8-K
COFFEE HOLDING CO INC (JVA)
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of
The
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): June 14, 2022
COFFEE
HOLDING CO., INC.
(Exactname of registrant as specified in its charter)
| Nevada | 001-32491 | 11-2238111 |
|---|---|---|
| (State or other jurisdiction | (Commission | (IRS Employer |
| of incorporation) | File Number) | Identification No.) |
| 3475 Victory Boulevard, Staten Island, New York | 10314 | |
| --- | --- | |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code: (718) 832-0800
NotApplicable
(Formername or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ☐ | Written<br> communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting<br> material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement<br> communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement<br> communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title<br> of each class | Trading<br> Symbol(s) | Name<br> of each exchange on which registered |
|---|---|---|
| Common<br> Stock, par value $0.001 per share | JVA | Nasdaq<br> Capital Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☐
Item2.02. Results of Operations and Financial Condition.
On June 14, 2022, Coffee Holding Co., Inc. (the “Company” or “Coffee Holding”) issued a press release disclosing certain information regarding its results of operations for the quarter ended April 30, 2022. A copy of the press release is furnished hereto under Item 2.02 as Exhibit 99.1.
The information included in this Item 2.02, and Exhibit 99.1 to this Current Report on Form 8-K, shall not be deemed “filed” for the purposes of or otherwise subject to the liabilities under Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Unless expressly incorporated into a filing of the Company under the Securities Act of 1933, as amended, or the Exchange Act made after the date hereof, the information contained in this Item 2.02 and Exhibit 99.1 hereto shall not be incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.
Item7.01. Regulation FD Disclosure.
See “Item 2.02 Results of Operations and Financial Condition” above.
Item9.01. Financial Statements and Exhibits.
(d)The following exhibit is furnished with this report:
| Exhibit No. | Description |
|---|---|
| 99.1 | Press<br> Release, dated June 14, 2022, issued by Coffee Holding entitled “Coffee Holding Co., Inc. Reports 14% Increase<br> in Net Sales But Records Small Net Loss Due to Losses at Steep N Brew Subsidiary.” |
| 104 | Cover<br> Page Interactive Data File (embedded within the Inline XBRL document). |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| COFFEE HOLDING CO., INC. | ||
|---|---|---|
| Dated:<br> June 14, 2022 | By: | /s/ Andrew Gordon |
| Name: | Andrew<br> Gordon | |
| Title: | President<br> and Chief Executive Officer |
Exhibit99.1
CoffeeHolding Co., Inc. Reports 14% Increase in Net Sales, But Records Small Net Loss Due to Losses at Steep N BrewSubsidiary
STATENISLAND, New York – June 14, 2022. Coffee Holding Co., Inc. (Nasdaq: JVA) (the “Company”) today announced its operating results for the fiscal quarter ended April 30, 2022:
NetSales. Net sales totaled $16,498,169 for the three months ended April 30, 2022, an increase of $2,029,611, or 14.0%, from $14,468,558 for the three months ended April 30, 2021. The increase in net sales was due to an increase of sales to the Company’s legacy customers partially offset by a decrease in sales from the Company’s Generations/Steep N Brew subsidiary.
Costof Sales. Cost of sales for the three months ended April 30, 2022 was $14,505,415, or 87.9% of net sales, as compared to $10,699,090, or 74% of net sales, for the three months April 30, 2021. The increase in cost of sales was due to the Company’s increased sales to the Company’s legacy customers, increased prices of green coffee and packaging materials and the Company’s continued losses from the Company’s Generations/Steep N Brew subsidiary, which included obsolete inventory write-off of approximately $718,000.
GrossProfit. Gross profit for the three months ended April 30, 2022 amounted to $1,992,754 or 12.1% of net sales, as compared to $3,769,468 or 26.1% of net sales, for the three months ended April 30, 2021. The decrease in gross profits on a percentage basis was attributable to the factors listed above.
OperatingExpenses. Total operating expenses increased by $50,899 to $3,366,223 for the three months ended April 30, 2022 from $3,315,324 for the three months ended April 30, 2021. Selling and administrative expenses increased by $53,399 and officers’ salaries decreased by $2,500.
Net(Loss) Income. The Company had a net loss of $368,096 or $(0.06) per share basic and diluted, for the three months ended April 30, 2022 compared to net income of $357,044, or $0.06 per share basic and diluted for the three months ended April 30, 2021. The decrease in net income was due primarily to the continued losses from the Company’s Generations/Steep N Brew subsidiary.
“Although we increased sales by approximately $2.0 million or 14.0% compared to last year and business remained strong in both the Coffee Holding legacy and Optco divisions, we recorded a loss of $0.06 per share for this fiscal period, primarily as a result of an operating loss at our Generations/Steep N Brew division. After several periods of losses at Generations/Steep N Brew, stemming from increasing costs, impacts of the COVID pandemic and poor performance, we are now looking to restructure the operational activities at Generations/Steep N Brew. Unfortunately, we incurred write offs relating to accounts receivables, inventory and packaging materials at this division, resulting in an operating loss of approximately $508,000 (net of tax) or $0.09 per share,” said Andrew Gordon, President and CEO of Coffee Holding Company.
“Moving forward, I believe we have a clear direction on how to grow both our sales and profits as we had in the past by focusing on sales of unroasted green coffee beans to small and medium size roasters, sales of private label products to large wholesalers and retailers and a continued push on our own legacy brands. I believe this has been and will continue to be a winning formula in our efforts to grow both our sales and profits. We have increased our sales now for seven consecutive months compared to the prior year despite low meaningful sales from our Generations/Steep N Brew subsidiary, including a 14% increase this quarter and I anticipate that trend will continue in spite of the inflationary headwinds that many of our green coffee customers now face. We appreciate our shareholders’ loyalty and patience and we look forward to a clearer path forward in the immediate future,” concluded Mr. Gordon.
AboutCoffee Holding
Coffee Holding Co., Inc. is a leading integrated wholesale coffee roaster and dealer in the United States and one of the few coffee companies that offers a broad array of coffee products across the entire spectrum of consumer tastes, preferences and price points. Coffee Holding has been a family-operated business for three generations and has remained profitable through varying cycles in the coffee industry and the economy. The Company’s private label and branded coffee products are sold throughout the United States, Canada and abroad to supermarkets, wholesalers, and individually owned and multi-unit retail customers.
Forwardlooking statements
Anystatements that are not historical facts contained in this release are “forward-looking statements” within the meaning ofthe Private Securities Litigation Reform Act of 1995, including the Company’s outlook on its revenue growth and operations. Forward-lookingstatements include statements with respect to our beliefs, plans, objectives, goals, expectations, anticipations, assumptions, estimates,intentions, and future performance, and involve known and unknown risks, uncertainties and other factors, which may be beyond the Company’scontrol, and which may cause the Company’s actual results, performance or achievements to be materially different from future results,performance or achievements expressed or implied by such forward-looking statements. All statements other than statements of historicalfact are statements that could be forward-looking statements. The Company has based these forward-looking statements upon informationavailable to management as of the date of this release and management’s expectations and projections about certain future events.It is possible that the assumptions made by management for purposes of such statements may not materialize. Such statements may involverisks and uncertainties, including but not limited to those relating to product demand, pricing, market acceptance, hedging activities,the effect of economic conditions, the effect of any pandemics including the one caused by Covid-19, intellectual property rights, theoutcome of competitive products, risks in product development, the results of financing efforts, the ability to complete transactionsand other factors discussed from time to time in the Company’s Securities and Exchange Commission filings. The Company undertakesno obligation to update or revise any forward-looking statement for events or circumstances after the date on which such statement ismade.
CompanyContact
Coffee Holding Co., Inc.
Andrew Gordon
President & CEO
718-832-0800
COFFEEHOLDING CO., INC.
CONDENSEDCONSOLIDATED BALANCE SHEETS
| October 31, 2021 | |||||
|---|---|---|---|---|---|
| - ASSETS - | |||||
| CURRENT ASSETS: | |||||
| Cash | 3,025,137 | $ | 3,696,275 | ||
| Accounts receivable, net of allowances of 144,000 for 2022 and 2021 | 7,335,947 | 9,299,978 | |||
| Inventories | 15,972,528 | 15,961,866 | |||
| Prepaid expenses and other current assets | 430,938 | 542,224 | |||
| Due from broker | 261,250 | 725,000 | |||
| Prepaid and refundable income taxes | 375,417 | 75,952 | |||
| TOTAL CURRENT ASSETS | 27,401,217 | 30,301,295 | |||
| Building machinery and equipment, net | 3,277,216 | 2,662,628 | |||
| Customer list and relationships, net of accumulated amortization of 255,444 and 237,131 for 2022 and 2021, respectively | 429,556 | 447,869 | |||
| Trademarks and tradenames | 408,000 | 408,000 | |||
| Non-compete, net of accumulated amortization of 74,250 and 69,300 for 2022 and 2021, respectively | 24,750 | 29,700 | |||
| Goodwill | 2,488,785 | 2,488,785 | |||
| Equity method investments | 366,444 | 402,245 | |||
| Investment - other | 2,500,000 | 2,500,000 | |||
| Deferred income tax asset - net | 114,961 | 77,394 | |||
| Right of Use Asset | 3,365,837 | 3,545,786 | |||
| Deposits and other assets | 508,522 | 449,225 | |||
| TOTAL ASSETS | 40,885,288 | $ | 43,312,927 | ||
| - LIABILITIES AND STOCKHOLDERS’ EQUITY - | |||||
| CURRENT LIABILITIES: | |||||
| Accounts payable and accrued expenses | 2,623,805 | $ | 5,047,640 | ||
| Line of credit – current portion | 5,900,000 | 3,800,850 | |||
| Lease liability – current portion | 191,374 | 340,400 | |||
| Note payable – current portion | 4,200 | 4,200 | |||
| Due to broker | 132,125 | 708,321 | |||
| Income taxes payable | 6,214 | 416,449 | |||
| TOTAL CURRENT LIABILITIES | 8,857,718 | 10,317,860 | |||
| Lease liabilities | 3,295,876 | 3,299,784 | |||
| Note payable – long term | 10,461 | 13,092 | |||
| Deferred compensation payable | 302,412 | 311,872 | |||
| TOTAL LIABILITIES | 12,466,467 | 13,942,608 | |||
| Commitments and Contingencies | |||||
| 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<br> shares issued as of April 30, 2022 and October 31, 2021; 5,708,599 shares outstanding as of April 30, 2022 and October<br> 31, 2021 | 6,634 | 6,634 | |||
| Additional paid-in capital | 19,052,806 | 18,688,797 | |||
| Retained earnings | 13,984,989 | 14,471,222 | |||
| Less: Treasury stock, 925,331 common shares, at cost as<br> of April 30, 2022 and October 31, 2021 | (4,633,560 | ) | (4,633,560 | ) | |
| Total Coffee Holding Co., Inc. Stockholders’ Equity | 28,410,869 | 28,533,093 | |||
| Non-controlling interest | 7,952 | 837,226 | |||
| TOTAL EQUITY | 28,418,821 | 29,370,319 | |||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | 40,885,288 | $ | 43,312,927 |
All values are in US Dollars.
COFFEEHOLDING CO., INC.
CONDENSEDCONSOLIDATED STATEMENTS OF OPERATIONS
SIXAND THREE MONTHS ENDED APRIL 30, 2022 AND 2021
(Unaudited)
| Six Months Ended<br> <br>April 30, | Three Months Ended<br> <br>April 30, | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2022 | 2021 | 2022 | 2021 | |||||||||
| NET SALES | $ | 33,203,029 | $ | 32,602,395 | $ | 16,498,169 | $ | 14,468,558 | ||||
| COST OF SALES | 26,938,669 | 24,353,356 | 14,505,415 | 10,699,090 | ||||||||
| GROSS PROFIT | 6,264,360 | 8,249,039 | 1,992,754 | 3,769,468 | ||||||||
| OPERATING EXPENSES: | ||||||||||||
| Selling and administrative | 6,784,824 | 6,321,651 | 3,215,085 | 3,161,686 | ||||||||
| Officers’ salaries | 302,275 | 306,863 | 151,138 | 153,638 | ||||||||
| TOTAL | 7,087,099 | 6,628,514 | 3,366,223 | 3,315,324 | ||||||||
| (LOSS) INCOME FROM OPERATIONS | (822,739 | ) | 1,620,525 | (1,373,469 | ) | 454,144 | ||||||
| OTHER (EXPENSE) INCOME | ||||||||||||
| Interest income | 4,094 | 929 | 2,556 | 519 | ||||||||
| Loss from equity method investment | (35,801 | ) | (3,915 | ) | (4,075 | ) | (1,317 | ) | ||||
| Interest expense | (90,293 | ) | (43,507 | ) | (49,683 | ) | (16,839 | ) | ||||
| TOTAL | (122,000 | ) | (46,493 | ) | (51,202 | ) | (17,637 | ) | ||||
| (LOSS) INCOME BEFORE (BENEFIT) PROVISION FOR INCOME TAXES AND NON-CONTROLLING INTEREST IN SUBSIDIARY | (944,739 | ) | 1,574,032 | (1,424,671 | ) | 436,507 | ||||||
| (Benefit) provision for income taxes | (248,275 | ) | 510,329 | (385,681 | ) | 129,086 | ||||||
| NET (LOSS) INCOME BEFORE NON-CONTROLLING INTEREST IN SUBSIDIARY | (696,464 | ) | 1,063,703 | (1,038,990 | ) | 307,421 | ||||||
| Less: Net loss (income) attributable to the non-controlling interest | 609,231 | (29,348 | ) | 670,894 | 49,623 | |||||||
| NET INCOME (LOSS) ATTRIBUTABLE TO COFFEE HOLDING CO., INC. | $ | (87,233 | ) | $ | 1,034,355 | $ | (368,096 | ) | $ | 357,044 | ||
| Basic and diluted (loss) earnings per share | $ | (.02 | ) | $ | .18 | $ | (.06 | ) | $ | .06 | ||
| Weighted average common shares outstanding: | ||||||||||||
| Basic and diluted | 5,708,599 | 5,708,599 | 5,708,599 | 5,708,599 |
COFFEEHOLDING CO., INC.
CONDENSEDCONSOLIDATED STATEMENTS OF CASH FLOWS
SIXMONTHS ENDED APRIL 30, 2022 AND 2021
(Unaudited)
| 2022 | 2021 | |||||
|---|---|---|---|---|---|---|
| OPERATING ACTIVITIES: | ||||||
| Net (loss) income | $ | (696,464 | ) | $ | 1,063,703 | |
| Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: | ||||||
| Depreciation and amortization | 280,594 | 337,353 | ||||
| Stock-based compensation | 364,009 | 379,537 | ||||
| Unrealized gain on commodities | (112,446 | ) | (559,408 | ) | ||
| Loss on equity method investments | 35,801 | 3,915 | ||||
| Write-off of accounts receivable | 415,096 | - | ||||
| Write-down of obsolete inventory | 718,353 | - | ||||
| Amortization of right of use asset | 179,949 | 226,155 | ||||
| Deferred income taxes | (37,567 | ) | 154,550 | |||
| Changes in operating assets and liabilities: | ||||||
| Accounts receivable | 1,548,935 | 709,476 | ||||
| Inventories | (949,058 | ) | 1,935,996 | |||
| Prepaid expenses and other current assets | 111,286 | (173,177 | ) | |||
| Prepaid and refundable income taxes | (299,465 | ) | 91,684 | |||
| Accounts payable and accrued expenses | (2,423,835 | ) | 970,875 | |||
| Deposits and other assets | (68,757 | ) | (100,000 | ) | ||
| Change in lease liability | (152,934 | ) | (248,980 | ) | ||
| Income taxes payable | (410,235 | ) | 255,611 | |||
| Net cash (used in) provided by operating activities | (1,496,738 | ) | 5,047,290 | |||
| INVESTING ACTIVITIES: | ||||||
| Purchases of machinery and equipment | (871,919 | ) | (597,444 | ) | ||
| Net cash used in investing activities | (871,919 | ) | (597,444 | ) | ||
| FINANCING ACTIVITIES: | ||||||
| Advances under bank line of credit | 2,500,000 | 15,563 | ||||
| Principal payments on note payable | (2,631 | ) | (2,507 | ) | ||
| Payment of dividend | (399,000 | ) | - | |||
| Principal payments under bank line of credit | (400,850 | ) | (3,809,885 | ) | ||
| Net cash provided by (used in) financing activities | 1,697,519 | (3,796,829 | ) | |||
| NET (DECREASE) INCREASE IN CASH | (671,138 | ) | 653,017 | |||
| CASH, BEGINNING OF PERIOD | 3,696,275 | 2,875,120 | ||||
| CASH, END OF PERIOD | $ | 3,025,137 | $ | 3,528,137 | ||
| 2022 | 2021 | |||||
| --- | --- | --- | --- | --- | ||
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW DATA: | ||||||
| Interest<br> paid | $ | 84,967 | $ | 54,943 | ||
| Income<br> taxes paid | $ | 498,992 | $ | 8,485 | ||
| SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||||||
| Purchase<br> of inventory by non-controlling interest | $ | 220,043 | ||||
| Initial<br> recognition of operating lease right of use asset | - | $ | 65,999 | |||
| Initial<br> recognition of operating lease liabilities | - | $ | 65,999 |
RECONCILIATIONOF NON-GAAP FINANCIAL MEASURE
To supplement Coffee Holding’s consolidated financial statements presented in accordance with U.S. GAAP, Coffee Holding uses a non-GAAP measure, Adjusted Earnings Before Interest, Income Taxes (benefits), Depreciation and Amortization (Adjusted EBITDA). This non-GAAP measure is provided to enhance overall understanding of Coffee Holding’s current financial performance. Reconciliation of the nearest GAAP measure to Adjusted EBITDA follows:
| Net income (GAAP measure) | $ | (368,096 | ) |
|---|---|---|---|
| Addback: <br> Interest expense | 49,683 | ||
| Income tax provision | (385,681 | ) | |
| Depreciation and amortization | 124,835 | ||
| Stock compensation | 174,241 | ||
| Total adjusted EBITDA | $ | (405,018 | ) |