What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2023-04-28 compared with 2022-09-14 · 188 added, 236 removed, 250 unchanged (63% of the section changed)

2 unchanged sentences

CONSOLIDATED BALANCE SHEETS

July 31, 2022

31, 2023 AND OCTOBER 31, 2022

January 31, 2023

October 31, 2022

CURRENT ASSETS:

Cash and cash equivalents

Accounts receivable, net of allowances of $ 144,000 for 2023 and 2022

Prepaid expenses and other current assets

Due from broker

Prepaid expenses and other current assets

Prepaid and refundable income taxes

3 unchanged sentences

Trademarks and tradenames

Non-compete, net of accumulated amortization of $ 74,250 and $ 69,300 for 2022 and 2021, respectively

Equity method investments

Investment - other

Deferred income tax asset - net

Right of use asset

Deferred income tax assets - net

Deposits and other assets

2 unchanged sentences

Accounts payable and accrued expenses

Line of credit – current portion

Lease liability – current portion

Note payable – current portion

Cash overdrafts

Due to broker

Income taxes payable

Note payable – current portion

Lease liability – current portion

TOTAL CURRENT LIABILITIES

Line of credit

Lease liabilities

Line of credit net of current portion

Note payable – long term

8 unchanged sentences

Common stock, par value $ .001 per share;

30,000,000 shares authorized, 6,633,930 shares issued as of July 31, 2022 and October 31, 2021;

5,708,599 shares outstanding as of July 31, 2022 and October 31, 2021

30,000,000 shares authorized, 6,633,930 shares issued for 2023 and 2022;

5,708,599 shares outstanding for 2023 and 2022

Additional paid-in capital

Retained earnings

Treasury stock, 925,331 common shares, at cost as of July 31, 2022 and October 31, 2021

Treasury stock, 925,331 common shares, at cost for 2023 and 2022

( 4,633,560 )

2 unchanged sentences

Stockholders’ Equity

Non-controlling interest

Noncontrolling interest

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

2 unchanged sentences

CONSOLIDATED STATEMENTS OF OPERATIONS

AND THREE MONTHS ENDED JULY 31, 2022 AND 2021

Nine Months Ended

Three Months Ended

MONTHS ENDED JANUARY 31, 2023 AND 2022

COST OF SALES

3 unchanged sentences

(LOSS) INCOME FROM OPERATIONS

OTHER (EXPENSE) INCOME

OTHER INCOME (EXPENSE):

Interest income

Loss from equity method investment

Loss from equity method investments

Interest expense

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

(Benefit) provision for income taxes

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

Net loss attributable to the non-controlling interest

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

(LOSS) INCOME BEFORE INCOME TAX (BENEFIT) PROVISION AND NON-CONTROLLING INTEREST IN SUBSIDIARY

Income Tax (benefit) provision

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

Net income attributable to the non-controlling interest in subsidiary

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

$ ( 532,103 )

Basic and diluted (loss) earnings per share

Basic and diluted (loss) earnings earnings per share

Weighted average common shares outstanding:

3 unchanged sentences

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

AND NINE MONTHS ENDED JULY 31, 2022 AND 2021

MONTHS ENDED JANUARY 31, 2023 AND 2022

Treasury Stock

4 unchanged sentences

Stock Compensation

Dividend to common shareholders

Non-Controlling Interest

1 unchanged sentence

$ ( 4,633,560 )

Stock Compensation

Non-Controlling Interest

Balance, April 30, 2021

$ ( 4,633,560 )

Stock Compensation

Non-Controlling Interest

Balance, July 31, 2021

$ ( 4,633,560 )

Balance, October 31, 2022

$ ( 4,633,560 )

Stock Compensation

Dividend to common shareholders

Non-Controlling Interest

Balance, January 31, 2022

$ ( 244,462 )

Stock Compensation

Distribution to non-controlling interest

Non-Controlling Interest

Balance, April 30, 2022

income (loss)

Balance, January 3l, 2023

$ ( 4,633,560 )

Stock Compensation

Balance, July 31, 2022

$ ( 244,462 )

2 unchanged sentences

CONSOLIDATED STATEMENTS OF CASH FLOWS

MONTHS ENDED JULY 31, 2022 AND 2021

MONTHS ENDED JANUARY 31, 2023 AND 2022

OPERATING ACTIVITIES:

1 unchanged sentence

$ ( 532,103 )

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

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

operating activities:

Depreciation and amortization

2 unchanged sentences

Loss on equity method investments

Write-off of accounts receivable

Write-down of obsolete inventory

Amortization of right of use asset

Amortization of right to use asset

Deferred income taxes

1 unchanged sentence

Accounts receivable

( 4,215,991 )

Prepaid expenses and other current assets

Prepaid and refundable income taxes

Accounts payable and accrued expenses

Lease liability

Deposits and other assets

Change in lease liability

Accounts payable and accrued expenses

( 1,897,340 )

Income taxes payable

Net cash (used in) provided by operating activities

Net cash provided by (used in) operating activities

( 1,233,464 )

1 unchanged sentence

Purchases of machinery and equipment

( 1,357,066 )

( 1,491,233 )

Net cash used in investing activities

( 1,357,066 )

( 1,491,233 )

FINANCING ACTIVITIES:

Advances under bank line of credit

Cash overdraft

Principal payments on note payable

Payment of dividend

Principal payments under bank line of credit

( 3,812,385 )

Net cash provided by (used in) financing activities

( 1,300,605 )

NET (DECREASE) INCREASE IN CASH

( 2,265,798 )

Net cash (used in) provided by financing

NET INCREASE IN CASH

CASH, BEGINNING OF PERIOD

3 unchanged sentences

CONSOLIDATED STATEMENTS OF CASH FLOWS

MONTHS ENDED JULY 31, 2022 AND 2021

MONTHS ENDED JANUARY 31, 2023 AND 2022

SUPPLEMENTAL DISCLOSURE OF CASH FLOW DATA:

2 unchanged sentences

SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:

Purchase of inventory by non-controlling interest

Initial recognition of operating lease right of use asset

Initial recognition of operating lease liabilities

Notes to Condensed Consolidated Financial Statements

29 unchanged sentences

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

to the non-controlling interest.

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

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

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

in March 2020 and has negatively affected the U.S.

and global economies, disrupted global supply chains, resulted in significant travel

and transport restrictions, mandated closures and stay-at-home orders, and created significant disruption of the financial markets.

continuing impact on the Company’s business, including the decrease in our sales, the length and impact of stay-at-home orders

and/or regional quarantines, labor shortages and employment trends, disruptions to supply chains, including its ability to obtain products

from global suppliers, higher operating costs, the form and impact of economic stimulus and general overall economic instability, has

contributed to and may continue to have a material adverse effect on the Company’s business, results of operations, financial condition

and cash flows.

At this time the full impact could not be determined.

September 29, 2022, the Company entered into a Merger and Share Exchange Agreement (the “Merger Agreement”), by and among

the Company, Delta Corp Holdings Limited, a Cayman Islands exempted company (“Pubco”), Delta Corp Holdings Limited, a company

incorporated in England and Wales (“Delta”), CHC Merger Sub Inc., a Nevada corporation and wholly owned subsidiary of Pubco

(“Merger Sub”), and each of the holders of ordinary shares of Delta as named therein (the “Sellers”).

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 “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”).

HOLDING CO., INC.

2 unchanged sentences

Company’s fiscal year ends on October 31, of each calendar year.

The accompanying interim condensed consolidated financial statements

are unaudited and have been prepared on substantially the same basis as our annual consolidated financial statements for the fiscal year

ended October 31, 2021.

In the opinion of the Company’s management, these interim condensed consolidated financial statements reflect

all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair statement of our financial position,

results of operations and cash flows for the periods presented.

The preparation of financial statements in conformity with generally

accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities

and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts

of revenue and expenses during the reporting periods.

Actual results could differ from these estimates.

The October 31, 2021 year-end

condensed consolidated balance sheet data in this document was derived from audited consolidated financial statements.

These condensed

consolidated financial statements and notes included in this quarterly report on Form 10-Q does not include all disclosures required

generally accepted accounting principles (“U.S.

GAAP”) and should be read in conjunction with the Company’s

audited consolidated financial statements as of and for the year ended October 31, 2021 and notes thereto included in the Company’s

fiscal 2021 Annual Report on Form 10-K, filed with the Securities and Exchange Commission (“SEC”) on January 31, 2022 (the

“2021 10-K”).

The results of operations and cash flows for the interim periods included in these condensed consolidated financial

statements are not necessarily indicative of the results to be expected for any future period or the entire fiscal year.

The accompanying interim condensed consolidated financial

statements are unaudited and have been prepared on substantially the same basis as our annual consolidated financial statements for

the fiscal year ended October 31, 2022.

In the opinion of the Company’s management, these interim condensed consolidated

financial statements reflect all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair

statement of our financial position, results of operations and cash flows for the periods presented.

The preparation of financial

statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that

affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the

condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting periods.

results could differ from these estimates.

The October 31, 2022 year-end condensed consolidated balance sheet data in this document

was derived from audited consolidated financial statements.

These condensed consolidated financial statements and notes included in

this quarterly report on Form 10-Q does not include all disclosures required by U.S.

generally accepted accounting principles

GAAP”) and should be read in conjunction with the Company’s audited consolidated financial statements as of

and for the year ended October 31, 2022 and notes thereto included in the Company’s fiscal 2022 Annual Report on Form

10-K, filed with the Securities and Exchange Commission (“SEC”) on March 29, 2023 (the “2022 10-K”).

results of operations and cash flows for the interim periods included in these condensed consolidated financial statements are not

necessarily indicative of the results to be expected for any future period or the entire fiscal year.

condensed consolidated financial statements include the accounts of the Company, the Company’s subsidiaries, Organic Products Trading

4 unchanged sentences

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

Accounting Policy

Accounting Policies

significant accounting policies used in the preparation of these condensed consolidated financial statements are disclosed in our 2022

10-K, and there have been no changes to the Company’s significant accounting policies during the three and nine months ended July

10-K, and there have been no changes to the Company’s significant accounting policies during the three months ended January 31,

Company recognizes revenue in accordance with the five-step model as prescribed by the Financial Accounting Standards Board (“FASB”)

10 unchanged sentences

2 - BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICY (cont’d):

following table presents revenues by stream for the nine and three months ended July 31, 2022 and 2021.

July 31, 2022

July 31, 2021

following table presents revenues by product line in the three months ended January 31, 2023 and 2022

SCHEDULE OF REVENUE

January 31, 2023

January 31, 2022

3 - INVENTORIES :

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

OF INVENTORIES

at January 31, 2023 and October 31, 2022 consisted of the following:

SCHEDULE OF INVENTORIES

January 31, 2023

October 31, 2022

5 unchanged sentences

4 - COMMODITIES HELD BY BROKER :

Company has used, and intends to continue to use in a limited capacity, short term coffee futures and options contracts primarily for

the purpose of partially hedging and minimizing the effects of changing green coffee prices and to reduce our cost of sales.

The commodities

held at broker represent the market value of the Company’s trading account, which consists of options and future contracts for

coffee held with a brokerage firm.

The Company uses options and futures contracts, which are not designated or qualifying as hedging

instruments, to partially hedge the effects of fluctuations in the price of green coffee beans.

Options and futures contracts are recognized

at fair value in the condensed consolidated financial statements with current recognition of gains and losses on such positions.

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

We record all

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

not offset these assets and liabilities.

Company has used, and intends to continue to use in a limited capacity, short term coffee futures and options contracts primarily

for the purpose of partially hedging and minimizing the effects of changing green coffee prices and to reduce cost of sales.

commodities held at broker represent the market value of the Company’s trading account, which consists of options and future

contracts for coffee held with a brokerage firm.

The Company uses options and futures contracts, which are not designated or

qualifying as hedging instruments, to partially hedge the effects of fluctuations in the price of green coffee beans.

futures contracts are recognized at fair value in the condensed consolidated financial statements with current recognition of gains

and losses on such positions.

The Company’s accounting for options and futures contracts may increase earnings volatility in

any particular period.

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

due to broker line items and typically do not offset these assets and liabilities.

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

1 unchanged sentence

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

OF REALIZED AND UNREALIZED GAINS AND LOSSES ON CONTRACTS

Three Months Ended July 31,

Gross realized gains

Gross realized losses

Unrealized loss

Nine Months Ended July 31,

SCHEDULE OF REALIZED AND UNREALIZED GAINS AND LOSSES ON CONTRACTS

Three Months Ended January 31,

Gross realized gains

Gross realized losses

Unrealized gain (loss)

$ ( 123,545 )

Unrealized (loss) gain

Gain (Loss) on Investments

$ ( 123,545 )

HOLDING CO., INC.

3 unchanged sentences

into an Amended and Restated Loan and Security Agreement (the “A&R Loan Agreement”) and Amended and Restated Loan Facility

(the “A&R Loan Facility”) with Sterling National Bank (“Sterling”), which consolidated (i) the financing

agreement between the Company and Sterling, dated February 17, 2009, as modified, (the “Company Financing Agreement”) and

(ii) the financing agreement between Company, as guarantor, OPTCO and Sterling, dated March 10, 2015 (the “OPTCO Financing Agreement”),

amongst other things.

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

the new agreement, among other things:

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

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

(the “A&R Loan Facility”) with Sterling National Bank (later acquired by Webster Bank N.A.) (“Sterling”),

which consolidated (i) the financing agreement between the Company and Sterling, dated February 17, 2009, as modified, (the “Company

Financing Agreement”) and (ii) the financing agreement between Company, as guarantor, OPTCO and Sterling, dated March 10, 2015

(the “OPTCO Financing Agreement”), amongst other things.

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 substantially the same.

On June 28, 2022, the Company reached an agreement for a new loan modification agreement

and credit facility with Webster Bank.

The terms of the new agreement, among other things:

(i) provided for a new maturity date of June

30, 2024, and (ii) changed the interest rate per annum to SOFR plus 1.75 % (with such interest rate not to be lower than 3.50 %).

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

Loan Facility remained 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 remained the same.

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

The loan agreement was also modified on March 15, 2023 to, among other things:

(i) provides for a requirement for subordination

agreements if necessary, and (ii) changes the terms of transactions with affiliates from a dollar limitation to allowable in the ordinary

course of business, (iii) establishes a new covenant for a fixed charge coverage ratio.

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

2 unchanged sentences

and preferred stock), and restrictions on intercompany transactions.

The Company was in compliance with all covenants as of July 31,

2022 and October 31, 2021.

The outstanding balance on the Company’s lines of credit were $ 6,114,000 and $ 3,800,850 as of July 31,

2022 and October 31, 2021, respectively.

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

$ 8,328,782 and $ 8,314,000 as of January 31, 2023 and October 31, 2022, respectively.

6 - INCOME TAXES :

7 unchanged sentences

deferred tax assets and liabilities.

of July 31, 2022 and October 31, 2021, the Company did no t have any unrecognized tax benefits or open tax positions.

of January 31, 2023 and October 31, 2022, the Company did no t have any unrecognized tax benefits or open tax positions.

The Company’s

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

As of July 31, 2022 and October

As of January 31, 2023 and October

31, 2022, the Company had no accrued interest or penalties related to income taxes.

1 unchanged sentence

examinations in progress.

HOLDING CO., INC.

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

6 - INCOME TAXES (cont’d):

Company files a U.S.

1 unchanged sentence

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

Company’s federal income tax return is no longer subject to examination by the federal taxing authority for years before fiscal

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.

The Company’s Oregon, New York, Kansas, South Carolina, Rhode Island, Connecticut and Michigan income tax returns

are no longer subject to examination by their respective taxing authorities for the years before fiscal 2018.

HOLDING CO., INC.

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

7 - EARNINGS PER SHARE :

6 unchanged sentences

effect of common shares issuable upon exercise of potential sources of dilution.

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

and three months ended July 31, 2022 and 2021.

The Company had granted 1,000,000 options in the second quarter of 2019, which have not

been included in the calculation of diluted earnings per share due to these options being out of the money.

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

months ended January 31, 2023 and 2022.

The Company had granted 1,000,000 options in the second quarter of 2019, which have not been

included in the calculation of diluted earnings per share due to their anti-dilutive nature.

8 - COMMITMENTS AND CONTINGENCIES :

ACTION COMPLAINT

Company was named as a defendant in a putative class action lawsuit filed in the United States District Court for the Northern District

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

The plaintiffs, Eileen Brodsky and Rhonda Diamond, purported to

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

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

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

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

CLASS ACTION COMPLAINT

The Company was named as a defendant in a putative

class action lawsuit filed in the United States District Court for the Northern District of Illinois (the “Court”) on or about

December 21, 2020.

The plaintiffs, Eileen Brodsky and Rhonda Diamond, purported to represent a class of individuals who purchased coffee

products at one of the Company’s supermarket customers, generally allege that such client sold private label coffee products manufactured

by the Company and one of its partners, which falsely described the number of cups of coffee that could be made from the amount of product

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

on private label coffee productions we sold to the customer.

The plaintiff, David Cohen, purporting to represent a class of individuals

who purchased coffee products from our customer, generally allege that the customer sold private label coffee products manufactured by

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

is not named as a defendant in the action, but has agreed to indemnify the customer for the costs and expenses incurred in defending

the lawsuit and for any liability the customer may suffer as a result.

The complaint asserts a variety of claims under Massachusetts

consumer protection laws, and seeks unspecified monetary damages as well as other forms of relief including class certification, declaratory

and injunctive relief, attorneys’ fees, and interest.

The Company believes the allegations in the complaint are wholly without

merit and that the claims asserted are legally deficient, and intends to vigorously support the customer in defending the action.

February 28, 2022, the Company and the plaintiff, in his individual capacity and not on behalf of a presumptive class, resolved the matter

in principle and have reported the agreement in principle to the Massachusetts District Court.

After the end of the period, the parties

finalized the details of a settlement agreement.

The final settlement amount was immaterial to the Company’s operations and results

of operations.

HOLDING CO., INC.

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

8 - COMMITMENTS AND CONTINGENCIES (cont’d):

NOTE 8 - COMMITMENTS AND CONTINGENCIES (cont’d):

A significant customer of the Company was named as

a defendant in a putative class action lawsuit filed in the United States District Court for the District of Massachusetts on or about

February 2, 2021, concerning the labeling on private label coffee productions the Company sold to the customer.

The plaintiff, David Cohen,

purporting to represent a class of individuals who purchased coffee products from the Company’s customer, generally alleged 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 the Company 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.

complaint asserts a variety of claims under Massachusetts consumer protection laws, and seeks unspecified monetary damages as well as

other forms of relief including class certification, declaratory and injunctive relief, attorneys’ fees, and interest.

have finalized the details of a settlement agreement.

The final settlement amount was immaterial to the Company’s operations and

results of operations.

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

2 unchanged sentences

and 50% of aggregate contribution of the next 2% of compensation.

Contributions to the plan aggregated $ 56,038 and $ 72,558 for the nine months ended July 31, 2022 and for the year ended October 31, 2021,

respectively.

following summarizes the Company’s operating leases:

4 unchanged sentences

Total lease liability

amortization of the right-of-use asset for the three months ended July 31, 2022 and 2021 was $ 78,079 and $ 95,766 , respectively.

The amortization

of the right-of-use asset for the nine months ended July 31, 2022 and 2021 was $ 258,028 and $ 321,921 , respectively.

amortization of the right-of-use asset for the three months ended January 31, 2023 and 2022 was $ 79,663 and $ 102,681 , respectively.

Weighted average remaining lease term

2 unchanged sentences

OF MINIMUM FUTURE LEASE PAYMENTS

2022 remaining

Total lease payments

5 unchanged sentences

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

September 2021, the Company extended its headquarters lease in Staten Island, New York through September 2036.

December 2022, the Company extended its lease at its subsidiary Sonofresco in Washington through December 2023.

As a result, on the date

of the modification the Company increased its right-of-use asset and lease liability by $ 2,025,316 as of October 31, 2021.

of the modification the Company increased its right-of-use asset and lease liability by $ 40,979 as of January 31, 2023.

HOLDING CO., INC.

1 unchanged sentence

10 - RELATED PARTY TRANSACTIONS :

Company has engaged its 40 % partner in GCC as an outside contractor (the “Partner”).

Included in contract labor expense are

expenses incurred from the Partner during the three and nine months ended July 31, 2022 and 2021 of $ 58,490 and $ 210,961 and $ 91,207

and $ 253,932 , respectively, for the processing of finished goods.

Company has engaged its 40 % former partner in GCC as an outside contractor (the “Partner”).

Included in contract labor expense

are expenses incurred from the Partner during the three months ended January 31, 2023 and 2022 of $ 56,851 and $ 58,434 , respectively,

for the processing of finished goods.

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

7 unchanged sentences

the liability due to the Chief Executive Officer of the Company.

The assets were $ 300,013 and $ 311,872 at July 31, 2022 and October 31,

The assets were $ 176,074 and $ 243,238 at January 31, 2023 and October

31, 2022, respectively, and are included in the Deposits and other assets in the accompanying balance sheets.

The deferred compensation liability

at July 31, 2022 and October 31, 2021 were $ 300,013 and $ 311,872 , respectively.

The deferred compensation

liability at January 31, 2023 and October 31, 2022 were $ 176,074 and $ 243,238 , respectively.

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 Company did not purchase any shares during the three and nine months ended July 31, 2022 and the year ended

October 31, 2021.

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 three and nine months ended July 31,

The cost of reissued shares is determined under

the last-in, first-out method.

The Company did not purchase any shares during the three months ended January 31, 2023 and the year

ended October 31, 2022.

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

19, 2019, has granted 1,000,000 stock options to employees, officers and non-employee directors from the 2013 Plan each with an exercise

price of $ 5.43 .

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

the Administrator at the time of grant.

No options were granted, forfeited or expired during the three months ended January 31, 2023

or for the year ended October 31, 2022.

The Company recorded $ 41,812

and $ 405,821 of stock-based compensation for the three and nine months ended July 31, 2022 and $ 189,768 and $ 569,305 for the three

and nine months ended July 31, 2021.

Stock compensation expense

was fully recognized as of July 31, 2022.

Company recorded $ 0 and $ 189,768 of stock-based compensation for the three months ended January 31, 2023 and 2022.

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-Q

Item 1. Financial Statements