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<SEC-DOCUMENT>0000891092-01-000418.txt : 20010319
<SEC-HEADER>0000891092-01-000418.hdr.sgml : 20010319
ACCESSION NUMBER:		0000891092-01-000418
CONFORMED SUBMISSION TYPE:	10SB12G
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20010316

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			COFFEE HOLDING CO INC
		CENTRAL INDEX KEY:			0001007019
		STANDARD INDUSTRIAL CLASSIFICATION:	BLANK CHECKS [6770]
		IRS NUMBER:				113860760
		STATE OF INCORPORATION:			NV
		FISCAL YEAR END:			0930

	FILING VALUES:
		FORM TYPE:		10SB12G
		SEC ACT:		
		SEC FILE NUMBER:	000-32457
		FILM NUMBER:		1570678

	BUSINESS ADDRESS:	
		STREET 1:		4401 FIRST AVENUE
		CITY:			BROOKLYN
		STATE:			NY
		ZIP:			11232
		BUSINESS PHONE:		7188320800

	MAIL ADDRESS:	
		STREET 1:		4401 FIRST AVENUE
		CITY:			BROOKLYN
		STATE:			NY
		ZIP:			11232

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	TRANSPACIFIC INTERNATIONAL GROUP CORP
		DATE OF NAME CHANGE:	19960201
</SEC-HEADER>
<DOCUMENT>
<TYPE>10SB12G
<SEQUENCE>1
<FILENAME>0001.txt
<DESCRIPTION>FORM 10SB
<TEXT>


                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                   FORM 10-SB

   GENERAL FORM FOR REGISTRATION OF SECURITIES OF SMALL BUSINESS ISSUERS UNDER
          SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934

                            COFFEE HOLDING CO., INC.
                 (Name of small business issuer in its charter)

                 Nevada                                     11-2238111
    (state or other jurisdiction of                       (IRS employer
     incorporation or organization)                   identification number)

 4401 First Avenue, Brooklyn, New York                      11232-0005
 (address of principal executive offices)                   (zip code)

          Issuer's telephone number, including area code (718) 832-0800

        Securities to be registered pursuant to Section 12(b) of the Act:

     Title of Each Class                      Name of Each Exchange on Which
     to be so Registered                      Each Class is to be Registered

     None
     ------------------------                 ---------------------------------

        Securities to be registered pursuant to Section 12(g) of the Act:

                     Common Stock, par value $.001 per share
                                (Title of Class)


                                       1
<PAGE>

                                     PART I

                            COFFEE HOLDING CO., INC.

Forward - Looking Statements

      This document contains forward looking statements. Forward looking
statements are based on management's then current views and assumptions
regarding future events and results. These statements are subject to factors
which could cause actual results to differ materially from those statements.

      The Private Securities Litigation Reform Act of 1995 (the "Act") provides
a safe harbor for forward-looking statements made by or on behalf of the
Company. Coffee Holding and its representatives may from time to time make
written or oral forward-looking statements, including statements contained in
this report and in our other filings with the SEC. These statements use words
such as "believes", "expects", "intends", "plans", "may", "will", "should",
"anticipates" and other similar expressions. All statements which address
operating performance, events or developments that the Company expects or
anticipates will occur in the future are forward-looking statements within the
meaning of the Act. The forward-looking statements are and will be based on
management's then current views and assumptions regarding future events and
operating performance. We cannot assure that anticipated results will be
achieved since actual results may differ materially because of risks and
uncertainties. These risks and uncertainties include, without limitation, those
described below and under Item 1. "Description of Business - Risk Factors" and
those we identify in future filings with the SEC. You are strongly encouraged to
consider these factors when evaluating forward-looking statements in this
registration statement. We do not undertake to revise these statements to
reflect new information or future developments.

      The following are some of the factors that could cause actual results to
differ materially from our forward-looking statements:

      o     the impact of rapid or persistent fluctuations in the price of
            coffee beans;

      o     fluctuations in the supply of coffee beans;

      o     general economic conditions and conditions which affect the market
            for coffee;

      o     the effects of any loss of major customers;

      o     the effects of competition from other coffee manufacturers and other
            beverage alternatives;

      o     changes in consumption of coffee; and

      o     other risks which we identify in future filings with the SEC.

ITEM 1. BUSINESS

Organizational History

      Coffee Holding Co., Inc. (sometimes referred to herein as the "Company" or
"Coffee Holding") conducts wholesale coffee operations, including roasting,
blending, packaging, marketing and distributing coffees for sale under private
labels and under its own brands of specialty coffees. The Company also sells
unprocessed green coffee to specialty gourmet roasters. Coffee Holding's sales
are primarily to customers located throughout the United States.

      Coffee Holding Co., Inc. was originally incorporated in New York in 1971.
Pursuant to an Agreement and Plan of Merger between Coffee Holding Co., Inc. and
Transpacific International Group Corp. (the "Merger Agreement"), Coffee Holding
merged (the "Merger") with and into Transpacific International Group Corp.
("Transpacific") in February, 1998, with Transpacific being the surviving
corporation (the "Reverse Acquisition"). After the Merger, Transpacific changed
its name to Coffee Holding Co., Inc.

      Transpacific was incorporated in Nevada in 1995 for the sole purpose of
acquiring or merging with an unspecified operating business. Transpacific had no
operating assets and did not engage in any business activities other than
seeking and investigating other businesses for potential merger or acquisition.
On August 12, 1996, Transpacific commenced a "blank check" offering pursuant to
Rule 419 of the Securities Act (the "Rule 419 Offering"), selling 3,000 shares
of common stock at $6.00 per share, which generated $18,000 in gross proceeds
from approximately 35 different investors. Prior to the Rule 419 Offering,
Transpacific had outstanding 97,000 shares of common stock. Pursuant to Rule
419, all of the gross proceeds from the offering, less 10%, and the shares of
Transpacific purchased by the investors were held in escrow pending distribution
of a prospectus to each of them describing any prospective business acquisition
by Transpacific and the subsequent confirmation of holders of at least 80% of
the shares that they elected to remain investors. All but one investor
reconfirmed their investment and the merger was consummated. Pursuant to the
Merger Agreement, the then outstanding shares of Transpacific common stock were
split ten for one and 3,000,000 shares were issued to Coffee Holding
shareholders in exchange for their outstanding shares of Coffee Holding.


                                       2
<PAGE>

Products

      Coffee Holding's products can be divided into three categories:

      (i)   Private label coffee

      (ii)  Branded coffee; and

      (iii) Wholesale green coffee

      Private label coffee. From its facility in Brooklyn, New York, Coffee
Holding roasts, blends, packages and distributes coffee under private labels for
companies throughout the United States and Canada. The coffee is distributed in
cans and brick packs in a variety of sizes. As of October 31, 2000, the Company
supplied coffee to approximately 35 different wholesale and retail companies.
Coffee Holding is currently the leading supplier for three of the largest
wholesalers in the United States. The Company produces private label coffee for
customers who desire to sell coffee under their own name but do not want to
engage in the manufacturing process. Sellers of private label coffee seek to
achieve a similar quality at a lower cost to the national brands representing a
better value for the consumer.

      In the year ended October 31, 2000 ("fiscal 2000"), approximately 48% of
Coffee Holding's sales revenue came from private label coffee sales, and, in
fiscal years 1999 and 1998, 50% and 42% of revenues, respectively, came from
those sales.

      Branded coffee. Coffee Holding roasts, grinds and blends coffee according
to its own recipes and packages the coffee at its facility in Brooklyn, New
York. The Company then sells the packaged coffee in its proprietary brand label
to supermarkets, wholesalers and individually owned stores throughout the United
States, shipping directly from its factory.

      Coffee Holding's name brands of coffee are: Cafe Caribe, Cafe Supremo, Don
Manuel, Fifth Avenue and Via Roma. The Company has acquired trademark
registration rights for each of Coffee Holding's name brands. For further
information regarding these trademark registration rights, see
"Business--Trademarks and Domain Names." Each of Coffee Holding's name brands is
directed at a particular segment of the consumer coffee market.

      Cafe Caribe, Coffee Holding's leading name brand by revenue, is a
specialty espresso coffee that targets espresso coffee drinkers, in particular,
the Hispanic consumer market. Market research indicates that Hispanic coffee
drinkers consume more coffee than other coffee drinkers and tend to be more
brand loyal than other coffee drinkers.

      Cafe Supremo is a specialty espresso that targets espresso drinkers of all
backgrounds and tastes. It is designed to introduce coffee drinkers to the
tastes of dark roasted coffee.

      Don Manuel is a 100% Colombian coffee product made from the finest beans
Colombia produces. 100% Colombian coffee is an upscale quality product which
commands a substantial premium at retail compared to the more traditional brown
coffee blends.

      Fifth Avenue is a blended coffee which has become popular as an
alternative for consumers who purchase private label or national branded coffee.
The Company also markets this brand to wholesalers who do not wish to undertake
the expense of developing a private label coffee program under their own name.

      Via Roma is an Italian style espresso targeted at the more traditional
espresso drinker.

      In fiscal 2000, sales of Coffee Holding's branded coffees comprised
approximately  9% of its sales revenues and, in fiscal 1999 and 1998, 6% and 10%
of revenues, respectively, came from those sales.

      Wholesale Green Coffee. Coffee Holding sells and brokers gourmet specialty
coffee beans to small roasters and coffee shop operators located throughout the
United States.

      Coffee Holding carries over 50 different varieties of green coffee beans
to meet its customers needs. Green gourmet coffee beans are sold unroasted,
direct from the Company's warehouse to the small roasters and gourmet coffee
shop operators which then roast and blend the beans themselves. In fiscal 2000,
wholesales of green coffee beans accounted for approximately 43% of Coffee
Holding's sales revenues, and, in fiscal 1999 and 1998, approximately 44% and
48% of revenues, respectively, came from such sales.

      Although the overall coffee market is mature, the gourmet specialty coffee
market represents the fastest growing area of the industry, as the number of
gourmet coffee houses have been increasing in all areas of the United States.
The Company currently has approximately 200 customers in this area, including
coffee houses, single store operators, mall coffee stores and mail order
sellers.


                                       3
<PAGE>

Raw Materials

      Coffee is a commodity traded on the Commodities and Futures Exchange.
Coffee prices are subject to fluctuation. Over the past five years, the average
price per pound of coffee beans ranged from approximately $.60 to $3.18. The
price for coffee beans on the commodities market as of January 31, 2001, was
$.64.

      The Company purchases its green coffee from dealers located primarily
within the United States. The dealers supply the Company with coffee beans from
many countries, including Columbia, Mexico, Kenya, Indonesia, Brazil and
Ethiopia, among others. In fiscal 2000, substantially all of the Company's
purchases were from approximately nine dealers. Management does not believe that
the loss of any one dealer would have a material adverse effect on the Company's
operations due to the availability of alternate suppliers.

      The supply and price of coffee beans are subject to volatility and are
influenced by numerous factors which are beyond Coffee Holding's control. Supply
and price can be affected by many factors such as weather, politics and
economics in the exporting countries, as well as efforts by coffee growers to
expand or form cartels or associations. Increases in the cost of coffee beans
can, to a certain extent, be passed on to Coffee Holding's customers in the form
of higher prices for coffee beans and processed coffee. However, there can be no
assurance that the Company will be successful in passing coffee price increases
to customers without losses in sales volume or margin. Drastic or prolonged
increases in coffee prices could also adversely impact the Company's business as
it could lead to a decline in overall consumption of coffee. Similarly, rapid
decreases in the cost of coffee beans could force the Company to lower its sales
prices before realizing cost reductions in its purchases. In addition, a
worldwide supply shortage of gourmet coffee beans could have an adverse impact
on the Company.

      Gourmet green coffee, unlike most coffee, does not trade in direct
relation to the actual daily price fluctuations on the commodity market.
Instead, it tends to trade on a negotiated basis at a substantial premium over
commodity coffee pricing, depending on the origin, supply and demand at the time
of purchase.

      The Company from time to time engages in the purchase and sale of coffee
futures and option contracts to guard against the effects of fluctuations in the
price of green coffee beans and to supplement its supply of coffee, if
necessary.

Trademarks and Domain Names

      Coffee Holding holds trademarks, registered with the United States Office
of Patent and Trademark for all five of its proprietary coffee brands. Trademark
registrations are subject to periodic renewal and the Company anticipates
maintaining its registrations. The Company believes that its brands are
recognizable in the marketplace and that brand recognition is important to the
success of its branded coffee business.

Customers

      Coffee Holding sells private label and its branded coffee to three of the
leading wholesalers in the United States: Supervalu, Nash Finch and Shurfine
International. For fiscal 2000, sales to these three companies accounted for
approximately 31% of Coffee Holding's total sales. Sales of green coffee beans
to Green Mountain Coffee Roasters accounted for approximately 17% of Coffee
Holding's total sales.

      The Company historically has had at times short term agreements with some
of these customers (generally one to three years in duration). Although the
Company believes that it has a strong mutually beneficial relationship with its
customers, there can be no assurance that these relationships will continue. The
Company currently has agreements with two of its wholesale customers in which
the Company is the exclusive supplier at fixed prices for lines of private label
ground coffee. The agreements, which contain generally only pricing terms, do
not set any minimum purchase obligations. The loss of any one of these
relationships would likely have a material adverse effect on the Company's
business and results of operations. In fiscal 2000, the Company experienced a
significant loss in business from one of its former largest wholesale customers.
See Item 2 - "Management's Discussion and Analysis".

Competition

      The coffee market is highly competitive. Coffee Holding competes with
other suppliers and distributors of green coffee beans, whole coffee beans and
roasted coffees. The Company's whole bean coffees compete directly against
specialty coffees sold at retail through supermarkets and a growing number of
specialty coffee stores.

      Private Label Competition. There are approximately four major producers of
coffee for private label sale in the United States. Many other companies produce
coffee for sale on a regional basis. Coffee Holding's main competitors are
Kroger and Chock


                                       4
<PAGE>

Full O' Nuts. Both Kroger and Chock Full O' Nuts, a division of Sara Lee, are
larger and have more financing and resources than Coffee Holding does and
therefore are able to devote more resources to product development and
marketing. The Company believes that it remains competitive by providing a high
level of quality and customer service. This service includes ensuring that the
coffee produced for each label maintains a consistent taste and delivering the
coffee on time in the proper quantities. The Company also provides its private
label customers with information on the coffee market on a regular basis.
Private label coffee competes with all of the branded coffee on the market.
Chock Full O' Nuts also produces branded coffees which compete directly with
their private label products.

      Brand Competition. Coffee Holding's proprietary brand coffees compete with
many other brand coffees which are sold in supermarkets and specialty stores.
The branded coffee market is dominated by three large companies: Kraft General
Foods, Inc., Proctor & Gamble Co. and Sara Lee, who also market gourmet coffee
in addition to non-gourmet coffee. Coffee Holding's large competitors have
greater access to capital than the Company and have a greater ability to conduct
marketing and promotions. The Company believes that, while its competitors'
brands may be more recognizable nationwide, its proprietary brands are well
recognized in the Northeastern United States and are distinguished by their
distinctive flavors.

      Wholesale Green Coffee Competition. There are many green coffee sellers
and specialty coffee roasters throughout the United States. Many of these
competitors have greater financial resources than Coffee Holding. However,
Coffee Holding believes that it has both the knowledge and the capability to
assist small specialty gourmet coffee roasters with developing and growing their
business. Because the Company is also a roaster as well as a seller of green
coffee, it can provide its roasting knowledge and experience as a value added
service to its gourmet roaster customers. While other coffee merchants may be
able to offer a lower price for coffee beans, Coffee Holding markets itself as a
partner to small roasters, with the ability to help them market their specialty
coffee products and develop a customer base. The assistance the Company provides
its customers includes training, coffee blending and market identification.

Marketing; Strategy

      The Company markets its private label and wholesale coffee through trade
shows, industry publications, face to face contact and through the use of
non-exclusive independent food and beverage sales brokers. The Company also uses
its web site (www.coffeeholding.com) as a method of marketing itself and its
coffee products.

      For its private label and brand coffees, the Company will from time to
time, in conjunction with retailers and with wholesalers, conduct in-store
promotions (e.g. coupons, price reductions, two for one sales).

      The Company seeks to achieve conservative growth within its core business
by developing and maintaining long term relationships with its customers. By
this strategy, the Company hopes to establish and grow profitable business. The
Company wants to capitalize on its commitment to quality and service and its
personal contact with its customers. The Company does not intend to try to
compete on price alone nor does it intend to try to grow sales at the expense of
profitability.

      The Company also evaluates new opportunities for growth consistent with
its core business. The Company recently established relationships with
additional independent sales brokers to market the Company's products in the
western United States, an area of the country where the Company has historically
not held a large market share. The Company is also considering the possibility
of using web site auctions to market coffee.

Seasonality

      Historically, consumer coffee consumption is greater in the winter months
as compared to the other seasons.

Employees

      Coffee Holding has 27 full-time employees, 22 of which are employed in the
areas of coffee roasting, blending and packaging and five of which are in
administration and sales. None of its employees are represented by unions or
collective bargaining agreements. The Company's management believes that the
Company maintains a good working relationship with its employees. In order to
supplement its internal sales staff, Coffee Holding sometimes uses independent
national and regional sales brokers who work on a commission basis.


                                       5
<PAGE>

RISK FACTORS

      An  investment  in our common  stock is  speculative  and  involves  risk.
Investors should carefully  consider the risks described below before buying our
common stock.  The risks described below are not the only ones we face and there
may be  additional  risks and  uncertainties.  These risks could have an adverse
material effect on our business,  financial  condition and results of operations
and the value of our common stock.

Our lack of diversification may affect business if demand for coffee is reduced.

      Our  business  is  centered  on  essentially  one  product:   coffee.  Our
operations have been limited to several segments of the coffee industry:

            o     the roasting,  blending, packaging and distribution of private
                  label coffee;

            o     the  roasting,   blending,   packaging  and   distribution  of
                  proprietary branded coffee; and

            o     the selling of wholesale gourmet green coffee.

      Any decrease in demand for coffee would harm our business  more than if we
had more diversified  product offerings and would have a material adverse effect
on our business, operating results and financial condition.

We rely on the services of Andrew Gordon and David Gordon.

      Coffee's  success  depends to a large  degree upon the  services of Andrew
Gordon,  President,  Chief  Executive  Officer and  Treasurer  and David Gordon,
Executive  Vice-President-Operations  and Secretary.  If we lose the services of
one or both of these key  employees,  the loss  could  have a  material  adverse
effect on our business. We do not have employment agreements with them nor do we
have  key  person  life  insurance.  There  is no  assurance  that we  would  be
successful in obtaining and retaining a replacement  for either of Andrew Gordon
or David Gordon.

A few stockholders control Coffee.

      Andrew  Gordon and David  Gordon,  executive  officers  and  directors  of
Coffee,  beneficially own approximately 65% of our outstanding  shares of common
stock.  They will be able to control the vote on all matters submitted to a vote
of  stockholders,  including  the  election  of  directors,  amendments  to  the
certificate of incorporation  and by-laws and approval of significant  corporate
transactions.  In addition,  other members of the Gordon family beneficially own
an additional 20% of the outstanding  shares of common stock. This control could
have the effect of  discouraging,  delaying or preventing a change in control of
Coffee which other  stockholders  might consider  favorable.  This control could
also have the effect of  approving  a change in control of Coffee on terms which
other stockholders might consider unfavorable.

Disruptions  in the  supply of green  coffee or  increases  in the cost of green
coffee could adversely affect our business.

      Coffee is a commodity  and its supply and price are subject to  volatility
beyond our control.  Supply and price are affected by many factors in the coffee
growing countries including weather,  political and economic conditions, as well
as efforts by coffee growers to expand or form cartels or  associations.  If our
cost of green coffee increases,  we may not be able to pass along those costs to
our  customers.  The  effect  would have a negative  impact on our  margins  and
profitability.  If we are unable to procure a sufficient supply of green coffee,
our sales would suffer.

The coffee  industry is highly  competitive and we may not have the resources to
compete effectively.

      The coffee  markets in which we do business  are highly  competitive.  Our
private label and branded  coffee  compete with other  manufacturers  of private
label  coffee  as well as  branded  coffees.  These  competitors,  such as Kraft
General Foods,  Inc.,  Kroger,  Proctor & Gamble and Sara Lee, have much greater
financial,  marketing,  distribution  and management and other resources than us
for marketing,  promotions and  geographic  and market  expansion.  In addition,
there are a growing  number of specialty  coffee  companies who provide  gourmet
green coffee and roasted coffee for retail sale.  There can be no assurance that
we can compete successfully against existing and new competitors.

Our operating results may fluctuate significantly.

      Historically,  our operating  results have fluctuated  significantly  from
quarter to quarter and year to year.  These  fluctuations are caused by a number
of factors including:

            o     fluctuations in purchase prices of green coffee;

            o     fluctuations in the selling prices of the Company's products;

            o     the level of marketing and pricing  competition  from existing
                  or new competitors in the coffee industry;

            o     the Company's ability to retain existing customers and attract
                  new customers; and


                                       6
<PAGE>

            o     the  Company's  ability to manage  inventory  and  fulfillment
                  operations and maintain gross margins.

      As  a  result  of  the  foregoing,  period-to-period  comparisons  of  our
operating results are not necessarily  meaningful and those  comparisons  should
not be  relied  upon  as  indicators  of  future  performance.  Fluctuations  in
operating results can have a negative impact on the value of our common stock.

We are dependent on a few customers.

      Sales of our  private  label  and  branded  coffee  to three  wholesalers,
Supervalu,  Nash Finch and  Shurefine,  accounted for  approximately  31% of our
total sales for the fiscal year ended October 31, 2000 and sales of green coffee
beans to Green Mountain Coffee Roasters accounted for approximately 17% of total
sales for that period.  The loss or reduction of business  from any one of these
customers would likely have a material adverse effect on the Company's business,
results of operations and financial condition.

We may need additional financing.

      We have a credit  facility with Wells Fargo Business Credit which provides
for a  revolving  line of credit of up to  $5,000,000  based on  eligible  trade
accounts  receivable and  inventory.  As of October 31, 2000, the line of credit
had an outstanding balance of $2,618,000,  which approximated the maximum amount
we could borrow based on the eligible trade accounts receivable and inventory as
of that date. The Company  anticipates,  but cannot assure, that we will be able
to fund our  operations  in fiscal  2001  through  cash  provided  by  operating
activities and borrowings  under the credit facility.  This expectation  assumes
that we are able to  generate a  sufficient  level of sales in order to increase
income  and  eligible  accounts  receivable  and  inventory.  In the  event  our
expectations are not fulfilled, we may be required to seek additional financing.
We have no current  arrangements  for  additional  financing and there can be no
assurance  that  additional  financing  will  be  available  to the  Company  on
commercially reasonable terms, or at all.

We do not anticipate paying dividends.

      We do not anticipate paying cash dividends in the foreseeable future.

There may be no market for our common stock.

      There  currently  is no public  trading  market for our common  stock.  We
intend to solicit  market  makers to make a market in our common  stock upon the
effectiveness  of this Form 10-SB and to obtain a listing for trading on the OTC
Electronic  Bulletin Board.  However,  there can be no assurance that any broker
will ever agree to make a market in our common  stock or that listing on the OTC
Electronic Bulletin Board will be achieved or maintained. Furthermore, given the
minimal number of the outstanding  shares of common stock held by non-affiliates
of the Company, it is unlikely that a liquid public market would ever develop.

The market price of our common stock may be volatile.

      Even  if a  market  for  our  common  stock  does  develop,  there  may be
significant volatility in the market price due to many factors including:

            o     Fluctuations in our results of operations;

            o     Minimal public float and lack of liquidity;

            o     Financial market and economic conditions; and

            o     Investor sentiment for coffee related companies.

The Penny Stock Rules may limit the liquidity of our common stock.

      Even if a market for our  common  stock does  develop,  the "penny  stock"
rules under the Securities Exchange Act of 1934 may apply to transactions in our
common  stock.  If the market price of our common stock is below $5.00 per share
and the common  stock is not traded on NASDAQ or a national  stock  exchange,  a
broker-dealer will be required to approve the prospective investors' purchase in
accordance  with  specified  procedures.  The  additional  burdens  imposed upon
broker-dealers  by these  requirements  could  discourage  them  from  effecting
transactions in our common stock.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS

Year Ended  October 31, 2000 (fiscal  2000)  Compared to Year Ended  October 31,
1999 (fiscal 1999)

      Net sales totaled  $20,097,548 in fiscal 2000, a decrease of $2,992,044 or
13% from  $23,089,592 in fiscal 1999.  Coffee pounds sold were  approximately 16
million pounds, unchanged from fiscal 1999.

      The Company experienced a significant loss in business from an important
wholesale customer. This customer's purchases in fiscal 2000 were approximately
one million pounds lower than its purchases in fiscal 1999 which negatively
impacted net sales by


                                       7
<PAGE>

approximately $1,000,000. Sales to this customer in fiscal 2001 are expected to
be at a level similar to fiscal 2000. The number of the Company's customers in
the gourmet green coffee area increased from approximately 150 to approximately
200 in fiscal 2000. These customers are predominately independent gourmet coffee
shops. Sales to new customers in this area historically start slowly because
many of these shops are start up ventures. The Company believes that its
customer base and sales will grow in this area.

      The Company's selling prices decreased steadily throughout fiscal 2000.
Beginning at the end of 1998, the purchase price of green coffee began a gradual
decline that, with the exception of brief price surges, continued through to the
end of fiscal 2000. Declines in green coffee purchase prices eventually led to
declines in selling prices. Selling prices of products which use commodity
coffee react fairly quickly to changes in green coffee purchase prices. Gourmet
green coffee selling prices tend to react more slowly to changes in purchase
prices because demand for gourmet coffee is less price sensitive. The Company
also experienced pricing pressure in the private label area as some of the
Company's larger competitors cut their prices to order to increase market share.
For example, from the end of calendar year 1999 to the end of fiscal 2000, the
leading seller of national brand coffee implemented a series of price reductions
on a can of its regular ground coffee which resulted in an aggregate price
reduction of approximately 20%. The Company is unable to predict how long and to
what extent pricing pressure in the private label area will continue.

      Cost of sales in fiscal 2000 was $16,673,790, or 83% of net sales, as
compared to $19,796,476, or 86% of net sales in fiscal 1999. Cost of sales
consists primarily of green coffee and packaging materials. The decrease in cost
of sales was attributable to the decline in green coffee purchase prices. As the
price of coffee is cyclical and volatile and subject to many factors, including
weather, politics and economics, the Company is unable to predict the purchase
price of coffee in fiscal 2001.

      The Company uses options and future contracts to partially offset the
effects of fluctuations in the price of green coffee beans. Options and future
contracts are marked to market with current recognition of gains and losses on
such positions. The Company does not defer such gains and losses since its
positions are not considered hedges for financial reporting purposes. The
Company's accounting for options and futures contracts may have the effect of
increasing earnings volatility in any particular period.

      At October, 31, 2000, the Company held options (generally with terms of
two months or less) covering an aggregate of 1,875,000 pounds of green coffee
beans at a price of $.725 per pound. The fair market value of these options,
which was obtained from a major financial institution, was approximately $27,000
at October 31, 2000.

      The Company began to acquire futures contracts during the year ended
October 31, 2000 with longer terms (generally three to four months) primarily
for the purpose of ensuring an adequate supply of green coffee. At October 31,
2000, the Company held longer-term futures contracts for the purchase of 412,500
pounds of coffee at an average price of $1.04 per pound. The market price of
coffee applicable to such contracts was $.744 per pound on that date. For the
fiscal year ended October 31, 2000, the Company recorded a net trading loss of
$183,236 which was charged to cost of sales, as compared to a net trading gain
of $174,620 for the fiscal year ended October 31, 1999 which was credited to
cost of sales.

      The Company's gross profit in fiscal 2000 was $3,423,758, an increase of
$130,642 or 4% from $3,293,116 in fiscal 1999. Gross profit as a percentage of
net sales increased by 3% to 17% in fiscal 2000 from 14% in fiscal 1999. Margins
improved primarily due to lower inventory costs as a result of the overall
decline in green coffee purchase prices. Margins were particularly favorable in
gourmet green coffee sales, as pricing in this area decreased more slowly
relative to the decrease in green coffee purchase prices.

      Selling and administrative expenses were $2,317,629 in fiscal 2000, an
increase of $406,323 or 21% from $1,911,306 in fiscal 1999. As a percentage of
net sales, this change represented a 4% increase from 8% in fiscal 1999 to 12%
in fiscal 2000. The increase was primarily attributable to an increase in
freight expenses, commissions, professional fees incurred in connection with the
preparation of reports filed by the Company with the Securities and Exchange
Commission and a one time settlement of litigation in the amount of $75,000.
Freight expenses were approximately $130,000 higher in fiscal 2000 due in part
to fuel surcharges by the carriers as a result of higher gasoline costs and
shipping costs incurred as the Company shipped more products to the Western
United States. Increased commission expenses of approximately $59,000 included
amortization of pre-paid commissions in the amount of $28,000.

      Interest expense increased $20,353 or 5% from $386,506 in fiscal 1999 to
$406,859 in fiscal 2000. The increase was attributable to higher interest rates
on outstanding borrowings. Rates of interest on the Company's outstanding
borrowings are tied to the prime rate. As the prime rate rose in fiscal 2000,
the Company's rate of interest payable on its outstanding borrowings also rose.

      Other income (expense), which consisted of interest expense and interest
income in fiscal 2000, was a net expense of $375,795. Other income (expense) in
fiscal 1999 was a net expense of $382,906.

      The Company had income of $400,334 before income taxes in fiscal 2000
compared to income of $608,904 before income taxes in fiscal 1999. The decline
was attributable primarily to the increase in selling and administrative
expenses.

      The Company's provision for income taxes for the year ended October 31,
2000 totaled $119,000 whereas it had no provision or credit for income taxes for
the year ended October 31, 1999. The difference between the tax provision
computed based on the


                                       8
<PAGE>

Company's pre-tax income and the applicable statutory income tax rate and the
Company's provisions for Federal, state and local taxes for the year ended
October 31, 2000 and 1999 are set forth below:

                                                             Year Ended
                                                             October 31
                                                             ----------
                                                          2000         1999
                                                          ----         ----
Tax provision at statutory rate of 34%
Adjustments for the effects of:                        $ 140,000    $ 207,000

State income taxes, net of Federal benefit                45,000       67,000
Net change in valuation allowance                        (66,000)    (274,000)
                                                       ---------    ---------
Provision for income taxes                             $ 119,000    $      --
                                                       =========    =========

      As further explained in Note 7 of the notes to the financial statements
elsewhere herein, the Company had estimated net operating loss carryforwards
remaining as of October 31, 1999 of approximately $191,000 available to reduce
future Federal, state and local taxable income. Due to the uncertainties related
to the extent and timing of the Company's future taxable income, the Company had
offset the estimated deferred tax assets of approximately $89,000 attributable
to the potential benefits from the net operating loss carryforwards as of
October 31, 1999 by an equivalent allowance.

      The Company had pre-tax income of approximately $400,000 for the year
ended October 31, 2000; however, it was only able to use net operating loss
carryforwards of $145,000. As a result, the Company reversed the valuation
allowance of $89,000 that it had established to offset the remaining deferred
tax assets attributable to the estimated potential benefits from the net
operating loss carryforwards as of October 31, 1999, of which $23,000 was
attributable to the reduction in the estimate of net operating loss
carryforwards and $66,000 was attributable to the reduction in the provision for
income taxes for benefits actually realized from the net operating loss
carryforwards.

      The Company did not record a provision for income taxes in fiscal 1999 as
a result of the utilization of a portion of its net operating loss
carryforwards.

      As a result, the Company had net income of $281,334, or $.07 per share, in
fiscal 2000 compared to net income of $608,904, or $.15 per share, in fiscal
1999.

Liquidity and Capital Resources

      As of October 31, 2000, the Company had working capital of $1,062,000,
which increased by $560,000 from its working capital of $502,000 as of October
31, 1999, and a total stockholders' equity of $225,000, which increased by
$544,000 from its total stockholders' deficiency of $319,000 as of October 31,
1999. The Company's working capital increased primarily as a result of net
income generated, additional borrowings under its credit facility and a capital
contribution from a stockholder.

      As of November 29, 2000, the Company extended the maturity of its credit
facility with Wells Fargo Business Credit from November 20, 2000 until November
20, 2002, and amended certain terms of the facility (see Note 5 of the notes to
the financial statements). The credit facility, as amended, provides for a
revolving line of credit of up to $5,000,000 based on eligible trade accounts
receivable and inventories and a term loan of up to $600,000 based on eligible
equipment. The line of credit provides for borrowings of up to 85% of the
Company's eligible trade accounts receivable and 60% of its eligible
inventories. Interest on the line of credit is payable monthly at the prime rate
plus .5% (an effective rate of 9.5% at January 31, 2001). Interest on the term
loan is payable monthly at the prime rate plus .75% (an effective rate of 9.75%
at January 31, 2001). Principal payments on the term loan are payable monthly at
$7,276 and beginning January 1, 2001, are payable monthly at $10,000. Andrew
Gordon and David Gordon, directors and officers of the Company, each have
guaranteed borrowings under the credit facility up to $500,000.

      As of October 31, 2000, the line of credit had an outstanding balance of
$2,618,000, which approximated the maximum amount that the Company could borrow
based on its eligible trade accounts receivable and inventory as of that date as
compared to an outstanding balance of $2,445,000 at October 31, 1999. The
outstanding balance under the term loan was $192,000 as at October 31, 2000, and
was $600,000 as at November 29, 2000 as the Company borrowed the maximum amount
of the term loan upon the amendment of the credit facility. The Company has on
deposit $261,000 in a cash collateral account to secure the outstanding


                                       9
<PAGE>

borrowings under the credit facility. The outstanding balance under the line of
credit and a portion of the outstanding balance under the term loan were
classified as long-term liabilities in the Company's October 31, 2000 balance
sheet based on the amended terms of the credit facility whereby the Company may
either defer principal payments until, or make installment payments though,
November 20, 2002.

      The Company had loans payable to its stockholders, all of whom are members
of the Gordon family, of $245,000 at October 31, 2000. The loans are due on
demand and bear interest at 10%. The Company borrows from its stockholders, from
time-to-time to supplement short-term working capital needs. The stockholders
are under no obligation to make such loans.

      In fiscal 2000, the Company's operating activities provided net cash of
$2,400 as compared to fiscal 1999 when net cash provided by operating activities
was $704,000. The decrease principally reflects a decrease in net income of
$328,000, and a decrease in accounts payable and accrued expenses of $1,038,000,
partially offset by decreases in accounts receivable of $306,000 and amounts due
from broker of $143,000.

      During fiscal 2000, the Company used $95,000 of its cash resources to
purchase property and equipment. Capital expenditures were slightly below those
made in fiscal 1999 and management does not believe that the Company's capital
expenditures will be significant in fiscal 2001. Capital expenditures have
decreased as compared to fiscal 1998 and fiscal 1997 when the Company purchased
and installed new equipment and refurbished existing equipment to upgrade its
production capabilities.

      The Company also used $689,000 of cash in fiscal 2000, which included
$399,000 to make interest payments and pay administrative fees on its credit
facility, $87,000 to reduce its term loan and $203,000 to reduce capital lease
obligations. In addition, the Company deposited approximately $261,000 in a cash
collateral account to secure outstanding borrowings under its credit facility.

      During fiscal 2000, the Company received short term advances of $97,000
from related parties and a capital contribution of $263,000 from a stockholder
which represented a return of a portion of a dividend paid during a period in
which the Company was taxed as an "S" corporation.

      The Company anticipates, but cannot assure, that it will be able to fund
its operations, including paying its liabilities, funding capital expenditures
and making required payments on its debts, in fiscal 2001 through cash provided
by operating activities and borrowings under its credit facility. This
expectation assumes that the Company is able to generate a sufficient level of
sales in order to increase net income and eligible accounts receivable. An
increase in eligible accounts receivable and inventory would permit the Company
to make additional borrowings under its line of credit. The Company believes it
could, if necessary, obtain additional loans by mortgaging its headquarters.

Year 2000

      The Year 2000 issue concerns the possible inability of information systems
and non-information systems with embedded technology to properly recognize and
process date sensitive information beyond December 31, 1999. The Company did not
experience any systems problems related to Year 2000 issues. The Company's
information and non-information systems functioned normally. The Company's
business with its suppliers and customers was not affected by Year 2000 issues,
although the Company did experience some reduction in inventory purchases from
its wholesale customers in November and December 1999 as the customers did not
want to carry a large inventory ahead of the Year 2000. The Company does not
presently anticipate making any expenditures in the fiscal year ending October
31, 2001 for Year 2000 items.

ITEM 3. DESCRIPTION OF PROPERTY

      Coffee Holding is headquartered at 4401 First Avenue, Brooklyn, New York
where it owns the land and an approximately 15,000 square foot building. The
building houses the Company's executive offices as well as the Company's plant
where it roasts, blends and packages its coffee.

      Coffee Holding also leases a 7,500 square foot warehouse located at 4425A
First Avenue in Brooklyn from T&O Management. T&O Management is not affiliated
with the Company or any of its officers, directors or shareholders. The Company
pays an annual rent of $46,800. The lease expires on August 31, 2002.

      Coffee Holding also uses a variety of independent, bonded commercial
warehouses to store its green coffee beans.

      Coffee Holding's management believes that the Company's facilities are
adequate for its current operations and for the foreseeable future.


                                       10
<PAGE>

ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

      The following table sets forth information regarding ownership of shares
of the Company's common stock, as of January 31, 2001, by each person known to
be the owner of 5% or more of the Company's common stock, by each person who is
a director or executive officer and by all directors and executive officers as a
group.

      When reviewing the following table, you should be aware that:

      (i)   The amounts and percentages of common stock and preferred stock
            beneficially owned are reported on the basis of regulations of the
            SEC governing the determination of beneficial ownership of
            securities. Under the rules of the SEC, a person is deemed to be a
            "beneficial owner" of a security if that person has or shares
            "voting power," which includes the power to vote or to direct the
            voting of such security, or "investment power," which includes the
            power to dispose of or to direct the disposition of such security. A
            person is also deemed to be a beneficial owner of any securities of
            which that person has a right to acquire beneficial ownership within
            60 days. Under these rules, more than one person may be deemed a
            beneficial owner of the same securities and a person may be deemed
            to be a beneficial owner of securities as to which that person has
            no economic interest.

      (ii)  Unless otherwise indicated by footnote, each person identified in
            the table below has sole voting power and investment power as to the
            shares beneficially owned.

                                                          Common Stock
                                                          ------------
                                                   Number of      Percentage of
                                                    Shares            Class
                                                    ------            -----
Andrew Gordon(1)                                   1,970,378          49.3%
David Gordon(1)                                    1,970,378          49.3%
Gerard DeCapua                                           100            *
Daniel Dwyer                                             100            *
Matt Phillips                                            100            *
Rachelle Gordon(2)                                 1,740,000          43.5%
Rachelle Gordon Grantor
    Retained Annuity Trust(3)                      1,350,878          33.8%
Sterling Gordon(4)                                   199,600           5.0%
Judy Melnick(5)                                      199,600           5.0%

All directors and executive                        2,590,178          64.8%
officers as a group (5 persons)(1)

- ----------
* Less than 1%.

(1)   Includes 1,350,878 shares held by the Rachelle Gordon Grantor Retained
      Annuity Trust, of which Andrew and David Gordon are the co-trustees with
      the power to vote and dispose of the shares. The address of Andrew Gordon
      and David Gordon is 4401 First Avenue, Brooklyn, New York 11232.

(2)   Includes 1,350,878 shares held by the Rachelle Gordon Grantor Retained
      Annuity Trust, of which Ms. Gordon is the grantor and beneficiary. Ms.
      Gordon's address is 304 Whitman Drive, Brooklyn, New York 11234.

(3)   The address of the trust is c/o Andrew Gordon, 4401 First Avenue,
      Brooklyn, New York 11234.

(4)   Mr. Gordon's address is 4401 First Avenue, Brooklyn, New York 11232.

(5)   Ms. Melnick's address is 940 Lost Forest Drive, Atlanta, Georgia 30328.

ITEM 5. DIRECTORS AND EXECUTIVE OFFICERS

      Set forth below is information concerning the Company's directors and
executive officers. The Company's board of directors currently consists of five
directors. Directors are elected by a plurality of the votes cast at the
Company's annual meeting of stockholders. Once elected, each director serves
until the next annual meeting of stockholders and until his or her successor is
duly elected and qualified, or until his or her earlier death, resignation or
removal. Officers are appointed by the directors, and, once appointed, each
officer serves until his or her successor is duly appointed, or until his or her
earlier death, resignation or removal.


                                       11
<PAGE>

     Name             Age              Position
     ----             ---              --------

Andrew Gordon........ [39]  Chief Executive Officer, President, Treasurer and
                            Director
David Gordon......... [36]  Executive Vice President - Operations, Secretary and
                            Director
Gerard DeCapua....... [39]  Director
Daniel Dwyer......... [44]  Director
Matthew Phillips..... [46]  Director

      Andrew Gordon is Chief Executive Officer, President, Treasurer and a
Director of Coffee Holding. He was previously a Vice President from 1981 to
1997. He has been a Director of Coffee Holding since 1981. Mr. Gordon received
his B.B.A. degree from Emory University. He is the brother of David Gordon.

      David Gordon is Executive Vice President--Operations, Secretary and a
Director of Coffee Holding. He was previously a Vice President and Operating
Manager from 1983 to 1997. He has been a Director of Coffee Holding since 1983.
Mr. Gordon attended Baruch College in New York City. He is the brother of Andrew
Gordon.

      Gerard DeCapua has been a Director of Coffee Holding since 1997. He has
had his own law practice in Rockville Centre, New York since 1985. Mr. DeCapua
received his law degree from Pace University.

      Daniel Dwyer has been a Director of Coffee Holding since 1998. Mr. Dwyer
has been a senior coffee trader at Rothfos Corporation since 1995.

      Matthew Phillips has been a Director of Coffee Holding since 1998. Since
1991, Mr. Phillips has been a Vice-President of Branco Peres International,
responsible for coffee trading operations.

      The Company currently does not have any standing committees.

ITEM 6. EXECUTIVE COMPENSATION

      The following table sets forth certain compensation information for the
Company's chief executive officer and each other executive officer whose salary
and bonus compensation exceeded $100,000 for the fiscal year ended October 31,
2000.

                           Summary Compensation Table
                           --------------------------

                                           Annual
                                           Compensation
                                           ------------

Name and                                   Salary    Bonus   All Other
Principal Position           Fiscal Year   ($)      ($)(1)   Compensation ($)(2)
- ------------------           -----------   ------   ------   -------------------

Andrew Gordon ................  2000      155,000     --      13,671
Chief Executive                 1999      160,000   50,000     8,896
Officer and President ........  1998      160,000     --      24,379

David Gordon .................  2000      125,000   40,000     6,919
Executive Vice ...............  1999      160,000   50,000     6,970
President - Operations ......   1998      130,000     --       6,970

- ----------
(1)   Amounts shown as bonuses were earned in the fiscal year shown.
(2)   The amounts set forth consist of amounts paid by the Company for the use
      of an automobile and automobile insurance.

      The Company's Board of Directors does not have a compensation committee.
Salaries and bonuses are determined by the Company's Chief Executive Officer.
Andrew Gordon's base salary for fiscal 2001 is $175,000. David Gordon's base
salary for fiscal 2001 is $140,000.


                                       12
<PAGE>

      No employee has an employment agreement with the Company.

Stock Option Plan

      The Company has a stock option plan, the Coffee Holding Co., Inc. 1998
Stock Option Plan, under which non-qualified and incentive stock options to
purchase shares of Common Stock may be granted to the Company's directors,
officers and other key employees and consultants. The plan was adopted by the
board of directors on February 10, 1998. The Company has reserved 2,000,000
shares of its Common Stock for issuance under the plan, subject to adjustment
for stock splits, stock dividends, reorganizations, mergers, recapitalizations
or other capital adjustments. The plan is administered by the board of directors
of the Company which may delegate its powers to a committee of the board. No
options may be granted after February 10, 2008. The board of directors
determines, at the time of grant, the purchase price of shares issuable pursuant
to exercise of stock options; provided that the purchase price of a share of
common stock under incentive stock options shall not be less than the fair
market value of a share on the date the option is granted. Unless earlier
terminated due to termination of employment or death or disability of the
optionee, each stock option shall terminate no later than ten years from the
date on which it is granted. Options are transferable only by will or the laws
of descent and distribution. No options have ever been granted under the plan.

Compensation of Directors

      Directors do not receive any compensation for their services. They are,
however, reimbursed for travel expenses and other out-of-pocket costs incurred
in connection with attendance at board of directors and committee meetings.

ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

      From time to time, certain of the Company's stockholders and directors and
officers make loans to the Company for working capital purposes.

      At January 31, 2001, the Company had loans payable to certain of its
stockholders and directors and officers in the principal amounts as follows:

      Rachelle Gordon - $ 39,592
      Sterling Gordon - $ 41,041
      David Gordon    - $115,136
      Andrew Gordon   - $ 52,489

      The loans are unsecured, due on demand and bear interest at 10% per annum.

      Andrew Gordon and David Gordon have each guaranteed the payment of the
Company's borrowings under its outstanding credit facilities from Wells Fargo
Business Credit up to $500,000.

      Daniel Dwyer, a director of the Company, is a senior coffee trader for
Rothfos Corporation, one of the leading green coffee dealers in the world. Mr.
Dwyer is responsible for the Company's account. The Company paid Rothfos
approximately $3,500,000 for green coffee purchases in fiscal 2000 and expects
to pay it a similar amount in fiscal 2001.

ITEM 8. DESCRIPTION OF SECURITIES

General

      The following description of the Company's securities is a summary, does
not purport to be complete and is subject in all respects to Coffee's Articles
of Incorporation, as amended, By-laws and Nevada law.

      The authorized capital stock of Coffee consists of 30,000,000 shares of
common stock, par value $.001 per share, and 10,000,000 shares of preferred
stock, par value $.001 per share.

Common Stock

      As of the date hereof, there are 3,999,650 shares of Common Stock issued
and outstanding. Holders of Common Stock have the right to cast one vote for
each share held of record on all maters submitted to a vote of holders of common
Stock, including the


                                       13
<PAGE>

election of directors. There is no right to cumulate votes. Stockholders holding
a majority of the total number of shares then issued and outstanding and
entitled to vote is necessary to constitute a quorum for the transaction of
business. Directors are elected by a plurality of the votes cast and all other
corporate actions must be authorized by a majority of votes cast by the holders
of shares entitled to vote on the matter.

      Holders of Common Stock are entitled to receive dividends pro rata based
on the number of shares held, when, as and if declared by the Board of Directors
from funds legally available therefor. In the event of the liquidation,
dissolution or winding up of the affairs of the Company, all assets and funds
available for distribution to the holders of Common Stock shall be distributed
pro rata. Holders of Common Stock are not entitled to preemptive, subscription
or conversion rights and there are no redemption or sinking fund provisions
applicable to the Common Stock.

Preferred Stock

      The Company's Articles of Incorporation authorizes the issuance of up to
10,000,000 shares of preferred stock, none of which are currently outstanding,
with the Board of Directors having the right to determine the designations,
rights, preferences and powers of each series of preferred stock. Accordingly,
the Board of Directors is empowered, without stockholder approval, to issue
preferred stock with voting, dividend, conversion, redemption, liquidation or
other rights which may be superior to the rights of the holders of Common Stock
and could adversely affect the voting power and other equity interests of the
holders of Common Stock.

Transfer Agent/Registrar

      The transfer agent and registrar for Coffee Common Stock is OTR, Inc. Its
address is 317 SW Alder, Suite 1120, Portland, Oregon 97204 and its telephone
number is (503) 225-0375.

Anti-Takeover

      The Nevada General Corporation Law ("NGCL") provides generally that a
Nevada corporation may not engage in a business combination with any stockholder
who is the beneficial owner of 10% or more of the voting power of the
outstanding voting shares of the corporation for 3 years after the stockholder
acquired the shares unless the combination or the purchase of shares made by the
interested stockholder on the interested stockholders' date of acquiring shares
is approved by the board of directors of the corporation before that date. A
Nevada corporation may not engage in any combination with an interested
stockholder after the expiration of 3 years after his date of acquiring the
shares other than a combination meeting all of the requirements of the articles
of incorporation and either (1) the combination is approved by the board of
directors before the interested stockholders' date of acquiring the shares or as
to which the purchase of shares made by the interested stockholder on that date
had been approved by the board of directors before that date, (2) the
combination is approved by the affirmative vote of the holders of stock
representing a majority of the outstanding voting power not beneficially owned
by the interested stockholder proposing the combination or any affiliate or
associate of the interested stockholder proposing the combination at a meeting
called for that purpose no earlier than 3 years after the interested
stockholder's date of acquiring shares, or (3) the consideration to be received
by all of the holders of outstanding stock of the corporation not beneficially
owned by the interested stockholder equals or exceeds thresholds set forth by
the NGCL.

      The power of the Board of Directors to designate and issue shares of
preferred stock could be utilized as a method of discouraging, delaying or
preventing a change of control of the Company.

Possible Listing on OTC Electronic Bulletin Board

      There currently is no public trading market for our common stock. The
Company intends to solicit market makers to make a market in our common stock
upon the effectiveness of this Form 10-SB and to obtain a listing for trading on
the OTC Electronic Bulletin Board. However, there can be no assurance that any
broker will ever agree to make a market in our common stock or that listing on
the OTC Electronics Bulletin Board will be achieved or maintained. Furthermore,
given the minimal number of the outstanding shares of common stock held by
non-affiliates of the Company, it is unlikely that a liquid public market would
ever develop.


                                       14
<PAGE>

                                     PART II

ITEM 1. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY AND
        RELATED STOCKHOLDER MATTERS

      The Company's Common Stock is not quoted or listed on any quotation system
or market. The Company does not know of any firm that makes a market for the
Common Stock.

      The number of registered holders of the Company's common stock at January
31, 2001 was 472.

      As of January 31, 2001, the Company had 3,999,650 shares of common stock
issued and outstanding. Of those shares, 29,650 shares were registered in the
Rule 419 Offering and may be resold. The other 3,970,000 shares are "restricted
securities" and may not be sold unless the sale is registered under the
Securities Act or pursuant to an exemption from registration under the
Securities Act, including the exemption provided by Rule 144.

      In general, under Rule 144 as currently in effect, a shareholder who has
beneficially owned any restricted securities for at least one year will be
entitled to sell the securities provided that specified public information,
manner of sale and notice requirements are satisfied, within any three month
period, that number of shares that does not exceed the greater of (i) 1% of the
then outstanding shares of common stock or (ii) the average weekly trading
volume of the common stock during the four calendar weeks preceding the date on
which the notice of the sale is given to the SEC. Holders of Common Stock which
is listed on the OTC Electronic Bulletin Board is not eligible to use the
trading volume calculation. A stockholder who is not an affiliate of the Company
at any time during the 90 days preceeding the sale, and who has beneficially
owned the restricted shares for at least two years, will be eligible to sell the
securities shares under subparagraph (k) of Rule 144 without regard to the
volume restrictions and other requirements.

      In January 1998, prior to the date of the merger with Transpacific, Coffee
Holding, while it was still a privately held "S" corporation, paid a
distribution in the amount of $422,258 to its stockholders to pay personal
income taxes. Since the January 1998 payment, the Company has never paid any
cash dividends on its common stock and has no intention to do so in the
foreseeable future. In addition, under the terms of its credit facility with
Wells Fargo Business Credit, the Company is prohibited from paying cash
dividends without the lender's written consent. See Item 2 - "Management's
Discussion and Analysis".

ITEM 2. LEGAL PROCEEDINGS

      In the ordinary course of its business, Coffee Holding is a party to
litigation involving its operations. The Company does not believe that the
outcome of any current litigation will have a material adverse effect upon its
business, financial condition or results of operations.

ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS

         None.

ITEM 4. RECENT SALES OF UNREGISTRED SECURITIES

      Other than the shares of Common Stock issued pursuant to the Merger, no
shares of Common Stock have been sold by the Company in the past three years.

ITEM 5. INDEMNIFCATION OF DIRECTORS AND OFFICERS

      The Nevada General Corporation Law provides for the discretionary and
mandatory indemnification of directors, officers, employees and agents under
certain circumstances.

      A corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
except an action by or in the right of the corporation, reason of the fact that
he is or was a director, officer, employee or agent of the corporation, or was
serving at the request of the corporation as a director, officer, employee or
agent of another entity, against expenses, including attorneys fees, judgments,
fines and amounts paid in settlement actually and reasonably incurred by him in
connection with the action or if he acted in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the
corporation and, with respect to any criminal action, had no reasonable cause to
believe his conduct was unlawful. This discretionary indemnification, unless
ordered by a court, may be made by the corporation only if the indemnification
is proper under the circumstances as determined by the stockholders, the board
of directors consisting of members who were not parties to the proceeding, or by
independent legal counsel.

      A corporation may similarly indemnify a person described above who was or
is a party or is threatened to be made a party to any threatened, pending or
completed action brought by or in the right of the corporation to procure a
judgment in its favor. However, indemnification may not be made for any claim,
issue or matter as to which such person has been adjudged by a court of
competent jurisdiction, after exhaustion of all appeals therefrom, to be liable
to the corporation or for amounts paid in settlement to the


                                       15
<PAGE>

corporation, unless and only to the extent that the court in which the action or
suit was brought or other court of competent jurisdiction determines upon
application that in view of all the circumstances of the case, the person is
fairly and reasonably entitled to indemnity for such expenses as the court deems
proper.

      To the extent that a director, officer, employee or agent of a corporation
has been successful on the merits or otherwise in defense of any action, suit or
preceding referred to above, or in defense of any claim, issue or matter
therein, the corporation shall indemnify him against expenses, including
attorneys' fees, actually and reasonably incurred by him in connection with the
defense.

      A corporation may pay or advance expenses in connection with the defense
of a proceeding in advance of a final disposition of the action, upon receipt of
an undertaking by or on behalf of the indemnitee to repay the amount if it is
ultimately determined by a court that he is not entitled to be indemnified by
the corporation.

      The Company's articles of incorporation and by-laws contain no provisions
regarding indemnification of directors.

                                    PART F/S

                            COFFEE HOLDING CO., INC.

                          INDEX TO FINANCIAL STATEMENTS
                          -----------------------------

                                                                      PAGE
                                                                      ----
(A) FINANCIAL STATEMENTS:

          REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS                     F-2

          BALANCE SHEET
              OCTOBER 31, 2000                                         F-3

          STATEMENTS OF OPERATIONS
              YEARS ENDED OCTOBER 31, 2000 AND 1999                    F-4

          STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIENCY)
              YEARS ENDED OCTOBER 31, 2000 AND 1999                    F-5

          STATEMENTS OF CASH FLOWS
              YEARS ENDED OCTOBER 31, 2000 AND 1999                    F-6

          NOTES TO FINANCIAL STATEMENTS                             F-7/14

                                      * * *


                                      F-1
<PAGE>

                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Board of Directors
Coffee Holding Co., Inc.

We have audited the accompanying balance sheet of COFFEE HOLDING CO., INC. as of
October  31,  2000,  and  the  related  statements  of  operations,  changes  in
stockholders' equity (deficiency) and cash flows for the years ended October 31,
2000  and  1999.  These  financial  statements  are  the  responsibility  of the
Company's  management.  Our  responsibility  is to  express  an opinion on these
financial statements based on our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects,  the financial position of Coffee Holding Co., Inc. as of
October 31,  2000,  and its results of  operations  and cash flows for the years
ended  October  31,  2000  and  1999,  in  conformity  with  generally  accepted
accounting principles.

                                                     J. H. COHN LLP

Roseland, New Jersey
December 29, 2000


                                      F-2
<PAGE>

                            COFFEE HOLDING CO., INC.

                                  BALANCE SHEET
                                OCTOBER 31, 2000

                                     ASSETS

Current assets:
     Cash                                                            $  153,844
     Due from broker                                                    138,555
     Accounts receivable, net of allowance for doubtful
        accounts of $200,510                                          2,066,964
     Inventories                                                      1,466,050
     Prepaid expenses and other current assets                           68,582
                                                                     ----------
           Total current assets                                       3,893,995
Property and equipment, at cost, net of accumulated
     depreciation of $2,161,398                                       1,825,648
Cash equivalents restricted under credit facility                       261,038
Deposits and other assets                                                16,796
                                                                     ----------
           Totals                                                    $5,997,477
                                                                     ==========

                                 LIABILITIES AND
                              STOCKHOLDERS' EQUITY

Current liabilities:
     Current portion of term loan                                    $  114,552
     Current portion of obligations under capital leases                 46,161
     Accounts payable and accrued expenses                            2,671,094
                                                                     ----------
           Total current liabilities                                  2,831,807
Term loan, net of current portion                                        77,563
Line of credit borrowings                                             2,617,702
Obligations under capital leases, net of current portion
Loans from related parties                                              245,261
                                                                     ----------
           Total liabilities                                          5,772,333
                                                                     ----------

Commitments and contingencies

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, 3,999,650 shares issued and outstanding               4,000
     Additional paid-in capital                                         743,985
     Accumulated deficit                                               (522,841)
                                                                     ----------
           Total stockholders' equity                                   225,144
                                                                     ----------

           Totals                                                    $5,997,477
                                                                     ==========

See Notes to Financial Statements.


                                      F-3
<PAGE>

                            COFFEE HOLDING CO., INC.

                            STATEMENTS OF OPERATIONS
                      YEARS ENDED OCTOBER 31, 2000 AND 1999

                                                       2000           1999
                                                   -----------    -----------
Net sales                                          $20,097,548    $23,089,592
Cost of sales                                       16,673,790     19,796,476
                                                   -----------    -----------

Gross profit                                         3,423,758      3,293,116
                                                   -----------    -----------

Operating expenses:
     Selling and administrative                      2,317,629      1,911,306
     Officers' salaries                                330,000        390,000
                                                   -----------    -----------
           Totals                                    2,647,629      2,301,306
                                                   -----------    -----------

Income from operations                                 776,129        991,810
                                                   -----------    -----------

Other income (expense):
     Interest income                                    31,064          3,600
     Interest expense                                 (406,859)      (386,506)
                                                   -----------    -----------
           Totals                                     (375,795)      (382,906)
                                                   -----------    -----------

Income before income taxes                             400,334        608,904

Provision for income taxes                             119,000
                                                   -----------    -----------

Net income                                         $   281,334    $   608,904
                                                   ===========    ===========

Basic earnings per share                                  $.07           $.15
                                                          ====           ====

Basic weighted average common shares outstanding     3,999,650      3,999,650
                                                     =========      =========

See Notes to Financial Statements.


                                      F-4
<PAGE>

                            COFFEE HOLDING CO., INC.

           STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIENCY)
                      YEARS ENDED OCTOBER 31, 2000 AND 1999


<TABLE>
<CAPTION>
                                     Common Stock
                               ---------------------                   Retained
                                   $.001 Par Value                     Earnings
                               ---------------------      Additional   (Accum-
                               Number of                    Paid-in     ulated
                                Shares        Amount        Capital     Deficit)         Total
                                ------        ------        -------     --------         -----

<S>                           <C>            <C>           <C>        <C>              <C>
Balance, November 1, 1998     3,999,650      $  4,000      $480,997   $(1,413,079)     $(928,082)

Net income                                                                608,904        608,904
                              ---------      --------      --------   -----------      ---------
Balance, October 31, 1999     3,999,650         4,000       480,997      (804,175)      (319,178)

Capital contribution                                        262,988                      262,988

Net income                                                                281,334        281,334
                              ---------      --------      --------   -----------      ---------
Balance, October 31, 2000     3,999,650      $  4,000      $743,985   $  (522,841)     $ 225,144
                              =========      ========      ========   ===========      =========
</TABLE>

See Notes to Financial Statements.


                                      F-5
<PAGE>

                            COFFEE HOLDING CO., INC.

                            STATEMENTS OF CASH FLOWS
                      YEARS ENDED OCTOBER 31, 2000 AND 1999

<TABLE>
<CAPTION>
                                                                  2000         1999
                                                                  ----         ----
<S>                                                          <C>            <C>
Operating activities:
     Net income                                              $   281,334    $ 608,904
     Adjustments to reconcile net income to net
        cash provided by operating activities:
        Depreciation and amortization                            252,988      252,925
        Bad debts                                                 44,091       12,210
        Write-off of deferred mortgage financing costs                         55,063
        Changes in operating assets and liabilities:
           Due from broker                                       142,509     (130,472)
           Accounts receivable                                   305,645     (185,112)
           Inventories                                            12,435     (118,531)
           Prepaid expenses and other current assets              (9,017)      (2,367)
           Deposits and other assets                              10,627       71,900
           Accounts payable and accrued expenses              (1,038,203)     139,976
                                                             -----------    ---------
               Net cash provided by operating activities           2,409      704,496
                                                             -----------    ---------

Investing activities - purchases of property and
     equipment                                                   (95,319)    (111,092)
                                                             -----------    ---------

Financing activities:
     Principal payments on mortgage note payable                             (600,000)
     (Increase) decrease in cash and cash equivalents
        restricted under credit facility and mortgage note      (261,038)     432,965
     Principal payments on term loan                             (87,316)     (87,312)
     Net advances under bank line of credit                      172,572      124,617
     Principal payments of obligations under capital
        leases                                                  (202,743)    (215,447)
     Advances from related parties                                97,247       16,817
     Capital contribution                                        262,988
                                                             -----------    ---------
               Net cash used in financing activities             (18,290)    (328,360)
                                                             -----------    ---------

Net increase (decrease) in cash                                 (111,200)     265,044
Cash, beginning of year                                          265,044           --
                                                             -----------    ---------

Cash, end of year                                            $   153,844    $ 265,044
                                                             ===========    =========

Supplemental disclosure of cash flow data:
     Interest paid                                           $   399,045    $ 335,267
                                                             ===========    =========

     Income taxes paid                                       $    12,519    $     904
                                                             ===========    =========
</TABLE>

See Notes to Financial Statements.


                                      F-6
<PAGE>

                            COFFEE HOLDING CO., INC.

                          NOTES TO FINANCIAL STATEMENTS

Note 1 - Business activities:
            CoffeeHolding  Co., Inc.  ("Coffee"),  which was incorporated in New
            York on January 22,  1971,  conducts  wholesale  coffee  operations,
            including   manufacturing,   roasting,   packaging,   marketing  and
            distributing   roasted  and  blended  coffees  for  private  labeled
            accounts and its own brands, and sells green coffees.  The Company's
            sales are  primarily to customers  that are located  throughout  the
            United States.

Note 2 - Summary of significant accounting policies:
            Use  of  estimates:
                  The  preparation  of financial  statements in conformity  with
                  generally accepted  accounting  principles requires management
                  to make estimates and assumptions that affect certain reported
                  amounts and  disclosures.  Accordingly,  actual  results could
                  differ from those estimates.

            Cash equivalents:
                  Cash  equivalents  represent  highly liquid  investments  with
                  maturities of three months or less at the date of purchase.

            Inventories:
                  Inventories  are  valued  at  the  lower  of  cost  (first-in,
                  first-out basis) or market.

            Property and equipment:
                  Property and  equipment  are recorded at cost and  depreciated
                  using the straight-line method over the estimated useful lives
                  of the assets.

            Hedging:
                  The Company  uses  options and futures  contracts to partially
                  hedge the effects of fluctuations in the price of green coffee
                  beans. Options and futures contracts are marked to market with
                  current recognition of gains and losses on such positions. The
                  Company  does not  defer  such  gains  and  losses  since  its
                  positions are not  considered  hedges for financial  reporting
                  purposes.  The  Company's  accounting  for options and futures
                  contracts   may  have  the  effect  of   increasing   earnings
                  volatility in any particular period.

                  At October 31, 2000, the Company held options  (generally with
                  terms  of  two  months  or  less)  covering  an  aggregate  of
                  1,875,000 pounds of green coffee beans at a price of $.725 per
                  pound.  The fair  market  value of these  options,  which  was
                  obtained from a major financial institution, was approximately
                  $27,000 at October 31, 2000.


                                      F-7
<PAGE>

                            COFFEE HOLDING CO., INC.

                          NOTES TO FINANCIAL STATEMENTS

Note 2 - Summary of significant accounting policies (continued):
            Hedging (concluded):
                  The Company began to acquire futures contracts during the year
                  ended October 31, 2000 with longer terms  (generally  three to
                  four  months)  primarily  for the purpose of  guaranteeing  an
                  adequate  supply of green  coffee.  At October 31,  2000,  the
                  Company held longer-term futures contracts for the purchase of
                  412,500  pounds  of coffee  at an  average  price of $1.04 per
                  pound. The market price of coffee applicable to such contracts
                  was $.744 per pound at that date.

            Deferred financing costs:
                  Costs  incurred in  connection  with  obtaining  financing are
                  capitalized  and  amortized  over the term of the related loan
                  using a method that approximates the interest method.

            Advertising:
                  The Company expenses the cost of advertising and promotions as
                  incurred.  Advertising  costs  charged to  operations  totaled
                  $70,108 and $92,924 in 2000 and 1999, respectively.

            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  temporary  differences
                  between the  financial  statement  and tax bases 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 credit is the tax
                  payable or refundable  for the period plus or minus the change
                  during the period in deferred tax assets and liabilities.

            Stock options:
                  In accordance  with the  provisions  of Accounting  Principles
                  Board  Opinion  No.  25,   "Accounting  for  Stock  Issued  to
                  Employees," the Company will recognize compensation costs as a
                  result of the issuance of stock options to employees  based on
                  the excess,  if any, of the fair value of the underlying stock
                  at the date of grant or award (or at an appropriate subsequent
                  measurement  date) over the amount the  employees  must pay to
                  acquire the stock. Therefore, the Company will not be required
                  to recognize compensation expense as a result of any grants of
                  stock  options  to  employees  at an  exercise  price  that is
                  equivalent  to or greater  than fair value.  The Company  will
                  also make pro forma  disclosures,  as required by Statement of
                  Financial   Accounting  Standards  No.  123,  "Accounting  for
                  Stock-Based  Compensation" ("SFAS 123"), of net income or loss
                  as if a fair  value  based  method  of  accounting  for  stock
                  options had been applied,  if such amounts  differ  materially
                  from the historical amounts.


                                      F-8
<PAGE>

                            COFFEE HOLDING CO., INC.

                          NOTES TO FINANCIAL STATEMENTS

Note 2 - Summary of significant accounting policies (concluded):
            Earnings (loss) per share:
                  The Company  presents  "basic" and, if  applicable,  "diluted"
                  earnings  per  common  share  pursuant  to the  provisions  of
                  Statement of Financial Accounting Standards No. 128, "Earnings
                  per Share" ("SFAS 128") and certain other financial accounting
                  pronouncements.  Basic  earnings  (loss) per  common  share is
                  calculated  by  dividing  net  income or loss by the  weighted
                  average  number  of  common  shares  outstanding  during  each
                  period.  The calculation of diluted  earnings per common share
                  is similar to that of basic earnings per common share,  except
                  that the  denominator  is  increased  to include the number of
                  additional  common shares that would have been  outstanding if
                  all potentially dilutive common shares, such as those issuable
                  upon the  exercise of stock  options,  were issued  during the
                  period.   Since  the  Company  had  no  potentially   dilutive
                  securities  outstanding in 2000 and 1999,  only basic earnings
                  per share amounts are presented in the accompanying  statement
                  of operations for those years.

            Recent accounting pronouncements:
                  In June 1998, the Financial  Accounting  Standards  Board (the
                  "FASB") issued Statement of Financial Accounting Standards No.
                  133,  "Accounting  for  Derivative   Instruments  and  Hedging
                  Activities" ("SFAS 133"), which, as amended, requires that all
                  derivative  financial  instruments  be  recognized  as  either
                  assets or  liabilities  in the balance  sheet and  measured at
                  fair value. The Company will be required to implement SFAS 133
                  in the first  quarter of its fiscal  year  ending  October 31,
                  2001.  Management  does not believe  that the adoption of SFAS
                  133 will have a significant impact on results of operations.

                  The FASB and the Accounting  Standards  Executive Committee of
                  the American  Institute of Certified  Public  Accountants  had
                  issued certain other accounting  pronouncements  as of October
                  31, 2000 that will become effective in subsequent  periods. In
                  December 1999, the Securities and Exchange  Commission  issued
                  Staff  Accounting  Bulletin No. 101,  "Revenue  Recognition in
                  Financial  Statements" ("SAB 101"). SAB 101 summarizes certain
                  staff  views  in  applying   generally   accepted   accounting
                  principles to revenue recognition in financial statements. The
                  Company  will be required to  implement  SAB 101 no later than
                  the fourth quarter of its fiscal year ending October 31, 2001.
                  However,  management  of the Company does not believe that any
                  of  those  other   pronouncements   would  have  significantly
                  affected the Company's  financial  accounting  measurements or
                  disclosures  had they been in effect  during  the years  ended
                  October 31, 2000 and 1999 or that they will have a significant
                  affect at the time they become effective.

            Reclassifications:
                  Certain  accounts in the 1999 financial  statements  have been
                  reclassified to conform to the 2000 presentation.


                                      F-9
<PAGE>

                            COFFEE HOLDING CO., INC.

                          NOTES TO FINANCIAL STATEMENTS

Note 3 - Inventories:

            Inventories at October 31, 2000 consisted of the following:

                  Packed coffee                                    $  280,764
                  Green coffee                                        813,320
                  Packaging supplies                                  371,966
                                                                   ----------

                     Totals                                        $1,466,050
                                                                   ==========

Note 4 - Property and equipment:
            Property and equipment at October 31, 2000 consisted of the
            following:

                                                     Estimated
                                                    Useful Life      Amount
                                                    -----------      ------

                  Building and improvements           30 years     $1,244,285
                  Machinery and equipment             7 years       2,194,351
                  Machinery and equipment under
                     capital leases                   7 years         288,500
                  Furniture and fixtures              7 years         118,910
                                                                   ----------
                                                                    3,846,046
                  Less accumulated depreciation
                     (including $103,035 arising
                     from capital leases)                           2,161,398
                                                                   ----------
                                                                    1,684,648
                  Land                                                141,000
                                                                   ----------

                         Totals                                    $1,825,648
                                                                   ==========

            Depreciation expense totaled $252,988 and $251,204 in 2000 and 1999,
            respectively.

Note 5 - Credit facility and other borrowings:
            As of October 31, 2000, the Company was obligated for aggregate
            borrowings of $2,809,817 under a credit facility provided by Bank of
            America Commercial Finance Corporation ("BACFC"), formerly
            Nationscredit Commercial Corp., that was scheduled to expire on
            November 20, 2000. The credit facility consisted of a revolving line
            of credit and a term loan.

            The line of credit provided for borrowings of up to 85% of the
            Company's eligible trade accounts receivable and 60% of its eligible
            inventories up to a maximum of $5,000,000. The outstanding balance
            of $2,617,702 at October 31, 2000 approximated the maximum amount
            that the Company could borrow based on its eligible trade accounts
            receivable and inventories as of that date. Interest was payable
            monthly at the prime rate plus 1% (an effective rate of 10.5% at
            October 31, 2000).


                                      F-10
<PAGE>

                            COFFEE HOLDING CO., INC.

                          NOTES TO FINANCIAL STATEMENTS

Note 5 - Credit facility and other borrowings (concluded):
            The  term  loan,  which  had  an  outstanding  balance  of  $192,115
            (including  a current  portion  of  $114,552)  at October  31,  2000
            provided for  borrowings  of up to the greater of 80% of the cost of
            eligible  equipment  or $500,000.  Principal  was payable in monthly
            installments  of $7,276  plus  interest  which was also at the prime
            rate plus 1%.

            Two of the Company's  stockholders  had each guaranteed  outstanding
            borrowings  under the credit  facility  of up to $100,000 at October
            31, 2000, plus interest and other costs and expenses as defined, and
            the Company  also had $261,038 in an interest  bearing  money market
            account that was deposited  with BACFC during the year ended October
            31, 2000 to secure outstanding borrowings under the credit facility.

            As a  result  of  amendments  to the  agreements  with  Wells  Fargo
            Business  Credit,  the assignee of BACFC,  that became  effective on
            November 29, 2000,  interest on borrowings  under the line of credit
            and the term loan will be payable  monthly at .5% and .75% above the
            prime rate, respectively;  the credit facility will not expire until
            November 20, 2002; the maximum  amount of borrowings  under the term
            loan  increased  from  $500,000  to  $600,000;  term loan  principal
            payments will  increase from $7,276 to $10,000 per month  commencing
            January 1, 2001; the amount of borrowings  guaranteed by each of the
            two stockholders increased to $500,000; and the Company's ability to
            continue  to use the  credit  facility  will  become  subject to its
            ability  to  meet  specified  financial  covenants  and  ratios.  In
            addition,  the  outstanding  balance  under the line of credit and a
            portion  of  the  outstanding  balance  under  the  term  loan  were
            classified as long-term  liabilities in the accompanying October 31,
            2000 balance  sheet based on the  Company's  ability to either defer
            payments until, or make installment  payments through,  November 20,
            2002.

            The Company was  obligated  for  variable  rate  borrowings  under a
            $600,000  mortgage  note  until it was  prepaid in March  1999.  The
            Company wrote off deferred financing costs of approximately  $55,000
            in connection with the prepayment of the mortgage note in 1999.

Note 6 - Loans from related parties:
            The Company  had loans  payable to its  stockholders  of $245,261 at
            October 31, 2000.  The loans are due on demand and bear  interest at
            10%. Interest expense totaled  approximately  $34,000 and $12,000 in
            2000 and 1999, respectively.


                                      F-11
<PAGE>

                            COFFEE HOLDING CO., INC.

                          NOTES TO FINANCIAL STATEMENTS

Note 7 - Income taxes:
            The Company's provision for income taxes in 2000 consisted of the
            following:

                                                                         2000
                                                                       --------
                  Federal                                              $ 72,000
                  State and local                                        47,000
                                                                       --------

                      Total historical                                 $119,000
                                                                       ========

            The Company had no provision for income taxes in 1999.

            The differences between the tax provision computed based on the
            Company's pre-tax income and the applicable statutory income tax
            rate and the Company's provisions for Federal, state and local
            income taxes for 2000 and 1999 are set forth below:

                                                              1999       2000
                                                            --------  ---------
                  Tax provision at statutory rate of 34%    $140,000  $ 207,000
                  Adjustments for effects of:
                     State income taxes, net of Federal
                         tax effect                           45,000     67,000
                     Net change in valuation allowance       (66,000)  (274,000)
                                                            --------  ---------

                  Provision                                 $119,000  $      --
                                                            ========  =========

            The Company had pre-tax income of approximately $609,000 in 1999,
            and had net operating loss carryforwards as of October 31, 1999 of
            approximately $191,000 available to reduce future Federal, state and
            local taxable income. There were no other material temporary
            differences as of October 31, 1999. Due to the uncertainties related
            to the extent and timing of the Company's future taxable income, the
            Company offset the deferred tax assets of approximately $89,000
            attributable to the potential benefits from its net operating loss
            carryforwards as of October 31, 1999 by an equivalent valuation
            allowance. As a result of the reduction in the valuation allowance
            of $274,000 from $363,000 at October 31, 1998 to $89,000 at October
            31, 1999, the Company did not recognize any provisions for income
            taxes for the year ended October 31, 1999.

            The Company had pre-tax income of approximately $400,000 for the
            year ended October 31, 2000; however, it was only able to use net
            operating loss carryforwards of $145,000. As a result, the Company
            reversed the valuation allowance of $89,000 that it had established
            to offset the remaining deferred tax assets attributable to the
            estimated potential benefits from the net operating loss
            carryforwards as of October 31, 1999, of which $23,000 was
            attributable to the reduction in the estimate of net operating loss
            carryforwards and $66,000 was attributable to the reduction in the
            provision for income taxes for benefits actually realized from the
            net operating loss carryforwards.


                                      F-12
<PAGE>

                            COFFEE HOLDING CO., INC.

                          NOTES TO FINANCIAL STATEMENTS

Note 8 - Commitments and contingencies:
            Operating lease:
                  The Company occupies warehouse facilities under an operating
                  lease which expires on August 31, 2002 unless renewed at the
                  option of the Company for an additional two years. The lease
                  requires the Company to pay utilities and other maintenance
                  expenses. Rent charged to operations amounted to $46,800 in
                  2000 and 1999. Future minimum rental payments under the
                  noncancelable operating lease in years subsequent to October
                  31, 2000 totaled $85,800, of which $46,800 is payable in 2001
                  and $39,000 is payable in 2002.

            Capital leases:
                  As of October 31, 2000, the Company remained obligated under
                  one capital lease for machinery and equipment that expires in
                  February 2001. Assets under capital leases are amortized over
                  their estimated useful lives of seven years. Amortization of
                  $99,300 and $96,271 was charged to operations in 2000 and
                  1999, respectively. The future minimum lease payments under
                  the remaining capital lease as of October 31, 2000 and the net
                  present value of the future minimum lease payments through the
                  expiration of the lease in 2001 were as follows:

                  Total minimum lease payments                          $47,043
                  Less amount representing interest                         882
                                                                        -------

                  Present value of net minimum lease payments           $46,161
                                                                        =======

            Legal proceedings:
                  The Company is a party to various legal proceedings. In the
                  opinion of management, these actions are routine in nature and
                  will not have any material adverse effects on the Company's
                  financial statements in subsequent years.

Note 9 - Concentrations of credit risk:
            Financial  instruments  that  potentially  subject  the  Company  to
            concentrations  of credit risk consist  principally of cash and cash
            equivalents,  amounts due from broker and trade accounts receivable.
            The  Company  maintains  its cash and cash  equivalents  in bank and
            brokerage  accounts  the  balances  of which,  at times,  may exceed
            Federal  insurance limits. At October 31, 2000, the Company had cash
            balances that exceeded  Federal  insurance  limits by  approximately
            $160,000. The net balance of the Company's investments in derivative
            financial  instruments  also represents an amount due from a broker.
            Exposure  to credit  risk is reduced by placing  such  deposits  and
            investments  with major financial  institutions and monitoring their
            credit ratings.


                                      F-13
<PAGE>

                            COFFEE HOLDING CO., INC.

                          NOTES TO FINANCIAL STATEMENTS

Note 9 - Concentrations of credit risk (concluded):
            Approximately  17% and 20% of the Company's  sales were derived from
            one customer during 2000 and 1999, respectively.  That customer also
            accounted  for  approximately  $121,000  of the  Company's  accounts
            receivable  balance at October 31,  2000.  Concentrations  of credit
            risk with respect to other trade  receivables are limited due to the
            short payment terms  generally  extended by the Company;  by ongoing
            credit evaluations of customers; and by maintaining an allowance for
            doubtful accounts that management  believes will adequately  provide
            for credit losses.

            Management  does not believe  that credit  risk was  significant  at
            October 31, 2000.

Note 10- Stock option plan:
            On February 10, 1998,  the Company's  stockholders  consented to the
            adoption of the  Company's  stock option plan (the  "Plan")  whereby
            incentive and/or  nonincentive  stock options for the purchase of up
            to 2,000,000  shares of the Company's common stock may be granted to
            the  Company's   directors,   officers,   other  key  employees  and
            consultants.  Under the Plan, the exercise price of all options must
            be at least 100% of the fair market value of the common stock on the
            date of grant (the exercise  price of an incentive  stock option for
            an optionee that holds more than 10% of the combined voting power of
            all  classes  of stock of the  Company  must be at least 110% of the
            fair market value on the date of grant).

            As of October 31, 2000, no options had been granted under the Plan.

Note 11- Major vendors:
            During 2000,  substantially all of the Company's purchases were from
            nine vendors.  The nine vendors also accounted for substantially all
            of the Company's  accounts  payable at October 31, 2000. An employee
            of one of those vendors is a director of the Company. Purchases from
            that vendor totaled approximately  $3,500,000 and $4,400,000 in 2000
            and 1999, respectively. Management does not believe that the loss of
            any one vendor would have a material adverse effect on the Company's
            operations due to the availability of alternate suppliers.

                                      * * *


                                      F-14

<PAGE>

                                    PART III

ITEM 1. INDEX TO EXHIBITS

Exhibit
Number            Exhibit Name
- ------            ------------
3.1               Articles  of   Incorporation   of  the  Company,   as  amended
                  (incorporated  herein  by  reference  to  Exhibit  3.1  to the
                  Company's  Quarterly Report on Form 10-Q for the quarter ended
                  April 30, 1998).

3.2               Certificate  of  Amendment  of  Articles of  Incorporation  of
                  Coffee Holding Co., Inc.  (incorporated herein by reference to
                  Exhibit 3.2 to the Company's Quarterly Report on Form 10-Q for
                  the quarter ended April 30, 1998).

3.3               The Company's  By-Laws,  (incorporated  herein by reference to
                  Exhibit 3.3 to the Company's Quarterly Report on Form 10-Q for
                  the quarter ended April 30, 1998).

3.4               Articles  of  Merger  of  Coffee   Holding   Co.,   Inc.   and
                  Transpacific International Group Corp. (incorporated herein by
                  reference  to Exhibit 3.4 to the  Company's  Annual  Report on
                  Form 10-K/A for the year ended October 31, 2000).


                                       16
<PAGE>

10.1              Lease  with  T&O  Management   Corp.  dated  August  15,  1997
                  (incorporated  herein  by  reference  to  Exhibit  10.1 to the
                  Company's  Quarterly Report on Form 10-Q for the quarter ended
                  April 30, 1998).

10.2              1998 Stock  Option  Plan  (incorporated  hereby  reference  to
                  Exhibit 10.2 to the  Company's  Quarterly  Report on Form 10-Q
                  for the quarter ended April 30, 1998).

10.3              Loan and  Security  Agreement  dated as of  November  21, 1997
                  between the Company and NationsCredit  Commercial  Corporation
                  (incorporated  herein  by  reference  to  Exhibit  10.3 to the
                  Company's  Annual  Report on Form  10-K/A  for the year  ended
                  October 31, 2000).

10.4              First Amendment to Loan and Security Agreement dated as of May
                  22, 1998  between the  Company  and  NationsCredit  Commercial
                  Corporation  (incorporated herein by reference to Exhibit 10.4
                  to the Company's Annual Report on Form 10-K for the year ended
                  October 31, 2000).

10.5              Second  Amendment  dated as of  November  29, 2000 to Loan and
                  Security   Agreement  between  the  Company  and  Wells  Fargo
                  Business Credit, as assignee (incorporated herein by reference
                  to Exhibit 10.5 to the  Company's  Annual  Report on Form 10-K
                  for the year ended October 31, 2000).

10.6              Term Note dated as of November 29, 2000 made by the Company in
                  favor of Wells Fargo  Business  Credit,  Inc. in the principal
                  amount  of  $600,000  (incorporated  herein  by  reference  to
                  Exhibit 10.6 to the  Company's  Annual Report on Form 10-K for
                  the year ended October 31, 2000).


                                       17
<PAGE>

                                   SIGNATURES

      Pursuant to the requirements of Section 12 of the Securities  Exchange Act
of 1934, the Registrant has duly caused this registration statement to be signed
on its behalf by the undersigned, thereunto duly authorized.

                                      COFFEE HOLDING CO., INC.

                                      By: /s/ Andrew Gordon
                                         -------------------------
Date: March 15, 2001                        Andrew Gordon


                                       18

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