock listed next to his or her name.

The address for each

person shown in the table is c/o Coffee Holding Co., Inc., 3475 Victory Boulevard, Staten Island, New York 10314, unless otherwise indicated.

Outstanding (%) (1)

Directors and Executive Officers

Andrew Gordon

President, Chief Executive Officer, Chief Financial Officer, Treasurer and Director

Executive Vice President — Operations, Secretary and Director

Gerard DeCapua

Barry Knepper

All directors and executive officers as a group (7 persons)

5% or More Holders

Renaissance Technologies LLC

ownership includes shares of common stock as to which a person or group has sole or shared voting power or investment power.

of common stock subject to stock options that are exercisable currently or within 60 days of the Record Date, are deemed outstanding

for purposes of computing the number of shares beneficially owned and percentage ownership of the person or group holding such stock

options, warrants or convertible securities, but are not deemed outstanding for computing the percentage of any other person

14,000 shares owned by Mr.

Gordon directly, a stock option to purchase 349,000 shares held directly by Mr.

A Gordon, and 273,750

shares owned indirectly by Mr.

Gordon through A.

Gordon Family Ventures LLC.

367,181 shares of common stock owned by Mr.

Gordon directly, and a stock option to purchase 281,000 shares of common stock owned

directly by Mr.

100 shares of common stock and an option to purchase 14,000 shares owned directly by Mr.

5,900 shares of common stock and an option to purchase 14,000 shares of common stock owned directly by Mr.

22,010 shares of common stock and an option to purchase 14,000 shares of common stock owned directly by Mr.

6,548 shares of common stock and an option to purchase 14,000 shares of common stock owned directly by Mr.

3,000 shares of common stock owned by Mr.

Thomas directly, an option to purchase 3,000 shares of common stock owned by Mr.

directly, and 600 shares owned by Mr.

Thomas’ wife.

shares of common stock beneficially owned by Renaissance Technologies Holdings Corporation (“RTHC”) because of RTHC’s

majority ownership of Renaissance Technologies LLC (“RTC”).

The principal business address of both RTHC and RTC is 800

Third Avenue, New York, New York 10022.

All information regarding RTHC is based on information disclosed in a statement on Schedule

13G filed with the SEC on February 13, 2023.

RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

required by this item is incorporated by reference to our Proxy Statement for the 2022 Annual Meeting of Stockholders.

following is a summary of transactions since November 1, 2021 and all currently proposed transactions, to which JVA has been a participant,

amounts exceeded or will exceed the lesser of $120,000 or one percent of the average of JVA’s total assets at year-end for

the last two completed fiscal years;

of the directors, executive officer or holders of more than 5% of the respective capital stock, or any member of the immediate family

of the foregoing persons, had or will have a direct or indirect material interest.

Dwyer, a member of our Board of Directors, was a senior coffee trader for Rothfos Corporation, a coffee trading company (“Rothfos”),

during the year ended October 31, 2021.

While employed at Rothfos, Mr.

Dwyer was responsible for the JVA account.

Dwyer retired from

Rothfos on January 1, 2022.

JVA paid Rothfos approximately $3.5 million for green coffee purchases in fiscal 2021.

has engaged its 40% partner in Generations Coffee Company, LLC (“GCC”), with which JVA has a joint venture, as an outside

JVA is the 60% equity owner of the joint venture and Caruso’s Coffee Company (“Caruso’s”) owns the

other 40% equity interest.

Payments to Caruso’s during the years ended October 31, 2022, and October 31, 2021 amounted to $285,696,

and $349,760, respectively, for the processing of finished goods.

ACCOUNTING FEES AND SERVICES

required by this item is incorporated by reference to our Proxy Statement for the 2022 Annual Meeting of Stockholders.

Billed to the Company in fiscal years 2022 and 2021

following table summarizes the fees for professional services rendered by Marcum, our independent registered public accounting firm,

for the fiscal year ended October 31, 2022 and fees for professional services rendered by Eisner, our independent registered public accounting

firm, for the fiscal year ended October 31, 2021 (the only fiscal year Eisner served as our independent registered public accounting

2022 (Marcum)

2021 (Eisner)

Audit Fees (1)

Audit-Related Fees (2)

All Other Fees

Audit fees consisted of work performed in connection with the audit of the consolidated financial statements as well as work

generally only the independent auditors can reasonably be expected to provide, such as quarterly reviews and review of our Annual

Reports on Form 10-K for fiscal years ended October 31, 2021 and 2022.

Audit-Related fees consisted of fees paid to Marcum in connection with Marcum’s review of the Registration Statement on Form F-4 in connection

with the Merger.

Committee Pre-Approval Policy

Audit Committee, or a designated member of the Audit Committee, shall preapprove all auditing services and permitted non-audit services

(including the fees and terms) to be performed for Coffee Holding by our registered independent public accountants, subject to the de

minimis exceptions for non-audit services that are approved by the Audit Committee prior to completion of the audit, provided that:

the aggregate amount of all such services provided constitutes no more than five percent of the total amount of revenues paid by Coffee

Holding to its registered independent public accountant during the fiscal year in which the services are provided;

(2) such services

were not recognized by Coffee Holding at the time of the engagement to be non-audit services;

and (3) such services are promptly brought

to the attention of the Audit Committee and approved prior to the completion of the audit by the Audit Committee or by one or more members

of the Audit Committee who are members of the Board to whom authority to grant such approvals has been delegated by the Audit Committee.

All of the services set forth in the table above were preapproved by the Audit Committee.

FINANCIAL STATEMENT SCHEDULES

of Documents filed as part of this Report

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

financial statements and related notes, together with the report of Marcum LLP appear at pages F-1 through F-22 following the Exhibit

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

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333-00588-NY)).

Merger and Share Exchange Agreement, dated September 9, 2022 by and among Coffee Holding Company, Inc., Delta Corp Holdings Limited, Delta Corp Cayman Limited and each of the selling stockholders named therein (incorporated herein by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed on September 30, 2022).

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.

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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.*

and Our Two Buddies, LLC, TANJ Properties, LLC and VGM Realty Services, LLC (incorporated herein by reference to Exhibit 10.26 (listed as Exhibit 10.6) to the Company’s Annual Report on Form 10-K filed on January 31, 2022).

Loan Modification Agreement, dated June 28, 2022, by and among Coffee Holding Co., Inc., Organic Products Trading Company LLC and Webster Bank.*

Loan Modification Agreement, dated March 15, 2023, by and among Coffee Holding Co., Inc., Organic Products Trading Company LLC and Webster Bank.*

Form of Registration Rights Agreement (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on September 30, 2022).

Form of Voting and Support Agreement (incorporated herein by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on September 30, 2022).

List of Significant Subsidiaries.*

Consent of EisnerAmper LLP*

Consent of Marcum LLP*

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Taxonomy Extension Definition Linkbase Document.

Cover Page Interactive Data File (embedded within the Inline XBRL document)

Filed herewith

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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 January 31, 2022.

by the undersigned, thereunto duly authorized on March 29, 2023.

HOLDING CO., INC.

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and on the dates indicated.

President, Chief Executive Officer, Chief Financial Officer,

Treasurer and Director

(principal executive officer and principal financial and

accounting officer)

Chief Executive Officer, Chief Financial Officer, Treasurer and Director

executive officer and principal financial and accounting officer)

Vice President – Operations, Secretary and Director

5 unchanged sentences

TO CONSOLIDATED FINANCIAL STATEMENTS

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMS

FINANCIAL STATEMENTS:

OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM PCAOB ID No.

CONSOLIDATED BALANCE SHEETS AS OF OCTOBER 31, 2022 AND 2021

4 unchanged sentences

OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

the Board of Directors and Stockholders of

Holdings Co., Inc.

the Shareholders and Board of Directors of

Holding Co., Inc.

on the Financial Statements

have audited the accompanying consolidated balance sheet of Coffee Holding Co., Inc.

have audited the accompanying consolidated balance sheets of Coffee Holding Co., Inc.

(the “Company”) as of October 31, 2022

and the related consolidated statements of operations, changes in stockholders’ equity, and cash flows for the year then ended,

and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements

present fairly, in all material respects, the consolidated financial position of the Company as of October 31, 2021, and the consolidated

results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in

the United States of America.

and 2021, 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, 2022, 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, 2022 and 2021, and the results of its operations and its cash flows for each of the two years in the period ended October 31, 2022,

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

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 audit.

financial statements based on our audits.

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

1 unchanged sentence

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

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

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

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 audit

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

1 unchanged sentence

Accordingly, we express no such opinion.

audit 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.

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 audit also included evaluating the accounting principles used and significant

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 audit provides

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 was communicated

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

(1) relates 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

Company had goodwill and indefinite lived intangible assets with a book value of $2,488,785 and $408,000, respectively, at October 31,

As 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 values.

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,

The significant estimates and assumptions in these assessments include the royalty rate, projected future cashflows, and the discount

As a result of the indefinite lived intangible asset assessment, Management determined the fair values of the indefinite lived

intangible assets did not exceed the respective carrying values and recorded an impairment charge of $1,080,000.

As a result of the goodwill

assessment, Management determined the fair value of the reporting unit exceeded the carrying value and no impairment charge was recorded.

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

due to the significant measurement uncertainty in evaluating the significant estimates and assumptions utilized in the impairment assessments.

As such, there is a high degree of auditor judgement and subjectivity, and significant audit effort was required in performing procedures

to evaluate management’s significant estimates and assumptions.

the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the financial

These procedures included, among others, (i) obtaining an understanding of management’s process and evaluating the

design of controls related to the goodwill and indefinite lived intangible asset impairment assessments;

(ii) testing management’s

process for developing the fair value estimates;

(iii) evaluating the appropriateness of the valuation models used in management’s

(iv) testing the completeness, accuracy, and relevance of underlying data used in the models;

and (v) evaluating the reasonableness

of the assumptions used by management.

Evaluating management’s assumptions related to the revenue growth rates, estimated costs,

the discount rate, and the royalty rate involved evaluating whether the assumptions used by management were reasonable considering (i)

the current and past performance of the Company, (ii) the consistency with external market and industry data, (iii) whether these assumptions

were consistent with evidence obtained in other areas of the audit, and (iv) performing a sensitivity analyses over significant estimates

and assumptions.

We 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.

EisnerAmper LLP

have served as the Company’s auditor since 2021.

OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

the Shareholders and Board of Directors of

Holding Co., Inc.

on the Financial Statements

have audited the accompanying consolidated balance sheet of Coffee Holding Co., Inc.

and Subsidiaries (the “Company”)

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

for the year then ended, 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

the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted

in the United States of America.

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 audit.

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 audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit

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

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 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.

we express no such opinion.

audit 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 also included evaluating the accounting principles

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

that our audit provides a reasonable basis for our opinion.

have served as the Company’s auditor from 2013 to 2021 .

We believe that our audits

provide a reasonable basis for our opinion.

Audit Matters

audit matters are matters 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.

We determined that there are no critical audit matters.

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

York, New York

HOLDING CO., INC.

2 unchanged sentences

31, 2022 AND 2021

and cash equivalents

receivable, net of allowances of $ 144,000 for 2021 and 2020

expenses and other current assets

and refundable income taxes

CURRENT ASSETS:

machinery and equipment, net

list and relationships, net of accumulated amortization of $ 237,131 and $ 194,379 for 2021 and 2020, respectively

and tradenames

net of accumulated amortization of $ 69,300 and $ 49,500 for 2021 and 2020, respectively

method investments

income tax assets - net

and other assets

Cash and cash equivalents

Accounts receivable, net of allowances of $ 144,000 for 2022 and 2021

Due from broker

Prepaid expenses and other current assets

Prepaid and refundable income taxes

TOTAL CURRENT ASSETS

Building machinery and equipment, net

Customer list and relationships, net of accumulated amortization of $ 279,883 and $ 237,131 for 2022 and 2021, respectively

Trademarks and tradenames

Non-compete, net of accumulated amortization of $ 99,000 and $ 69,300 for 2022 and 2021, respectively

Equity method investments

Investment - other

Right of use asset

Deferred income tax assets - net

Deposits and other assets

- LIABILITIES AND STOCKHOLDERS’ EQUITY -

payable and accrued expenses

of credit – current portion

payable – current portion

liability – current portion

taxes payable

CURRENT LIABILITIES:

income tax liabilities - net

of credit net of current portion

payable – long term

compensation payable

and Contingencies (Note 8)

STOCKHOLDERS’

Holding Co., Inc.

Accounts payable and accrued expenses

Cash overdrafts

Due to broker

Note payable – current portion

Lease liability – current portion

Income taxes payable

TOTAL CURRENT LIABILITIES

Line of credit

Lease liabilities

Note payable – long term

Deferred compensation payable

TOTAL LIABILITIES

Commitments and Contingencies (Note 8)

STOCKHOLDERS’ EQUITY:

stock, par value $ .001 per share;

Coffee Holding Co., Inc.

stockholders’ equity:

Preferred stock, par value $ .001 per share;

10,000,000 shares authorized;

stock, par value $ .001 per share;

Common stock, par value $ .001 per share;

30,000,000 shares authorized, 6,633,930 shares issued for 2022 and 2021;

5,708,599 shares outstanding

for 2021 and 2020

paid-in capital

5,708,599 shares outstanding for 2022 and 2021

Additional paid-in capital

Retained earnings

Treasury stock, 925,331 common shares, at cost for 2022 and 2021

1 unchanged sentence

( 4,633,560 )

Coffee Holding Co., Inc.

Total Coffee Holding Co., Inc.

stockholders’ equity

Non-controlling

LIABILITIES AND STOCKHOLDERS’ EQUITY

Non-controlling interest

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

Notes to Consolidated Financial Statements

3 unchanged sentences

ENDED OCTOBER 31, 2022 AND 2021

OF SALES (which includes purchases of approximately $ 3.5 million and $ 5.3 million in fiscal years 2021 and 2020, respectively, from

a related party)

and administrative

(LOSS) 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

COST OF SALES

OPERATING EXPENSES:

Selling and administrative

Goodwill and other impairment charges

Officers’ salaries

(LOSS) INCOME FROM OPERATIONS

( 5,338,900 )

OTHER INCOME (EXPENSE):

Interest income

Loss from equity method investment

Interest expense

(LOSS) INCOME BEFORE INCOME TAX (BENEFIT) PROVISION

( 5,597,650 )

Income Tax (benefit) provision

NET (LOSS) INCOME BEFORE ADJUSTMENT FOR NON-CONTROLLING INTEREST IN SUBSIDIARY

( 4,601,857 )

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:

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

$ ( 3,744,785 )

Basic and diluted (loss) earnings per share

Weighted average common shares outstanding:

Basic and diluted

Notes to Consolidated Financial Statements

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ENDED OCTOBER 31, 2022 AND 2021

November 1, 2019

Treasury Stock

Balance, November 1, 2020

$ ( 4,633,560 )

issuance equity investment

Non-Controlling

October 31, 2020

Stock Compensation

Non-Controlling interest

Balance, October 31, 2021

$ ( 4,633,560 )

Non-Controlling

October 31, 2021

$ ( 4,633,560 )

Stock Compensation

Distributions to non-controlling interest

Inflow from non-controlling interest

Non-Controlling Interest

Dividend to common shareholders

( 3,744,785 )

Net income (loss)

( 3,744,785 )

Balance, October 31, 2022

$ ( 4,633,560 )

$ ( 244,462 )

$ ( 4,633,560 )

$ ( 244,462 )

Notes to Consolidated Financial Statements

3 unchanged sentences

ENDED OCTOBER 31, 2022 AND 2021

income (loss)

OPERATING ACTIVITIES:

Net (loss) income

$ ( 4,601,857 )

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

and amortization

of trademarks and tradenames

(gain) loss on commodities - net

on equity method investments

on disposal of machinery and equipment

of right of use asset

in operating assets and liabilities:

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

Depreciation and amortization

Impairment of goodwill, trademarks and tradenames

Write-off of accounts receivable

Stock-based compensation

Unrealized loss (gain) on commodities - net

Loss on equity method investments

Impairment of customer list and non-compete agreement

Write down of obsolete inventory

Amortization of right of use asset

Deferred income taxes

Changes in operating assets and liabilities:

Accounts receivable

( 1,891,073 )

expenses and other current assets

and refundable income taxes

and other assets

payable and accrued expenses

( 4,563,317 )

in lease liability

taxes payable

cash provided by operating activities

of other investment

Prepaid expenses and other current assets

Prepaid and refundable income taxes

Deposits and other assets

Accounts payable and accrued expenses

( 1,232,776 )

of funds from deferred compensation plan

from sale of machinery and equipment

of building, machinery and equipment

Change in lease liability

Income taxes payable

Net cash (used in) provided by operating activities

( 5,437,508 )

cash used in investing activities

INVESTING ACTIVITIES:

Purchases of other investment

( 2,500,000 )

under bank line of credit

payment on note payable

payments under bank line of credit

Proceeds from sale of machinery and equipment

Purchases of building, machinery and equipment

( 1,059,205 )

( 1,500,483 )

cash used in financing activities

Net cash used in investing activities

( 1,059,205 )

INCREASE IN CASH

AND CASH EQUIVALENTS, BEGINNING OF YEAR

AND CASH EQUIVALENTS, END OF YEAR

( 3,887,317 )

FINANCING ACTIVITIES:

Advances under bank line of credit

Cash overdraft

Principal payment on note payable

Payment of dividend

Capital contributed by non-controlling interest

Principal payments under bank line of credit

( 1,914,504 )

( 6,012,385 )

Net cash provided by (used in) financing activities

NET (DECREASE) INCREASE IN CASH

( 1,180,402 )

CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR

CASH AND CASH EQUIVALENTS, END OF YEAR

Notes to Consolidated Financial Statements

3 unchanged sentences

ENDED OCTOBER 31, 2022 AND 2021

DISCLOSURE OF CASH FLOW DATA:

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

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

SUPPLEMENTAL DISCLOSURE OF CASH FLOW DATA:

Interest paid

Income taxes paid

SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:

Initial recognition of operating lease right of use asset

Initial recognition of operating lease liabilities

Termination of operating lease right of use asset

Termination of operating lease liability

Distribution of inventory by non-controlling interest

Notes to Consolidated Financial Statements

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Thus, the Company considers the three product lines to be one single reporting segment.

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

As part of this restructuring

approximately $ 550,000 of its inventory was distributed to the non-controlling interest partner for $ 330,000 in cash.

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, Coffee Holding Co., Inc, a Nevada corporation (the “Company”), entered into a Merger and Share Exchange

Agreement (the “Merger Agreement”), by and among the Company, Delta Corp Holdings Limited, a Cayman Islands exempted company

(“Pubco”), Delta Corp Holdings Limited, a company incorporated in England and Wales (“Delta”), CHC Merger Sub

Inc., a Nevada corporation and wholly owned subsidiary of Pubco (“Merger Sub”), and each of the holders of ordinary shares

of Delta as named therein (the “Sellers”).

Upon the terms and subject to the conditions set forth in the Merger Agreement,

Merger Sub will merge with and into the Company, with the Company surviving as a direct, wholly-owned subsidiary of Pubco (the “Merger”).

As a result of the Merger, each issued and outstanding share of the Company common stock, $ 0.001 par value per share (the “JVA

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”).

Due to Geopolitical Events

Due to Russia’s invasion of Ukraine,

which began in February 2022, and the resulting sanctions and other actions against Russia and Belarus, there has been uncertainty and

disruption in the global economy.

Although Russia’s invasion of Ukraine did not have a material adverse impact on the Company’s

revenue or other financial results for the year ended October 31, 2022, at this time the Company is unable to fully assess the aggregate

impact will have on its business due to various uncertainties, which include, but are not limited to, the duration of the war, the war’s

effect on the economy, its impact to the businesses of the Company’s customers, and actions that may be taken by governmental authorities

related to the war.

HOLDING CO., INC.

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

31, 2022 AND 2021

1 - BUSINESS ACTIVITIES (cont’d):

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

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

Company has historically financed its operations with the use of a line of credit facility further discussed in Note 6.

This credit facility

currently expires in March 2022.

The Company expects to renew the line of credit facility or, if necessary, seek alternative financing

on similar terms.

There can be no assurance that the Company will be able to renew the line of credit facility in a timely manner and/or

that any such renewal will contain commercially acceptable terms.

2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES :

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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

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

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

on recorded amounts.

AND CASH EQUIVALENTS :

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SCHEDULE OF ACCOUNTS RECEIVABLE

for doubtful accounts

for other allowances

for sales discounts

Allowance for doubtful accounts

Reserve for other allowances

Reserve for sales discounts

INVENTORIES :

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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.

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

The Company’s accounting for options and futures contracts may impact earnings volatility in any particular period.

We record all open contract positions on our consolidated balance sheets at fair value in the due from and due to broker line items and

typically do not offset these assets and liabilities.

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’

in the statement of operations as a component of cost of sales.

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

SCHEDULE OF REALIZED AND UNREALIZED GAINS AND LOSSES ON CONTRACTS

Ended October 31,

realized gains

realized (losses)

( 1,451,761 )

gains (losses)

Year Ended October 31,

Gross realized gains

Gross realized (losses)

( 1,683,401 )

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

Unrealized (losses) gains

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.

Comfort Foods and Sonofresco which are being amortized on the straight-line method over their estimated useful life of twenty years.

Amortization expense for the years ended October 31, 2022 and 2021 was $ 62,552 , respectively.

AND TRADEMARKS :

The Company has determined that its goodwill

and trademarks, which consist of product lines, trade names and packaging designs have indefinite useful lives.

Goodwill and trademarks

are tested for impairment at least annually or when circumstances indicate that the carrying amount of goodwill or trademarks exceed fair

For purposes of evaluating goodwill for impairment, the Company has determined it operates a single reporting unit.

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

HOLDING CO., INC.

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

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 %

The Company quantitatively assessed the carrying amount of its goodwill in 2021 and 2022 due to its declining stock price.

most significant assumptions used in these impairment tests include the royalty rates using the relief from royalty method of

testing trademarks, forecasted revenues and expenses, income tax rates and discounts and premiums built into our weighted average

cost of capital to estimate future cash flows using an income approach.

Due to the sustained decline in the price of the Company

stock through the fourth quarter of 2022 and after the proposed Delta merger announcement, the Company determined that an impairment

charge was necessary and recorded an impairment charge of $ 2,569,785 ,

which consisted of $ 2,488,785

of goodwill and $ 81,000

of trademarks and tradenames.

No impairment charge was recorded to the carrying amount of

goodwill as the reporting unit had a fair value in excess of its carrying amount of 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.

For the year ended October 31, 2021, we recorded impairment charges on two of our trademarks as the carrying

amount of these trademarks exceeded the respective fair values on the test date which were determined using the relief from royalty

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 and is reflected as a component of selling and administrative expenses in the accompanying

consolidated statement of income.

OF CONSOLIDATED STATEMENT OF INCOME

and tradenames

at November 1, 2019

at October 31, 2020

The impairment charge amounted to

$ 1,080,000 for

the year ended October 31, 2021.

SCHEDULE OF CONSOLIDATED STATEMENT OF INCOME

Trademarks and tradenames

Balance at November 1, 2020

( 1,080,000 )

at October 31, 2021

$ ( 1,080,000 )

Balance at October 31, 2021

Impairment charge

Balance at October 31, 2022

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

intangible assets subject to amortization, when events and circumstances indicate that the carrying value amounts of these assets

might not be recoverable.

For purposes of evaluating the recoverability of buildings, machinery and equipment and amortizable

intangible assets, the undiscounted cash flows estimated to be generated by those assets are compared to the carrying amounts of

those assets.

If and when the carrying amounts of the assets exceed the undiscounted cashflows, then the related assets will be

written down to fair value, if less.

During the year ended October 31, 2022 and 2021, the Company recorded $ 199,767

respectively of impairment charges of its amortizable intangible assets.

impairment charges were recorded against buildings, machinery and equipment.

ADVERTISING :

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for the years ended October 31, 2022 and 2021, respectively.

HOLDING CO., INC.

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

31, 2022 AND 2021

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

Company accounts for income taxes pursuant to the asset and liability method which requires deferred income tax assets and liabilities

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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.

Diluted earnings per common share is computed by dividing the net income by the weighted-average number of common shares outstanding

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

The 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 are anti-dilutive.

weighted average common shares outstanding used in the computation of basic and diluted earnings per share were 5,708,599 and 5,575,453

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

HOLDING CO., INC.

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

31, 2021 AND 2020

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

EARNINGS PER SHARE :

(loss) earnings per common share was computed by dividing net (loss) income by the sum of the weighted-average number of common shares

Diluted (loss) earnings per common share is computed by dividing the net (loss) income by the weighted-average number of

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

has issued 1,000,000 options that are outstanding which have not been included in the calculation of diluted (loss) earnings per share

because they are anti-dilutive.

weighted average common shares outstanding used in the computation of basic and diluted (loss) earnings per share were 5,708,599

and 5,575,453 for the years ended October 31, 2022 and 2021, respectively.

VALUE OF FINANCIAL INSTRUMENTS :

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

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

because of the short-term nature of these instruments.

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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.

Level 1 – unadjusted quoted prices in active

markets for identical assets or liabilities that the Company has the ability to access as of the measurement date.

Level 2 – inputs other than quoted prices included

within Level 1 that are directly observable for the asset or liability or indirectly observable through corroboration with observable

Level 3 – unobservable inputs for the asset or

liability only used when there is little, if any, market activity for the asset or liability at the measurement date.

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

HOLDING CO., INC.

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

31, 2022 AND 2021

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

RECOGNITION :

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a performance obligation.

HOLDING CO., INC.

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

31, 2021 AND 2020

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

following table presents revenues by product line for the years ended October 31, 2022 and 2021.

5 unchanged sentences

$ 2,964,000 and $ 3,165,000 for the years ended October 31, 2022 and 2021, 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.

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

HOLDING CO., INC.

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

31, 2021 AND 2020

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 :

13 unchanged sentences

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.

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

HOLDING CO., INC.

3 unchanged sentences

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

METHOD OF ACCOUNTING (cont’d):

of Operations.

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

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;

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 Operations.

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.

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The loss recognized amounted to $ 15,178 and $ 9,213 for the years ended October 31, 2022 and 2021, respectively.

The net value

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

amount of this investment as presented on the consolidated balance sheet at October 31, 2022 and 2021 was $ 56,601 and $ 71,779 , respectively.

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

5 unchanged sentences

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 net value of this investment as presented on our consolidated balance sheet

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

The loss recognized amounted to $ 32,622 and $ 149,947 for the year ended October

31, 2022 and 2021, respectively.

The net value of this investment as presented on the consolidated balance sheet at October 31, 2022

and 2021 was $ 297,843 and $ 330,466 .

– other represent investments made by the Company that do not qualify as equity method investments as the Company cannot exercise

8 unchanged sentences

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.

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.

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:

As of October 31, 2022 and 2021, no such price changes

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

HOLDING CO., INC.

3 unchanged sentences

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

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

contain leases, (2) carryforward the existing lease classification, and (3) not reassess initial direct costs associated with existing

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

The 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.

The 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.

The Company’s operating lease arrangement are comprised

of real estate and facility leases.

Right of use assets represent the Company’s right to use the underlying asset for the lease

term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease.

Right of use assets

and lease liabilities are recognized at the commencement date based on the present value of the lease payments over the lease term.

the Company’s leases do not provide an implicit rate and the implicit rate is not readily determinable, the Company estimates its

incremental borrowing rate based on the information available at the measurement date in determining the present value of the lease payments.

The present value of the lease payments was determined 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.

are accounted for under ASC 842.

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

The Company’s operating

lease arrangement are comprised of real estate and facility leases.

Right of use assets represent the Company’s right to use the

underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from

Right of use assets and lease liabilities are recognized at the commencement date based on the present value of the lease

payments over the lease term.

As the Company’s leases do not provide an implicit rate and the implicit rate is not readily determinable,

the Company estimates its incremental borrowing rate based on the information available at the measurement date in determining the present

value of the lease payments.

The present value of the lease payments was determined to be 5.00 % for new leases and lease amendments that

occurred during fiscal year 2022 and 2021.

Right of use assets also exclude lease incentives.

The 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 - 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

Packed coffee

Roaster parts

Packaging supplies

HOLDING CO., INC.

2 unchanged sentences

31, 2022 AND 2021

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

expense totaled $ 600,357 and

$ 678,951 for

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

4 – BUILDING, MACHINERY AND EQUIPMENT :

machinery and equipment at October 31, 2022 and 2021 consisted of the following:

SCHEDULE OF MACHINERY AND EQUIPMENT

15 - 30 years

Machinery and equipment

Furniture and fixtures

Less, accumulated depreciation

expense totaled $ 522,043 and $ 600,357 for the years ended October 31, 2022 and 2021, 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.

of machinery and equipment with a carrying value of $ 434,817 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 :

1 unchanged sentence

OF ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable

Purchase accruals

Other accruals

6 - LINE OF CREDIT :

5 unchanged sentences

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 %).

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 was then approved for a two-year extension.

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 substantially 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,

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.

Loan Facility remain the same.

HOLDING CO., INC.

2 unchanged sentences

31, 2022 AND 2021

6 - LINE OF CREDIT (cont’d):

Company is subject to certain covenants with respect to its line of credit agreement.

The Company was not in compliance with the

net profit and non-borrower affiliate covenants as of October 31, 2022.

The Company requested a waiver from the lender and the waiver

was granted and received on March 15, 2023.

The lender also extended the due date of the October 31, 2022 financial statements until

April 15, 2023.

The loan agreement was also modified on March 15, 2023.

The terms of the modification, among other things:

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.

of the A&R Loan Facility and A&R Loan Agreement contains covenants, subject to certain exceptions, that place annual restrictions

on the Borrowers’ operations, including covenants relating to debt restrictions, capital expenditures, indebtedness, minimum deposit

restrictions, tangible net worth, net profit, leverage, employee loan restrictions, dividend and repurchase restrictions (common stock

and preferred stock), and restrictions on intercompany transactions.

The outstanding balance on the Company’s lines of credit were

$ 8,314,000 and $ 3,800,850 as of October 31, 2022 and October 31, 2021, respectively.

7 - INCOME TAXES :

1 unchanged sentence

OF PROVISION FOR INCOME TAX

tax expense/(benefit)

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

federal tax rate and the Company’s

effective tax rate is as follows:

OF EFFECTIVE INCOME TAX RATE

for (Benefit) from tax at the federal statutory rate

permanent differences

and local tax, net of federal

for (benefit from) income taxes

income tax rate

State and local

Income tax (benefit)

$ ( 995,793 )

HOLDING CO., INC.

3 unchanged sentences

7 - INCOME TAXES (cont’d):

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

federal tax rate and the Company’s

effective tax rate is as follows:

OF EFFECTIVE INCOME TAX RATE

(Benefit) from provision for tax at the federal statutory rate

$ ( 1,175,507 )

Goodwill impairment

Other permanent differences

State and local tax, net of federal

(Benefit from) provision for income taxes

$ ( 995,793 )

Effective income tax rate

tax effects of the temporary differences that give rise to the deferred tax assets and liabilities as of October 31, 2022 and 2021 are

OF DEFERRED TAX ASSETS AND LIABILITIES

operating loss

deferred tax asset

tax liabilities:

assets acquired

machinery and equipment

Deferred tax assets:

Accounts receivable

Unrealized loss

Deferred rent

Deferred compensation

Net operating loss

Stock-based compensation

Total deferred tax asset

Deferred tax liabilities:

deferred tax assets (liabilities)

$ ( 100,407 )

Intangible assets acquired

Unrealized gain

Buildings, machinery and equipment

Total deferred tax liabilities

Net deferred tax asset

valuation allowance was not provided at October 31, 2022 or 2021.

6 unchanged sentences

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.

HOLDING CO., INC.

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

31, 2022 AND 2021

7 - INCOME TAXES (cont’d):

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

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, 2022 and 2021, the Company did no t have any unrecognized tax benefits or open tax positions.

4 unchanged sentences

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

The Company files a U.S.

federal income tax

return and California, Colorado, Connecticut, Idaho, Kansas, Michigan, New Jersey, New York, New York City, Virginia, Texas, Rhode Island,

South Carolina, and Oregon state tax returns.

The Company’s federal income tax return is no longer subject to examination by the

federal taxing authority for years before fiscal 2019.

The Company’s California, Colorado and New Jersey and Texas income tax returns

are no longer subject to examination by their respective taxing authorities for the years before fiscal 2019.

The Company’s Oregon,

New York, Kansas, South Carolina, Rhode Island, Connecticut and Michigan income tax returns are no longer subject to examination by their

respective taxing authorities for the years before fiscal 2019.

of October 31, 2022, and 2021, the Company had cumulative net operating loss carryforwards of approximately $ 2,281,518 and $ 274,173 respectively,

4 unchanged sentences

event of a change in ownership.

HOLDING CO., INC.

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

31, 2021 AND 2020

8 - 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 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

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

as the suit was dismissed and we are awaiting a ruling on the plantiff’s appeal.

of Illinois (the “Court”) on or about December 21, 2020.

The plaintiffs, Eileen Brodsky and Rhonda Diamond, purported to

represent a class of individuals who purchased coffee products at Aldi, Inc.

(“Aldi”), a supermarket chain, generally allege

that Aldi sold private label coffee products manufactured by the Company and by Pan American Coffee Co., LLC (“Pan American”), which

falsely described the number of cups of coffee that could be made from the amount of product purchased.

Aldi and Pan American were also

named as defendants in the action.

The complaint asserted a variety of claims under New York and California consumer protection laws,

and sought unspecified monetary damages, including disgorgement and restitution, as well as other forms of relief including class certification,

declaratory and injunctive relief, attorneys’ fees, and interest.

On September 28, 2021, the Court entered an order granting the

Company’s motion to dismiss with prejudice (the “Dismissal Order”).

In the Dismissal Order, the Court stated that no

reasonable coffee drinker would be deceived by the Company’s packaging.

The plaintiffs filed an appeal with the 7 th

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.

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 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.

for the District of Massachusetts (the “Massachusetts District Court”) on or about February 2, 2021, concerning the labeling

on private label coffee productions the Company sold to the customer.

HOLDING CO., INC.

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

31, 2022 AND 2021

8 - COMMITMENTS AND CONTINGENCIES (cont’d):

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

1 unchanged sentence

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.

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

Company has a 401(k) Retirement Plan, which covers all the full time employees who have completed one year of service and have reached

2 unchanged sentences

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.

Contributions to the plan aggregated $ 75,004

for the years ended October 31, 2022 and 2021,

respectively.

following summarizes the Company’s operating leases:

OF OPERATING LEASES

Right-of-use operating lease assets

Current lease liability

Non-current lease liability

Total lease liability

amortization of the right-of-use asset for the years ended October 31, 2022 and 2021 was $ 674,013 and $ 350,871 , respectively.

Weighted average remaining lease term

Weighted average discount rate

HOLDING CO., INC.

2 unchanged sentences

31, 2022 AND 2021

following summarizes the Company’s operating leases:

OF OPERATING LEASE LIABILITY

operating lease assets

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

9 – LEASES (cont’d):

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

OF MATURITY LEASE LIABILITY

lease payments

Total lease payments

imputed interest

( 1,157,350 )

value of operating lease liabilities

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

Present value of operating lease liabilities

aggregate cash payments under these leasing agreements was $ 426,271 and $ 442,118 for the years ended October 31, 2022 and 2021, respectively.

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

4 unchanged sentences

of the modification the Company increased its right-of-use asset and lease liability by $ 2,025,316 .

HOLDING CO., INC.

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

31, 2021 AND 2020

10 - RELATED PARTY TRANSACTIONS :

3 unchanged sentences

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

Purchases from that vendor totaled approximately $ 3,500,000 and

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

Purchases from that vendor totaled approximately $ 3,500,000 for

the year ended October 31, 2021.

This director retired from this vendor.

The corresponding accounts payable balance to this vendor was

approximately $ 1,014,000 and $ 0 at October 31, 2021 and 2020, respectively.

approximately $ 1,014,000 at October 31, 2021.

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

4 unchanged sentences

this employee of the Company upon his retirement.

The deferred compensation liability at October 31, 2021 and 2020 was $ 311,872

and $ 276,548 ,

The deferred compensation liability at October 31, 2022 and 2021 was $ 243,238 and $ 311,872 ,

respectively.

Deferred compensation expenses included in officers’ salaries were $ 0

during the years ended October 31, 2021 and 2020,

Deferred compensation expenses included in officers’ salaries were $ 0 during the years ended October 31, 2022 and

2021, respectively as no amounts were contributed to this plan during the years ended October 31, 2022 and 2021.

HOLDING CO., INC.

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

31, 2021 AND 2020

11 - STOCKHOLDERS’ EQUITY :

Treasury Stock .

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

The cost of reissued shares is determined under

the last-in, first-out method.

The 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, 2022 and 2021.

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.

Stock Options .

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

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, 2022 and 2021.

As of October

31, 2021, 666,383 options are exercisable.

As of October 31, 2022 and October 31, 2021, 1,000,000 and 666,383 options were exercisable, respectively.

Company recorded $ 405,821 and $ 759,073 of stock-based compensation during the years ended October 31, 2022 and 2021, 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, 2021 was approximately $ 405,821 .

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.

compensation was fully recognized during the year ended October 31, 2022.

12 – SUBSEQUENT EVENTS :

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

The dividend is payable

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

Company is subject to certain covenants with respect to its line of credit agreement.

The Company was not in compliance with the net

profit and non-borrower affiliate covenants as of October 31, 2022.

The Company requested a waiver from the lender and the waiver

was granted and received on March 15, 2023.

The lender also extended the due date of the October 31, 2022 financial statements

until April 15, 2023.

The loan agreement was also modified on March 15, 2023.

The terms of the modification, among other things:

provides for a requirement for subordination agreements if necessary, (ii) changes the terms of transactions with affiliates from a

dollar limitation to allowable in the ordinary course of business and (iii) establishes a new covenant for a fixed charge coverage

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

Item 9A. Controls and Procedures