COFFEE HOLDING CO INC

Previous wording

Some of the matters discussed under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operation,” “Business,” “Risk Factors” and elsewhere in this quarterly report include forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. We have based these forward-looking statements upon information available to management as of the date of this quarterly report and management’s expectations and projections about future events, including, among other things:

Current wording

Some of the matters discussed under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Business,” “Risk Factors” and elsewhere in this quarterly report include forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. We have based these forward-looking statements upon information available to management as of the date of this quarterly report and management’s expectations and projections about future events, including, among other things:

Previous wording

Our net sales are driven primarily by the success of our sales and marketing efforts and our ability to retain existing customers and attract new customers. For this reason, we have made, and will continue to evaluate, strategic decisions to invest in measures that are expected to increase net sales. These transactions include our acquisition of Premier Roasters, LLC, including equipment and a roasting facility in La Junta, Colorado, the addition of a west coast sales manager to increase sales of our private label and branded coffees to new customers and the transaction with OPTCO. On June 29, 2016, we purchased substantially all the assets, including equipment, inventory, customer lists and relationships of Coffee Kinetics, LLC., a Washington limited liability company. On February 24, 2017, we acquired 100% of the capital stock of Comfort Foods, Inc. (“CFI”), a Massachusetts based medium sized coffee roaster, manufacturing both branded and private label coffee for retail and foodservice customers. On November 11, 2024, we acquired substantially all of the assets of Empire Coffee Company, a New York-based long-running private-label roaster.

Current wording

Our net sales are driven primarily by the success of our sales and marketing efforts and our ability to retain existing customers and attract new customers. For this reason, we have made, and will continue to evaluate, strategic decisions to invest in measures that are expected to increase net sales. These transactions include our acquisition of Premier Roasters, LLC, including equipment and a roasting facility in La Junta, Colorado, the addition of a west coast sales manager to increase sales of our private label and branded coffees to new customers and the transaction with OPTCO. On June 29, 2016, we purchased substantially all the assets, including equipment, inventory, customer lists and relationships of Coffee Kinetics, LLC., a Washington limited liability company. On February 24, 2017, we acquired 100% of the capital stock of Common Foods, Inc. (“CFI”), a Massachusetts based medium sized coffee roaster, manufacturing both branded and private label coffee for retail and foodservice customers. On November 11, 2024, we acquired substantially all of the assets of Empire Coffee Company, a New York-based long-running private-label roaster.

Previous wording

The supply and price of coffee beans are subject to volatility and are influenced by numerous factors which are beyond our control. Historically, we have used, and intend to continue to use in a limited capacity, short-term coffee futures and options contracts primarily for the purpose of partially hedging the effects of changing green coffee prices, as further explained in Note 2 of the Notes to the condensed consolidated financial statements in this quarterly report. In addition, we acquired, and expect to continue to acquire, futures contracts with longer terms, generally three to four months, primarily for the purpose of guaranteeing an adequate supply of green coffee. Realized and unrealized gains or losses on options and futures contracts are reflected in our cost of sales. Gains on options and futures contracts reduce our cost of sales and losses on options and futures contracts increase our cost of sales. The use of these derivative financial instruments has generally enabled us to mitigate the effect of changing prices. We believe that, in normal economic times, our hedging policies remain a vital element to our business model not only in controlling our cost of sales, but also giving us the flexibility to obtain the inventory necessary to continue to grow our sales while trying to minimize margin compression during a time of historically high coffee prices. However, no strategy can entirely eliminate pricing risks and we generally remain exposed to losses on futures contracts when prices decline significantly in a short period of time, and we would generally remain exposed to supply risk in the event of non-performance by the counterparties to any of our futures contracts. Although we have had net gains on options and futures contracts in the past, we have incurred significant losses on options and futures contracts during some recent reporting periods. In these cases, our cost of sales has increased, resulting in a decrease in our profitability or increase our losses. Such losses have and could in the future materially increase our cost of sales and materially decrease our profitability and adversely affect our stock price. See “Part II. Item 1A – Risk Factors - If our hedging policy is not effective, we may not be able to control our coffee costs, we may be forced to pay greater than market value for green coffee and our profitability may be reduced.” Failure to properly design and implement an effective hedging strategy may materially adversely affect our business and operating results. If the hedges that we enter do not adequately offset the risks of coffee bean price volatility or our hedges result in losses, our cost of sales may increase, resulting in a decrease in profitability or increased losses. As previously announced, as a result of the volatile nature of the commodities markets, we have and are continuing to scale back our use of hedging and short-term trading of coffee futures and options contracts, and intend to continue…

Excerpt shortened here; the source contains the full paragraph.

Current wording

The supply and price of coffee beans are subject to volatility and are influenced by numerous factors which are beyond our control. Historically, we have used, and intend to continue to use in a limited capacity, short-term coffee futures and options contracts primarily for the purpose of partially hedging the effects of changing green coffee prices, as further explained in Note 2 of the Notes to the condensed consolidated financial statements in this quarterly report. In addition, we acquired, and expect to continue to acquire, future contracts with longer terms, generally three to four months, primarily for the purpose of guaranteeing an adequate supply of green coffee. Realized and unrealized gains or losses on options and futures contracts are reflected in our cost of sales. Gains on options and futures contracts reduce our cost of sales and losses on options and futures contracts increase our cost of sales. The use of these derivative financial instruments has generally enabled us to mitigate the effect of changing prices. We believe that, in normal economic times, our hedging policies remain a vital element to our business model not only in controlling our cost of sales, but also giving us the flexibility to obtain the inventory necessary to continue to grow our sales while trying to minimize margin compression during a time of historically high coffee prices. However, no strategy can entirely eliminate pricing risks and we generally remain exposed to losses on futures contracts when prices decline significantly in a short period of time, and we would generally remain exposed to supply risk in the event of non-performance by the counterparties to any of our futures contracts. Although we have had net gains on options and futures contracts in the past, we have incurred significant losses on options and futures contracts during some recent reporting periods. In these cases, our cost of sales has increased, resulting in a decrease in our profitability or increase our losses. Such losses have and could in the future, materially increase our cost of sales and materially decrease our profitability and adversely affect our stock price. See “Part II. Item 1A – Risk Factors - If our hedging policy is not effective, we may not be able to control our coffee costs, we may be forced to pay greater than market value for green coffee and our profitability may be reduced.” Failure to properly design and implement an effective hedging strategy may materially adversely affect our business and operating results. If the hedges that we enter do not adequately offset the risks of coffee bean price volatility or our hedges result in losses, our cost of sales may increase, resulting in a decrease in profitability or increased losses. As previously announced, as a result of the volatile nature of the commodities markets, we have and are continuing to scale back our use of hedging and short-term trading of coffee futures and options contracts, and intend to continue…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

There have been no changes to our critical accounting policies during the three months ended January 31, 2026. Critical accounting policies and the significant estimates in accordance with such policies are regularly discussed with our Audit Committee. Those policies are discussed under “Critical Accounting Policies and Estimates” in “Part II. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” as well as in our consolidated financial statements and notes thereto, each in our 2025 10-K.

Current wording

There have been no changes to our critical accounting policies during the three and six months ended April 30, 2026. Critical accounting policies and the significant estimates in accordance with such policies are regularly discussed with our Audit Committee. Those policies are discussed under “Critical Accounting Policies and Estimates” in “Part II. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” as well as in our consolidated financial statements and notes thereto, each in our 2025 10-K.

Previous wording

Three Months Ended January 31, 2026 Compared to the Three Months Ended January 31, 2025

Current wording

Three Months Ended April 30, 2026 Compared to the Three Ended April 30, 2025

Previous wording

Gross Profit. Gross profit for the three months ended January 31, 2026, was $7,029,017, an increase of $1,297,091 from $5,731,926 for the three months ended January 31, 2025. Gross profit as a percentage of net sales was 27% for both periods.

Current wording

Gross Profit. Gross profit for the three months ended April 30, 2026, was $3,487,068, a decrease of $243,104 from $3,730,172 for the three months ended April 30, 2025. Gross profit as a percentage of net sales was 15.8% for the three months ended April 30, 2026, compared to 16.0% for the three months ended April 30, 2025. The decrease in gross profit was primarily attributable to the lower sales volumes and pricing pressures discussed above.

Previous wording

Operating Expenses. Total operating expenses increased by $511,380 to $4,652,275 for the three months ended January 31, 2026, from $4,140,895 for the three months ended January 31, 2025. Selling and administrative expenses increased from $3,929,598 for the three months ended January 31, 2025, to $4,443,286 for the three months ended January 31, 2026. Overall, operating expenses remained relatively consistent year over year, with the increase primarily reflecting timing and normal fluctuations in operating activities.

Current wording

Operating Expenses. Total operating expenses increased by $303,015 to $3,144,572 for the three months ended April 30, 2026, from $2,841,557 for the three months ended April 30, 2025. Selling and administrative expenses increased from $2,598,283 for the three months ended April 30, 2025, to $2,943,955 for the three months ended April 30, 2026. Operating expenses increased slightly compared to the prior-year period but remained generally consistent with historical levels.

Previous wording

Other Income (Expense). Other expense for the three months ended January 31, 2026 was $65,732, an increase of $34,049 from other income of $31,683 for the three months ended January 31, 2025. The increase in expense was primarily attributable to higher interest expense related to increased borrowings outstanding under the Company’s line of credit during the current period.

Current wording

Other Income (Expense). Other expense for the three months ended April 30, 2026 was $39,619, an increase of $22,132 from other income of $17,487 for the three months ended April 30, 2025. The increase in expense was primarily attributable to higher interest expense related to increased borrowings outstanding under the Company’s line of credit during the current periods.

Previous wording

Income Before Provision For Income Taxes. We had income of $2,311,010 before income taxes for the three months ended January 31, 2026, compared to income of $1,559,348 for the three months ended January 31, 2025, resulting in a net change of $751,662 for the three months ended January 31, 2026. The increase was primarily attributable to improved gross margins and higher operating efficiencies during the current period.

Current wording

Income Before Provision For Income Taxes. We had income of $302,877 before income taxes for the three months ended April 30, 2026, compared to income of $871,128 for the three months ended April 30, 2025, resulting in a net change of $568,251 for the three months ended April 30, 2026. The decrease was primarily attributable to the market conditions described above.

Previous wording

Income Taxes. Our expense for income taxes for the three months ended January 31, 2026 totaled $662,690, compared to an expense of $406,092 for the three months ended January 31, 2025. The change was attributable to the difference in the income for the three months ended January 31, 2026 versus the three months ended January 31, 2025.

Current wording

Income Taxes. Our expense for income taxes for the three months ended April 30, 2026 totaled $40,388, compared to an expense of $227,073 for the three months ended April 30, 2025. The change was attributable to the difference in the income for the three months ended April 30, 2026 versus the three months ended April 30, 2025.

Previous wording

Net Income. We had net income of $1,648,320 or $0.29 per share basic and diluted, for the three months ended January 31, 2026 compared to net income of $1,153,256, or $0.20 per share basic and diluted, for the three months ended January 31, 2025. The change in net income was due to our results of operations as described above.

Current wording

Net Income. We had net income of $262,489 or $0.05 per share basic and diluted, for the three months ended April 30, 2026, compared to net income of $644,055, or $0.11 per share basic and diluted, for the three months ended April 30, 2025. The change in net income was due to our results of operations as described above.

Previous wording

Net Sales. Net sales totaled $25,565,840 for the three months ended January 31, 2026, an increase of $4,260,555, or 20%, from $21,305,285 for the three months ended January 31, 2025. The increase in net sales was driven by higher sales to legacy customers, incremental sales to new customers, and a full quarter of Second Empire customer sales in the current period, partially offset by the loss of Comfort Foods customer sales.

Current wording

Net Sales. Net sales totaled $47,691,996 for the six months ended April 30, 2026, an increase of $3,066,650, or 6.9%, from $44,625,346 for the six months ended April 30, 2025. The increase in net sales was driven by higher sales to legacy customers, incremental sales to new customers, and a full six months of Second Empire customer sales in the current periods, partially offset by the loss of Comfort Foods customer sales.

Previous wording

Cost of Sales. Cost of sales for the three months ended January 31, 2026, was $18,536,823, or 73% of net sales, as compared to $15,573,359, or 73% of net sales, for the three months ended January 31, 2025. Cost of sales consists primarily of the cost of green coffee and packaging materials and realized and unrealized gains or losses on hedging activity. For the three months ended January 31, 2026, the net result of our hedging activities resulted in a gain of approximately $376,338, compared to the three months ended January 31, 2025, in which the net result of our hedging activities resulted in a gain of approximately $1.7 million. The increase in cost of sales was due to higher sales volume, increased salaries, and higher packaging material costs.

Current wording

Cost of Sales. Cost of sales for the six months ended April 30, 2026, was $38,079,991, or 79.8% of net sales, as compared to $36,009,105, or 80.69% of net sales, for the six months ended April 30, 2025. Cost of sales consists primarily of the cost of green coffee and packaging materials and realized and unrealized gains or losses on hedging activity. For the six months ended April 30, 2026, the net result of our hedging activities resulted in a gain of approximately 161,048, compared to the six months ended April 30, 2025, in which the net result of our hedging activities resulted in a gain of approximately 1,456,722. The increase in cost of sales was primarily attributable to higher sales volume during the current period and lower gains from hedging activities compared to the prior-year period. Despite the increase in cost of sales dollars, cost of sales as a percentage of net sales decreased compared to the prior-year period.

Previous wording

As of January 31, 2026, we had working capital of $22,553,899, which represented a $79,393 decrease from our working capital of $22,633,292 as of October 31, 2025. Our working capital remained relatively consistent during the period.

Current wording

As of April 30, 2026, we had working capital of $23,193,100, which represented a $559,808 increase from our working capital of $22,633,292 at October 31, 2025. Our working capital remained relatively consistent during the periods.

Previous wording

For the three months ended January 31, 2026, our operating activities provided net cash of $6,608,764 as compared to the three months ended January 31, 2025, when operating activities used net cash of $401,899. The increase primarily relates to decreases to inventory and accounts receivable.

Current wording

For the six months ended April 30, 2026, our operating activities provided net cash of $6,648,313, as compared to the six months ended April 30, 2025, when operating activities used net cash of $1,555,954, respectively. The increase primarily relates to decreases to inventory and accounts receivable offset by a decrease in accounts payable and accrued expenses.

Previous wording

For the three months ended January 31, 2026, our investing activities used net cash of $1,164,145 as compared to the three months ended January 31, 2025, when net cash used in investing activities was $817,906. The change is primarily attributable to capital expenditures related to leasehold improvements at the Second Empire location, as well as the purchase of an investment during the quarter.

Current wording

For the six months ended April 30, 2026, our investing activities used net cash of $1,159,598, as compared to the six months ended April 30, 2025, when net cash used in investing activities was $992,907. The change is primarily attributable to capital expenditures related to leasehold improvements at the Second Empire location, as well as the purchase of an investment during the current six-month period.

Previous wording

For the three months ended January 31, 2026, our financing activities had net cash used of $3,400,000 compared to net cash provided by financing activities of $2,200,000 for the three months ended January 31, 2025. The year-over-year change in cash flows from financing activities was primarily attributable to activity on the Company’s line of credit.

Current wording

For the six months ended April 30, 2026, our financing activities had net cash used of $3,867,813, compared to net cash provided by financing activities of $3,000,000, for the six months ended April 30, 2025. The year-over-year change in cash flows from financing activities was primarily attributable to activity on the Company’s line of credit.