COFFEE HOLDING CO INC 10-Q

ITEM 1. FINANCIAL STATEMENTS COFFEE HOLDING CO., INC. CONDENSED CONSOLIDATED BALANCE SHEETS January 31, 2026 October 31, 2025 (Unaudited) ASSETS CURRENT ASSETS: Cash and cash equivalents $ 2,746,491 $ 701,872 Accounts receivable, net of allowances of $ 313,000 for 2026 and 2025 9,494,976 12,093,251 Inventories 18,988,272 20,446,481 Due from broker 1,824,684 1,424,036 Prepaid expenses and other current assets 452,629 594,360 Prepaid and refundable income taxes - 180,916 TOTAL CURRENT ASSETS 33,507,052 35,440,916 Building, machinery, and equipment, net 3,565,990 3,463,072 Customer list and relationships, net of accumulated amortization of $ 323,875 and $ 316,250 for January 31, 2026 and October 31, 2025, respectively 116,125 123,750 Trademarks and tradenames 327,000 327,000 Equity investments 889,651 39,651 Right of use asset 1,917,620 2,084,175 Deferred income tax assets - net 400,896 229,899 Deposits and other assets 429,267 339,909 TOTAL ASSETS $ 41,153,601 $ 42,048,372 LIABILITIES AND STOCKHOLDERS’ EQUITY CURRENT LIABILITIES: Accounts payable and accrued expenses $ 6,463,765 $ 5,641,836 Line of credit 2,650,000 6,050,000 Due to broker 968,123 303,813 Lease liabilities - current portion 871,265 811,975 TOTAL CURRENT LIABILITIES 10,953,153 12,807,624 Lease liabilities - long term 1,305,288 1,530,096 Deferred compensation payable 133,647 129,646 TOTAL LIABILITIES 12,392,088 14,467,366 Commitments and Contingencies (Note 9) - - STOCKHOLDERS’ EQUITY: Coffee Holding Co., Inc. stockholders’ equity: Preferred stock, par value $ .001 per share; 10,000,000 shares authorized; none issued - - Common stock, par value $ .001 per share; 30,000,000 shares authorized, 6,633,930 shares issued for January 31, 2026 and October 31, 2025; 5,708,599 shares outstanding for January 31, 2026 and October 31, 2025 6,634 6,634 Additional paid in capital 19,094,618 19,094,618 Retained earnings 14,293,821 13,113,314 Less: common stock held in treasury, at cost; 925,331 shares for January 31, 2026 and October 31, 2025 ( 4,633,560 ) ( 4,633,560 ) TOTAL STOCKHOLDERS’ EQUITY 28,761,513 $ 27,581,006 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 41,153,601 $ 42,048,372 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 3 COFFEE HOLDING CO., INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) 2026 2025 Three months ended January 31, 2026 2025 NET SALES $ 25,565,840 $ 21,305,285 COST OF SALES 18,536,823 15,573,359 GROSS PROFIT 7,029,017 5,731,926 OPERATING EXPENSES: Selling and administrative 4,443,286 3,929,598 Officers’ salaries 208,989 211,297 TOTAL 4,652,275 4,140,895 INCOME FROM OPERATIONS $ 2,376,742 $ 1,591,031 OTHER INCOME (EXPENSE): Interest income 8 10 Loss from equity investment - ( 23 ) Interest expense ( 65,740 ) ( 31,670 ) TOTAL ( 65,732 ) ( 31,683 ) INCOME BEFORE INCOME TAX $ 2,311,010 $ 1,559,348 Income Tax Provision 662,690 406,092 NET INCOME 1,648,320 1,153,256 Basic and diluted income per share 0.29 0.20 Weighted average common shares outstanding: $ $ Basic and diluted 5,708,599 5,708,599 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 4 COFFEE HOLDING CO., INC. CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY THREE MONTHS ENDED JANUARY 31, 2026 AND 2025 (UNAUDITED) Shares Amount Shares Amount in Capital Earnings Total Common Stock Treasury Stock Additional Paid- Retained Shares Amount Shares Amount in Capital Earnings Total Balance, October 31, 2024 5,708,599 $ 6,634 925,331 $ ( 4,633,560 ) $ 19,094,618 $ 11,709,875 $ 26,177,567 Net income - - - - - 1,153,256 1,153,256 Balance, January 31, 2025 5,708,599 $ 6,634 925,331 $ ( 4,633,560 ) $ 19,094,618 $ 12,863,131 $ 27,330,823 Balance, October 31, 2025 5,708,599 $ 6,634 925,331 $ ( 4,633,560 ) $ 19,094,618 $ 13,113,314 $ 27,581,006 Balance 5,708,599 $ 6,634 925,331 $ ( 4,633,560 ) $ 19,094,618 $ 13,113,314 $ 27,581,006 Dividend declared at $ 0.08 per common share outstanding ( 467,813 ) ( 467,813 ) Net income - - - - - 1,648,320 1,648,320 Balance, January 31, 2026 5,708,599 $ 6,634 925,331 $ ( 4,633,560 ) $ 19,094,618 $ 14,293,821 $ 28,761,513 Balance 5,708,599 $ 6,634 925,331 $ ( 4,633,560 ) $ 19,094,618 $ 14,293,821 $ 28,761,513 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 5 COFFEE HOLDING CO., INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) 2026 2025 Three months ended January 31, 2026 2025 OPERATING ACTIVITIES: Net income $ 1,648,320 $ 1,153,256 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation and amortization 218,852 159,891 Unrealized and realized loss (income) on commodities - net ( 376,338 ) ( 742,918 ) Loss on equity investments - 23 Amortization of right-of-use asset 166,555 189,962 Bad debt expense 50,000 - Deferred income taxes ( 170,997 ) 119,827 Changes in operating assets and liabilities: Accounts receivable 2,548,275 ( 1,993,162 ) Inventories 1,458,209 1,023,657 Prepaid expenses and other current assets 141,731 ( 128,891 ) Prepaid and refundable income taxes 180,916 285,438 Deposits and other assets ( 89,358 ) ( 120,291 ) Accounts payable and accrued expense 354,116 ( 194,362 ) Change in lease liabilities ( 165,518 ) ( 169,532 ) Change in due to/from broker 640,000 - Deferred compensation payable 4,001 15,203 NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES 6,608,764 ( 401,899 ) INVESTING ACTIVITIES: Acquisition of Second Empire - ( 800,000 ) Purchase of investment ( 850,000 ) - Cash paid for leasehold improvements ( 280,834 ) - Purchases of building, machinery and equipment ( 33,311 ) ( 17,906 ) NET CASH USED IN INVESTING ACTIVITIES ( 1,164,145 ) ( 817,906 ) FINANCING ACTIVITIES: Proceeds from bank line of credit - 2,500,000 Principal payments under bank line of credit ( 3,400,000 ) ( 300,000 ) NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES ( 3,400,000 ) 2,200,000 NET CHANGE IN CASH AND CASH EQUIVALENTS 2,044,619 980,195 CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 701,872 1,381,023 CASH AND CASH EQUIVALENTS, END OF YEAR $ 2,746,491 $ 2,361,218 SUPPLEMENTAL DISCLOSURE OF CASH FLOW DATA: Cash paid for income taxes $ - $ 2,833 Interest paid $ 82,227 $ 23,444 SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: Dividend declared $ 467,813 - Initial recognition of operating lease right-of-use asset $ - $ 2,113,581 Initial recognition of operating lease liabilities $ - $ 2,113,581 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 6 COFFEE HOLDING CO., INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE 1 - BUSINESS ACTIVITIES Coffee Holding Co., Inc. (the “Company”) conducts wholesale coffee operations, including manufacturing, roasting, packaging, marketing and distributing roasted and blended coffees for private labeled accounts and its own brands, and it sells green coffee. The Company also manufactures and sells coffee roasters. The Company’s core product, coffee, can be summarized and divided into three product categories (“product lines”) as follows: Wholesale Green Coffee: unroasted raw beans imported from around the world and sold to large and small roasters and coffee shop operators; Private Label Coffee: coffee roasted, blended, packaged and sold under the specifications and names of others, including supermarkets that want to have their own brand name on coffee to compete with national brands; and Branded Coffee: coffee roasted and blended to the Company’s own specifications and packaged and sold under the Company’s eight proprietary and licensed brand names in different segments of the market. The Company’s private label and branded coffee sales are primarily to customers that are located throughout the United States with limited sales in Canada and certain countries in Asia. Such customers include supermarkets, wholesalers, and individually-owned and multi-unit retailers. The Company’s unprocessed green coffee, which includes over 90 specialty coffee offerings, is sold primarily to specialty gourmet roasters and to coffee shop operators in the United States with limited sales in Australia and Canada. The Company’s wholesale green, private label, and branded coffee product categories generate revenues and cost of sales individually but incur selling, general and administrative expenses in the aggregate. There are no individual product managers and discrete financial information is not available for any of the product lines. The Company’s product portfolio is used in one business and it operates and competes in one business activity and economic environment. In addition, the three product lines share customers, manufacturing resources, sales channels, and marketing support. Thus, the Company considers the three product lines to be one single reporting segment. Liquidity The 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. 7 COFFEE HOLDING CO., INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE 2 - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The Company’s fiscal year ends on October 31 of each calendar year. The accompanying interim condensed consolidated financial statements are unaudited and have been prepared on substantially the same basis as its annual consolidated financial statements for the fiscal year ended October 31, 2025. 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 its 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, 2025 year-end condensed consolidated balance sheet data in this document was derived from audited consolidated financial statements. These condensed consolidated financial statements and notes included in this quarterly report on Form 10-Q does not include all disclosures required by U.S. generally accepted accounting principles (“U.S. GAAP”) and should be read in conjunction with the Company’s audited consolidated financial statements as of and for the year ended October 31, 2025 and notes thereto included in the Company’s fiscal 2025 Annual Report on Form 10-K, filed with the Securities and Exchange Commission (“SEC”) on January 28, 2026 (the “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. The condensed consolidated financial statements include the accounts of the Company, the Company’s subsidiaries, Organic Products Trading Company, LLC (“OPTCO”), Sonofresco, LLC (“SONO”), Comfort Foods, Inc., and Second Empire, LLC (“Second Empire”). 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. Significant Accounting Policies The significant accounting policies used in the preparation of these condensed consolidated financial statements are disclosed in the Company’s 2025 Annual Report, and there have been no changes to the Company’s significant accounting policies during the three months ended January 31, 2026. Revenue Recognition The Company recognizes revenue in accordance with the five-step model as prescribed by the Financial Accounting Standards Board (“FASB”) Accounting Codification (“ASC”) Topic 606 (“ASC 606”) in which the Company evaluates the transfer of promised goods or services and recognizes revenue when its customer obtains control of promised goods or services in an amount that reflects the consideration which the Company expects to be entitled to receive in exchange for those goods or services. To determine revenue recognition for the arrangements that the Company determines are within the scope of ASC 606, the Company performs the following five steps: (1) identify the contract(s) with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract and (5) recognize revenue when (or as) the entity satisfies a performance obligation. Equity Investments The 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. Because 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 period. Any impairment losses or adjustments resulting from observable price changes are recognized in earnings. 8 COFFEE HOLDING CO., INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) The following table presents revenues by product line for the three months ended January 31, 2026 and 2025: SCHEDULE OF REVENUE 2026 2025 Three Months Ended January 31, 2026 2025 Green $ 8,834,994 $ 8,893,954 Packed 16,730,846 12,411,331 Totals $ 25,565,840 $ 21,305,285 Revenues $ 25,565,840 $ 21,305,285 Recent Accounting Pronouncements - Adopted In 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. The adoption of ASU 2023-09 did not have a material impact on the Company’s condensed consolidated financial statements and related disclosures. 9 COFFEE HOLDING CO., INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE 3 - BUSINESS COMBINATION On November 6, 2024, the Company (through its wholly-owned subsidiary, Second Empire) purchased the remaining assets of Empire Coffee Company for $ 800,000 in a Uniform Commercial Code (“UCC”) Chapter 9 sale (the “Second Empire Acquisition”). Operations of Second Empire will include roasting and packing for current Company’s customers as well as customers of Empire Coffee. The results of Second Empire are included in the Company’s condensed consolidated financial statements from the date of acquisition. The Company has accounted for the Second Empire Acquisition as a business combination using the acquisition method of accounting, whereby the total purchase price was allocated to the acquired identifiable net assets purchased in the Second Empire Acquisition based on assessments of their respective fair values. 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 Accounts Receivable $ 531,585 Inventory 268,415 Total purchase price $ 800,000 In 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. NOTE 4 - INVENTORIES Inventories at January 31, 2026 and October 31, 2025 consisted of the following: SCHEDULE OF INVENTORIES January 31, 2026 October 31, 2025 Packed coffee $ 2,831,656 $ 1,767,614 Green coffee 14,021,632 16,551,660 Roasters and parts 402,679 429,466 Packaging supplies 1,732,305 1,697,741 Totals $ 18,988,272 $ 20,446,481 Inventories $ 18,988,272 $ 20,446,481 10 COFFEE HOLDING CO., INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE 5 – COMMODITIES HELD BY BROKER The Company has used, and intends to continue to use in a limited capacity, short term coffee futures and options contracts primarily for the purpose of partially hedging and minimizing the effects of changing green coffee prices and to reduce cost of sales. The commodities held by broker represent the market value of the Company’s trading account, which consists of options and futures contracts for coffee held with a brokerage firm. The Company uses options and futures contracts, which are not designated or qualifying as hedging instruments, to partially hedge the effects of fluctuations in the price of green coffee beans. Options and futures contracts are level 1 investments recognized at fair value in the condensed 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 period. The Company records all open contract positions on the condensed 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. The Company classifies its options and future contracts as trading securities and accordingly, realized and unrealized holding gains and losses are included in the condensed consolidated statements of operations as a component of cost of sales. The Company recorded realized and unrealized gains and losses respectively, on these contracts as follows: Schedule of Realized and Unrealized Gains and Losses on Contracts 2026 2025 Three Months Ended January 31, 2026 2025 Gross realized gains $ 1,040,648 $ 994,001 Unrealized (losses) gains, net ( 664,310 ) 742,918 Totals $ 376,338 $ 1,736,919 NOTE 6 - LINE OF CREDIT On June 27, 2024, the Organic Trading Products Trading Company, LLC (“OPTCO” and together with us, collectively referred to herein as the “Borrowers”) entered into the Tenth Loan Modification Agreement with Webster Financial Corp. (“Webster”) which amended the Amended and Restated Loan and Security Agreement (“A&R Loan Agreement”) to, among other things: (i) provide for a new loan maturity date of June 29, 2025 , (ii) provide that the applicable margin requirement for any revolving loan outstanding under the A&R Loan Agreement to 2.25 %, (iii) provide that the maximum facility amount shall be $ 10,000,000 and (iv) to adjust certain definitions and terms related to the borrowing base and leverage ratios applicable to the A&R Loan Agreement. The average interest for the three months ended January 31, 2026 was 6.04 %. On 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. 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. Each of the A&R Loan Facility and A&R Loan Agreement contains covenants, subject to certain exceptions, that place annual restrictions on the Borrowers’ operations, including covenants relating to 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 line of credit was $ 2,650,000 and $ 6,050,000 as of January 31, 2026, and October 31, 2025, respectively. NOTE 7 - INCOME TAXES The Company accounts for income taxes pursuant to the asset and liability method which requires deferred income tax assets and liabilities to be computed for net operating loss carryforwards and temporary differences between the financial statement and tax basis of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. The income tax provision or benefit is the tax incurred for the period plus or minus the change during the period in deferred tax assets and liabilities. 11 COFFEE HOLDING CO., INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) As 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 January 31, 2026 and October 31, 2025, the Company had no accrued interest or penalties related to income taxes. The Company currently has no federal or state tax examinations in progress. The Company files a U.S. federal income tax return and California, Colorado, Connecticut, Florida, Idaho, Illinois, Kansas, Louisiana, Massachusetts, Michigan, Montana, New Jersey, New York, Oregon, Pennsylvania, Rhode Island, South Carolina, Tennessee, Texas, and Virginia state tax returns. For the three months ended January 31, 2026 and 2025, the Company recorded income tax expense of $ 662,690 and $ 406,092 , respectively. The 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. On 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 condensed consolidated financial statements. Note 8 - EARNINGS PER SHARE The Company presents “basic” and “diluted” earnings per common share pursuant to the provisions included in ASC Topic 260, “Earnings (loss) per Share,” and certain other financial accounting pronouncements. Basic earnings per common share is computed by dividing net income by the sum of the weighted-average number of common shares outstanding. Diluted earnings per common share is computed by dividing the net income by the weighted-average number of common shares outstanding plus the dilutive effect of common shares issuable upon exercise of potential sources of dilution. The weighted average common shares outstanding used in the computation of basic and diluted earnings per share were 5,708,599 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. NOTE 9 - COMMITMENTS AND CONTINGENCIES Legal Proceedings The Company and its subsidiaries are not involved in any pending proceedings other than ordinary routine litigation incidental to their business. Management believes none of these proceedings, if determined adversely, would have a material effect on the business or financial condition of the Company or its subsidiaries. 12 COFFEE HOLDING CO., INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE 10 - LEASES The following summarizes the Company’s operating leases: SCHEDULE OF OPERATING LEASES January 31, 2026 October 31, 2025 Right-of-use operating lease assets $ 1,917,620 $ 2,084,175   Current lease liability 871,265 811,975 Non-current lease liability 1,305,288 1,530,096 Total lease liability $ 2,176,553 $ 2,342,071 The amortization of the right-of-use assets for the three months ended January 31, 2026 and 2025 was $ 166,555 and $ 189,962 , respectively. Weighted average remaining lease term 2.75 Weighted average discount rate 6.98 % Maturities of lease liabilities by year for our operating leases are as follows: SCHEDULE OF MATURITY LEASE LIABILITY 2026 $ 711,245 2027 860,331 2028 766,322 2029 66,619 Thereafter - Total lease payments 2,404,517 Less: imputed interest ( 227,964 ) Present value of operating lease liabilities $ 2,176,553 The aggregate cash payments under these leasing agreements were $ 277,629 and $ 189,962 for the three months ended January 31, 2026 and 2025, respectively. Variable lease payments were $ 74,102 and $ 6,658 during the three months ended January 31, 2026 and 2025, respectively. Operating lease costs were $ 245,600 for each of the three months ended January 31, 2026 and 2025. In November 2024, the Company entered into a new lease in connection with the Second Empire Acquisition. As a result, the Company recognized a right-of-use asset and lease liability of $ 2,113,581 in connection with such new lease. 13 COFFEE HOLDING CO., INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) In 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. NOTE 11 - RELATED PARTY TRANSACTIONS In January 2005, the Company established the “Coffee Holding Co., Inc. Non-Qualified Deferred Compensation Plan.” Currently, there is only one participant in the plan: the Company’s Chief Executive Officer. Within the plan guidelines, this employee is deferring a portion of his current salary and bonus. The assets are held in a separate trust. The deferred compensation payable represents the liability due to the Chief Executive Officer of the Company. 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 January 31, 2026 and October 31, 2025 was $ 133,647 and $ 129,646 , respectively. NOTE 12 - STOCKHOLDERS’ EQUITY a. 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. b. 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. The 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. On 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 Securities . The carrying amount of this investment as presented on the consolidated balance sheet at January 31, 2026 was $ 850,000 . NOTE 14 – SEGMENT INFORMATION ASC Topic 280, “Segment Reporting,” establishes standards for companies to report in their financial statement information about operating segments, products, services, geographic areas, and major customers. Operating segments are defined as components of an enterprise for which separate financial information is available that is regularly evaluated by the Company’s chief operating decision maker, or group, in deciding how to allocate resources and assess performance. 14 COFFEE HOLDING CO., INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) The Company’s chief operating decision maker (“CODM”) is Andrew Gordon, President, Chief Executive Officer, Chief Financial Officer, and Director. The Company has one reportable segment: coffee. The Company derives revenue primarily in North America and manages the business activities on a consolidated basis. The coffee segment derives revenue from the sale of wholesale green coffee, private label coffee and branded coffee. Revenue for these product lines is recognized upon shipment to the customer. The CODM assesses performance for the coffee segment and decides how to allocate resources 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. When 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 January 31, 2026 January 31, 2025 Statement of operations For the three months ended January 31, 2026 January 31, 2025 Net sales $ 25,565,840 $ 21,305,285 Cost of Goods Sold (1) 18,913,161 17,310,278 Gross Profit 6,652,679 3,995,007 Trading Profit (1) 376,338 1,736,919 Overhead (2) 4,652,275 4,140,895 Operating income $ 2,376,742 $ 1,591,031 (1) Trading profit 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. The 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. NOTE 15 – SUBSEQUENT EVENTS On 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. Pursuant 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 income. The dividend was paid on or about February 26, 2026, to shareholders of record as of February 10, 2026. 15