What changed in this filing

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Item 1. Financial Statements

2026-03-16 compared with 2025-09-12 · 242 added, 325 removed, 211 unchanged (73% of the section changed)

2 unchanged sentences

CONSOLIDATED BALANCE SHEETS

July 31, 2025

October 31, 2024

and cash equivalents

receivable, net of allowances of $ 313,000 for 2026 and 2025

expenses and other current assets

and refundable income taxes

CURRENT ASSETS

Cash and cash equivalents

Accounts receivable, net of allowances for credit losses of $ 144,000 for 2025 and 2024

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 $ 308,625 and $ 285,750 for 2025 and 2024, respectively

Trademarks and tradenames

Equity method investments

Right-of-use asset

Deferred income tax assets, net

Deposits and other assets

LIABILITIES AND STOCKHOLDERS’ EQUITY

machinery, and equipment, net

list and relationships, net of accumulated amortization of $ 323,875 and $ 316,250 for January 31, 2026 and October 31, 2025, respectively

and tradenames

income tax assets - net

and other assets

AND STOCKHOLDERS’ EQUITY

payable and accrued expenses

liabilities - current portion

CURRENT LIABILITIES

Accounts payable and accrued expenses

Due to broker

Line of credit

Lease liabilities - current portion

TOTAL CURRENT LIABILITIES

Lease liabilities – long term

Deferred compensation payable

TOTAL LIABILITIES

Commitments and Contingencies (Note 9)

liabilities - long term

compensation payable

and Contingencies (Note 9)

STOCKHOLDERS’

Holding Co., Inc.

stockholders’ equity:

Preferred stock, par value $ .001 per share;

stock, par value $ .001 per share;

10,000,000 shares authorized;

Common stock, par value $ .001 per share;

30,000,000 shares authorized, 6,633,930 shares issued for July 31, 2025 and October 31, 2024;

5,708,599 shares outstanding for July 31, 2025 and October 31, 2024

Additional paid in capital

Retained earnings

stock, par value $ .001

shares authorized, 6,633,930

shares issued for January 31, 2026 and October 31, 2025;

shares outstanding for January 31, 2026 and October 31, 2025

paid in capital

common stock held in treasury, at cost;

925,331 shares for July 31, 2025 and October 31, 2024

shares for January 31, 2026 and October 31, 2025

( 4,633,560 )

TOTAL STOCKHOLDERS’ EQUITY

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

STOCKHOLDERS’ EQUITY

LIABILITIES AND STOCKHOLDERS’ EQUITY

accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

1 unchanged sentence

CONSOLIDATED STATEMENTS OF OPERATIONS

Nine months ended July 31,

Three months ended July 31,

COST OF SALES

OPERATING EXPENSES

Selling and administrative

Officers’ salaries

INCOME (LOSS) FROM OPERATIONS

( 1,095,151 )

OTHER INCOME (EXPENSE)

Interest income

Interest expense

Gain on extinguishment of lease

INCOME (LOSS) BEFORE EXPENSE FOR INCOME TAXES

( 1,187,829 )

Expense for income taxes

NET INCOME (LOSS)

$ ( 1,205,413 )

Basic and diluted earnings (loss) per share

Weighted average common shares outstanding:

Basic and diluted

months ended January 31,

and administrative

FROM OPERATIONS

INCOME (EXPENSE):

from equity investment

BEFORE INCOME TAX

Tax Provision

and diluted income per share

average common shares outstanding:

accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

1 unchanged sentence

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

THE THREE AND NINE MONTHS ENDED JULY 31 2025, AND 2024

Treasury Stock

Additional Paid-in

Non-controlling

Balance October 31, 2023

$ ( 4,633,560 )

$ ( 244,462 )

Balance January 31, 2024

( 4,633,560 )

Balance, April 30, 2024

$ ( 4,633,560 )

$ ( 244,462 )

Balance, July 31, 2024

$ ( 4,633,560 )

$ ( 244,462 )

Balance October 31, 2024

( 4,633,560 )

Balance, January 31, 2025

$ ( 4,633,560 )

Balance, April 30, 2025

$ ( 4,633,560 )

MONTHS ENDED JANUARY 31, 2026 AND 2025

October 31, 2024

$ ( 4,633,560 )

January 31, 2025

$ ( 4,633,560 )

Net income (loss)

October 31, 2025

$ ( 4,633,560 )

Balance, July 31, 2025

declared at $ 0.08 per common share outstanding

January 31, 2026

$ ( 4,633,560 )

3 unchanged sentences

CONSOLIDATED STATEMENTS OF CASH FLOWS

Nine Months Ended July 31,

OPERATING ACTIVITIES:

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

Depreciation and amortization

Unrealized gain on commodities

( 1,862,877 )

Amortization of right-of-use asset

Gain on extinguishment of lease liability

Deferred income taxes

Changes in operating assets and liabilities:

Accounts receivable

( 5,711,012 )

Prepaid expenses and other current assets

Prepaid and refundable income taxes

Lease liabilities

Deposits and other assets

Deferred compensation payable

Accounts payable, accrued expenses

Net cash (used in) provided by operating activities

( 5,396,716 )

Cash flows from investing activities:

Acquisition of Empire Coffee Company

Cash paid for leasehold improvements

Purchases of machinery and equipment

Proceeds from sale of investment

Net cash (used in) provided by investing activities

months ended January 31,

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

and amortization

and realized loss (income) on commodities - net

on equity investments

of right-of-use asset

in operating assets and liabilities:

( 1,993,162 )

Cash flows from financing activities:

Proceeds from bank line of credit

Principal payments under bank line of credit

expenses and other current assets

and refundable income taxes

and other assets

payable and accrued expense

in lease liabilities

Change in due to/from broker

compensation payable

CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES

of Second Empire

of investment

paid for leasehold improvements

of building, machinery and equipment

CASH USED IN INVESTING ACTIVITIES

( 1,164,145 )

from bank line of credit

payments under bank line of credit

( 3,400,000 )

Principal payments on note payable

Net cash provided by (used in) financing activities

CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES

( 3,400,000 )

Net change in cash and cash equivalents

Cash and cash equivalents, beginning of period

Cash and cash equivalents, end of period

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

CHANGE IN CASH AND CASH EQUIVALENTS

AND CASH EQUIVALENTS, BEGINNING OF YEAR

AND CASH EQUIVALENTS, END OF YEAR

DISCLOSURE OF CASH FLOW DATA:

paid for income taxes

DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:

recognition of operating lease right-of-use asset

recognition of operating lease liabilities

accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

19 unchanged sentences

The Company’s unprocessed green coffee, which includes over 90 specialty coffee offerings, is sold primarily to specialty

gourmet roasters and to coffee shop operators in the United States with limited sales in Australia, Canada, England and China.

gourmet roasters and to coffee shop operators in the United States with limited sales in Australia and Canada.

Company’s wholesale green, private label, and branded coffee product categories generate revenues and cost of sales individually

7 unchanged sentences

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

Company’s line of credit will be due June 28, 2026 (see Note 6).

The agreement requires the Company to maintain compliance with

certain financial covenants computed on a quarterly and annual basis.

As of July 31, 2025, the Company is in compliance with those financial

The Company has net income for the nine months ended July 31, 2025, of $ 591,898 and a net working capital surplus of $ 20,979,529 .

As a result, the Company does not believe that substantial doubt is raised regarding the Company’s ability to continue as a going

concern and the ability to meet its obligations as they become due within twelve months from the date the condensed consolidated financial

statements are issued.

Company’s line of credit will become due June 28, 2026 (see Note 6).

The agreement requires the Company to maintain compliance

with certain financial covenants computed on a quarterly and annual basis.

As of January 31, 2026, the Company is in compliance with

those financial covenants.

The Company is in a net income position for the three months ended January 31, 2026 of $ 1,648,320 and a net

working capital surplus of $ 22,553,899 .

As a result, the Company does not believe that substantial doubt is raised regarding the Company’s

ability to continue as a going concern and the ability to meet its obligations as they become due within twelve months from the date

the condensed consolidated financial statements are issued.

HOLDING CO., INC.

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

2 – Basis of Presentation and Significant Accounting Policy

2 - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

of Presentation

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

18 unchanged sentences

fiscal 2025 Annual Report on Form 10-K, filed with the Securities and Exchange Commission (“SEC”) on January 28, 2026 (the

“2024 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.

“2025 Annual Report”).

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.

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

Company, LLC (“OPTCO”), Sonofresco, LLC (“SONO”), Comfort Foods, Inc, and Second Empire, LLC (“Second Empire”).

Company, LLC (“OPTCO”), Sonofresco, LLC (“SONO”), Comfort Foods, Inc., and Second Empire, LLC (“Second

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

The consolidated financial statements

have been prepared in accordance with US GAAP and comply with SEC reporting requirements.

The consolidated financial

statements have been prepared in accordance with US GAAP and comply with SEC reporting requirements.

Accounting Policies

significant accounting policies used in the preparation of these condensed consolidated financial statements are disclosed in the Company’s

2024 10-K, and there have been no changes to the Company’s significant accounting policies during the nine months ended July 31,

2025 Annual Report, and there have been no changes to the Company’s significant accounting policies during the three months ended

January 31, 2026.

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

7 unchanged sentences

a performance obligation.

following table presents revenues by product line for the nine and three months ended July 31, 2025 and 2024:

Nine Months Ended July 31,

Three Months Ended July 31,

Company accounts for its investment in equity securities in accordance with ASC 321, Investments—Equity Securities.

The investment

represents a noncontrolling ownership interest in a privately held company and does not provide the Company with the ability to exercise

significant influence over the investee.

the investment does not have a readily determinable fair value, it is accounted for using the measurement alternative, under which the

investment is recorded at cost, less impairment, if any, and adjusted for observable price changes in orderly transactions for identical

or similar investments of the same issuer.

The Company evaluates the investment for impairment or observable price changes each reporting

Any impairment losses or adjustments resulting from observable price changes are recognized in earnings.

HOLDING CO., INC.

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

following table presents revenues by product line for the three months ended January 31, 2026 and 2025:

SCHEDULE OF REVENUE

Months Ended January 31,

Accounting Pronouncements - Adopted

Company follows the FASB Accounting Standard Update (“ASU”) 2016-13, “Financial Instruments – Credit Losses (Topic

326).” This guidance requires entities to use a current expected credit loss impairment model rather than incurred losses.

Company considers factors such as credit quality, age of balances, historical experience and current and future economic conditions that

may affect the Company’s expectation of collectability in determining the allowance for credit losses.

The standard became effective

for the Company on November 1, 2023.

The adoption of this new guidance did not have a material impact on the Company’s consolidated

financial statements and related disclosures.

November 2023, the FASB issued ASU 2023-07, “Segment Reporting – Improving Reportable Segment Disclosures (Topic 280).”

The standard is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant

The standard requires disclosure to include significant segment expenses that are regularly provided to the chief operating

decision maker (“CODM”), a description of other segment items by reportable segment, and any additional measures of a segment’s

profit or loss used by the CODM when deciding how to allocate resources.

The standard also requires all annual disclosures currently

required by ASC Topic 280 to be included in interim periods.

This standard is effective for fiscal years beginning after December 15,

2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted, and requires retrospective

application to all prior periods presented in the financial statements.

The adoption of this new guidance did not have a material impact

on the Company’s consolidated financial statements, however;

it did result in enhanced disclosures.

Accounting Pronouncements – Not Yet Adopted

October 2023, the FASB issued ASU 2023-06, “Disclosure Improvements – Codification Amendments in Response to the SEC’s

Disclosure Update and Simplification Initiative.” This standard affects a wide variety of Topics in the Codification.

The effective

date for each amendment will be the date on which the SEC’s removal of that related disclosure from Regulation S-X or Regulation

S-K becomes effective.

Early adoption is prohibited.

The Company does not expect the adoption of this standard to have a material impact

on the Company’s consolidated financial statements and related disclosures.

December 2023, the FASB issued ASU 2023-09, “Improvements to Income Tax Disclosures,” a final standard on improvements to

income tax disclosures, The standard requires disaggregated information about a reporting entity’s effective tax rate reconciliation

as well as information on income taxes paid.

The standard is effective for fiscal years beginning after December 15, 2024, with early

adoption permitted and should be applied prospectively.

The Company is currently evaluating the impact of this standard on its consolidated

financial statements and related disclosures.

November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic

Disaggregation of Income Statement Expenses (“ASU 2024-03”), and in January 2025, the FASB issued ASU 2025-01, Income

Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40):

Clarifying the Effective Date (“ASU

ASU 2024-03 requires additional disclosure of the nature of expenses included in the income statement as well as disclosures

about specific types of expenses included in the expense captions presented in the income statement.

ASU 2024-03, as clarified by ASU

2025-01, is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December

15, 2027, with early adoption permitted.

The Company is currently evaluating the impact of these standards will have on it financial

December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures.

ASU 2023-09 is intended

to improve income tax disclosure requirements by requiring (1) consistent categories and greater disaggregation of information in the

rate reconciliation and (2) the disaggregation of income taxes paid by jurisdiction.

The guidance in ASU 2023-09 is effective for annual

reporting periods in fiscal years beginning after December 15, 2024.

The Company adopted ASU 2023-09 on November 1, 2025.

of ASU 2023-09 did not have a material impact on the Company’s condensed consolidated financial statements and related disclosures.

HOLDING CO., INC.

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

3 - BUSINESS COMBINATION

6 unchanged sentences

of their respective fair values.

The fair value estimates of the assets acquired are subject to subsequent adjustments as additional

information is obtained during the applicable measurement period.

The assets purchased consisted of equipment, accounts receivable and

The Company has determined that no portion of the purchase price is allocated to intangible assets as there were no acquired

intangibles that are considered identifiable under ASC 805.

Based on a fair value assessment, all value has been attributed to tangible

Second Empire will operate as a 100 % wholly owned subsidiary of the Company.

The following tables summarize the fair values of

consideration transferred and the fair values of identified assets acquired at the date of acquisition:

of Business Combination

Accounts Receivable

Total purchase price

acquired business contributed revenues of $ 3,238,704 and a loss of $ 694,130 to the Company for the period from November 6, 2024, to July

There were no acquisition costs incurred.

The assets purchased consisted of equipment, accounts receivable and inventories.

The Company has determined

that no portion of the purchase price is allocated to intangible assets as there were no acquired intangibles that are considered identifiable

under ASC 805.

Based on a fair value assessment, all value has been attributed to tangible assets.

Second Empire will operate as a 100 %

wholly owned subsidiary of the Company.

The following tables summarize the fair values of consideration transferred and the fair values

of identified assets acquired at the date of acquisition:

SCHEDULE OF BUSINESS COMBINATION

purchase price

connection with this transaction, the Company entered into a 4

four-year lease with 21 Grace Church Street Realty LLC for

the existing property at 21 Grace Church Street, Port Chester, NY 10573 where Empire Coffee Company had its offices and production facility.

four-year lease with 21 Grace Church Street Realty LLC for the existing property at 21 Grace Church Street, Port Chester, NY 10573

where Empire Coffee Company had its offices and production facility.

4 - INVENTORIES

at July 31, 2025 and October 31, 2024 consisted of the following:

at January 31, 2026 and October 31, 2025 consisted of the following:

SCHEDULE OF INVENTORIES

July 31, 2025

October 31, 2024

Packed coffee

Roaster parts

Packaging supplies

HOLDING CO., INC.

17 unchanged sentences

of Realized and Unrealized Gains and Losses on Contracts

Three Months Ended July 31,

Ended January 31,

Gross realized gains

Gross realized losses

Unrealized (losses) gains

( 2,056,404 )

$ ( 769,846 )

Months Ended July 31,

realized gains

realized losses

(losses) gains

Unrealized (losses) gains, net

6 - LINE OF CREDIT

6 unchanged sentences

The average interest

for the nine months ended July 31, 2025 was 6.74 %.

for the three months ended January 31, 2026 was 6.04 %.

April 17, 2025, the Borrowers entered into the Eleventh Loan Modification Agreement with Webster which, among other things, amended the

A&R Loan Agreement to provide for a new loan maturity date of June 28, 2026.

HOLDING CO., INC.

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

On March 4, 2026, the Borrowers entered into a Twelfth Loan Modification Agreement with Webster, which amended the A&R Loan Agreement

to extend the maturity date to December 28, 2026.

All other terms of the Loan Agreement remain unchanged and in full force and effect.

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

3 unchanged sentences

The outstanding balance on the Company’s line of credit was

$ 6,250,000 and $ 0 as of July 31, 2025, and October 31, 2024, respectively.

$ 2,650,000 and $ 6,050,000 as of January 31, 2026, and October 31, 2025, respectively.

7 - INCOME TAXES

7 unchanged sentences

or minus the change during the period in deferred tax assets and liabilities.

of July 31, 2025 and October 31, 2024, the Company did no t have any unrecognized tax benefits or open tax positions.

HOLDING CO., INC.

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

of January 31, 2026 and October 31, 2025, 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, 2025 and October

As of January 31, 2026 and October

31, 2025, the Company had no accrued interest or penalties related to income taxes.

4 unchanged sentences

Michigan, Montana, New Jersey, New York, Oregon, Pennsylvania, Rhode Island, South Carolina, Tennessee, Texas, and Virginia state tax

the three months ended July 31, 2025 and 2024, the Company recorded income tax expense of $ 17,584 and $ 259,249 , respectively.

nine months ended July 31, 2025 and 2024, the Company recorded income tax expense of $ 650,749 and $ 323,954 , respectively.

The Company recorded income tax expense for the 3 months ending July 31, 2025, principally due to the tax impact of the unrealized losses

from coffee futures and options contracts, which are recorded in cost of sales (see note 5).

the three months ended January 31, 2026 and 2025, the Company recorded income tax expense of $ 662,690 and $ 406,092 , respectively.

increase in income tax expense for the three months ended January 31, 2026 compared to the prior year period was primarily driven by

an increase in pre-tax income.

July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the United States.

The OBBBA includes the permanent

extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and

the restoration of favorable tax treatment for certain business provisions, including immediate expensing for domestic research expenditures.

Additionally, the OBBBA allows accelerated tax deductions for qualified property.

The legislation has multiple effective dates, with

certain provisions effective in 2025 and others implemented through 2027.

The Company is currently assessing the impact of the OBBBA

on its consolidated financial statements.

8 – Earnings (Loss) Per Share

extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration

of favorable tax treatment for certain business provisions, including immediate expensing for domestic research expenditures.

Additionally,

the OBBBA allows accelerated tax deductions for qualified property.

The legislation has multiple effective dates, with certain provisions

effective in 2025 and others implemented through 2027.

The Company is currently assessing the impact of the OBBBA on its condensed consolidated

financial statements.

8 - EARNINGS PER SHARE

Company presents “basic” and “diluted” earnings per common share pursuant to the provisions included in ASC Topic

5 unchanged sentences

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 three-

and nine-months ending July 31, 2025, and 2024.

The Company has 921,000 outstanding stock options which have not been included in the

calculation of diluted earnings per share because they are antidilutive.

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

ending January 31, 2026 and 2025.

The Company has 921,000 outstanding stock options which have not been included in the calculation of

diluted earnings per share because they are antidilutive.

9 - COMMITMENTS AND CONTINGENCIES

4 unchanged sentences

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

following summarizes the Company’s operating leases as of July 31, 2025 and October 31, 2024:

of Operating Leases

July 31, 2025

October 31, 2024

Right-of-use operating lease assets

Total lease assets

July 31, 2025

October 31, 2024

Current lease liability

Non-current lease liability

Total lease liability

amortization of the right-of-use assets for the three months ended July 31, 2025 and 2024 was $ 200,913 and $ 79,812 , respectively.

The amortization of the right-of-use assets for the nine months ended July 31, 2025, and 2024 was $ 583,643 and $ 203,268 ,

following summarizes the Company’s operating leases:

SCHEDULE OF OPERATING LEASES

operating lease assets

lease liability

amortization of the right-of-use assets for the three months ended January 31, 2026 and 2025 was $ 166,555 and $ 189,962 , respectively.

average remaining lease term

average discount rate

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

SCHEDULE OF MATURITY LEASE LIABILITY

lease payments

imputed interest

value of operating lease liabilities

aggregate cash payments under these leasing agreements were $ 277,629 and $ 189,962 for the three months ended January 31, 2026 and 2025,

respectively.

lease payments were $ 102,000 and $ 38,090 during the three months ended July 31, 2025, and 2024, respectively.

Variable lease

payments were $ 372,724 and $ 100,389 during the nine months ended July 31, 2025, and 2024, respectively.

lease costs were $ 736,800 and $ 356,509 for the nine months ended July 31, 2025, and 2024, respectively.

lease payments were $ 74,102 and $ 6,658 during the three months ended January 31, 2026 and 2025, respectively.

Operating lease costs were

and $ 118,836 for the three months ended July 31, 2025, and 2024, respectively.

weighted-average remaining lease term and the weighted-average discount rate of the Company’s leases were as follows:

Weighted average remaining lease term (in years)

Weighted average discount rate

of lease liabilities by fiscal year for the Company’s operating leases are as follows:

of Maturity Lease Liability

For the Years Ending October 31,:

Remainder of fiscal 2025

Total lease payments

imputed interest

Present value of operating lease liabilities

HOLDING CO., INC.

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

May 2024, the Company modified its existing lease agreement pertaining to a portion of its office facility.

The Company wrote off $ 1,848,032

in right-of-use assets and $ 2,058,599 lease liability associated with this agreement, resulting in a gain on extinguishment of lease

of $ 210,567 .

On May 1, 2024, the Company entered into an amended lease agreement for the remaining portion of its office facility in

Staten Island, NY, which changed the lease modification date to April 30, 2029.

The amended lease commenced on May 1, 2024.

recognized a right-of-use asset and lease liability associated with this modified agreement of $ 547,975 .

As a result of the modification,

the Company decreased its right-of-use asset by $ 1,300,057 and lease liability by $ 1,510,624 as of July 31, 2024.

$ 245,600 for each of the three months ended January 31, 2026 and 2025.

November 2024, the Company entered into a new lease in connection with the Second Empire Acquisition.

1 unchanged sentence

a right-of-use asset and lease liability of $ 2,113,581 in connection with such new lease.

HOLDING CO., INC.

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

October 2025, the Company ceased operations of its Comfort Foods manufacturing subsidiary and exited the leased facility located in North

Andover, Massachusetts.

The lease for this facility was scheduled to expire on May 31, 2028.

Upon the closure of Comfort Foods, the Company determined that the right-of-use asset associated with the lease was

fully impaired, as the facility would no longer be utilized in the Company’s operations.

The impairment was recognized in a prior

reporting period.

Based on ongoing legal discussions with the landlord and management’s estimate of the expected settlement amount,

the Company estimates that the remaining lease liability associated with this facility is approximately $ 200,000 as of January 31, 2026,

representing management’s current estimate of the expected settlement obligation.

11 - RELATED PARTY TRANSACTIONS

8 unchanged sentences

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

The assets were $ 129,972 and $ 121,386 as of July 31, 2025, and October

The assets were $ 133,647 and $ 129,646 as of January 31, 2026, and October

31, 2025, respectively, and are included in Deposits and other assets in the accompanying balance sheets.

The deferred compensation liability

at July 31, 2025 and October 31, 2024 was $ 129,972 and $ 121,386 , respectively.

at January 31, 2026 and October 31, 2025 was $ 133,647 and $ 129,646 , respectively.

12 - STOCKHOLDERS’ EQUITY

Company utilizes the cost method of accounting for treasury stock.

The cost of reissued shares is determined under the last-in, first-out

The Company did not purchase any shares during the three and nine months ended July 31, 2025 and the year ended October 31, 2024.

Company has an incentive stock plan, the 2013 Equity Compensation Plan (the “2013 Plan”), and has granted stock options for

an aggregate of 1,000,000 shares to employees, officers and non-employee directors from the 2013 Plan 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 and nine months ended July 31, 2025.

were granted or expired during the year ended October 31, 2024.

As of July 31, 2025, and October 31, 2024, 921,000 options were exercisable.

Company recorded no stock-based compensation expense for the three and nine months ended July 31, 2025 and 2024, as all stock option

awards were fully vested as of the beginning of the reporting period.

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 months ended January 31, 2026 and the year

ended October 31, 2025.

Stock Options.

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.

During the year ended October 31, 2025 and the three months ended January 31, 2026, no stock options

were granted, forfeited, or expired.

As of January 31, 2026 and October 31, 2025, 921,000 options were exercisable.

Company recorded no stock-based compensation expense for the three months ended January 31, 2026 and 2025, as all stock option awards

were fully vested as of the beginning of the reporting period.

January 28, 2026, the Company’s Board of Directors approved a cash dividend of $ 0.08 per share, representing one-third of net income.

The dividend was payable on or about February 26, 2026 , to shareholders of record as of February 10, 2026 .

NOTE 13 – EQUITY INVESTMENT

In December 2025, the Company invested $ 850,000 in

The Ryl Company LLC pursuant to a subscription agreement in exchange for a non-controlling minority interest.

The investment is passive

in nature, and the Company does not participate in the management or operations of The Ryl Company LLC.

Accordingly, the Company does

not have the ability to exercise significant influence over the investee and accounts for the investment under ASC 321, Investments—Equity

The carrying amount of this investment as presented on the consolidated balance sheet at January 31, 2026 was $ 850,000 .

14 – SEGMENT INFORMATION

4 unchanged sentences

or group, in deciding how to allocate resources and assess performance.

HOLDING CO., INC.

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Company’s chief operating decision maker (“CODM”) is Andrew Gordon, President, Chief Executive Officer, Chief Financial

7 unchanged sentences

The CODM assesses performance for the coffee segment and decides how to allocate resources

based on operating income (loss) that also is reported on statement of operations as consolidated income (loss) from operations.

measure of segment assets is reported on the condensed consolidated balance sheet as total consolidated assets.

evaluating the Company’s performance and making key decisions regarding resource allocation the CODM reviews the following key

of Segment Information

Statement of operations

based on operating income that also is reported on statement of operations as consolidated income from operations.

The measure of segment

assets is reported on the consolidated balance sheet as total consolidated assets.

evaluating the Company’s performance and making key decisions regarding resource allocation the CODM reviews the Trading Profit

and Operating Income table below:

SCHEDULE OF SEGMENT INFORMATION

of operations

For the three months ended

July 31, 2025

July 31, 2024

Cost of Goods Sold (1)

( 20,227,932 )

( 15,623,586 )

Trading Profit (Loss) (1)

( 4,007,888 )

( 3,206,201 )

Operating (loss) income

$ ( 1,095,151 )

Statement of operations

For the nine months ended

July 31, 2025

July 31, 2024

Cost of Goods Sold (1)

( 55,940,847 )

( 47,458,328 )

of Goods Sold (1)

(1) Trading profit

( 11,897,386 )

( 9,840,219 )

Operating income

Operating (loss) income

profit is included in cost of goods sold in the consolidated statement of operations.

includes officers’ salaries and selling and administrative expenses included in the consolidated statement of operations.

CODM uses operating income (loss) to evaluate income generated from segment assets (return on assets) in deciding whether to reinvest

profits into the coffee segment or into other parts of the entity such as for acquisitions or to pay dividends.

Intra-entity sales and

cash transfers are eliminated in operating income (loss) used by the CODM.

is included in cost of goods sold in the condensed consolidated statement of operations.

(2) Overhead includes

officers’ salaries and selling and administrative expenses included in the condensed consolidated statement of operations.

CODM uses operating income to evaluate income generated from segment assets (return on assets) in deciding whether to reinvest profits

into the coffee segment or into other parts of the entity such as for acquisitions or to pay dividends.

Intra-entity sales and cash transfers

are eliminated in operating income used by the CODM.

15 – SUBSEQUENT EVENTS

Company has evaluated all subsequent events through the date on which the condensed consolidated financial statements were available

for use and has determined that no events need to be reported.

February 26, 2026, with approval of the Company’s board of directors, Coffee Holding Co., Inc.

entered into an amendment to the

Amended and Restated Employment Agreement, dated April 11, 2008, with Andrew Gordon, the Company’s President, Chief Executive Officer,

Chief Financial Officer and Treasurer.

to the amendment, Mr.

Gordon agreed to reduce his base salary from $ 325,000 to $ 80,000 per year, was granted the right to receive a $ 1.6

million incentive bonus if he remains employed through January 1, 2030 (payable by March 16, 2030), and will be required to execute a

general release to receive severance benefits.

On January 28th, 2026, the Company’s Board of Directors approved a cash dividend of $ 0.08 per share, representing one-third of net

The dividend was paid on or about February 26, 2026, to shareholders of record as of February 10, 2026.

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