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<SEC-DOCUMENT>0001125282-04-005239.txt : 20041025
<SEC-HEADER>0001125282-04-005239.hdr.sgml : 20041025
<ACCEPTANCE-DATETIME>20041022185037
ACCESSION NUMBER:		0001125282-04-005239
CONFORMED SUBMISSION TYPE:	SB-2/A
PUBLIC DOCUMENT COUNT:		5
FILED AS OF DATE:		20041025
DATE AS OF CHANGE:		20041022

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			COFFEE HOLDING CO INC
		CENTRAL INDEX KEY:			0001007019
		STANDARD INDUSTRIAL CLASSIFICATION:	BEVERAGES [2080]
		IRS NUMBER:				113860760
		STATE OF INCORPORATION:			NV
		FISCAL YEAR END:			0930

	FILING VALUES:
		FORM TYPE:		SB-2/A
		SEC ACT:		1933 Act
		SEC FILE NUMBER:	333-116838
		FILM NUMBER:		041092798

	BUSINESS ADDRESS:	
		STREET 1:		4401 FIRST AVENUE
		STREET 2:		STE 1507
		CITY:			BROOKLYN
		STATE:			NY
		ZIP:			11232
		BUSINESS PHONE:		7188320800

	MAIL ADDRESS:	
		STREET 1:		4401 FIRST AVENUE
		STREET 2:		STE 1507
		CITY:			BROOKLYN
		STATE:			NY
		ZIP:			11232

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	TRANSPACIFIC INTERNATIONAL GROUP CORP
		DATE OF NAME CHANGE:	19960201
</SEC-HEADER>
<DOCUMENT>
<TYPE>SB-2/A
<SEQUENCE>1
<FILENAME>b332774_sb2a.htm
<DESCRIPTION>REGISTRATION STATEMENT
<TEXT>
<html>
<head><title>
Prepared and filed by St Ives Burrups
</title>
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<body bgcolor="#FFFFFF">
<div style="page-break-before:always"></div>
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<table width="100%" border="0" cellpadding="0" cellspacing="0">
  <tr>
    <td width="70%" align="left"><font size="2" face="serif">As filed with the
    Securities and Exchange Commission on October 25, 2004</font></td>
    <td align="right"><font size="2" face="serif"><b>Registration No. 333- 116838</b></font></td>
  </tr>
</table>

<table width="100%" border="0" cellpadding="0" cellspacing="0">
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
</table>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td height="4" valign="bottom" bgcolor="#000000"></td>
  </tr>
  <tr>
    <td height="2" valign="top"></td>
  </tr>
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    <td height="1" valign="top" bgcolor="#000000"></td>
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<p align="center"><font size="4" face="serif"><b><font size="5">U.S. Securities
  and Exchange Commission</font></b></font><b><br>
  <font size="3" face="serif">Washington, D.C. 20549</font></b></p>

<p align="center"><font face="serif" size="3"><b>Amendment No.&nbsp;2<br>
<br>
to</b></font></p>
<p align="center"><b><font face="serif" size="5">FORM SB-2</font></b></p>

<p align="center"><b><font face="serif" size="3">REGISTRATION STATEMENT<br>
UNDER<br>
THE SECURITIES ACT OF 1933</font></b></p>

<p align="center"><b><font face="serif" size="4">Coffee Holding Co., Inc.</font></b><br>
<font face="serif" size="1">(Name of small business issuer in its charter)</font></p>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
  <tr valign="top">
    <td width="34%" align="center"><b><font size="2" face="serif">Nevada</font></b></td>
    <td width="34%" align="center"><b><font size="2" face="serif">2080</font></b></td>
    <td align="center"><b><font size="2" face="serif">11-2238111</font></b></td>
  </tr>
  <tr valign="top">
    <td align="center"><font size="2" face="serif"><font face="serif" size="1">(State
      or other jurisdiction of<br>
      incorporation or organization)</font></font></td>
    <td align="center"><font size="2" face="serif"><font face="serif" size="1">
      (Primary Standard Industrial<br>
      Classification Code Number)</font></font></td>
    <td align="center"><font face="serif" size="1">(I.R.S. Employer</font><br>
      <font face="serif" size="1">Identification No.)</font></td>
  </tr>
</table>
<p align="center"><font size="2" face="serif">4401 First Avenue, Brooklyn, New York  11232-0005</font><br>
<font size="2" face="serif">(718) 832-0800</font><br>
<font face="serif" size="1">(Address and telephone number of principal executive offices)</font><br>
<font face="serif" size="1">(Address of principal place of business or intended principal place of business)</font></p>
<p align="center"><font size="2" face="serif">________________</font></p>
<p align="center"><font size="2" face="serif">Andrew Gordon</font><br>
<font size="2" face="serif"> President and Chief Executive Officer</font><br>
<font size="2" face="serif">4401 First Avenue</font><br>
<font size="2" face="serif">Brooklyn, New York 11232-0005</font><br>
<font face="serif" size="1">(Name and address, and telephone of agent for service)</font></p>
<p align="center"><font size="2" face="serif">With copies to:</font></p>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
<td align="center" width="50%"><font size="2" face="serif">Matthew Dyckman, Esq.</font><br><font size="2" face="serif">Thacher Proffitt &amp; Wood <font face="serif" size="1">LLP</font></font><br><font size="2" face="serif">1700 Pennsylvania Avenue, N.W., Suite 800</font><br><font size="2" face="serif">Washington, D.C.  20006</font><br><font size="2" face="serif">(202)&nbsp;347-8400</font></td>
<td align="center"><font size="2" face="serif">Steven M. Skolnick, Esq.</font><br><font size="2" face="serif">Lowenstein Sandler PC</font><br><font size="2" face="serif">65 Livingston Avenue</font><br><font size="2" face="serif">Roseland, New Jersey  07068</font><br><font size="2" face="serif">(973) 597-2500</font></td>
</tr>
<tr valign="top">
<td><hr align="center" width="50%" size="1" noshade></td>
<td><hr align="center" width="50%" size="1" noshade></td>
</tr>
</table>
<p align="left"><font size="2" face="serif">Approximate date of proposed sale to the public: As soon as practicable after this Registration Statement becomes effective.</font></p>
<p align="center"><font size="2" face="serif"><b>CALCULATION OF REGISTRATION FEE</b></font></p>

<table width="100%" border="1" align="center" cellpadding="4" cellspacing="0" bordercolor="#000000">
<tr valign="bottom" bgcolor="#FFFFFF">
<td align="center"><b><font size="2" face="serif"><font face="serif" size="1">Title of Each Class of Securities<br>
to be Registered</font></font></b></td>
<td align="center"><b><font size="2" face="serif"><font face="serif" size="1">Amount to be<br>
registered (1)</font></font></b></td>
<td align="center"><b><font size="1" face="serif">Proposed<br>
Maximum Offering </font><font size="1"><br>
  <font face="serif"><font face="serif">Price Per Share (2)</font></font></font></b></td>
<td align="center"><b><font size="2" face="serif"><font face="serif" size="1">Proposed Maximum<br>
Aggregate Offering Price (2)</font></font></b></td>
<td align="center"><b><font size="2" face="serif"><font face="serif" size="1">Amount of<br>
Registration Fee </font></font></b></td>
</tr>
<tr valign="bottom" bgcolor="#ffffff">
<td height="16"><font size="2" face="serif">Common Stock, $ 0.001 par value</font></td>
<td width="18%" align="center"><font size="2" face="serif">1,840,000</font></td>
<td width="18%" align="center"><font size="2" face="serif"> $&nbsp;&nbsp;6.00&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
<td width="18%" align="center"><font size="2" face="serif"> $&nbsp;&nbsp;&nbsp;&nbsp;11,040,000</font></td>
<td width="18%" align="center"><font size="2" face="serif"> $&nbsp;&nbsp;1,399</font></td>
</tr>
<tr valign="bottom" bgcolor="#FFFFFF">
    <td height="28"><font size="2" face="serif">Warrants(3)</font></td>
<td align="center"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;160,000</font></td>
<td align="center"><font size="2" face="serif"> $&nbsp;&nbsp;&nbsp;&nbsp;.000625</font></td>
<td align="center"><font size="2" face="serif"> $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;100</font></td>
<td align="center"><font size="2" face="serif"> $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1</font></td>
</tr>
<tr valign="bottom" bgcolor="#ffffff">
<td><font size="2" face="serif">Common Stock, $0.001 par value(4)</font></td>
<td align="center"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;160,000</font></td>
<td align="center"><font size="2" face="serif"> $&nbsp;&nbsp;6.60&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
<td align="center"><font size="2" face="serif"> $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,056,000</font></td>
<td align="center"><font size="2" face="serif"> $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;134</font></td>
</tr>
<tr valign="bottom" bgcolor="#FFFFFF">
<td><font size="2" face="serif">Total</font></td>
<td align="center"><font size="2" face="serif">&nbsp;</font></td>
<td align="center"><font size="2" face="serif">&nbsp;</font></td>
<td align="center"><font size="2" face="serif"> $&nbsp;&nbsp;&nbsp;12,096,100</font></td>
<td align="center"><font size="2" face="serif"> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;$&nbsp;&nbsp;1,534(5)</font></td>
</tr>
</table>

<table width="100%" cellspacing="0" cellpadding="0" border="0">

  <tr align="left" valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr align="left" valign="top">
    <td width="3%"><font face="serif" size="2">(1)</font></td>
    <td width="2%"><font size="2">&nbsp;</font></td>
    <td><font face="serif" size="2">Includes the maximum number of shares that
      may be issued in connection with this offering.</font> </td>
  </tr>
  <tr align="left" valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr align="left" valign="top">
    <td width="3%"><font face="serif" size="2">(2)</font></td>
    <td width="1%"><font size="2">&nbsp;</font></td>
    <td><font face="serif" size="2">Estimated solely for the purpose of calculating
      the registration fee.</font> </td>
  </tr>
  <tr align="left" valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr align="left" valign="top">
    <td width="3%"><font face="serif" size="2">(3)</font></td>
    <td width="1%"><font size="2">&nbsp;</font></td>
    <td><font face="serif" size="2">To be issued to the underwriter.</font> </td>
  </tr>
  <tr align="left" valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr align="left" valign="top">
    <td width="3%"><font face="serif" size="2">(4)</font></td>
    <td width="1%"><font size="2">&nbsp;</font></td>
    <td><font face="serif" size="2">Issuable upon exercise of the underwriter&#146;s
      warrants. Pursuant to Rule 416 under the Securities Act of 1933, as amended,
      also includes such additional shares of common stock as may become issuable
      pursuant to the anti-dilution provision of the warrants. </font></td>
  </tr>
  <tr align="left" valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr align="left" valign="top">
    <td width="3%"><font face="serif" size="2">(5)</font></td>
    <td width="2%"><font size="2">&nbsp;</font></td>
    <td><font face="serif" size="2">A fee in the amount of $1,534 has been previously paid.</font> </td>
  </tr>
</table>
<p align="left"><b><font face="serif" size="2">The registrant hereby amends this
      registration statement on such date or dates as may be necessary to delay
      its effective date until the registrant shall file a further amendment
      which specifically states that this registration statement shall thereafter
      become effective in accordance with Section 8(a) of the Securities Act
      of 1933 or until the registration statement shall become effective on such
      date as the Commission, acting pursuant to said Section 8(a), may determine.</font></b></p>

<table width="100%" border="0" cellspacing="0" cellpadding="0">
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    <td height="1" valign="top" bgcolor="#000000"></td>
  </tr>
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    <td height="2" valign="top" bgcolor="#FFFFFF"></td>
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    <td height="4" valign="bottom" bgcolor="#000000"></td>
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<div style="page-break-before:always"></div>
<page>
<a name="cover"></a>
<p><a href="#contents"><font size="2">Back to Contents</font></a></p>

<p align="center"><font size="2" face="serif"><b>Subject to Completion, Dated
October 25, 2004</b></font></p>

<p align="left"><font size="2" face="serif"><b>PROSPECTUS</b></font></p>
<p align="center"><font size="4" face="serif"><b>1,600,000 Shares</b></font></p>
<p align="center"><font size="4" face="serif"><b>COFFEE HOLDING CO., INC.</b></font></p>
<p align="center"><font size="4" face="serif"><b>Common Stock </b></font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This is our initial public offering of shares of common stock.  We are offering 1,600,000 shares of our common stock.  </font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;While we have been filing reports under the Securities Exchange Act of 1934, there currently is no public market for our common stock.  We currently anticipate that the initial public offering price will be between $5.00 per share and $6.00 per share.  We have applied to have our common stock listed on the American Stock Exchange under the symbol &#147;JVA.&#148;  See &#147;Underwriting&#148; for information relating to the factors considered in determining the initial public offering price.</font></p>

<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>Investing in our common stock involves a high degree of risk.  Please read the &#147;Risk Factors&#148; beginning
on page 6. You will experience immediate and substantial dilution.</b></font></p>

<table width="80%" border="0" align="center" cellpadding="0" cellspacing="0">
  <tr valign="top">
<td align="left" width="79%"><font size="2" face="serif">Public offering price</font></td>
<td align="left"><font size="2" face="serif">$ </font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Underwriting discounts</font></td>
<td align="left"><font size="2" face="serif">$ </font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Proceeds to Coffee Holding</font></td>
<td align="left"><font size="2" face="serif">$ </font></td>
</tr>
<tr valign="top">
<td>&nbsp;</td>
<td>&nbsp;</td> </tr>
</table>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have granted the underwriter a 45 day option to purchase up to 240,000 additional shares of common stock on the same terms and conditions as set forth above, solely to cover over-allotments, if any.  </font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the accuracy or adequacy of this prospectus.  Any representation to the contrary is a criminal offense.</b></font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Maxim Group LLC expects to deliver the shares on or about <u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u>, 2004.</font></p>
<p align="center"><b><font face="serif" size="4">MAXIM GROUP LLC</font></b></p>
<p align="center"><font size="2" face="serif">The date of this prospectus is <u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u>, 2004</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The information in this prospectus is not complete and may be changed.  We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective.  This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.</font></p>
<p align="center">&nbsp;</p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<page>
<a name="contents"></a>
<p><a href="#contents"><font size="2">Back to Contents</font></a></p>
<p align="center"><font size="2" face="serif"><b>TABLE OF CONTENTS</b></font></p>

<table width="100%" cellspacing="0" cellpadding="0" border="0">
  <tr valign="top">
    <td align="left"><a href="#p1"><font size="2" face="serif">Prospectus Summary</font></a></td>
    <td align="right" width="6%"><a href="#p1"><font size="2" face="serif">2</font></a></td>
  </tr>
  <tr valign="top">
    <td align="left"><a href="#p9"><font size="2" face="serif">Risk Factors</font></a></td>
    <td align="right"><a href="#p9"><font size="2" face="serif">8</font></a></td>
  </tr>
  <tr valign="top">
    <td align="left"><a href="#p20"><font size="2" face="serif">Special Note Regarding Forward-Looking
      Statements</font></a></td>
    <td align="right"><a href="#p20"><font size="2" face="serif">18</font></a></td>
  </tr>
  <tr valign="top">
    <td align="left"><a href="#p21"><font size="2" face="serif">Use of Proceeds</font></a></td>
    <td align="right"><a href="#p21"><font size="2" face="serif">19</font></a></td>
  </tr>
  <tr valign="top">
    <td align="left"><a href="#p22"><font size="2" face="serif">Dilution</font></a></td>
    <td align="right"><a href="#p22"><font size="2" face="serif">20</font></a></td>
  </tr>
  <tr valign="top">
    <td align="left"><a href="#p23"><font size="2" face="serif">Capitalization</font></a></td>
    <td align="right"><a href="#p23"><font size="2" face="serif">21</font></a></td>
  </tr>
  <tr valign="top">
    <td align="left"><a href="#p24"><font size="2" face="serif">Dividend Policy</font></a></td>
    <td align="right"><a href="#p24"><font size="2" face="serif">22</font></a></td>
  </tr>
  <tr valign="top">
    <td align="left"><a href="#p25"><font size="2" face="serif">Selected Financial Information</font></a></td>
    <td align="right"><a href="#p25"><font size="2" face="serif">23</font></a></td>
  </tr>
  <tr valign="top">
    <td align="left"><a href="#p26"><font size="2" face="serif">Management&#146;s
      Discussion and Analysis of Financial Condition and Results of Operations</font></a></td>
    <td align="right"><a href="#p26"><font size="2" face="serif">24</font></a></td>
  </tr>
  <tr valign="top">
    <td align="left"><a href="#p37"><font size="2" face="serif">Business</font></a></td>
    <td align="right"><a href="#p37"><font size="2" face="serif">35</font></a></td>
  </tr>
  <tr valign="top">
    <td align="left"><a href="#p50"><font size="2" face="serif">Management</font></a></td>
    <td align="right"><a href="#p50"><font size="2" face="serif">48</font></a></td>
  </tr>
  <tr valign="top">
    <td align="left"><a href="#p56"><font size="2" face="serif">Security Ownership of Certain
      Beneficial Owners and Management</font></a></td>
    <td align="right"><a href="#p56"><font size="2" face="serif">54</font></a></td>
  </tr>
  <tr valign="top">
    <td align="left"><a href="#p57"><font size="2" face="serif">Certain Relationships and Related
      Transactions</font></a></td>
    <td align="right"><a href="#p57"><font size="2" face="serif">55</font></a></td>
  </tr>
  <tr valign="top">
    <td align="left"><a href="#p58"><font size="2" face="serif">Description of Capital Stock</font></a></td>
    <td align="right"><a href="#p58"><font size="2" face="serif">55</font></a></td>
  </tr>
  <tr valign="top">
    <td align="left"><a href="#p64"><font size="2" face="serif">Shares Eligible for Future Sale</font></a></td>
    <td align="right"><a href="#p64"><font size="2" face="serif">61</font></a></td>
  </tr>
  <tr valign="top">
    <td align="left"><a href="#p65"><font size="2" face="serif">Underwriting</font></a></td>
    <td align="right"><a href="#p65"><font size="2" face="serif">63</font></a></td>
  </tr>
  <tr valign="top">
    <td align="left"><a href="#p68"><font size="2" face="serif">Legal Matters</font></a></td>
    <td align="right"><a href="#p68"><font size="2" face="serif">66</font></a></td>
  </tr>
  <tr valign="top">
    <td align="left"><a href="#p68"><font size="2" face="serif">Experts</font></a></td>
    <td align="right"><a href="#p68"><font size="2" face="serif">66</font></a></td>
  </tr>
  <tr valign="top">
    <td align="left"><a href="#p68"><font size="2" face="serif">Where You Can Find Additional
      Information</font></a></td>
    <td align="right"><a href="#p68"><font size="2" face="serif">66</font></a></td>
  </tr>
  <tr valign="top">
    <td align="left"><a href="#f1"><font size="2" face="serif">Financial Statements</font></a></td>
    <td align="right"><a href="#f1"><font size="2" face="serif">F-1</font></a></td>
  </tr>
</table>

<p align="left"><font size="2" face="serif">Until <u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u>, 2004, 25 days after the date of this offering, all dealers that effect transactions in our shares, whether or not participating in this offering, may be required to deliver a prospectus.  This is in addition to the dealer&#146;s obligations to deliver a prospectus when acting as an underwriter and with respect to their unsold allotments or subscriptions.</font></p>
<p align="center">&nbsp;</p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<page>
<a name="p1"></a>
<p><a href="#contents"><font size="2">Back to Contents</font></a></p>
<p align="center"><font size="2" face="serif"><b>PROSPECTUS SUMMARY</b></font></p>

<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<i>This
      summary highlights material information about us that is described more
      fully elsewhere in this prospectus. It may not contain all of the information
      that you find important. You should carefully read this entire document,
      including the &quot;Risk Factors&quot; section beginning on page 6  and
      our financial statements and their related notes before making a decision
      to invest in our common stock. Unless otherwise indicated, the information
      in this prospectus assumes that the underwriter will not exercise its over-allotment
      option</i>.</font></p>

<p align="left"><font size="2" face="serif"><b>General Overview</b></font></p>

<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><i>Products
        and Operations.</i></b>  We are an integrated wholesale coffee roaster
        and dealer in the United States and one of the few coffee companies that
        offers a broad array of coffee products across the entire spectrum of
        consumer tastes, preferences and price points. Our core products can
        be divided into three categories:</font></p>

<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
<td width="3%"></td>
<td width="3%">
<font size="2" face="serif">&#149;</font></td>
<td>
<font size="2" face="serif"><b><i>Wholesale Green Coffee</i></b><b>:</b>  unroasted raw beans imported from around the world and sold to large and small roasters and coffee shop operators;</font></td>
</tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td width="3%"><font size="2" face="serif">&nbsp;</font></td>
    <td width="3%"><font size="2" face="serif">&#149;</font></td>
    <td align="left"> <font size="2" face="serif"> <b><i>Private Label Coffee</i></b><b>:</b>
      coffee roasted, blended, packaged and sold under the specifications and
      names of others, including supermarkets that want to have their own brand
      name on coffee to compete with national brands; and</font></td>
  </tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td width="3%"><font size="2" face="serif">&nbsp;</font></td>
    <td width="3%"><font size="2" face="serif">&#149;</font></td>
    <td align="left"> <font size="2" face="serif"> <b><i>Branded Coffee</i></b><b>: </b><i></i>coffee
        roasted and blended to our own specifications and packaged and sold under
    our seven brand names in different segments of the market.</font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
</table>
<p align="left"><font size="2" face="serif">Our private label and branded coffee products are sold throughout the United States and Canada to supermarkets, wholesalers, and individually owned and multi-unit retail customers.  Our unprocessed green coffee, which includes over 70 types of coffee from all over the world, is sold to specialty gourmet roasters.  </font></p>

<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><i>Geographic Expansion.</i></b>  In
    February 2004, we acquired certain assets of Premier Roasters, a roaster-dealer
    located in La Junta, Colorado, for $825,000. We are using the purchased assets
    to expand our integrated wholesale coffee roaster and dealer operations in
    the Western United States.</font></p>

<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><i>Financial Highlights.</i></b></font></p>

<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
<td width="3%"></td>
<td width="3%">
<font size="2" face="serif">&#149;</font></td>
<td>
<font size="2" face="serif">Net sales increased 28% for the nine months ended
July 31, 2004 compared to the nine months ended July 31, 2003, from approximately
$14,486,000 to approximately $18,578,000 and 16% for the year ended October 31,
2003 compared to the year ended October 31, 2002 from approximately $17,433,000
to approximately $20,240,000;</font></td>
</tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
  <tr valign="top">
    <td></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td width="3%"></td>
    <td width="3%"> <font size="2" face="serif">&#149;</font></td>
    <td> <font size="2" face="serif">Net income increased 39% for the nine months
        ended July 31, 2004 compared to the nine months ended July 31, 2003 from
        approximately
$441,000 to approximately $613,000 and decreased 18% for the year ended October
31, 2003 compared to the </font></td>
  </tr>
</table>

<p align="center"><font face="serif" size="2">2</font></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<page> <a name="p2"></a>
<p>&nbsp;</p>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
  <tr valign="top">
    <td></td>
    <td>&nbsp;</td>
    <td><font size="2" face="serif">year ended October 31, 2002 from approximately
        $755,000
to approximately $622,000;</font></td>
  </tr>
  <tr valign="top">
    <td></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td width="3%"></td>
    <td width="3%"> <font size="2" face="serif">&#149;</font></td>
    <td> <font size="2" face="serif">We increased our overall annual coffee poundage
      volume from 13 million pounds in 1998 to 17.4 million pounds in 2003;</font></td>
  </tr>
</table>


<br>


<table width="100%" cellspacing="0" cellpadding="0" border="0">
  <tr valign="top">
    <td></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td width="3%"></td>
    <td width="3%"> <font size="2" face="serif">&#149;</font></td>
    <td> <font size="2" face="serif">We continued to be profitable through varying
      cycles of the coffee commodity market. From fiscal years 2001 to 2003, when
      coffee commodity prices were trading at 30-year lows, our net income was
      approximately $518,000, $755,000, and $622,000, respectively; and</font></td>
  </tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
  <tr valign="top">
    <td></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td width="3%"></td>
    <td width="3%"> <font size="2" face="serif">&#149;</font></td>
    <td> <font size="2" face="serif">Since 1998, we increased the number of our
        specialty green coffee customers, including coffee houses, single store
        operators, mall coffee stores and mail order sellers, by 81% from 150
        to
      272.</font></td>
  </tr>
</table>

<p align="left"><font size="2" face="serif"><b>Our Competitive Strengths</b></font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To achieve our growth objectives described below,
we intend to leverage the following competitive strengths:</font></p>

<table width="100%" cellspacing="0" cellpadding="0" border="0">
  <tr valign="top">
    <td></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td width="3%"></td>
    <td width="3%"> <font size="2" face="serif">&#149;</font></td>
    <td> <font size="2" face="serif"><b><i>National Distribution with Capacity For Growth</i>.</b>  Since
1991, we have been able to expand our distribution to a national platform while operating from
only our East Coast location.   We have recently made capital investments to improve our
roasting, packaging and fulfillment infrastructure to support the production and distribution
of large quantities of fresh coffee products throughout the United States.  We believe that our
new La Junta, Colorado facility will allow us to continue to grow our business by further
increasing our presence in the Western United States.</font></td>
  </tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
  <td></td>
  <td>&nbsp;</td>
  <td>&nbsp;</td>
</tr>
<tr valign="top">
<td width="3%"></td>
<td width="3%">
<font size="2" face="serif">&#149;</font></td>
<td>
<font size="2" face="serif"><b><i>Positioned to Profitably Grow Through Varying
Cycles of the Coffee Market. </i></b>  While many of our competitors engage in
distinct segments of the coffee business, we sell retail branded coffee, retail
private label coffee, wholesale specialty green and whole bean coffees, food
service coffees, instant coffees and niche products. Our branded and private
label roasted ground coffees are sold predominantly at competitive and value
price levels and some of our other branded and specialty gourmet coffees are
sold predominantly at the premium price levels. We believe that our profitability
is not dependent on any one product or price segment of the coffee industry and,
therefore, is less sensitive than our competition to potential coffee commodity
price
and overall economic volatility. </font></td>
</tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
  <tr valign="top">
    <td></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td width="3%"></td>
    <td width="3%"> <font size="2" face="serif">&#149;</font></td>
    <td> <font size="2" face="serif"><b><i>Wholesale Green Coffee Market Presence. </i></b>We
believe that our relationships with wholesale green coffee customers and our
focus on selling green coffee as a wholesaler </font></td>
  </tr>
</table>

<p align="center"><font face="serif" size="2">3</font></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<page> <a name="p3"></a>

<table width="100%" cellspacing="0" cellpadding="0" border="0">
  <tr valign="top">
    <td></td>
    <td>&nbsp;</td>
    <td><font size="2" face="serif">has enabled us to participate in the growth
        of the specialty coffee market while mitigating the risks associated
    with the competitive retail specialty coffee environment.</font></td>
  </tr>
  <tr valign="top">
    <td></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td width="3%"></td>
    <td width="3%"> <font size="2" face="serif">&#149;</font></td>
    <td> <font size="2" face="serif"><b><i>Diverse Portfolio of Differentiated Branded
Coffees. </i></b>We have amassed a portfolio of five proprietary name brands sold
to supermarkets, wholesalers and individually-owned stores in the United States,
including brands for specialty espresso, Latin espresso, Italian espresso, 100%
Colombian coffee and blended coffee. In addition, we have entered into a licensing
agreement with Del Monte Corporation for the exclusive right to use the S&amp;W
and IL CLASSICO trademarks in the United States and other countries approved
by Del Monte Corporation in connection with the production, manufacture and sale
of roasted whole bean and ground coffee for distribution to retail customers.
Our existing portfolio of differentiated brands combined with our management
expertise serve as a platform to add additional name brands through acquisition
or licensing agreements which target product niches and segments that do not
compete with our existing brands.</font></td>
  </tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
  <tr valign="top">
    <td></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td width="3%"></td>
    <td width="3%"> <font size="2" face="serif">&#149;</font></td>
    <td> <font size="2" face="serif"><b><i>Management Has Extensive Experience in the
Coffee Industry. </i></b>We have been a family operated business for three generations.
Throughout this time, we have remained profitable through varying cycles in the
coffee industry and the economy. Our founder, Sterling Gordon, has over 50 years
of experience in the coffee business during which time he has developed a reputation
in the industry as an expert in coffee blending and quality. Andrew Gordon and
David Gordon have worked with Coffee Holding for 21 and 23 years, respectively.</font></td>
  </tr>
</table>

<p align="left"><font size="2" face="serif"><b>Our Growth Strategy</b></font></p>

<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We believe that
significant growth opportunities exist by: </font></p>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
<td width="3%"></td>
<td width="3%">
<font size="2" face="serif">&#149;</font></td>
<td>
<font size="2" face="serif"><b><i>Selectively Pursuing Strategic Acquisitions
and Alliances</i>. </b>We  intend to expand our operations by acquiring
coffee companies, seeking strategic alliances and acquiring or licensing brands
which complement our business objectives. Consistent with this strategy, in February
2004, we acquired certain assets of Premier Roasters. We intend to further expand
the market presence of our branded products outside our primary Northeastern
United States market through other acquisitions and strategic alliances.  </font></td>
</tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
  <td></td>
  <td>&nbsp;</td>
  <td>&nbsp;</td>
</tr>
<tr valign="top">
<td width="3%"></td>
<td width="3%">
<font size="2" face="serif">&#149;</font></td>
<td>
<font size="2" face="serif"><b><i>Growing Our Caf&eacute; Caribe Product.  </i></b>We believe
there is significant opportunity for our Caf&eacute; Caribe brand to gain market
share among Hispanic consumers in the United States. Caf&eacute; Caribe is a
specialty espresso coffee that targets espresso coffee drinkers. We intend to
use a portion of the proceeds of this offering to increase the sales of this
brand and other espresso-based products by implementing a branded sales and marketing
campaign designed to increase our brand awareness in existing markets.  </font></td>
</tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
  <td></td>
  <td>&nbsp;</td>
  <td>&nbsp;</td>
</tr>
<tr valign="top">
<td width="3%"></td>
<td width="3%">
<font size="2" face="serif">&#149;</font></td>
<td>
<font size="2" face="serif"><b><i>Furthering the Market Penetration of Our Niche
Products. </i></b>We intend to capture additional market share through our existing
distribution channels by selectively adding or introducing new brand names and
products across multiple price points, including: specialty blends; private label &#8220;value&#8221; blends
and trial-sized mini-brick packages; specialty instant coffees; instant cappuccinos
and hot chocolates; and tea line products.  </font></td>
</tr>
</table>

<p align="center"><font size="2" face="serif">4</font></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<page> <a name="p4"></a>

<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
  <td></td>
  <td>&nbsp;</td>
  <td>&nbsp;</td>
</tr>
<tr valign="top">
<td width="3%"></td>
<td width="3%">
<font size="2" face="serif">&#149;</font></td>
<td>
<font size="2" face="serif"><b><i>Developing Our Food Service Business.</i></b> We
plan to expand further into the food service business by developing new distribution
channels for our products. We intend to use a portion of the proceeds of this
offering to grow our food service distribution both organically and through acquisitions.</font></td>
</tr>
</table>

<p align="left"><font size="2" face="serif"><b>Principal Executive Office</b></font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our address is 4401 First Avenue, Brooklyn, New York 11232-0005.  Our telephone number is 718-832-0800.  We maintain a website at www.coffeeholding.com.  Information contained on our website does not constitute part of this prospectus.</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We were originally incorporated in New York in 1971.  Pursuant to an Agreement and Plan of Merger between us and Transpacific International Group Corp., we merged with and into Transpacific International Group Corp. in February, 1998, with Transpacific being the surviving corporation.  After the merger, Transpacific changed its name to Coffee Holding Co., Inc.</font></p>
<p align="center"><font face="serif" size="2">5</font></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<page>
<a name="p7"></a>
<p><a href="#contents"><font size="2">Back to Contents</font></a></p>
<p align="center"><font size="2" face="serif"><b><i>The Offering</i></b></font></p>

<table width="100%" cellspacing="0" cellpadding="0" border="0">
  <tr valign="top">
    <td align="left" width="50%"><font size="2" face="serif">Common stock offered</font></td>
    <td align="left"><font size="2" face="serif">1,600,000 shares</font></td>
  </tr>
  <tr valign="top">
    <td></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td align="left"><font size="2" face="serif">Common stock outstanding<br>
      after the offering(1)</font></td>
    <td align="left"><font size="2" face="serif">5,599,650 shares</font></td>
  </tr>
  <tr valign="top">
    <td></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td align="left"><font size="2" face="serif">Use of proceeds</font></td>
    <td align="left"><font size="2" face="serif">We intend to use the proceeds of
    this offering to repay approximately $1.8 million of indebtedness, to purchase
    equipment for our La Junta, Colorado facility, to implement a branded sales
    and marketing campaign and for general corporate purposes, including working
    capital and capital expenditures. As strategic opportunities arise, we may
    use the proceeds of this offering to fund acquisitions, licensing and other
    strategic alliances. See &#8220;Use of Proceeds.&#8221;</font></td>
  </tr>
  <tr valign="top">
    <td align="left">&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td align="left"><font size="2" face="serif">Proposed American Stock Exchange
      symbol</font></td>
    <td align="left"><font size="2" face="serif">Currently, no public market for
      our common stock exists. We have applied to have our common stock listed
      on the American Stock Exchange under the symbol &#147;JVA.&#148;</font></td>
  </tr>
  <tr valign="top">
    <td align="left">&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td align="left"><font size="2" face="serif">Risk factors</font></td>
    <td align="left"><font size="2" face="serif">The securities offered by this prospectus are speculative and involve a
high degree of risk and investors purchasing securities will experience immediate and substantial dilution and
should not purchase the securities unless they can afford the loss of their entire investment.
See &#8220;Risk Factors&#8221; beginning on page 6.</font></td>
  </tr>
  <tr valign="top">
    <td><hr align="left" width="25%" size="1" noshade></td>
    <td>&nbsp;</td>
  </tr>
</table>

<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
<td width="3%"><font size="2" face="serif">(1)</font></td>
<td align="left">
<font size="2" face="serif">This number does not include 800,000 shares reserved for issuance upon
exercise of options eligible for grant under the Coffee Holding Co., Inc. 1998 Stock Option Plan,
for which no options have yet been granted, or 160,000 shares of our common stock underlying warrants
to be issued to the underwriter.</font></td>
</tr>
</table>
<p align="center"><font face="serif" size="2">6</font></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<page>
<a name="p8"></a>
<p><a href="#contents"><font size="2">Back to Contents</font></a></p>
<p align="center"><font size="2" face="serif"><b>Summary Financial Information</b></font></p>

<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The summary
    financial data for the fiscal years ended October 31, 2003, 2002 and 2001
    was derived from our financial statements that have been audited by Lazar
    Levine &amp; Felix LLP for the respective periods.  The information for the
    nine months ended July 31, 2004 and 2003 was derived from unaudited financial
    data but, in the opinion of management, reflects all adjustments necessary
    for a fair presentation of the results for such periods. The summary financial
    and other data presented below should be read in conjunction with, and is
    qualified in its entirety by, our audited financial statements and related
    notes appearing in this prospectus beginning on page F-1. See &#8220;Management&#8217;s
    Discussion and
Analysis of Financial Condition and Results of Operations&#8221; for a discussion
of our financial statements for the years ended October 31, 2003 and 2002 and
for the nine months ended July 31, 2004 and 2003.</font></p>
<table width="100%" border="0" cellpadding="0" cellspacing="0">
  <tr valign="top" bgcolor="#FFFFFF">
    <td align="left">&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td align="center" colspan="8"><font size="1" face="serif"><b>For the Year
      Ended</b></font><font size="2" face="serif">&nbsp;</font><font size="2" face="serif">&nbsp;</font><font size="2" face="serif">&nbsp;</font></td>
    <td align="center">&nbsp;</td>
    <td align="center" colspan="5"><font size="1" face="serif"><b>For the<br>
	Nine Months Ended</b></font><font size="2" face="serif">&nbsp;</font><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top" bgcolor="#FFFFFF">
    <td align="left">&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td colspan="8" align="center"><hr noshade size="1"></td>
    <td align="center">&nbsp;</td>
    <td colspan="5" align="center"><hr noshade size="1"></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td align="left"><font size="1" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="center"><font size="1" face="serif"><b>October 31,<br>
      2003</b></font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="center"><font size="1" face="serif"><b>October 31,<br>
      2002</b></font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="center"><font size="1" face="serif"><b>October 31,<br>
      2001</b></font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="center"><font size="1" face="serif"><b>July 31,<br>2004</b></font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="center"><font size="1" face="serif"><b>July 31,<br>2003</b></font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td></td>
    <td></td>
    <td><hr noshade size="1"></td>
    <td><hr noshade size="1"></td>
    <td></td>
    <td><hr noshade size="1"></td>
    <td><hr noshade size="1"></td>
    <td></td>
    <td><hr noshade size="1"></td>
    <td><hr noshade size="1"></td>
    <td></td>
    <td><hr noshade size="1"></td>
    <td><hr noshade size="1"></td>
    <td></td>
    <td><hr noshade size="1"></td>
    <td><hr noshade size="1"></td>
    <td></td>
  </tr>
  <tr valign="top">
    <td align="left"><font size="1" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td colspan="13" align="center"><font size="1" face="serif"><b>(Dollars in
      thousands, except per share data)</b></font></td>
    <td align="left">&nbsp;</td>
  </tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif"><b>Income Statement Data</b>:</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#ffffff">
<td align="left"><font size="2" face="serif">Net sales</font></td>
<td width="1%" align="left">&nbsp;</td>
<td width="2%" align="right"><font size="2" face="serif">$</font></td>
<td width="8%" align="right"><font size="2" face="serif"> 20,240</font></td>
<td width="1%" align="left">&nbsp;</td>
<td width="2%" align="right"><font size="2" face="serif">$</font></td>
<td width="8%" align="right"><font size="2" face="serif"> 17,433</font></td>
<td width="1%" align="left">&nbsp;</td>
<td width="2%" align="right"><font size="2" face="serif">$</font></td>
<td width="8%" align="right"><font size="2" face="serif"> 20,327</font></td>
<td width="1%" align="left">&nbsp;</td>
<td width="2%" align="right"><font size="2" face="serif">$</font></td>
<td width="8%" align="right"><font size="2" face="serif"> 18,578</font></td>
<td width="1%" align="left">&nbsp;</td>
<td width="2%" align="right"><font size="2" face="serif">$</font></td>
<td width="8%" align="right"><font size="2" face="serif"> 14,486</font></td>
<td width="2%" align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">Cost of sales</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">15,373</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">12,453</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">16,065</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">13,893</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">10,887</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td></td>
<td></td>
<td><hr noshade size="1"></td>
<td><hr noshade size="1"></td>
<td></td>
<td><hr noshade size="1"></td>
<td><hr noshade size="1"></td>
<td></td>
<td><hr noshade size="1"></td>
<td><hr noshade size="1"></td>
<td></td>
<td><hr noshade size="1"></td>
<td><hr noshade size="1"></td>
<td></td>
<td><hr noshade size="1"></td>
<td><hr noshade size="1"></td>
<td></td>
</tr>
<tr valign="top" bgcolor="#ffffff">
<td align="left"><font size="2" face="serif">Gross profit</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">4,867</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">4,980</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">4,262</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">4,685</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">3,599</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">Operating expenses</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">3,993</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">3,505</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">3,162</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">3,462</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">2,761</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td></td>
<td></td>
<td><hr noshade size="1"></td>
<td><hr noshade size="1"></td>
<td></td>
<td><hr noshade size="1"></td>
<td><hr noshade size="1"></td>
<td></td>
<td><hr noshade size="1"></td>
<td><hr noshade size="1"></td>
<td></td>
<td><hr noshade size="1"></td>
<td><hr noshade size="1"></td>
<td></td>
<td><hr noshade size="1"></td>
<td><hr noshade size="1"></td>
<td></td>
</tr>
<tr valign="top" bgcolor="#ffffff">
<td align="left"><font size="2" face="serif">Income from operations</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">874</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">1,475</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">1,100</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">1,223</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">838</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">Other income (expense) </font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">(136</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">(162</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">( 269</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">(128</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">(99</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
</tr>
<tr valign="top">
<td></td>
<td></td>
<td><hr noshade size="1"></td>
<td><hr noshade size="1"></td>
<td></td>
<td><hr noshade size="1"></td>
<td><hr noshade size="1"></td>
<td></td>
<td><hr noshade size="1"></td>
<td><hr noshade size="1"></td>
<td></td>
<td><hr noshade size="1"></td>
<td><hr noshade size="1"></td>
<td></td>
<td><hr noshade size="1"></td>
<td><hr noshade size="1"></td>
<td></td>
</tr>
<tr valign="top" bgcolor="#ffffff">
<td align="left"><font size="2" face="serif">Income before income taxes</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">738</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">1,313</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">831</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">1,095</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">739</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">Provision for income taxes</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">116</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">558</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">313</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">482</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">298</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td></td>
<td></td>
<td><hr noshade size="1"></td>
<td><hr noshade size="1"></td>
<td></td>
<td><hr noshade size="1"></td>
<td><hr noshade size="1"></td>
<td></td>
<td><hr noshade size="1"></td>
<td><hr noshade size="1"></td>
<td></td>
<td><hr noshade size="1"></td>
<td><hr noshade size="1"></td>
<td></td>
<td><hr noshade size="1"></td>
<td><hr noshade size="1"></td>
<td></td>
</tr>
<tr valign="top" bgcolor="#ffffff">
<td align="left"><font size="2" face="serif">Net income</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif"> 622</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif"> 755</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif"> 518</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif"> 613</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif"> 441</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td></td>
<td></td>
<td><hr noshade size="2"></td>
<td><hr noshade size="2"></td>
<td></td>
<td><hr noshade size="2"></td>
<td><hr noshade size="2"></td>
<td></td>
<td><hr noshade size="2"></td>
<td><hr noshade size="2"></td>
<td></td>
<td><hr noshade size="2"></td>
<td><hr noshade size="2"></td>
<td></td>
<td><hr noshade size="2"></td>
<td><hr noshade size="2"></td>
<td></td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">Net income  per share &#150; basic and diluted</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif"> .16</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif"> .19</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif"> .13</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif"> .15</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif"> .11</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#ffffff">
<td align="left"><font size="2" face="serif">Book value per share</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif"> .53</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif"> .37</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif"> .19</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif"> .68</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif"> .48</font></td>
<td align="left">&nbsp;</td>
</tr>
</table>
<br>
<br>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
  <tr valign="top">
    <td align="left"><font size="1" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td colspan="7" align="center" valign="bottom"><font size="1" face="serif"><b>At</b></font>
      <font size="1" face="serif"><b>October 31,</b></font></td>
    <td align="center" valign="bottom">&nbsp;</td>
    <td align="center" valign="bottom">&nbsp;</td>
    <td colspan="4" align="center" valign="bottom"><font size="1" face="serif"><b>At July 31, 2004</b></font></td>
    <td align="center" valign="bottom">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td align="left"><font size="1" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td colspan="7" align="center" valign="bottom"><hr noshade size="1"></td>
    <td align="center" valign="bottom">&nbsp;</td>
    <td align="center" valign="bottom">&nbsp;</td>
    <td colspan="4" align="center" valign="bottom"><hr noshade size="1"></td>
    <td align="center" valign="bottom">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td align="left"><font size="1" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="center" valign="bottom"><font size="1" face="serif"><b>2003</b></font></td>
    <td align="center" valign="bottom">&nbsp;</td>
    <td align="center" valign="bottom">&nbsp;</td>
    <td align="center" valign="bottom"><font size="1" face="serif"><b>2002</b></font></td>
    <td align="center" valign="bottom">&nbsp;</td>
    <td align="center" valign="bottom">&nbsp;</td>
    <td align="center" valign="bottom"><font size="1" face="serif"><b>2001</b></font></td>
    <td align="center" valign="bottom">&nbsp;</td>
    <td align="center" valign="bottom">&nbsp;</td>
    <td align="center" valign="bottom"><font size="1" face="serif"><b>Actual</b></font></td>
    <td align="center" valign="bottom">&nbsp;</td>
    <td align="center" valign="bottom">&nbsp;</td>
    <td align="center" valign="bottom"><font size="1" face="serif"><b>As Adjusted(1)</b></font></td>
    <td align="center" valign="bottom">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td align="left"><font size="1" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td colspan="2" align="right"><hr noshade size="1"></td>
    <td align="center" valign="bottom">&nbsp;</td>
    <td colspan="2" align="center" valign="bottom"><hr noshade size="1"></td>
    <td align="center" valign="bottom">&nbsp;</td>
    <td colspan="2" align="center" valign="bottom"><hr noshade size="1"></td>
    <td align="center" valign="bottom">&nbsp;</td>
    <td colspan="2" align="center" valign="bottom"><hr noshade size="1"></td>
    <td align="center" valign="bottom">&nbsp;</td>
    <td colspan="2" align="center" valign="bottom"><hr noshade size="1"></td>
    <td align="center" valign="bottom">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td align="left"><font size="1" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td colspan="13" align="center" valign="bottom"><font size="1" face="serif"><b>(Dollars
      in thousands)</b></font></td>
    <td align="center" valign="bottom">&nbsp;</td>
  </tr>
  <tr valign="top" bgcolor="#FFFFFF">
    <td align="left"><font size="2" face="serif"><b>Balance Sheet Data</b>:</font></td>
    <td align="left" width="2%">&nbsp;</td>
    <td width="1%" align="right">&nbsp;</td>
    <td width="8%" align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td width="2%" align="left">&nbsp;</td>
    <td width="1%" align="right">&nbsp;</td>
    <td width="8%" align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td width="2%" align="left">&nbsp;</td>
    <td width="1%" align="right">&nbsp;</td>
    <td width="8%" align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td width="2%" align="left">&nbsp;</td>
    <td width="1%" align="right">&nbsp;</td>
    <td width="8%" align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td width="2%" align="left">&nbsp;</td>
    <td width="1%" align="right">&nbsp;</td>
    <td width="8%" align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td width="2%" align="left">&nbsp;</td>
  </tr>

<tr valign="top" bgcolor="#ffffff">
<td align="left"><font size="2" face="serif">Total assets</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif"> 7,035</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif"> 6,042</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif"> 5,713</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif"> 8,387</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif"> 13,927</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">Short-term debt</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif"> 2,076</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif"> 2,483</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif"> 2,090</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif"> 5,426</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif"> 3,815</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#ffffff">
<td align="left"><font size="2" face="serif">Long-term debt</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif"> 2,839</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif"> 2,061</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif"> 2,880</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif"> 228</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif"> 39</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">Total liabilities</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif"> 4,915</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif"> 4,544</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif"> 4,970</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif"> 5,654</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif"> 3,854</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#ffffff">
<td align="left"><font size="2" face="serif">Shareholders&#8217; equity</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif"> 2,120</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif"> 1,498</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif"> 743</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif"> 2,733</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif"> 10,073</font></td>
<td align="left">&nbsp;</td>
</tr>
</table>

<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
<td width="3%"><font size="2" face="serif">(1)</font></td>
<td align="left">
<font size="2" face="serif"> Adjusted to give effect to the receipt and application
of the net proceeds of approximately $7,340,000 from the sale of common shares
offered by this prospectus at an assumed initial public offering price of $5.50
per share.</font></td>
</tr>
</table>
<p align="center"><font face="serif" size="2">7</font></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<page>
<a name="p9"></a>
<p><a href="#contents"><font size="2">Back to Contents</font></a></p>

<p align="center"><font size="2" face="serif"><b>RISK FACTORS</b></font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<i>An investment in our common stock is speculative and involves a high degree of  risk.  You should carefully consider the risks described below before buying our common stock.  These risks could have a material adverse effect on our business, financial condition and results of operations and the value of our common stock. </i></font></p>

<p align="center"><font size="2" face="serif"><b><i>Risk Factors Affecting Our
  Company</i></b></font></p>

<p align="left"><font size="2" face="serif"><b>Because our business is highly dependent upon a single commodity, coffee, any decrease in demand for coffee could materially adversely affect our revenues and profitability.</b></font></p>

<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our business is centered on essentially one commodity: coffee. Our operations have primarily focused on the following areas of the coffee industry:</font></p>
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<td width="3%"></td>
<td width="3%">
<font size="2" face="serif">&#149;</font></td>
<td>
<font size="2" face="serif">the roasting, blending, packaging and distribution of private label coffee;</font></td>
</tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
  <tr valign="top">
    <td></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td width="3%"></td>
    <td width="3%"> <font size="2" face="serif">&#149;</font></td>
    <td> <font size="2" face="serif">the roasting, blending, packaging and distribution
      of proprietary branded coffee; and</font></td>
  </tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
  <tr valign="top">
    <td></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td width="3%"></td>
    <td width="3%"> <font size="2" face="serif">&#149;</font></td>
    <td> <font size="2" face="serif">the sale of wholesale specialty green coffee.</font></td>
  </tr>
  <tr valign="top">
    <td></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td colspan="3"><font size="2" face="serif">Demand for our products is affected by:</font></td>
  </tr>
  <tr valign="top">
    <td></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
<td width="3%"></td>
<td width="3%">
<font size="2" face="serif">&#149;</font></td>
<td>
<font size="2" face="serif">consumer tastes and preferences;</font></td>
</tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
  <tr valign="top">
    <td></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td width="3%"></td>
    <td width="3%"> <font size="2" face="serif">&#149;</font></td>
    <td> <font size="2" face="serif">national, regional and local economic conditions;</font></td>
  </tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
  <tr valign="top">
    <td></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td width="3%"></td>
    <td width="3%"> <font size="2" face="serif">&#149;</font></td>
    <td> <font size="2" face="serif">demographic trends; and</font></td>
  </tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
  <tr valign="top">
    <td></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td width="3%"></td>
    <td width="3%"> <font size="2" face="serif">&#149;</font></td>
    <td> <font size="2" face="serif">the type, number and location of competing
      products.</font></td>
  </tr>
</table>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Because we rely on a single commodity, any decrease in demand for coffee would harm our business more than if we had more diversified product offerings and could materially adversely affect our revenues and operating results. </font></p>

<p align="left"><font size="2" face="serif"><b>If we are unable to geographically expand our branded and private label products, our growth will be impeded which could result in reduced sales and profitability. </b></font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our business strategy emphasizes, among other things, geographic expansion of our branded and private label products as opportunities arise.  We may not be able to implement successfully this portion of our business strategy.  Our ability to implement this portion of our business strategy is dependent on our ability to: </font></p>

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<td width="3%">
<font size="2" face="serif">&#149;</font></td>
<td>
<font size="2" face="serif">market our products on a national scale;</font></td>
</tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
  <tr valign="top">
    <td></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td width="3%"></td>
    <td width="3%"> <font size="2" face="serif">&#149;</font></td>
    <td> <font size="2" face="serif">increase our brand recognition on a national
      scale;</font></td>
  </tr>
  <tr valign="top">
    <td></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td></td>
    <td> <font size="2" face="serif">&#149;</font></td>
    <td> <font size="2" face="serif">enter into distribution and other strategic
        arrangements with third party retailers; and</font></td>
  </tr>
</table>
<p>&nbsp;</p>
<p align="center"><font face="serif" size="2">8</font></p>
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<div style="page-break-before:always"></div>
<page>
<a name="p10"></a>
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  <tr valign="top">
    <td width="3%"></td>
    <td width="3%">&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
      <tr valign="top">
    <td width="3%"></td>
    <td width="3%"> <font size="2" face="serif">&#149;</font></td>
    <td> <font size="2" face="serif">manage growth in administrative overhead
      and distribution costs likely to result from the planned expansion of our
      distribution channels.</font></td>
  </tr>
</table>

<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our sales and profitability may be adversely affected if we fail to successfully expand the geographic distribution of our branded and private label products.  In addition, our expenses could increase and our profits could decrease as we implement our growth strategy.</font></p>
<p align="left"><font size="2" face="serif"><b>Any inability to successfully implement our strategy of growth through selective acquisitions, licensing arrangements and other strategic alliances could materially affect our revenues and profitability.</b></font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our strategy of growth through the selective acquisition of coffee companies, the selective acquisition or licensing of additional coffee brands and other strategic alliances presents risks that could result in increased expenditures and could materially adversely affect our revenues and profitability, including:</font></p>
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<td width="3%">
<font size="2" face="serif">&#149;</font></td>
<td>
<font size="2" face="serif">such acquisitions, licensing arrangements or other strategic alliances may divert our management&#146;s attention from our existing operations;</font></td>
</tr>
</table>

<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
  <td></td>
  <td>&nbsp;</td>
  <td>&nbsp;</td>
</tr>
<tr valign="top">
<td width="3%"></td>
<td width="3%">
<font size="2" face="serif">&#149;</font></td>
<td>
<font size="2" face="serif">we may not be able to successfully integrate any acquired
coffee companies or new coffee brands into our existing business;</font></td>
</tr>
</table>

<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
  <td></td>
  <td>&nbsp;</td>
  <td>&nbsp;</td>
</tr>
<tr valign="top">
<td width="3%"></td>
<td width="3%">
<font size="2" face="serif">&#149;</font></td>
<td>
<font size="2" face="serif">we may not be able to manage the contingent risks associated with the past operations of, and other unanticipated problems arising in, any acquired coffee company; and</font></td>
</tr>
</table>

<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
  <td></td>
  <td>&nbsp;</td>
  <td>&nbsp;</td>
</tr>
<tr valign="top">
<td width="3%"></td>
<td width="3%">
<font size="2" face="serif">&#149;</font></td>
<td>
<font size="2" face="serif">we may not be able to control unanticipated costs associated with such acquisitions, licensing arrangements or strategic alliances.</font></td>
</tr>
</table>

<p align="left"><font size="2" face="serif">In addition, any such acquisitions,
    licensing arrangements or strategic alliances may result in:</font></p>
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  <tr valign="top">
    <td width="3%"></td>
    <td width="3%"> <font size="2" face="serif">&#149;</font></td>
    <td> <font size="2" face="serif">potentially dilutive issuances of our equity
        securities; and</font></td>
  </tr>
</table>
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  <tr valign="top">
    <td></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td width="3%"></td>
    <td width="3%"> <font size="2" face="serif">&#149;</font></td>
    <td> <font size="2" face="serif">the incurrence of additional debt.</font></td>
  </tr>
</table>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
    has been our practice in the past, we will continuously evaluate any such
    acquisitions, licensing opportunities or strategic alliances. However, we
    have not reached any agreement or arrangement with respect to any such acquisition,
    licensing opportunity or strategic alliance as of the date of this prospectus
    and we may not be able to consummate any acquisitions, licensing arrangements
    or strategic alliances on terms favorable to us or at all. The failure to
    consummate any such acquisitions, licensing arrangements or strategic alliances
    may reduce our growth and expansion.</font></p>
<p align="left"><font size="2" face="serif"><b>The loss of any of our key customers
      could negatively affect our revenues and decrease our earnings.</b></font></p>

<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
    are highly dependant upon sales of our private label and branded coffee to
    two wholesalers, Supervalu and Topco/Shurfine, and upon sales of wholesale
    green coffee to one </font></p>

<p align="center"><font face="serif" size="2">9</font></p>
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<a name="p11"></a>



<p align="left"><font size="2" face="serif">customer, Green Mountain Coffee Roasters. Sales to Supervalu,
    Topco/Shurfine, and Green Mountain Coffee Roasters accounted for approximately
    16.1%, 7.5%, and 15.6% of our net sales for the fiscal year ended October
    31, 2003 and 9.2%, 6.5%, and 21.2% for the nine months ended July 31, 2004,
    respectively. Although no other customer accounted for greater than 5% of
    our consolidated net revenues during these periods, other customers may account
    for more than 5% of our consolidated net revenues in future periods. We do
    not have long-term contracts with these or any of our customers. Accordingly,
    our customers can stop purchasing our products at any time without penalty
    and are free to purchase products from our competitors. The loss of, or reduction
    in sales to, customers such as Supervalu, Topco/Shurfine, Green Mountain
    Coffee Roasters or any of our other customers to which we sell a significant
    amount of our products or any material adverse change in the financial condition
of such customers would negatively affect our revenues and decrease our earnings.</font></p>

<p align="left"><font size="2" face="serif"><b>If we lose our key personnel, including Andrew Gordon and David Gordon, our revenues and profitability could suffer.</b></font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
    success depends to a large degree upon the services of Andrew Gordon, our
    President, Chief Executive Officer and Treasurer, and David Gordon, our Executive
    Vice President-Operations and Secretary. We also depend to a large degree
    on the expertise of our coffee roasters. We do not have employment contracts
    with our coffee roasters. Our ability to source and purchase a sufficient
    supply of high quality coffee beans and to roast coffee beans consistent
    with our quality standards could suffer if we lose the services of any of
    these individuals. As a result, our business and operating results would
    be adversely affected. We may not be successful in obtaining and retaining
    a replacement for either Andrew Gordon or David Gordon if they elect to stop
    working for us. In addition, we do not have key-man insurance on the lives
    of Andrew Gordon or David Gordon.</font></p>

<p align="left"><font size="2" face="serif"><b>If our hedging policy is not effective,
      we may not be able to control our coffee costs, we may be forced to pay
      greater than market value for green coffee and our profitability may be
      reduced.</b></font></p>

<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
    supply and price of coffee beans are subject to volatility and are influenced
    by numerous factors which are beyond our control. Historically, we have used
    short-term coffee futures and options contracts primarily for the purpose
    of partially hedging and minimizing the effects of changing green coffee
    prices and to reduce our cost of sales. In addition, during the latter half
    of fiscal 2000, we began to acquire futures contracts with longer terms,
    generally three to six months, primarily for the purpose of guaranteeing
    an adequate supply of green coffee. Realized and unrealized gains or losses
    on futures contracts are accounted for in cost of sales. Gains on futures
    contracts reduce cost of sales and losses on futures contracts increase cost
    of sales. Gains on futures contracts were $868,669 and $778,410 for the years
    ended October 31, 2003 and 2002, respectively, and were $720,297 for the
    nine months ended July 31, 2004. Although the use of these derivative financial
    instruments has enabled us to mitigate the effect of changing prices, no
    strategy is effective to eliminate the pricing risks and we generally remain
    exposed to loss when prices decline significantly in a short period of time,
    and we generally remain exposed to supply risk in the event of non-performance
    by the counter-parties to any futures contracts. Although we generally have
    been able to pass green coffee price increases through to customers, thereby
    maintaining our gross profits, we may not be able to pass price </font></p>

<p align="center"><font size="2" face="serif">10</font></p>
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<div style="page-break-before:always"></div>
<page>
<p><a name="p12"></a> </p>


<p align="left"><font size="2" face="serif">increases
through to our customers in the future.  Our hedging strategy and the hedges
    that we enter into may not adequately offset the risks of coffee bean price
    volatility and our hedges may result in losses. Failure to properly design
    and implement an effective hedging strategy may materially adversely affect
    our business and operating results. In this case, our costs of sales may
increase, resulting in a decrease in profitability.</font></p>


<p align="left"><font size="2" face="serif"><b>If our planned increase in marketing expenditures fails to promote and enhance our brands, the value of our brands could decrease and our revenues and profitability could be adversely affected.</b></font></p>

<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We believe that promoting and enhancing our brands is critical to our success.  We intend to increase our marketing expenditures to increase awareness of our brands, which we expect will create and maintain brand loyalty.  If our brand-building strategy is unsuccessful, these expenses may never be recovered, and we may be unable to increase awareness of our brands or protect the value of our brands.  If we are unable to achieve these goals, our revenues and ability to implement our business strategy could be adversely affected.</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
    success in promoting and enhancing our brands will also depend on our ability
    to provide customers with high quality products and service. Although we
    take measures to ensure that we sell only fresh roasted coffee, we have no
    control over our coffee products once they are purchased by our wholesale
    customers. Accordingly, wholesale customers may store our coffee for longer
    periods of time or resell our coffee without our consent, in each case, potentially
    affecting the quality of the coffee prepared from our products. Although
    we believe we are less susceptible to quality control problems than many
    of our competitors because a majority of our products are sold in cans or
    brick packs unlike whole bean coffees, if consumers do not perceive our products
    and service to be of high quality, then the value of our brands may be diminished
    and, consequently, our operating results and ability to implement our business
    strategy may be adversely affected.</font></p>


<p align="left"><font size="2" face="serif"><b>Our roasting methods are not proprietary,
      so competitors may be able to duplicate them, which could harm our competitive
      position. If our competitive position is weakened, our revenues and profitability
      could be materially adversely affected.</b></font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
    consider our roasting methods essential to the flavor and richness of our
    roasted coffee and, therefore, essential to our brands of coffee. Because
    we do not hold any patents for our roasting methods, it may be difficult
    for us to prevent competitors from copying our roasting methods if such methods
    become known. If our competitors copy our roasting methods, the value of
    our coffee brands may be diminished, and we may lose customers to our competitors.
    In addition, competitors may be able to develop roasting methods that are
    more advanced than our roasting methods, which may also harm our competitive
    position.</font></p>
<p align="left"><font size="2" face="serif"><b></b></font></p>
<p align="center"><font face="serif" size="2">11</font></p>
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<page>
<a name="p13"></a>

<p align="left"><font size="2" face="serif"><b>Our operating results may fluctuate significantly, which makes our results of operations difficult to predict and could cause our results of operations to fall short of expectations.</b></font></p>

<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our operating results may fluctuate from quarter to quarter and year to year as a result of a number of factors, many of which are outside of our control.  These fluctuations could be caused by a number of factors including:</font></p>

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<td width="3%"></td>
<td width="3%">
<font size="2" face="serif">&#149;</font></td>
<td>
<font size="2" face="serif">fluctuations in purchase prices and supply of green coffee; </font></td>
</tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
  <tr valign="top">
    <td></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td width="3%"></td>
    <td width="3%"> <font size="2" face="serif">&#149;</font></td>
    <td> <font size="2" face="serif">fluctuations in the selling prices of our
      products;</font></td>
  </tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
  <tr valign="top">
    <td></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td width="3%"></td>
    <td width="3%"> <font size="2" face="serif">&#149;</font></td>
    <td> <font size="2" face="serif">the level of marketing and pricing competition
      from existing or new competitors in the coffee industry;</font></td>
  </tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
  <tr valign="top">
    <td></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td width="3%"></td>
    <td width="3%"> <font size="2" face="serif">&#149;</font></td>
    <td> <font size="2" face="serif">our ability to retain existing customers
      and attract new customers; and</font></td>
  </tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
  <tr valign="top">
    <td></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td width="3%"></td>
    <td width="3%"> <font size="2" face="serif">&#149;</font></td>
    <td> <font size="2" face="serif">our ability to manage inventory and fulfillment
      operations and maintain gross margins.</font></td>
  </tr>
</table>

<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
    a result of the foregoing, period-to-period comparisons of our operating results
    may not necessarily be meaningful and those comparisons should not be relied
    upon as indicators of future performance. Accordingly, our operating results
    in future quarters may be below market expectations. In this event, the price
    of our common stock may decline.</font></p>

<p align="left"><font size="2" face="serif"><b>Since we rely heavily on common
      carriers to ship our coffee on a daily basis, any disruption in their services
      or increase in shipping costs could adversely affect our relationship with </b></font><font size="2" face="serif"><b>our customers, which could result in reduced revenues, increased operating expenses, a loss of customers or reduced profitability.</b></font></p>

<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We rely on a number of common carriers to deliver coffee to our customers and to deliver coffee beans to us.  We consider roasted coffee a perishable product and we rely on these common carriers to deliver fresh roasted coffee on a daily basis. We have no control over these common carriers and the services provided by them may be interrupted as a result of labor shortages, contract disputes and other factors. If we experience an interruption in these services, we may be unable to ship our coffee in a timely manner, which could reduce our revenues and adversely effect our relationship with our customers.  In addition, a delay in shipping could require us to contract with alternative, and possibly more expensive,
common carriers and could cause orders to be cancelled or receipt of goods to be refused.  Any significant increase in shipping costs could lower our profit margins or force us to raise prices, which could cause our revenue and profits to suffer.</font></p>
<p align="left"><font size="2" face="serif"><b>If we are unable to obtain additional financing, we may not be able to fund and grow our operations.</b></font></p>

<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We anticipate, but cannot assure you, that we
will be able to expand our operations and implement our growth strategy in fiscal 2004 through the proceeds of this
offering, cash provided by operating activities and borrowings under the credit facility with Wells Fargo Business
Credit. This expectation assumes that we will be able to generate a sufficient level of sales in order to increase
income, eligible accounts receivable and inventory to permit advances</font></p>

<p>&nbsp;</p>
<p align="center"><font face="serif" size="2">12</font></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<page>
<a name="p15"></a>

<p align="left"><font size="2" face="serif">under our line of credit facility.  In the
event our expectations are not fulfilled or that we are unable to generate sufficient amounts of cash to implement
our growth strategy, we may be required to seek additional financing. We have no current arrangements for
additional financing and additional financing may not be available to us on commercially reasonable terms, or at
 all.  If we are not successful in obtaining additional financing, we might not be able to implement our
 expansion plans.</font></p>
<p align="left"><font size="2" face="serif"><b>If there was a significant interruption in the operation of either one of our facilities, we may not have the capacity to service all of our customers and we may not be able to service our customers in a timely manner, thereby reducing our revenues and earnings.</b></font></p>

<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Even though we recently acquired a second coffee roasting and distribution facility, a significant interruption in the operation of either facility, whether as a result of a natural disaster or other causes, could significantly impair our ability to operate our business.  Due to manufacturing and logistical efficiencies, our New York facility generally services customers in the Northeastern United States and the Midwest United States and our La Junta, Colorado facility services customers in the Western United States.  If there was a significant interruption in the operation of either one of our facilities, we may not have the capacity to service all of our customers out of the lone operating facility and we may not
be able to service our customers in a timely manner.  As a result, our revenues and earnings would be materially adversely affected.</font></p>

<p align="center"><font size="2" face="serif"><b><i>Risk Factors Relating to the
  Coffee Industry</i></b></font></p>
<p align="left"><font size="2" face="serif"><b>Increases in the cost of high quality Arabica or Robusta coffee beans could reduce our gross margin and profit.</b></font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Coffee is a traded commodity and, in general, its price can fluctuate depending on:</font></p>
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<tr valign="top">
<td width="3%"></td>
<td width="3%">
<font size="2" face="serif">&#149;</font></td>
<td>
<font size="2" face="serif">weather patterns in coffee-producing countries;</font></td>
</tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
  <tr valign="top">
    <td></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td width="3%"></td>
    <td width="3%"> <font size="2" face="serif">&#149;</font></td>
    <td> <font size="2" face="serif">economic and political conditions affecting
      coffee-producing countries, including acts of terrorism in such countries;</font></td>
  </tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
  <tr valign="top">
    <td></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td width="3%"></td>
    <td width="3%"> <font size="2" face="serif">&#149;</font></td>
    <td> <font size="2" face="serif">foreign currency fluctuations; and</font></td>
  </tr>
</table>
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    <td></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
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    <td width="3%"></td>
    <td width="3%"> <font size="2" face="serif">&#149;</font></td>
    <td> <font size="2" face="serif">trade regulations and restrictions between
      coffee-producing countries and the United States.</font></td>
  </tr>
</table>

<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If the cost of wholesale green coffee increases due to any of these factors, our margins could decrease and our profitability could suffer accordingly.  Although we have historically attempted to raise the selling prices of our products in response to increases in the price of wholesale green coffee, when wholesale green coffee prices increase rapidly or to significantly higher than normal levels, we are not always able to pass the price increases through to our customers on a timely basis, if at all, which adversely affects our operating margins and cash flow.  We may not be able to recover any future increases in the cost of wholesale green coffee.  Even if we are able to recover future increases, our operating
margins and results of operations </font></p>
<p align="center"><font face="serif" size="2">13</font></p>
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</p>
<p align="left"><font size="2" face="serif">may still be materially and adversely
    affected by time delays in the implementation of price increases.</font></p>
<p align="left"><font size="2" face="serif"><b>Disruptions in the supply of green
      coffee could result in a deterioration of our relationship with our customers,
      decreased revenues or could impair our ability to grow our business.</b></font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Green
    coffee is a commodity and its supply is subject to volatility beyond our
    control. Supply is affected by many factors in the coffee growing countries
    including weather, political and economic conditions, acts of terrorism,
    as well as efforts by coffee growers to expand or form cartels or associations.
    If we are unable to procure a sufficient supply of green coffee, our sales
    would suffer.</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Some
    of the arabica coffee beans of the quality we purchase do not trade directly
    on the commodity markets. Rather, we purchase the high end arabica coffee
    beans that we use on a negotiated basis. We depend on our relationships with
    coffee brokers, exporters and growers for the supply of our primary raw material,
    high quality Arabica coffee beans. If any of our relationships with coffee
    brokers, exporters or growers deteriorate, we may be unable to procure a
    sufficient quantity of high quality coffee beans at prices acceptable to
    us or at all. In such case, we may not be able to fulfill the demand of our
    existing customers, supply new retail stores or expand other channels of
    distribution. A raw material shortage could result in a deterioration of
    our relationship with our customers, decreased revenues or could impair our
    ability to expand our business.</font></p>
<p align="left"><font size="2" face="serif"><b>The coffee industry is highly competitive and if we cannot compete successfully, we may lose our customers or experience reduced sales and profitability.</b></font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
    coffee markets in which we do business are highly competitive and competition
    in these markets is likely to become increasingly more intense due to the
    relatively low barriers to entry. The industry in which we compete is particularly
    sensitive to price pressure, as well as quality, reputation and viability
    for wholesale and brand loyalty for retail. To the extent that one or more
    of our competitors becomes more successful with respect to any key competitive
    factor, our ability to attract and retain customers could be materially adversely
    affected. Our private label and branded coffee products compete with other
    manufacturers of private label coffee and branded coffees. These competitors,
    such as Kraft General
Foods, Inc., The Kroger Co., The Procter &amp; Gamble Company and Sara Lee Corporation,
have much greater financial, marketing, distribution, management and other resources
than we do for marketing, promotions and geographic and market expansion. In
addition, there are a growing number of specialty coffee companies who provide
specialty green coffee and roasted coffee for retail sale. If we are unable to
compete successfully against existing and new competitors, we may lose our customers
or experience reduced sales and profitability.</font></p>
<p align="left"><font size="2" face="serif"><b>Adverse public or medical opinion about caffeine may reduce our sales and profits.</b></font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Some of our coffee products contain caffeine and other active compounds, the health effects of which are not fully understood. A number of research studies conclude or suggest that excessive consumption of caffeine may lead to an increased heart rate, restlessness and anxiety, depression, headaches, sleeplessness and other adverse health effects. An unfavorable report on </font></p>

<p>&nbsp;</p>
<p align="center"><font face="serif" size="2">14</font></p>
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<p><a name="p17"></a>
</p>
<p align="left"><font size="2" face="serif">the health effects of caffeine or
    other compounds present in coffee could significantly reduce the demand for
    coffee, which could reduce our sales and profits.</font></p>
<p align="center"><font size="2" face="serif"><b><i>Risk Factors Related to this
        Offering</i></b></font></p>
<p align="left"><font size="2" face="serif"><b>The Gordon family effectively
      controls Coffee Holding, substantially reducing the influence of our other
      stockholders.</b></font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Andrew
    Gordon and David Gordon, executive officers and directors of Coffee Holding,
    beneficially own approximately 31.0% of our outstanding shares of common
    stock. In addition, other members of the Gordon family beneficially own an
    additional 55.5% of the outstanding shares of common stock. After the offering,
    Andrew Gordon, David Gordon and other members of the Gordon family will beneficially
    own approximately 61.8% of our outstanding common stock and will be able
    to control the vote on all matters submitted to a vote of stockholders, including
    the election of directors, amendments to the Articles of Incorporation and
    Bylaws and approval of significant corporate transactions. This control could
    have the effect of discouraging, delaying or preventing a change in our control
    which other stockholders might consider favorable. This control could also
    have the effect of approving a change in our control on terms which other
    stockholders might consider unfavorable.</font></p>
<p align="left"><font size="2" face="serif"><b>We intend to implement anti-takeover provisions which could discourage or prevent a takeover, even if an acquisition would be beneficial to our stockholders.</b></font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We intend to amend our Articles of Incorporation to, among other things, include provisions which could make it more difficult for a third party to acquire us, even if doing so would be beneficial to our stockholders.  These provisions include: </font></p>
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<td>
<font size="2" face="serif">establishing a classified board of directors requiring that members of the board be elected in different years;</font></td>
</tr>
</table>
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  <tr valign="top">
    <td></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td width="3%"></td>
    <td width="3%"> <font size="2" face="serif">&#149;</font></td>
    <td> <font size="2" face="serif">authorizing the issuance of &#147;blank
      check&#148; preferred stock that could be issued by our board of directors
      to increase the number of outstanding shares or change the balance of voting
      control and resist a takeover attempt;</font></td>
  </tr>
</table>
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  <tr valign="top">
    <td></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td width="3%"></td>
    <td width="3%"> <font size="2" face="serif">&#149;</font></td>
    <td> <font size="2" face="serif">prohibiting cumulative voting in the election
      of directors, which would otherwise allow less than a majority of stockholders
      to elect director candidates;</font></td>
  </tr>
</table>
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    <td></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
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    <td width="3%"></td>
    <td width="3%"> <font size="2" face="serif">&#149;</font></td>
    <td> <font size="2" face="serif">limiting the ability of stockholders to call
      special meetings of stockholders;</font></td>
  </tr>
</table>
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  <tr valign="top">
    <td></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td width="3%"></td>
    <td width="3%"> <font size="2" face="serif">&#149;</font></td>
    <td> <font size="2" face="serif">prohibiting stockholder action by written
      consent and requiring all stockholder actions to be taken at a meeting of
      our stockholders; and</font></td>
  </tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
  <tr valign="top">
    <td></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td width="3%"></td>
    <td width="3%"> <font size="2" face="serif">&#149;</font></td>
    <td> <font size="2" face="serif">establishing advance notice requirements
      for nominations for election to the board of directors and for proposing
      matters that can be acted upon by stockholders at stockholder meetings.</font></td>
  </tr>
</table>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition, provisions of the Nevada Revised Statutes and the terms of the employment agreements with our executive officers may discourage, delay or prevent a change in our control.  </font></p>
<p align="left">&nbsp;</p>
<p align="center"><font face="serif" size="2">15</font></p>
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</p>
<p align="left"><font size="2" face="serif"><b>Sales of substantial amounts of
      our common stock may occur after this offering, which could cause our stock
      price to fall.</b></font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
    current stockholders hold a substantial number of shares, which they will
    be able to sell in the public market in the near future. Upon the completion
    of this offering (and excluding shares underlying the underwriter&#146;s
    warrants), we will have 5,599,650 shares of common stock issued and outstanding
    (5,839,650 shares if the underwriter&#146;s over-allotment option is exercised
    in full). Of those shares, the 1,600,000 sold in this offering (1,840,000
    if the underwriter&#146;s over-allotment option is exercised in full) and
    the 29,650 shares registered in the Rule 419 Offering will have been registered
    under the Securities Act of 1933, as amended, and may be resold without further
    registration and 3,970,000 shares are &#147;restricted securities&#148; 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. All
    of these restricted securities (including 1,239,200 held by our officers
    and directors and an additional 2,220,200 shares owned by members of the
    Gordon family who are not our officers or directors) are eligible for sale
    under the exemption provided by Rule 144 of the Securities Act. Approximately
    3,540,400 shares will be subject to lock-up agreements which prohibit the
    sale of the shares for nine months after this offering. However, it is possible
    that the underwriter could waive the nine-month lock-up period, if, for example, the underwriter determines that the market price of our common
stock has reached a sufficiently stable point that it could bear the sale of shares subject to the lock-ups. Sales of a substantial number of shares of our common stock within a short period of time after this offering could cause our stock price to fall.  In addition, the sale of these shares could impair our ability to raise capital through the sale of additional stock.  </font></p>

<p align="left"><font size="2" face="serif"><b>There has been no prior market for our common stock and if an active trading market for our stock does not develop or if our stock is delisted from the American Stock Exchange, you may have difficulty selling your stock.</b></font></p>

<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prior to the offering, there has been no public trading market for our common stock. Furthermore, given the minimal number of outstanding shares of common stock held by our non-affiliates, a liquid public market may not develop. We have applied for listing of our common stock on the American Stock Exchange under the symbol &#147;JVA&#148;.</font></p>

<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The development of an active trading market depends on the existence of willing buyers and sellers, the presence of which is not within our control, or the control of any market maker or specialist.  The number of active buyers and sellers of our common stock at any particular time may be limited.  Under such circumstances, you could have difficulty selling your shares on short notice, and, therefore, you should not view our common stock as a short-term investment.  An active trading market for our securities might not develop or be sustained.  In addition, even if these securities are listed and traded initially on the American Stock Exchange, we may fail to meet certain minimum standards for continued listing. In
that event, our common stock could be delisted, and our common stock would no longer be listed, if we are unable to list our common stock on another trading market.  This may make it extremely difficult to sell or trade our common stock.</font></p>


<p>&nbsp;</p>
<p align="center"><font face="serif" size="2">16</font></p>
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<a name="p19"></a>

<p align="left"><font size="2" face="serif"><b>We will have discretion as to the use of the proceeds of this offering.  If we do not use the proceeds effectively, we may not be able to successfully implement our business strategy which could impede our growth and reduce our sales and profitability.</b></font></p>

<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
    intend to use the proceeds of this offering to repay approximately $1.8 million
    of indebtedness, to purchase equipment for our La Junta, Colorado facility,
    to implement a branded sales and marketing campaign and for general corporate
    purposes, including working capital and capital expenditures. As strategic
    opportunities arise, we may use the proceeds of this offering to fund acquisitions,
    licensing and other strategic alliances. We will have broad discretion in
    applying the portion of the net proceeds reserved for general corporate purposes
    and may use the proceeds in ways that are not optimal or with which the stockholders
    disagree. Accordingly, investors in this offering will be relying on management&#8217;s
judgment with only limited information about our specific intentions regarding
    a significant portion of the use of proceeds.</font></p>

<p align="left"><font size="2" face="serif"><b>You will incur immediate and substantial dilution.</b></font></p>

<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;You
    will experience an immediate and substantial dilution of $3.70 per share ($3.58
    per share assuming exercise of the underwriter&#8217;s over-allotment option)
    in the net tangible book value per share of common stock based on an assumed
    initial public offering price of $5.50 per share. New investors and existing
    stockholders will have paid 91.0% and 9.0%, respectively, of the total consideration
    paid for the shares of our common stock outstanding after this offering.
    Accordingly, existing stockholders will benefit disproportionately from this
    offering. If we raise additional capital through the sale of equity, including
    preferred stock or convertible securities, your percentage of ownership will
    be diluted.  You may also experience dilution if stock options or warrants
    to purchase our shares are exercised. As of the date of this prospectus,
    we had reserved 800,000 shares of our common stock for issuance under our
    1998 Stock Option Plan and 160,000 shares of our common stock for issuance
    upon the exercise of warrants to be issued to the underwriter at the completion
    of this offering. No other options or warrants had been granted or exercised
    as of the date of this prospectus.</font></p>


<p align="left"><font size="2" face="serif"><b>If our common stock is deemed to be a &#147;penny stock,&#148; it may be subject to special requirements or conditions that could make it more difficult for you to sell your stock. This could cause our stock price to decline.</b></font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If the trading price of our common stock drops below $5.00 per share and our common stock ceases to be listed on the American Stock Exchange or other comparable national exchange, our common stock may be deemed to be &#147;penny stock.&#148; Penny stocks are stocks:</font></p>
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<font size="2" face="serif">With a price of less than $5.00 per share;</font></td>
</tr>
</table>
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  <tr valign="top">
    <td></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td width="3%"></td>
    <td width="3%"> <font size="2" face="serif">&#149;</font></td>
    <td> <font size="2" face="serif">Not traded on a &#147;recognized&#148; national
      exchange;</font></td>
  </tr>
</table>
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  <tr valign="top">
    <td></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td width="3%"></td>
    <td width="3%"> <font size="2" face="serif">&#149;</font></td>
    <td> <font size="2" face="serif">Whose prices are not quoted on the Nasdaq
      automated quotation system; or</font></td>
  </tr>
</table>
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  <tr valign="top">
    <td></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td width="3%"></td>
    <td width="3%"> <font size="2" face="serif">&#149;</font></td>
    <td> <font size="2" face="serif">In issuers with net tangible assets less
        than $2.0 million (if the issuer has been in continuous operation for
        at least three years) or $5.0 million (if in continuous operation</font></td>
  </tr>
</table>
<p>&nbsp;</p>
<p align="center"><font face="serif" size="2">17</font></p>
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</p>
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    <td width="3%"></td>
    <td width="3%">&nbsp;</td>
    <td><font size="2" face="serif"> for less than three years), or with average
    revenues of less than $6.0 million for the last three years.</font></td>
  </tr>
</table>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Broker/dealers dealing in penny stocks are required to provide potential investors with a document disclosing the risks of penny stocks. Moreover, broker/dealers are required to determine whether an investment in a penny stock is a suitable investment for a prospective investor. These requirements may reduce the potential market for our common stock by reducing the number of potential investors. This may make it more difficult for investors in our common stock to resell shares to third parties or to otherwise dispose of them. This could cause our stock price to decline.</font></p>

<p align="center"><font size="2" face="serif"><b>SPECIAL NOTE REGARDING FORWARD-LOOKING
  STATEMENTS</b></font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This prospectus contains forward-looking statements.  Forward-looking statements typically are identified by use of terms such as &#147;may,&#148; &#147;should,&#148; &#147;plan,&#148; &#147;expect,&#148; &#147;anticipate,&#148; &#147;estimate&#148; and similar words, although some forward-looking statements are expressed differently.  Forward-looking statements represent our management&#146;s judgment regarding future events.  Although we believe that the expectations reflected in such forward-looking statements are reasonable, we can give no assurance that such expectations will prove to be correct.  All statements other than statements of historical fact included in this prospectus regarding our
financial position, business strategy, products, products under development, markets, budgets, plans, or objectives for future operations are forward-looking statements.  We cannot guarantee the accuracy of the forward-looking statements, and you should be aware that our actual results could differ materially from those contained in the forward-looking statements due to a number of factors, including the statements under &#147;Risk Factors&#148; set forth above.</font></p>

<p align="center"><font face="serif" size="2">18</font></p>
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<p align="center"><font size="2" face="serif"><b>USE OF PROCEEDS</b></font></p>

<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
    estimate that the net proceeds to us from the offering will be approximately
    $7.3 million, or $8.5 million if the underwriter exercises its over-allotment
    option in full, assuming an initial public offering price of $5.50 per share
    and after deducting the underwriting discounts and commissions of approximately
    $880,000, or $1.0 million if the underwriter exercises its over-allotment
    option in full, and estimated offering expenses of approximately $580,000
    or $619,600 if the underwriter exercises its over-allotment option in full
    payable by us.  </font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We intend to use the
net proceeds of this offering as follows:</font></p>
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<td>
<font size="2" face="serif">approximately $1.8 million to repay indebtedness under our revolving line of credit and term loan;</font></td>
</tr>
</table>
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  <td></td>
  <td>&nbsp;</td>
  <td>&nbsp;</td>
</tr>
<tr valign="top">
<td width="3%"></td>
<td width="3%">
<font size="2" face="serif">&#149;</font></td>
<td>
<font size="2" face="serif">approximately $1.65 million to purchase equipment for our La Junta, Colorado facility that will allow us to increase production and expand our product offerings on the West Coast; </font></td>
</tr>
</table>
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  <td></td>
  <td>&nbsp;</td>
  <td>&nbsp;</td>
</tr>
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<td width="3%"></td>
<td width="3%">
<font size="2" face="serif">&#149;</font></td>
<td>
<font size="2" face="serif">approximately $1.5 million implement a branded sales and marketing campaign designed to increase our brand awareness in existing markets, including targeting Hispanic consumers throughout the United States; and</font></td>
</tr>
</table>
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  <td></td>
  <td>&nbsp;</td>
  <td>&nbsp;</td>
</tr>
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<td>
<font size="2" face="serif">the remaining $2.35 million for general corporate purposes, including working capital and capital expenditures.</font></td>
</tr>
</table>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The $1.8 million indebtedness that we intend to repay using proceeds of this offering includes approximately $1.53 million of obligations under our revolving line of credit and approximately $273,000 of obligations under the term loan.  Our credit facility with Wells Fargo Business Credit 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 $750,000 based on eligible equipment through November 20, 2004.  Interest on the line of credit is payable monthly at the prime rate plus .25% (an effective rate of 4.75% at September 30, 2004) and interest on the term loan is payable monthly at the prime rate plus .50% (an effective rate
of 5.00% at September 30, 2004).  Principal payments on the term loan are payable in monthly installments of $7,000.  </font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The foregoing represents our best estimate of our allocation of the net proceeds of this offering.  This estimate is based on certain assumptions related to our sales and marketing activities, the growth of our business, competition and other factors.  Future events, as well as changes in economic or competitive conditions or our business and the results of our sales and marketing activities and growth of our business, may make shifts in the allocation of funds necessary or desirable.  In addition, although we have no present plans or intentions, as strategic opportunities arise, we may use a portion of the proceeds of this offering to fund acquisitions, licensing and other strategic alliances.  </font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A substantial portion of the net proceeds will be reserved for general corporate purposes.  Our management will have broad discretion in the application of this portion of the net proceeds.  </font></p>

<p align="center"><font face="serif" size="2">19</font></p>
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<p align="left"><font size="2" face="serif">Pending such uses, we intend to invest
    the net proceeds in direct and guaranteed obligations of the United States,
    interest-bearing, investment-grade instruments or certificates of deposit.</font></p>


<p align="center"><font size="2" face="serif"><b>DILUTION</b></font></p>

<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
    net tangible book value at July 31, 2004 was approximately $2,733,000 or $.68
    per share of common stock. Net tangible book value per share represents the
    amount of our total tangible assets less total liabilities divided by the
    number of shares of common stock outstanding at that date. After giving effect
    to the sale of our common stock at an assumed initial public offering price
    of $5.50 per share, and after deducting underwriting discounts and commissions
    and estimated offering expenses payable by us, our as adjusted net tangible
    book value at July 31, 2004 would have been approximately $10,073,000, or
    $1.80 per share ($11,221,000 or $1.92 per share assuming exercise of the
    underwriter&#8217;s over-allotment
option) of common stock.  This represents an immediate increase in the net tangible
    book value of $1.12 per share ($1.24 per share assuming exercise of the underwriter&#8217;s
    over-allotment option) to existing stockholders and an immediate dilution
    of $3.70 per share ($3.58 per share assuming exercise of the underwriter&#8217;s
    over-allotment option) to new investors purchasing shares of our common stock
    in this offering. The following table illustrates this per share dilution:</font></p>
<table width="80%" border="0" align="center" cellpadding="0" cellspacing="0">
<tr valign="top" bgcolor="#ffffff">
<td align="left"><font size="2" face="serif">Assumed public offering price per share (1)</font></td>
<td align="left" width="2%">&nbsp;</td>
<td width="2%" align="right">&nbsp;</td>
<td width="10%" align="left"><font size="2" face="serif">&nbsp;</font></td>
<td width="2%" align="left">&nbsp;</td>
<td width="2%" align="right"><font size="2" face="serif">$</font></td>
<td width="10%" align="right"><font size="2" face="serif"> 5.50</font></td>
<td width="2%" align="left">&nbsp;</td> </tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><div style="margin-left: 6%; text-indent: -3%"><font size="2" face="serif">Net
    tangible book value per share at July 31, 2004</font></div></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif"> .68</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#ffffff">
<td align="left"><div style="margin-left: 6%; text-indent: -3%"><font size="2" face="serif">Increase
    per share attributable to new investors</font></div></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">   1.12  </font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td></td>
<td></td>
<td><hr noshade size="1"></td>
<td><hr noshade size="1"></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">As adjusted net tangible book value per share<br>after the offering(2) </font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif"> 1.80</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td><hr noshade size="1"></td>
<td><hr noshade size="1"></td>
<td></td>
</tr>
<tr valign="top" bgcolor="#ffffff">
<td align="left"><font size="2" face="serif">Dilution per share to new investors</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif"> 3.70</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td><hr noshade size="2"></td>
<td><hr noshade size="2"></td>
<td></td>
</tr>
</table>

<table width="80%" border="0" align="center" cellpadding="0" cellspacing="0">
  <tr valign="top">
    <td><hr align="left" width="25%" size="1" noshade></td>
  </tr>
</table>
<table width="80%" border="0" align="center" cellpadding="0" cellspacing="0">
  <tr valign="top">
<td width="3%"><font size="2" face="serif">(1)</font></td>
<td align="left">
<font size="2" face="serif"> Before deduction of underwriting discounts and commissions and estimated expenses of the offering.</font></td>
</tr>
</table>
<table width="80%" border="0" align="center" cellpadding="0" cellspacing="0">
  <tr valign="top">
<td width="3%"><font size="2" face="serif">(2)</font></td>
<td align="left">
<font size="2" face="serif"> After deduction of underwriting discounts and commissions and estimated expenses of the offering.</font></td>
</tr>
</table>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table summarizes, on an as-adjusted basis, after giving effect to this offering (assuming no exercise of the underwriter&#146;s over-allotment option), the number of shares purchased from us, the total consideration paid and the average price per share paid by the existing stockholders and by the new investors at an assumed initial public offering price of $5.50 per share:</font></p>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
  <tr valign="top">
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td colspan="4" align="center"><font size="1" face="serif"><b>Shares<br>Purchased</b></font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td colspan="4" align="center"><font size="1" face="serif"><b>Total<br>Consideration</b></font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="center"><font size="1" face="serif"><b>Average <br>Price</b></font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="center"><font size="1" face="serif"><b>Number</b></font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="center"><font size="1" face="serif"><b>Percent</b></font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="center"><font size="1" face="serif"><b>Amount</b></font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="center"><font size="1" face="serif"><b>Percent</b></font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="center"><font size="1" face="serif"><b>Per Share</b></font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td></td>
<td></td>
<td><hr noshade size="1"></td>
<td><hr noshade size="1"></td>
<td></td>
<td><hr noshade size="1"></td>
<td><hr noshade size="1"></td>
<td></td>
<td><hr noshade size="1"></td>
<td><hr noshade size="1"></td>
<td></td>
<td><hr noshade size="1"></td>
<td><hr noshade size="1"></td>
<td></td>
<td><hr noshade size="1"></td>
<td><hr noshade size="1"></td>
<td></td>
</tr>
<tr valign="top">
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">Existing stockholders</font></td>
<td align="left" width="2%">&nbsp;</td>
<td width="1%" align="right">&nbsp;</td>
<td width="8%" align="right"><font size="2" face="serif">3,999,650</font></td>
<td width="2%" align="left">&nbsp;</td>
<td width="1%" align="right">&nbsp;</td>
<td width="11%" align="right"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;71.4</font></td>
<td width="2%" align="left"><font size="2" face="serif">%</font></td>
<td width="1%" align="right"><font size="2" face="serif">$</font></td>
<td width="8%" align="right"><font size="2" face="serif"> 871,887</font></td>
<td width="2%" align="left">&nbsp;</td>
<td width="1%" align="right">&nbsp;</td>
<td width="8%" align="right"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.0</font></td>
<td width="2%" align="left"><font size="2" face="serif">%</font></td>
<td width="1%" align="right"><font size="2" face="serif">$</font></td>
<td width="8%" align="right"><font size="2" face="serif"> .22</font></td>
<td width="2%" align="left">&nbsp;</td> </tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">New investors</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">1,600,000</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;28.6</font></td>
<td align="left"><font size="2" face="serif">%</font></td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">8,800,000</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;91.0</font></td>
<td align="left"><font size="2" face="serif">%</font></td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif"> 5.50</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td></td>
<td></td>
<td><hr noshade size="1"></td>
<td><hr noshade size="1"></td>
<td></td>
<td><hr noshade size="1"></td>
<td><hr noshade size="1"></td>
<td></td>
<td><hr noshade size="1"></td>
<td><hr noshade size="1"></td>
<td></td>
<td><hr noshade size="1"></td>
<td><hr noshade size="1"></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><div style="margin-left: 6%; text-indent: -3%"><font size="2" face="Times New Roman, Times, serif">Total</font></div><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">5,599,650</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;100.0</font></td>
<td align="left"><font size="2" face="serif">%</font></td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif"> 9,671,887</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">100.0</font></td>
<td align="left"><font size="2" face="serif">%</font></td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td></td>
<td></td>
<td><hr noshade size="2"></td>
<td><hr noshade size="2"></td>
<td></td>
<td><hr noshade size="2"></td>
<td><hr noshade size="2"></td>
<td></td>
<td><hr noshade size="2"></td>
<td><hr noshade size="2"></td>
<td></td>
<td><hr noshade size="2"></td>
<td><hr noshade size="2"></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
</table>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition, 800,000 shares of our common stock have been reserved for future issuance upon exercise of options to be granted pursuant to our 1998 Stock Option Plan and 160,000 shares of our common stock have been reserved for future issuance upon exercise of warrants to be granted to the underwriter upon completion of this offering.  The issuance of such shares of our common stock may result in further dilution to new investors.  </font></p>
<p align="center"><font face="serif" size="2">20</font></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<page>
<a name="p23"></a>
<p><a href="#contents"><font size="2">Back to Contents</font></a></p>

<p align="center"><font size="2" face="serif"><b>CAPITALIZATION</b></font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
    following table sets forth our capitalization as of July 31, 2004, on an actual
    basis and as adjusted to reflect the completion of this offering and the
    sale of 1,600,000 shares of common stock at an assumed initial public offering
    price of $5.50 per share, and after deducting underwriting discounts and
    commissions and the estimated offering expenses payable by us. The share
    information in this table is based on our shares of common stock outstanding
    as of July 31, 2004. This table does not include 800,000 shares of our common
    stock reserved for future issuance under our 1998 Stock Option Plan and 160,000
    shares of our common stock reserved for future issuance upon exercise of
    warrants to be granted to the
underwriter in connection with this offering.</font></p>

<table width="100%" cellspacing="0" cellpadding="0" border="0">
  <tr valign="top">
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td colspan="4" align="center"><font size="1" face="serif"><b>At July 31, 2004</b></font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td></td>
<td></td>
<td><hr noshade size="1"></td>
<td colspan="4"><hr noshade size="1"></td>
<td></td>
</tr>
<tr valign="top">
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="center"><font size="1" face="serif"><b>Actual</b></font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="center"><font size="1" face="serif"><b>As Adjusted(1)</b></font></td>
<td align="left">&nbsp;</td>
</tr>
  <tr valign="bottom">
    <td></td>
    <td></td>
    <td>
      <hr noshade size="1"></td>
    <td>
      <hr noshade size="1"></td>
    <td></td>
    <td>
      <hr noshade size="1"></td>
    <td>
      <hr noshade size="1"></td>
    <td></td>
</tr>
  <tr valign="bottom" bgcolor="#FFFFFF">
    <td align="left"><font size="2" face="serif">Short term debt:</font></td>
    <td width="2%" align="left">&nbsp;</td>
    <td width="1%" align="right">&nbsp;</td>
    <td width="8%" align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td width="2%" align="left">&nbsp;</td>
    <td width="1%" align="right">&nbsp;</td>
    <td width="8%" align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td width="2%" align="left">&nbsp;</td>
  </tr>
<tr valign="top" bgcolor="#ffffff">
<td align="left"><div style="margin-left: 6%; text-indent: -3%"><font size="2" face="serif">Current
    portion of term loan</font></div></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif"> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;84,000</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif"> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#150;</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><div style="margin-left: 6%; text-indent: -3%"><font size="2" face="serif">Current portion of obligations under capital lease</font></div></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">125,336</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">125,336</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#ffffff">
<td align="left"><div style="margin-left: 6%; text-indent: -3%"><font size="2" face="serif">Line of credit borrowings</font></div></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">2,895,661</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">1,368,661</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td></td>
<td></td>
<td><hr noshade size="1"></td>
<td><hr noshade size="1"></td>
<td></td>
<td><hr noshade size="1"></td>
<td><hr noshade size="1"></td>
<td></td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><div style="margin-left: 9%; text-indent: -3%"><font size="2" face="serif">Total short term debt</font></div></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">3,104,997</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">1,493,997</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td></td>
<td></td>
<td><hr noshade size="1"></td>
<td><hr noshade size="1"></td>
<td></td>
<td><hr noshade size="1"></td>
<td><hr noshade size="1"></td>
<td></td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">Long term debt:</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#ffffff">
<td align="left"><div style="margin-left: 6%; text-indent: -3%"><font size="2" face="serif">Term loan, net of current portion</font></div></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;189,000</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#150;</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td></td>
<td></td>
<td><hr noshade size="1"></td>
<td><hr noshade size="1"></td>
<td></td>
<td><hr noshade size="1"></td>
<td><hr noshade size="1"></td>
<td></td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">Other long term liabilities</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">39,000</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">39,000</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td></td>
<td></td>
<td><hr noshade size="1"></td>
<td><hr noshade size="1"></td>
<td></td>
<td><hr noshade size="1"></td>
<td><hr noshade size="1"></td>
<td></td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">Stockholders&#8217; equity:</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#ffffff">
<td align="left"><div style="margin-left: 6%; text-indent: -3%"><font size="2" face="serif">Preferred stock, $.001 per value, 10,000,000 shares authorized, no shares issued or outstanding</font></div></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">&#150;</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">&#150;</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><div style="margin-left: 6%; text-indent: -3%"><font size="2" face="serif">Common stock, $.001 par value, 30,000,000 shares authorized, 3,999,650 shares issued and outstanding actual, and 5,599,650 shares issued and outstanding as adjusted(2)</font></div></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">4,000</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">5,600</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#ffffff">
<td align="left"><div style="margin-left: 6%; text-indent: -3%"><font size="2" face="serif">Additional paid-in capital</font></div></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">867,887</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">8,206,287</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><div style="margin-left: 6%; text-indent: -3%"><font size="2" face="serif">Retained earnings</font></div></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">1,861,140</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">1,861,140</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td></td>
<td></td>
<td><hr noshade size="1"></td>
<td><hr noshade size="1"></td>
<td></td>
<td><hr noshade size="1"></td>
<td><hr noshade size="1"></td>
<td></td>
</tr>
<tr valign="top" bgcolor="#ffffff">
<td align="left"><font size="2" face="serif">Total stockholders&#8217; equity</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">2,733,027</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">10,073,027</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td></td>
<td></td>
<td><hr noshade size="1"></td>
<td><hr noshade size="1"></td>
<td></td>
<td><hr noshade size="1"></td>
<td><hr noshade size="1"></td>
<td></td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">Total capitalization</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif"> 6,066,024</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif"> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11,606,024</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td></td>
<td></td>
<td><hr noshade size="1"></td>
<td><hr noshade size="1"></td>
<td></td>
<td><hr noshade size="1"></td>
<td><hr noshade size="1"></td>
<td></td>
</tr>
</table>

<table width="100%" cellspacing="0" cellpadding="0" border="0">
  <tr valign="top">
    <td colspan="2"><hr align="left" width="25%" size="1" noshade></td>
  </tr>
  <tr valign="top">
    <td width="3%"><font size="2" face="serif">(1)</font></td>
    <td align="left"> <font size="2" face="serif"> Reflects completion of this
      offering, the sale of 1,600,000 shares of common stock and the application
      of the net proceeds from this offering after deducting underwriting discounts
      and commissions and the estimated offering expenses payable by us.</font></td>
  </tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
<td width="3%"><font size="2" face="serif">(2)</font></td>
<td align="left">
<font size="2" face="serif"> Does not include 800,000 shares of common stock reserved for issuance upon exercise of stock options and 160,000 shares of our common stock reserved for future issuance upon exercise of warrants to be granted to the underwriter upon completion of this offering.  Assumes no exercise of the underwriter&#146;s over-allotment option.</font></td>
</tr>
</table>

<p align="center"><font face="serif" size="2">21</font></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<page>
<a name="p24"></a>
<p><a href="#contents"><font size="2">Back to Contents</font></a></p>
<p align="center"><font size="2" face="serif"><b>DIVIDEND POLICY</b></font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We do not intend to pay dividends for the foreseeable future.  Under the current terms of our credit facility with Wells Fargo Business Credit, we are prohibited from paying cash dividends without the lender&#146;s written consent.  The payment of dividends in the future will depend upon our debt and equity structure, earnings and financial condition, need for capital in connection with possible future acquisitions and other factors, including economic conditions, regulatory restrictions and tax considerations.  We cannot guarantee that we will pay dividends or, if we pay dividends, the amount or frequency of these dividends.  </font></p>
<p align="center"><font face="serif" size="2">22</font></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<page>
<a name="p25"></a>
<p><a href="#contents"><font size="2">Back to Contents</font></a></p>
<p align="center"><font size="2" face="serif"><b>SELECTED FINANCIAL INFORMATION</b></font></p>

<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The selected financial data for the fiscal years ended October 31, 2003, 2002 and 2001 were derived from our fiscal financial statements audited by Lazar Levine &amp; Felix LLP for the respective periods.  The information for the nine months ended July 31, 2004 and 2003 was derived from unaudited financial data but, in the opinion of management, reflects all adjustments necessary for a fair presentation of the results for such periods.  The selected financial and other data presented below should be read in conjunction with, and is qualified in its entirety by, our audited financial statements and related notes appearing in this prospectus on page F-1.  See &#8220;Management&#8217;s Discussion and Analysis of
Financial Condition and Results of Operations&#8221; for a discussion of our financial statements for the years ended October 31, 2003 and 2002 for the nine months ended July 31, 2004 and 2003.</font></p>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td colspan="8" align="center"><font size="1" face="serif"><b>For the Year Ended</b></font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td colspan="4" align="center"><font size="1" face="serif"><b>For the Nine Months Ended</b></font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td colspan="8" align="center"><hr noshade size="1"></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td colspan="4" align="center"><hr noshade size="1"></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="center"><font size="1" face="serif"><b>October 31,<br>2003</b></font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="center"><font size="1" face="serif"><b>October 31,<br>2002</b></font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="center"><font size="1" face="serif"><b>October 31,<br>2001</b></font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="center"><font size="1" face="serif"><b>July 31,<br>2004</b></font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="center"><font size="1" face="serif"><b>July 31,<br>2003</b></font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td></td>
<td></td>
<td><hr noshade size="1"></td>
<td><hr noshade size="1"></td>
<td></td>
<td><hr noshade size="1"></td>
<td><hr noshade size="1"></td>
<td></td>
<td><hr noshade size="1"></td>
<td><hr noshade size="1"></td>
<td></td>
<td><hr noshade size="1"></td>
<td><hr noshade size="1"></td>
<td></td>
<td><hr noshade size="1"></td>
<td><hr noshade size="1"></td>
<td></td>
</tr>

<tr valign="top">
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td colspan="13" align="center"><font size="1" face="serif"><b>(Dollars in thousands, except per share data)</b></font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif"><b>Income Statement Data</b>:</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
</tr>

<tr valign="top" bgcolor="#ffffff">
<td align="left"><font size="2" face="serif">Net sales</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif"> 20,240</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif"> 17,433</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif"> 20,327</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif"> 18,578</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif"> 14,486</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">Cost of sales</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">15,373</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">12,453</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">16,065</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">13,893</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">10,887</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td></td>
<td></td>
<td><hr noshade size="1"></td>
<td><hr noshade size="1"></td>
<td></td>
<td><hr noshade size="1"></td>
<td><hr noshade size="1"></td>
<td></td>
<td><hr noshade size="1"></td>
<td><hr noshade size="1"></td>
<td></td>
<td><hr noshade size="1"></td>
<td><hr noshade size="1"></td>
<td></td>
<td><hr noshade size="1"></td>
<td><hr noshade size="1"></td>
<td></td>
</tr>
<tr valign="top" bgcolor="#ffffff">
<td align="left"><font size="2" face="serif">Gross profit</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">4,867</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">4,980</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">4,262</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">4,685</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">3,599</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">Operating expenses</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">3,993</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">3,505</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">3,162</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">3,462</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">2,761</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td></td>
<td></td>
<td><hr noshade size="1"></td>
<td><hr noshade size="1"></td>
<td></td>
<td><hr noshade size="1"></td>
<td><hr noshade size="1"></td>
<td></td>
<td><hr noshade size="1"></td>
<td><hr noshade size="1"></td>
<td></td>
<td><hr noshade size="1"></td>
<td><hr noshade size="1"></td>
<td></td>
<td><hr noshade size="1"></td>
<td><hr noshade size="1"></td>
<td></td>
</tr>
<tr valign="top" bgcolor="#ffffff">
<td align="left"><font size="2" face="serif">Income from operations</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">874</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">1,475</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">1,100</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">1,223</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">838</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">Other income (expense) </font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">(136</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">(162</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">(269</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">(128</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">(99</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
</tr>
<tr valign="top">
<td></td>
<td></td>
<td><hr noshade size="1"></td>
<td><hr noshade size="1"></td>
<td></td>
<td><hr noshade size="1"></td>
<td><hr noshade size="1"></td>
<td></td>
<td><hr noshade size="1"></td>
<td><hr noshade size="1"></td>
<td></td>
<td><hr noshade size="1"></td>
<td><hr noshade size="1"></td>
<td></td>
<td><hr noshade size="1"></td>
<td><hr noshade size="1"></td>
<td></td>
</tr>
<tr valign="top" bgcolor="#ffffff">
<td align="left"><font size="2" face="serif">Income before income taxes</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">738</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">1,313</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">831</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">1,095</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">739</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">Provision for income taxes</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">116</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">558</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">313</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">482</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">298</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td></td>
<td></td>
<td><hr noshade size="1"></td>
<td><hr noshade size="1"></td>
<td></td>
<td><hr noshade size="1"></td>
<td><hr noshade size="1"></td>
<td></td>
<td><hr noshade size="1"></td>
<td><hr noshade size="1"></td>
<td></td>
<td><hr noshade size="1"></td>
<td><hr noshade size="1"></td>
<td></td>
<td><hr noshade size="1"></td>
<td><hr noshade size="1"></td>
<td></td>
</tr>
<tr valign="top" bgcolor="#ffffff">
<td align="left"><font size="2" face="serif">Net income</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif"> 622</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif"> 755</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif"> 518</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif"> 613</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif"> 441</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td></td>
<td></td>
<td><hr noshade size="2"></td>
<td><hr noshade size="2"></td>
<td></td>
<td><hr noshade size="2"></td>
<td><hr noshade size="2"></td>
<td></td>
<td><hr noshade size="2"></td>
<td><hr noshade size="2"></td>
<td></td>
<td><hr noshade size="2"></td>
<td><hr noshade size="2"></td>
<td></td>
<td><hr noshade size="2"></td>
<td><hr noshade size="2"></td>
<td></td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">Net income  per share &#150; basic and diluted</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif"> .16</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif"> .19</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif"> .13</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif"> .15</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif"> .11</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#ffffff">
<td align="left"><font size="2" face="serif">Book value per share</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif"> .53</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif"> .37</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif"> .19</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif"> .68</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif"> .48</font></td>
<td align="left">&nbsp;</td>
</tr>
</table>
<br><br>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
  <tr align="center" valign="bottom">
    <td><font size="1" face="serif">&nbsp;</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td colspan="7"><font size="1" face="serif"><b>At</b></font> <font size="1" face="serif"><b>October
      31,</b></font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td colspan="4"><font size="1" face="serif"><b>At July 31, 2004</b></font></td>
    <td>&nbsp;</td>
</tr>
  <tr align="center" valign="bottom">
    <td><font size="1" face="serif">&nbsp;</font></td>
    <td>&nbsp;</td>
    <td colspan="8"><hr noshade size="1"></td>
    <td>&nbsp;</td>
    <td colspan="5"><hr noshade size="1"></td>
    <td>&nbsp;</td>
</tr>

  <tr align="center" valign="bottom">
    <td><font size="1" face="serif">&nbsp;</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td><font size="1" face="serif"><b>2003</b></font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td><font size="1" face="serif"><b>2002</b></font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td><font size="1" face="serif"><b>2001</b></font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td><font size="1" face="serif"><b>Actual</b></font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td><font size="1" face="serif"><b>As Adjusted(1)</b></font></td>
    <td>&nbsp;</td>
</tr>
  <tr align="center" valign="bottom">
    <td><font size="1" face="serif">&nbsp;</font></td>
    <td>&nbsp;</td>
    <td colspan="2"><hr noshade size="1"></td>
    <td>&nbsp;</td>
    <td colspan="2"><hr noshade size="1"></td>
    <td>&nbsp;</td>
    <td colspan="2"><hr noshade size="1"></td>
    <td>&nbsp;</td>
    <td colspan="2"><hr noshade size="1"></td>
    <td>&nbsp;</td>
    <td colspan="2"><hr noshade size="1"></td>
    <td>&nbsp;</td>
</tr>

  <tr align="center" valign="bottom">
    <td><font size="1" face="serif">&nbsp;</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td colspan="13"><font size="1" face="serif"><b>(Dollars in thousands)</b></font></td>
    <td>&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif"><b>Balance Sheet Data</b>:</font></td>
<td align="left" width="2%">&nbsp;</td>
<td width="1%" align="right">&nbsp;</td>
<td width="8%" align="left"><font size="2" face="serif">&nbsp;</font></td>
<td width="2%" align="left">&nbsp;</td>
<td width="1%" align="right">&nbsp;</td>
<td width="8%" align="left"><font size="2" face="serif">&nbsp;</font></td>
<td width="2%" align="left">&nbsp;</td>
<td width="1%" align="right">&nbsp;</td>
<td width="8%" align="left"><font size="2" face="serif">&nbsp;</font></td>
<td width="2%" align="left">&nbsp;</td>
<td width="1%" align="right">&nbsp;</td>
<td width="8%" align="left"><font size="2" face="serif">&nbsp;</font></td>
<td width="2%" align="left">&nbsp;</td>
<td width="1%" align="right">&nbsp;</td>
<td width="8%" align="left"><font size="2" face="serif">&nbsp;</font></td>
<td width="2%" align="left">&nbsp;</td>
</tr>

<tr valign="top" bgcolor="#ffffff">
<td align="left"><font size="2" face="serif">Total assets</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif"> 7,035</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif"> 6,042</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif"> 5,713</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif"> 8,387</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif"> 13,927</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">Short-term debt</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif"> 2,076</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif"> 2,483</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif"> 2,090</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif"> 5,426</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif"> 3,815</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#ffffff">
<td align="left"><font size="2" face="serif">Long-term debt</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif"> 2,839</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif"> 2,061</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif"> 2,880</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif"> 228</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif"> 39</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">Total liabilities</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif"> 4,915</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif"> 4,544</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif"> 4,970</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif"> 5,654</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif"> 3,854</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#ffffff">
<td align="left"><font size="2" face="serif">Stockholders&#8217; equity</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif"> 2,120</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif"> 1,498</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif"> 743</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif"> 2,733</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif"> 10,073</font></td>
<td align="left">&nbsp;</td>
</tr>
</table>

<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
<td width="3%"><font size="2" face="serif">(1)</font></td>
<td align="left">
<font size="2" face="serif"> Adjusted to give effect to the receipt and application of the net proceeds of approximately $7,340,000 from the sale of  shares of common stock offered by this prospectus.</font></td>
</tr>
</table>
<p align="center"><font face="serif" size="2">23</font></p>
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<p><a href="#contents"><font size="2">Back to Contents</font></a></p>
<p align="center"><font size="2" face="serif"><b>MANAGEMENT&#146;S DISCUSSION
  AND ANALYSIS OF FINANCIAL<br>
  CONDITION AND RESULTS OF OPERATIONS</b></font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<i>The following discussion contains forward-looking statements and involves numerous risks and uncertainties, including, but not limited to, those described in the &#147;Risk Factors&#148; section of this prospectus.  Actual results may differ materially from those contained in any forward-looking statements.  The following discussion should be read in conjunction with &#147;Selected Financial Data&#148; and our financial statements and the notes thereto included elsewhere in this prospectus.</i></font></p>
<p align="left"><font size="2" face="serif"><b>Overview</b></font></p>

<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are an integrated wholesale coffee roaster and dealer in the United States and one of the few coffee companies that offers a broad array of coffee products across the entire spectrum of consumer tastes, preferences and price points.  As a result, we believe that we are well positioned to increase our profitability and endure potential coffee price volatility throughout varying cycles of the coffee market and economic conditions.</font></p>

<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our operations have primarily focused on the following areas of the coffee industry:</font></p>
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<td width="3%"></td>
<td width="3%">
<font size="2" face="serif">&#149;</font></td>
<td>
<font size="2" face="serif">the sale of wholesale specialty green coffee;</font></td>
</tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
  <tr valign="top">
    <td></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td width="3%"></td>
    <td width="3%"> <font size="2" face="serif">&#149;</font></td>
    <td> <font size="2" face="serif">the roasting, blending, packaging and sale
      of private label coffee; and</font></td>
  </tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
  <tr valign="top">
    <td></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td width="3%"></td>
    <td width="3%"> <font size="2" face="serif">&#149;</font></td>
    <td> <font size="2" face="serif">the roasting, blending, packaging and sale
      of our seven brands of coffee. </font></td>
  </tr>
</table>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our operating results are affected by a number of factors including:</font></p>
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<td width="3%"></td>
<td width="3%">
<font size="2" face="serif">&#149;</font></td>
<td>
<font size="2" face="serif">the level of marketing and pricing competition from existing or new competitors in the coffee industry; </font></td>
</tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
  <tr valign="top">
    <td></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td width="3%"></td>
    <td width="3%"> <font size="2" face="serif">&#149;</font></td>
    <td> <font size="2" face="serif">our ability to retain existing customers
      and attract new customers;</font></td>
  </tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
  <tr valign="top">
    <td></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td width="3%"></td>
    <td width="3%"> <font size="2" face="serif">&#149;</font></td>
    <td> <font size="2" face="serif">fluctuations in purchase prices and supply
      of green coffee and in the selling prices of our products; and</font></td>
  </tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
  <tr valign="top">
    <td></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td width="3%"></td>
    <td width="3%"> <font size="2" face="serif">&#149;</font></td>
    <td> <font size="2" face="serif">our ability to manage inventory and fulfillment
      operations and maintain gross margins. </font></td>
  </tr>
</table>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
    net sales are driven primarily by the success of our sales and marketing
    efforts and our ability to retain existing customers and attract new customers.
    For this reason, we have made the strategic decision to invest in measures
    that will increase net sales. During the three months ended April 30, 2004,
    we acquired certain assets of Premier Roasters. See &#8220;&#150; Overview &#150; Recent
    Developments.&#8221;  We also hired a West Coast Brand Manager to market
    our S&amp;W brand and to increase sales of S&amp;W coffee to new customers
    and increased attendance at trade shows to promote our food service and private
    label coffee business. In the last twelve months, we also hired third party
    marketing specialists to increase the sale of our branded coffee through
    label redesigns and new distribution. As a result of these efforts, net sales
    increased in our specialty </font></p>

<p>&nbsp;</p>
<p align="center"><font size="2" face="serif">24</font></p>
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<p align="left"><font size="2" face="serif">green coffee, private label and branded coffee
    business lines in both dollars and pounds sold since the date of the acquisition.
    In addition, we increased the number of our customers in all three areas.</font></p>

<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our net sales are also affected by the price of green coffee.  We import green coffee from Colombia, Mexico, Kenya, Brazil and Uganda.  The supply and price of coffee beans are subject to volatility and are influenced by numerous factors which are beyond our control.  For example, coffee crops in Brazil, which produces one-third of the world&#146;s green coffee, are susceptible to frost in June and July and drought in September, October and November.  However, because we purchase coffee from a number of countries and are able to freely substitute one country&#146;s coffee for another in our products, price fluctuations in one country generally have not had a material impact on the price we pay for coffee.
Accordingly, price fluctuations in one country generally have not had a material effect on our results of operations, liquidity and capital resources.  Because we generally have been able to pass green coffee price increases through to customers, increased prices of green coffee generally result in increased net sales.  However, increased green coffee prices also generally result in increased cost of sales.  Cost of sales consists primarily of the cost of green coffee and packaging materials and realized and unrealized gains or losses on hedging activity.  </font></p>

<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Historically,
    we have used short-term coffee futures and options contracts primarily for
    the purpose of partially hedging and minimizing the effects of changing green
    coffee prices and to reduce our cost of sales. In addition, during the latter
    half of fiscal 2000, we began to acquire futures contracts with longer terms,
    generally three to six months, primarily for the purpose of guaranteeing
    an adequate supply of green coffee at favorable prices. Although the use
    of these derivative financial instruments has enabled us to mitigate the
    effect of changing prices, no strategy can entirely eliminate pricing risks
    and we generally remain exposed to loss when prices decline significantly
    in a short period of time, and we generally remain exposed to supply risk
    in the event of non-performance by the counter-parties to any futures contracts.
    If the hedges that we enter do not adequately offset the risks of coffee
    bean price volatility or our hedges result in losses, our cost of sales may
increase, resulting in a decrease in profitability.  </font></p>

<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<i>Recent Developments.</i>  In February 2004, we acquired certain assets of Premier Roasters, a roaster-dealer located in La Junta, Colorado, for $825,000.  The assets purchased by us include all of the operating equipment located at Premier Roasters&#146; La Junta and Rocky Ford, Colorado locations, as well as all labels for all of Premier Roasters&#146; coffee products.  In connection with the acquisition of these assets, we reached an agreement with the City of La Junta, Colorado on a 20-year lease for a 50,000 square foot facility in La Junta.  We are using the assets that we purchased to expand our integrated wholesale coffee roaster and dealer operations to the Western United States.  In connection with this
transaction, we also entered into a licensing agreement with Del Monte Corporation for the exclusive right to use the S&amp;W and IL CLASSICO trademarks, including Premium, Premium Decaf, French Roast, Colombian, Colombian Decaf, Swiss Water Decaf, Kona, and Mellow&#146;d Roast lines, in connection with the production, manufacture and sale of ground coffee for distribution to retail customers in the United States and certain other countries approved by Del Monte Corporation.</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
    believe that our new La Junta, Colorado facility will allow us to grow our
    business and increase sales to new and existing customers in the Western
United States. By operating out</font></p>

<p>&nbsp;</p>
<p align="center"><font face="serif" size="2">25</font></p>
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<p align="left"><font size="2" face="serif"> of two facilities, we will now be
able to compete aggressively throughout the United States as we have gained new economies of scale in both manufacturing and logistical efficiencies which were unavailable in the past while operating solely out of our New York facility.  In addition, we intend to broaden our customer base and increase penetration with existing customers by expanding the S&amp;W label from a well-known brand on the West coast to a well-known brand throughout the entire continental United States.  </font></p>
<p align="left"><font size="2" face="serif"><b>Critical Accounting Policies and Estimates</b></font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Estimates are used for, but not limited to, the accounting for the allowance for doubtful accounts, inventories, income taxes and loss contingencies. Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Actual results could differ from these estimates under different assumptions or conditions.</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We believe the following critical accounting policies, among others, may be impacted significantly by judgment, assumptions and estimates used in the preparation of the financial statements:</font></p>
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<td width="3%"><font size="2" face="serif">&nbsp;</font></td>
<td width="3%"><font size="2" face="serif">&#149;</font></td>
<td align="left">
<font size="2" face="serif"> We recognize revenue in accordance with Securities and Exchange Commission Staff Accounting Bulletin No. 101, &#147;Revenue Recognition in Financial Statements&#148; (&#147;SAB 101&#148;). Under SAB 101, revenue is recognized at the point of passage to the customer of title and risk of loss, when there is persuasive evidence of an arrangement, the sales price is determinable, and collection of the resulting receivable is reasonably assured. We generally recognize revenue at the time of shipment. Sales are reflected net of discounts and returns.</font></td>
</tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td width="3%"><font size="2" face="serif">&nbsp;</font></td>
    <td width="3%"><font size="2" face="serif">&#149;</font></td>
    <td align="left"> <font size="2" face="serif"> Our allowance for doubtful
      accounts is maintained to provide for losses arising from customers&#146;
      inability to make required payments. If there is deterioration of our customers&#146;
      credit worthiness and/or there is an increase in the length of time that
      the receivables are past due greater than the historical assumptions used,
      additional allowances may be required.</font></td>
  </tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td width="3%"><font size="2" face="serif">&nbsp;</font></td>
    <td width="3%"><font size="2" face="serif">&#149;</font></td>
    <td align="left"> <font size="2" face="serif"> Inventories are stated at cost
      (determined on an average cost basis). Based on our assumptions about future
      demand and market conditions, inventories are written-down to market value.
      If our assumptions about future demand change and/or actual market conditions
      are less favorable than those projected, additional write-downs of inventories
      may be required.</font></td>
  </tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td width="3%"><font size="2" face="serif">&nbsp;</font></td>
    <td width="3%"><font size="2" face="serif">&#149;</font></td>
    <td align="left"> <font size="2" face="serif"> We account for income taxes
      in accordance with Statement of Financial Accounting Standards No. 109,
      &#147;Accounting for Income Taxes&#148; (&#147;SFAS No. 109&#148;).
      Under SFAS No. 109, deferred tax assets and liabilities are determined based
      on the liabilities, using enacted tax rates in effect for the year in which
      the differences are expected to reverse. Deferred tax assets are reflected
      on the</font></td>
  </tr>
</table>
<p>&nbsp;</p>
<p align="center"><font face="serif" size="2">26</font></p>
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  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td width="3%"><font size="2" face="serif">&nbsp;</font></td>
    <td width="3%"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left"> <font size="2" face="serif">balance sheet when it is determined that it is more likely than not
      that the asset will be realized.</font></td>
  </tr>
</table>

<p align="left"><font size="2" face="serif"><b>Comparison of Results of Operations</b></font></p>

<p align="left"><font size="2" face="serif"><b>Nine Months Ended July 31, 2004 Compared to the Nine Months Ended July 31, 2003</b></font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<i>Net Income</i>.  Net income increased $171,736, or 39.0%, to $612,548 or $.15 per share for the nine months ended July 31, 2004 compared to $440,812 or $.11 per share for the nine months ended July 31, 2003.  The increase in net income primarily reflects increased net sales, increased margins on our branded coffee and private label coffee products and increased margins on specialty green coffee sales.  </font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<i>Net Sales.</i>  Net sales totaled $18,577,528 for the nine months ended July 31, 2004, an increase of $4,091,720 or 28.2% from $14,485,808 for the nine months ended July 31, 2003.  The increase in net sales reflects initial sales of $601,573 under our license of the S&amp;W brand which we signed in February 2004, $510,803 from an increase in pounds sold of private label coffee to existing customers and $93,328 from an increase in pounds sold of branded coffees to existing customers.  Sales of our Caf&eacute; Caribe brand, as measured by Information Resources Incorporated data, increased approximately 25% over the comparable 2003 period due in part to the efforts of our third party marketing specialists through
label redesigns and new distribution.  The increase in net sales also reflects increased sales of specialty green coffee in the amount of $2,882,016.  The number of our customers in the specialty green coffee area grew approximately 11.1% to 272 customers.  These customers are predominately independent gourmet/specialty roasters, some of whom own their own retail outlets.  Sales to new customers in this area historically start slowly because many of these companies are start up ventures.  Because the specialty green coffee area is the fastest growing segment of the coffee market, we believe that our customer base and sales will grow in this area.  The increase in the price of the underlying commodity (coffee) also contributed to the increase in net sales.</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<i>Cost of Sales.</i>  Cost of sales for the nine months ended July 31, 2004 was $13,892,695 or 74.8% of net sales, as compared to $10,866,840 or 75.0% of net sales for the nine months ended July 31, 2003.  Cost of sales consists primarily of the cost of green coffee and packaging materials and realized and unrealized gains or losses on hedging activity.  The increase in cost of sales reflects a $419,731 increase in packaging costs associated with the increase in net sales and $2,601,546 from higher green coffee prices during the period as prices increased $.10 per pound year to year, partially offset by net gains on future contracts.  As the price of coffee is cyclical and volatile and subject to many factors,
including weather, politics and economics, we are unable to predict the purchase price of green coffee for fiscal 2004.  We began to acquire futures contracts with longer terms (generally three to six months) primarily for the purpose of guaranteeing an adequate supply of green coffee at favorable prices beginning in the latter half of fiscal 2000 and continuing through fiscal 2004.  As the price of specialty green coffee beans continued to increase, we used our favorable inventory position to increase our margins.  We had net gains on futures contracts of $720,297 for the nine months ended July 31, 2004 compared to $622,034 for the comparable period in 2003.  The use of these derivative financial instruments has enabled us to mitigate the effect of changing prices, to increase our margins
as coffee prices have increased and to be more competitive with our pricing.</font></p>

<p>&nbsp;</p>
<p align="center"><font face="serif" size="2">27</font></p>
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<p><a name="p30"></a> </p>

<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<i>Gross Profit.</i>  Gross profit for the nine months ended July 31, 2004 was $4,684,833, an increase of $1,085,865 or 30.2%, from $3,598,968 for the nine months ended July 31, 2003.  Gross profit as a percentage of net sales increased by 0.4% to 25.2% for the nine months ended July 31, 2004 from 24.8% for the same period in 2003.  Gains on futures contracts, reduced pricing pressure from national brands and new business with favorable pricing terms allowed us to increase our margins as the price of green coffee has increased.  As previously discussed, we believe that our favorable inventory position will allow us to increase our sales and ultimately our margins if coffee prices continue to rise.</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<i>Operating Expenses.</i>  Total operating expenses increased $700,208 or 25.4% to $3,461,534 for the nine months ended July 31, 2004 from $2,761,326 for the same period in 2003 due to increases in selling and administrative expenses and officers&#8217; salaries.  Selling and administrative expenses increased $642,394 or 26.2% to $3,091,110 for the nine months ended July 31, 2004 from $2,448,716 for the same period in 2003.  The increase in selling and administrative expenses reflects several factors, including increases of  $231,724 in shipping expenses, $140,686 in office salaries, $81,223 in sales commissions, $48,953 in rent and $43,118 in utilities.    </font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We acquired certain assets of Premier Roasters and entered into a lease to operate from our new La Junta facility in February 2004.  Prior to commencing operations in La Junta, we incurred expenses associated with repairing and maintaining equipment located at the facility so that such equipment could meet our need and our roasting and blending requirements.  We also incurred expenses associated with the hiring of 25 new employees at the facility.  In addition, because many S&amp;W brand customers had previously placed orders with Premier Roasters, they initially did not require additional inventory to be shipped.  As a result, sales out of our La Junta facility were initially slower than expected.  However, in April
2004, these customers began to replace their existing inventories of S&amp;W brand products, resulting in increased sales.  Although we will continue to incur increased operating expenses from operating out of two facilities, we expect to gain new economies of scale in both manufacturing and logistical efficiencies which were unavailable in the past while operating solely out of our New York facility.  We believe that this will allow us to compete aggressively throughout the United States.  </font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The increase in shipping expenses reflects the increase in pounds of coffee sold, higher rates caused by increased fuel surcharges and gasoline prices, and the addition of new customers during the period.  The increase in commissions reflects the hiring of a West Coast Brand Manager to market our S&amp;W brand as well as increases in sales of S&amp;W coffee to new customers.  We believe that these changes reflect our strategic decision to invest in measures that will increase net sales on a present and future basis.  The increase in office salaries reflects normal salary increases to non-officer employees in our New York facility and the addition of new personnel in our Colorado facility.  The increases in rent and
utilities reflect the increased costs of operating two facilities.  </font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Officers&#8217; salaries
    increased $57,814 to $370,424 for the nine months ended July 31, 2004 from
    $312,610 for the nine months ended July 31, 2003. The increase was due to
salary increases for senior officers.</font></p>

<p>&nbsp;</p>
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<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<i>Other Expense.</i> Other
    expense increased $30,121 or 30.6% from $98,530 for the nine months ended
    July 31, 2003 to $128,651 for the nine months ended July 31, 2004. The increase
    is attributable to increased interest expense due to the higher balance in
    outstanding borrowings under our credit facility for the nine months ended
    July 31, 2004 compared to 2003 due to higher inventory levels necessitated
    by the operation of two facilities. Rates of interest on our outstanding
    borrowings are tied to the prime rate. See &#8220;&#150;Liquidity and Capital
Resources.&#8221;</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<i>Income Before Taxes.</i>  We had income of $1,094,648 before income taxes for the nine months ended July 31, 2004 compared to income of $739,112 before income taxes for the nine months ended July 31, 2003.  The increase was attributable primarily to improved margins on the sale of our private label, branded and specialty green coffee products due to a favorable inventory position as coffee prices increased.</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<i>Income Taxes</i>.  Our provision for income taxes for the nine months ended July 31, 2004 totaled $482,100 compared to $298,300 for the nine months ended July 31, 2003 as a result of increased income before taxes.</font></p>
<p align="left"><font size="2" face="serif"><b>Year Ended October 31, 2003 (Fiscal 2003) Compared to the Year Ended October 31, 2002 (Fiscal 2002) </b></font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<i>Net Income.</i>  Net income decreased $133,293 to $622,082 or $.16 per share for the year ended October 31, 2003 from $755,375, or $.19 per share, for the year ended October 31, 2002.  The decrease in net income primarily reflects the increase in operating expenses and the increase in cost of goods sold as we focused on increasing market share in order to capitalize on increased prices in the future.</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<i>Net
      Sales.</i>  Net
    sales totaled $20,239,867 for the year ended October 31, 2003, an increase
    of $2,807,125 or 16.1% from $17,432,742 for the year ended October 31, 2002.
    The increase in net sales reflected an increase in coffee pounds sold from
    16.1 million pounds in 2002 to 17.4 million pounds in 2003. The increase
    in pounds of coffee sold was the result of increased sales of our private
    label coffees in the amount of $633,262 to current and new customers and
    an increase of $175,154 in the sales of our branded products. The increase
    in net sales also reflects increased sales of specialty green coffee in the
    amount of $500,799. The
    number of our customers in the specialty green coffee area grew approximately
    8.9% to 245 during the year ended October 31, 2003. These customers are predominately
    independent gourmet/specialty roasters, some of whom own their own retail
    outlets. Sales to new customers in this area historically start slowly because
    many of these companies are start-up ventures. Since management believes
    that the specialty green coffee area is the fastest growing segment of the
    coffee market, we believe that our customer base and sales will expand in
    this area. We also believe that historically low coffee prices will continue
    to encourage consumers to purchase higher quality specialty coffee relative
    to supermarket brands. </font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
    sales prices decreased steadily throughout fiscal 2002 due to the decline
    in the price of green coffee. Commencing in late 1998, the purchase price
    of green coffee began a decline that, with the exception of brief price surges,
    continued through August 2002. Declines in green coffee purchase prices eventually
    led to declines in selling prices. Sales prices of products which use commodity
coffee react fairly quickly to changes in green coffee purchase prices. Specialty </font></p>

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<p align="left"><font size="2" face="serif">green coffee sales prices tend to
    react more slowly to changes in purchase prices because demand for specialty
    coffee is less price sensitive. We also experienced some pricing pressure
    in the private label area as national brands cut their prices in order to
    increase market share. The decrease in national brand prices made private
    label coffee less attractive to consumers compared to these national brands.
    However, the price of green coffee began to increase in the last two months
    of fiscal 2002 and we believe further increases are possible. If this does
    occur, national and regional brands will begin either decreasing their levels
    of promotion or initiating price increases to cover the added expense of
    higher priced green coffee. Based on this, we believe that pricing pressure
    will decrease in fiscal 2004, allowing for both an increase in private label
sales and higher prices received for our products.  </font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<i>Cost
      of Sales.</i>  Cost of sales for the year ended October 31, 2003 was $15,373,127,
      or 76.0% of net sales, as compared to $12,452,713 or 71.4% of net sales
      for the year ended October 31, 2002. Cost of sales consists primarily of
      the cost of green coffee and packaging materials and realized and unrealized
      gains or losses on hedging activity. The increase in cost of sales consisted
      primarily of an increase in green coffee purchase prices of approximately
      $2.5 million.
      As the price
      of coffee is cyclical and volatile and subject to many factors, including
      weather, politics and economics, we are unable to predict the purchase
      price of green coffee for fiscal 2004. We began to acquire futures contracts
      with longer terms (generally three to six months) primarily for the purpose
      of guaranteeing an adequate supply of green coffee at favorable prices
      beginning in the latter half of fiscal 2000 and continuing through fiscal
      2003. We had net gains on future contracts of $868,669 for the year ended
      October 31, 2003 compared to gains of $778,410 for the year ended October
      31, 2002. The use of these derivative financial instruments has enabled
      us to mitigate the effect of changing prices although we generally remain
      exposed to loss when prices surge significantly in a short period of time
      and remain at higher levels, preventing us from obtaining inventory at
      favorable prices. We believe that our favorable inventory position will
      allow us to increase our sales
and near term margins if coffee prices continue to rise.  </font></p>

<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<i>Gross Profit.</i>  Our gross profit in fiscal 2003 was $4,866,740, a decrease of $113,289, or 2.3% from $4,980,029 for the year ended October 31, 2002.  Gross profit as a percentage of net sales decreased by 4.6% to 24.0% in fiscal 2003 from 28.6% in fiscal 2002.  Margins decreased primarily due to pricing pressure from national brands which caused us to increase marketing efforts to maintain sales.</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<i>Operating Expenses.</i>  Total operating expenses increased $487,561, or 13.9%, to $3,992,325 in fiscal 2003 from $3,504,764 in fiscal 2002 due to increases in selling and administrative expenses, including shipping, and officers&#146; salaries, partially offset by a decrease in professional fees.  Officers&#146; salaries were $490,860 in fiscal 2003, an increase of $47,638 from $443,222 for the year ended October 31, 2002.  Selling and administrative expenses increased $439,923 during the period.  This increase is mainly attributable to increases of $213,845 in office salaries, $206,115 in shipping expenses, $130,599 in sales commissions, $45,912 in depreciation expense, and $37,232 in travel expenses,
partially offset by a decrease of $219,363 in professional fees.  </font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
    increase in commissions and travel expenses reflects the hiring of additional
    sales personnel and increased attendance at trade shows to promote our food
service and private label </font></p>
<p>&nbsp;</p>
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<p>
</p>
<p align="left"><font size="2" face="serif">coffee business. The increase in
    shipping expenses reflects the increase in pounds of coffee sold, higher
    rates caused by increased
    fuel surcharges and gasoline prices, and the addition of new customers during
    the period. We believe that these changes reflect our strategic decision
    to invest in measures that will increase net sales on a present and future
    basis. The increase in office salaries reflects normal salary increases to
    non-officer employees in our New York facility and the addition of new sales
    personnel. We expect advertising and promotional expenses to increase in
    the future as we continue to increase our participation in national and regional
    shows
    to promote our brands and our private label products. As a percentage of
    net sales, total operating expenses decreased 0.4% from 20.1% for the year
    ended October 31, 2002 to 19.7% for the year ended October 31, 2003. This
    change reflects the fact that selling and administrative expenses, in total,
increased proportionate to the increase in sales.</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<i>Interest Expense.</i>  Interest
    expense decreased $34,071, or 18.9%, from $180,678 for the year ended October
    31, 2002 to $146,607 for the year ended October 31, 2003. Substantially all of
	this decrease was attributable to lower interest rates on outstanding
    borrowings. Rates of interest on our outstanding borrowings are tied to the
    prime rate. As the prime rate declined from the prior period, the rate of
interest payable on our outstanding borrowings also declined. See &#147;&#150;Liquidity and Capital Resources.&#148;</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<i>Net Income Before Taxes.</i>  We had income before taxes of $738,448 in fiscal 2003 compared to income before taxes of $1,313,095 in fiscal 2002.  The decrease was primarily attributable to the increase of $487,561 in operating expenses and the increase of $2,920,414 in cost of goods sold as we focused on increasing market share in order to capitalize on increased prices in the future, offset by a $2,807,125 increase in net sales.</font></p>

<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<i>Income Taxes.</i>  Our provision for income taxes for the year ended October 31, 2003 totaled $116,366 compared to $557,720 for the year ended October 31, 2002.  The decrease was primarily attributable to the decrease in income before taxes for the 2003 fiscal year.</font></p>
<p align="left"><font size="2" face="serif"><b>Liquidity and Capital Resources</b></font></p>

<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
    of July 31, 2004, we had working capital of $691,182 which represented a $2,672,014
    decrease from our working capital of $3,363,196 as of October 31, 2003, and
    total stockholders&#8217; equity of $2,733,027, which increased by $612,548
    from our total stockholders&#8217; equity of $2,120,479 as of October 31,
    2003. Our working capital decreased primarily due to the recategorization
    of the outstanding balance under our line of credit to short-term liabilities
    (liabilities due and payable in less than one year). The outstanding balance
    under the line of credit was classified as short-term debt in our July 31,
    2004 balance sheet since the agreement expires in November 2004, but was
    classified as long-term debt in our October 31, 2003 balance sheet. At July
    31, 2004, the outstanding balance on our line of credit was $2,895,661 compared
    to $2,376,066 at October 31, 2003. This decrease in working capital was partially
    offset by a $994,281 increase in inventories at July 31, 2004 compared to
    October 31, 2003.</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
    have a credit facility with Wells Fargo Business Credit. The credit facility
    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 $750,000
    based on eligible equipment. The line of credit provides for borrowings of
up to 85% of our eligible trade accounts receivable and 60% of </font></p>

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<p align="left"><font size="2" face="serif">eligible inventories.
    On October 1, 2002, we extended our credit facility for an additional two
    years to November 20, 2004 at lower interest rates. Interest on the line
    of credit is payable monthly at the prime rate plus .25% (an effective rate
    of 4.75% at July 31, 2004) and interest on the term loan is payable monthly
    at the prime rate plus .50% (an effective rate of 5.00% at July 31, 2004).
    Principal payments on the term loan are payable in monthly installments of
    $7,000. Andrew Gordon and David Gordon, two of our directors and officers,
    each have guaranteed borrowings under the credit facility up to $500,000. </font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition, our credit facility with Wells Fargo Business Credit contains covenants that place restrictions on our operations.  Among other things, these covenants: require that a portion of our cash flow from operations be dedicated to servicing our debt;  limit our ability to obtain additional capital through financings without the consent of the lender; limit our ability to pay dividends or make other distributions to our stockholders and acquire or retire our common stock without the consent of the lender; and prohibit us from forming or acquiring subsidiaries, merging with or into other companies or selling all or substantially all of our assets without the consent of the lender.  These restrictions could
adversely impact our ability to implement our business plan, or raise additional capital, if needed.  In addition, if we default under our existing credit facility or if our lender demands payment of a portion or all of our indebtedness, we may not have sufficient funds to make such payments.  We are currently in compliance with all covenants contained in the credit facility.  We intend to renegotiate the terms of our credit facility, including the covenants, prior to its expiration in November 2004.</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As indicated above, as of July 31, 2004, the line of credit with Wells Fargo Business Credit had an outstanding balance of $2,895,661 as compared to an outstanding balance of $2,376,066 at October 31, 2003.  The outstanding balance under the term loan was $273,000 as of July 31, 2004, and was $336,000 at October 31, 2003.  We were in compliance with all required financial covenants at July 31, 2004.</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We also lease machinery and equipment under a capital lease which expires in July 2005.  The interest rate on the capital lease is 8-1/3% per annum.  The outstanding balance on the capital lease was $125,336 at July 31, 2004 compared to $222,446 at October 31, 2003.</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We had loans payable to our stockholders, all of whom are members of the Gordon family, of $79,646 at October 31, 2003.  The loans were repaid during the quarter ended July 31, 2004.  We do not intend to borrow additional amounts from our stockholders.</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For the nine months ended July 31, 2004, our operating activities provided net cash of $714,781 as compared to the nine months ended July 31, 2003 when net cash used in operating activities was $639,661.  The increased cash flow from operations for the nine months ended July 31, 2004 was primarily due to a decrease of $574,333 in cash due from broker, $612,548 in net income, $370,419 in decreased accounts payable, offset in part by $994,281 in increased inventory levels and a $289,637 increase in accounts receivable.</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For
    the nine months ended July 31, 2004, our investing activities used net cash
    of $952,917 as compared to the nine months ended July 31, 2003 when net cash
    used by investing activities was $31,450. The decreased cash flow from investing
activities for the nine months </font></p>

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<p align="left"><font size="2" face="serif">ended July 31, 2004 was primarily
    due to the purchase of property and equipment from Premier Roasters in February
2004.  </font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For the nine months ended July 31, 2004, our financing activities provided net cash of $268,348 as compared to the nine months ended July 31, 2003 when net cash provided by financing activities was $684,996.  The decreased cash flow from financing activities was primarily due to net payments under our line of credit and payments to related parties.  Net payments on our line of credit increased $1,362,396 to net cash used of $519,595 for the nine months ended July 31, 2004 compared to net cash provided of $842,801 for the nine months ended July 31, 2003.  In addition, we repaid $91,131 in loans to our stockholders during the nine months ended July 31, 2004.  We also lease machinery and equipment under a capital lease
which expires in July 2005.  The interest rate on the capital lease is 8-1/3% per annum.  Management does not expect to incur other significant capital expenditures in fiscal 2004.  </font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In February, 2004, we acquired certain assets of Premier Roasters for $825,000.  In addition, we entered into an agreement with the City of La Junta, Colorado to lease a 50,000 square foot facility for $8,341 per month.  We do not believe that the purchase price or costs associated with operating a second facility will have a material effect on our future cash flow or liquidity position.  We believe that the costs associated with operating the second facility will be mitigated by the new economies of scale in both manufacturing and logistical efficiencies which were unavailable in the past while operating solely out of our New York facility and increased sales to new and existing customers in the Western United
States.</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We expect to fund our operations, including paying our liabilities, funding capital expenditures and making required payments on our debts, through October 31, 2005 with cash provided by operating activities and the use of our credit facility.  In addition, an increase in eligible accounts receivable and inventory would permit us to make additional borrowings under our line of credit.  We also believe we could, if necessary, obtain additional loans by mortgaging our headquarters.  We plan to use the proceeds of this offering to expand our business and repay indebtedness.  We may not be able to successfully grow our business without the proceeds of this offering.  See &#8220;Use of Proceeds.&#8221;</font></p>
<p align="left"><font size="2" face="serif"><b>Market Risks</b></font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Market risks relating to our operations result primarily from changes in interest rates and commodity prices as further described below.</font></p>
<p align="left"><font size="2" face="serif"><b>Interest Rate Risks</b></font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are subject to market risk from exposure to fluctuations in interest rates.  At July 31, 2004, our debt consisted of $125,336 of fixed rate debt on the capital lease and $3,168,661 of variable rate debt under our revolving line of credit and term loan.  At July 31, 2004,  interest on the variable rate debt was payable primarily at 4.75% (or .25% above the prime rate) for the revolving line of credit and at 5.00% (or .50% above the prime rate) for the term loan.  We do not expect changes in interest rates to have a material effect on results of operations or cash flows in fiscal 2004, although there can be no assurance that interest rates will not significantly change.</font></p>

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<p align="left"><font size="2" face="serif"><b>Commodity Price Risks</b></font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The supply and price of coffee beans are subject to volatility and are influenced by numerous factors which are beyond our control.  Historically, we have used short-term coffee futures and options contracts primarily for the purpose of partially hedging and minimizing the effects of changing green coffee prices, as further explained in Note 2 of the notes to financial statements in this prospectus.  In addition, during the latter half of fiscal 2000, we began to acquire futures contracts with longer terms (generally three to six months) primarily for the purpose of guaranteeing an adequate supply of green coffee.  The use of these derivative financial instruments has enabled us to mitigate the effect of changing
prices although we generally remain exposed to loss when prices decline significantly in a short period of time and remain at higher levels, preventing us from obtaining inventory at favorable prices.  We generally have been able to pass green coffee price increases through to customers, thereby maintaining our gross profits.  However, we cannot predict whether we will be able to pass inventory price increases through to our customers in the future.</font></p>

<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At July 31, 2004, we held 118 options (generally with terms of two months or less) covering an aggregate of 4,425,000 pounds of green coffee beans at a price of $.675 and $.725 per pound.  The fair market value of these options, which was obtained from a major financial institution, was $150,038 at July 31, 2004.</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We acquire futures contracts with longer terms (generally three to six months) primarily for the purpose of guaranteeing an adequate supply of green coffee.  At July 31, 2004, we held 53 futures contracts for the purchase of 1,987,500 pounds of coffee at an average price of $.707 per pound for September 2004 contracts.  The market price of coffee applicable to such contracts was $.665 per pound at that date.</font></p>

<p align="left"><font size="2" face="serif"><b>Off-Balance Sheet Arrangements</b></font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.</font></p>
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<p><a href="#contents"><font size="2">Back to Contents</font></a></p>
<p align="center"><font size="2" face="serif"><b>BUSINESS</b></font></p>
<p align="left"><font size="2" face="serif"><b>General Overview</b></font></p>

<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><i>Products and Operations.</i></b> &nbsp;&nbsp;We are an integrated wholesale coffee roaster and dealer in the United States and one of the few coffee companies that offers a broad array of coffee products across the entire spectrum of consumer tastes, preferences and price points.  As a result, we believe that we are well positioned to increase our profitability and endure potential coffee price volatility throughout varying cycles of the coffee market and economic conditions.  Our core products can be divided into three categories:</font></p>

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<td width="3%"></td>
<td width="3%">
<font size="2" face="serif">&#149;</font></td>
<td>
<font size="2" face="serif"><b><i>Wholesale Green Coffee:</i></b>  unroasted raw beans imported from around the world and sold to large and small roasters and coffee shop operators;</font></td>
</tr>
</table>
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    <td></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td width="3%"></td>
    <td width="3%"> <font size="2" face="serif">&#149;</font></td>
    <td> <font size="2" face="serif"><b><i>Private Label Coffee:</i></b> coffee
      roasted, blended, packaged and sold under the specifications and names of
      others, including supermarkets that want to have their own brand name on
      coffee to compete with national brands; and</font></td>
  </tr>
</table>
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    <td></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
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    <td width="3%"> <font size="2" face="serif">&#149;</font></td>
    <td> <font size="2" face="serif"><b><i>Branded Coffee:</i></b> coffee roasted
      and blended to our own specifications and packaged and sold under our seven
      brand names in different segments of the market.</font></td>
  </tr>
</table>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our private label and branded coffee products are sold throughout the United States and Canada to supermarkets, wholesalers, and individually owned and multi-unit retail customers.  Our unprocessed green coffee, which includes over 70 types of coffee from all over the world, is sold to specialty gourmet roasters.  </font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We conduct our operations in accordance with strict freshness and quality standards.  All of our private label and branded coffee is produced from high quality coffee beans that are deep roasted for full flavor using a slow roasting process that has been perfected utilizing our more than thirty years of experience in the coffee industry.  In order to ensure freshness, our products are delivered to our customers within 72 hours of roasting.  We believe that our long history has enabled us to develop a loyal customer base. </font></p>


<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><i>Geographic
        Expansion.</i></b>&nbsp;&nbsp;In February 2004, we acquired certain assets
        of Premier Roasters, a roaster-dealer located in La Junta, Colorado,
        for $825,000. The assets purchased by us include all of the operating
        equipment located at Premier Roasters&#146; La Junta and Rocky Ford,
        Colorado locations, as well as all labels for all of Premier Roasters&#146; coffee
        products. In connection with the acquisition of these assets, we reached
        an agreement with the City of La Junta, Colorado on a 20-year lease for
        a 50,000 square foot facility in La Junta. We are using the assets that
        we purchased to expand our integrated wholesale coffee roaster and dealer
        operations in the Western United States. In connection with this transaction,
        we also entered into a licensing agreement with Del Monte Corporation
        for the exclusive right to use the S&amp;W and IL CLASSICO trademarks
        in connection with the production, manufacture and sale of ground coffee
        for distribution to retail customers in the United States and certain
        other countries approved by Del Monte Corporation.</font></p>
<p align="center"><font face="serif" size="2">35</font></p>
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</p>
<p>  <font size="2" face="serif"><b>Our Industries</b></font>
</p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The United States coffee market consists of two distinct product categories:</font></p>
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<tr valign="top">
<td width="3%"></td>
<td width="3%">
<font size="2" face="serif">&#149;</font></td>
<td>
<font size="2" face="serif">Commercial ground roast, mass-merchandised coffee; and</font></td>
</tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
  <tr valign="top">
    <td></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td width="3%"></td>
    <td width="3%"> <font size="2" face="serif">&#149;</font></td>
    <td> <font size="2" face="serif">Specialty coffees, which include:</font></td>
  </tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
  <tr valign="top">
    <td></td>
    <td></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td width="3%"></td>
    <td width="3%"></td>
    <td width="3%"> <font size="2" face="serif">&#149;</font></td>
    <td> <font size="2" face="serif">Gourmet coffees (premium grade Arabica coffees
      sold in whole bean and ground form);</font></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
<td width="3%"></td>
<td width="3%"></td>
<td width="3%">
<font size="2" face="serif">&#149;</font></td>
<td>
<font size="2" face="serif">Espresso-based beverages; and</font></td>
</tr>
<tr>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
</table>

<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
<td width="3%"></td>
<td width="3%"></td>
<td width="3%">
<font size="2" face="serif">&#149;</font></td>
<td>
<font size="2" face="serif">Premium coffees (upscale coffees mass-marketed by the leading coffee companies).</font></td>
</tr>
</table>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><i>Specialty Green Coffee.</i></b>&nbsp;&nbsp;Specialty green coffee, or what is sometimes called gourmet coffee, is high quality Arabica bean coffee. The Arabica bean is widely considered in the industry to be superior to its counterpart, the Robusta bean, which is used mainly in non-specialty coffee.  High quality Arabica beans usually grow at high elevations, absorb little moisture and mature slowly.  These factors result in beans with a mild aroma and a bright, pleasing flavor that is suitable for specialty coffee.Although the overall coffee industry is mature, the specialty green
coffee market continues to be a fast growing segment.</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
    have observed several industry trends that have contributed to the increase
in demand for specialty coffee, including: </font></p>

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  <tr valign="top">
    <td width="3%"></td>
    <td width="3%"> <font size="2" face="serif">&#149;</font></td>
    <td> <font size="2" face="serif">According to the National Coffee Association,
        the number of specialty coffee retail outlets grew from 500 units in
        1991 to over 10,000 units in 2001 and according to the Specialty Coffee
        Association, the number of units grew to 13,700 by 2003;</font></td>
  </tr>
</table>

<table width="100%" cellspacing="0" cellpadding="0" border="0">
  <tr valign="top">
    <td></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td width="3%"></td>
    <td width="3%"> <font size="2" face="serif">&#149;</font></td>
    <td> <font size="2" face="serif">Increasing demand for all premium food products,
        including specialty coffee, where the difference in price from the commercial
        brands is small compared to the perceived improvement in product quality
        and taste;</font></td>
  </tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
  <tr valign="top">
    <td></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td width="3%"></td>
    <td width="3%"> <font size="2" face="serif">&#149;</font></td>
    <td> <font size="2" face="serif">Greater consumer awareness of specialty
        coffee as a result of its increasing availability;</font></td>
  </tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
  <tr valign="top">
    <td></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td width="3%"></td>
    <td width="3%"> <font size="2" face="serif">&#149;</font></td>
    <td> <font size="2" face="serif">Ease of preparation of specialty coffees
        resulting from the increased use of automatic drip coffee makers and
        home espresso machines; and</font></td>
  </tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
  <tr valign="top">
    <td></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td width="3%"></td>
    <td width="3%"> <font size="2" face="serif">&#149;</font></td>
    <td> <font size="2" face="serif">The overall low price of Arabica coffee
        beans, which has allowed consumers to afford higher end specialty 100%
        Arabica coffees.</font></td>
  </tr>
</table>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><i>Hispanic
        Coffee Market in the United States.</i>&nbsp;&nbsp;</b>Hispanics are
        now the fastest growing and largest minority demographic in the United
        States. Some attractive features about the Hispanic coffee market in
        the United States are: </font></p>
<p>&nbsp;</p>
<p align="center"><font face="serif" size="2">36</font></p>
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<table width="100%" cellspacing="0" cellpadding="0" border="0">
  <tr valign="top">
    <td></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td width="3%"></td>
    <td width="3%"> <font size="2" face="serif">&#149;</font></td>
    <td> <font size="2" face="serif">According to Information Resources Inc.,
      Spanish espresso beverages&#146; total volume sales increased by 12% from
      April 2003 to April 2004.</font></td>
  </tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
  <tr valign="top">
    <td></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td width="3%"></td>
    <td width="3%"> <font size="2" face="serif">&#149;</font></td>
    <td> <font size="2" face="serif">According to the United States Census Bureau,
      Hispanic Americans are the largest minority group in the United States as
      of January 2003 with 37 million people residing throughout the United States.
      </font></td>
  </tr>
</table>

<table width="100%" cellspacing="0" cellpadding="0" border="0">
  <tr valign="top">
    <td></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td width="3%"></td>
    <td width="3%"> <font size="2" face="serif">&#149;</font></td>
    <td> <font size="2" face="serif">According to a May 2004 report by the Selig Center
for Economic Growth, the purchasing power of Hispanic consumers will reach $992
billion by 2009.</font></td>
  </tr>
</table>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><i>Coffee
        Commodity Market. </i></b><b></b>Due to oversupply, in 2002 and 2003
        coffee prices plummeted to 30-year lows. The price decrease was an 82
        percent drop from four years earlier. In 2003, coffee-producing nations
        received approximately $5.5 billion for their beans, less than half what
        they made in the late 1980s. The oversupply has gone largely unnoticed
        in the United States, the world&#8217;s largest coffee consumer because
        Americans have not seen equally steep price declines for coffee products.
        Changes in prices have been obscured by the dramatic expansion in the
        variety of upscale coffees available to ordinary consumers. Selling for
        over $2.00 per cup in many gourmet shops, coffee has become an affordable
        luxury. In 2004, coffee production is expected to fall below demand for
        the first time in six years. According to its July 2004 Coffee Market
        Report, the International Coffee Organization expects coffee production
        in the agricultural year ending 2004 to fall 16%. Consequently, for the
        first nine months of 2004, coffee futures are at their highest prices
        in three years and many of the industry leaders have increased the prices
        of their retail coffee products. However, this report also stated that
        coffee production was expected to increase 11% to 16% in 2005. If coffee
        production increases in 2005, the price of coffee futures could also
        decrease.</font></p>

<p align="left"><font size="2" face="serif"><b>Our Competitive Strengths</b></font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To
    achieve our growth objectives described below, we intend to leverage the
    following competitive strengths:</font></p>

<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><i>National
        Distribution with Capacity For Growth. </i></b>Since 1991, we have been
        able to expand our distribution to a national platform while operating
        from only our East Coast location. We have recently made capital investments
        to improve our roasting, packaging and fulfillment infrastructure to
        support the production and distribution of large quantities of fresh
        coffee products throughout the United States. We believe that our new
        La Junta, Colorado facility will allow us to continue to grow our business
        by further increasing our presence in the Western United States. By operating
        out of two facilities, we have gained new economies of scale in both
        manufacturing and logistical efficiencies and are confident that we can
        compete aggressively throughout the United States. These two facilities
        allow us to reduce our freight and shipping costs to the Western United
        States, thereby enabling us to be more competitive in bidding for new
        business. In addition, our presence in Colorado has increased the number
        of potential customers we have because of our proximity to the West Coast.</font></p>

<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><i>Positioned
        to Profitably Grow Through Varying Cycles of the Coffee Market.</i></b>&nbsp;&nbsp;We
        believe that we are one of the few coffee companies to offer a broad
        array of branded and private</font></p>
<p>&nbsp;</p>
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<p align="left"><font size="2" face="serif">label roasted ground coffees and wholesale green coffee across the spectrum of consumer tastes, preferences and price points.  While many of our competitors engage in distinct segments of the coffee business, we sell products in each of the following areas:</font></p>
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<tr valign="top">
<td width="3%"></td>
<td width="3%">
<font size="2" face="serif">&#149;</font></td>
<td>
<font size="2" face="serif">Retail branded coffee; </font></td>
</tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
  <tr valign="top">
    <td></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td width="3%"></td>
    <td width="3%"> <font size="2" face="serif">&#149;</font></td>
    <td> <font size="2" face="serif">Retail private label coffee;</font></td>
  </tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
  <tr valign="top">
    <td></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td width="3%"></td>
    <td width="3%"> <font size="2" face="serif">&#149;</font></td>
    <td> <font size="2" face="serif">Wholesale specialty green and gourmet whole
      bean coffees; </font></td>
  </tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
  <tr valign="top">
    <td></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td width="3%"></td>
    <td width="3%"> <font size="2" face="serif">&#149;</font></td>
    <td> <font size="2" face="serif">Food service;</font></td>
  </tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
  <tr valign="top">
    <td></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td width="3%"></td>
    <td width="3%"> <font size="2" face="serif">&#149;</font></td>
    <td> <font size="2" face="serif">Instant coffees; and</font></td>
  </tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
  <tr valign="top">
    <td></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td width="3%"></td>
    <td width="3%"> <font size="2" face="serif">&#149;</font></td>
    <td> <font size="2" face="serif">Niche products.</font></td>
  </tr>
</table>

<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our branded and private label roasted ground coffees are sold predominantly at competitive and value price levels while some of our other branded and specialty coffees are sold predominantly at the premium price levels.  Premium price level coffee is high-quality gourmet coffee, such as AA Arabica coffee, which sells at a substantial premium over traditional retail canned coffee, while competitive and value price level coffee is mainstream or traditional canned coffee.  Because of this diversification, we believe that our profitability is not dependent on any one area of the coffee industry and, therefore, is less sensitive than our competition to potential coffee commodity price and overall economic
volatility.</font></p>

<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><i>Wholesale
        Green Coffee Market Presence.</i></b>  As a large roaster/dealer of green
        coffee, we believe that we are favorably positioned to increase our specialty
        coffee sales. Since 1998, we increased the number of our wholesale green
        coffee customers, including coffee houses, single store operators, mall
        coffee stores and mail order sellers, by 81% from 150 to 272. We are
        a charter member of the Specialty Coffee Association of America and one
        of the largest distributors of Swiss water processed decaffeinated coffees
        along the East Coast. In addition, although we do not have any formalized,
        material agreements or long-term contracts with it, we have a 13-year
        relationship with our largest wholesale green coffee customer, Green
        Mountain Coffee Roasters. Our 30-plus years of experience as a roaster
        and a dealer of green coffee allows us to provide our roasting experience
        as a value added service to our gourmet roaster customers. The assistance
        we provide to our customers includes training, coffee blending and market
        identification. We believe that our relationships with wholesale green
        coffee customers and our focus on selling green coffee as a wholesaler
        has enabled us to participate in the growth of the specialty coffee market
        while mitigating the risks associated with the competitive retail specialty
        coffee environment. </font></p>

<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><i>Diverse
        Portfolio of Differentiated Branded Coffees.</i></b>&nbsp;&nbsp;Currently,
        our highest net profit margin is on our branded coffees. We have amassed
        a portfolio of five proprietary name brands sold to supermarkets, wholesalers
        and individually-owned stores in the United States, including brands
        for specialty espresso, Latin espresso, Italian espresso, 100% Colombian
        coffee and blended coffee. In addition, we have entered into a licensing
        agreement with Del Monte Corporation for the exclusive right to use the
        S&amp;W and IL CLASSICO trademarks in the United </font></p>
<p>&nbsp;</p>
<p align="center"><font size="2" face="serif">38</font></p>
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<p align="left"><font size="2" face="serif">States and other countries approved
    by Del Monte Corporation in connection with the production, manufacture and
    sale of roasted whole bean and ground coffee for distribution to retail customers.
    We plan to broaden our customer base and increase penetration with existing
    customers by expanding the S&amp;W label from a well-known brand on the West
    Coast to a well-known brand throughout the United States. Our existing portfolio
    of differentiated brands combined with our management expertise serve as
    a platform to add additional name brands through acquisition or licensing
    agreements which target product niches and segments that do not compete with
    our existing brands. In addition, we have added a group of third-party marketing
    specialists to help grow our branded coffee sales. These specialists have
    redesigned our packaging and labels and have assisted in extending our product
    lines to include instant cappuccinos, large can coffees and trial-sized mini-brick
packages. </font></p>

<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><i>Management Has Extensive Experience in the Coffee Industry.</i></b>&nbsp;&nbsp;We have been a family operated business for three generations.  Throughout this time, we have remained profitable through varying cycles in the coffee industry and the economy.  Our founder, Sterling Gordon, has over 50 years of experience in the coffee business during which time he has developed a reputation in the industry as an expert in coffee blending and quality.  Andrew Gordon and David Gordon have worked with Coffee Holding for 21 and 23 years, respectively.  David Gordon is an original member of the Specialty Coffee Association of America.  Andrew Gordon publishes a weekly report on the coffee commodity industry.  We believe that our
employees and management are dedicated to our vision and mission, which is to produce high quality products, as well as to provide quality and responsive service to our customers.<b></b></font></p>
<p align="left"><font size="2" face="serif"><b>Our Growth Strategy</b></font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
    believe that significant growth opportunities exist by selectively pursuing
    strategic acquisitions and alliances, targeting the rapidly growing Hispanic
    market, increasing penetration with existing customers by adding new products,
    and developing our food service business. By capitalizing on this strategy,
    we hope to continue to grow our business with our commitment to quality and
    personalized service to our customers. We do not intend to compete on price
    alone nor do we intend to expand sales at the expense of profitability. </font></p>

<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><i>Selectively
        Pursue Strategic Acquisitions and Alliances. </i></b>We  intend to expand
        our operations by acquiring coffee companies, seeking strategic alliances
        and acquiring or licensing brands which complement our business objectives.
        Consistent with this strategy, in February 2004, we acquired certain
        assets of Premier Roasters and we have entered into a licensing agreement
        with Del Monte Corporation for the exclusive right to use the S&amp;W
        and IL CLASSICO trademarks in the United States and other countries approved
        by Del Monte Corporation in connection with the production, manufacture
        and sale of roasted whole bean and ground coffee for distribution at
        the retail level. We are using the assets we purchased from Premier Roasters
        and our new facility in La Junta, Colorado to expand our private label
        coffee and branded coffee operations in the Western United States. We
        believe that our Western United States presence recently enabled us to
        win a competitive bidding process to be the exclusive supplier of ground
        roast private label coffee for four West Coast divisions of Albertson&#8217;s,
        Inc., the second largest food and drug retailer in the United States
        according to Hoover&#8217;s Online.  We intend to further expand the
        market presence of our branded products outside our primary Northeastern
        United States market through other acquisitions and strategic alliances.</font></p>

<p align="left"><font size="2" face="serif"></font></p>
<p align="center"><font face="serif" size="2">39</font></p>
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<p><a href="#contents"><font size="2">Back to Contents</font></a></p>

<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><i>Grow
        Our Caf&eacute; Caribe Product. </i></b>Hispanic consumers drink four
        times more coffee per capita than other coffee drinking Americans, according
        to the Strategy Research Corporation 2000 U.S. Hispanic Market Study.
        The Hispanic population in the United States is growing at nine times
        the average rate and now represents the largest minority demographic
        in the United States, according to 2000 census data. We believe there
        is significant opportunity for our Caf&eacute; Caribe brand to gain market share among Hispanic consumers in the United States.  Caf&eacute; Caribe is a specialty espresso coffee that we believe is popular with Hispanic consumers.  Although Caf&eacute; Caribe
        has historically been our leading brand by revenue, we have not implemented
        a comprehensive marketing program that targets Hispanic consumers. We
        intend to use a portion
of the proceeds of this offering to increase the sales of this brand and other
espresso-based products by developing a comprehensive sales and marketing program
aimed at Hispanic consumers throughout the United States, particularly in Florida
where we believe there is a significant opportunity to capture additional market
share.</font></p>

<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><i>Further Market Penetration of Our Niche Products.</i></b>&nbsp;&nbsp;We intend to capture additional market share through our existing distribution channels by selectively adding or introducing new brand names and products across multiple price points, including:</font></p>
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<td width="3%"></td>
<td width="3%">
<font size="2" face="serif">&#149;</font></td>
<td>
<font size="2" face="serif">Specialty blends;</font></td>
</tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
  <tr valign="top">
    <td></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td width="3%"></td>
    <td width="3%"> <font size="2" face="serif">&#149;</font></td>
    <td> <font size="2" face="serif">Private label &#147;value&#148; blends and
      trial-sized mini-brick packages;</font></td>
  </tr>
  <tr valign="top">
    <td></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
<td width="3%"></td>
<td width="3%">
<font size="2" face="serif">&#149;</font></td>
<td>
<font size="2" face="serif">Specialty instant coffees;</font></td>
</tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
  <tr valign="top">
    <td></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td width="3%"></td>
    <td width="3%"> <font size="2" face="serif">&#149;</font></td>
    <td> <font size="2" face="serif">Instant cappuccinos and hot chocolates; and</font></td>
  </tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
  <tr valign="top">
    <td></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td width="3%"></td>
    <td width="3%"> <font size="2" face="serif">&#149;</font></td>
    <td> <font size="2" face="serif">Tea line products. </font></td>
  </tr>
</table>
<p align="left"><font size="2" face="serif">We recently established relationships with additional independent sales brokers to market our products on a national scale.  </font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><i>Develop Our Food Service Business.</i></b>&nbsp;&nbsp;We plan to expand further into the food service business by developing new distribution channels for our products.  Currently, we have a limited presence in the food service market.  We have commenced marketing our upscale restaurant and Colombian coffee brands to hotels, restaurants, office coffee services companies and other food service retailers.  In addition, we have expanded our food service offerings to include instant cappuccinos, tea products and an equipment program for our customers.  We attend at least ten annual trade shows held by various buying groups which provide us a national audience to market our food service products.  We intend to use a portion of
the proceeds of this offering to grow our food service distribution both organically and through acquisitions.</font></p>
<p align="left"><font size="2" face="serif"><b>Our Core Products </b></font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our core products can be divided into three categories:</font></p>
<p align="center"><font size="2" face="serif">40</font></p>
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<p align="left">&nbsp;</p>
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<td>
<font size="2" face="serif"><b><i>Wholesale Green Coffee</i></b><b>:</b> unroasted raw beans imported from around the world and sold to large and small roasters and coffee shop operators;</font></td>
</tr>
</table>
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    <td></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
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    <td width="3%"></td>
    <td width="3%"> <font size="2" face="serif">&#149;</font></td>
    <td> <font size="2" face="serif"><b><i>Private Label Coffee</i></b><b>:</b>
      coffee roasted, blended, packaged and sold under the specifications and
      names of others, including supermarkets that want to have their own brand
      name on coffee to compete with national brands; and</font></td>
  </tr>
</table>
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  <tr valign="top">
    <td></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
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    <td width="3%"></td>
    <td width="3%"> <font size="2" face="serif">&#149;</font></td>
    <td> <font size="2" face="serif"><b><i>Branded Coffee</i></b><b>:</b> coffee
      roasted and blended to our own specifications and sold under our seven brand
      names in different segments of the market.</font></td>
  </tr>
</table>

<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><i>Wholesale Green Coffee.</i></b>&nbsp;&nbsp;The specialty green coffee market represents the fastest growing area of our industry.  The number of gourmet coffee houses have been increasing in all areas of the United States.  The growth in specialty coffee sales has created a marketplace for higher quality and differentiated products which can be priced at a premium in the marketplace.  As a large roaster/dealer of green coffee, we are favorably positioned to increase our specialty coffee sales.  We sell green coffee beans to small roasters and coffee shop operators located throughout the United States and carry over 70 different varieties.  Specialty green coffee beans are sold unroasted, direct from warehouses to small
roasters and gourmet coffee shop operators which then roast the beans themselves. We sell from as little as one bag (132 pounds) to a full truckload (44,000 pounds) depending on the size and need of the customer.  We believe that we can increase sales of wholesale green coffee without venturing into the highly competitive retail specialty coffee environment and that we can be as profitable or more profitable than our competition in this segment by selling &#147;one bag at a time&#148; rather than &#147;one cup at a time.&#148; </font></p>

<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><i>Private
        Label Coffee. </i></b>We roast, blend, package and sell coffee under
        private labels for companies throughout the United States and Canada.
        Our private label coffee is sold in cans, brick packages and instants
        in a variety of sizes. As of July 31, 2004, we supplied coffee under
        approximately 35 different labels to wholesalers and retailers, including
        Supervalu, Topco/ShurFine and Nash Finch, three of the largest grocery
        wholesalers in North America according to <i>Private Label</i> <i>Magazine.</i> We
        produce private label coffee for customers who desire to sell coffee
        under their own name but do not want to engage in the manufacturing process.
        Our private label customers seek a quality similar to the national brands
        at a lower cost, which represents a better value for the consumer.</font></p>

<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><i>Branded
        Coffee</i></b><b>.</b> We roast and blend our branded coffee according
        to our own recipes and package the coffee at our facilities in Brooklyn,
        New York and La Junta, Colorado. We then sell the packaged coffee under
        our brand labels to supermarkets, wholesalers and individually owned
        stores throughout the United States.</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
    hold trademarks for each of our proprietary name brands and have the exclusive
    right to use the S&amp;W and IL CLASSICO trademarks in the United States
    in connection with the production, manufacture and sale of roasted whole
    bean and ground coffee for distribution at the retail level. For further
    information regarding our trademark rights, see &#147;Business&#150;Trademarks.&#148; </font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each
    of our name brands is directed at a particular segment of the coffee market.
    Our branded coffees are:</font></p>
<p align="center"><font size="2" face="serif">41</font></p>
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<table width="100%" cellspacing="0" cellpadding="0" border="0">
  <tr valign="top">
    <td></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
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<td width="3%"></td>
<td width="3%">
<font size="2" face="serif">&#149;</font></td>
<td>
<font size="2" face="serif"><b><i>Caf&eacute; Caribe </i></b>is a specialty espresso coffee that targets espresso coffee drinkers and, in particular, the Hispanic consumer market;<i></i></font></td>
</tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
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    <td></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
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<td>
<font size="2" face="serif"><b><i>S&amp;W</i></b> is an upscale canned coffee established in 1921 and includes Premium, Premium Decaf, French Roast, Colombian, Colombian Decaf, Swiss Water Decaf, Kona, Mellow&#146;d Roast and IL CLASSICO lines;</font></td>
</tr>
</table>
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    <td></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
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<td width="3%"></td>
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<td>
<font size="2" face="serif"><b><i>Caf&eacute; Supremo</i></b><i></i>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;</font></td>
</tr>
</table>
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    <td></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
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<td width="3%"></td>
<td width="3%">
<font size="2" face="serif">&#149;</font></td>
<td>
<font size="2" face="serif"><b><i>Don Manuel</i></b> is produced from the finest 100% Colombian coffee beans.  Don Manuel is an upscale quality product which commands a substantial premium compared to the more traditional brown coffee blends.  We also use this known trademark in our food service business because of the high brand quality;</font></td>
</tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
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    <td></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
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<td width="3%"></td>
<td width="3%">
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<td>
<font size="2" face="serif"><b><i>Fifth Avenue</i></b> is a blended coffee that has become popular as an alternative for consumers who purchase private label or national branded coffee.  We also market this brand to wholesalers who do not wish to undertake the expense of developing a private label coffee program under their own name;</font></td>
</tr>
</table>
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  <tr valign="top">
    <td></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
<tr valign="top">
<td width="3%"></td>
<td width="3%">
<font size="2" face="serif">&#149;</font></td>
<td>
<font size="2" face="serif"><b><i>Via Roma</i></b> is an Italian espresso targeted at the more traditional espresso drinker; and</font></td>
</tr>
</table>
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  <tr valign="top">
    <td></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td width="3%"></td>
    <td width="3%"> <font size="2" face="serif">&#149;</font></td>
    <td> <font size="2" face="serif"><b><i>Il CLASSICO</i></b> is an S&amp;W brand
      espresso product.</font></td>
  </tr>
</table>
<p align="left"><font size="2" face="serif"><b>Other Products</b></font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We also offer several niche products, including:  </font></p>
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<td>
<font size="2" face="serif">trial-sized mini-brick coffee packages;</font></td>
</tr>
</table>
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  <tr valign="top">
    <td></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
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<td width="3%"></td>
<td width="3%">
<font size="2" face="serif">&#149;</font></td>
<td>
<font size="2" face="serif">specialty instant coffees;</font></td>
</tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
  <tr valign="top">
    <td></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
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<td width="3%"></td>
<td width="3%">
<font size="2" face="serif">&#149;</font></td>
<td>
<font size="2" face="serif">instant cappuccinos and hot chocolates; and</font></td>
</tr>
</table>
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  <tr valign="top">
    <td></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td width="3%"></td>
    <td width="3%"> <font size="2" face="serif">&#149;</font></td>
    <td> <font size="2" face="serif">tea line products. </font></td>
  </tr>
</table>
<p align="left"><font size="2" face="serif"><b>Raw Materials</b></font></p>

<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Coffee
    is a commodity traded on the Commodities and Futures Exchange subject to
    price fluctuations. Over the past five years, the average price per pound
    of coffee
    beans ranged from approximately $.41 to $1.45. The price for coffee beans
    on the commodities market as of July 31, 2004 was $.70 per pound. Specialty
    green coffee, unlike most coffee, is not tied directly to the commodities
    cash markets. 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. We are a licensed Fair Trade dealer of Fair
    Trade certified coffee. Fair Trade certified coffee helps small coffee farmers
    to increase their incomes and improve the prospects of their communities
    and families by guaranteeing farmers a minimum price of five cents above
    the current market price. Although we may purchase Fair Trade certified coffee
    from time to time, </font></p>

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<p align="left"><font size="2" face="serif">we are not obligated to do so and
      we do not have any commitments to purchase Fair Trade certified coffee. All
      of our specialty green coffees,
        as well as all of the other coffees we import for roasting, are subject
      to multiple levels of quality control. </font></p>

<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We purchase our green coffee from dealers located primarily within the United States.  The dealers supply us with coffee beans from many countries, including Colombia, Mexico, Kenya, Indonesia, Brazil and Uganda.  In fiscal 2003, substantially all of our green coffee purchases were from approximately ten suppliers, which accounted for approximately $11.0 million, or 84% of our total product purchases.  One of these suppliers, Rothfos Corporation, accounted for $4.1 million, or 31% of our total product purchases.  An employee of Rothfos Corporation is one of our directors.  We do not have any formalized, material agreements or long-term contracts with any of these suppliers.  Rather, our purchases are typically made
pursuant to individual purchase orders.  We do not believe that the loss of any one supplier, including Rothfos, would have a material adverse effect on our operations due to the availability of alternate suppliers.  </font></p>

<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
    supply and price of coffee beans are subject to volatility and are influenced
    by numerous factors which are beyond our control. Supply and price can be
    affected by factors such as weather, politics and economics in the coffee
    exporting countries. Increases in the cost of coffee beans can, to a certain
    extent, be passed on to our customers in the form of higher prices for coffee
    beans and processed coffee. Drastic or prolonged increases in coffee prices
    could also adversely impact our business as it could lead to a decline in
    overall consumption of</font> <font size="2" face="serif">coffee. Similarly, rapid decreases
          in the cost of coffee beans could force us to lower our sale prices before
          realizing cost reductions
    in our purchases.</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We subject all of our private unroasted green coffee to both a pre-shipment sample approval and an additional sample approval upon arrival into the United States.  Once the arrival sample is approved, we then bring the coffee to one of our facilities to roast and blend according to our own strict specifications.  During the roasting and blending process, samples are pulled off the production line and tested on an hourly basis to ensure that each batch roasted is consistent with the others and meets the strict quality standards demanded by our customers and us.</font></p>
<p align="left"><font size="2" face="serif"><b>Our Use of Derivatives</b></font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Historically, we have used short-term coffee futures and options contracts primarily for the purpose of partially hedging and minimizing the effects of changing green coffee prices, as further explained in Note 4 of the notes to financial statements in this prospectus.  In addition, during the latter half of fiscal 2000, we began to acquire futures contracts with longer terms (generally three to six months) primarily for the purpose of guaranteeing an adequate supply of green coffee as prices were rising after historical 30 year lows.  The use of these derivative financial instruments has enabled us to mitigate the effect of changing prices although we generally remain exposed to loss when prices decline
significantly in a short period of time or remain at higher levels, preventing us from obtaining inventory at favorable prices.  We generally have been able to pass green coffee price increases through to customers, thereby maintaining our gross profits.  However, we cannot predict whether we will be able to pass inventory price increases through to our customers in the future.  See &#147;Management&#146;s Discussion and Analysis of Financial Condition and Results of Operations &#150; Commodity Price Risks.&#148;</font></p>
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<p align="left"><font size="2" face="serif"><b>Trademarks</b></font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We hold trademarks, registered with the United States Office of Patent and Trademark, for all five of our proprietary coffee brands and an exclusive license for S&amp;W and IL CLASSICO brands for sale in the United States.  Trademark registrations are subject to periodic renewal and we anticipate maintaining our registrations.  We believe that our brands are recognizable in the marketplace and that brand recognition is important to the success of our branded coffee business.</font></p>
<p align="left"><font size="2" face="serif"><b>Customers</b></font></p>

<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
    sell our private label and our branded coffee to three of the largest wholesalers
    in the United States (according to Supermarket News) and are the exclusive
    coffee supplier for Supervalu and Nash Finch Co., the largest and fourth
    largest wholesalers in the United States. We sell wholesale green coffee
    to Green Mountain Coffee Roasters. Sales to Supervalu, Topco/Shurfine and
    Green Mountain Coffee Roasters accounted for approximately
    16.1%, 7.5%, and 15.6% of our net sales for the fiscal year ended October
    31, 2003 and 9.2%, 6.5% and 21.2% for the nine months ended July 31,
    2004, respectively.</font></p>

<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Although
    our agreements with wholesale customers generally contain only pricing terms,
    our contract with Supervalu also contains minimum and maximum purchase obligations
    at fixed prices.  Because our profits on
      a fixed-price contract could decline if coffee prices increased, we began
      to acquire futures contracts with longer terms (generally three to six
    months) primarily for the purpose of guaranteeing an adequate supply of green
    coffee
      at favorable prices beginning in the latter half of fiscal 2000 and continuing
      through fiscal 2003. The use of these derivative financial instruments
    has enabled us to mitigate the effect of changing prices although we generally
      remain exposed to loss when prices surge significantly in a short period
      of time and remain at higher levels, preventing us from obtaining inventory
      at favorable prices. In addition, during fiscal 2002 and fiscal 2003, the
      historically low price of coffee allowed us to replace our existing inventory
      with cheaper new inventory, locking in additional margins on previously
    contracted
      business. We believe that our favorable inventory position will allow us
    to increase sales and margins if coffee prices continue to rise.</font></p>
<p align="left"><font size="2" face="serif"><b>Marketing</b></font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
    market our private label and wholesale coffee through trade shows, industry
    publications, face-to-face contact and through the use of our internal sales
    force and non-exclusive independent food and beverage sales brokers. We also
    use our web site (www.coffeeholding.com) as a method of marketing our coffee
    products and ourselves.</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For
    our private label and branded coffees, we will, from time to time in conjunction
    with retailers and with wholesalers, conduct in-store promotions, such as
    product demonstrations, coupons, price reductions, two-for-one sales and
    new product launches to capture changing consumer taste preference for upscale
    canned coffees.</font></p>
<p align="left"><font size="2" face="serif"></font></p>
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<p align="left"><font size="2" face="serif"> </font><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We evaluate opportunities for growth consistent with our business objectives.  We recently established relationships with additional independent sales brokers to market our products in the Western United States, an area of the country where we have not had a high penetration of sales.  We intend to use a portion of the proceeds of this offering to increase our sales and marketing program.  In particular, we intend to increase our efforts to market our branded coffees, especially Caf&eacute; Caribe and Caf&eacute; Supremo, toward Hispanic consumers.  We have hired third-party marketing specialists to act as brand managers that will focus exclusively on developing sales of our ethnic espresso brands.  In addition, we
have hired a West Coast Brand Manager to market our S&amp;W and IL CLASSICO brands, as well as our other branded and private label coffee products.  We intend to capture additional market share in our existing distribution channels by selectively adding or introducing new brand names and products across multiple price points, including niche specialty blends, private label &#147;value&#148; blends
and mini-brick, filter packages, instant cappuccinos and tea line products. We
also intend to add specialty instant coffees to our extensive line of instant
coffee products.</font></p>
<p align="left"><font size="2" face="serif"><b>Charitable Activities</b></font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Coffee Holding is also a supporter of several coffee oriented charitable organizations.  </font></p>
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<td>
<font size="2" face="serif">For over 10 years, we have been members of Coffee Kids, an international non-profit organization that helps to improve the quality of life of children and their families in coffee&#150;growing communities in Mexico, Guatemala, Nicaragua and Costa Rica.</font></td>
</tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
  <td></td>
  <td>&nbsp;</td>
  <td>&nbsp;</td>
</tr>
<tr valign="top">
<td width="3%"></td>
<td width="3%">
<font size="2" face="serif">&#149;</font></td>
<td>
<font size="2" face="serif">We are members of Grounds for Health, an organization that educates, screens, and arranges treatment for women who have cancer and live in the rural coffee growing communities of Mexico.</font></td>
</tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
  <tr valign="top">
    <td></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td width="3%"></td>
    <td width="3%"> <font size="2" face="serif">&#149;</font></td>
    <td> <font size="2" face="serif">We are a licensed Fair Trade dealer of Fair
      Trade certified coffee. Fair Trade helps small coffee farmers to increase
      their incomes and improve the prospects of their communities and families.
      It guarantees farmers a minimum price of $1.26 per pound or five cents above
      the current market price.</font></td>
  </tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
  <tr valign="top">
    <td></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td width="3%"></td>
    <td width="3%"> <font size="2" face="serif">&#149;</font></td>
    <td> <font size="2" face="serif">Most recently, we are the administrative
      benefactors to a new non-profit organization called Cup for Education. After
      discovering the lack of schools, teachers, and basic fundamental learning
      supplies in the poor coffee growing communities of Central and Latin America,
      &#147;Cup&#148; was established by our employee, Karen Gordon, to help build
      schools, sponsor teachers, and purchase basic supplies such as books, chalk
      and other necessities for a proper education. </font></td>
  </tr>
</table>
<p align="left"><font size="2" face="serif"><b>Competition</b></font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The coffee market is highly competitive.  We compete in the following areas: </font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><i>Wholesale Green Coffee.</i></b>&nbsp;&nbsp;There are many green coffee dealers throughout the United States.  Many of these dealers have greater financial resources than we do.  However, we believe that we have both the knowledge and the capability to assist small specialty gourmet coffee roasters with developing and growing their business.  Our 30-plus years of experience as a </font></p>
<p align="left">&nbsp;</p>
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<p align="left"><font size="2" face="serif">roaster and a dealer of green coffee
      allows us to provide our roasting experience as a value added service to
      our gourmet roaster customers. While other coffee merchants may be able to
      offer lower prices for coffee beans, we market ourselves as a value-added
      supplier to small roasters, with the ability to help them market their specialty
      coffee products and develop a customer base. The assistance we provide our
      customers includes training, coffee blending and market identification. Because
      specialty green coffee beans are sold unroasted to small coffee shops and
      roasters that market their products to local gourmet customers, we do not
      believe that our specialty green coffee customers compete with our private
      label or branded coffee lines of business.</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><i>Private Label Competition.</i></b>&nbsp;&nbsp;There are several major producers of coffee for private label sale in the United States.  Many other companies produce coffee for sale on a regional basis.  Our main competitors are The Kroger Co. and the coffee division of Sara Lee Corporation.  Both The Kroger Co. and Sara Lee Corporation are larger and have more financial and other resources than we do and therefore are able to devote more resources to product development and marketing.  We believe that we remain 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 is delivered on time and in the
proper quantities.  In addition, we provide our private label customers with information on the coffee market on a regular basis.</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><i>Branded
        Competition.</i></b>&nbsp;&nbsp;Our proprietary brand coffees compete
        with many other brands that are sold in supermarkets and specialty stores,
        primarily in the Northeastern United States. The branded coffee market
        in both the Northeast and elsewhere is dominated by three large companies:
        Kraft General Foods, Inc., The Procter &amp; Gamble Company and Sara
        Lee Corporation, who also market specialty coffee in addition to non-specialty
        coffee. Our large competitors have greater access to capital and a greater
        ability to conduct marketing and promotions. We believe that, while our
        competitors&#146; brands may be more nationally recognizable, our proprietary
        and licensed brands are just as competitive in the Northeastern United
        States and have the potential to be competitive throughout the United
        States.</font></p>
<p align="left"><font size="2" face="serif"><b>Government Regulation</b></font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
    coffee roasting operations are subject to various governmental laws and regulations,
    which require us to obtain licenses, relating to customs, health and safety,
    building and land use, and environmental protection. Our roasting facility
    is subject to state and local air-quality and emissions regulation. If we
    encounter difficulties in obtaining any necessary licenses or if we have
    difficulty complying with these laws and regulations, then we could be subject
    to fines and penalties which could have a material adverse effect on our
    profitability. In addition, our product offerings could be limited, thereby
    reducing our revenues.</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
    believe that we are in compliance in all material respects with all such
    laws and regulations and that we have obtained all material licenses and
    permits that are required for the operation of our business. We are not aware
    of any environmental regulations that have or that we believe will have a
    material adverse effect on our operations.</font></p>
<p align="left"><font size="2" face="serif"><b>Employees</b></font></p>
<p align="left"><font size="2" face="serif"></font></p>
<p align="center"><font size="2" face="serif">46</font></p>
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<p align="left"><font size="2" face="serif"> </font><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
    have 62 full-time employees, 50 of whom are employed in the areas of coffee
    roasting, blending and packaging and 12 of whom are in administration and
    sales. None of our employees are represented by unions or collective bargaining
    agreements. Our management believes that we maintain a good working relationship
    with our employees. To supplement our internal sales staff, we sometimes
    use independent national and regional sales brokers who work on a commission
    basis.</font></p>
<p align="left"><font size="2" face="serif"><b>Description of Property</b></font></p>

<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are headquartered at 4401 First Avenue, Brooklyn, New York, where we own the land and an approximately 15,000 square foot building.  The building houses our executive offices, as well as our plant where we roast, blend and package our coffee.  </font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We lease a 50,000 square foot facility located at 27700 Frontage Road in La Junta, Colorado from the City of La Junta.  We pay annual rent of $100,092, beginning in January of 2005 through January of 2024.  </font></p>

<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We also lease a 7,500 square foot warehouse located at 4425A First Avenue in Brooklyn from T &amp; O Management.  T &amp; O Management is not affiliated with us or any of our officers, directors or stockholders.  We pay annual rent of $50,076 until the expiration of the lease on August 31, 2004.  We do not plan to extend the term of this lease.  Rather, we plan to enter into a new multi-year lease for a larger warehouse in Brooklyn.</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We also use a variety of independent,
    bonded commercial warehouses to store our green coffee beans. Our management
    believes that our facilities are adequate for our current operations and
for our contemplated operations in the foreseeable future. </font></p>
<p align="left"><font size="2" face="serif"><b>Legal Proceedings</b></font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
    are not a party to, and none of our property is the subject of, any pending
    legal proceedings other than routine litigation that is incidental to our
    business. To our knowledge, no governmental authority is contemplating initiating
    any such proceedings. </font></p>
<p align="center"><font size="2" face="serif"><b></b></font></p>
<p align="center"><font size="2" face="serif">47</font></p>
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<p align="center"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;</font><font size="2" face="serif"><b>MANAGEMENT</b></font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Set forth below is information concerning our directors and executive officers.  Our board of directors currently consists of four directors.  We intend to add three additional directors, each of whom will be independent directors as defined under The American Stock Exchange listing standards, upon completion of the offering.</font></p>

<table width="100%" cellspacing="0" cellpadding="0" border="0">

<tr valign="bottom" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif"><b>Name</b></font></td>
<td width="2%" align="left">&nbsp;</td>
<td width="5%" align="center"><font size="2" face="serif"><b>Age</b></font></td>
<td width="2%" align="left">&nbsp;</td>
<td width="45%" align="center"><font size="2" face="serif"><b>Position</b></font></td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
  <td align="left"><hr align="left" width="10%" size="1" noshade></td>
  <td align="left">&nbsp;</td>
  <td align="right"><hr noshade size="1"></td>
  <td align="left">&nbsp;</td>
  <td align="left"><hr align="center" width="25%" size="1" noshade></td>
  </tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">Andrew Gordon</font></td>
<td align="left">&nbsp;</td>
<td align="center"><font size="2" face="serif">42</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">Chief Executive Officer, President, Treasurer and Director</font></td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">David Gordon</font></td>
<td align="left">&nbsp;</td>
<td align="center"><font size="2" face="serif">39</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">Executive Vice President &#150; Operations, Secretary and Director</font></td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">Richard E. Pino</font></td>
<td align="left">&nbsp;</td>
<td align="center"><font size="2" face="serif">38</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">Chief Financial Officer</font></td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">Gerard DeCapua</font></td>
<td align="left">&nbsp;</td>
<td align="center"><font size="2" face="serif">42</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">Director</font></td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">Daniel Dwyer</font></td>
<td align="left">&nbsp;</td>
<td align="center"><font size="2" face="serif">47</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">Director</font></td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">Barry Knepper</font></td>
<td align="left">&nbsp;</td>
<td align="center"><font size="2" face="serif">54</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">Director(1)</font></td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">Sal Reda, CPA</font></td>
<td align="left">&nbsp;</td>
<td align="center"><font size="2" face="serif">40</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">Director(1)</font></td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">Robert M. Williams</font></td>
<td align="left">&nbsp;</td>
<td align="center"><font size="2" face="serif">45</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">Director(1)</font></td>
</tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
  <td>&nbsp;</td>
  <td align="left">&nbsp;</td>
</tr>
<tr valign="top">
  <td colspan="2"><hr align="left" width="100" size="1" noshade>
  </td>
  </tr>
<tr valign="top">
<td width="3%"><font size="2" face="serif">(1)</font></td>
<td align="left">
<font size="2" face="serif"> Effective upon completion of the offering.</font></td>
</tr>
</table>

<p align="left"><font size="2" face="serif">&nbsp;</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;<b>Andrew Gordon</b> has
    been our Chief Executive Officer, President, Treasurer and one of our directors
    since 1997. He is responsible for managing our overall business and has worked
    for Coffee Holding for over 21 years, previously as a Vice President from
    1993 to 1997. Mr. Gordon has worked in all capacities of our business and
    serves as the direct contact with our major private label accounts. In addition,
    Mr. Gordon publishes a weekly report that is distributed to our customers
    and is perceived by many of his peers and customers as a coffee market expert.
    Mr. Gordon received his Bachelor of Business Administration degree from Emory
    University. He is the brother of David Gordon.</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>David
      Gordon</b> has been our Executive Vice President &#150; Operations, Secretary
      and one of our directors since 1995. He is responsible for managing all
      aspects of our roasting and blending operations, including quality control,
      and, has worked for Coffee Holding for over 23 years, previously as an
      Operating Manager from 1989 to 1995. He is a charter member of the Specialty
      Coffee Association of America. Mr. Gordon attended Baruch College in New
      York City. He is the brother of Andrew
Gordon.</font></p>


<p align="left"><font size="2" face="serif"><b>Richard
      E. Pino,</b> age 38, has served as our Chief Financial Officer since July
      2004. Mr. Pino has more than 17 years of experience in the communications
      industry and investment banking industry, where he worked for both public
      and private companies. From August 2001 through July 2004, Mr. Pino served
      as Chief Financial Officer for Frontline Communications International,
      Inc., a wholesale supplier of long-distance telecommunications services
      to retail telecommunications providers. He served as Chief Financial Officer
      for Ocean Records, Inc., an independent record label, from August 2000
      to August 2001 and as Vice President of Finance & Administration at
      Eagle Communications, Inc., a competitive local exchange carrier (CLEC), </font></p>

<p align="left"><font size="2" face="serif">&nbsp;</font></p>
<p align="left">&nbsp;</p>
<p align="center"><font size="2" face="serif">48</font></p>
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<p align="left"><font size="2" face="serif"> </font><font size="2" face="serif">from August 1999 to August 2000. His career began at Mellon Securities
      and Merrill Lynch Capital Markets. He holds a BA in Economics from St.
      Francis College, and an MBA in Corporate Finance and Investment from Adelphi
University.</font></p>

<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>Gerard DeCapua</b> has served as a director of Coffee Holding since 1997.  Mr. DeCapua has had his own law practice in Rockville Centre, New York since 1986.  Mr. DeCapua received his law degree from Pace University.</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>Daniel Dwyer</b> has served as a director of Coffee Holding since 1998.  Mr Dwyer has been a senior coffee trader at Rothfos Corporation, a green coffee bean supplier, since 1995.  Mr. Dwyer is responsible for our account with Rothfos.  We paid Rothfos approximately $4.1 million for green coffee purchases in fiscal 2003 and expect to pay it a similar amount in fiscal 2004.  All purchases are made on arms&#146; length terms.</font></p>

<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
    addition, the following persons have been appointed to serve as directors
    upon completion of the offering:</font></p>

<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>Barry Knepper</b> will become a director concurrently with the completion of the offering.  Mr. Knepper has been the Chief Financial Officer for TruFoods Corporation, a growth oriented franchise management company since April 2001.  From January 2000 through March 2001 he was the Chief Financial Officer of Offline Entertainment, an early stage television and motion picture production company.  From 1982 through 1999 he served as the Chief Financial Officer of Unitel Video, Inc., a publicly traded nationwide high tech service company in the television, film and new media fields.</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>Sal
      Reda, CPA</b> will become a director concurrently with the completion of
      the offering. Mr. Reda has been a partner at Citrin Cooperman &amp; Company,
      LLP, a certified public accounting and business consulting firm, since
      1994. Mr. Reda has extensive audit and accounting experience and helps
      business owners acquire financing and prepare budgets and forecasts to
      monitor current operations. He also provides strategic planning advice
      to small business owners. He is a member of both the New York State CPA
      Society and the American Institute of CPAs. He received his Bachelor of
      Business Administration from Baruch College and earned his CPA designation
      in 1996.</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>Robert M. Williams</b> will become a director concurrently with the completion of the offering.  Mr. Williams has been a principal of R. Madison, Inc., a national sales, distribution, sourcing and business development firm, since 2003.  From 2002 to 2003, he was the Executive Vice President, Sales &amp; Marketing for Lodis Corporation, a fine leather goods manufacturer.  From May 2001 to January 2002, he was the Vice President of Sales, Central &amp; Eastern North America, of Hartmann, Inc., the leather and luggage goods division of Brown-Forman Corporation, and from 1997 to May 2001 he served as its Director, Personal Leather Goods &amp; Accessories.  Mr. Williams received a Bachelor of Science, Business
Administration, Marketing from the University of South Carolina, Columbia in 1981.</font></p>

<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Directors
    are elected by a plurality of the votes cast at our 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,</font></p>
<p align="center"><font size="2" face="serif">49</font></p>
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<p align="left"><font size="2" face="serif"> 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.</font></p>


<p align="left"><font size="2" face="serif"><b>Committees of the Board of Directors</b></font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We currently do not have any standing committees.  However, upon completion of the offering, we will establish the following committees:  </font></p>

<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<i>Audit Committee.</i>&nbsp;&nbsp;The Audit Committee will oversee and monitor our financial reporting process and internal control system, review and evaluate the audit performed by our outside auditors and report to the Board of Directors any substantive issues found during the audit.  The Audit Committee will be directly responsible for the appointment, compensation and oversight of the work of our independent auditors.  The Audit Committee will also review and approve all transactions with affiliated parties.  The Board of Directors will adopt a written charter for the Audit Committee.  All members of the Audit Committee will be independent directors as defined under The American Stock Exchange listing standards.
Directors DeCapua, Knepper, and Reda will serve as members of the Audit Committee upon completion of the offering.  We believe that Director Knepper and Director Reda each qualifies as an Audit Committee Financial Expert as that term is defined by SEC regulations.</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<i>Compensation</i><b><i></i></b><i>
  Committee</i>.&nbsp;&nbsp;The Compensation Committee will provide advice and recommendation
  to the Board of Directors in the areas of employee salaries and benefit programs.
  The Committee will also review the compensation of the President and Chief Executive
  Officer of Coffee Holding and will make recommendations in that regard to the
  Board of Directors as a whole. All members of the Compensation Committee will
  be independent directors as defined under The American Stock Exchange listing
  standards. Directors Knepper, Reda and Williams will serve as members of the
  Compensation Committee upon completion of the offering.</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<i>Nominating
      and Corporate Governance Committee</i>.&nbsp;&nbsp;The Nominating and Corporate
      Governance Committee will meet to recommend the nomination of Directors
      to the full
      Board of Directors to fill the terms for the upcoming year or to fill vacancies
      during a term. The Nominating and Corporate Governance
        Committee will consider recommendations from stockholders if submitted
      in a timely manner in accordance
            with the procedures established in the Bylaws and will apply the
      same criteria to all persons being considered. All members of the Nominating
      and
        Corporate
            Governance Committee will be independent directors as defined under
      The American Stock Exchange listing standards. Directors DeCapua, Reda
      and
            Williams will serve as members of the Nominating and Corporate Governance
      Committee upon completion of the offering.</font></p>

<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;It
    will be the policy of the Nominating and Corporate Governance Committee to
    select individuals as director nominees who shall have the highest personal
    and professional integrity, who shall have demonstrated exceptional ability
    and judgment and who shall be most effective, in conjunction with the other
    nominees to the Board, in collectively serving the long-term interests of
    the stockholders. Stockholder nominees will be analyzed by the Nominating
    and Corporate Governance Committee in the same manner as nominees that are
    identified by the </font></p>
<p align="center"><font size="2" face="serif">50</font></p>
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<p align="left"><font size="2" face="serif">Nominating and Corporate Governance Committee.  We will not pay a fee to any third party to identify or evaluate nominees.</font></p>

<p align="left"><font size="2" face="serif"><b>Executive Compensation</b></font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table sets forth certain compensation information for our chief executive officer and each other executive officer whose salary and bonus compensation exceeded $100,000 for the fiscal years ended October 31, 2003, 2002, or 2001.</font></p>
<table width="100%" cellspacing="0" cellpadding="0" border="0">

<tr valign="top" bgcolor="#FFFFFF">
<td colspan="13" align="center"><font size="2" face="serif"><b>Summary Compensation Table</b></font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td width="1%" align="right">&nbsp;</td>
<td width="7%" align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td width="1%" align="right">&nbsp;</td>
<td colspan="7" align="center"><font size="1" face="serif"><b>Annual Compensation</b></font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
  <td align="left">&nbsp;</td>
  <td width="2%" align="left">&nbsp;</td>
  <td width="1%" align="right">&nbsp;</td>
  <td width="10%" align="center">&nbsp;</td>
  <td width="2%" align="left">&nbsp;</td>
  <td width="1%" align="right"><hr noshade size="1"></td>
  <td width="10%" align="center"><hr noshade size="1"></td>
  <td width="2%" align="left"><hr noshade size="1"></td>
  <td width="1%" align="right"><hr noshade size="1"></td>
  <td width="10%" align="center"><hr noshade size="1"></td>
  <td width="2%" align="left"><hr noshade size="1"></td>
  <td width="1%" align="right"><hr noshade size="1"></td>
  <td width="10%" align="center"><hr noshade size="1"></td>
  <td width="2%" align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left" valign="bottom"><font size="2" face="serif"><b><font size="1">Name and</font></b></font><font size="1"><br>
    <font face="serif"><b>Principal Position</b></font></font></td>
<td align="left" width="2%">&nbsp;</td>
<td colspan="2" align="center" valign="bottom"><font size="1" face="serif"><b>Fiscal<br>
  Year</b></font></td>
<td width="2%" align="left">&nbsp;</td>
<td colspan="2" align="center" valign="bottom"><font size="1" face="serif"><b>Salary <br>($)</b></font></td>
<td width="2%" align="left">&nbsp;</td>
<td colspan="2" align="center" valign="bottom"><font size="1" face="serif"><b>Bonus <br>($) (1)</b></font></td>
<td width="2%" align="left">&nbsp;</td>
<td colspan="2" align="center" valign="bottom"><font size="1" face="serif"><b>All Other<br>
  Compensation<br>
  ($) (2)</b></font></td>
<td width="2%" align="left">&nbsp;</td> </tr>
<tr valign="top" bgcolor="#FFFFFF">
  <td align="left"><hr noshade size="1"></td>
  <td align="left">&nbsp;</td>
  <td align="right"><hr noshade size="1"></td>
  <td align="right"><hr noshade size="1"></td>
  <td align="left">&nbsp;</td>
  <td align="right"><hr noshade size="1"></td>
  <td align="right"><hr noshade size="1"></td>
  <td align="left">&nbsp;</td>
  <td align="right"><hr noshade size="1"></td>
  <td align="right"><hr noshade size="1"></td>
  <td align="left">&nbsp;</td>
  <td align="right"><hr noshade size="1"></td>
  <td align="right"><hr noshade size="1"></td>
  <td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">Andrew Gordon</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="center"><font size="2" face="serif">2003</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">245,000</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">33,000</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;28,719</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">Chief Executive Officer and President</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="center"><font size="2" face="serif">2002</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">190,254</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">49,500</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#150;</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="center"><font size="2" face="serif">2001</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">160,000</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;30,000</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19,838</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="center"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">David Gordon</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="center"><font size="2" face="serif">2003</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">204,000</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">33,000</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9,887</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">Executive Vice President &#150; Operations</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="center"><font size="2" face="serif">2002</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">153,467</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">49,500</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#150;</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="center"><font size="2" face="serif">2001</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">140,000</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;25,000</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7,311</font></td>
<td align="left">&nbsp;</td>
</tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
  <td>&nbsp;</td>
  <td align="left">&nbsp;</td>
</tr>
<tr valign="top">
  <td colspan="2"><hr align="left" width="100" size="1" noshade>
    </td>
  </tr>
<tr valign="top">
<td width="3%"><font size="2" face="serif">(1)</font></td>
<td align="left">
<font size="2" face="serif"> Amounts shown reflect bonuses earned in each fiscal year.</font></td>
</tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
<td width="3%"><font size="2" face="serif">(2)</font></td>
<td align="left">
<font size="2" face="serif"> The amounts set forth consist of amounts paid for the use of an automobile and automobile insurance. </font></td>
</tr>
</table>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our Board of Directors did not have a compensation committee in fiscal 2003.  During that year, salaries and bonuses were determined by the Board of Directors.  Andrew Gordon&#146;s base salary for fiscal 2004 is $269,500.  David Gordon&#146;s base salary for fiscal 2004 is $224,400.  Once established, the Compensation Committee will determine the salaries and bonuses of Andrew Gordon, David Gordon and our other executive officers.</font></p>
<p align="left"><font size="2" face="serif"><b>Employment Agreements</b></font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
    connection with this offering, we intend to enter into employment agreements
    with Andrew Gordon to secure his continued service as President and Chief
    Executive Officer and with David Gordon to secure his continued service as
    Executive Vice President &#150; Operations. These employment agreements will
    have rolling three-year terms that will begin at the conclusion of the offering.
    These agreements may be converted to a fixed three-year term by the decision
    of our Board of Directors or the executive. These agreements will provide
    for minimum annual salaries of $325,000 and $300,000, respectively, discretionary
    cash bonuses, and participation on generally applicable terms and conditions
    in other compensation and fringe benefit plans. They also guarantee customary
    corporate indemnification and errors and omissions insurance coverage throughout
    the employment term and thereafter for so long as the executives are subject
    to liability for such service to the extent permissible by the Nevada Revised
    Statutes.</font></p>
<p align="left"><font size="2" face="serif"></font></p>
<p align="center"><font size="2" face="serif">51</font></p>
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<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The terms of the proposed employment agreements will provide that each executive will be entitled to severance benefits if his employment is terminated without &#147;cause&#148; or if he resigns for &#147;good reason&#148; or following a &#147;change in control&#148; (as such terms will be defined in the employment agreements) equal to the value of the cash compensation and fringe benefits that he would have received if he had continued working for the remaining unexpired term of the agreement.  The employment agreements will also provide uninsured disability benefits.  During the term of the employment agreements and, in case of discharge with &#147;cause&#148; or resignation without &#147;good
reason,&#148; for a period of one year thereafter, the executives will be subject
to (i) restrictions on competition with us and (ii) restrictions on the solicitation
of our customers and employees. For all periods during and after the term, the
executives will be subject to nondisclosure and restrictions relating to our
confidential information and trade secrets.</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If we experience a change in ownership, a change in effective ownership or control or a change in ownership of a substantial portion of our assets as contemplated by Section 280G of the Internal Revenue Code, a portion of any severance payments under the employment agreements might constitute an &#147;excess parachute payment&#148; under current federal tax laws.  Federal tax laws impose a 20% excise tax, payable by each executive, on excess parachute payments.  Under the terms of the proposed employment agreements, we would reimburse the executives for the amount of this excise tax and would make an additional gross-up payment so that, after payment of the excise tax and all income and excise taxes imposed on the
reimbursement and gross-up payments, the executives will retain approximately the same net-after tax amounts under the employment agreement that they would have retained if there were no 20% excise tax.  The effect of this provision is that we, and not the executives, bear the financial cost of the excise tax and we could not claim a federal income tax deduction for an excess parachute payment, excise tax reimbursement or gross-up payment.</font></p>
<p align="left"><font size="2" face="serif"><b>Stock Option Plan</b></font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
    have a stock option plan, 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 our directors, officers and other key employees
    and consultants. The plan was adopted by our Board of Directors and approved
    by our stockholders on February 10, 1998. On June 21, 2004, the plan was
    amended by our Board of Directors to reduce the number of shares of common
    stock
        reserved for issuance under the plan from 2,000,000 to 800,000, subject
      to adjustment for stock splits, stock dividends, reorganizations, mergers,
      recapitalizations
        or other capital adjustments. The plan is administered by our Board of
      Directors which may delegate our powers to a committee of the Board. No
    options may
        be granted after February 10, 2008. The Compensation Committee will determine,
        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 been granted under the plan.</font></p>
<p align="left"><font size="2" face="serif"><b></b></font></p>
<p align="center"><font size="2" face="serif">52</font></p>
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<p align="left"><font size="2" face="serif"><b>Compensation of Directors </b></font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Directors currently 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.  After the offering, non-employee directors will receive $400 per board meeting attended and $400 per committee meeting attended.  </font></p>
<p align="left"><font size="2" face="serif"><b>Indemnification Of Directors And Officers</b></font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Nevada Revised Statutes provides for the discretionary and mandatory indemnification of directors, officers, employees and agents under certain circumstances.</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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, by reason of the fact that he is or was a director, officer, employee or agent of the corporation, or was serving at request of the corporation as a director, officer, employee or agent of another entity, against expenses, including attorneys&#146; 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.</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 our 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 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 be indemnified for such expenses as the court deems
    proper.</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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
    herein, the corporation shall indemnify him against expenses, including attorneys&#146; fees,
    actually and reasonably incurred by him in connection with the defense.</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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.</font></p>
<p align="left"><font size="2" face="serif"></font></p>
<p align="center"><font size="2" face="serif">53</font></p>
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<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
    current Articles of Incorporation provide that we will limit the liability
    of our officers and directors to the fullest extent permitted by Nevada law.
    Our proposed Articles of Incorporation and Bylaws will provide that we also
    will indemnify our officers and directors to the fullest extent permitted
    by Nevada law.</font></p>
<p align="center"><font size="2" face="serif"><b>SECURITY OWNERSHIP OF CERTAIN BENEFICIAL<br>
OWNERS AND MANAGEMENT</b></font></p>

<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following
    table sets forth information regarding ownership of shares of our common
    stock, as of July 31, 2004 and as of the date immediately following the offering,
    by each person known to be the owner of 5% or more of our common stock, by
    each person who is a director or executive officer and by all directors and
    executive officers as a group. Except as otherwise indicated, each person
    and each group shown in the table has sole voting and investment power with
    respect to the shares of common stock indicated. For purposes of the table
    below, in accordance with Rule 13d-3 under the Securities Exchange Act of
    1934, as amended, a person is deemed to be the beneficial owner, for purposes
    of any shares of common stock: (1) over which he or she has or shares, directly
    or indirectly, voting or investment power; or (2) of which he or she has
    the right to acquire beneficial ownership at any time within 60 days after
    July 31, 2004. As used in this prospectus, &#8220;voting power&#8221; is
    the power to vote or direct the voting of shares and &#8220;investment power&#8221; includes
    the power to dispose or direct the disposition of shares. Common stock beneficially
    owned and percentage ownership, before the offering and after the offering,
    were based on 3,999,650 and 5,599,650 shares outstanding, respectively. The
    address of each beneficial owner is c/o Coffee Holding Co., Inc., 4401 First
    Avenue, Brooklyn, New York 11232-0005.</font></p>
<table width="100%" cellspacing="0" cellpadding="0" border="0">

<tr valign="top" bgcolor="#FFFFFF">
<td align="left" valign="bottom"><font size="1" face="serif"><b>Name of Beneficial Owners,<br>
  Officers and Directors</b></font></td>
<td align="left" width="2%">&nbsp;</td>
<td colspan="2" align="center" valign="bottom"><font size="1" face="serif"><b>Number
      of Shares<br>
      Owned Before<br>
      Offering</b></font></td>
<td width="2%" align="left">&nbsp;</td>
<td colspan="2" align="center" valign="bottom"><font size="1" face="serif"><b>Percentage <br>
  Owned Before<br>
  Offering</b></font></td>
<td width="2%" align="left">&nbsp;</td>
<td colspan="2" align="center" valign="bottom"><font size="1" face="serif"><b>Percentage<br>
  Owned
      After<br>
      Offering</b></font></td>
<td width="2%" align="left">&nbsp;</td> </tr>
<tr valign="top" bgcolor="#FFFFFF">
  <td align="left"><hr align="left" width="50%" size="1" noshade></td>
  <td align="left">&nbsp;</td>
  <td align="right"><hr noshade size="1"></td>
  <td align="right"><hr noshade size="1"></td>
  <td align="left">&nbsp;</td>
  <td align="right"><hr noshade size="1"></td>
  <td align="right"><hr noshade size="1"></td>
  <td align="left">&nbsp;</td>
  <td align="right"><hr noshade size="1"></td>
  <td align="right"><hr noshade size="1"></td>
  <td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">Andrew Gordon</font></td>
<td align="left">&nbsp;</td>
<td width="1%" align="right">&nbsp;</td>
<td width="15%" align="right"><font size="2" face="serif">619,500</font></td>
<td align="left">&nbsp;</td>
<td width="1%" align="right">&nbsp;</td>
<td width="15%" align="right"><font size="2" face="serif">15.5</font></td>
<td align="left"><font size="2" face="serif">%</font></td>
<td width="1%" align="right">&nbsp;</td>
<td width="15%" align="right"><font size="2" face="serif">11.1</font></td>
<td align="left"><font size="2" face="serif">%</font></td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">David Gordon</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">619,500</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">15.5</font></td>
<td align="left"><font size="2" face="serif">%</font></td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">11.1</font></td>
<td align="left"><font size="2" face="serif">%</font></td>
</tr>
<tr valign="top" bgcolor="#ffffff">
<td align="left"><font size="2" face="serif">Richard E. Pino</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">0</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="left"><div align="right"><font size="2" face="serif">*</font></div></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="left"><div align="right"><font size="2" face="serif">*</font></div></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">Gerard DeCapua</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">100</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="left"><div align="right"><font size="2" face="serif">*</font></div></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="left"><div align="right"><font size="2" face="serif">*</font></div></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#ffffff">
<td align="left"><font size="2" face="serif">Daniel Dwyer</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">100</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="left"><div align="right"><font size="2" face="serif">*</font></div></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="left"><div align="right"><font size="2" face="serif">*</font></div></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">Rachelle L. Gordon(1)</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">1,343,202</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">33.5</font></td>
<td align="left"><font size="2" face="serif">%</font></td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">24.0</font></td>
<td align="left"><font size="2" face="serif">%</font></td>
</tr>
<tr valign="top" bgcolor="#ffffff">
<td align="left"><font size="2" face="serif">Sterling A. Gordon(2)</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">1,343,202</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">33.5</font></td>
<td align="left"><font size="2" face="serif">%</font></td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">24.0</font></td>
<td align="left"><font size="2" face="serif">%</font></td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">All directors and executive <br>officers as a group (4 persons)</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">1,239,200</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">31.0</font></td>
<td align="left"><font size="2" face="serif">%</font></td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">22.1</font></td>
<td align="left"><font size="2" face="serif">%</font></td>
</tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
  <td colspan="2"><hr align="left" width="15%" size="1" noshade>
  </td>
  </tr>
<tr valign="top">
<td width="3%"><font size="2" face="serif">*</font></td>
<td align="left">
<font size="2" face="serif"> Less than 1%.</font></td>
</tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
<td width="3%"><font size="2" face="serif">(1)</font></td>
<td align="left">
<font size="2" face="serif"> Includes 273,602 shares owned by Ms. Gordon directly, 596,398 shares
owned by the Rachelle L. Gordon 2002 Grantor Retained Annuity Trust of which Rachelle L. Gordon
is the grantor, beneficiary and trustee, with sole power to vote and dispose of the shares
and 473,202 shares owned by Rachelle Gordon&#8217;s husband, Sterling A. Gordon.  Pursuant
to the terms of Rachelle L. Gordon 2002 Grantor Retained Annuity Trust, Mrs. Gordon will
receive annual distributions of common stock based on the appraised value of our</font></td>
</tr>
</table>

<p align="center"><font size="2" face="serif">54</font></p>
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<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
<td width="3%">&nbsp;</td>
<td align="left">
<font size="2" face="serif">common stock through 2004.  Any shares remaining in the trust after such distribution will be
distributed in equal amounts to Andrew Gordon and David Gordon.  Mrs. Gordon is the mother
of Andrew Gordon and David Gordon.</font></td>
</tr>
</table>

<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
  <td>&nbsp;</td>
  <td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td width="3%"><font size="2" face="serif">(2)</font></td>
<td align="left">
<font size="2" face="serif"> Includes 473,202 shares owned by Mr. Gordon directly, 596,398 shares owned by the Sterling A. Gordon 2002 Grantor Retained Annuity Trust of which Sterling A. Gordon is the grantor, beneficiary and trustee, with sole power to vote and dispose of the shares and 273,602 shares owned by Sterling Gordon&#8217;s wife, Rachelle L. Gordon.  Pursuant to the terms of Sterling A. Gordon 2002 Grantor Retained Annuity Trust, Mr. Gordon will receive annual distributions of common stock based on the appraised value of our common stock through 2004.  Any shares remaining in the trust after such distribution will be distributed in equal amounts to Andrew Gordon and David Gordon.  Mr. Gordon is the father of Andrew Gordon and David Gordon.</font></td>
</tr>
</table>

<p align="center"><font size="2" face="serif"><b>CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS</b></font></p>

<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;From time to time, certain of our stockholders, directors and officers have made loans to us for working capital purposes.  We had loans bearing interest at an annual rate of 6% payable to our stockholders, all of whom are members of the Gordon family, of $79,646 at October 31, 2003.  The loans were repaid during the quarter ended April 30, 2004.  We do not intend to borrow additional amounts from our stockholders.</font></p>

<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Andrew Gordon and David Gordon have guaranteed up to $500,000 of the payment of our borrowings under our outstanding credit facilities from Wells Fargo Business Credit.</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Daniel
    Dwyer, a director, is a senior coffee trader for Rothfos Corporation, a coffee
    trading company. Mr. Dwyer is responsible for our account. We paid Rothfos
    approximately $4.1 million for green coffee purchases
      in fiscal 2003 and expect to pay it a similar amount in fiscal 2004. All
      purchases are made on arms&#146; length
        terms.</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We believe that all of the transactions set forth above were made on terms no less favorable to us than could have been obtained from unaffiliated third parties.  All future transactions between us and our officers, directors and principal stockholders and their affiliates will be subject to approval by an independent committee of our Board of Directors.</font></p>
<p align="center"><font size="2" face="serif"><b>DESCRIPTION OF CAPITAL STOCK</b></font></p>
<p align="left"><font size="2" face="serif"><b>General</b></font></p>

<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following description of our securities is a summary and is subject in all respects to our Articles of Incorporation, as amended, Bylaws and Nevada law. </font></p>

<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our authorized capital stock consists of 30,000,000 <b></b>shares of common stock, par value $.001 per share, and 10,000,000 shares of preferred stock, par value $.001 per share.</font></p>
<p align="left"><font size="2" face="serif"><b>Common Stock</b></font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
    of the date of this prospectus, there are 3,999,650 shares of common stock
    issued and outstanding and 472 registered holders of our common stock. Holders
of common stock have</font></p>
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<p align="left"><font size="2" face="serif">right to cast one vote for each share held of record
    on all matters submitted to a vote of holders of common stock, including
    the 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 are necessary to constitute a quorum for the transaction
    of business. Directors are elected by a majority 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.</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 therefore. In the event of the liquidation, dissolution or winding up of our affairs, all assets and funds available for distribution to the holders of our 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.</font></p>
<p align="left"><font size="2" face="serif"><b>Preferred Stock</b></font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our Articles of Incorporation authorize 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.</font></p>
<p align="left"><font size="2" face="serif"><b>Underwriter&#146;s Warrants</b></font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have agreed to issue warrants to the underwriter to purchase from us up to 160,000 shares of our common stock.  These warrants are exercisable at a price per share equal to 110% of the public offering price per share in this offering and will allow for cashless exercise.  The warrants will provide for registration rights, including a one time demand registration right and unlimited piggyback registration rights, and customary anti-dilution provisions for stock dividends and splits and recapitalizations consistent with the National Association of Securities Dealers, Inc. Rules of Fair Practice.  </font></p>
<p align="left"><font size="2" face="serif"><b>Provisions of our proposed Articles of Incorporation, Bylaws and Employment Agreements
with Andrew Gordon and David Gordon and Nevada law may have anti-takeover effects</b></font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Provisions in our proposed Articles of Incorporation, Bylaws and employment agreements, together with provisions of the Nevada Revised Statutes, may have anti-takeover effects.</font></p>
<p align="left"><font size="2" face="serif"><b>Our proposed Articles of Incorporation and Bylaws</b></font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
    proposed Articles of Incorporation and Bylaws will contain a number of provisions
    relating to corporate governance and rights of stockholders which might discourage
    future takeover attempts. As a result, stockholders who might desire to participate
    in such transactions may not have an opportunity to do so. In addition, these
    provisions will also render the removal of our Board of Directors or management
    more difficult.</font></p>
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<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following description is a summary of the provisions of the proposed Articles of Incorporation and Bylaws.  See &#147;Where You Can Find Additional Information&#148; as to how to review copies of these documents.</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<i>Directors.</i>  Certain provisions of our proposed Articles of Incorporation and Bylaws will impede changes in control of our Board of Directors.  Our proposed Articles of Incorporation will provide that our Board of Directors will be divided into three classes with directors in each class, except for the initial directors, elected for three-year staggered terms.  Thus, it would take two annual elections to replace a majority of our Board of Directors.  Our proposed Articles of Incorporation will provide that the size of our Board of Directors may be increased or decreased only by a majority vote of the Board of Directors.  The proposed Articles of Incorporation will also provide that any vacancy occurring in our
Board of Directors, including a vacancy created by an increase in the number of directors, shall be filled for the remainder of the unexpired term by a majority vote of the directors then in office.  Finally, the proposed Articles of Incorporation and Bylaws will impose notice and information requirements in connection with the nomination by stockholders of candidates for election to our Board of Directors or the proposal by stockholders of business to be acted upon at an annual meeting of stockholders.</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
    proposed Amended and Restated Articles of Incorporation will provide that
    a director may be removed from office, with or without cause, by the affirmative
    vote of stockholders representing not less than eighty percent (80%) of the
    voting power of the issued and outstanding stock entitled to vote. In the
    absence of this provision, the affirmative vote of the stockholders representing
    not less than two-thirds of the voting power of the issued and outstanding
        stock entitled to vote could remove the entire Board and replace it with
        persons of such holders&#146; choice.</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<i>Restrictions on Call of Special Meetings.</i>  The proposed Articles of Incorporation will provide that a special meeting of stockholders may be called by a majority of our Board of Directors or the affirmative vote of a majority of the disinterested directors then in office, or, upon written application, by stockholders holding at least 80% of the capital stock entitled to vote at the meeting.</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<i>Votes of Stockholders.</i>  The proposed Articles of Incorporation will prohibit cumulative voting for the election of directors.  No cumulative voting means that our directors and officers and members of the Gordon family may have the power to elect all of the directors to be elected at any particular meeting and could prevent representation of other stockholders on our Board of Directors.  In addition, the proposed Articles of Incorporation will also provide that any action required or permitted to be taken by our stockholders may be taken only at an annual or special meeting and prohibits stockholder action by written consent in lieu of a meeting.</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<i>Authorization
      of Preferred Stock. </i>The proposed Articles of Incorporation will authorize
      10,000,000 shares of preferred stock, par value $0.001 per share. We will
      be authorized to issue preferred stock from time to time in one or more
      series subject to applicable provisions of law, and the Board of Directors
      will be authorized to fix the designations and relative preferences, limitations
      and voting rights, if any. In the event of a proposed merger, tender offer
      or other attempt to gain control of us that the Board of Directors does
      not approve, it may be possible for the Board of Directors to authorize
      the issuance of a series of preferred stock with rights and</font></p>
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<p align="left"><font size="2" face="serif">preferences
      that would impede the completion of such a transaction. An effect of the
      possible issuance of preferred stock therefore may be to deter a future
      attempt to gain control of us. Our Board of Directors has no present plan
      or intention to issue any preferred stock.</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<i>Higher Stockholder Vote Required to Approve Certain Business Combinations</i>.  The proposed Amended and Restated Articles of Incorporation will require the approval of the holders of at least eighty percent (80%) of our outstanding shares of voting stock in connection with certain &#147;Business Combinations&#148; with an Interested Stockholder after the expiration of three years after the date the person becomes an Interested Stockholder, except in cases where the proposed Business Combination has been approved in advance by a majority of those members of the Board of Directors who are unaffiliated with the Interested Stockholder and who were directors prior to the time when the Interested Stockholder became
and Interested Stockholder.  In addition, the Business Combination must also satisfy any one of the following requirements:  (1) the Business Combination is approved by our Board of Directors prior to the date that the person first became an Interested Stockholder; (2) the transaction by which the Interested Stockholder became an Interested Stockholder was approved by our Board of Directors prior to the date such shares were purchased; (3) the Business 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 Business Combination, at a meeting duly called for that purpose no earlier than three years after the date that the person first became an
Interested Stockholder; or (4) the consideration to be received by all the holders of our outstanding stock not beneficially owned by the Interested Stockholder equals or exceeds thresholds set forth by the Nevada Revised
Statutes.</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Business Combination&#148; means:</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Any merger or consolidation of us with the interested stockholder, or any other corporation, which is, or after the merger or consolidation would be, an affiliate or associate of the interested stockholder.</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Any sale, lease, exchange, mortgage, pledge, transfer or other disposition, in one transaction or a series of transactions, to or with the interested stockholder or any affiliate or associate of the interested stockholder of our assets or any of our subsidiaries&#146; assets:</font></p>
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<font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Having an aggregate market value equal to 5 percent or more of the aggregate market value of all our assets, determined on a consolidated basis;</font></td>
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<font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Having an aggregate market value equal to 5 percent or more of the aggregate market value of all our outstanding shares; or</font></td>
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<font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Representing 10 percent or more of our earning power or net income, determined on a consolidated basis.</font></td>
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<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The
    issuance or transfer by us or any of our subsidiaries, in one transaction
    or a series of transactions, of our shares or any of our subsidiaries&#146; shares
    that have an aggregate market value equal to 5 percent or more of the aggregate
    market value of all our outstanding shares to the interested stockholder
    or any affiliate or associate of the interested stockholder</font></p>
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<p align="left"><font size="2" face="serif">except under
    the exercise of warrants or rights to purchase shares offered, or a dividend
    or distribution paid or made, pro rata to all our stockholders.</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The adoption of any plan or proposal for our liquidation or dissolution proposed by, or under any agreement, arrangement or understanding, whether or not in writing, with, the interested stockholder or any affiliate or associate of the interested stockholder.</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Any reclassification of securities, including, without limitation, any splitting of shares, dividend distributed in shares, or other distribution of shares with respect to other shares, or any issuance of new shares in exchange for a proportionately greater number of old shares, recapitalization, merger or consolidation of us with any of our subsidiaries, or other transaction, with the interested stockholder or any affiliate or associate of the interested stockholder which has the effect, directly or indirectly, of increasing the proportionate share of the outstanding shares of the interested stockholder or any affiliate or associate of the interested
stockholder, except as a result of immaterial changes because of adjustments of fractional shares.</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Any receipt by the interested stockholder or any affiliate or associate of the interested stockholder of the benefit, directly or indirectly, except proportionately as our stockholder, of any loan, advance, guarantee, pledge or other financial assistance or any tax credit or other tax advantage provided by or through Coffee
Holding, Co., Inc.</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Interested stockholder,&#148; means any person, other than us, who is:</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The beneficial owner, directly or indirectly, of 10 percent or more of the voting power of our outstanding voting shares; or</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; An affiliate or associate of ours and at any time within 3 years immediately before the date in question was the beneficial owner, directly or indirectly, of 10 percent or more of the voting power of our then outstanding shares.</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<i>Evaluation of Offers.</i>  The proposed Articles of Incorporation further provide that our Board of Directors shall, when evaluating any offer to us from another party to:</font></p>
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<font size="2" face="serif">make a tender offer or exchange offer for any of our outstanding equity securities;</font></td>
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<font size="2" face="serif">merge or consolidate us with another corporation or entity; or</font></td>
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<font size="2" face="serif">purchase or otherwise acquire all or substantially all of our properties and assets,</font></td>
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<p align="left"><font size="2" face="serif">in connection with the exercise of its judgment in determining what is in the best interest of us and our stockholders, give due consideration to the extent permitted by law to all relevant factors, including, without limitation, our employees, suppliers, creditors and customers; the economy of the state, region and nation; community and societal considerations; and the long- and short-term interests of us and our stockholders, including the possibility that these interests will best be served by our continued independence.</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;By having
    these standards in our proposed Articles of Incorporation, the Board of Directors
    may be in a stronger position to oppose such a transaction if our Board of
    Directors</font></p>
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<p align="left"><font size="2" face="serif">concludes that the transaction would not be in our best interests,
    even if the price offered is significantly greater than the market price
    of any of our equity securities.</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<i>Amendment to Proposed Articles of Incorporation and Bylaws.</i>  The proposed Articles of Incorporation may be amended by the affirmative vote of 80% of the total votes eligible to be cast by stockholders, voting together as a single class; provided, however, that if at least a majority of our Board of Directors recommend approval of the amendment, then such amendment shall require the affirmative vote of only a majority of the total votes eligible to cast by stockholder, voting together as a single class.</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Bylaws may be amended by the affirmative vote of a majority of our Board of Directors or by the affirmative vote of at least 80% of the total votes eligible to be cast by stockholders, voting together as a single class.  These provisions could have the effect of discouraging a tender offer or other takeover attempt where the ability to make fundamental changes through Bylaw amendments is an important element of the takeover strategy of the acquiror.</font></p>
<p align="left"><font size="2" face="serif"><b>Proposed Employment Agreements</b></font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
    provisions described above are intended to reduce our vulnerability to takeover
    attempts and other transactions which have not been negotiated with and approved
    by members of our Board of Directors. The provisions
        of the proposed employment agreements may also discourage takeover attempts
        by increasing the costs
          to be incurred by us in the event of a takeover.</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our Board of Directors believes that the provisions of the proposed Articles of Incorporation, Bylaws and employment agreements are in the best interests of us and our stockholders.  An unsolicited non-negotiated proposal can seriously disrupt the business and management of a corporation and cause it great expense. Accordingly, the Board of Directors believes it is in the best interests of us and our stockholders to encourage potential acquirors to negotiate directly with management and that these provisions will encourage such negotiations and discourage non-negotiated takeover attempts. It is also the Board of Directors&#146; view that these provisions should not discourage persons from proposing a merger or other
transaction at a price which reflects our true value and that otherwise is in the best interests of all stockholders.</font></p>
<p align="left"><font size="2" face="serif"><b>Nevada Law</b></font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
    Nevada Revised Statutes 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 three years after the stockholder acquired the shares
    unless the combination or the purchase of shares made by the interested stockholder
    on the interested stockholders&#146; 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 business combination with an interested stockholder
    after the expiration of three years after his date of acquiring the shares
    other than a business combination meeting all of the requirements of the
    Articles of Incorporation and either (1) the business combination is approved
    by the Board of Directors before the interested stockholders&#146; date of
    acquiring the shares or as to </font></p>
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<p align="left"><font size="2" face="serif">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 business 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 duly called for that purpose no earlier than
    three years after the interested stockholder&#146;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 Nevada Revised Statutes.</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The power of the Board of Directors to issue and determine the designations, rights, preferences, and powers of each series of preferred stock may be utilized as a method of discouraging, delaying or preventing a change of control of us.</font></p>
<p align="left"><font size="2" face="serif"><b>Transfer Agent and Registrar</b></font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
    transfer agent and registrar for our common stock is OTR, Inc. Its address
    is 317 SW Alder, Suite 1120, Portland, Oregon 97204 and its telephone number
    is (503) 225-0375.</font></p>
<p align="center"><font size="2" face="serif"><b>SHARES ELIGIBLE FOR FUTURE SALE</b></font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Upon the completion of this offering (and excluding shares underlying the underwriter&#146;s warrants), we will have 5,599,650 shares of common stock issued and outstanding (5,839,650 shares if the underwriter&#146;s over-allotment option is exercised in full). Of those shares, the 1,600,000 sold in this offering (1,840,000 if the underwriter&#146;s over-allotment option is exercised in full) and the 29,650 shares registered in the Rule 419 Offering will have been registered under the Securities Act of 1933, as amended, and may be resold without further registration and 3,970,000 shares are &#147;restricted securities&#148; 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.  All of these restricted securities (including 1,239,200 held by our officers and directors and an additional 2,220,200 shares owned by members of the Gordon family who are not our officers or directors) are eligible for sale under the exemption provided by Rule 144 of the Securities Act.    </font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our directors, executive offers and certain of our stockholders, including Andrew Gordon and David Gordon and other members of the Gordon Family, have agreed that, for a period of nine (9) months after the effective date of the registration statement of which this prospectus is a part, they will not sell, contract to sell, grant any option for the sale of or otherwise dispose of any of our equity securities, or any securities convertible into or exercisable or exchangeable for our equity securities, other than through intra-family transfers or transfers to trusts for estate planning purposes, without the written consent of the underwriter.  </font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
    general, under Rule 144 as currently in effect, a stockholder 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, and provided that the number
    of shares to be sold in any three-month period 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</font></p>
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<p align="left"><font size="2" face="serif">notice of the sale is given to the U.S. Securities
    and Exchange Commission (the &#147;SEC&#148;).  A  stockholder who is not
    an officer, director or beneficial owner of 10% or more of our common stock
    at any time during the 90 days preceding the sale, and who has beneficially
    owned the restricted shares for at least two years, will be eligible to sell
    such shares under subparagraph (k) of Rule 144 without regard to the volume
    restrictions and other requirements. Except upon the consent of the underwriter,
    holders of 3,540,400 shares, including all executive officers and directors,
    have agreed not to, directly or indirectly, issue, or agree or offer to sell,
    transfer, assign, encumber or grant an option for the purchase or sale of,
    pledge, hypothecate or otherwise dispose of any beneficial interest in such
    shares for a period of nine months following the commencement of the offering.</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prior to this offering, there has been no public market for our common stock and no prediction can be made as to the effect, if any, that market sales of shares of common stock or the availability of such shares for sale will have on the market prices prevailing from time to time.  Nevertheless, the possibility that substantial amounts of common stock may be sold in the public market may adversely affect prevailing market prices for the common stock and could impair our ability to raise capital through the sale of our equity securities.</font></p>
<p align="center"><font size="2" face="serif">62</font></p>
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<p align="center"><font size="2" face="serif"><b>UNDERWRITING</b></font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Maxim Group LLC is the underwriter of the offering described in this prospectus.  We have entered into an underwriting agreement with the underwriter with respect to the shares of our common stock being offered pursuant to this offering.  In connection with  this offering and subject to certain conditions contained in the underwriting agreement, the underwriter has agreed to purchase, and we have agreed to sell, the number of shares of our common stock listed below:</font></p>
<table align="center" width="60%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td><b><font size="1" face="serif"><u>Underwriter</u></font></b></td>
    <td width="10%" align="center"><b><font size="1" face="serif"><u>Number of
      Shares</u></font></b></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td><font size="2" face="serif">Maxim Group LLC</font></td>
    <td>______________</td>
  </tr>
  <tr>
    <td><font size="2" face="serif">Total</font></td>
    <td align="center"><font size="2" face="serif">1,600,000</font></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td><hr noshade size="2"></td>
  </tr>
</table>
<p align="left"><font size="2" face="serif"><b>Nature of Underwriting Commitment</b></font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The underwriting agreement provides that the underwriter is committed to purchase all of the shares of common stock offered by this prospectus if they purchase any of the shares.  This commitment does not apply to the shares of common stock subject to an over-allotment option granted by us to the underwriter to purchase additional shares of common stock in this<b></b>offering.  The underwriting agreement also provides that the obligations of the underwriter to pay for and accept delivery of the shares of common stock are subject to the passing upon of certain legal matters by counsel and certain other conditions.  </font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the underwriting agreement, we have granted to the underwriter an option, exercisable for 45 days after the date of this prospectus, to purchase up to an additional 240,000 shares of common stock from us on the same terms and at the same per share price as the other shares of common stock being purchased by the underwriter from us.  The underwriter may exercise the option solely to cover over-allotments, if any, in the sale of shares of common stock that the underwriter has agreed to purchase from us.  If the over-allotment option is exercised in full, the total public offering price, underwriting discounts and commissions and proceeds to us before expenses will be $[ ], $[ ] and $[ ],
respectively.</font></p>
<p align="left"><font size="2" face="serif"><b>Conduct of the Offering</b></font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table shows the per share and total underwriting discounts and commissions to be paid by us in connection with this offering.  These amounts are shown assuming both no exercise and full exercise of the underwriter&#146;s over-allotment option.</font></p>
<table width="80%" border="0" align="center" cellpadding="0" cellspacing="0">
  <tr>
    <td>&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="20%"><font size="2" face="serif">&nbsp;<b><u><font size="1">Without Option</font></u></b></font></td>
    <td width="2%">&nbsp;</td>
    <td width="20%"><font size="1" face="serif"><b><u>With Option</u></b></font></td>
  </tr>
  <tr>
    <td><font size="2" face="serif">Per Share</font></td>
    <td><font size="2" face="serif">$</font></td>
    <td>&nbsp;</td>
    <td><font size="2" face="serif">$</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td><font size="2" face="serif">Total</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
</table>
<p align="center"><font size="2" face="serif">63</font></p>
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<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
    estimate that the total expenses of the offering payable by us, excluding
    underwriting discounts and commissions and not taking into consideration
    the underwriter&#8217;s over-allotment allowance, will be approximately $580,000.</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
    underwriter will initially offer the shares of common stock to be sold in
    this offering directly to the public at the initial public offering price
    set forth on the cover of this prospectus and some of the shares of common
    stock to certain dealers at the initial public offering less a concession
    not in excess of $[ ] per share. The underwriter may allow, and such dealers
    may reallow, a concession not in excess of $[ ] per share on sales to certain
    other dealers. If all of the shares are not sold at the initial public offering
    price, the underwriter may change the offering price and the other selling
    terms. If the terms of the offering are changed prior to the completion of
    the offering, we would either amend or supplement the prospectus, as required
    by the securities laws, to disclose the changes to the offering price and
    other selling terms. No change in those terms will change the amount of proceeds
    to be received by us as set forth on the cover of this prospectus. The
    underwriter has informed us that they do not expect to confirm sales of shares
    of common stock offered by this prospectus to accounts over which they exercise
    discretionary authority without obtaining the specific approval of the account
    holder.</font></p>

<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prior to the offering, there has been no public market for the common stock.   The initial public offering price for the common stock will be negotiated between the underwriter and us.  Among the factors to be considered in determining the initial public offering price of the shares, in addition to prevailing market conditions, will be our recent financial results and current financial condition, our future prospects, the qualifications of our management, and the consideration of the above factors in relation to market valuation of companies in related businesses.  </font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have applied to list our common stock on the American Stock Exchange under the symbol &#147;JVA&#148;.</font></p>
<p align="left"><font size="2" face="serif"><b>Indemnification</b></font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The underwriting agreement provides for indemnification between us and the underwriter against specified liabilities, including liabilities under the Securities Act of 1933, and for contribution by us and the underwriter to payments that may be required to be made with respect to those liabilities.</font></p>
<p align="left"><font size="2" face="serif"><b>Underwriter&#146;s Compensation </b></font></p>

<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
    have agreed to sell the shares of common stock to the underwriter at the
    initial public offering price less the underwriting discount set forth on
    the cover of this prospectus. The underwriting agreement also provides that
    the underwriter will be paid a non-accountable expense allowance equal to
    3% of the gross proceeds from the sale of the shares of common stock offered
    by this prospectus ($50,000 of which has been previously advanced to the
    underwriter), including any common stock purchased on exercise of the over-allotment
    option. We have also granted the underwriter a right of first refusal to
    act as lead underwriter for any public or private equity offering by us for
    a period of 15 months following this offering.</font></p>
<p align="center"><font size="2" face="serif">64</font></p>
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<p align="left"><font size="2" face="serif">Following this offering, we
    will enter into a financial advisory agreement with the underwritter, the
    terms of which have not been determined.</font></p>


<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
    have also agreed to issue warrants to the underwriter to purchase from us
    up to 160,000 shares of our common stock. These warrants are exercisable
    during the four year period commencing one year from this offering at a price
    per share equal to 110% of the public offering price per share in this offering
    and will allow for cashless exercise. The warrants will provide for registration
    rights, including a one time demand registration right and unlimited piggyback
    registration rights, and customary anti-dilution provisions for stock dividends
    and splits and recapitalizations consistent with the National Association
    of Securities Dealers, Inc. Rules of Fair Practice. The exercise price of
    the warrants was negotiated between us and the underwriter as part of the
    underwriter&#8217;s compensation in the offering.</font></p>

<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Although
    certain principals of Maxim Group have extensive experience in the securities
    industry, Maxim Group itself was formed in October 2002 and has acted as
    an underwriter in a limited number of public offerings. Maxim Group is a
    member of the National Association of Securities Dealers and the Securities
    Investor Protection Corporation.</font></p>



<p align="left"><font size="2" face="serif"><b>Lock-up Agreements</b></font></p>

<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
    directors, executive officers and certain of our stockholders representing
    approximately
    3,540,000 shares of our common stock, including Andrew Gordon and David Gordon
    and other members of the Gordon family, have agreed that, for a period of
    nine (9) months after the effective date of the registration statement of
    which this prospectus is a part, they will not sell, contract to sell, grant
    any option for the sale of or otherwise dispose of any of our equity securities,
    or any securities convertible into or exercisable or exchangeable for our
    equity securities, other than through intra-family transfers or transfers
    to trusts for estate planning purposes, without the written consent of the
    underwriter. The underwriter could waive the nine-month lock-up period if,
    for example, the underwriter believes the sale of the shares into the market
    would not adversely affect the market price of our common stock. </font></p>


<p align="left"><font size="2" face="serif"><b>Stabilization</b></font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Until the distribution of the shares of common stock offered by this prospectus is completed, rules of the Securities and Exchange Commission may limit the ability of the underwriter to bid for and to purchase shares of our common stock.  As an exception to these rules, the underwriter may engage in transactions effected in accordance with Regulation M under the Securities Exchange Act of 1934 that are intended to stabilize, maintain or otherwise affect the price of our common stock.  The underwriter may engage in over-allotment sales, syndicate covering transactions, stabilizing transactions and penalty bids in accordance with Regulation M.</font></p>

<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
<td width="3%"></td>
<td width="3%"></td>
<td width="3%">
<font size="2" face="serif">&nbsp;</font></td>
<td width="3%">
<font size="2" face="serif">&#149;</font></td>
<td>
<font size="2" face="serif">Over-allotments occur when the underwriter sells more
of our shares than it purchases from us in this offering. In order to cover the
resulting short position, the underwriter may exercise the over-allotment option
described above.</font></td>
</tr>
<tr>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
</table>
<p align="center"><font size="2" face="serif">65</font></p>
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<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
<td width="3%"></td>
<td width="3%"></td>
<td width="3%">
<font size="2" face="serif">&nbsp;</font></td>
<td width="3%">&nbsp;</td>
<td>
<font size="2" face="serif">Additionally, the underwriter may engage in syndicate covering
transactions. Syndicate covering transactions are bids for or purchases of our
common stock on the open market by the underwriter in order to reduce a short
position incurred by the underwriter on behalf of the underwriting syndicate.
There is no contractual limit on the size of any syndicate covering transaction.</font></td>
</tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
  <td></td>
  <td></td>
  <td>&nbsp;</td>
  <td>&nbsp;</td>
  <td>&nbsp;</td>
</tr>
<tr valign="top">
<td width="3%"></td>
<td width="3%"></td>
<td width="3%">
<font size="2" face="serif">&nbsp;</font></td>
<td width="3%">
<font size="2" face="serif">&#149;</font></td>
<td>
<font size="2" face="serif">Stabilizing transactions consist of bids or purchases made by the underwriter for the purpose of preventing or slowing a decline in the market price of our securities while the offering is in progress.</font></td>
</tr>
<tr>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
<td width="3%"></td>
<td width="3%"></td>
<td width="3%">
<font size="2" face="serif">&nbsp;</font></td>
<td width="3%">
<font size="2" face="serif">&#149;</font></td>
<td>
<font size="2" face="serif">A penalty bid is an arrangement permitting the underwriter to reclaim the selling concession that would otherwise accrue to an underwriter if the common stock originally sold by the underwriter was later repurchased by the underwriter and therefore was not effectively sold to the public by such underwriter.</font></td>
</tr>
</table>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In general, the purchase of a security to stabilize or to reduce a short position could cause the price of the security to be higher than it might otherwise be.  Neither we nor the underwriter make any representation or prediction about the direction or magnitude of any effect that the transactions described above may have on the price of our common stock.  In addition, neither we nor the underwriter make any representation that the underwriter will engage in these types of transactions or that these types of transactions, once commenced, will not be discontinued without notice.</font></p>
<p align="center"><font size="2" face="serif"><b>LEGAL MATTERS</b></font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The legality of the securities offered in this prospectus has been passed upon for us by Thacher Proffitt &amp; Wood LLP, Washington, DC.  Lowenstein Sandler PC, Roseland, NJ, has served as counsel to the underwriter in connection with this offering.</font></p>
<p align="center"><font size="2" face="serif"><b>EXPERTS</b></font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The financial statements as of October 31, 2003 and 2002 and for the years then ended, included in this prospectus have been audited by Lazar Levine &amp; Felix LLP, independent auditors, as stated in their report appearing in this prospectus and elsewhere in the registration statement, and have been so included in reliance upon the reports of such firm given upon their authority as experts in accounting and auditing.  </font></p>
<p align="center"><font size="2" face="serif"><b>WHERE YOU CAN FIND ADDITIONAL
INFORMATION</b></font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are subject to the informational requirements of the Exchange Act and must file annual, quarterly and current reports and other information with the SEC.  You may examine this information without charge at the public reference facilities of the SEC located at 450 Fifth Street, N.W., Washington, D.C. 20549.  You may obtain copies of this material from the SEC at prescribed rates.  You may obtain information on the operations of the Public Reference Room by calling the SEC at 1-800-SEC-0330.  The SEC also maintains a website that contains reports, proxy and information statements and other information regarding registrants, including us, that file electronically with the SEC. The address for this web site is
&#147;http://www.sec.gov.&#148;</font></p>
<p align="center"><font size="2" face="serif">66</font></p>
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<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
    have filed with the SEC a registration statement on Form SB-2 and related
    exhibits under the Securities Act of 1933, as amended, with respect to the
    common stock offered in this document. As permitted by the rules and regulations
    of the SEC, this document does not contain all the information set forth
    in the registration statement and related exhibits. You may examine the registration
          statement and exhibits without charge at the Public Reference Room of the
          SEC and you may obtain copies from the SEC at prescribed rates.</font></p>


<p align="center"><font face="serif" size="2">67</font></p>
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<p align="center"><font size="6" face="serif"></font></p>

<p align="center"><font size="2" face="serif"><b>COFFEE HOLDING CO., INC.</b></font></p>
<p align="center"><font size="2" face="serif"><b>INDEX TO FINANCIAL STATEMENTS </b></font></p>
<p align="left">&nbsp;</p>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td align="left"><div align="center"><font size="2" face="serif"><b><u>PAGE(S)</u></b></font></div>
    </td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td colspan="2"><font size="2" face="serif"><b>FINANCIAL STATEMENTS:</b></font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td width="3%">&nbsp;</td>
    <td align="left"><a href="#f1"><font size="2" face="serif">REPORT OF INDEPENDENT
          REGISTERED PUBLIC ACCOUNTING FIRM</font></a></td>
    <td width="8%" align="left"><div align="center"><a href="#f1"><font size="2" face="serif"> F-2</font></a></div>
    </td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td align="left"><div align="center"></div>
    </td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left"><a href="#f3"><font size="2" face="serif">BALANCE SHEETS</font></a></td>
    <td align="left"><div align="center"><font size="2" face="serif"><a href="#f3">F-3</a></font></div>
    </td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td align="left"><div align="center"></div>
    </td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left"><font size="2" face="serif"><a href="#f4">STATEMENTS OF
          INCOME</a></font></td>
    <td align="left"><div align="center"><font size="2" face="serif"><a href="#f4">F-4</a></font></div>
    </td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td align="left"><div align="center"></div>
    </td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left"><font size="2" face="serif"><a href="#f5">STATEMENTS OF
          CHANGES IN STOCKHOLDERS&#8217; EQUITY</a></font></td>
    <td align="left"><div align="center"><font size="2" face="serif"><a href="#f5">F-5</a></font></div>
    </td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td align="left"><div align="center"></div>
    </td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left"><font size="2" face="serif"><a href="#f6">STATEMENTS OF
          CASH FLOWS</a></font></td>
    <td align="left"><div align="center"><font size="2" face="serif"><a href="#f6">F-6</a></font></div>
    </td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td align="left"><div align="center"></div>
    </td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left"><a href="#f7"><font size="2" face="serif">NOTES TO FINANCIAL
          STATEMENTS</font></a></td>
    <td align="left"><div align="center"><a href="#f7"><font size="2" face="serif">F-7 &#150; F-19</font></a></div>
    </td>
  </tr>
</table>

<p align="center"><font face="serif" size="2">F-1</font></p>
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<p align="center"><font size="2" face="serif"><b>REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM</b></font></p>
<p align="left"><font size="2" face="serif">To the Board of Directors<br>
</font><font size="2" face="serif">Coffee Holding Co., Inc.</font></p>
<p align="left"><font size="2" face="serif">We have audited the accompanying
    balance sheet of Coffee Holding Co., Inc. as of October 31, 2003 and the
    related statements of operations, changes in stockholders&#8217; equity and
    cash flows for the two years in the period ended October 31, 2003. These
    financial statements are the responsibility of the Company&#8217;s management.
    Our responsibility is to express an opinion on these financial statements
    based on our audits.</font></p>
<p align="left"><font size="2" face="serif">We conducted our audits in accordance
    with the standards of the Public Company Accounting Oversight Board (United
    States). 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.</font></p>
<p align="left"><font size="2" face="serif">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, 2003 and the results
    of its operations and its cash flows for each of the two years in the period
    ended October 31, 2003, in conformity with accounting principles generally
    accepted in the United States of America.</font></p>
<div style="margin-left: 50%"><u><font size="2" face="Times New Roman, Times, serif">  &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;/s/
      Lazar Levine &amp; Felix LLP&nbsp;&nbsp;&nbsp;</font></u><b>&nbsp;<br>
      <font size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;LAZAR LEVINE &amp; FELIX
LLP</font></b></div>
<p align="left"><font size="2" face="serif">New York, New York<br>
</font><font size="2" face="serif">December 10, 2003</font></p>
<p align="left">&nbsp;</p>
<p align="center"> <font face="serif" size="2">F-2</font></p>
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<p align="center"><font size="2" face="serif"><b>COFFEE HOLDING CO., INC.<br>
</b></font><font size="2" face="serif"><b>BALANCE SHEETS</b></font></p>
<p align="left">&nbsp;</p>
<table width="100%" cellspacing="0" cellpadding="0" align="center" border="0">
  <tr valign="top">
    <td width="3%" align="left">&nbsp;</td>
    <td align="left"><font size="1" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="center"><font size="1" face="serif"><b>July 31, </b><b><br>
      2004</b></font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="center"><font size="1" face="serif">October 31, <br>
      2003</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td align="left">&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td align="right"><hr size="1" noshade>
    </td>
    <td align="center"><hr size="1" noshade>
    </td>
    <td align="left">&nbsp;</td>
    <td align="right"><hr size="1" noshade>
    </td>
    <td align="left"><hr size="1" noshade>
    </td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td align="left">&nbsp;</td>
    <td align="left"><font size="1" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="center"><font size="1" face="serif"><b>(unaudited)</b></font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="1" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top" bgcolor="#FFFFFF">
    <td colspan="8" align="left"><div align="center"><font size="2" face="serif"><b>-
            ASSETS -</b></font></div>
    </td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="bottom" bgcolor="#FFFFFF">
    <td colspan="2"align="left"><font size="2" face="serif"><b>CURRENT ASSETS:</b></font></td>
    <td width="2%" align="left">&nbsp;</td>
    <td width="1%" align="right">&nbsp;</td>
    <td width="10%" align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td width="2%" align="left">&nbsp;</td>
    <td width="1%" align="right">&nbsp;</td>
    <td width="10%" align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td width="2%" align="left">&nbsp;</td>
  </tr>
  <tr valign="bottom" bgcolor="#ffffff">
    <td align="left">&nbsp;</td>
    <td align="left"><font size="2" face="serif">Cash</font></td>
    <td align="left">&nbsp;</td>
    <td align="right"><font size="2" face="serif"><b>$</b></font></td>
    <td align="right"><font size="2" face="serif"> <b>104,044</b></font></td>
    <td align="left">&nbsp;</td>
    <td align="right"><font size="2" face="serif">$</font></td>
    <td align="right"><font size="2" face="serif">73,832</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="bottom" bgcolor="#FFFFFF">
    <td align="left">&nbsp;</td>
    <td align="left"><font size="2" face="serif">Due from broker</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif"><b>319,790</b></font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">894,123</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="bottom" bgcolor="#ffffff">
    <td align="left">&nbsp;</td>
    <td align="left"><div style="margin-left: 3%; text-indent: -3%"><font size="2" face="serif">Accounts
          receivable, net of allowance for doubtful accounts of $100,349 and
          $119,435 respectively</font></div>
    </td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif"><b>2,463,406</b></font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">2,154,683</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="bottom" bgcolor="#FFFFFF">
    <td align="left">&nbsp;</td>
    <td align="left"><font size="2" face="serif">Inventories</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif"><b>2,775,705</b></font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">1,781,424</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="bottom" bgcolor="#ffffff">
    <td align="left">&nbsp;</td>
    <td align="left"><font size="2" face="serif">Prepaid expenses and other current
        assets</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif"><b>359,856</b></font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">431,432</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="bottom" bgcolor="#FFFFFF">
    <td align="left">&nbsp;</td>
    <td align="left"><font size="2" face="serif">Deferred tax asset</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif"><b>94,400</b></font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">103,700</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td></td>
    <td></td>
    <td></td>
    <td><hr noshade size="1">
    </td>
    <td><hr noshade size="1">
    </td>
    <td></td>
    <td><hr noshade size="1">
    </td>
    <td><hr noshade size="1">
    </td>
    <td></td>
  </tr>
  <tr valign="bottom" bgcolor="#ffffff">
    <td align="left">&nbsp;</td>
    <td align="left"><div style="margin-left: 9%; text-indent: -3%"><font size="2" face="serif"><b>TOTAL
            CURRENT ASSETS</b></font></div>
    </td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif"><b>6,117,201</b></font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">5,439,194</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="bottom" bgcolor="#FFFFFF">
    <td align="left">&nbsp;</td>
    <td align="left"><div style="margin-left: 3%; text-indent: -3%"><font size="2" face="serif">Property
          and equipment, at cost, net of accumulated depreciation of $3,269,698
          and $2,991,206 respectively</font></div>
    </td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif"><b>2,222,358</b></font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">1,579,294</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="bottom" bgcolor="#ffffff">
    <td align="left">&nbsp;</td>
    <td align="left"><font size="2" face="serif">Deposits and other assets</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif"><b>35,996</b></font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">16,796</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="bottom" bgcolor="#FFFFFF">
    <td align="left">&nbsp;</td>
    <td align="left"><font size="2" face="serif">Loans to related parties</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif"><b>11,491</b></font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">&#151;</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td></td>
    <td></td>
    <td></td>
    <td><hr noshade size="1">
    </td>
    <td><hr noshade size="1">
    </td>
    <td></td>
    <td><hr noshade size="1">
    </td>
    <td><hr noshade size="1">
    </td>
    <td></td>
  </tr>
  <tr valign="bottom" bgcolor="#ffffff">
    <td align="left">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right"><font size="2" face="serif"><b>$</b></font></td>
    <td align="right"><font size="2" face="serif"> <b>8,387,046</b></font></td>
    <td align="left">&nbsp;</td>
    <td align="right"><font size="2" face="serif">$</font></td>
    <td align="right"><font size="2" face="serif">7,035,284</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td></td>
    <td></td>
    <td></td>
    <td><hr noshade size="2">
    </td>
    <td><hr noshade size="2">
    </td>
    <td></td>
    <td><hr noshade size="2">
    </td>
    <td><hr noshade size="2">
    </td>
    <td></td>
  </tr>
  <tr valign="bottom">
    <td align="left">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="bottom" bgcolor="#FFFFFF">
    <td colspan="8" align="left"><div align="center"><font size="2" face="serif"><b>-
            LIABILITIES AND STOCKHOLDERS&#8217; EQUITY -</b></font></div>
    </td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="bottom" bgcolor="#FFFFFF">
    <td colspan="2" align="left"><font size="2" face="serif"><b>CURRENT LIABILITIES:</b></font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="bottom" bgcolor="#FFFFFF">
    <td align="left">&nbsp;</td>
    <td align="left"><font size="2" face="serif">Current portion of term loan</font></td>
    <td align="left">&nbsp;</td>
    <td align="right"><font size="2" face="serif"><b>$</b></font></td>
    <td align="right"><font size="2" face="serif"><b>84,000</b></font></td>
    <td align="left">&nbsp;</td>
    <td align="right"><font size="2" face="serif">$</font></td>
    <td align="right"><font size="2" face="serif">84,000</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="bottom" bgcolor="#ffffff">
    <td align="left">&nbsp;</td>
    <td align="left"><font size="2" face="serif">Current portion of obligations
        under capital lease</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif"><b>125,336</b></font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">130,551</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="bottom" bgcolor="#FFFFFF">
    <td align="left">&nbsp;</td>
    <td align="left"><font size="2" face="serif">Line of credit borrowings</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif"><b>2,895,661</b></font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">&#151;</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="bottom" bgcolor="#ffffff">
    <td align="left">&nbsp;</td>
    <td align="left"><font size="2" face="serif">Accounts payable and accrued
        expenses</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif"><b>2,231,866</b></font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">1,861,447</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="bottom" bgcolor="#FFFFFF">
    <td align="left">&nbsp;</td>
    <td align="left"><font size="2" face="serif">Income taxes payable &#150; current</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif"><b>89,156</b></font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">&#151;</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td></td>
    <td></td>
    <td></td>
    <td><hr noshade size="1">
    </td>
    <td><hr noshade size="1">
    </td>
    <td></td>
    <td><hr noshade size="1">
    </td>
    <td><hr noshade size="1">
    </td>
    <td></td>
  </tr>
  <tr valign="bottom" bgcolor="#ffffff">
    <td align="left">&nbsp;</td>
    <td align="left"><div style="margin-left: 9%; text-indent: -3%"><font size="2" face="serif"><b>TOTAL
            CURRENT LIABILITIES</b></font></div>
    </td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif"><b>5,426,019</b></font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">2,075,998</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="bottom" bgcolor="#FFFFFF">
    <td align="left">&nbsp;</td>
    <td align="left"><font size="2" face="serif">Term loan, net of current portion</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif"><b>189,000</b></font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">252,000</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="bottom" bgcolor="#ffffff">
    <td align="left">&nbsp;</td>
    <td align="left"><font size="2" face="serif">Obligations under capital lease,
        net of current portion</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">&#151;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">91,895</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="bottom" bgcolor="#FFFFFF">
    <td align="left">&nbsp;</td>
    <td align="left"><font size="2" face="serif">Line of credit borrowings</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">&#151;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">2,376,066</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="bottom" bgcolor="#ffffff">
    <td align="left">&nbsp;</td>
    <td align="left"><font size="2" face="serif">Loans from related parties</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">&#151;<b>&nbsp;</b></font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">79,646</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="bottom" bgcolor="#FFFFFF">
    <td align="left">&nbsp;</td>
    <td align="left"><font size="2" face="serif">Income taxes payable &#150; deferred</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif"><b>39,000</b></font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">39,200</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td></td>
    <td></td>
    <td></td>
    <td><hr noshade size="1">
    </td>
    <td><hr noshade size="1">
    </td>
    <td></td>
    <td><hr noshade size="1">
    </td>
    <td><hr noshade size="1">
    </td>
    <td></td>
  </tr>
  <tr valign="bottom" bgcolor="#ffffff">
    <td align="left">&nbsp;</td>
    <td align="left"><div style="margin-left: 9%; text-indent: -3%"><font size="2" face="serif"><b>TOTAL
            LIABILITIES</b></font></div>
    </td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif"><b>5,654,019</b></font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">4,914,805</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td></td>
    <td></td>
    <td></td>
    <td><hr noshade size="1">
    </td>
    <td><hr noshade size="1">
    </td>
    <td></td>
    <td><hr noshade size="1">
    </td>
    <td><hr noshade size="1">
    </td>
    <td></td>
  </tr>
  <tr valign="bottom">
    <td align="left">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="bottom" bgcolor="#FFFFFF">
    <td colspan="2" align="left"><font size="2" face="serif"><b>COMMITMENTS AND
          CONTINGENCIES</b></font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="bottom" bgcolor="#FFFFFF">
    <td colspan="2" align="left"><font size="2" face="serif"><b>STOCKHOLDERS&#8217; EQUITY: </b></font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="bottom" bgcolor="#FFFFFF">
    <td align="left">&nbsp;</td>
    <td align="left"><font size="2" face="serif">Preferred stock, par value $.001
        per share; 10,000,000 shares authorized; none issued</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">&#151;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">&#151;</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="bottom" bgcolor="#ffffff">
    <td align="left">&nbsp;</td>
    <td align="left"><div style="margin-left: 3%; text-indent: -3%"><font size="2" face="serif">Common
          stock, par value $.001 per share; 30,000,000 shares authorized, 3,999,650
          shares issued and outstanding</font></div>
    </td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif"><b>4,000</b></font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">4,000</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="bottom" bgcolor="#FFFFFF">
    <td align="left">&nbsp;</td>
    <td align="left"><font size="2" face="serif">Additional paid-in capital</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif"><b>867,887</b></font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">867,887</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="bottom" bgcolor="#ffffff">
    <td align="left">&nbsp;</td>
    <td align="left"><font size="2" face="serif">Retained earnings</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif"><b>1,861,140</b></font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">1,248,592</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td></td>
    <td></td>
    <td></td>
    <td><hr noshade size="1">
    </td>
    <td><hr noshade size="1">
    </td>
    <td></td>
    <td><hr noshade size="1">
    </td>
    <td><hr noshade size="1">
    </td>
    <td></td>
  </tr>
  <tr valign="bottom" bgcolor="#FFFFFF">
    <td align="left">&nbsp;</td>
    <td align="left"><div style="margin-left: 9%; text-indent: -3%"><font size="2" face="serif"><b>TOTAL
            STOCKHOLDERS&#8217; EQUITY </b></font></div>
    </td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif"><b>2,733,027</b></font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">2,120,479</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td></td>
    <td></td>
    <td></td>
    <td><hr noshade size="1">
    </td>
    <td><hr noshade size="1">
    </td>
    <td></td>
    <td><hr noshade size="1">
    </td>
    <td><hr noshade size="1">
    </td>
    <td></td>
  </tr>
  <tr valign="bottom" bgcolor="#ffffff">
    <td align="left">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right"><font size="2" face="serif"><b>$</b></font></td>
    <td align="right"><font size="2" face="serif"> <b>8,387,046</b></font></td>
    <td align="left">&nbsp;</td>
    <td align="right"><font size="2" face="serif">$</font></td>
    <td align="right"><font size="2" face="serif"> 7,035,284</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td></td>
    <td></td>
    <td></td>
    <td><hr noshade size="2">
    </td>
    <td><hr noshade size="2">
    </td>
    <td></td>
    <td><hr noshade size="2">
    </td>
    <td><hr noshade size="2">
    </td>
    <td></td>
  </tr>
</table>

<p align="center"><font size="2" face="Times New Roman, Times, serif">See notes
    to Condensed Financial Statements.</font></p>
<p align="center"><font face="serif" size="2">F-3</font></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<page> <a name="f4"></a>
<p><a href="#index"><font size="2">Back to Index</font></a></p>

<p align="center"><font size="2" face="serif"><b>COFFEE HOLDING CO., INC.<br>
</b></font><font size="2" face="serif"><b>STATEMENTS OF INCOME</b></font></p>
<table width="100%" cellspacing="0" cellpadding="0" align="center" border="0">
  <tr valign="bottom">
    <td width="3%" align="left">&nbsp;</td>
    <td align="left"><font size="1" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td rowspan="2" align="right">&nbsp;</td>
    <td colspan="4" rowspan="2" align="center"><font size="1" face="serif"><b>Nine
          Months Ended</b></font><br>
        <font size="1" face="serif"><b>July 31</b>,</font><br>
        <font size="1" face="serif"><b>(Unaudited)</b></font></td>
    <td rowspan="2" align="left">&nbsp;</td>
    <td rowspan="2" align="right">&nbsp;</td>
    <td colspan="4" rowspan="2" align="center"><font size="1" face="serif">For
        the Years Ended</font><br>
        <font size="1" face="serif">October 31,</font></td>
    <td rowspan="2" align="left">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left">&nbsp;</td>
    <td align="left"><font size="1" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left">&nbsp;</td>
    <td align="left"><font size="1" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><div align="center"><font size="1" face="serif"><b>2004</b></font></div>
    </td>
    <td align="left"><div align="center"></div>
    </td>
    <td align="right"><div align="center"></div>
    </td>
    <td align="right"><div align="center"><font size="1" face="serif">2003</font></div>
    </td>
    <td align="left"><div align="center"></div>
    </td>
    <td align="right"><div align="center"></div>
    </td>
    <td align="right"><div align="center"><font size="1" face="serif">2003</font></div>
    </td>
    <td align="left"><div align="center"></div>
    </td>
    <td align="right"><div align="center"></div>
    </td>
    <td align="right"><div align="center"><font size="1" face="serif">2002</font></div>
    </td>
    <td align="left"><div align="center"></div>
    </td>
  </tr>
  <tr valign="bottom" bgcolor="#ffffff">
    <td align="left">&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td align="right"><hr noshade size="1">
    </td>
    <td align="right"><hr noshade size="1">
    </td>
    <td align="left">&nbsp;</td>
    <td align="right"><hr noshade size="1">
    </td>
    <td align="right"><hr noshade size="1">
    </td>
    <td align="left">&nbsp;</td>
    <td align="right"><hr noshade size="1">
    </td>
    <td align="right"><hr noshade size="1">
    </td>
    <td align="left">&nbsp;</td>
    <td align="right"><hr noshade size="1">
    </td>
    <td align="right"><hr noshade size="1">
    </td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top" bgcolor="#ffffff">
    <td colspan="2" align="left"><font size="2" face="serif"><b>NET SALES</b></font></td>
    <td align="left" width="2%">&nbsp;</td>
    <td width="1%" align="right"><font size="2" face="serif"><b>$</b></font></td>
    <td width="10%" align="right"><font size="2" face="serif"> <b>18,577,528</b></font></td>
    <td width="2%" align="left">&nbsp;</td>
    <td width="1%" align="right"><font size="2" face="serif">$</font></td>
    <td width="10%" align="right"><font size="2" face="serif"> 14,485,808</font></td>
    <td width="2%" align="left">&nbsp;</td>
    <td width="1%" align="right"><font size="2" face="serif">$</font></td>
    <td width="10%" align="right"><font size="2" face="serif">20,239,867</font></td>
    <td width="2%" align="left">&nbsp;</td>
    <td width="1%" align="right"><font size="2" face="serif">$</font></td>
    <td width="10%" align="right"><font size="2" face="serif"> 17,432,742</font></td>
    <td width="2%" align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td align="left">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top" bgcolor="#FFFFFF">
    <td colspan="2" align="left"><font size="2" face="serif"><b>COST OF SALES</b></font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif"><b>13,892,695</b></font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">10,886,840</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">15,373,127</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">12,452,713</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td></td>
    <td></td>
    <td></td>
    <td><hr noshade size="1">
    </td>
    <td><hr noshade size="1">
    </td>
    <td></td>
    <td><hr noshade size="1">
    </td>
    <td><hr noshade size="1">
    </td>
    <td></td>
    <td><hr noshade size="1">
    </td>
    <td><hr noshade size="1">
    </td>
    <td></td>
    <td><hr noshade size="1">
    </td>
    <td><hr noshade size="1">
    </td>
    <td></td>
  </tr>
  <tr valign="top">
    <td align="left">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top" bgcolor="#ffffff">
    <td colspan="2" align="left"><font size="2" face="serif"><b>GROSS PROFIT</b></font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif"><b>4,684,833</b></font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">3,598,968</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">4,866,740</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">4,980,029</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td></td>
    <td></td>
    <td></td>
    <td><hr noshade size="1">
    </td>
    <td><hr noshade size="1">
    </td>
    <td></td>
    <td><hr noshade size="1">
    </td>
    <td><hr noshade size="1">
    </td>
    <td></td>
    <td><hr noshade size="1">
    </td>
    <td><hr noshade size="1">
    </td>
    <td></td>
    <td><hr noshade size="1">
    </td>
    <td><hr noshade size="1">
    </td>
    <td></td>
  </tr>
  <tr valign="top">
    <td align="left">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top" bgcolor="#FFFFFF">
    <td colspan="2" align="left"><font size="2" face="serif"><b>OPERATING EXPENSES:</b></font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top" bgcolor="#FFFFFF">
    <td align="left">&nbsp;</td>
    <td align="left"><font size="2" face="serif">Selling and administrative</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif"><b>3,091,110</b></font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">2,448,716</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">3,501,465</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">3,061,542</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top" bgcolor="#ffffff">
    <td align="left">&nbsp;</td>
    <td align="left"><font size="2" face="serif">Officers&#146; salaries</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif"><b>370,424</b></font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">312,610</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">490,860</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">443,222</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td></td>
    <td></td>
    <td></td>
    <td><hr noshade size="1">
    </td>
    <td><hr noshade size="1">
    </td>
    <td></td>
    <td><hr noshade size="1">
    </td>
    <td><hr noshade size="1">
    </td>
    <td></td>
    <td><hr noshade size="1">
    </td>
    <td><hr noshade size="1">
    </td>
    <td></td>
    <td><hr noshade size="1">
    </td>
    <td><hr noshade size="1">
    </td>
    <td></td>
  </tr>
  <tr valign="top" bgcolor="#FFFFFF">
    <td align="left">&nbsp;</td>
    <td align="left"><div style="margin-left: 9%; text-indent: -3%"><font size="2" face="serif"><b>TOTALS</b></font></div>
    </td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif"><b>3,461,534</b></font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">2,761,326</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">3,992,325</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">3,504,764</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td></td>
    <td></td>
    <td></td>
    <td><hr noshade size="1">
    </td>
    <td><hr noshade size="1">
    </td>
    <td></td>
    <td><hr noshade size="1">
    </td>
    <td><hr noshade size="1">
    </td>
    <td></td>
    <td><hr noshade size="1">
    </td>
    <td><hr noshade size="1">
    </td>
    <td></td>
    <td><hr noshade size="1">
    </td>
    <td><hr noshade size="1">
    </td>
    <td></td>
  </tr>
  <tr valign="top">
    <td align="left">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top" bgcolor="#ffffff">
    <td colspan="2" align="left"><font size="2" face="serif"><b>INCOME FROM OPERATIONS</b></font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif"><b>1,223,299</b></font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">837,642</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">874,415</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">1,475,265</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td></td>
    <td></td>
    <td></td>
    <td><hr noshade size="1">
    </td>
    <td><hr noshade size="1">
    </td>
    <td></td>
    <td><hr noshade size="1">
    </td>
    <td><hr noshade size="1">
    </td>
    <td></td>
    <td><hr noshade size="1">
    </td>
    <td><hr noshade size="1">
    </td>
    <td></td>
    <td><hr noshade size="1">
    </td>
    <td><hr noshade size="1">
    </td>
    <td></td>
  </tr>
  <tr valign="top">
    <td align="left">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top" bgcolor="#FFFFFF">
    <td colspan="2" align="left"><font size="2" face="serif"><b>OTHER INCOME
          (EXPENSE)</b></font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top" bgcolor="#FFFFFF">
    <td align="left">&nbsp;</td>
    <td align="left"><font size="2" face="serif">Interest income</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif"><b>9,195</b></font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">6,835</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">9,000</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">18,508</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top" bgcolor="#ffffff">
    <td align="left">&nbsp;</td>
    <td align="left"><font size="2" face="serif">Other income</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">&#151;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">&#151;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">1,640</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">&#151;</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top" bgcolor="#FFFFFF">
    <td align="left">&nbsp;</td>
    <td align="left"><font size="2" face="serif">Interest expense</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif"><b></b><b>(137,846</b></font></td>
    <td align="left"><font size="2" face="serif"><b>)</b></font></td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">(105,365</font></td>
    <td align="left"><font size="2" face="serif">)</font></td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">(146,607</font></td>
    <td align="left"><font size="2" face="serif">)</font></td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">(180,678</font></td>
    <td align="left"><font size="2" face="serif">)</font></td>
  </tr>
  <tr valign="top">
    <td></td>
    <td></td>
    <td></td>
    <td><hr noshade size="1">
    </td>
    <td><hr noshade size="1">
    </td>
    <td></td>
    <td><hr noshade size="1">
    </td>
    <td><hr noshade size="1">
    </td>
    <td></td>
    <td><hr noshade size="1">
    </td>
    <td><hr noshade size="1">
    </td>
    <td></td>
    <td><hr noshade size="1">
    </td>
    <td><hr noshade size="1">
    </td>
    <td></td>
  </tr>
  <tr valign="top" bgcolor="#ffffff">
    <td align="left">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif"><b></b><b>(128,651</b></font></td>
    <td align="left"><font size="2" face="serif"><b>)</b></font></td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">(98,530</font></td>
    <td align="left"><font size="2" face="serif">)</font></td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">(135,967</font></td>
    <td align="left"><font size="2" face="serif">)</font></td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">(162,170</font></td>
    <td align="left"><font size="2" face="serif">)</font></td>
  </tr>
  <tr valign="top">
    <td></td>
    <td></td>
    <td></td>
    <td><hr noshade size="1">
    </td>
    <td><hr noshade size="1">
    </td>
    <td></td>
    <td><hr noshade size="1">
    </td>
    <td><hr noshade size="1">
    </td>
    <td></td>
    <td><hr noshade size="1">
    </td>
    <td><hr noshade size="1">
    </td>
    <td></td>
    <td><hr noshade size="1">
    </td>
    <td><hr noshade size="1">
    </td>
    <td></td>
  </tr>
  <tr valign="top">
    <td align="left">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top" bgcolor="#FFFFFF">
    <td colspan="2" align="left"><font size="2" face="serif"><b>INCOME BEFORE
          INCOME TAXES</b></font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif"><b>1,094,648</b></font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">739,112</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">738,448</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">1,313,095</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td align="left">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top" bgcolor="#ffffff">
    <td align="left">&nbsp;</td>
    <td align="left"><font size="2" face="serif">Provision for income taxes</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif"><b>482,100</b></font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">298,300</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">116,366</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">557,720</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td></td>
    <td></td>
    <td></td>
    <td><hr noshade size="1">
    </td>
    <td><hr noshade size="1">
    </td>
    <td></td>
    <td><hr noshade size="1">
    </td>
    <td><hr noshade size="1">
    </td>
    <td></td>
    <td><hr noshade size="1">
    </td>
    <td><hr noshade size="1">
    </td>
    <td></td>
    <td><hr noshade size="1">
    </td>
    <td><hr noshade size="1">
    </td>
    <td></td>
  </tr>
  <tr valign="top">
    <td align="left">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top" bgcolor="#FFFFFF">
    <td colspan="2" align="left"><font size="2" face="serif"><b>NET INCOME</b></font></td>
    <td align="left">&nbsp;</td>
    <td align="right"><font size="2" face="serif"><b>$</b></font></td>
    <td align="right"><font size="2" face="serif"> <b>612,548</b></font></td>
    <td align="left">&nbsp;</td>
    <td align="right"><font size="2" face="serif">$</font></td>
    <td align="right"><font size="2" face="serif"> 440,812</font></td>
    <td align="left">&nbsp;</td>
    <td align="right"><font size="2" face="serif">$</font></td>
    <td align="right"><font size="2" face="serif">622,082</font></td>
    <td align="left">&nbsp;</td>
    <td align="right"><font size="2" face="serif">$</font></td>
    <td align="right"><font size="2" face="serif"> 755,375</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td></td>
    <td></td>
    <td></td>
    <td><hr noshade size="2">
    </td>
    <td><hr noshade size="2">
    </td>
    <td></td>
    <td><hr noshade size="2">
    </td>
    <td><hr noshade size="2">
    </td>
    <td></td>
    <td><hr noshade size="2">
    </td>
    <td><hr noshade size="2">
    </td>
    <td></td>
    <td><hr noshade size="2">
    </td>
    <td><hr noshade size="2">
    </td>
    <td></td>
  </tr>
  <tr valign="top">
    <td align="left">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top" bgcolor="#ffffff">
    <td colspan="2" align="left"><font size="2" face="serif">Basic and diluted
        earnings per share</font></td>
    <td align="left">&nbsp;</td>
    <td align="right"><font size="2" face="serif"><b>$</b></font></td>
    <td align="right"><font size="2" face="serif"> <b>.15</b></font></td>
    <td align="left">&nbsp;</td>
    <td align="right"><font size="2" face="serif">$</font></td>
    <td align="right"><font size="2" face="serif"> .11</font></td>
    <td align="left">&nbsp;</td>
    <td align="right"><font size="2" face="serif">$</font></td>
    <td align="right"><font size="2" face="serif"> .16</font></td>
    <td align="left">&nbsp;</td>
    <td align="right"><font size="2" face="serif">$</font></td>
    <td align="right"><font size="2" face="serif"> .19</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td></td>
    <td></td>
    <td></td>
    <td><hr noshade size="2">
    </td>
    <td><hr noshade size="2">
    </td>
    <td></td>
    <td><hr noshade size="2">
    </td>
    <td><hr noshade size="2">
    </td>
    <td></td>
    <td><hr noshade size="2">
    </td>
    <td><hr noshade size="2">
    </td>
    <td></td>
    <td><hr noshade size="2">
    </td>
    <td><hr noshade size="2">
    </td>
    <td></td>
  </tr>
  <tr valign="top">
    <td align="left">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top" bgcolor="#FFFFFF">
    <td colspan="2" align="left"><font size="2" face="serif">Weighted average
        common shares outstanding</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif"><b>3,999,650</b></font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">3,999,650</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">3,999,650</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">3,999,650</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td></td>
    <td></td>
    <td></td>
    <td><hr noshade size="2">
    </td>
    <td><hr noshade size="2">
    </td>
    <td></td>
    <td><hr noshade size="2">
    </td>
    <td><hr noshade size="2">
    </td>
    <td></td>
    <td><hr noshade size="2">
    </td>
    <td><hr noshade size="2">
    </td>
    <td></td>
    <td><hr noshade size="2">
    </td>
    <td><hr noshade size="2">
    </td>
    <td></td>
  </tr>
</table>

<p align="center"><font size="2" face="Times New Roman, Times, serif">See notes
    to Condensed Financial Statements.</font></p>
<p align="center"><font face="serif" size="2">F-4</font></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<page> <a name="f5"></a>
<p><a href="#index"><font size="2">Back to Index</font></a></p>

<p align="center"><font size="2" face="serif"><b>COFFEE HOLDING CO., INC.<br>
</b></font><font size="2" face="serif"><b>STATEMENTS OF CHANGES IN STOCKHOLDERS&#146; EQUITY</b></font></p>
<table width="100%" cellspacing="0" cellpadding="0" align="center" border="0">
  <tr valign="bottom" bgcolor="#ffffff">
    <td align="left"><div align="center"></div>
    </td>
    <td align="left"><div align="center"></div>
    </td>
    <td align="right"><div align="center"></div>
    </td>
    <td colspan="4" align="right"><div align="center"></div>
        <div align="center"></div>
        <div align="center"></div>
        <div align="center"><font size="1" face="serif">Common Stock</font></div>
    </td>
    <td align="left"><div align="center"></div>
    </td>
    <td align="right"><div align="center"></div>
    </td>
    <td align="right"><div align="center"></div>
    </td>
    <td align="left"><div align="center"></div>
    </td>
    <td align="right"><div align="center"></div>
    </td>
    <td align="right"><div align="center"></div>
    </td>
    <td align="left"><div align="center"></div>
    </td>
    <td align="right"><div align="center"></div>
    </td>
    <td align="right"><div align="center"></div>
    </td>
    <td align="left"><div align="center"></div>
    </td>
  </tr>
  <tr valign="bottom" bgcolor="#ffffff">
    <td align="left"><div align="center"></div>
    </td>
    <td align="left"><div align="center"></div>
    </td>
    <td align="right"><div align="center"></div>
    </td>
    <td colspan="4" align="right"><div align="center">
        <hr noshade size="1">
      </div>
        <div align="center"></div>
        <div align="center"></div>
        <div align="center"></div>
    </td>
    <td align="left"><div align="center"></div>
    </td>
    <td align="right"><div align="center"></div>
    </td>
    <td align="right"><div align="center"></div>
    </td>
    <td align="left"><div align="center"></div>
    </td>
    <td align="right"><div align="center"></div>
    </td>
    <td align="right"><div align="center"></div>
    </td>
    <td align="left"><div align="center"></div>
    </td>
    <td align="right"><div align="center"></div>
    </td>
    <td align="right"><div align="center"></div>
    </td>
    <td align="left"><div align="center"></div>
    </td>
  </tr>
  <tr valign="bottom" bgcolor="#ffffff">
    <td align="left"><div align="center"></div>
    </td>
    <td align="left"><div align="center"></div>
    </td>
    <td align="right"><div align="center"></div>
    </td>
    <td colspan="4" align="right"><div align="center"></div>
        <div align="center"></div>
        <div align="center"></div>
        <div align="center"><font size="1" face="serif">$.001 Par Value</font></div>
    </td>
    <td align="left"><div align="center"></div>
    </td>
    <td align="right"><div align="center"></div>
    </td>
    <td align="right"><div align="center"></div>
    </td>
    <td align="left"><div align="center"></div>
    </td>
    <td align="right"><div align="center"></div>
    </td>
    <td align="right"><div align="center"></div>
    </td>
    <td align="left"><div align="center"></div>
    </td>
    <td align="right"><div align="center"></div>
    </td>
    <td align="right"><div align="center"></div>
    </td>
    <td align="left"><div align="center"></div>
    </td>
  </tr>
  <tr valign="bottom" bgcolor="#ffffff">
    <td align="left"><div align="center"></div>
    </td>
    <td align="left"><div align="center"></div>
    </td>
    <td align="right"><div align="center"></div>
    </td>
    <td colspan="4" align="right"><div align="center"></div>
        <div align="center"></div>
        <div align="center"></div>
        <div align="center">
          <hr noshade size="1">
        </div>
    </td>
    <td align="left"><div align="center"></div>
    </td>
    <td align="right"><div align="center"></div>
    </td>
    <td align="right"><div align="center"></div>
    </td>
    <td align="left"><div align="center"></div>
    </td>
    <td align="right"><div align="center"></div>
    </td>
    <td align="right"><div align="center"></div>
    </td>
    <td align="left"><div align="center"></div>
    </td>
    <td align="right"><div align="center"></div>
    </td>
    <td align="right"><div align="center"></div>
    </td>
    <td align="left"><div align="center"></div>
    </td>
  </tr>
  <tr valign="bottom" bgcolor="#ffffff">
    <td align="left"><div align="center"></div>
    </td>
    <td align="left"><div align="center"></div>
    </td>
    <td align="right"><div align="center"></div>
    </td>
    <td align="right"><div align="center"><font size="1" face="serif">Number
          of<br>
        Shares</font></div>
    </td>
    <td align="left"><div align="center"></div>
    </td>
    <td align="right"><div align="center"></div>
    </td>
    <td align="right"><div align="center"><font size="1" face="serif">Amount</font></div>
    </td>
    <td align="left"><div align="center"></div>
    </td>
    <td align="right"><div align="center"></div>
    </td>
    <td align="right"><div align="center"><font size="1" face="serif">Additional<br>
        Paid-in Capital</font></div>
    </td>
    <td align="left"><div align="center"></div>
    </td>
    <td align="right"><div align="center"></div>
    </td>
    <td align="right"><div align="center"><font size="1" face="serif">Retained<br>
        Earnings<br>
        (Accumulated <br>
        Deficit)</font></div>
    </td>
    <td align="left"><div align="center"></div>
    </td>
    <td align="right"><div align="center"></div>
    </td>
    <td align="right"><div align="center"><font size="1" face="serif">Total</font></div>
    </td>
    <td align="left"><div align="center"></div>
    </td>
  </tr>
  <tr valign="bottom" bgcolor="#ffffff">
    <td align="left"><div align="center"></div>
    </td>
    <td align="left"><div align="center"></div>
    </td>
    <td align="right"><div align="center">
        <hr noshade size="1">
      </div>
    </td>
    <td align="right"><div align="center">
        <hr noshade size="1">
      </div>
    </td>
    <td align="left"><div align="center"></div>
    </td>
    <td align="right"><div align="center">
        <hr noshade size="1">
      </div>
    </td>
    <td align="right"><div align="center">
        <hr noshade size="1">
      </div>
    </td>
    <td align="left"><div align="center"></div>
    </td>
    <td align="right"><div align="center">
        <hr noshade size="1">
      </div>
    </td>
    <td align="right"><div align="center">
        <hr noshade size="1">
      </div>
    </td>
    <td align="left"><div align="center"></div>
    </td>
    <td align="right"><div align="center">
        <hr noshade size="1">
      </div>
    </td>
    <td align="right"><div align="center">
        <hr noshade size="1">
      </div>
    </td>
    <td align="left"><div align="center"></div>
    </td>
    <td align="right"><div align="center">
        <hr noshade size="1">
      </div>
    </td>
    <td align="right"><div align="center">
        <hr noshade size="1">
      </div>
    </td>
    <td align="left"><div align="center"></div>
    </td>
  </tr>
  <tr valign="top" bgcolor="#ffffff">
    <td align="left">&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top" bgcolor="#ffffff">
    <td align="left"><font size="2" face="serif">Balance, October 31, 2001 </font></td>
    <td align="left" width="2%">&nbsp;</td>
    <td width="1%" align="right">&nbsp;</td>
    <td width="10%" align="right"><font size="2" face="serif">3,999,650</font></td>
    <td width="2%" align="left">&nbsp;</td>
    <td width="1%" align="right"><font size="2" face="serif">$</font></td>
    <td width="10%" align="right"><font size="2" face="serif"> 4,000</font></td>
    <td width="2%" align="left">&nbsp;</td>
    <td width="1%" align="right"><font size="2" face="serif">$</font></td>
    <td width="10%" align="right"><font size="2" face="serif"> 867,887</font></td>
    <td width="2%" align="left">&nbsp;</td>
    <td width="1%" align="right"><font size="2" face="serif">$</font></td>
    <td width="10%" align="right"><font size="2" face="serif"> (128,865</font></td>
    <td width="2%" align="left"><font size="2" face="serif">)</font></td>
    <td width="1%" align="right"><font size="2" face="serif">$</font></td>
    <td width="10%" align="right"><font size="2" face="serif"> 743,022</font></td>
    <td width="2%" align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top" bgcolor="#FFFFFF">
    <td align="left"><font size="2" face="serif">Net income</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">&#151;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">&#151;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">&#151;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">755,375</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">755,375</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td></td>
    <td></td>
    <td>&nbsp;</td>
    <td><hr noshade size="1">
    </td>
    <td></td>
    <td><hr noshade size="1">
    </td>
    <td><hr noshade size="1">
    </td>
    <td></td>
    <td><hr noshade size="1">
    </td>
    <td><hr noshade size="1">
    </td>
    <td></td>
    <td><hr noshade size="1">
    </td>
    <td><hr noshade size="1">
    </td>
    <td></td>
    <td><hr noshade size="1">
    </td>
    <td><hr noshade size="1">
    </td>
    <td></td>
  </tr>
  <tr valign="top">
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top" bgcolor="#ffffff">
    <td align="left"><font size="2" face="serif">Balance, October 31, 2002</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">3,999,650</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">4,000</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">867,887</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">626,510</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">1,498,397</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top" bgcolor="#FFFFFF">
    <td align="left"><font size="2" face="serif">Net income</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">&#151;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">&#151;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">&#151;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">622,082</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">622,082</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td></td>
    <td></td>
    <td><hr noshade size="1">
    </td>
    <td><hr noshade size="1">
    </td>
    <td></td>
    <td><hr noshade size="1">
    </td>
    <td><hr noshade size="1">
    </td>
    <td></td>
    <td><hr noshade size="1">
    </td>
    <td><hr noshade size="1">
    </td>
    <td></td>
    <td><hr noshade size="1">
    </td>
    <td><hr noshade size="1">
    </td>
    <td></td>
    <td><hr noshade size="1">
    </td>
    <td><hr noshade size="1">
    </td>
    <td></td>
  </tr>
  <tr valign="top">
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top" bgcolor="#ffffff">
    <td align="left"><font size="2" face="serif">Balance, October 31, 2003</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">3,999,650</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">4,000</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">867,887</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">1,248,592</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">2,120,479</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top" bgcolor="#FFFFFF">
    <td align="left"><font size="2" face="serif"><b>Net income (unaudited)</b></font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">&#151;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">&#151;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">&#151;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif"><b>612,548</b></font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif"><b>612,548</b></font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td></td>
    <td></td>
    <td><hr noshade size="1">
    </td>
    <td><hr noshade size="1">
    </td>
    <td></td>
    <td><hr noshade size="1">
    </td>
    <td><hr noshade size="1">
    </td>
    <td></td>
    <td><hr noshade size="1">
    </td>
    <td><hr noshade size="1">
    </td>
    <td></td>
    <td><hr noshade size="1">
    </td>
    <td><hr noshade size="1">
    </td>
    <td></td>
    <td><hr noshade size="1">
    </td>
    <td><hr noshade size="1">
    </td>
    <td></td>
  </tr>
  <tr valign="top">
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top" bgcolor="#ffffff">
    <td align="left"><font size="2" face="serif"><b>Balance, July 31, 2004 (unaudited)</b></font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif"><b>3,999,650</b></font></td>
    <td align="left">&nbsp;</td>
    <td align="right"><font size="2" face="serif"><b>$</b></font></td>
    <td align="right"><font size="2" face="serif"><b>4,000</b></font></td>
    <td align="left">&nbsp;</td>
    <td align="right"><font size="2" face="serif"><b>$</b><b></b></font></td>
    <td align="right"><font size="2" face="serif"><b>867,887</b></font></td>
    <td align="left">&nbsp;</td>
    <td align="right"><font size="2" face="serif"><b>$</b></font></td>
    <td align="right"><font size="2" face="serif"> <b>1,861,140</b></font></td>
    <td align="left">&nbsp;</td>
    <td align="right"><font size="2" face="serif"><b>$</b></font></td>
    <td align="right"><font size="2" face="serif"> <b>2,733,027</b></font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td></td>
    <td></td>
    <td><hr noshade size="2">
    </td>
    <td><hr noshade size="2">
    </td>
    <td></td>
    <td><hr noshade size="2">
    </td>
    <td><hr noshade size="2">
    </td>
    <td></td>
    <td><hr noshade size="2">
    </td>
    <td><hr noshade size="2">
    </td>
    <td></td>
    <td><hr noshade size="2">
    </td>
    <td><hr noshade size="2">
    </td>
    <td></td>
    <td><hr noshade size="2">
    </td>
    <td><hr noshade size="2">
    </td>
    <td></td>
  </tr>
</table>

<p align="center"><font size="2" face="Times New Roman, Times, serif">See notes
    to Condensed Financial Statements.</font></p>
<p align="center"><font face="serif" size="2">F-5</font></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<page> <a name="f6"></a>
<p><a href="#index"><font size="2">Back to Index</font></a></p>

<p align="center"><font size="2" face="serif"><b>COFFEE HOLDING CO., INC.<br>
</b></font><font size="2" face="serif"><b>STATEMENTS OF CASH FLOWS</b></font></p>
<p align="left">&nbsp;</p>
<table width="100%" cellspacing="0" cellpadding="0" align="center" border="0">
  <tr valign="bottom">
    <td width="3%" align="left">&nbsp;</td>
    <td width="3%" align="left">&nbsp;</td>
    <td align="left"><div align="center"><font size="1" face="serif">&nbsp;</font></div>
    </td>
    <td align="left"><div align="center"></div>
    </td>
    <td align="right"><div align="center"></div>
    </td>
    <td colspan="4" align="center"><div align="center"><font size="1" face="serif"><b>For
            the Nine Months Ended</b></font><br>
            <font size="1" face="serif"><b>July 31,</b></font><br>
            <font size="1" face="serif"><b>(Unaudited)</b></font></div>
    </td>
    <td align="left"><div align="center"></div>
    </td>
    <td align="right"><div align="center"></div>
    </td>
    <td colspan="4" align="center"><div align="center"><font size="1" face="serif">For
          the Years Ended</font><br>
            <font size="1" face="serif">October 31,</font></div>
    </td>
    <td align="left"><div align="center"></div>
    </td>
  </tr>
  <tr valign="bottom">
    <td align="left">&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td align="right"><hr noshade size="1">
    </td>
    <td align="right"><hr noshade size="1">
    </td>
    <td align="left">&nbsp;</td>
    <td align="right"><hr noshade size="1">
    </td>
    <td align="right"><hr noshade size="1">
    </td>
    <td align="left">&nbsp;</td>
    <td align="right"><hr noshade size="1">
    </td>
    <td align="right"><hr noshade size="1">
    </td>
    <td align="left">&nbsp;</td>
    <td align="right"><hr noshade size="1">
    </td>
    <td align="right"><hr noshade size="1">
    </td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left">&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td align="left"><div align="center"><font size="1" face="serif">&nbsp;</font></div>
    </td>
    <td align="left"><div align="center"></div>
    </td>
    <td align="right"><div align="center"></div>
    </td>
    <td align="right"><div align="center"><font size="1" face="serif"><b>2004</b></font></div>
    </td>
    <td align="left"><div align="center"></div>
    </td>
    <td align="right"><div align="center"></div>
    </td>
    <td align="right"><div align="center"><font size="1" face="serif">2003</font></div>
    </td>
    <td align="left"><div align="center"></div>
    </td>
    <td align="right"><div align="center"></div>
    </td>
    <td align="right"><div align="center"><font size="1" face="serif">2003</font></div>
    </td>
    <td align="left"><div align="center"></div>
    </td>
    <td align="right"><div align="center"></div>
    </td>
    <td align="right"><div align="center"><font size="1" face="serif">2002</font></div>
    </td>
    <td align="left"><div align="center"></div>
    </td>
  </tr>
  <tr valign="bottom" bgcolor="#FFFFFF">
    <td align="left">&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td align="right"><hr noshade size="1">
    </td>
    <td align="left"><hr noshade size="1">
    </td>
    <td align="left">&nbsp;</td>
    <td align="right"><hr noshade size="1">
    </td>
    <td align="left"><hr noshade size="1">
    </td>
    <td align="left">&nbsp;</td>
    <td align="right"><hr noshade size="1">
    </td>
    <td align="left"><hr noshade size="1">
    </td>
    <td align="left">&nbsp;</td>
    <td align="right"><hr noshade size="1">
    </td>
    <td align="left"><hr noshade size="1">
    </td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="bottom" bgcolor="#FFFFFF">
    <td colspan="3" align="left"><font size="2" face="serif"><b>OPERATING ACTIVITIES:</b></font></td>
    <td width="2%" align="left">&nbsp;</td>
    <td width="1%" align="right">&nbsp;</td>
    <td width="10%" align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td width="2%" align="left">&nbsp;</td>
    <td width="1%" align="right">&nbsp;</td>
    <td width="10%" align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td width="2%" align="left">&nbsp;</td>
    <td width="1%" align="right">&nbsp;</td>
    <td width="10%" align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td width="2%" align="left">&nbsp;</td>
    <td width="1%" align="right">&nbsp;</td>
    <td width="10%" align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td width="2%" align="left">&nbsp;</td>
  </tr>
  <tr valign="bottom" bgcolor="#ffffff">
    <td align="left">&nbsp;</td>
    <td colspan="2" align="left"><font size="2" face="serif">Net income</font></td>
    <td align="left">&nbsp;</td>
    <td align="right"><font size="2" face="serif"><b>$</b></font></td>
    <td align="right"><font size="2" face="serif"> <b>612,548</b></font></td>
    <td align="left">&nbsp;</td>
    <td align="right"><font size="2" face="serif">$</font></td>
    <td align="right"><font size="2" face="serif"> 440,812</font></td>
    <td align="left">&nbsp;</td>
    <td align="right"><font size="2" face="serif">$</font></td>
    <td align="right"><font size="2" face="serif"> 622,082</font></td>
    <td align="left">&nbsp;</td>
    <td align="right"><font size="2" face="serif">$</font></td>
    <td align="right"><font size="2" face="serif"> 755,375</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="bottom" bgcolor="#FFFFFF">
    <td align="left">&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td align="left"><div style="margin-left: 3%; text-indent: -3%"><font size="2" face="serif">Adjustments
          to reconcile net income to net cash provided by (used in) operating
          activities:</font></div>
    </td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="bottom" bgcolor="#FFFFFF">
    <td align="left">&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td align="left"><div style="margin-left: 6%; text-indent: -3%"><font size="2" face="serif">Depreciation
          and amortization</font></div>
    </td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif"><b>290,653</b></font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">152,924</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">299,774</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">270,994</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="bottom" bgcolor="#ffffff">
    <td align="left">&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td align="left"><div style="margin-left: 6%; text-indent: -3%"><font size="2" face="serif">Bad
          debts (recovery)</font></div>
    </td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif"><b>(19,086</b></font></td>
    <td align="left"><font size="2" face="serif"><b>)</b></font></td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">(12,154</font></td>
    <td align="left"><font size="2" face="serif">)</font></td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">&#151;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">&#151;</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="bottom" bgcolor="#FFFFFF">
    <td align="left">&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td align="left"><div style="margin-left: 6%; text-indent: -3%"><font size="2" face="serif">Deferred
          taxes</font></div>
    </td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif"><b>9,100</b></font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">(31,200</font></td>
    <td align="left"><font size="2" face="serif">)</font></td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">(38,300</font></td>
    <td align="left"><font size="2" face="serif">)</font></td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">(26,200</font></td>
    <td align="left"><font size="2" face="serif">)</font></td>
  </tr>
  <tr valign="bottom" bgcolor="#FFFFFF">
    <td align="left">&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td align="left"><div style="margin-left: 6%; text-indent: -3%"><font size="2" face="serif">Changes
    in operating assets and liabilities:</font></div></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="bottom" bgcolor="#ffffff">
    <td align="left">&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td align="left"><div style="margin-left: 6%; text-indent: -3%"><font size="2" face="serif">(Increase)
          decrease in due from broker</font></div>
    </td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif"><b>574,333</b></font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">(127,039</font></td>
    <td align="left"><font size="2" face="serif">)</font></td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">(125,521</font></td>
    <td align="left"><font size="2" face="serif">)</font></td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">(494,037</font></td>
    <td align="left"><font size="2" face="serif">)</font></td>
  </tr>
  <tr valign="bottom" bgcolor="#FFFFFF">
    <td align="left">&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td align="left"><div style="margin-left: 6%; text-indent: -3%"><font size="2" face="serif">(Increase)
          decrease in accounts receivable</font></div>
    </td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif"><b>(289,637</b></font></td>
    <td align="left"><font size="2" face="serif"><b>)</b></font></td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">18,867</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">(371,261</font></td>
    <td align="left"><font size="2" face="serif">)</font></td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">118,327</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="bottom" bgcolor="#ffffff">
    <td align="left">&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td align="left"><div style="margin-left: 6%; text-indent: -3%"><font size="2" face="serif">(Increase)
          in inventories</font></div>
    </td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif"><b>(994,281</b></font></td>
    <td align="left"><font size="2" face="serif"><b>)</b></font></td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">(494,666</font></td>
    <td align="left"><font size="2" face="serif">)</font></td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">(363,280</font></td>
    <td align="left"><font size="2" face="serif">)</font></td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">(66,994</font></td>
    <td align="left"><font size="2" face="serif">)</font></td>
  </tr>
  <tr valign="bottom" bgcolor="#FFFFFF">
    <td align="left">&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td align="left"><div style="margin-left: 6%; text-indent: -3%"><font size="2" face="serif">(Increase)
          decrease in prepaid expenses and other current assets</font></div>
    </td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif"><b>71,576</b></font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">(356,163</font></td>
    <td align="left"><font size="2" face="serif">)</font></td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">(348,165</font></td>
    <td align="left"><font size="2" face="serif">)</font></td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">(42,378</font></td>
    <td align="left"><font size="2" face="serif">)</font></td>
  </tr>
  <tr valign="bottom" bgcolor="#ffffff">
    <td align="left">&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td align="left"><div style="margin-left: 6%; text-indent: -3%"><font size="2" face="serif">(Decrease)
          increase in accounts payable and accrued expenses</font></div>
    </td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif"><b>370,419</b></font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">(424,751</font></td>
    <td align="left"><font size="2" face="serif">)</font></td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">(190,015</font></td>
    <td align="left"><font size="2" face="serif">)</font></td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">301,128</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="bottom" bgcolor="#FFFFFF">
    <td align="left">&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td align="left"><div style="margin-left: 6%; text-indent: -3%"><font size="2" face="serif">(Decrease)
          increase in income taxes payable</font></div>
    </td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif"><b>89,156</b></font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">193,709</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">(229,540</font></td>
    <td align="left"><font size="2" face="serif">)</font></td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">7,225</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td></td>
    <td></td>
    <td></td>
    <td></td>
    <td><hr noshade size="1">
    </td>
    <td><hr noshade size="1">
    </td>
    <td></td>
    <td><hr noshade size="1">
    </td>
    <td><hr noshade size="1">
    </td>
    <td></td>
    <td><hr noshade size="1">
    </td>
    <td><hr noshade size="1">
    </td>
    <td></td>
    <td><hr noshade size="1">
    </td>
    <td><hr noshade size="1">
    </td>
    <td></td>
  </tr>
  <tr valign="bottom" bgcolor="#ffffff">
    <td align="left">&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td align="left"><div style="margin-left: 9%; text-indent: -3%"><font size="2" face="serif"><b>Net
            cash provided by (used in) operating activities</b></font></div>
    </td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif"><b>714,781</b></font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">(639,661</font></td>
    <td align="left"><font size="2" face="serif">)</font></td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">(744,226</font></td>
    <td align="left"><font size="2" face="serif">)</font></td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">823,440</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td></td>
    <td></td>
    <td></td>
    <td></td>
    <td><hr noshade size="1">
    </td>
    <td><hr noshade size="1">
    </td>
    <td></td>
    <td><hr noshade size="1">
    </td>
    <td><hr noshade size="1">
    </td>
    <td></td>
    <td><hr noshade size="1">
    </td>
    <td><hr noshade size="1">
    </td>
    <td></td>
    <td><hr noshade size="1">
    </td>
    <td><hr noshade size="1">
    </td>
    <td></td>
  </tr>
  <tr valign="bottom" bgcolor="#FFFFFF">
    <td colspan="3" align="left"><font size="2" face="serif"><b>INVESTING ACTIVITIES:</b></font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="bottom" bgcolor="#FFFFFF">
    <td align="left">&nbsp;</td>
    <td colspan="2" align="left"><font size="2" face="serif">Purchases of property
        and equipment</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif"><b>(908,093</b></font></td>
    <td align="left"><font size="2" face="serif"><b>)</b></font></td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">(31,450</font></td>
    <td align="left"><font size="2" face="serif">)</font></td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">(62,758</font></td>
    <td align="left"><font size="2" face="serif">)</font></td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">(435,538</font></td>
    <td align="left"><font size="2" face="serif">)</font></td>
  </tr>
  <tr valign="bottom" bgcolor="#ffffff">
    <td align="left">&nbsp;</td>
    <td colspan="2" align="left"><font size="2" face="serif">Disposal of fixed
        assets</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif"><b>(25,624</b></font></td>
    <td align="left"><font size="2" face="serif"><b>)</b></font></td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">&#151;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">&#151;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">&#151;</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="bottom" bgcolor="#FFFFFF">
    <td align="left">&nbsp;</td>
    <td colspan="2" align="left"><font size="2" face="serif">Security deposits</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif"><b>(19,200</b></font></td>
    <td align="left"><font size="2" face="serif"><b>)</b></font></td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">&#151;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">&#151;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">&#151;</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td></td>
    <td></td>
    <td></td>
    <td></td>
    <td><hr noshade size="1">
    </td>
    <td><hr noshade size="1">
    </td>
    <td></td>
    <td><hr noshade size="1">
    </td>
    <td><hr noshade size="1">
    </td>
    <td></td>
    <td><hr noshade size="1">
    </td>
    <td><hr noshade size="1">
    </td>
    <td></td>
    <td><hr noshade size="1">
    </td>
    <td><hr noshade size="1">
    </td>
    <td></td>
  </tr>
  <tr valign="bottom" bgcolor="#ffffff">
    <td align="left">&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td align="left"><div style="margin-left: 9%; text-indent: -3%"><font size="2" face="serif"><b>Net
            cash (used in) investing activities</b></font></div>
    </td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif"><b>(952,917</b></font></td>
    <td align="left"><font size="2" face="serif"><b>)</b></font></td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">(31,450</font></td>
    <td align="left"><font size="2" face="serif">)</font></td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">(62,758</font></td>
    <td align="left"><font size="2" face="serif">)</font></td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">(435,538</font></td>
    <td align="left"><font size="2" face="serif">)</font></td>
  </tr>
  <tr valign="bottom">
    <td></td>
    <td></td>
    <td></td>
    <td></td>
    <td><hr noshade size="1">
    </td>
    <td><hr noshade size="1">
    </td>
    <td></td>
    <td><hr noshade size="1">
    </td>
    <td><hr noshade size="1">
    </td>
    <td></td>
    <td><hr noshade size="1">
    </td>
    <td><hr noshade size="1">
    </td>
    <td></td>
    <td><hr noshade size="1">
    </td>
    <td><hr noshade size="1">
    </td>
    <td></td>
  </tr>
  <tr valign="bottom">
    <td align="left">&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="bottom" bgcolor="#FFFFFF">
    <td colspan="3" align="left"><font size="2" face="serif"><b>FINANCING ACTIVITIES:</b></font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="bottom" bgcolor="#FFFFFF">
    <td align="left">&nbsp;</td>
    <td colspan="2" align="left"><font size="2" face="serif">Advances on term
        loan</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">&#151;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">&#151;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">&#151;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">40,000</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="bottom" bgcolor="#ffffff">
    <td align="left">&nbsp;</td>
    <td colspan="2" align="left"><font size="2" face="serif">Principal payments
        on term loan</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif"><b>(63,000</b></font></td>
    <td align="left"><font size="2" face="serif"><b>)</b></font></td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">(63,000</font></td>
    <td align="left"><font size="2" face="serif">)</font></td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">(84,000</font></td>
    <td align="left"><font size="2" face="serif">)</font></td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">(120,000</font></td>
    <td align="left"><font size="2" face="serif">)</font></td>
  </tr>
  <tr valign="bottom" bgcolor="#FFFFFF">
    <td align="left">&nbsp;</td>
    <td colspan="2" align="left"><div style="margin-left: 3%; text-indent: -3%"><font size="2" face="serif">Decrease
          in cash and cash equivalents restricted under credit facility and mortgage
          note</font></div>
    </td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">&#151;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">&#151;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">&#151;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">279,518</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="bottom" bgcolor="#ffffff">
    <td align="left">&nbsp;</td>
    <td colspan="2" align="left"><font size="2" face="serif">Advances under bank
        line of credit</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif"><b>19,912,579</b></font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">15,685,990</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">21,358,723</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">18,037,747</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="bottom" bgcolor="#FFFFFF">
    <td align="left">&nbsp;</td>
    <td colspan="2" align="left"><font size="2" face="serif">Principal payments
        under bank line of credit</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif"><b>(19,392,984</b></font></td>
    <td align="left"><font size="2" face="serif"><b>)</b></font></td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">(14,843,189</font></td>
    <td align="left"><font size="2" face="serif">)</font></td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">(20,304,030</font></td>
    <td align="left"><font size="2" face="serif">)</font></td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">(19,055,590</font></td>
    <td align="left"><font size="2" face="serif">)</font></td>
  </tr>
  <tr valign="bottom" bgcolor="#ffffff">
    <td align="left">&nbsp;</td>
    <td colspan="2" align="left"><font size="2" face="serif">Advances of obligations
        under capital leases</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">&#151;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">&#151;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">&#151;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">383,764</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="bottom" bgcolor="#FFFFFF">
    <td align="left">&nbsp;</td>
    <td colspan="2" align="left"><font size="2" face="serif">Principal payments
        of obligations under capital leases</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif"><b>(97,110</b></font></td>
    <td align="left"><font size="2" face="serif"><b>)</b></font></td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">(89,195</font></td>
    <td align="left"><font size="2" face="serif">)</font></td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">(120,521</font></td>
    <td align="left"><font size="2" face="serif">)</font></td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">(40,797</font></td>
    <td align="left"><font size="2" face="serif">)</font></td>
  </tr>
  <tr valign="bottom" bgcolor="#ffffff">
    <td align="left">&nbsp;</td>
    <td colspan="2" align="left"><font size="2" face="serif">(Repayment) advances
        from related parties</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif"><b>(91,137</b></font></td>
    <td align="left"><font size="2" face="serif"><b>)</b></font></td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">(5,640</font></td>
    <td align="left"><font size="2" face="serif">)</font></td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">(12,924</font></td>
    <td align="left"><font size="2" face="serif">)</font></td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">(68,410</font></td>
    <td align="left"><font size="2" face="serif">)</font></td>
  </tr>
  <tr valign="bottom">
    <td></td>
    <td></td>
    <td></td>
    <td></td>
    <td><hr noshade size="1">
    </td>
    <td><hr noshade size="1">
    </td>
    <td></td>
    <td><hr noshade size="1">
    </td>
    <td><hr noshade size="1">
    </td>
    <td></td>
    <td><hr noshade size="1">
    </td>
    <td><hr noshade size="1">
    </td>
    <td></td>
    <td><hr noshade size="1">
    </td>
    <td><hr noshade size="1">
    </td>
    <td></td>
  </tr>
  <tr valign="bottom" bgcolor="#FFFFFF">
    <td align="left">&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td align="left"><div style="margin-left: 9%; text-indent: -3%"><font size="2" face="serif"><b>Net
            cash (used in) provided by financing activities</b></font></div>
    </td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif"><b>268,348</b></font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">684,966</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">837,248</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">(543,768</font></td>
    <td align="left"><font size="2" face="serif">)</font></td>
  </tr>
  <tr valign="bottom">
    <td></td>
    <td></td>
    <td></td>
    <td></td>
    <td><hr noshade size="1">
    </td>
    <td><hr noshade size="1">
    </td>
    <td></td>
    <td><hr noshade size="1">
    </td>
    <td><hr noshade size="1">
    </td>
    <td></td>
    <td><hr noshade size="1">
    </td>
    <td><hr noshade size="1">
    </td>
    <td></td>
    <td><hr noshade size="1">
    </td>
    <td><hr noshade size="1">
    </td>
    <td></td>
  </tr>
  <tr valign="bottom" bgcolor="#ffffff">
    <td colspan="3" align="left"><font size="2" face="serif"><b>NET INCREASE
          (DECREASE) IN CASH</b></font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif"><b>30,212</b></font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">13,855</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">30,264</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">(155,866</font></td>
    <td align="left"><font size="2" face="serif">)</font></td>
  </tr>
  <tr valign="bottom" bgcolor="#FFFFFF">
    <td align="left">&nbsp;</td>
    <td colspan="2" align="left"><font size="2" face="serif">Cash, beginning
        of year</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif"><b>73,832</b></font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">43,568</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">43,568</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">199,434</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td></td>
    <td></td>
    <td></td>
    <td></td>
    <td><hr noshade size="1">
    </td>
    <td><hr noshade size="1">
    </td>
    <td></td>
    <td><hr noshade size="1">
    </td>
    <td><hr noshade size="1">
    </td>
    <td></td>
    <td><hr noshade size="1">
    </td>
    <td><hr noshade size="1">
    </td>
    <td></td>
    <td><hr noshade size="1">
    </td>
    <td><hr noshade size="1">
    </td>
    <td></td>
  </tr>
  <tr valign="bottom" bgcolor="#ffffff">
    <td colspan="3" align="left"><font size="2" face="serif"><b>CASH, END OF
          PERIOD/YEAR</b></font></td>
    <td align="left">&nbsp;</td>
    <td align="right"><font size="2" face="serif"><b>$</b></font></td>
    <td align="right"><font size="2" face="serif"> <b>104,044</b></font></td>
    <td align="left">&nbsp;</td>
    <td align="right"><font size="2" face="serif">$</font></td>
    <td align="right"><font size="2" face="serif"> 57,423</font></td>
    <td align="left">&nbsp;</td>
    <td align="right"><font size="2" face="serif">$</font></td>
    <td align="right"><font size="2" face="serif"> 73,832</font></td>
    <td align="left">&nbsp;</td>
    <td align="right"><font size="2" face="serif">$</font></td>
    <td align="right"><font size="2" face="serif"> 43,568</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td></td>
    <td></td>
    <td></td>
    <td></td>
    <td><hr noshade size="2">
    </td>
    <td><hr noshade size="2">
    </td>
    <td></td>
    <td><hr noshade size="2">
    </td>
    <td><hr noshade size="2">
    </td>
    <td></td>
    <td><hr noshade size="2">
    </td>
    <td><hr noshade size="2">
    </td>
    <td></td>
    <td><hr noshade size="2">
    </td>
    <td><hr noshade size="2">
    </td>
    <td></td>
  </tr>
  <tr valign="bottom" bgcolor="#FFFFFF">
    <td colspan="3" align="left"><div style="margin-left: 3%; text-indent: -3%"><font size="2" face="serif"><b>SUPPLEMENTAL
            DISCLOSURE OF CASH FLOW DATA:</b></font></div>
    </td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="bottom" bgcolor="#FFFFFF">
    <td align="left">&nbsp;</td>
    <td colspan="2" align="left"><font size="2" face="serif">Interest paid</font></td>
    <td align="left">&nbsp;</td>
    <td align="right"><font size="2" face="serif"><b>$</b></font></td>
    <td align="right"><font size="2" face="serif"> <b>137,846</b></font></td>
    <td align="left">&nbsp;</td>
    <td align="right"><font size="2" face="serif">$</font></td>
    <td align="right"><font size="2" face="serif"> 105,365</font></td>
    <td align="left">&nbsp;</td>
    <td align="right"><font size="2" face="serif">$</font></td>
    <td align="right"><font size="2" face="serif"> 143,682</font></td>
    <td align="left">&nbsp;</td>
    <td align="right"><font size="2" face="serif">$</font></td>
    <td align="right"><font size="2" face="serif"> 145,969</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td></td>
    <td></td>
    <td></td>
    <td></td>
    <td><hr noshade size="2">
    </td>
    <td><hr noshade size="2">
    </td>
    <td></td>
    <td><hr noshade size="2">
    </td>
    <td><hr noshade size="2">
    </td>
    <td></td>
    <td><hr noshade size="2">
    </td>
    <td><hr noshade size="2">
    </td>
    <td></td>
    <td><hr noshade size="2">
    </td>
    <td><hr noshade size="2">
    </td>
    <td></td>
  </tr>
  <tr valign="bottom" bgcolor="#ffffff">
    <td align="left">&nbsp;</td>
    <td colspan="2" align="left"><font size="2" face="serif">Income taxes paid</font></td>
    <td align="left">&nbsp;</td>
    <td align="right"><font size="2" face="serif"><b>$</b></font></td>
    <td align="right"><font size="2" face="serif"> <b>194,300</b></font></td>
    <td align="left">&nbsp;</td>
    <td align="right"><font size="2" face="serif">$</font></td>
    <td align="right"><font size="2" face="serif"> 336,029</font></td>
    <td align="left">&nbsp;</td>
    <td align="right"><font size="2" face="serif">$</font></td>
    <td align="right"><font size="2" face="serif"> 396,295</font></td>
    <td align="left">&nbsp;</td>
    <td align="right"><font size="2" face="serif">$</font></td>
    <td align="right"><font size="2" face="serif"> 494,669</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td></td>
    <td></td>
    <td></td>
    <td></td>
    <td><hr noshade size="2">
    </td>
    <td><hr noshade size="2">
    </td>
    <td></td>
    <td><hr noshade size="2">
    </td>
    <td><hr noshade size="2">
    </td>
    <td></td>
    <td><hr noshade size="2">
    </td>
    <td><hr noshade size="2">
    </td>
    <td></td>
    <td><hr noshade size="2">
    </td>
    <td><hr noshade size="2">
    </td>
    <td></td>
  </tr>
</table>

<p align="center"><font size="2" face="Times New Roman, Times, serif">See notes
    to Condensed Financial Statements.</font></p>
<p align="center"><font face="serif" size="2">F-6</font></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<page> <a name="f7"></a>
<p><a href="#index"><font size="2">Back to Index</font></a></p>

<p align="center"><font size="2" face="serif"><b>COFFEE HOLDING CO., INC.<br>
  </b></font><font size="2" face="serif"><b>NOTES TO FINANCIAL STATEMENTS<br>
  </b></font><font size="2" face="serif"><b>OCTOBER 31, </b><b>2003 AND </b><b>2002<br>
</b></font><font size="2" face="serif"><b>(Information as of and for the periods
ended July 31, 2004 and 2003 is unaudited)</b></font></p>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
  <tr valign="top">
    <td><font size="2" face="serif"><b>NOTE 1 -</b></font></td>
    <td align="left"><font size="2" face="serif"><b>BUSINESS ACTIVITIES AND REVERSE
          ACQUISITION:</b></font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td width="8%"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left"><font size="2" face="serif">Coffee Holding Co., Inc. (&#8220;Coffee&#8221;),
        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&#8217;s sales
        are primarily to customers that are located throughout the United States.</font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td><font size="2" face="serif"><b>NOTE 2 -</b></font></td>
    <td align="left"><font size="2" face="serif"><b>SUMMARY OF SIGNIFICANT ACCOUNTING
          POLICIES:</b></font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left"><font size="2" face="serif"><b><i>Use of estimates:</i></b></font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left"><font size="2" face="serif">The preparation of financial
        statements in conformity with accounting principles generally accepted
        in the United States of America requires management to make estimates
        and assumptions that affect certain reported amounts and disclosures.
        Accordingly, actual results could differ from those estimates.</font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left"><font size="2" face="serif"><b><i>Cash equivalents:</i></b></font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left"><font size="2" face="serif">Cash equivalents represent highly
        liquid investments with maturities of three months or less at the date
        of purchase.</font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left"><font size="2" face="serif"><b><i>Inventories:</i></b></font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left"><font size="2" face="serif">Inventories are valued at the
        lower of cost (first-in, first-out basis) or market.</font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left"><font size="2" face="serif"><b><i>Property and equipment:</i></b></font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left"><font size="2" face="serif">Property and equipment are recorded
        at cost and depreciated using the straight-line method over the estimated
        useful lives of the assets.</font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left"><font size="2" face="serif"><b><i>Hedging:</i></b></font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left"><font size="2" face="serif">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&#8217;s
        accounting for options and futures contracts may have the effect of increasing
        earnings volatility in any particular period.</font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left"><font size="2" face="serif">At July 31, 2004, the Company
        held 118 options (generally with terms of two months or less) covering
        an aggregate of 4,425,000 pounds of green coffee beans at a price of
        $.675 and $.725 per pound. The fair market value of these options, which
        was obtained from a major financial institution, was $150,038 at July
        31, 2004.</font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left"><font size="2" face="serif">At July 31, 2003, the options
        contracts held by the Company were immaterial.</font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left"><font size="2" face="serif">At October 31, 2003, the Company
        held 150 options covering an aggregate of 5,625,000 pounds of green coffee
        beans at $.60 per pound. The fair market value of these options, which
        was obtained from a major financial institution, was approximately $95,813
        at October 31, 2003.</font></td>
  </tr>
</table>

<p align="center"><font face="serif" size="2">F-7</font></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<page> <a name="f8"></a>
<p><a href="#index"><font size="2">Back to Index</font></a></p>

<p align="center"><font size="2" face="serif"><b>COFFEE HOLDING CO., INC.<br>
  </b></font><font size="2" face="serif"><b>NOTES TO FINANCIAL STATEMENTS<br>
  </b></font><font size="2" face="serif"><b>OCTOBER 31, </b><b>2003 AND </b><b>2002<br>
</b></font><font size="2" face="serif"><b>(Information as of and for the periods
ended July 31, 2004 and 2003 is unaudited)</b></font></p>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
  <tr valign="top">
    <td><font size="2" face="serif"><b>NOTE 2 -</b></font></td>
    <td align="left"><font size="2" face="serif"><b>SUMMARY OF SIGNIFICANT ACCOUNTING
          POLICIES (Continued):</b></font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left"><font size="2" face="serif"><b><i>Hedging (Continued):</i></b></font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td width="8%"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left"><font size="2" face="serif">At October 31, 2002, the Company
        held 75 options covering an aggregate of 2,812,500 pounds of green coffee
        beans at prices ranging from $.60 to $.65 per pound. The fair market
        value of these options, which was obtained from a major financial institution,
        was approximately $145,000 at October 31, 2002. </font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left"><font size="2" face="serif">The Company acquires futures
        contracts with longer terms (generally three to four months) primarily
        for the purpose of guaranteeing an adequate supply of green coffee. At
        July 31, 2004, the Company held 53 futures contracts for the purchase
        of 1,987,500 pounds of coffee at an average price of $.707 per pound
        for September 2004 contracts. The market price of coffee applicable to
        such contracts was $.665 per pound at that date.</font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left"><font size="2" face="serif">At July 31, 2003, the Company
        held 144 futures contracts for the purchase of 5,400,000 pounds of coffee
        at an average price of $.6155 per pound for September 2003 contracts.
        The market price of coffee applicable to such contracts was $.47 per
        pound at that date.</font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left"><font size="2" face="serif">At October 31, 2003 and 2002,
        the Company held 183 and 70 longer-term futures contracts for the purchase
        of 6,862,500 and 2,625,000 pounds of coffee at an average price of $.65
        and $.62 per pound, respectively. The market price of coffee applicable
        to such contracts was $.59 and $.62 per pound at October 31, 2003 and
        $.66 per pound at October 31, 2002. </font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left"><font size="2" face="serif">The Company historically has
        had short term contracts with some of its customers (generally one to
        two years in duration). The Company currently has agreements with two
        of its wholesale customers in which it is the supplier at fixed prices
        for lines of private label ground coffee. The Company is the exclusive
        supplier of one of these customers. The agreements generally contain
        only pricing terms. </font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left"><font size="2" face="serif">The Company classifies its options
        and future contracts as trading securities and accordingly, unrealized
        holding gains and losses are included in earnings and not reflected as
        a net amount in a separate component of shareholders&#8217; equity until
        realized.</font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left"><font size="2" face="serif">Included in cost of sales and
        due from broker for the nine month periods ended July 31, 2004 and 2003
        and for the years ended October 31, 2003 and 2002, the Company recorded
        realized and unrealized gain and losses respectively, on these hedging
        contracts (using the specific identification method) as follows:</font></td>
  </tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" align="center" border="0">
  <tr valign="top">
    <td align="left">&nbsp;</td>
    <td align="left" valign="bottom">&nbsp;</td>
    <td align="left" valign="bottom">&nbsp;</td>
    <td align="right" valign="bottom">&nbsp;</td>
    <td colspan="4" align="center" valign="bottom">&nbsp;</td>
    <td align="left" valign="bottom">&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td align="left">&nbsp;</td>
    <td align="left" valign="bottom"><font size="1" face="serif">&nbsp;</font></td>
    <td align="left" valign="bottom">&nbsp;</td>
    <td align="right" valign="bottom">&nbsp;</td>
    <td colspan="4" align="center" valign="bottom"><div align="center"><font size="1" face="serif"><b>Nine
            Months Ended July 31,</b></font></div>
    </td>
    <td align="left" valign="bottom"><div align="center"></div>
    </td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td align="left">&nbsp;</td>
    <td align="left" valign="bottom">&nbsp;</td>
    <td align="left" valign="bottom">&nbsp;</td>
    <td align="right" valign="bottom"><hr size="1" noshade>
    </td>
    <td align="right" valign="bottom"><hr align="center" size="1" noshade>
    </td>
    <td align="left" valign="bottom"><div align="center">
        <hr align="center" size="1" noshade>
      </div>
    </td>
    <td align="right" valign="bottom"><hr align="center" size="1" noshade>
    </td>
    <td align="right" valign="bottom"><hr align="center" size="1" noshade>
    </td>
    <td align="left" valign="bottom"><div align="center"></div>
    </td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td align="left">&nbsp;</td>
    <td align="left" valign="bottom"><font size="1" face="serif">&nbsp;</font></td>
    <td align="left" valign="bottom">&nbsp;</td>
    <td align="right" valign="bottom">&nbsp;</td>
    <td align="right" valign="bottom"><div align="center"><font size="1" face="serif"><b>2004</b></font></div>
    </td>
    <td align="left" valign="bottom"><div align="center"></div>
    </td>
    <td align="right" valign="bottom"><div align="center"></div>
    </td>
    <td align="right" valign="bottom"><div align="center"><font size="1" face="serif">2003</font></div>
    </td>
    <td align="left" valign="bottom"><div align="center"></div>
    </td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top" bgcolor="#ffffff">
    <td align="left">&nbsp;</td>
    <td align="left" valign="bottom">&nbsp;</td>
    <td align="left" valign="bottom">&nbsp;</td>
    <td align="right" valign="bottom"><hr size="1" noshade>
    </td>
    <td align="right" valign="bottom"><hr align="center" size="1" noshade>
    </td>
    <td align="left" valign="bottom"><div align="center"></div>
    </td>
    <td align="right" valign="bottom"><hr align="center" size="1" noshade>
    </td>
    <td align="right" valign="bottom"><hr align="center" size="1" noshade>
    </td>
    <td align="left" valign="bottom"><div align="center"></div>
    </td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top" bgcolor="#ffffff">
    <td width="8%" align="left">&nbsp;</td>
    <td align="left"><font size="2" face="serif">Gross realized gain</font></td>
    <td align="left" width="2%">&nbsp;</td>
    <td width="1%" align="right"><font size="2" face="serif"><b>$</b></font></td>
    <td width="10%" align="right"><font size="2" face="serif"> <b>2,122,367</b></font></td>
    <td width="2%" align="left">&nbsp;</td>
    <td width="1%" align="right"><font size="2" face="serif">$</font></td>
    <td width="10%" align="right"><font size="2" face="serif"> 1,331,193</font></td>
    <td width="2%" align="left">&nbsp;</td>
    <td width="30%" align="left">&nbsp;</td>
  </tr>
  <tr valign="top" bgcolor="#FFFFFF">
    <td align="left">&nbsp;</td>
    <td align="left"><font size="2" face="serif">Gross realized loss</font></td>
    <td align="left">&nbsp;</td>
    <td align="right"><font size="2" face="serif"><b>$</b></font></td>
    <td align="right"><font size="2" face="serif"> <b>(1,083,315</b></font></td>
    <td align="left"><font size="2" face="serif"><b>)</b></font></td>
    <td align="right"><font size="2" face="serif">$</font></td>
    <td align="right"><font size="2" face="serif"> (712,139</font></td>
    <td align="left"><font size="2" face="serif">)</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top" bgcolor="#ffffff">
    <td align="left">&nbsp;</td>
    <td align="left"><font size="2" face="serif">Unrealized (losses)</font></td>
    <td align="left">&nbsp;</td>
    <td align="right"><font size="2" face="serif"><b>$</b></font></td>
    <td align="right"><font size="2" face="serif"> <b>(318,755</b></font></td>
    <td align="left"><font size="2" face="serif"><b>)</b></font></td>
    <td align="right"><font size="2" face="serif">$</font></td>
    <td align="right"><font size="2" face="serif"> 2,980</font></td>
    <td align="left">&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top" bgcolor="#FFFFFF">
    <td align="left">&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td colspan="4" align="center">&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top" bgcolor="#FFFFFF">
    <td align="left">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td colspan="4" align="center"><div align="center"><font size="1" face="serif"><b>Years
          Ended October 31,</b></font></div>
    </td>
    <td align="left"><div align="center"></div>
    </td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top" bgcolor="#FFFFFF">
    <td align="left">&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td align="right"><hr align="center" size="1" noshade>
    </td>
    <td align="right"><div align="center">
        <hr align="center" size="1" noshade>
      </div>
    </td>
    <td align="left"><div align="center">
        <hr align="center" size="1" noshade>
      </div>
    </td>
    <td align="right"><div align="center">
        <hr align="center" size="1" noshade>
      </div>
    </td>
    <td align="right"><div align="center">
        <hr align="center" size="1" noshade>
      </div>
    </td>
    <td align="left"><div align="center"></div>
    </td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top" bgcolor="#FFFFFF">
    <td align="left">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><div align="center"><font size="1" face="serif">2003</font></div>
    </td>
    <td align="left"><div align="center"><font size="1"></font></div>
    </td>
    <td align="right"><div align="center"><font size="1"></font></div>
    </td>
    <td align="right"><div align="center"><font size="1" face="serif">2002</font></div>
    </td>
    <td align="left"><div align="center"></div>
    </td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top" bgcolor="#ffffff">
    <td align="left">&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td align="right"><hr align="center" size="1" noshade>
    </td>
    <td align="right"><hr align="center" size="1" noshade>
    </td>
    <td align="left">&nbsp;</td>
    <td align="right"><hr align="center" size="1" noshade>
    </td>
    <td align="right"><hr align="center" size="1" noshade>
    </td>
    <td align="left">&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top" bgcolor="#ffffff">
    <td align="left">&nbsp;</td>
    <td align="left"><font size="2" face="serif">Gross realized gain</font></td>
    <td align="left">&nbsp;</td>
    <td align="right"><font size="2" face="serif">$</font></td>
    <td align="right"><font size="2" face="serif"> 2,063,349</font></td>
    <td align="left">&nbsp;</td>
    <td align="right"><font size="2" face="serif">$</font></td>
    <td align="right"><font size="2" face="serif"> 1,631,254</font></td>
    <td align="left">&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top" bgcolor="#FFFFFF">
    <td align="left">&nbsp;</td>
    <td align="left"><font size="2" face="serif">Gross realized loss</font></td>
    <td align="left">&nbsp;</td>
    <td align="right"><font size="2" face="serif">$</font></td>
    <td align="right"><font size="2" face="serif"> (946,655</font></td>
    <td align="left"><font size="2" face="serif">)</font></td>
    <td align="right"><font size="2" face="serif">$</font></td>
    <td align="right"><font size="2" face="serif"> (854,674</font></td>
    <td align="left"><font size="2" face="serif">)</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top" bgcolor="#ffffff">
    <td align="left">&nbsp;</td>
    <td align="left"><font size="2" face="serif">Unrealized gain and (losses)</font></td>
    <td align="left">&nbsp;</td>
    <td align="right"><font size="2" face="serif">$</font></td>
    <td align="right"><font size="2" face="serif">(248,025)</font></td>
    <td align="left">&nbsp;</td>
    <td align="right"><font size="2" face="serif">$</font></td>
    <td align="right"><font size="2" face="serif"> 1,830</font></td>
    <td align="left">&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
</table>

<p align="center"><font face="serif" size="2">F-8</font></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<page> <a name="f9"></a>
<p><a href="#index"><font size="2">Back to Index</font></a></p>

<p align="center"><font size="2" face="serif"><b>COFFEE HOLDING CO., INC.<br>
  </b></font><font size="2" face="serif"><b>NOTES TO FINANCIAL STATEMENTS<br>
  </b></font><font size="2" face="serif"><b>OCTOBER 31, </b><b>2003 AND </b><b>2002<br>
</b></font><font size="2" face="serif"><b>(Information as of and for the periods
ended July 31, 2004 and 2003 is unaudited)</b></font></p>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
  <tr valign="top">
    <td><font size="2" face="serif"><b>NOTE 2 -</b></font></td>
    <td align="left"><font size="2" face="serif"><b>SUMMARY OF SIGNIFICANT ACCOUNTING
          POLICIES (Continued):</b></font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left"><font size="2" face="serif"><b><i>Advertising:</i></b></font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td width="8%"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left"><font size="2" face="serif">The Company expenses the cost
        of advertising and promotions as incurred. Advertising costs charged
        to operations totaled $143,130 and $109,751 for the years ended October
        31, 2003 and 2002, respectively and $102,889 and $107,593 for the nine
        month periods ended July 31, 2004 and 2003, respectively</font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left"><font size="2" face="serif"><b><i>Income taxes:</i></b></font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left"><font size="2" face="serif">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 (see also Note 7).</font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left"><font size="2" face="serif"><b><i>Stock options:</i></b></font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left"><font size="2" face="serif">In accordance with the provisions
        of Accounting Principles Board Opinion No. 25, &#8220;Accounting for
        Stock Issued to Employees,&#8221; 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, &#8220;Accounting for Stock-Based Compensation&#8221; (&#8220;SFAS
        123&#8221;), 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.</font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left"><font size="2" face="serif"><b><i>Earnings (loss) per share:</i></b></font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left"><font size="2" face="serif">The Company presents &#8220;basic&#8221; and,
        if applicable, &#8220;diluted&#8221; earnings per common share pursuant
        to the provisions of Statement of Financial Accounting Standards No.
        128, &#8220;Earnings per Share&#8221; (&#8220;SFAS 128&#8221;), as amended
        by SFAS No. 148 (see below) and certain other financial accounting pronouncements.
        Basic earnings (loss) per common share are 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 any period presented, diluted earnings per share equals
        basic earnings per share in the accompanying statement of operations.</font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left"><font size="2" face="serif">The weighted average common
        shares outstanding used in the computation of basic and diluted earnings
        per share in each period presented was the 3,999,650 shares of common
        stock actually outstanding during those periods.</font></td>
  </tr>
</table>

<p align="center"><font face="serif" size="2">F-9</font></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<page> <a name="f10"></a>
<p><a href="#index"><font size="2">Back to Index</font></a></p>

<p align="center"><font size="2" face="serif"><b>COFFEE HOLDING CO., INC.<br>
  </b></font><font size="2" face="serif"><b>NOTES TO FINANCIAL STATEMENTS<br>
  </b></font><font size="2" face="serif"><b>OCTOBER 31, </b><b>2003 AND </b><b>2002<br>
</b></font><font size="2" face="serif"><b>(Information as of and for the periods
ended July 31, 2004 and 2003 is unaudited)</b></font></p>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
  <tr valign="top">
    <td><font size="2" face="serif"><b>NOTE 2 -</b></font></td>
    <td align="left"><font size="2" face="serif"><b>SUMMARY OF SIGNIFICANT ACCOUNTING
          POLICIES (Continued):</b></font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left"><font size="2" face="serif"><b><i>Fair value of financial
            instruments:</i></b></font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td width="8%"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left"><font size="2" face="serif">The carrying amounts of cash
        and cash equivalents, accounts receivable and accounts payable approximate
        fair value because of the short-term nature of these instruments. Fair
        value estimates are made at a specific point in time, based on relevant
        market information about the financial instrument when available. These
        estimates are subjective in nature and involve uncertainties and matters
        of significant judgment and therefore, cannot be determined with precision.
        Changes in assumptions could significantly affect the estimates.</font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left"><font size="2" face="serif"><b><i>Revenue recognition:</i></b></font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left"><font size="2" face="serif">The Company recognizes revenue
        in accordance with Securities and Exchange Commission Staff Accounting
        Bulletin No. 101, &#8220;Revenue Recognition in Financial Statements&#8221; (&#8220;SAB
        101&#8221;). Under SAB 101, revenue is recognized at the point of passage
        to the customer of title and risk of loss, when there is persuasive evidence
        of an arrangement, the sales price is determinable, and collection of
        the resulting receivable is reasonably assured. The Company generally
        recognizes revenue at the time of shipment.</font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left"><font size="2" face="serif">The Company sells its products
        without the right of return. Returns and allowances are recorded when
        a customer claims receipt of damaged goods. The Company in turn seeks
        reimbursement from the shipper.</font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left"><font size="2" face="serif"><u>Slotting fees</u>: Certain
        retailers require the payment of slotting fees in order to obtain space
        for the corporation&#8217;s products on the retailer&#8217;s store shelves.
        The cost of these fees is recognized at the earlier of the date cash
        is paid or a liability to the retailer is created. These amounts are
        included in the determination of net sales.</font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left"><font size="2" face="serif"><u>Discounts and rebates</u>:
        The cost of these incentives are recognized at the later of the date
        at which the related sale is recognized or the date at which the incentive
        is offered. These amounts are included in the determination of net sales.
        Incentives in the form of free product are included in the determination
        of cost of sales.</font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left"><font size="2" face="serif"><u>Volume-based incentives</u>:
        These incentives typically involve rebates or refunds of a specific amount
        of cash consideration that are redeemable only if the reseller completes
        a specified cumulative level of sales transactions. Under incentive programs
        of this nature, the corporation estimates the anticipated cost of the
        rebate to each underlying sales transaction with the customer.</font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left"><font size="2" face="serif"><u>Cooperative advertising</u>:
        Under these arrangements, the Corporation will agree to reimburse the
        reseller for a portion of the costs incurred by the reseller to advertise
        and promote certain of the Corporation&#8217;s products. The Corporation
        will recognize the cost of cooperative advertising programs in the period
        in which the advertising and promotional activity first takes place.
        The costs of these incentives will generally be included in the determination
        of net sales.</font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left"><font size="2" face="serif"><b><i>Merchandise costs:</i></b></font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left"><font size="2" face="serif">In addition to the product costs,
        net of discounts; inbound freight charges; warehousing costs and certain
        production and operational costs are included in the cost of sales line
        item of the statements of income.</font></td>
  </tr>
</table>

<p align="center"><font face="serif" size="2">F-10</font></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<page> <a name="f11"></a>
<p><a href="#index"><font size="2">Back to Index</font></a></p>

<p align="center"><font size="2" face="serif"><b>COFFEE HOLDING CO., INC.<br>
  </b></font><font size="2" face="serif"><b>NOTES TO FINANCIAL STATEMENTS<br>
  </b></font><font size="2" face="serif"><b>OCTOBER 31, </b><b>2003 AND </b><b>2002<br>
</b></font><font size="2" face="serif"><b>(Information as of and for the periods
ended July 31, 2004 and 2003 is unaudited)</b></font></p>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
  <tr valign="top">
    <td><font size="2" face="serif"><b>NOTE 2 -</b></font></td>
    <td align="left"><font size="2" face="serif"><b>SUMMARY OF SIGNIFICANT ACCOUNTING
          POLICIES (Continued):</b></font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left"><font size="2" face="serif"><b><i>Merchandise costs (Continued):</i></b></font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td width="8%"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left"><font size="2" face="serif">Included in the selling and
        administrative line item of the statements of income are office salaries;
        commissions; freight out; promotion; insurance; professional fees; other
        selling expenses and other administrative expenses.</font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left"><font size="2" face="serif"><b><i>Shipping and handling
            fees and costs: </i></b></font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left"><font size="2" face="serif">In accordance with EITF No.
        00-10 &#8220;Accounting for Shipping and Handling Fees and Costs&#8221;,
        revenue received from shipping and handling fees is reflected in net
        sales. Costs associated with shipping product to customers aggregating
        approximately $847,000 and $615,000 for the nine month periods ended
        July&nbsp;31, 2004 and 2003, respectively and $877,000 and $671,000 for
        the years ended October 31, 2003 and 2002, respectively is included in
        selling and administrative expenses.</font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left"><font size="2" face="serif"><b><i>Recent accounting pronouncements:</i></b></font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left"><font size="2" face="serif">On July 30, 2002, the FASB issued
        Statement of Financial Accounting Standards No. 146, &#8220;Accounting
        for Costs Associated with Exit or Disposal Activities&#8221; (&#8220;SFAS
        146&#8221;), that is applicable to exit or disposal activities initiated
        after December 31, 2002. This standard requires companies to recognize
        costs associated with exit or disposal activities when they are incurred
        rather than at the date of a commitment to an exit or disposal plan.
        This standard does not apply where SFAS 144 is applicable. The adoption
        of this new standard does not have any impact on the Company&#8217;s
        operating results and financial position at this time.</font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left"><font size="2" face="serif">On December 31, 2002, the FASB
        issued Statement of Financial Accounting Standards No. 148, &#8220;Accounting
        for Stock-Based Compensation-Transition and Disclosure&#8221; (&#8220;SFAS
        148&#8221;), that is applicable to financial statements issued for fiscal
        years ending after December 15, 2002. In addition, interim disclosure
        provisions are applicable for financial statements issued for interim
        periods beginning after December 15, 2002. This standard amends SFAS
        123 and provides guidance to companies electing to voluntarily change
        to the fair value method of accounting for stock-based compensation.
        In addition, this standard amends SFAS 123 to require more prominent
        and more frequent disclosures in financial statements regarding the effects
        of stock-based compensation. The adoption of this new standard does not
        have any impact on the Company&#8217;s operating results and financial
        position at this time.</font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left"><font size="2" face="serif">In January 2003, FASB Interpretation
        No. 46 (&#8220;FIN No. 46&#8221;), &#8220;Consolidation of Variable Interest
        Entities, an interpretation of Accounting Research Bulletin No. 51,&#8221; was
        issued. In general, a variable interest entity is a corporation, partnership,
        trust, or any other legal structure used for business purposes that either
        (a) does not have equity investors with voting rights or (b) has equity
        investors that do not provide sufficient financial resources for the
        entity to support its activities. FIN No. 46 requires a variable interest
        entity to be consolidated by a company if that company is subject to
        a majority of the risk of loss from the variable interest entity&#8217;s
        activities or is entitled to receive a majority of the entity&#8217;s
        residual returns or both. Currently, this standard has no effect on the
        Company&#8217;s financial statements.</font></td>
  </tr>
</table>

<p align="center"><font face="serif" size="2">F-11</font></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<page> <a name="p12"></a>
<p><a href="#index"><font size="2">Back to Index</font></a></p>

<p align="center"><font size="2" face="serif"><b>COFFEE HOLDING CO., INC.<br>
  </b></font><font size="2" face="serif"><b>NOTES TO FINANCIAL STATEMENTS<br>
  </b></font><font size="2" face="serif"><b>OCTOBER 31, </b><b>2003 AND </b><b>2002<br>
</b></font><font size="2" face="serif"><b>(Information as of and for the periods
ended July 31, 2004 and 2003 is unaudited)</b></font></p>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
  <tr valign="top">
    <td><font size="2" face="serif"><b>NOTE 2 -</b></font></td>
    <td align="left"><font size="2" face="serif"><b>SUMMARY OF SIGNIFICANT ACCOUNTING
          POLICIES (Continued):</b></font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left"><font size="2" face="serif"><b><i>Recent accounting pronouncements
            (Continued):</i></b></font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td width="8%"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left"><font size="2" face="serif">During April 2003, the Financial
        Accounting Standards Board issued SFAS 149, &#8220;Amendment of Statement
        133 on Derivative Instruments and Hedging Activities.&#8221; SFAS 149
        amends and clarifies accounting for derivative instruments, including
        certain derivative instruments embedded in other contracts, and for hedging
        activities under SFAS 133, &#8220;Accounting for Derivative Instruments
        and Hedging Activities.&#8221; The statement requires that contracts
        with comparable characteristics be accounted for similarly and clarifies
        when a derivative contains a financing component that warrants special
        reporting in the statement of cash flows. SFAS 149 is effective for contracts
        entered into or modified after June 30, 2003, except in certain circumstances,
        and for hedging relationships designated after June&nbsp;30, 2003. The
        adoption of this standard has not had a material effect on the Company&#8217;s
        financial statements.</font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left"><font size="2" face="serif">In May 2003, the FASB issued &#8220;SFAS
        150&#8221;, &#8220;Accounting for Certain Financial Instruments with
        Characteristics of both Liabilities and Equity&#8221;. &#8220;SFAS 150&#8221; requires
        that certain financial instruments, which under previous guidance were
        accounted for as equity, must now be accounted for as liabilities. The
        financial instruments affected include mandatorily redeemable stock,
        certain financial instruments that require or may require the issuer
        to buy back some of its shares in exchange for cash or other assets and
        certain obligations that can be settled with shares of stock. SFAS 150
        is effective for all financial instruments entered into or modified after
        May 31, 2003, and otherwise is effective at the beginning of the first
        interim period beginning after June&nbsp;15, 2003. The adoption of this
        standard has had no effect on the Company&#8217;s financial statements.</font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left"><font size="2" face="serif"><b><i>Reclassifications:</i></b></font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left"><font size="2" face="serif">Certain accounts in the 2002
        financial statements may have been reclassified to conform to the 2003
        presentation.</font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td><font size="2" face="serif"><b>NOTE 3 -</b></font></td>
    <td align="left"><font size="2" face="serif"><b>INVENTORIES:</b></font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left"><font size="2" face="serif">Inventories at July 31, 2004
        and October 31, 2003 consisted of the following:</font></td>
  </tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" align="center" border="0">
  <tr valign="top">
    <td align="left">&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="center">&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="center">&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td align="left">&nbsp;</td>
    <td align="left"><font size="1" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="center"><font size="1" face="serif"><b>July 31, 2004</b></font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="center"><font size="1" face="serif">October 31, 2003</font></td>
    <td align="left">&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top" bgcolor="#ffffff">
    <td align="left">&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td align="right"><hr noshade size="1">
    </td>
    <td align="right"><hr noshade size="1">
    </td>
    <td align="left">&nbsp;</td>
    <td align="right"><hr noshade size="1">
    </td>
    <td align="right"><hr noshade size="1">
    </td>
    <td align="left">&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top" bgcolor="#ffffff">
    <td width="8%" align="left">&nbsp;</td>
    <td align="left"><font size="2" face="serif">Packed coffee</font></td>
    <td align="left" width="2%">&nbsp;</td>
    <td width="1%" align="right"><font size="2" face="serif"><b>$</b></font></td>
    <td width="10%" align="right"><font size="2" face="serif"> <b>1,022,004</b></font></td>
    <td width="2%" align="left">&nbsp;</td>
    <td width="1%" align="right"><font size="2" face="serif">$</font></td>
    <td width="10%" align="right"><font size="2" face="serif"> 213,062</font></td>
    <td width="2%" align="left">&nbsp;</td>
    <td width="30%" align="left">&nbsp;</td>
  </tr>
  <tr valign="top" bgcolor="#FFFFFF">
    <td align="left">&nbsp;</td>
    <td align="left"><font size="2" face="serif">Green coffee</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif"><b>1,202,973</b></font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">999,137</font></td>
    <td align="left">&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top" bgcolor="#ffffff">
    <td align="left">&nbsp;</td>
    <td align="left"><font size="2" face="serif">Packaging supplies</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif"><b>550,728</b></font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">569,225</font></td>
    <td align="left">&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td></td>
    <td></td>
    <td></td>
    <td><hr noshade size="1">
    </td>
    <td><hr noshade size="1">
    </td>
    <td></td>
    <td><hr noshade size="1">
    </td>
    <td><hr noshade size="1">
    </td>
    <td></td>
    <td></td>
  </tr>
  <tr valign="top" bgcolor="#FFFFFF">
    <td align="left">&nbsp;</td>
    <td align="left"><font size="2" face="serif">Totals</font></td>
    <td align="left">&nbsp;</td>
    <td align="right"><font size="2" face="serif"><b>$</b></font></td>
    <td align="right"><font size="2" face="serif"> <b>2,775,705</b></font></td>
    <td align="left">&nbsp;</td>
    <td align="right"><font size="2" face="serif">$</font></td>
    <td align="right"><font size="2" face="serif">1,781,424</font></td>
    <td align="left">&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td></td>
    <td></td>
    <td></td>
    <td><hr noshade size="2">
    </td>
    <td><hr noshade size="2">
    </td>
    <td></td>
    <td><hr noshade size="2">
    </td>
    <td><hr noshade size="2">
    </td>
    <td></td>
    <td></td>
  </tr>
</table>

<p align="center"><font face="serif" size="2">F-12</font></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<page> <a name="f13"></a>
<p><a href="#index"><font size="2">Back to Index</font></a></p>

<p align="center"><font size="2" face="serif"><b>COFFEE HOLDING CO., INC.<br>
  </b></font><font size="2" face="serif"><b>NOTES TO FINANCIAL STATEMENTS<br>
  </b></font><font size="2" face="serif"><b>OCTOBER 31, </b><b>2003 AND </b><b>2002<br>
</b></font><font size="2" face="serif"><b>(Information as of and for the periods
ended July 31, 2004 and 2003 is unaudited)</b></font></p>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
  <tr valign="top">
    <td width="8%"><font size="2" face="serif">&nbsp;<b>NOTE 4 -</b></font></td>
    <td align="left"><font size="2" face="serif"><b>PROPERTY AND EQUIPMENT:</b></font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left"><font size="2" face="serif">Property and equipment at July
        31, 2004 and October 31, 2003 consisted of the following:</font></td>
  </tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" align="center" border="0">
  <tr valign="top">
    <td align="left">&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="center">&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="center">&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="center">&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td align="left">&nbsp;</td>
    <td align="left"><font size="1" face="serif">&nbsp;</font></td>
    <td align="left"><div align="center"></div>
    </td>
    <td align="right"><div align="center"></div>
    </td>
    <td align="center" valign="bottom"><div align="center"><font size="1" face="serif">Estimated <br>
        Useful Life</font></div>
    </td>
    <td align="left" valign="bottom"><div align="center"></div>
    </td>
    <td align="right" valign="bottom"><div align="center"></div>
    </td>
    <td align="center" valign="bottom"><div align="center"><font size="1" face="serif"><b>July
            31, <br>
        2004</b></font></div>
    </td>
    <td align="left" valign="bottom"><div align="center"></div>
    </td>
    <td align="right" valign="bottom"><div align="center"></div>
    </td>
    <td align="center" valign="bottom"><div align="center"><font size="1" face="serif">October
          31, <br>
        2003</font></div>
    </td>
    <td align="left" valign="bottom"><div align="center"></div>
    </td>
  </tr>
  <tr valign="top" bgcolor="#ffffff">
    <td align="left">&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td align="right"><hr noshade size="1">
    </td>
    <td align="center"><hr noshade size="1">
    </td>
    <td align="left">&nbsp;</td>
    <td align="right"><hr noshade size="1">
    </td>
    <td align="right"><hr noshade size="1">
    </td>
    <td align="left">&nbsp;</td>
    <td align="right"><hr noshade size="1">
    </td>
    <td align="right"><hr noshade size="1">
    </td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top" bgcolor="#ffffff">
    <td width="8%" align="left">&nbsp;</td>
    <td align="left"><font size="2" face="serif">Building and improvements</font></td>
    <td align="left" width="2%">&nbsp;</td>
    <td width="1%" align="right">&nbsp;</td>
    <td width="10%" align="center"><font size="2" face="serif">30 years</font></td>
    <td width="2%" align="left">&nbsp;</td>
    <td width="1%" align="right"><font size="2" face="serif"><b>$</b></font></td>
    <td width="10%" align="right"><font size="2" face="serif"> <b>1,320,476</b></font></td>
    <td width="2%" align="left">&nbsp;</td>
    <td width="1%" align="right"><font size="2" face="serif">$</font></td>
    <td width="10%" align="right"><font size="2" face="serif">1,252,448</font></td>
    <td width="2%" align="left">&nbsp;</td>
  </tr>
  <tr valign="top" bgcolor="#FFFFFF">
    <td align="left">&nbsp;</td>
    <td align="left"><font size="2" face="serif">Machinery and equipment</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="center"><font size="2" face="serif">7 years</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif"><b>3,434,701</b></font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">2,606,859</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top" bgcolor="#ffffff">
    <td align="left">&nbsp;</td>
    <td align="left"><font size="2" face="serif">Machinery and equipment under
        capital leases</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="center"><font size="2" face="serif">7 years</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif"><b>426,404</b></font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">426,404</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top" bgcolor="#FFFFFF">
    <td align="left">&nbsp;</td>
    <td align="left"><font size="2" face="serif">Furniture and fixtures</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="center"><font size="2" face="serif">7 years</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif"><b>169,475</b></font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">143,789</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td></td>
    <td></td>
    <td></td>
    <td></td>
    <td></td>
    <td></td>
    <td><hr noshade size="1">
    </td>
    <td><hr noshade size="1">
    </td>
    <td></td>
    <td><hr noshade size="1">
    </td>
    <td><hr noshade size="1">
    </td>
    <td></td>
  </tr>
  <tr valign="top" bgcolor="#ffffff">
    <td align="left">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif"><b>5,351,056</b></font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">4,429,500</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top" bgcolor="#FFFFFF">
    <td align="left">&nbsp;</td>
    <td align="left"><font size="2" face="serif">Less accumulated depreciation
        (including $137,056 and $91,372, respectively arising from capital leases)</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif"><b>3,269,698</b></font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">2,991,206</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td></td>
    <td></td>
    <td></td>
    <td></td>
    <td></td>
    <td></td>
    <td><hr noshade size="1">
    </td>
    <td><hr noshade size="1">
    </td>
    <td></td>
    <td><hr noshade size="1">
    </td>
    <td><hr noshade size="1">
    </td>
    <td></td>
  </tr>
  <tr valign="top" bgcolor="#ffffff">
    <td align="left">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif"><b>2,081,358</b></font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">1,438,294</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top" bgcolor="#FFFFFF">
    <td align="left">&nbsp;</td>
    <td align="left"><font size="2" face="serif">Land</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif"><b>141,000</b></font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">141,000</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td></td>
    <td></td>
    <td></td>
    <td></td>
    <td></td>
    <td></td>
    <td><hr noshade size="1">
    </td>
    <td><hr noshade size="1">
    </td>
    <td></td>
    <td><hr noshade size="1">
    </td>
    <td><hr noshade size="1">
    </td>
    <td></td>
  </tr>
  <tr valign="top" bgcolor="#ffffff">
    <td align="left">&nbsp;</td>
    <td align="left"><font size="2" face="serif">Totals</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right"><font size="2" face="serif"><b>$</b></font></td>
    <td align="right"><font size="2" face="serif"> <b>2,222,358</b></font></td>
    <td align="left">&nbsp;</td>
    <td align="right"><font size="2" face="serif">$</font></td>
    <td align="right"><font size="2" face="serif">1,579,294</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td></td>
    <td></td>
    <td></td>
    <td></td>
    <td></td>
    <td></td>
    <td><hr noshade size="2">
    </td>
    <td><hr noshade size="2">
    </td>
    <td></td>
    <td><hr noshade size="2">
    </td>
    <td><hr noshade size="2">
    </td>
    <td></td>
  </tr>
  <tr valign="top">
    <td></td>
    <td></td>
    <td></td>
    <td></td>
    <td></td>
    <td></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td></td>
  </tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
  <tr valign="top">
    <td width="8%"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left"><font size="2" face="serif">Depreciation expense totaled
        $299,774 and $270,994 for the years end October 31, 2003 and 2002, respectively
        and $290,653 and $152,924 for the nine month periods ended July 31, 2004
        and 2003, respectively.</font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td><font size="2" face="serif"><b>NOTE 5 -</b></font></td>
    <td align="left"><font size="2" face="serif"><b>CREDIT FACILITY AND OTHER
          BORROWINGS:</b></font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left"><font size="2" face="serif">As of October 2003, the Company
        was obligated under a $5,750,000 credit facility provided by Wells Fargo
        Business Credit. The credit facility consisted of a $5,000,000 revolving
        line of credit and a $750,000 term loan secured by all the assets of
        the Company.</font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left"><font size="2" face="serif">The line of credit provides
        for borrowing of up to 85% of the Company&#8217;s eligible trade accounts
        receivable and 60% of its eligible inventories up to a maximum of $5,000,000.
        The term loan provides for borrowings of up to the greater of 80% of
        the cost of eligible equipment or $750,000.</font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left"><font size="2" face="serif">As a result of amendments to
        prior agreements with Wells Fargo Business Credit, that became effective
        on October 1, 2002, interest on borrowings under the line of credit and
        the term loan are payable monthly at the prime rate plus .25% and .50%,
        respectively (an effective rate of 4.25% and 4.50% respectively, at October
        31, 2003). In addition, the credit facility will not expire until November
        20, 2004; the maximum amount of borrowings under the term loan increased
        form $600,000 to $750,000; term loan principal payments decreased from
        $10,000 to $7,000 per month commencing November 1, 2002; the amount of
        borrowings guaranteed by each of the two stockholders is $500,000; a
        restricted cash collateral deposit aggregating approximately $290,000
        was used to reduced the outstanding line of credit balance; and the Company&#8217;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 balances under the term loan were classified as long-term
        liabilities in the accompanying October 31, 2003 balance sheet based
        on the Company&#8217;s ability to either defer payments until, or make
        installment payments through, November 20, 2004. The term loan, has an
        outstanding balance of $336,000 (including a current portion of $84,000)
        and aggregate borrowing of $2,376,066 were outstanding under its credit
        line facility at October 31, 2003. The line of credit can be withdrawn
        at Wells Fargo Business Credit&#8217;s option. The Company was in compliance
        with the required financial covenants at October 31, 2003 and at July
        31, 2004.</font></td>
  </tr>
</table>

<p align="center"><font face="serif" size="2">F-13</font></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<page> <a name="f14"></a>
<p><a href="#index"><font size="2">Back to Index</font></a></p>

<p align="center"><font size="2" face="serif"><b>COFFEE HOLDING CO., INC.<br>
  </b></font><font size="2" face="serif"><b>NOTES TO FINANCIAL STATEMENTS<br>
  </b></font><font size="2" face="serif"><b>OCTOBER 31, </b><b>2003 AND </b><b>2002<br>
</b></font><font size="2" face="serif"><b>(Information as of and for the periods
ended July 31, 2004 and 2003 is unaudited)</b></font></p>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
  <tr valign="top">
    <td width="8%"><font size="2" face="serif">&nbsp;<b>NOTE 5 -</b></font></td>
    <td align="left"><font size="2" face="serif"><b>CREDIT FACILITY AND OTHER
          BORROWINGS (Continued):</b></font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left"><font size="2" face="serif">The credit facility contains
        covenants that place restrictions on the Company&#8217;s operations.
        Among other things, these covenants: require that the Company maintain
        a certain minimum cumulative net income; require that a portion of the
        Company&#8217;s cash flow from operations be dedicated to servicing its
        debt; limit the Company&#8217;s ability to obtain additional capital
        through financings without the consent of the lender; limit the Company&#8217;s
        ability to pay dividends or make other distributions to stockholders
        and acquire or retire common stock without the consent of the lender;
        and prohibit the Company from forming or acquiring subsidiaries, merging
        with or into other companies or selling all or substantially all of its
        assets without the consent of the lender.</font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left"><font size="2" face="serif">A breach by the Company of any
        financial or negative covenant constitutes an event of default under
        the credit facility. The credit facility and the Company&#8217;s capital
        lease contain cross-default provisions. The Company is currently in compliance
        with all covenants contained in the credit facility and intends to renegotiate
        the terms of the credit facility, including the covenants, prior to its
        expiration in November 2004.</font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left"><font size="2" face="serif">The outstanding balance under
        the term loan was $273,000 and under the line of credit agreement was
        $2,895,661 at July 31, 2004. The entire line of credit amount is being
        reflected as short term at that date, since the principal loan balance
        is due in November of 2004.</font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td><font size="2" face="serif"><b>NOTE 6 -</b></font></td>
    <td align="left"><font size="2" face="serif"><b>LOANS TO/FROM RELATED PARTIES:</b></font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left"><font size="2" face="serif">The Company had loans payable
        to certain of its stockholders aggregating $79,646 at October 31, 2003
        and loans receivable from a stockholder of $11,491 at July 31, 2004.
        The loans are due on demand but payments are not expected to be required
        in the next twelve months. These loans bear interest at 6% per annum.
        Interest expense totaled approximately $5,405 and $13,000 for the years
        ended October 31, 2003 and 2002 respectively. Interest expense for the
        nine month periods ended July 31, 2004 and 2003 totaled approximately
        $1,200 and $4,200, respectively.</font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td><font size="2" face="serif"><b>NOTE 7 -</b></font></td>
    <td align="left"><font size="2" face="serif"><b>INCOME TAXES:</b></font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left"><font size="2" face="serif">The tax effects of the temporary
        differences that give rise to the deferred tax assets and liabilities
        as of July 31, 2004 and October 31, 2003 are as follows:</font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" align="center" border="0">
  <tr valign="top">
    <td align="left">&nbsp;</td>
    <td align="left"><font size="1" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="center"><font size="1" face="serif"><b>July 31, 2004</b></font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="center"><font size="1" face="serif">October 31, 2003</font></td>
    <td align="left">&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top" bgcolor="#FFFFFF">
    <td align="left">&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td align="right"><hr noshade size="1">
    </td>
    <td align="left"><hr noshade size="1">
    </td>
    <td align="left">&nbsp;</td>
    <td align="right"><hr noshade size="1">
    </td>
    <td align="left"><hr noshade size="1">
    </td>
    <td align="left">&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top" bgcolor="#FFFFFF">
    <td width="8%" align="left">&nbsp;</td>
    <td align="left"><font size="2" face="serif">Deferred tax assets:</font></td>
    <td align="left" width="2%">&nbsp;</td>
    <td width="1%" align="right">&nbsp;</td>
    <td width="10%" align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td width="2%" align="left">&nbsp;</td>
    <td width="1%" align="right">&nbsp;</td>
    <td width="10%" align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td width="2%" align="left">&nbsp;</td>
    <td width="30%" align="left">&nbsp;</td>
  </tr>
  <tr valign="top" bgcolor="#ffffff">
    <td align="left">&nbsp;</td>
    <td align="left"><div style="margin-left: 6%; text-indent: -3%"><font size="2" face="serif">Accounts
          receivable</font></div>
    </td>
    <td align="left">&nbsp;</td>
    <td align="right"><font size="2" face="serif"><b>$</b></font></td>
    <td align="right"><font size="2" face="serif"> <b>53,400</b></font></td>
    <td align="left">&nbsp;</td>
    <td align="right"><font size="2" face="serif">$</font></td>
    <td align="right"><font size="2" face="serif"> 49,100</font></td>
    <td align="left">&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top" bgcolor="#FFFFFF">
    <td align="left">&nbsp;</td>
    <td align="left"><div style="margin-left: 6%; text-indent: -3%"><font size="2" face="serif">Inventory</font></div>
    </td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif"><b>41,000</b></font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">54,600</font></td>
    <td align="left">&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td></td>
    <td></td>
    <td></td>
    <td><hr noshade size="1">
    </td>
    <td><hr noshade size="1">
    </td>
    <td></td>
    <td><hr noshade size="1">
    </td>
    <td><hr noshade size="1">
    </td>
    <td></td>
    <td></td>
  </tr>
  <tr valign="top" bgcolor="#ffffff">
    <td align="left">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right"><font size="2" face="serif"><b>$</b></font></td>
    <td align="right"><font size="2" face="serif"> <b>94,400</b></font></td>
    <td align="left">&nbsp;</td>
    <td align="right"><font size="2" face="serif">$</font></td>
    <td align="right"><font size="2" face="serif"> 103,700</font></td>
    <td align="left">&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td></td>
    <td></td>
    <td></td>
    <td><hr noshade size="2">
    </td>
    <td><hr noshade size="2">
    </td>
    <td></td>
    <td><hr noshade size="2">
    </td>
    <td><hr noshade size="2">
    </td>
    <td></td>
    <td></td>
  </tr>
  <tr valign="top" bgcolor="#FFFFFF">
    <td align="left">&nbsp;</td>
    <td align="left"><font size="2" face="serif">Deferred tax liability:</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top" bgcolor="#FFFFFF">
    <td align="left">&nbsp;</td>
    <td align="left"><div style="margin-left: 6%; text-indent: -3%"><font size="2" face="serif">Fixed
          assets</font></div>
    </td>
    <td align="left">&nbsp;</td>
    <td align="right"><font size="2" face="serif"><b>$</b></font></td>
    <td align="right"><font size="2" face="serif"> <b>39,000</b></font></td>
    <td align="left">&nbsp;</td>
    <td align="right"><font size="2" face="serif">$</font></td>
    <td align="right"><font size="2" face="serif">39,200</font></td>
    <td align="left">&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td></td>
    <td></td>
    <td></td>
    <td><hr noshade size="2">
    </td>
    <td><hr noshade size="2">
    </td>
    <td></td>
    <td><hr noshade size="2">
    </td>
    <td><hr noshade size="2">
    </td>
    <td></td>
    <td></td>
  </tr>
</table>

<p align="center"><font face="serif" size="2">F-14</font></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<page> <a name="f15"></a>
<p><a href="#index"><font size="2">Back to Index</font></a></p>

<p align="center"><font size="2" face="serif"><b>COFFEE HOLDING CO., INC.<br>
  </b></font><font size="2" face="serif"><b>NOTES TO FINANCIAL STATEMENTS<br>
  </b></font><font size="2" face="serif"><b>OCTOBER 31, 2003 AND 2002<br>
</b></font><font size="2" face="serif"><b>(Information as of and for the periods
ended July 31, 2004 and 2003 is unaudited)</b></font></p>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
  <tr valign="top">
    <td width="8%"><font size="2" face="serif">&nbsp;<b>NOTE 7 -</b></font></td>
    <td align="left"><font size="2" face="serif"><b>INCOME TAXES (Continued):</b></font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left"><font size="2" face="serif">The Company&#146;s provision
        for income taxes for the periods presented consisted of the following:</font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" align="center" border="0">
  <tr valign="top">
    <td align="left">&nbsp;</td>
    <td align="left" valign="bottom"><div align="center"><font size="1" face="serif">&nbsp;</font></div>
    </td>
    <td align="left" valign="bottom"><div align="center"></div>
    </td>
    <td align="right" valign="bottom"><div align="center"></div>
    </td>
    <td colspan="4" align="center" valign="bottom"><div align="center"><font size="1" face="serif"><b>Nine
            Months Ended July 31,</b></font></div>
    </td>
    <td align="left" valign="bottom"><div align="center"></div>
    </td>
    <td align="right" valign="bottom"><div align="center"></div>
    </td>
    <td colspan="4" align="center" valign="bottom"><div align="center"><font size="1" face="serif">Years
          Ended October 31, </font></div>
    </td>
    <td align="left" valign="bottom"><div align="center"></div>
    </td>
  </tr>
  <tr valign="top">
    <td align="left">&nbsp;</td>
    <td align="left" valign="bottom">&nbsp;</td>
    <td align="left" valign="bottom">&nbsp;</td>
    <td align="right" valign="bottom"><hr noshade size="1">
    </td>
    <td align="right" valign="bottom"><hr noshade size="1">
    </td>
    <td align="left" valign="bottom">&nbsp;</td>
    <td align="right" valign="bottom"><hr noshade size="1">
    </td>
    <td align="right" valign="bottom"><hr noshade size="1">
    </td>
    <td align="left" valign="bottom">&nbsp;</td>
    <td align="right" valign="bottom"><hr noshade size="1">
    </td>
    <td align="right" valign="bottom"><hr noshade size="1">
    </td>
    <td align="left" valign="bottom">&nbsp;</td>
    <td align="right" valign="bottom"><hr noshade size="1">
    </td>
    <td align="right" valign="bottom"><hr noshade size="1">
    </td>
    <td align="left" valign="bottom">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td align="left">&nbsp;</td>
    <td align="left" valign="bottom"><div align="center"><font size="1" face="serif">&nbsp;</font></div>
    </td>
    <td align="left" valign="bottom"><div align="center"></div>
    </td>
    <td align="right" valign="bottom"><div align="center"></div>
    </td>
    <td align="right" valign="bottom"><div align="center"><font size="1" face="serif"><b>2004</b></font></div>
    </td>
    <td align="left" valign="bottom"><div align="center"></div>
    </td>
    <td align="right" valign="bottom"><div align="center"></div>
    </td>
    <td align="right" valign="bottom"><div align="center"><font size="1" face="serif">2003</font></div>
    </td>
    <td align="left" valign="bottom"><div align="center"></div>
    </td>
    <td align="right" valign="bottom"><div align="center"></div>
    </td>
    <td align="right" valign="bottom"><div align="center"><font size="1" face="serif">2003</font></div>
    </td>
    <td align="left" valign="bottom"><div align="center"></div>
    </td>
    <td align="right" valign="bottom"><div align="center"></div>
    </td>
    <td align="right" valign="bottom"><div align="center"><font size="1" face="serif">2002</font></div>
    </td>
    <td align="left" valign="bottom"><div align="center"></div>
    </td>
  </tr>
  <tr valign="top" bgcolor="#ffffff">
    <td align="left">&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td align="right"><hr noshade size="1">
    </td>
    <td align="right"><hr noshade size="1">
    </td>
    <td align="left">&nbsp;</td>
    <td align="right"><hr noshade size="1">
    </td>
    <td align="right"><hr noshade size="1">
    </td>
    <td align="left">&nbsp;</td>
    <td align="right"><hr noshade size="1">
    </td>
    <td align="right"><hr noshade size="1">
    </td>
    <td align="left">&nbsp;</td>
    <td align="right"><hr noshade size="1">
    </td>
    <td align="right"><hr noshade size="1">
    </td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top" bgcolor="#ffffff">
    <td width="8%"align="left">&nbsp;</td>
    <td align="left"><font size="2" face="serif">Federal</font></td>
    <td align="left" width="2%">&nbsp;</td>
    <td width="1%" align="right"><font size="2" face="serif"><b>$</b></font></td>
    <td width="10%" align="right"><font size="2" face="serif"> <b>322,300</b></font></td>
    <td width="2%" align="left">&nbsp;</td>
    <td width="1%" align="right"><font size="2" face="serif">$</font></td>
    <td width="10%" align="right"><font size="2" face="serif"> 197,900</font></td>
    <td width="2%" align="left">&nbsp;</td>
    <td width="1%" align="right"><font size="2" face="serif">$</font></td>
    <td width="10%" align="right"><font size="2" face="serif">150,004</font></td>
    <td width="3%" align="left">&nbsp;</td>
    <td width="1%" align="right"><font size="2" face="serif">$</font></td>
    <td width="10%" align="right"><font size="2" face="serif"> 387,265</font></td>
    <td width="2%" align="left">&nbsp;</td>
  </tr>
  <tr valign="top" bgcolor="#FFFFFF">
    <td align="left">&nbsp;</td>
    <td align="left"><font size="2" face="serif">State and local</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif"><b>159,800</b></font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">100,400</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif"><b></b>(33,638</font></td>
    <td align="left"><font size="2" face="serif">)<b> *</b></font></td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">170,455</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td></td>
    <td></td>
    <td></td>
    <td><hr noshade size="1">
    </td>
    <td><hr noshade size="1">
    </td>
    <td></td>
    <td><hr noshade size="1">
    </td>
    <td><hr noshade size="1">
    </td>
    <td></td>
    <td><hr noshade size="1">
    </td>
    <td><hr noshade size="1">
    </td>
    <td></td>
    <td><hr noshade size="1">
    </td>
    <td><hr noshade size="1">
    </td>
    <td></td>
  </tr>
  <tr valign="top" bgcolor="#ffffff">
    <td align="left">&nbsp;</td>
    <td align="left"><font size="2" face="serif">Total </font></td>
    <td align="left">&nbsp;</td>
    <td align="right"><font size="2" face="serif"><b>$</b></font></td>
    <td align="right"><font size="2" face="serif"> <b>482,100</b></font></td>
    <td align="left">&nbsp;</td>
    <td align="right"><font size="2" face="serif">$</font></td>
    <td align="right"><font size="2" face="serif"> 298,300</font></td>
    <td align="left">&nbsp;</td>
    <td align="right"><font size="2" face="serif">$</font></td>
    <td align="right"><font size="2" face="serif">116,366</font></td>
    <td align="left">&nbsp;</td>
    <td align="right"><font size="2" face="serif">$</font></td>
    <td align="right"><font size="2" face="serif"> 557,720</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td></td>
    <td></td>
    <td></td>
    <td><hr noshade size="2">
    </td>
    <td><hr noshade size="2">
    </td>
    <td></td>
    <td><hr noshade size="2">
    </td>
    <td><hr noshade size="2">
    </td>
    <td></td>
    <td><hr noshade size="2">
    </td>
    <td><hr noshade size="2">
    </td>
    <td></td>
    <td><hr noshade size="2">
    </td>
    <td><hr noshade size="2">
    </td>
    <td></td>
  </tr>
  <tr valign="top">
    <td></td>
    <td></td>
    <td></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td></td>
  </tr>
  <tr valign="top">
    <td></td>
    <td colspan="13"><div style="margin-left: 6%; text-indent: -3%"><font size="2" face="serif">*
          Includes prior year over accrual of state franchise taxes.</font></div>
    </td>
    <td></td>
  </tr>
  <tr valign="top">
    <td></td>
    <td></td>
    <td></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td></td>
  </tr>
  <tr valign="top">
    <td></td>
    <td colspan="14"><font size="2" face="serif">A reconciliation of the difference
        between the expected income tax rate using the statutory federal tax
        rate and the Company&#8217;s effective tax rate is as follows:</font></td>
  </tr>
  <tr valign="top">
    <td></td>
    <td></td>
    <td></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td></td>
  </tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" align="center" border="0">
  <tr valign="bottom">
    <td align="left">&nbsp;</td>
    <td width="36%" align="left"><div align="center"><font size="1" face="serif">&nbsp;</font></div>
    </td>
    <td align="left"><div align="center"></div>
    </td>
    <td align="right"><div align="center"></div>
    </td>
    <td colspan="3" align="center"><div align="center"><font size="1" face="serif"><b>Nine Months Ended July 31,</b></font></div><div align="center"></div>
    </td>
    <td align="left">&nbsp;</td>
    <td colspan="3" align="center"><div align="center"><font size="1" face="serif">Years
          Ended October 31,</font></div><div align="center"></div>
    </td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left">&nbsp;</td>
    <td align="left"><div align="center"></div>
    </td>
    <td align="left"><div align="center"></div>
    </td>
    <td align="right"><div align="center">
      </div>
    </td>
    <td align="right"><div align="center">
        <hr noshade size="1">
      </div>      <div align="center"></div>
    </td>
    <td align="left">&nbsp;</td>
    <td align="right"><div align="center">
        <hr noshade size="1">
      </div>      <div align="center"></div>
    </td>
    <td align="left">&nbsp;</td>
    <td align="right"><div align="center">
        <hr noshade size="1">
      </div>      <div align="center"></div>
    </td>
    <td align="left">&nbsp;</td>
    <td align="right"><div align="center">
        <hr noshade size="1">
      </div></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left">&nbsp;</td>
    <td align="left"><div align="center"><font size="1" face="serif">&nbsp;</font></div>
    </td>
    <td align="left"><div align="center"></div>
    </td>
    <td align="right"><div align="center"></div>
    </td>
    <td align="right"><div align="center"><font size="1" face="serif"><b>2004</b></font></div>      <div align="center"></div>
    </td>
    <td align="left">&nbsp;</td>
    <td align="right"><div align="center"><font size="1" face="serif">2003</font></div>      <div align="center"></div>
    </td>
    <td align="left">&nbsp;</td>
    <td align="right"><div align="center"><font size="1" face="serif">2003</font></div>      <div align="center"></div>
    </td>
    <td align="left">&nbsp;</td>
    <td align="right"><div align="center"><font size="1" face="serif">2002</font></div>      <div align="center"></div>
    </td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top" bgcolor="#ffffff">
    <td align="left">&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;    </td>
    <td align="right"><hr noshade size="1">
    </td>
    <td align="left">&nbsp;</td>
    <td align="right"><hr noshade size="1">
    </td>
    <td align="left">&nbsp;</td>
    <td align="right"><hr noshade size="1">
    </td>
    <td align="left">&nbsp;</td>
    <td align="right"><hr noshade size="1">
    </td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top" bgcolor="#ffffff">
    <td width="8%" align="left">&nbsp;</td>
    <td align="left"><font size="2" face="serif">US Federal income tax statutory
        rate</font></td>
    <td align="left" width="1%">&nbsp;</td>
    <td width="2%" align="right">&nbsp;</td>
    <td width="8%" align="right"><div align="center"><font size="2" face="serif"><b>30</b></font><font size="2" face="serif"><b>%</b></font></div></td>
    <td width="2%" align="left">&nbsp;</td>
    <td width="8%" align="right"><div align="center"><font size="2" face="serif">30</font><font size="2" face="serif">%</font></div></td>
    <td width="2%" align="left">&nbsp;</td>
    <td width="8%" align="right"><div align="center"><font size="2" face="serif">34</font><font size="2" face="serif">%</font></div></td>
    <td width="2%" align="left">&nbsp;</td>
    <td width="8%" align="right"><div align="center"><font size="2" face="serif">34%</font></div></td>
    <td width="2%" align="left">&nbsp;</td>
  </tr>
  <tr valign="top" bgcolor="#FFFFFF">
    <td align="left">&nbsp;</td>
    <td align="left"><font size="2" face="serif">State income taxes, net of federal
        tax benefit</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><div align="center"><font size="2" face="serif"><b>&nbsp;&nbsp;9</b></font><font size="2" face="serif"><b>%</b></font></div></td>
    <td align="left">&nbsp;</td>
    <td align="right"><div align="center"><font size="2" face="serif">&nbsp;8</font><font size="2" face="serif">%</font></div></td>
    <td align="left">&nbsp;</td>
    <td align="right"><div align="center"><font size="2" face="serif">&nbsp;8</font><font size="2" face="serif">%</font></div></td>
    <td align="left">&nbsp;</td>
    <td align="right"><div align="center"><font size="2" face="serif">&nbsp;8</font><font size="2" face="serif">%</font></div></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top" bgcolor="#ffffff">
    <td align="left">&nbsp;</td>
    <td align="left"><font size="2" face="serif">Other</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><div align="center"><font size="2" face="serif"><b>&nbsp;&nbsp;5</b></font><font size="2" face="serif"><b>%</b></font></div></td>
    <td align="left">&nbsp;</td>
    <td align="right"><div align="center"><font size="2" face="serif">&nbsp;2</font><font size="2" face="serif">%</font></div></td>
    <td align="left">&nbsp;</td>
    <td align="right"><div align="center"><font size="2" face="serif">(26</font><font size="2" face="serif">%)</font></div></td>
    <td align="left">&nbsp;</td>
    <td align="right"><div align="center">&#151;</div></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td></td>
    <td></td>
    <td></td>
    <td>&nbsp;</td>
    <td><hr align="center" size="1" noshade>          </td>
    <td></td>
    <td><hr align="center" size="1" noshade>
    </td>
    <td></td>
    <td><hr align="center" size="1" noshade>    </td>
    <td></td>
    <td><hr align="center" size="1" noshade>    </td>
    <td></td>
  </tr>
  <tr valign="top" bgcolor="#FFFFFF">
    <td align="left">&nbsp;</td>
    <td align="left"><font size="2" face="serif">Effective tax rate</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><div align="center"><font size="2" face="serif"><b>44</b></font><font size="2" face="serif"><b>%</b></font></div></td>
    <td align="left">&nbsp;</td>
    <td align="right"><div align="center"><font size="2" face="serif">40</font><font size="2" face="serif">%</font></div></td>
    <td align="left">&nbsp;</td>
    <td align="right"><div align="center"><font size="2" face="serif">16</font><font size="2" face="serif">%</font></div></td>
    <td align="left">&nbsp;</td>
    <td align="right"><div align="center"><font size="2" face="serif">42</font><font size="2" face="serif">%</font></div></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td></td>
    <td></td>
    <td></td>
    <td>&nbsp;    </td>
    <td><hr noshade size="2">    </td>
    <td></td>
    <td><hr noshade size="2">    </td>
    <td></td>
    <td><hr noshade size="2">    </td>
    <td></td>
    <td><hr noshade size="2">    </td>
    <td></td>
  </tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
  <tr valign="top">
    <td>&nbsp;</td>
    <td width="3%">&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td width="8%"><font size="2" face="serif">&nbsp;<b>NOTE 8 -</b></font></td>
    <td colspan="2"><font size="2" face="serif"><b>COMMITMENTS AND CONTINGENCIES:</b></font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td colspan="2"><font size="2" face="serif"><b><i>Operating leases:</i></b></font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td><font size="2" face="serif">a)</font></td>
    <td align="left"> <font size="2" face="serif"> The Company occupies warehouse
        facilities under an operating lease, which expired on August&nbsp;31,
        2002 and was renewed for an additional two years. The lease requires
        the Company to also pay utilities and other maintenance expenses. Rent
        charged to operations amounted to $50,076 and $47,346 for the years ended
        October 31, 2003 and 2002, and $86,510 and $38,757 for the nine month
        periods ended July 31, 2004 and 2003, respectively. Future minimum rental
        payments under the noncancelable operating lease in years subsequent
        to October 31, 2003 are $41,730 in 2004. </font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="left"><font size="2" face="serif">The Company also uses a variety
        of independent, bonded commercial warehouses to store its green coffee
        beans.</font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td> <font size="2" face="serif">b)</font></td>
    <td align="left"> <font size="2" face="serif">In February 2004, the Company
        entered into a lease for office and warehouse space in La Junta City,
        Colorado with an unrelated third party. This lease, which is at a monthly
        rental of $8,341 beginning January 2005, expires on January 31, 2024.</font></td>
  </tr>
</table>

<p align="center"><font size="2" face="serif">F-15</font></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<page> <a name="f16"></a>
<p><a href="#index"><font size="2">Back to Index</font></a></p>

<p align="center"><font size="2" face="serif"><b>COFFEE HOLDING CO., INC.<br>
  </b></font><font size="2" face="serif"><b>NOTES TO FINANCIAL STATEMENTS<br>
  </b></font><font size="2" face="serif"><b>OCTOBER 31, 2003 AND 2002<br>
</b></font><font size="2" face="serif"><b>(Information as of and for the periods
ended July 31, 2004 and 2003 is unaudited)</b></font></p>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
  <tr valign="top">
    <td width="8%"><font size="2" face="serif">&nbsp;<b>NOTE 8 -</b></font></td>
    <td align="left"><font size="2" face="serif"><b>COMMITMENTS AND CONTINGENCIES
          (Continued):</b></font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left"><font size="2" face="serif"><b><i>Operating leases (Continued):</i></b></font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left"><font size="2" face="serif">The aggregate minimum future
        lease payments for the Colorado location as of October 31, 2004 for each
        of the next five years are as follows:</font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" align="center" border="0">
  <tr valign="bottom" bgcolor="#FFFFFF">
    <td width="16%"align="left"><div align="right"></div>
      <hr align="right" width="6%" size="1" noshade></td>
    <td align="left"><font size="2" face="serif">October 31,<br>
    </font>
      <hr align="left" width="30%" size="1" noshade>
    </td>
    <td width="2%" align="left">&nbsp;</td>
    <td width="1%" align="right">&nbsp;</td>
    <td width="10%" align="left">&nbsp;</td>
    <td width="2%" align="left">&nbsp;</td>
    <td width="20%" align="left">&nbsp;</td>
    <td width="20%" align="left">&nbsp;</td>
  </tr>
  <tr valign="top" bgcolor="#ffffff">
    <td align="left">&nbsp;</td>
    <td align="left"><font size="2" face="serif">2004</font></td>
    <td align="left">&nbsp;</td>
    <td align="right"><font size="2" face="serif">$</font></td>
    <td align="right"><font size="2" face="serif"> &#151;</font></td>
    <td align="left">&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top" bgcolor="#FFFFFF">
    <td align="left">&nbsp;</td>
    <td align="left"><font size="2" face="serif">2005</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">83,411</font></td>
    <td align="left">&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top" bgcolor="#ffffff">
    <td align="left">&nbsp;</td>
    <td align="left"><font size="2" face="serif">2006</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">100,093</font></td>
    <td align="left">&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top" bgcolor="#FFFFFF">
    <td align="left">&nbsp;</td>
    <td align="left"><font size="2" face="serif">2007</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">100,093</font></td>
    <td align="left">&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top" bgcolor="#ffffff">
    <td height="20" align="left">&nbsp;</td>
    <td align="left"><font size="2" face="serif">2008</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">100,093</font></td>
    <td align="left">&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top" bgcolor="#FFFFFF">
    <td align="left">&nbsp;</td>
    <td align="left"><font size="2" face="serif">Thereafter</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">1,526,418</font></td>
    <td align="left">&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td></td>
    <td></td>
    <td></td>
    <td><hr noshade size="1">
    </td>
    <td><hr noshade size="1">
    </td>
    <td></td>
    <td></td>
    <td></td>
  </tr>
  <tr valign="top" bgcolor="#ffffff">
    <td align="left">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right"><font size="2" face="serif">$</font></td>
    <td align="right"><font size="2" face="serif"> 1,910,108</font></td>
    <td align="left">&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td></td>
    <td></td>
    <td></td>
    <td><hr noshade size="2">
    </td>
    <td><hr noshade size="2">
    </td>
    <td></td>
    <td></td>
    <td></td>
  </tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
  <tr valign="top">
    <td width="8%"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left"><font size="2" face="serif"><b><i>Obligation under capital
            leases:</i></b></font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left"><font size="2" face="serif">The Company has leased machinery
        and equipment under a capital lease, which expires in July 2005. The
        asset and liability under the capital lease is recorded at the lower
        of the present value of the minimum lease payments or the fair value
        of the asset. The asset is being depreciated over the lease term. Depreciation
        expense of assets under capital lease are included in depreciation expense
        and amounted to $60,915 for each of the years ended October 31, 2003
        and 2002 and $45,687 for each of the nine months ended July&nbsp;31,
        2004 and 2003.</font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left"><font size="2" face="serif">Assets held under capital lease
        are as follows:</font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" align="center" border="0">
  <tr valign="top">
    <td align="left">&nbsp;</td>
    <td align="left"><font size="1" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="center"><font size="1" face="serif"><b>July 31, 2004</b></font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="center"><font size="1" face="serif">October 31, 2003</font></td>
    <td align="left">&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top" bgcolor="#ffffff">
    <td align="left">&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td align="right"><hr noshade size="1">
    </td>
    <td align="right"><hr noshade size="1">
    </td>
    <td align="left">&nbsp;</td>
    <td align="right"><hr noshade size="1">
    </td>
    <td align="right"><hr noshade size="1">
    </td>
    <td align="left">&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top" bgcolor="#ffffff">
    <td width="8%" align="left">&nbsp;</td>
    <td align="left"><div style="margin-left: 6%; text-indent: -3%"><font size="2" face="serif">Machinery
          and equipment</font></div>
    </td>
    <td align="left" width="2%">&nbsp;</td>
    <td width="1%" align="right"><font size="2" face="serif"><b>$</b></font></td>
    <td width="10%" align="right"><font size="2" face="serif"> <b>426,404</b></font></td>
    <td width="2%" align="left">&nbsp;</td>
    <td width="1%" align="right"><font size="2" face="serif">$</font></td>
    <td width="10%" align="right"><font size="2" face="serif"> 426,404</font></td>
    <td width="2%" align="left">&nbsp;</td>
    <td width="40%" align="left">&nbsp;</td>
  </tr>
  <tr valign="top" bgcolor="#FFFFFF">
    <td align="left">&nbsp;</td>
    <td align="left"><div style="margin-left: 6%; text-indent: -3%"><font size="2" face="serif">Less:
          accumulated depreciation</font></div>
    </td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif"><b>(137,059</b></font></td>
    <td align="left"><font size="2" face="serif"><b>)</b></font></td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">(91,372</font></td>
    <td align="left"><font size="2" face="serif">)</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td></td>
    <td></td>
    <td></td>
    <td><hr noshade size="1">
    </td>
    <td><hr noshade size="1">
    </td>
    <td></td>
    <td><hr noshade size="1">
    </td>
    <td><hr noshade size="1">
    </td>
    <td></td>
    <td></td>
  </tr>
  <tr valign="top" bgcolor="#ffffff">
    <td align="left">&nbsp;</td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right"><font size="2" face="serif"><b>$</b></font></td>
    <td align="right"><font size="2" face="serif"> <b>289,345</b></font></td>
    <td align="left">&nbsp;</td>
    <td align="right"><font size="2" face="serif">$</font></td>
    <td align="right"><font size="2" face="serif"> 335,032</font></td>
    <td align="left">&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td></td>
    <td></td>
    <td></td>
    <td><hr noshade size="2">
    </td>
    <td><hr noshade size="2">
    </td>
    <td></td>
    <td><hr noshade size="2">
    </td>
    <td><hr noshade size="2">
    </td>
    <td></td>
    <td></td>
  </tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td width="8%"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left"><font size="2" face="serif">Minimum annual future lease
        payments under the capital lease for each of the next two years and in
        the aggregate are:</font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" align="center" border="0">
  <tr valign="top">
    <td align="left">&nbsp;</td>
    <td align="left"><font size="1" face="serif">&nbsp;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="center"><font size="1" face="serif"><b>July 31, 2004</b></font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="center"><font size="1" face="serif">October 31, 2003</font></td>
    <td align="left">&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top" bgcolor="#FFFFFF">
    <td width="8%"align="left">&nbsp;</td>
    <td align="left"><font size="2" face="serif">Year ended October 31, </font></td>
    <td align="left" width="2%">&nbsp;</td>
    <td width="1%" align="right"><hr noshade size="1">
    </td>
    <td width="10%" align="left">
      <hr noshade size="1">
    </td>
    <td width="2%" align="left">&nbsp;</td>
    <td width="1%" align="right"><hr noshade size="1">
    </td>
    <td width="10%" align="left">
      <hr noshade size="1">
    </td>
    <td width="2%" align="left">&nbsp;</td>
    <td width="30%" align="left">&nbsp;</td>
  </tr>
  <tr valign="top" bgcolor="#ffffff">
    <td align="left">&nbsp;</td>
    <td align="left"><div style="margin-left: 9%; text-indent: -3%"><font size="2" face="serif">2004</font></div>
    </td>
    <td align="left">&nbsp;</td>
    <td align="right"><font size="2" face="serif"><b>$</b></font></td>
    <td align="right"><font size="2" face="serif"> <b>35,312</b></font></td>
    <td align="left">&nbsp;</td>
    <td align="right"><font size="2" face="serif">$</font></td>
    <td align="right"><font size="2" face="serif"> 141,249</font></td>
    <td align="left">&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top" bgcolor="#FFFFFF">
    <td align="left">&nbsp;</td>
    <td align="left"><div style="margin-left: 9%; text-indent: -3%"><font size="2" face="serif">2005</font></div>
    </td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif"><b>94,165</b></font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">94,165</font></td>
    <td align="left">&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td></td>
    <td></td>
    <td></td>
    <td><hr noshade size="1">
    </td>
    <td><hr noshade size="1">
    </td>
    <td></td>
    <td><hr noshade size="1">
    </td>
    <td><hr noshade size="1">
    </td>
    <td></td>
    <td></td>
  </tr>
  <tr valign="top" bgcolor="#ffffff">
    <td align="left">&nbsp;</td>
    <td align="left"><div style="margin-left: 6%; text-indent: -3%"><font size="2" face="serif">Total
          minimum lease payments</font></div>
    </td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif"><b>129,477</b></font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">235,414</font></td>
    <td align="left">&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top" bgcolor="#FFFFFF">
    <td align="left">&nbsp;</td>
    <td align="left"><div style="margin-left: 6%; text-indent: -3%"><font size="2" face="serif">Less:
          amount representing interest</font></div>
    </td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif"><b>(4,141</b></font></td>
    <td align="left"><font size="2" face="serif"><b>)</b></font></td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">(12,968</font></td>
    <td align="left"><font size="2" face="serif">)</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td></td>
    <td></td>
    <td></td>
    <td><hr noshade size="1">
    </td>
    <td><hr noshade size="1">
    </td>
    <td></td>
    <td><hr noshade size="1">
    </td>
    <td><hr noshade size="1">
    </td>
    <td></td>
    <td></td>
  </tr>
  <tr valign="top" bgcolor="#ffffff">
    <td align="left">&nbsp;</td>
    <td align="left"><div style="margin-left: 6%; text-indent: -3%"><font size="2" face="serif">Present
          value of minimum lease payments</font></div>
    </td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif"><b>125,336</b></font></td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">222,446</font></td>
    <td align="left">&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top" bgcolor="#FFFFFF">
    <td align="left">&nbsp;</td>
    <td align="left"><div style="margin-left: 6%; text-indent: -3%"><font size="2" face="serif">Less:
          current portion</font></div>
    </td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif"><b>(125,336</b></font></td>
    <td align="left"><font size="2" face="serif"><b>)</b></font></td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size="2" face="serif">(130,551</font></td>
    <td align="left"><font size="2" face="serif">)</font></td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td></td>
    <td></td>
    <td></td>
    <td><hr noshade size="1">
    </td>
    <td><hr noshade size="1">
    </td>
    <td></td>
    <td><hr noshade size="1">
    </td>
    <td><hr noshade size="1">
    </td>
    <td></td>
    <td></td>
  </tr>
  <tr valign="top" bgcolor="#ffffff">
    <td align="left">&nbsp;</td>
    <td align="left"><font size="2" face="serif">Long-term portion</font></td>
    <td align="left">&nbsp;</td>
    <td align="right"><font size="2" face="serif"><b>$</b></font></td>
    <td align="right"><font size="2" face="serif"> &#151;</font></td>
    <td align="left">&nbsp;</td>
    <td align="right"><font size="2" face="serif">$</font></td>
    <td align="right"><font size="2" face="serif"> 91,895</font></td>
    <td align="left">&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td></td>
    <td></td>
    <td></td>
    <td><hr noshade size="2">
    </td>
    <td><hr noshade size="2">
    </td>
    <td></td>
    <td><hr noshade size="2">
    </td>
    <td><hr noshade size="2">
    </td>
    <td></td>
    <td></td>
  </tr>
  <tr valign="top">
    <td></td>
    <td></td>
    <td></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td></td>
    <td></td>
  </tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
  <tr valign="top">
    <td width="8%"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left"><font size="2" face="serif">The interest rate on the capital
        lease is 8 1/3% per annum, which approximates the Company&#8217;s incremental
        rate of borrowing at the time the lease was entered into.</font></td>
  </tr>
</table>

<p align="center"><font size="2" face="serif">F-16</font></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<page> <a name="f17"></a>
<p><a href="#index"><font size="2">Back to Index</font></a></p>

<p align="center"><font size="2" face="serif"><b>COFFEE HOLDING CO., INC.<br>
  </b></font><font size="2" face="serif"><b>NOTES TO FINANCIAL STATEMENTS<br>
  </b></font><font size="2" face="serif"><b>OCTOBER 31, 2003 AND 2002<br>
</b></font><font size="2" face="serif"><b>(Information as of and for the periods
ended July 31, 2004 and 2003 is unaudited)</b></font></p>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
  <tr valign="top">
    <td width="8%"><font size="2" face="serif">&nbsp;<b>NOTE 8 -</b></font></td>
    <td align="left"><font size="2" face="serif"><b>COMMITMENTS AND CONTINGENCIES
          (Continued):</b></font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left"><font size="2" face="serif"><b><i>Legal proceedings:</i></b></font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left"><font size="2" face="serif">The Company is a party to various
        legal proceedings. In the opinion of management, these actions are routine
        in nature and will not have a material adverse effect on the Company&#8217;s
        financial statements in subsequent years.</font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td><font size="2" face="serif"><b>NOTE 9 -</b></font></td>
    <td align="left"><font size="2" face="serif"><b>CONCENTRATIONS OF CREDIT
          RISK:</b></font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left"><font size="2" face="serif">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, 2003 and July 31, 2004, the Company
        did not have cash balances that exceeded Federal insurance limits. The
        net balance of the Company&#8217;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.</font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left"><font size="2" face="serif">Approximately 16% of the Company&#8217;s
        sales were derived from each of two customers in 2003. Those customers
        also accounted for approximately $266,000 and $61,700 of the Company&#8217;s
        account receivable balance as of October 31, 2003. Approximately 18%
        and 17% of the Company&#8217;s sales were derived from two customers
        during 2002. Those customers also accounted for approximately $ 132,000
        and $ 141,000 of the Company&#8217;s accounts receivable balance at October
        31, 2002. </font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left"><font size="2" face="serif">Approximately 22% of the Company&#8217;s
        sales were derived from one customer for the nine month period ended
        July 31, 2004. That customer also accounted for approximately $344,000
        of the Company&#8217;s accounts receivable balance at July 31, 2004.</font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left"><font size="2" face="serif">Approximately 18% and 16% of
        the Company&#8217;s sales were derived from two customers for the nine
        month period ended July 31, 2003. Those customers also accounted for
        approximately $127,000 and $202,000 respectively, of the Company&#8217;s
        accounts receivable total at July 31, 2003.</font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left"><font size="2" face="serif">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.</font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left"><font size="2" face="serif">Management does not believe
        that credit risk was significant for any of the periods presented herewith.</font></td>
  </tr>
</table>

<p align="center"><font face="serif" size="2">F-17</font></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<page> <a name="f18"></a>
<p><a href="#index"><font size="2">Back to Index</font></a></p>

<p align="center"><font size="2" face="serif"><b>COFFEE HOLDING CO., INC.<br>
  </b></font><font size="2" face="serif"><b>NOTES TO FINANCIAL STATEMENTS<br>
  </b></font><font size="2" face="serif"><b>OCTOBER 31, 2003 AND 2002<br>
</b></font><font size="2" face="serif"><b>(Information as of and for the periods
ended July 31, 2004 and 2003 is unaudited)</b></font></p>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
  <tr valign="top">
    <td width="9%"><font size="2" face="serif">&nbsp;<b>NOTE 10 -</b></font></td>
    <td align="left"><font size="2" face="serif"><b>STOCK OPTION PLAN:</b></font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left"><font size="2" face="serif">On February 10, 1998, the Company&#8217;s
        stockholders consented to the adoption of the Company&#8217;s stock option
        plan (the &#8220;Plan&#8221;) whereby incentive and/or nonincentive stock
        options for the purchase of up to 2,000,000 shares of the Company&#8217;s
        common stock may be granted to the Company&#8217;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).</font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left"><font size="2" face="serif">No options have been granted
        under the Plan.</font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td><font size="2" face="serif"><b>NOTE 11 -</b></font></td>
    <td align="left"><font size="2" face="serif"><b>MAJOR VENDORS/RELATED PARTY:</b></font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left"><font size="2" face="serif">For the nine months ended July
        31, 2004, purchases from two suppliers, were in excess of 10% of the
        Company&#8217;s total purchases. Purchases from these suppliers were
        approximately $5,071,000 and $1,382,000 and the corresponding accounts
        payable to these suppliers at July 31, 2004 were approximately $390,000
        and $36,000, respectively.</font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left"><font size="2" face="serif">For the nine months ended July
        31, 2003, purchases from two suppliers, were in excess of 10% of the
        Company&#8217;s total purchases. Purchases from these suppliers were
        approximately $3,082,000 and $1,063,000 and the corresponding accounts
        payable to these suppliers at July 31, 2003 were approximately $110,000
        and $124,000, respectively.</font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left"><font size="2" face="serif">During fiscal 2003, substantially
        all of the Company&#8217;s purchases were from ten vendors. The ten vendors
        accounted for 84% of total product purchases. Two of these vendors accounted
        for 31% and 11% of total purchases. These vendors accounted for approximately
        $66,700 and $124,400 of the Company&#8217;s accounts payable at October
        31, 2003.</font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left"><font size="2" face="serif">During fiscal 2002, substantially
        all of the Company&#8217;s purchases were from ten vendors. The ten vendors
        accounted for 89% of total product purchases. One of these vendors accounted
        for 33% of total purchases and approximately $128,700 of the Company&#8217;s
        accounts payable at October 31, 2002. In addition, an employee of this
        vendor is a director of the Company. Purchases from that vendor totaled
        approximately $4,110,900 and $3,415,200 in 2003 and 2002, respectively. </font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left"><font size="2" face="serif">Management believes that all
        transactions are made at arms length and does not believe that the loss
        of any one vendor would have a material adverse effect on the Company&#8217;s
        operations due to the availability of alternate suppliers.</font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td><font size="2" face="serif"><b>NOTE 12 &#150;</b></font></td>
    <td align="left"><font size="2" face="serif"><b>CONSULTING AGREEMENT:</b></font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left"><font size="2" face="serif">On July 26, 2002, the Company
        entered into an agreement with two investment banking firms (collectively &#8220;Managing
        Underwriters&#8221;) for the Managing Underwriters to serve as the Company&#8217;s
        exclusive financial advisors and Managing Underwriters for 12 months.
        The main function of the Managing Underwriters was to facilitate a public
        offering of the Company&#8217;s common stock. The Company terminated
        this agreement on December 11, 2002. No funds were raised under this
        agreement.</font></td>
  </tr>
</table>

<p align="center"><font face="serif" size="2">F-18</font></p>
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<page> <a name="f19"></a>
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<p align="center"><font size="2" face="serif"><b>COFFEE HOLDING CO., INC.<br>
  </b></font><font size="2" face="serif"><b>NOTES TO FINANCIAL STATEMENTS<br>
  </b></font><font size="2" face="serif"><b>OCTOBER 31, 2003 AND 2002<br>
</b></font><font size="2" face="serif"><b>(Information as of and for the periods
ended July 31, 2004 and 2003 is unaudited)</b></font></p>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
  <tr valign="top">
    <td><font size="2" face="serif"><b>NOTE 13 &#150;</b></font></td>
    <td align="left"><font size="2" face="serif"><b>PURCHASE OF ASSETS:</b></font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td width="9%"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left"><font size="2" face="serif">On February 4, 2004, the Company
        entered into an agreement to purchase certain assets of an unrelated
        third party. The Company purchased coffee roasting and blending equipment
        located in a facility in Colorado, labels for private coffee products
        produced at this facility and certain other assets. The purchase price
        for these assets was $825,000, based upon an independent appraisal. The
        Company has also reached an agreement with the city of La Junta, Colorado
        to lease the facility formerly operated by the seller.</font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left"><font size="2" face="serif">The Company also entered into
        a 10 year (renewable for an additional 10 years) licensing agreement
        with Del Monte Corp, for the exclusive right to use the &#8220;S&amp;W&#8221; and &#8220;Il
        Classico&#8221; trademarks in the United States in connection with the
        production, manufacture and sale of roasted whole bean and ground coffee
        for distribution at the retail distribution level. The Company will pay
        Del Monte Corp., 2% of net revenues generated by the sale of these products.</font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td><font size="2" face="serif"><b>NOTE 14 &#150;</b></font></td>
    <td align="left"><font size="2" face="serif"><b>UNDERWRITERS AGREEMENT:</b></font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td align="left"><font size="2" face="serif">The Company has entered into
        an agreement with Maxim Group LLC for Maxim Group to serve as the Company&#8217;s
        financial advisors and lead managing underwriters for a proposed public
        offering of the Company&#8217;s common stock which would raise approximately
        $10 million. The Maxim Group will have the right to purchase for a period
        of forty-five days following the public offering up to an additional
        fifteen percent of the number of shares of common stock offered to the
        public by the Company, at the public offering price less the underwriting
        discount (ten percent) to cover over-allotments, if any. The Company
        paid $25,000 to Maxim Group upon execution of the agreement and will
        pay an additional $25,000 to Maxim Group upon filing of a registration
        statement for the proposed offering with the SEC. If the public offering
        is successfully completed, the Company shall pay to the Maxim Group a
        non-accountable expense allowance equal to three percent of the gross
        proceeds derived from the public offering including any proceeds derived
        from the over-allotment. The Company has also agreed to sell to the Maxim
        Group for an aggregate of $100, warrants to purchase up to ten percent
        of the shares being offered at 110% of the offering price. The warrant
        shall be exercisable for a period of five years and contain provisions
        for cashless exercise, antidilution and piggyback registration rights.
        To date no funds have been raised under this agreement.</font></td>
  </tr>
</table>

<p align="center"><font face="serif" size="2">F-19</font></p>
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<p align="left"><font size="2" face="serif">You should rely only on the information contained in or incorporated by reference into this prospectus. We have not, and the underwriter has not, authorized any other person to provide you with any different or additional information. If anyone provides you with different or inconsistent information, you should not rely on it. This prospectus is not an offer to sell nor is it seeking an offer to buy these securities in any jurisdiction where the offer or sale is not permitted. The information contained in this prospectus is correct only as of the date of this prospectus regardless of the time or the delivery of this prospectus or any sale of these securities.</font></p>
<p align="center"><font size="2" face="serif"><b>COFFEE HOLDING CO., INC.</b></font></p>
<p align="center"><font size="2" face="serif"><b>1,600,000 shares </b></font></p>
<p align="center"><font size="2" face="serif"><b>Common Stock </b></font></p>
<p align="center"><font size="2" face="serif">&#150;&#150;&#150;&#150;&#150;&#150;&#150;&#150;&#150;</font></p>
<p align="center"><font size="2" face="serif"><b>PROSPECTUS</b></font></p>
<p align="center"><font size="2" face="serif"><b>MAXIM GROUP LLC</b></font></p>
<p align="center"><font size="2" face="serif"><b>, 2004</b></font></p>
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<p align="left">&nbsp;</p>
<p align="center">&nbsp;</p>
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<div style="page-break-before:always"></div>
<a name="pii-2"></a>
<p><a href="#contents"><font size="2">Back to Contents</font></a></p>
<p align="center"><font size="2" face="serif"><b>PART II</b></font></p>
<p align="center"><font size="2" face="serif"><b>INFORMATION NOT REQUIRED IN PROSPECTUS</b></font></p>
<p align="left"><font size="2" face="serif"><b>Item 24.&nbsp;&nbsp;&nbsp;Indemnification of Directors and Officers.</b></font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Nevada Revised Statutes provides for the discretionary and mandatory indemnification of directors, officers, employees and agents under certain circumstances.</font></p>

<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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, by 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&#146; fees, judgments,
    fines and amounts paid in settlement actually and reasonably incurred by
    him in connection with the action 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.</font></p>

<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 our 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 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.</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 herein, the corporation shall indemnify him against expenses, including attorneys&#146; fees, actually and reasonably incurred by him in connection with the defense.</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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.</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our current Articles of Incorporation provide that we will limit the liability of our officers and directors to the fullest extent permitted by Nevada law.</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
    proposed Articles of Incorporation and Bylaws will provide that we will indemnify
    our officers and directors to the fullest extent permitted by Nevada law.
    The proposed Articles of Incorporation will also empower us to purchase and
    maintain insurance to protect ourselves and our directors, officers, employees
    and agents and those who were or have agreed to become directors, </font></p>
<p align="center"><font size="2" face="serif">II-1</font></p>
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<p align="left"><font size="2" face="serif"> officers,
    employees or agents, against any liability, regardless of whether or not
    we would have
      the power to indemnify those persons against such liability under the law
      or the provisions set forth in the Articles of Incorporation; provided
    that such insurance is available on acceptable terms as determined by a vote
    of
      the Board of Directors. We are also authorized to enter into individual
    indemnification contracts with directors, officers, employees and agents
    which may provide
      indemnification rights and procedures different from those set forth in
    our Articles of Incorporation. We expect to purchase directors&#146; and officers&#146; liability
    insurance consistent with the provisions of our Articles of Incorporation
    as soon as practicable.</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Underwriting Agreement to be filed as Exhibit 1.1 will provide for indemnification by the underwriters of the Company, its directors and officers.</font></p>

<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The proposed employment agreements with Andrew Gordon, President and Chief Executive Officer and a director, and David Gordon, Executive Vice President, Secretary and a director, provide that we shall cause those executives to be covered by and named as an insured under any policy or contract of insurance obtained by us to insure our directors and officers against personal liability for acts or omissions in connection with service as an officer or director or service in other capacities at our request.  The coverage provided to those executives are required to be of the same scope and on the same terms and conditions as the coverage (if any) provided to other officers or directors of the Company and shall continue
for so long as those executives shall be subject to personal liability relating to such service to the extent permitted under the Nevada Revised Statutes.  The proposed employment agreements also provide that, to the maximum extent permitted under applicable law, we shall indemnify those executives against and hold each harmless from any costs, liabilities, losses and exposures to the fullest extent and on the most favorable terms and conditions that similar indemnification is offered to any director or officer of us or any subsidiary or Affiliate of us and shall continue for so long as those executives shall be subject to personal liability relating to such service to the extent permitted under the Nevada Revised Statutes.</font></p>

<p align="center"><font face="serif" size="2">II-2</font></p>
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<p align="left"><font size="2" face="serif"><b>Item 25.&nbsp;&nbsp;&nbsp;Other Expenses of Issuance and Distribution</b>.</font></p>

<table width="100%" cellspacing="0" cellpadding="0" border="0">

<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">SEC Registration Fee (1)</font></td>
<td align="left" width="2%">&nbsp;</td>
<td width="1%" align="right"><font size="2" face="serif">$</font></td>
<td width="10%" align="right"><font size="2" face="serif"> 1,534</font></td>
<td width="10%" align="left">&nbsp;</td> </tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">National Association of Securities Dealers filing fee (1)</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,710</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">Amex Listing Fees</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;62,500</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">Printing</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;30,000</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">Legal fees and expenses</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;150,000</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">Underwriters&#146; non-accountable

expense allowance (2)</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;264,000</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">Accounting fees and expenses</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;50,000</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">Blue Sky fees and expenses (including fees of counsel)</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15,000</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">Miscellaneous</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">5,256</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td></td>
<td></td>
<td><hr noshade size="1"></td>
<td><hr noshade size="1"></td>
<td></td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif"><b>TOTAL</b></font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif"> 580,000</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td></td>
<td></td>
<td><hr noshade size="1"></td>
<td><hr noshade size="1"></td>
<td></td>
</tr>
</table>

<p align="left"><font size="2" face="serif">_________________</font></p>

<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
<td width="3%"><font size="2" face="serif">(1)</font></td>
<td align="left">
<font size="2" face="serif"> Actual expenses based upon the registration and issuance
of 1,840,000 shares of common stock to be sold in this offering at $6.00 per
share and 160,000 underwriter&#8217;s warrants and 160,000 shares of common stock
issuable upon exercise of underwriter&#8217;s warrants at an exercise price of
$7.20 per share. All other expenses are estimated.</font></td>
</tr>
</table>

<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
<td width="3%"><font size="2" face="serif">(2)</font></td>
<td align="left">
<font size="2" face="serif">The non-accountable expense allowance will be
$303,600 if the over-allotment option is exercised in full.</font></td>
</tr>
</table>

<p align="left"><font size="2" face="serif"><b>Item 26.&nbsp;&nbsp;&nbsp;Recent Sales of Unregistered Securities.</b></font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;None.</font></p>
<p align="center"><font face="serif" size="2">II-3</font></p>
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<p align="left"><font size="2" face="serif"><b>Item 27.&nbsp;&nbsp;&nbsp;Exhibits and Financial Statement Schedules.</b></font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The exhibits and financial statement schedules filed as a part of this Registration Statement are as follows:</font></p>
<p align="left"><font size="2" face="serif"><b>(a)</b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>List of Exhibits.</b>  (Filed herewith unless otherwise noted.)</font><font size="2" face="serif">&nbsp;</font></p>

<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top" bgcolor="#FFFFFF">
  <td width="10%" align="left"><font size="2" face="serif"><b><u>Exhibit No.</u></b></font></td>
  <td width="2%" align="left">&nbsp;</td>
  <td align="left"><font size="2" face="serif">&nbsp;<b><u>Description</u></b></font></td>
  </tr>
<tr valign="top" bgcolor="#FFFFFF">
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
  </tr>
<tr valign="top" bgcolor="#ffffff">
<td align="left"><font size="2" face="serif">1.1</font></td>
<td width="1%" align="right">&nbsp;</td>
<td width="80%" align="left"><font size="2" face="serif">Form of Underwriting Agreement.</font></td>
</tr>

<tr valign="top" bgcolor="#FFFFFF">
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
</tr>

<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">2.1</font></td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">Agreement and Plan of Merger by and Among Transpacific International Group Corp. and Coffee Holding Co., Inc. (incorporated herein by reference to Exhibit 2 to Post-Effective Amendment No. 1 to the Registration Statement on Form SB-2 (file No. 333-00588-NY) as filed with the Commission on November 10, 1997).</font></td>
</tr>

<tr valign="top" bgcolor="#FFFFFF">
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
</tr>


<tr valign="top" bgcolor="#ffffff">
<td align="left"><font size="2" face="serif">2.2</font></td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">Asset Purchase Agreement, dated February 4, 2004, by and between Coffee Holding Co., Inc. and Premier Roasters LLC (incorporated herein by reference to Exhibit 2.1 to the Current Report on Form 8-K dated February 4, 2004 as filed with the SEC on February 20, 2004.)</font></td>
</tr>


<tr valign="top" bgcolor="#FFFFFF">
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
</tr>


<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">3.1</font></td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">Articles of Incorporation of Coffee Holding Co., Inc., as amended (incorporated herein by reference to Exhibit 3.1 to the Coffee Holding Co., Inc. Annual  Report on Form 10-KSB for the fiscal year ended October 31, 2002, filed with the Securities and Exchange Commission on February 13, 2003).</font></td>
</tr>


<tr valign="top" bgcolor="#FFFFFF">
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
</tr>


<tr valign="top" bgcolor="#ffffff">
<td align="left"><font size="2" face="serif">3.2</font></td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">Certificate of Amendment of Articles
    of Incorporation of Coffee Holding Co., Inc. (incorporated herein by reference
    to Exhibit 3.2 to the Coffee Holding Co., Inc. Quarterly Report on Form 10-Q
    for the quarter ended April 30, 1998, filed with the Securities and Exchange
    Commission on October 27, 2000). </font></td>
</tr>


<tr valign="top" bgcolor="#FFFFFF">
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
</tr>


<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">3.3</font></td>
<td align="right">&nbsp;</td>
<td align="left"><p><font size="2" face="serif">By-Laws of Coffee Holding Co.,
      Inc., as amended (incorporated herein by reference to Exhibit 3.3 to the
      Coffee Holding Co., Inc. Quarterly Report on Form 10-Q for the quarter
      ended April 30, 1998, filed with the Securities and Exchange Commission
      on October 27, 2000).</font></p>
  </td>
</tr>


<tr valign="top" bgcolor="#FFFFFF">
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
</tr>


<tr valign="top" bgcolor="#ffffff">
<td align="left"><font size="2" face="serif">3.5</font></td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">Certificate of Amendment of Articles
    of Incorporation of Coffee Holding Co., Inc. (incorporated herein by reference
    to Exhibit 3.5 to the Coffee Holding Co., Inc. Quarterly Report on Form 10-QSB
    for the quarter ended April 30, 2001, filed with the Securities and Exchange
    Commission on June 14, 2001).</font></td>
</tr>

<tr valign="top" bgcolor="#FFFFFF">
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
</tr>

<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">4.1</font></td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">Form of Stock Certificate of Coffee Holding Co., Inc. (incorporated herein by reference to the initial filing of this Registration Statement, filed with the Securities and Exchange Commission on June 24, 2004).</font></td>
</tr>


<tr valign="top" bgcolor="#FFFFFF">
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
</tr>


<tr valign="top" bgcolor="#ffffff">
<td align="left"><font size="2" face="serif">4.2</font></td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">Form of Warrant Certificate.</font></td>
</tr>


<tr valign="top" bgcolor="#FFFFFF">
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
</tr>


<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">5.1</font></td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">Opinion of Thacher Proffitt &amp; Wood LLP as to legality of securities being offered (incorporated herein by reference to the initial filing of this Registration Statement, filed with the Securities and Exchange Commission on June 24, 2004).</font></td>
</tr>


<tr valign="top" bgcolor="#FFFFFF">
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
</tr>


<tr valign="top" bgcolor="#ffffff">
<td align="left"><font size="2" face="serif">10.1</font></td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">Lease with T&amp;O Management Corp. dated August 15, 1997 (incorporated herein by reference to Exhibit 10.1 to the Coffee Holding Co., Inc. Quarterly Report on Form 10-Q for the quarter ended April 30, 1998, filed with the Securities and Exchange Commission on October 27, 2000).</font></td>
</tr>
</table>

<p align="center"><font size="2" face="serif">II-4</font></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<page>
<a name="pii-6"></a>
<p><a href="#contents"><font size="2">Back to Contents</font></a></p>

<table width="100%" cellspacing="0" cellpadding="0" border="0">

<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">10.2</font></td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">1998 Stock Option Plan (incorporated herein by reference to Exhibit 10.2 to the Coffee Holding Co., Inc. Quarterly Report on Form 10-Q for the quarter ended April 30, 1998, filed with the Securities and Exchange Commission on October 27, 2000).</font></td>
</tr>


<tr valign="top" bgcolor="#FFFFFF">
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
</tr>


<tr valign="top" bgcolor="#ffffff">
<td align="left"><font size="2" face="serif">10.3</font></td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">Loan and Security Agreement dated as of November 21, 1997 between Coffee Holding Co., Inc. and NationsCredit Commercial Corporation (incorporated herein by reference to Exhibit 10.3 to Amendment No. 1 to the Coffee Holding Co., Inc. Annual Report on Form 10-K/A for the fiscal year ended October 31, 2000, filed with the Securities and Exchange Commission on February 1, 2001).</font></td>
</tr>

<tr valign="top" bgcolor="#FFFFFF">
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
</tr>

<tr valign="top" bgcolor="#FFFFFF">
<td width="10%" align="left"><font size="2" face="serif">10.4</font></td>
<td width="2%" align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">First Amendment to Loan and Security
    Agreement dated as of May 22, 1998 between Coffee Holding Co., Inc. and NationsCredit
    Commercial Corporation (incorporated herein by reference to Exhibit 10.4
    to the Coffee Holding Co., Inc. Annual Report on Form 10-K for the fiscal
    year ended October 31, 2000, filed with the Securities and Exchange Commission
    on January 29, 2001).</font></td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#ffffff">
<td align="left"><font size="2" face="serif">10.5</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">Second Amendment dated as of November 29, 2000 to Loan and Security Agreement between Coffee Holding Co., Inc. and Wells Fargo Business Credit, Inc., as assignee (incorporated herein by reference to Exhibit 10.5 to the Coffee Holding Co., Inc. Annual Report on Form 10-K for the fiscal year ended October 31, 2000, filed with the Securities and Exchange Commission on January 29, 2001).</font></td>
</tr>

<tr valign="top" bgcolor="#FFFFFF">
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
</tr>

<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">10.6</font></td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">Term Note dated as of November 29, 2000 made by Coffee Holding Co., Inc. 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 Coffee Holding Co., Inc. Annual Report on Form 10-K for the fiscal year ended October 31, 2000, filed with the Securities and Exchange Commission on January 29, 2001).</font></td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
</tr>

<tr valign="top" bgcolor="#ffffff">
<td align="left"><font size="2" face="serif">10.7</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">Third Amendment dated as of October 1, 2002 to Loan and Security Agreement between Coffee Holding Co., Inc. and Wells Fargo Business Credit, Inc., as assignee (incorporated herein by reference to Exhibit 10.7 to Amendment No. 1 to the Coffee Holding Co., Inc. Registration Statement on Form SB-2/A, filed with the Securities and Exchange Commission on August 12, 2004).</font></td>
</tr>

<tr valign="top" bgcolor="#FFFFFF">
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
</tr>

<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">10.8</font></td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">Term Note dated as of October 1, 2002 made by Coffee Holding Co., Inc. in favor of Wells Fargo Business Credit, Inc., in the principal amount of $750,000 (incorporated herein by reference to Exhibit 10.8 to the Coffee Holding Co., Inc. Annual Report on Form 10-KSB for the fiscal year ended October 31, 2002, filed with the Securities and Exchange Commission on February 13, 2003).</font></td>
</tr>

<tr valign="top" bgcolor="#FFFFFF">
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
</tr>

<tr valign="top" bgcolor="#ffffff">
<td align="left"><font size="2" face="serif">10.9</font></td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">Capital Lease Agreement with HSBC Business Credit (USA), Inc. (incorporated herein by reference to Exhibit 10.9 to Amendment No. 1 to the Coffee Holding Co., Inc. Registration Statement on Form SB-2/A, filed with the Securities and Exchange Commission on August 12, 2004).</font></td>
</tr>

<tr valign="top" bgcolor="#FFFFFF">
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
</tr>

<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">10.10</font></td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">Sales contract with Supervalu and Cub Foods (incorporated herein by reference to Exhibit 10.10 to Amendment No. 1 to the Coffee Holding Co., Inc. Annual Report on Form 10-KSB/A for the year ended October 31, 2002, filed with the Securities and Exchange Commission on August 26, 2004) (confidential portions have been redacted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission).</font></td>
</tr>

</table>

<p align="center"><font size="2" face="serif">II-5</font></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<page>
<a name="pii-7"></a>
<p><a href="#contents"><font size="2">Back to Contents</font></a></p>

<table width="100%" cellspacing="0" cellpadding="0" border="0">

<tr valign="top" bgcolor="#ffffff">
<td align="left"><font size="2" face="serif">10.11</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">Sales contract with Shurfine Central (incorporated herein by reference to Exhibit 10.11 to Amendment No. 1 to the Coffee Holding Co., Inc. Annual Report on Form 10-KSB/A for the year ended October 31, 2002, filed with the Securities and Exchange Commission on August 26, 2004) (confidential portions have been redacted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission).</font></td>
</tr>

<tr valign="top" bgcolor="#FFFFFF">
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
</tr>

<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">10.12</font></td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">Lease dated February 4, 2004 by and between Coffee Holding Co., Inc. and the City of La Junta, Colorado (incorporated herein by reference to Exhibit 10.12 to Amendment No. 1 to the Coffee Holding Co., Inc. Registration Statement on Form SB-2/A, filed with the Securities and Exchange Commission on August 12, 2004).</font></td>
</tr>

<tr valign="top" bgcolor="#FFFFFF">
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
</tr>

<tr valign="top" bgcolor="#ffffff">
<td align="left"><font size="2" face="serif">10.13</font></td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">Trademark License Agreement dated February 4, 2004 between Del Monte Corporation and Coffee Holding Co, Inc. (incorporated herein by reference to Exhibit 10.13 to the Coffee Holding Co., Inc. Quarterly Report on Form 10-QSB/A for the quarter ended April 30, 2004, filed with the Securities and Exchange Commission on August 26, 2004).</font></td>
</tr>

<tr valign="top" bgcolor="#FFFFFF">
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
</tr>

<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">10.14</font></td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">Proposed employment agreement by and among Coffee Holding Co., Inc. and Andrew Gordon (incorporated herein by reference to the initial filing of this Registration Statement, filed with the Securities and Exchange Commission on June 24, 2004).</font></td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
</tr>

<tr valign="top" bgcolor="#ffffff">
<td align="left"><font size="2" face="serif">10.15</font></td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">Proposed employment agreement by and among Coffee Holding Co., Inc. and David Gordon (incorporated herein by reference to the initial filing of this Registration Statement, filed with the Securities and Exchange Commission on June 24, 2004).</font></td>
</tr>

<tr valign="top" bgcolor="#FFFFFF">
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
</tr>

<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">10.16</font></td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">Form of Lock-up Agreement (incorporated herein by reference to the initial filing of this Registration Statement, filed with the Securities and Exchange Commission on June 24, 2004).</font></td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
</tr>

<tr valign="top" bgcolor="#ffffff">
<td width="10%" align="left"><font size="2" face="serif">10.17</font></td>
<td width="2%" align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">Corporate Brands Agreement dated as of March 30, 2004 by and between Albertson&#8217;s, Inc. and Coffee Holding Co., Inc. (confidential portions have been redacted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission).</font></td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
</tr>

<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">23.1</font></td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">Consent of Lazar Levine &amp; Felix LLP.</font></td>
</tr>

<tr valign="top" bgcolor="#FFFFFF">
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
</tr>

<tr valign="top" bgcolor="#ffffff">
<td align="left"><font size="2" face="serif">23.2</font></td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">Consent of Thacher Proffitt &amp; Wood LLP (incorporated by reference to Exhibit 5.1).</font></td>
</tr>

<tr valign="top" bgcolor="#FFFFFF">
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
</tr>

<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">24.1</font></td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">Powers of Attorney (Included in Signature Page of the initial filing of this Registration Statement).</font></td>
</tr>

<tr valign="top" bgcolor="#FFFFFF">
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
</tr>

<tr valign="top" bgcolor="#ffffff">
<td align="left"><font size="2" face="serif">99.1</font></td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">Consent of Barry Knepper (incorporated herein by reference to Exhibit 99.1 to Amendment No. 1 to the Coffee Holding Co., Inc. Registration Statement on Form SB-2/A, filed with the Securities and Exchange Commission on August 12, 2004).</font></td>
</tr>

<tr valign="top" bgcolor="#FFFFFF">
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
</tr>

<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">99.2</font></td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">Consent of Sal Reda (incorporated herein by reference to Exhibit 99.2 to Amendment No. 1 to the Coffee Holding Co., Inc. Registration Statement on Form SB-2/A, filed with the Securities and Exchange Commission on August 12, 2004).</font></td>
</tr>
</table>


<p align="center"><font size="2" face="serif">II-6</font></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<page>
<a name="pii-8"></a>
<p><a href="#contents"><font size="2">Back to Contents</font></a></p>


<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td width="10%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td><font size="2" face="serif">99.3</font></td>
    <td>&nbsp;</td>
    <td><font size="2" face="serif">Consent of Robert M. Williams (incorporated
        herein by reference to Exhibit 99.3 to Amendment No. 1 to the Coffee
        Holding Co., Inc. Registration Statement on Form SB-2/A, filed with the
    Securities and Exchange Commission on August 12, 2004).</font></td>
  </tr>
</table>

<p align="left"><font size="2" face="serif">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Financial Statement Schedules.</font></p>
<p align="left"><font size="2" face="serif"><b>Item 28.&nbsp;&nbsp;&nbsp;Undertakings.</b></font></p>

<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The undersigned Registrant hereby undertakes to provide to the underwriter at the closing specified in the Underwriting Agreement, certificates in such denominations and registered in such names as required by the underwriter to permit prompt delivery to each purchaser.</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For purposes of determining any liability under the Securities Act of 1933 (the &#147;Act&#148;), the information omitted from the form of prospectus filed as part of this Registration Statement in reliance upon Rule 430A and contained in a form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Act shall be deemed to be part of this Registration Statement as of the time it was declared effective and each post-effective amendment that contains a form of prospectus will be treated as a new registration statement for the securities offered in the registration statement, and that offering of the securities at that time will be treated as the initial bona fide offering of those
securities.</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The undersigned Registrant may elect to request acceleration of the effective date of the registration statement under Rule 461 under the Act.</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Insofar as indemnification for liabilities arising under the Act may be permitted to directors, officers and controlling persons of the undersigned Registrant pursuant to the foregoing provisions, or otherwise, the undersigned Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable.</font></p>


<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the event that a claim for indemnification against such liabilities (other than the payment by the undersigned Registrant  of expenses incurred or paid by a director, officer or controlling person of the undersigned Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the undersigned Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such
issue.</font></p>
<p align="center"><font face="serif" size="2">II-7</font></p>
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<div style="page-break-before:always"></div>
<page>
<a name="pii-9"></a>
<p><a href="#contents"><font size="2">Back to Contents</font></a></p>
<p align="center"><font size="2" face="serif"><b>SIGNATURES</b></font></p>

<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
    accordance with the requirements of the Securities Act of 1933, the Registrant
    certifies that it has reasonable grounds to believe that it meets all of
    the requirements of filing on Form SB-2 and authorized this registration
    statement to be signed on its behalf by the undersigned, thereunto duly authorized,
    in the City of New York, State of New York, on October 18, 2004.</font></p>

<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
<td><font size="2" face="serif">&nbsp;</font></td>
<td width="3%"><font size="2" face="serif">&nbsp;</font></td>
<td width="47%" align="left"><font size="2" face="serif"><b>COFFEE HOLDING CO., INC.</b></font></td>
</tr>
<tr valign="top">
  <td>&nbsp;</td>
  <td>&nbsp;</td>
  <td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td><font size="2" face="serif">&nbsp;</font></td>
<td><font size="2" face="serif">By:</font></td>
<td align="left">
<font size="2" face="serif"> <u>  /s/ Andrew Gordon&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u></font></td>
</tr>
<tr valign="top">
<td><font size="2" face="serif">&nbsp;</font></td>
<td><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">Andrew Gordon, President and </font></td>
</tr>
<tr valign="top">
<td><font size="2" face="serif">&nbsp;</font></td>
<td><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">Chief Executive Officer</font></td>
</tr>
</table>
<p align="center"><font size="2" face="serif">POWER OF ATTORNEY</font></p>

<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Andrew Gordon, as their true and lawful attorney-in-fact in any and agent, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities to sign the Form SB-2 Registration Statement and any and all amendments thereto, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the U.S. Securities and Exchange Commission, granting unto each said attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite and necessary to be done as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent, or either one of his or their substitute or substitutes, may lawfully do or cause to be done by virtue hereof.</font></p>

<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In accordance with the requirements of the Securities Act of 1933, this Registration Statement was signed by the following persons in the capacities and on the dates indicated.</font></p>

<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top"> <td align="center"><font size="1" face="serif"><u>Name</u></font></td>
<td align="center"><font size="1" face="serif"><u>Title</u></font></td>
<td align="center"><font size="1" face="serif"><u>Date</u></font></td>
</tr>
<tr valign="top">
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td align="center">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left" width="39%"><font size="2" face="serif"><u>/s/ Andrew Gordon</u></font><br><font size="2" face="serif">Andrew Gordon</font></td>
<td align="left" width="35%"><font size="2" face="serif">Chief Executive Officer,
    President, Treasurer and Director (principal executive officer)</font></td>
<td align="center"><font size="2" face="serif">October 18, 2004</font></td>
</tr>
<tr valign="top">
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td align="center">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif"><u>/s/ David Gordon</u></font><br><font size="2" face="serif">David Gordon</font></td>
<td align="left"><font size="2" face="serif">Executive Vice President &#150; Operations, Secretary and Director</font></td>
<td align="center"><font size="2" face="serif">October 18, 2004</font></td>
</tr>
<tr valign="top">
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td align="center">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif"><u>/s/ Richard E. Pino</u></font><br>
<font size="2" face="serif">Richard E. Pino</font></td>
<td align="left"><font size="2" face="serif">Chief Financial Officer (principal
financial and accounting officer)</font></td>
<td align="center"><font size="2" face="serif">October 18, 2004</font></td>
</tr>
<tr valign="top">
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td align="center">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif"><u>/s/ Gerard DeCapua</u></font><br><font size="2" face="serif">Gerard DeCapua</font></td>
<td align="left"><font size="2" face="serif">Director</font></td>
<td align="center"><font size="2" face="serif">October 18, 2004</font></td>
</tr>
<tr valign="top">
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td align="center">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif"><u>/s/ Daniel Dwyer</u></font><br><font size="2" face="serif">Daniel Dwyer</font></td>
<td align="left"><font size="2" face="serif">Director</font></td>
<td align="center"><font size="2" face="serif">October 18, 2004</font></td>
</tr>
</table>

<p align="center">&nbsp;</p>
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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-1.1
<SEQUENCE>2
<FILENAME>b332774ex_1-1.txt
<DESCRIPTION>UNDERWRITING AGREEMENT
<TEXT>
<PAGE>

                                                                     EXHIBIT 1.1



                        1,600,000 SHARES OF COMMON STOCK

                            COFFEE HOLDING CO., INC.

                             UNDERWRITING AGREEMENT

                           _______________ ____, 2004


MAXIM GROUP LLC
405 Lexington Avenue
New York, NY 10174
As Representative of the Underwriters
named on Schedule A hereto

Ladies and Gentlemen:

         Coffee Holding Co., Inc., a corporation organized and existing under
the laws of the State of Nevada (the "COMPANY"), confirms its agreement, subject
to the terms and conditions set forth herein, with each of the underwriters
listed on Schedule A hereto (collectively, the "UNDERWRITERS"), for whom Maxim
Group LLC is acting as Representative (in such capacity, the "REPRESENTATIVE"),
to sell and issue to the Underwriters an aggregate of 1,600,000 shares (the
"FIRM SHARES") of its common stock, par value $0.001 per share (the "COMMON
STOCK"). In addition, for the sole purpose of covering over-allotments in
connection with the sale of the Firm Shares, the Company proposes to sell and
issue to the Underwriters, at the Representative's option, up to an additional
240,000 shares of Common Stock as set forth herein (the "ADDITIONAL SHARES").
The Firm Shares and any Additional Shares purchased by the Underwriters are
referred to herein as the "SHARES." The Shares are more fully described in the
Registration Statement and Prospectus (as each such term is hereinafter
respectively defined). The offering and sale of the Shares contemplated by this
underwriting agreement (this "AGREEMENT") is referred to herein as the
"OFFERING."

         1. Representations and Warranties of the Company. The Company
represents, warrants and covenants to, and agrees with, each of the Underwriters
that, as of the date hereof and as of the First Closing Date and each Additional
Closing Date (as each such term is hereinafter respectively defined)(the First
Closing Date and each Additional Closing Date, if any, are referred to herein as
the "CLOSING DATE"):

                  (a) The Company has filed with the Securities and Exchange
Commission (the "COMMISSION") a registration statement on Form SB-2
(Registration No. 333-116838), and amendments thereto, and related preliminary
prospectuses for the registration under the Securities Act of 1933, as amended
(the "SECURITIES ACT"), of the Shares which registration statement, as so
amended (including post-effective amendments, if any), has been declared
effective by the Commission and copies of which have heretofore been delivered
to the Underwriters. The registration statement, as amended at the time it
became effective, including the prospectus, financial statements, schedules,
exhibits and other information (if any) deemed to
<PAGE>

                                                                     Maxim Group
                                                        ______________ ___, 2004
                                                                    Page 2 of 36


be part of the registration statement at the time of effectiveness pursuant to
Rule 430A under the Securities Act, is hereinafter referred to as the
"REGISTRATION STATEMENT." If the Company has filed, or is required pursuant to
the terms hereof to file, a registration statement pursuant to Rule 462(b) under
the Securities Act registering additional shares of Common Stock (a "RULE 462(B)
REGISTRATION STATEMENT"), then, unless otherwise specified, any reference herein
to the term "REGISTRATION STATEMENT" shall be deemed to include such Rule 462(b)
Registration Statement. Other than a Rule 462(b) Registration Statement, which,
if filed, becomes effective upon filing, no other document with respect to the
Registration Statement has heretofore been filed with the Commission. All of the
Shares have been registered under the Securities Act pursuant to the
Registration Statement or, if any Rule 462(b) Registration Statement is filed,
will be duly registered under the Securities Act with the filing of such Rule
462(b) Registration Statement. Based on communications from the Commission, no
stop order suspending the effectiveness of either the Registration Statement or
the Rule 462(b) Registration Statement, if any, has been issued and no
proceeding for that purpose has been initiated or threatened by the Commission.
The Company, if required by the Securities Act and the rules and regulations of
the Commission (the "RULES AND REGULATIONS"), shall file the prospectus with the
Commission pursuant to Rule 424(b) under the Securities Act ("RULE 424(B)"). The
prospectus, in the form in which it is to be filed with the Commission pursuant
to Rule 424(b), or, if the prospectus is not to be filed with the Commission
pursuant to Rule 424(b), the prospectus in the form included as part of the
Registration Statement at the time the Registration Statement became effective,
is hereinafter referred to as the "PROSPECTUS," except that if any revised
prospectus or prospectus supplement shall be provided to the Underwriters by the
Company for use in connection with the Offering which differs from the
Prospectus (whether or not such revised prospectus or prospectus supplement is
required to be filed by the Company pursuant to Rule 424(b)), the term
"PROSPECTUS" shall also refer to such revised prospectus or prospectus
supplement, as the case may be, from and after the time it is first provided to
the Underwriters for such use. Any preliminary prospectus or prospectus subject
to completion included in the Registration Statement or filed with the
Commission pursuant to Rule 424 under the Securities Act is hereafter called a
"PRELIMINARY PROSPECTUS." Any reference herein to the Registration Statement,
any Preliminary Prospectus or the Prospectus shall be deemed to refer to and
include the exhibits incorporated by reference therein pursuant to the Rules and
Regulations on or before the effective date of the Registration Statement, the
date of such Preliminary Prospectus or the date of the Prospectus, as the case
may be. Any reference herein to the terms "amend", "amendment" or "supplement"
with respect to the Registration Statement, any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include: (i) the filing of any
document under the Securities Exchange Act of 1934, as amended, and together
with the Rules and Regulations promulgated thereunder (the "EXCHANGE ACT"),
after the effective date of the Registration Statement, the date of such
Preliminary Prospectus or the date of the Prospectus, as the case may be, which
is incorporated therein by reference, and (ii) any such document so filed. All
references in this Agreement to the Registration Statement, the Rule 462(b)
Registration Statement, a Preliminary Prospectus and the Prospectus, or any
amendments or supplements to any of the foregoing shall be deemed to include any
copy thereof filed with the Commission pursuant to its Electronic Data
Gathering, Analysis and Retrieval System ("EDGAR").
<PAGE>

                                                                     Maxim Group
                                                        ______________ ___, 2004
                                                                    Page 3 of 36


                  (b) At the time (1) of the effectiveness of the Registration
Statement or any Rule 462(b) Registration Statement or the effectiveness of any
post-effective amendment to the Registration Statement, (2) when the Prospectus
is first filed with the Commission pursuant to Rule 424(b), (3) when any
supplement to or amendment of the Prospectus is filed with the Commission and
(4) of the First Closing Date and each Additional Closing Date, if any, in the
case of the items referred to in clauses (1) through (4) above, the Registration
Statement and the Prospectus and any amendments thereof and supplements or
exhibits thereto complied or will comply in all material respects with the
applicable provisions of the Securities Act, the Exchange Act and the Rules and
Regulations, and did not and will not contain an untrue statement of a material
fact and did not and will not omit to state any material fact required to be
stated therein or necessary in order to make the statements therein: (i) in the
case of the Registration Statement, not misleading, and (ii) in the case of the
Prospectus in light of the circumstances under which they were made, not
misleading. When any Preliminary Prospectus was first filed with the Commission
(whether filed as part of the Registration Statement for the registration of the
Shares or any amendment thereto or pursuant to Rule 424(a) under the Securities
Act) and when any amendment thereof or supplement thereto was first filed with
the Commission, such Preliminary Prospectus and any amendments thereof and
supplements thereto complied in all material respects with the applicable
provisions of the Securities Act, the Exchange Act and the Rules and Regulations
and did not contain an untrue statement of a material fact and did not omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading. No representation and warranty is made in this subsection
(b), however, with respect to any information contained in or omitted from the
Registration Statement or the Prospectus or any related Preliminary Prospectus
or any amendment thereof or supplement thereto in reliance upon and in
conformity with information furnished in writing to the Company by or on behalf
of any Underwriter through the Representative specifically for use therein. The
parties acknowledge and agree that such information provided by or on behalf of
any Underwriter consists solely of the information contained in the ___
paragraph of the cover page and in paragraphs ___________ under the caption
"Underwriting" in the Prospectus.

                  (c) Lazar Levine & Felix LLP, whose reports relating to the
Company are included in the Registration Statement and who have delivered the
letters referred to in Section 6(e), are independent public accountants as
required by the Securities Act, the Exchange Act and the Rules and Regulations.

                  (d) Subsequent to the respective dates as of which information
is presented in the Registration Statement and the Prospectus, and except as
disclosed in the Registration Statement and the Prospectus: (i) the Company has
not declared, paid or made any dividends or other distributions of any kind on
or in respect of its capital stock, and (ii) there has been no material adverse
change or material adverse effect (or any development which may result in a
material adverse change or a material adverse effect in the future), whether or
not arising from transactions in the ordinary course of business, in or
affecting: (A) the business, condition (financial or otherwise), results of
operations, shareholders' equity, properties or prospects of the Company; (B)
the long-term debt or capital stock of the Company; or (C) the Offering or
<PAGE>

                                                                     Maxim Group
                                                        ______________ ___, 2004
                                                                    Page 4 of 36


consummation of any of the other transactions contemplated by this Agreement,
the Registration Statement or the Prospectus (a "MATERIAL ADVERSE CHANGE" or a
"MATERIAL ADVERSE EFFECT"). Since the date of the latest balance sheet presented
in the Registration Statement and the Prospectus, the Company has not incurred
or undertaken any liabilities or obligations, whether direct or indirect,
liquidated or contingent, matured or unmatured, or entered into any
transactions, including any acquisition or disposition of any business or asset,
which are material to the Company, except for liabilities, obligations and
transactions which are disclosed in the Registration Statement and the
Prospectus.

                  (e) As of the dates indicated in the Prospectus, the
authorized, issued and outstanding shares of capital stock of the Company were
as set forth in the Prospectus in the column labeled "Actual" under the section
thereof captioned "Capitalization" and, after giving effect to the Offering and
the application of the proceeds of the Offering as set forth in the Prospectus,
the Registration Statement and the Prospectus, will be as set forth in the
column labeled "As Adjusted" in such section. All of the issued and outstanding
shares of capital stock of the Company are fully paid and non-assessable and
have been duly and validly authorized and issued, in compliance with all
applicable state, federal and foreign securities laws and not in violation of or
subject to any preemptive or similar right that does or will entitle any Person
(as defined below), upon the issuance or sale of any security, to acquire from
the Company any Relevant Security. As used herein, the term "RELEVANT SECURITY"
means Common Stock or any other security of the Company that is convertible
into, or exercisable or exchangeable for, Common Stock or other equity
securities of the Company (including any other equity security that is
convertible into, or exercisable or exchangeable for, Common Stock), or that
holds the right to acquire Common Stock or other equity securities of the
Company (including any other equity security that is convertible into, or
exercisable or exchangeable for, Common Stock), except for such rights as may
have been fully satisfied or waived prior to the effectiveness of the
Registration Statement. As used herein, the term "PERSON" means any individual,
corporation, trust, partnership, joint venture, limited liability company or
other entity, in each such case, whether foreign or domestic. The Company has
not issued any Relevant Security since February 1998.

                  (f) The Shares have been duly and validly authorized and, when
issued, delivered and paid for in accordance with this Agreement and as
described in the Prospectus on each of the First Closing Date and each
Additional Closing Date, as applicable, will be duly and validly issued, fully
paid and non-assessable, will have been issued in compliance with all applicable
state and federal securities laws and will not have been issued in violation of
or subject to any preemptive or similar right that does or will entitle any
Person to acquire any Relevant Security from the Company upon issuance or sale
of Shares in the Offering. The Underwriters will receive good title to the
Shares purchased by them, respectively, free and clear of all liens,
encumbrances, equities or claims or other defects of title whatsoever. No
further approval or authority of the shareholders or the Board of Directors of
the Company will be required for the issuance and sale of the Shares as
contemplated herein. The shares of Common Stock representing the Shares conform
to the descriptions thereof contained in the Registration Statement and the
Prospectus. Except as disclosed in the Registration Statement and the
<PAGE>

                                                                     Maxim Group
                                                        ______________ ___, 2004
                                                                    Page 5 of 36


Prospectus, the Company does not have any outstanding warrants, options to
purchase, or any preemptive rights or other rights to subscribe for or to
purchase, or any contracts or commitments to issue or sell, any Relevant
Security. The shares of Common Stock underlying the Stock Purchase Warrant (the
"WARRANT SHARES") to be issued to the Representative (the "STOCK PURCHASE
WARRANT") have been reserved for issuance upon the exercise of the Stock
Purchase Warrant and when issued and sold in accordance with the terms of the
Stock Purchase Warrant, will be duly authorized, validly issued, fully paid and
non-assessable and free of preemptive rights and no personal liability will
attach to the ownership thereof.

                  (g) The Company does not have any Subsidiaries (as defined in
Rule 405 of the Rules and Regulations). The Company holds no ownership or other
interest, nominal or beneficial, direct or indirect, in any corporation,
partnership, joint venture or other business entity. No director or officer
(including Sterling Gordon) of the Company named in the Prospectus holds any
direct equity, debt or other pecuniary interest in any Person with whom the
Company does business or is in privity of contract with, other than, in each
case, indirectly through the ownership by such individuals of shares of Common
Stock.

                  (h) The Company has been duly organized and is validly
existing as a corporation under the laws of the State of Nevada. The Company has
all requisite power and authority to carry on its business as it is currently
being conducted and as described in the Prospectus, and to own, lease and
operate its properties. The Company is duly qualified to do business and is in
good standing as a foreign corporation in each jurisdiction in which the
character or location of its properties (owned, leased or licensed) or the
nature or conduct of its business makes such qualification necessary, except, in
each case, for those failures to be so qualified or in good standing which
(individually and in the aggregate) could not reasonably be expected to have a
Material Adverse Effect.

                  (i) The Company: (i) is not in violation of its articles of
incorporation or by-laws, and (ii) is not in default under, and no event has
occurred which, with notice or lapse of time or both, would constitute a default
under or result in the creation or imposition of any Lien (as defined below)
upon any of its properties or assets pursuant to any indenture, mortgage, deed
of trust, loan agreement or other agreement or instrument to which it is a party
or by which it is bound or to which any of its properties or assets is subject,
except, in the case of clause (ii) above for any Lien disclosed in the
Registration Statement and the Prospectus. For purposes of this Agreement,
"LIEN" means any lien, charge, mortgage, pledge, security interest, claim,
equity, trust or other encumbrance, preferential arrangement, defect or
restriction of any kind whatsoever.

                  (j) The Company has full right, power and authority to execute
and deliver this Agreement and the Stock Purchase Warrant, to perform its
obligations hereunder and thereunder and to consummate each of the transactions
contemplated by this Agreement and the Stock Purchase Warrant. The Company has
duly and validly authorized this Agreement and the Stock Purchase Warrant and
each of the transactions contemplated by this Agreement and the Stock Purchase
Warrant. This Agreement has been duly and validly executed and delivered by
<PAGE>

                                                                     Maxim Group
                                                        ______________ ___, 2004
                                                                    Page 6 of 36


the Company and constitutes the legal, valid and binding obligation of the
Company and is enforceable against the Company in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights generally
and except as enforceability may be subject to general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law). The Stock Purchase Warrant, when executed and delivered by
the Company, will have been duly and validly executed and delivered by the
Company and will constitute the legal, valid and binding obligation of the
Company and will be enforceable against the Company in accordance with its
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors'
rights generally and except as enforceability may be subject to general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).

                  (k) The execution, delivery, and performance of this Agreement
and the Stock Purchase Warrant and the consummation of the transactions
contemplated by this Agreement and the Stock Purchase Warrant do not and will
not: (i) conflict with, require consent under or result in a breach of any of
the terms and provisions of, or constitute a default (or an event which with
notice or lapse of time, or both, would constitute a default) under, or result
in the creation or imposition of any Lien upon any of the Company's properties
or assets pursuant to any indenture, mortgage, deed of trust, loan agreement or
other agreement, instrument, franchise, license or permit to which the Company
is a party or by which the Company or its properties, operations or assets may
be bound or (ii) violate or conflict with any provision of the articles of
incorporation or by-laws of the Company, or (iii) violate or conflict with any
law, rule, regulation, ordinance, directive, judgment, decree or order of any
judicial, regulatory or other legal or governmental agency or body, domestic or
foreign.

                  (l) The Company has all necessary consents, approvals,
authorizations, orders, registrations, qualifications, licenses, filings and
permits of, with and from all judicial, regulatory and other legal or
governmental agencies and bodies and all third parties, foreign and domestic
(collectively, the "CONSENTS"), to own, lease and operate its properties and
conduct its business as it is now being conducted and as disclosed in the
Registration Statement and the Prospectus, and each such Consent is valid and in
full force and effect. The Company has not received notice of any investigation
or proceeding which has resulted in or, if decided adversely to the Company,
could reasonably be expected to result in, the revocation of, or imposition of a
materially burdensome restriction on, any Consent. No Consent contains a
materially burdensome restriction not adequately disclosed in the Registration
Statement and the Prospectus.

                  (m) The Company is in compliance with all applicable laws,
rules, regulations, ordinances, directives, judgments, decrees and orders,
foreign and domestic, except for those the non-compliance with which would not
have a Material Adverse Effect.

                  (n) No Consent of, with or from any judicial, regulatory or
other legal or governmental agency or body or any third party, foreign or
domestic, is required for the execution, delivery and performance of this

<PAGE>

                                                                     Maxim Group
                                                        ______________ ___, 2004
                                                                    Page 7 of 36


Agreement or the Stock Purchase Warrant or the consummation of the transactions
contemplated by this Agreement or the Stock Purchase Warrant, including the
issuance, sale and delivery of the Shares and the Warrant Shares to be issued,
sold and delivered hereunder and thereunder, except the registration under the
Securities Act of the Shares and the Warrant Shares, which has become effective,
and such Consents as may be required under state securities or blue sky laws or
the by-laws and rules of the American Stock Exchange ("AMEX"), the National
Association of Securities Dealers, Inc. (the "NASD") or NASD Regulation, Inc. in
connection with the purchase and distribution of the Shares by the Underwriters,
each of which has been obtained and is in full force and effect.

                  (o) Except as disclosed in the Registration Statement and the
Prospectus, there is no judicial, regulatory, arbitral or other legal or
governmental proceeding or other litigation or arbitration, domestic or foreign,
pending to which the Company is a party or of which any property, operations or
assets of the Company is the subject which, individually or in the aggregate, if
determined adversely to the Company, could reasonably be expected to have a
Material Adverse Effect. To the Company's knowledge, no such proceeding,
litigation or arbitration is threatened or contemplated.

                  (p) The financial statements of the Company included in the
Registration Statement and the Prospectus, including the notes thereto, and the
supporting schedules included in the Registration Statement and the Prospectus,
present fairly the financial position of the Company as of the dates indicated
and the cash flows and results of operations of the Company for the periods
specified. Except as otherwise stated in the Registration Statement and the
Prospectus, said financial statements have been prepared in conformity with
United States generally accepted accounting principles applied on a consistent
basis throughout the periods involved. The supporting schedules included in the
Registration Statement and the Prospectus present fairly the information
required to be stated therein. No other financial statements or supporting
schedules are required to be included or incorporated by reference in the
Registration Statement. The other financial and statistical information included
in the Registration Statement and the Prospectus present fairly the information
included therein and have been prepared on a basis consistent with that of the
financial statements that are included in the Registration Statement and the
Prospectus and the books and records of the Company.

                  (q) There are no pro forma or as adjusted financial statements
which are required to be included in the Registration Statement and the
Prospectus in accordance with Regulation S-X which have not been included as so
required. The pro forma and pro forma as adjusted financial information included
in the Registration Statement and the Prospectus has been properly compiled and
prepared in accordance with the applicable requirements of the Securities Act
and the Rules and Regulations and includes all adjustments necessary to present
fairly in accordance with generally accepted accounting principles the pro forma
and as adjusted financial position of the Company at the respective dates
indicated and its cash flows and results of operations for the respective
periods specified. The assumptions used in preparing the pro forma and pro forma
as adjusted financial information included in the Registration Statement and the
Prospectus provide a reasonable basis for presenting the significant effects

<PAGE>

                                                                     Maxim Group
                                                        ______________ ___, 2004
                                                                    Page 8 of 36


directly attributable to the transactions or events described therein. The
related pro forma and pro forma as adjusted adjustments give appropriate effect
to those assumptions; and the pro forma and pro forma as adjusted financial
information reflect the proper application of those adjustments to the
corresponding historical financial statement amounts.

                  (r) The statistical, industry-related and market-related data
included in the Registration Statement and the Prospectus are based on or
derived from sources which the Company reasonably and in good faith believes are
reliable and accurate, and such data agree with the sources from which they are
derived.

                  (s) The Company maintains a system of internal accounting and
other controls sufficient to provide reasonable assurances that: (i)
transactions are executed in accordance with management's general or specific
authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with United States generally
accepted accounting principles and to maintain accountability for assets, (iii)
access to assets is permitted only in accordance with management's general or
specific authorization, and (iv) the recorded accounting for assets is compared
with existing assets at reasonable intervals and appropriate action is taken
with respect to any differences.

                  (t) As of the effective date of the Registration Statement,
the Company's Board of Directors shall have validly appointed an audit
committee, nominating committee and compensation committee whose composition
satisfies the requirements of the Rules of AMEX (the "AMEX RULES") and the Board
of Directors and/or audit committee and the nominating committee has each
adopted a charter that satisfies the requirements the AMEX Rules. Neither the
Board of Directors nor the audit committee has been informed, nor is any
director of the Company aware, of: (i) any significant deficiencies and material
weaknesses in the design or operation of internal control over financial
reporting which are reasonably likely to adversely affect the Company's ability
to record, process, summarize and report financial information; or (ii) any
fraud, whether or not material, that involves management or other employees who
have a significant role in the Company's internal control over financial
reporting.

                  (u) The Company has not violated: (i) the Bank Secrecy Act, as
amended, (ii) the Money Laundering Control Act of 1986, as amended, (iii) the
Foreign Corrupt Practices Act, or (iv) the Uniting and Strengthening of America
by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA
PATRIOT ACT) Act of 2001, and/or the rules and regulations promulgated under any
such law, or any successor law, except for such violations which, singly or in
the aggregate, would not have a Material Adverse Effect.

                  (v) Neither the Company nor any of its Affiliates (within the
meaning of Rule 144 under the Securities Act) (collectively, "AFFILIATES") has
taken, directly or indirectly, any action which constitutes or is designed to
cause or result in, or which could reasonably be expected to constitute, cause
or result in, the stabilization or manipulation of the price of any security to
facilitate the sale or resale of the Shares.
<PAGE>

                                                                     Maxim Group
                                                        ______________ ___, 2004
                                                                    Page 9 of 36


                  (w) Neither the Company nor any of its Affiliates has, prior
to the date hereof, made any offer or sale of any securities which are required
to be "integrated" pursuant to the Securities Act or the Rules and Regulations
with the offer and sale of the Shares pursuant to the Registration Statement.
Except as disclosed in the Registration Statement, the Prospectus or in any
public filings relating to the Company filed with the Commission, neither the
Company nor any of its Affiliates has sold or issued any Relevant Security
during the six-month period preceding the date of the Prospectus, including but
not limited to any sales pursuant to Rule 144A or Regulation D or S under the
Securities Act, other than shares of Common Stock issued pursuant to employee
benefit plans, qualified stock option plans or employee compensation plans or
pursuant to outstanding options, rights or warrants as described in the
Registration Statement and the Prospectus.

                  (x) Except as disclosed in the Registration Statement and the
Prospectus, no holder of any Relevant Security has any rights to require
registration of any Relevant Security as part or on account of, or otherwise in
connection with, the offer and sale of the Shares contemplated hereby, and any
such rights so disclosed have either been fully complied with by the Company or
effectively waived by the holders thereof, and any such waivers remain in full
force and effect.

                  (y) The documents, exhibits or other materials incorporated or
deemed to be incorporated by reference in the Prospectus, at the time they were
or hereafter are filed with the Commission, complied and will comply in all
material respects with the requirements of the Securities Act, the Exchange Act
and the Rules and Regulations, and, when read together with the other
information in the Prospectus, do not and, in the case of any Prospectus filed
after the date hereof, will not contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading.

                  (z) The conditions for use of Form SB-2 to register the
Offering under the Securities Act, as set forth in the General Instructions to
such Form, have been satisfied.

                  (aa) The Company is not and, at all times up to and including
consummation of the transactions contemplated by this Agreement, and after
giving effect to application of the net proceeds of the Offering, will not be,
subject to registration as an "investment company" under the Investment Company
Act of 1940, as amended, and is not and will not be an entity "controlled" by an
"investment company" within the meaning of such act.

                  (bb) There are no contracts or other documents (including,
without limitation, any voting agreement), which are required to be described in
the Registration Statement and the Prospectus or filed as exhibits to the
Registration Statement by the Securities Act, the Exchange Act or the Rules and
Regulations and which have not been so described, filed or incorporated by
reference.
<PAGE>

                                                                     Maxim Group
                                                        ______________ ___, 2004
                                                                   Page 10 of 36


                  (cc) No relationship, direct or indirect, exists between or
among any of the Company or its Affiliates, on the one hand, and any director,
officer, shareholder, customer or supplier of the Company or any of their
respective Affiliates, on the other hand, which is required by the Securities
Act, the Exchange Act or the Rules and Regulations to be described in the
Registration Statement or the Prospectus which is not so described and described
as required. There are no outstanding loans, advances (except normal advances
for business expenses in the ordinary course of business) or guarantees of
indebtedness by the Company to or for the benefit of any of the officers or
directors of the Company or any of their respective family members, except as
disclosed in the Registration Statement and the Prospectus. The Company has not,
in violation of the Sarbanes-Oxley Act of 2002 ("SARB-OX"), directly or
indirectly, extended or maintained credit, arranged for the extension of credit,
or renewed an extension of credit, in the form of a personal loan to or for any
director or executive officer of the Company.

                  (dd) The Company is in material compliance with the provisions
of Sarb-Ox and the Rules and Regulations promulgated thereunder and related or
similar rules and regulations promulgated by AMEX or any other governmental or
self regulatory entity or agency, except for such violations which, singly or in
the aggregate, would not have a Material Adverse Effect. Without limiting the
generality of the foregoing, as of the effective date of the Registration
Statement: (i) all members of the Company's Board of Directors who are required
to be "independent" (as that term is defined under applicable laws, rules and
regulations), including, without limitation, all members of the audit committee
of the Company's Board of Directors, meet the qualifications of independence as
set forth under applicable laws, rules and regulations and (ii) the audit
committee of the Company's Board of Directors has at least one member who is an
"audit committee financial expert" (as that term is defined under applicable
laws, rules and regulations).

                  (ee) Except as disclosed in the Registration Statement and the
Prospectus, there are no contracts, agreements or understandings between the
Company and any Person that would give rise to a valid claim against the Company
or any Underwriter for a brokerage commission, finder's fee or other like
payment in connection with the transactions contemplated by this Agreement and
the Stock Purchase Warrant or, to the Company's knowledge, any arrangements,
agreements, understandings, payments or issuances with respect to the Company or
any of its officers, directors, shareholders, partners, employees, or Affiliates
that may affect the Underwriters' compensation as determined by the NASD.

                  (ff) The Company owns or leases all such properties as are
necessary to the conduct of its business as presently operated and as proposed
to be operated as described in the Registration Statement and the Prospectus.
The Company has good and marketable title in fee simple to all real property and
good and marketable title to all personal property owned by it, in each case,
free and clear of all Liens, except such Liens as are described in the
Registration Statement and the Prospectus or such Liens as do not (individually
or in the aggregate) materially affect the business or prospects of the Company.
Any real property and buildings held under lease or sublease by the Company are
held by the Company under valid, subsisting and enforceable leases with such
exceptions as are not material to, and do not interfere with, the use made and

<PAGE>

                                                                     Maxim Group
                                                        ______________ ___, 2004
                                                                   Page 11 of 36


proposed to be made of such property and buildings by the Company. The Company
has not received any notice of any claim adverse to its ownership of any real or
personal property or of any claim against the continued possession of any real
property, whether owned or held under lease or sublease by the Company.

                  (gg) The Company: (i) owns or possesses adequate right to use
all patents, patent applications, trademarks, service marks, trade names,
trademark registrations, service mark registrations, copyrights, licenses,
formulae, customer lists, and know-how and other intellectual property
(including trade secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures, "INTELLECTUAL PROPERTY")
necessary for the conduct of its business as being conducted and as described in
the Registration Statement and Prospectus and (ii) has no knowledge that the
conduct of its business does or will conflict with, and the Company has not
received any notice of any claim of conflict with, any such right of others. To
the Company's knowledge, all material technical information developed by and
belonging to the Company which has not been patented has been kept confidential
so, among other things, all such information may be deemed proprietary to the
Company. Except as set forth in the Registration Statement or the Prospectus,
the Company has not granted or assigned to any other Person any right to sell
the current products and services of the Company. To the Company's knowledge,
there is no infringement by third parties of any such Intellectual Property
owned by the Company; there is no pending or, to the Company's knowledge,
threatened action, suit, proceeding or claim by others challenging the Company's
rights in or to any such Intellectual Property, and the Company is unaware of
any facts which would form a reasonable basis for any such claim; and there is
no pending or, to the Company's knowledge, threatened action, suit, proceeding
or claim by others that the Company infringes or otherwise violates any patent,
trademark, copyright, trade secret or other proprietary rights of others, and
the Company is unaware of any other fact which would form a reasonable basis for
any such claim.

                  (hh) The Company maintains insurance of the types and in the
amounts which are customary for companies engaged in similar businesses,
including, but not limited to: (A) directors' and officers' insurance (including
insurance covering the Company, its directors and officers for liabilities or
losses arising in connection with this Offering, including, without limitation,
liabilities or losses arising under the Securities Act, the Exchange Act, the
Rules and Regulations and applicable foreign securities laws), (B) insurance
covering real and personal property owned or leased by the Company against
theft, damage, destruction, acts of vandalism and all other risks customarily
insured against and (C) business interruption insurance. There are no claims by
the Company under any policy or instrument described in this subparagraph as to
which any insurance company is denying liability or defending under a
reservation of rights clause. All of the insurance policies described in this
subparagraph are in full force and effect. The Company has not been refused any
insurance coverage sought or applied for, and the Company has no reason to
believe that it will not be able to renew its existing insurance coverage as and
when such coverage expires or to obtain similar coverage from similar insurers
as may be necessary to continue its business at a cost that would not materially

<PAGE>

                                                                     Maxim Group
                                                        ______________ ___, 2004
                                                                   Page 12 of 36


adversely affect the business, business prospects, properties, condition
(financial or otherwise) or results of operations of the Company.

                  (ii) The Company has accurately prepared and timely filed all
federal, state, foreign and other tax returns that are required to be filed by
it and has paid or made provision for the payment of all taxes, assessments,
governmental or other similar charges, including without limitation, all sales
and use taxes and all taxes which the Company is obligated to withhold from
amounts owing to employees, creditors and third parties, with respect to the
periods covered by such tax returns (whether or not such amounts are shown as
due on any tax return)[, other than taxes that have been reserved and accrued on
the balance sheet of the Company or which the Company is contesting in good
faith] [Are there any?]. No deficiency assessment with respect to a proposed
adjustment of the Company's federal, state, local or foreign taxes is pending
or, to the Company's knowledge, threatened. The accruals and reserves on the
books and records of the Company in respect of tax liabilities for any taxable
period not finally determined are adequate to meet any assessments and related
liabilities for any such period and, since the date of the Company's most recent
audited financial statements, the Company has not incurred any liability for
taxes other than in the ordinary course of its business. There is no tax Lien,
whether imposed by any federal, state, foreign or other taxing authority,
outstanding against the assets, properties or business of the Company.

                  (jj) No material labor dispute by the employees of the Company
currently exists or, to the Company's knowledge, is imminent.

                  (kk) The Company has at all times operated its business in
material compliance with all Environmental Laws (as defined below), and no
expenditures are or will be required in order to comply therewith that are
reasonably likely to result in a Material Adverse Effect. The Company has not
received any notice or communication that relates to or alleges any actual or
potential violation or failure to comply with any Environmental Laws that are
reasonably likely to result in a Material Adverse Effect. As used herein, the
term "ENVIRONMENTAL LAWS" means all applicable laws and regulations, including
any licensing, permits or reporting requirements, and any action by a Federal,
state or local governmental entity pertaining to the protection of the
environment, protection of public health, protection of worker health and
safety, or the handling of hazardous materials, including without limitation,
the Clean Air Act, 42 U.S.C. ss. 7401, et seq., the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, 42 U.S.C. ss. 9601, et seq.,
the Federal Water Pollution Control Act, 33 U.S.C. ss. 1321, et seq., the
Hazardous Materials Transportation Act, 49 U.S.C. ss. 1801, et seq., the
Resource Conservation and Recovery Act, 42 U.S.C. ss. 690-1, et seq., and the
Toxic Substances Control Act, 15 U.S.C. ss. 2601, et seq.

                  (ll) Except as set forth in the Registration Statement or the
Prospectus, the Company is not a party to an "employee benefit plan," as defined
in Section 3(3) of the Employee Retirement Income Security Act of 1974 ("ERISA")
which: (i) is subject to any provision of ERISA and (ii) is or was at any time
maintained, administered or contributed to by the Company and covers any
employee or former employee of the Company or any ERISA Affiliate (as defined

<PAGE>

                                                                     Maxim Group
                                                        ______________ ___, 2004
                                                                   Page 13 of 36


hereafter). These plans are referred to collectively herein as the "EMPLOYEE
PLANS." The term "ERISA AFFILIATE" of any Person means any other Person which,
together with that Person, could be treated as a single employer under Section
414(m) of the Internal Revenue Code of 1986, as amended (the "CODE"), or is an
"affiliate," whether or not incorporated, as defined in Section 407(d)(7) of
ERISA, of such Person.

                  (mm) The Registration Statement and the Prospectus identify
each employment, severance or other similar arrangement or policy and each
material plan or arrangement providing for insurance coverage (including any
self-insured arrangements), workers' compensation, disability benefits,
severance benefits, supplemental unemployment benefits, vacation benefits,
retirement benefits or for deferred compensation, profit-sharing, bonuses, stock
options, stock appreciation or other forms of incentive compensation, or
post-retirement insurance, compensation or benefits which: (i) is not an
Employee Plan, (ii) is entered into, maintained or contributed to, as the case
may be, by the Company or any of its ERISA Affiliates, and (iii) covers any
employee or former employee of the Company or any of its ERISA Affiliates. These
contracts, plans and arrangements are referred to collectively in this Agreement
as the "BENEFIT ARRANGEMENTS." Each Benefit Arrangement has been maintained in
substantial compliance with its terms and with the requirements prescribed by
any and all statutes, orders, rules and regulations that are applicable to that
Benefit Arrangement.

                  (nn) Except as set forth in the Registration Statement or the
Prospectus, there is no liability in respect of post-retirement health and
medical benefits for retired employees of the Company or any of its ERISA
Affiliates other than medical benefits required to be continued under applicable
law. With respect to any of the Company's Employee Plans which are "group health
plans" under Section 4980B of the Code and Section 607(1) of ERISA, there has
been material compliance with all requirements imposed thereunder such that that
the Company or its ERISA Affiliates have no (and will not incur any) loss,
assessment, tax penalty, or other sanction with respect to any such Company
Employee Plan.

                  (oo) Except: (i) as set forth in the Registration Statement or
the Prospectus or (ii) for employment agreements between the Company and each of
Andrew Gordon, the Company's Chief Executive Officer and President, and David
Gordon, the Company's Executive Vice President-Operations, the Company is not a
party to or subject to any employment contract or arrangement providing for
annual future compensation, or the opportunity to earn annual future
compensation (whether through fixed salary, bonus, commission, options or
otherwise) of more than $60,000 to any officer, consultant, director or
employee.

                  (pp) The execution of this Agreement and the Stock Purchase
Warrant and consummation of the Offering does not constitute a triggering event
under any Employee Plan or any other employment contract, whether or not legally
enforceable, which (either alone or upon the occurrence of any additional or
subsequent event) will or may result in any payment (of severance pay or
otherwise), acceleration, increase in vesting, or increase in benefits to any
current or former participant, employee or director of the Company other than an
event that is not material to the financial condition or business of the
Company.
<PAGE>

                                                                     Maxim Group
                                                        ______________ ___, 2004
                                                                   Page 14 of 36


                  (qq) No "prohibited transaction" (as defined in either Section
406 of the ERISA or Section 4975 of Code), "accumulated funding deficiency" (as
defined in Section 302 of ERISA) or other event of the kind described in Section
4043(b) of ERISA (other than events with respect to which the 30-day notice
requirement under Section 4043 of ERISA has been waived) has occurred with
respect to any Employee Plan for which the Company would have any liability;
each Employee Plan of the Company is in compliance in all material respects with
applicable law, including without limitation ERISA and the Code; the Company has
not incurred and does not expect to incur liability under Title IV of ERISA with
respect to the termination of, or withdrawal from any "pension plan"; and each
Employee Plan of the Company that is intended to be qualified under Section
401(a) of the Code is so qualified and nothing has occurred, whether by action
or by failure to act, which could cause the loss of such qualification.

                  (rr) Neither the Company nor, to the Company's knowledge, any
of its employees or agents has at any time: (i) made any unlawful contribution
to any candidate for foreign office, or failed to disclose fully any
contribution in violation of law, or (ii) made any payment to any federal or
state governmental officer or official, or other Person charged with similar
public or quasi-public duties, other than payments that are not prohibited by
the laws of the United States of any jurisdiction thereof.

                  (ss) The Company has not offered, or caused the Underwriters
to offer, the Firm Shares to any Person with the intention of unlawfully
influencing: (i) a customer or supplier of the Company to alter the customer's
or supplier's level or type of business with the Company or (ii) a journalist or
publication to write or publish favorable information about the Company or its
products or services.

                  (tt) The Shares have been authorized for listing on the AMEX.

                  (uu) The Company has not distributed, nor will it distribute
prior to the First Closing Date (as defined in Section 2(b) below), any offering
materials in connection with the offering and sale of the Shares other than the
Preliminary Prospectus, the Prospectus, the Registration Statement or any other
materials permitted by the Securities Act, if any.

                  (vv) The Company has timely filed all reports, schedules,
forms, statements and other documents required to be filed by it with the
Commission pursuant to the reporting requirements of the Exchange Act (all of
the foregoing, and all other documents and registration statements heretofore
filed by the Company with the Commission being hereinafter referred to as the
"SEC DOCUMENTS"). None of the SEC Documents, at the time they were filed with
the Commission (except those SEC Documents that were subsequently amended),
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. As of their respective dates, the financial statements of the
Company included (or incorporated by reference) in the SEC Documents complied as
to form in all material respects with applicable accounting requirements and the

<PAGE>

                                                                     Maxim Group
                                                        ______________ ___, 2004
                                                                   Page 15 of 36


published rules and regulations of the Commission or other applicable rules and
regulations with respect thereto (except those SEC Documents that were
subsequently amended).

                  (ww) As used in this Agreement, references to matters being
"material" with respect to the Company shall mean a material event, change,
condition, status or effect related to the condition (financial or otherwise),
properties, assets (including intangible assets), liabilities, business,
prospects, operations or results of operations of the Company.

                  (xx) As used in this Agreement, the term "knowledge of the
Company" (or similar language) shall mean the knowledge of the officers and
directors of the Company who are named in the Prospectus, with the assumption
that such officers and directors shall have made reasonable and diligent inquiry
of the matters presented (with reference to what is customary and prudent for
the applicable individuals in connection with the discharge by the applicable
individuals of their duties as officers or directors of the Company, as
applicable.

                  Any certificate signed by or on behalf of the Company and
delivered to the Representative or to Lowenstein Sandler PC, counsel for the
Representative ("UNDERWRITERS' COUNSEL"), shall be deemed to be a representation
and warranty by the Company to each Underwriter listed on Schedule A hereto as
to the matters covered thereby.

         2. Purchase, Sale and Delivery of the Shares.

         (a) On the basis of the representations, warranties, covenants and
agreements herein contained, but subject to the terms and conditions herein set
forth, the Company agrees to sell to each Underwriter and each Underwriter,
severally and not jointly, agrees to purchase from the Company, at a purchase
price per share of $__________, the number of Firm Shares set forth opposite
their respective names on Schedule A hereto together with any additional number
of Shares which such Underwriter may become obligated to purchase pursuant to
the provisions of Section 9 hereof.

         (b) Payment of the purchase price for, and delivery of certificates
representing, the Firm Shares shall be made at the offices of the Underwriters'
Counsel, 1251 Avenue of the Americas, 18th Floor, New York, New York 10020, or
at such other place as shall be agreed upon by the Representative and the
Company, at 10:00 A.M., New York City time, on the third (3rd) or, as permitted
under Rule 15c6-1 under the Exchange Act, fourth (4th) business day (unless
postponed in accordance with the provisions of Section 9 hereof) following the
date of the effectiveness of the Registration Statement, or such other time not
later than ten (10) business days after such date as shall be agreed upon by the
Representative and the Company as permitted under Rule 15c6-1 under the Exchange
Act (such time and date of payment and delivery being herein called the "FIRST
CLOSING DATE"). The closing of the payment of the purchase price for, and
delivery of certificates representing, the Firm Shares is referred to herein as
the "FIRST CLOSING."
<PAGE>

                                                                     Maxim Group
                                                        ______________ ___, 2004
                                                                   Page 16 of 36


         (c) Payment of the purchase price for the Firm Shares shall be made by
wire transfer in immediately available funds to or as directed by the Company
upon delivery of certificates for the Firm Shares to the Representative through
the facilities of The Depository Trust Company for the respective accounts of
the several Underwriters. Certificates for the Firm Shares shall be registered
in such name or names and shall be in such denominations as the Representative
may request at least two (2) business days before the First Closing Date. The
Company will permit the Representative to examine and package such certificates
for delivery at least one (1) full business day prior to the First Closing Date.

         (d) In addition, on the basis of the representations, warranties,
covenants and agreements herein contained, but subject to the terms and
conditions herein set forth, the Company hereby grants to the Underwriters an
option to purchase up to an aggregate of 240,000 Additional Shares at the same
purchase price per share to be paid by the Underwriters for the Firm Shares as
set forth in Section 2(a) above, for the sole purpose of covering
over-allotments in the sale of Firm Shares by the Underwriters. This option may
be exercised at any time and from time to time on or before the forty-fifth
(45th) day following the final date of the Prospectus, by written notice from
the Representative to the Company. Such notice shall set forth the aggregate
number of Additional Shares as to which the option is being exercised and the
date and time, as reasonably determined by the Representative, when the
Additional Shares are to be delivered (any such date and time being herein
sometimes referred to as an "ADDITIONAL CLOSING DATE"; the closing of the
payment of the purchase price for, and delivery of certificates representing,
any Additional Shares is referred to herein as an "ADDITIONAL CLOSING");
provided, however, that no Additional Closing Date shall occur earlier than the
First Closing Date or earlier than the second (2nd) full business day after the
date on which the option shall have been exercised nor later than the eighth
(8th) full business day after the date on which the option shall have been
exercised (unless such time and date are postponed in accordance with the
provisions of Section 9 hereof). Upon any exercise of the option as to all or
any portion of the Additional Shares, each Underwriter, acting severally and not
jointly, agrees to purchase from the Company the number of Additional Shares
that bears the same proportion of the total number of Additional Shares then
being purchased as the number of Firm Shares set forth opposite the name of such
Underwriter on Schedule A hereto (or such number increased as set forth in
Section 9 hereof) bears to the total number of Firm Shares that the Underwriters
have agreed to purchase hereunder, subject, however, to such adjustments to
eliminate fractional shares as the Representative in its sole discretion shall
make. In the event the Company declares or pays a dividend or distribution on
its Common Stock, whether in the form of cash, shares of Common Stock or any
other consideration, following the First Closing Date and prior to any
Additional Closing Date, such dividend or distribution shall also be paid on the
Additional Shares issued on such Additional Closing Date.

         (e) Payment of the purchase price for, and delivery of certificates
representing, the Additional Shares shall be made at the office of Underwriters'
Counsel, or at such other place as shall be agreed upon by the Representative
and the Company, at 10:00 A.M., New York City time, on the Additional Closing
Date (unless postponed in accordance with the provisions of Section 9 hereof),
or such other time as shall be agreed upon by the Representative and the
Company.
<PAGE>

                                                                     Maxim Group
                                                        ______________ ___, 2004
                                                                   Page 17 of 36


         (f) Payment of the purchase price for the Additional Shares shall be
made by wire transfer in immediately available funds to or as directed by the
Company upon delivery of certificates for the Additional Shares to the
Representative through the facilities of The Depository Trust Company for the
respective accounts of the several Underwriters. Certificates for the Additional
Shares shall be registered in such name or names and shall be in such
denominations as the Representative may request at least two (2) business days
before the Additional Closing Date. The Company will permit the Representative
to examine and package such certificates for delivery at least one full business
day prior to the Additional Closing Date.

         3. Offering. Upon authorization of the release of the Firm Shares by
the Representative, the Underwriters propose to offer the Shares for sale to the
public upon the terms and conditions set forth in the Prospectus. The
Underwriters may from time to time change the public offering price after the
closing of the initial public offering and increase or decrease the concessions
and discounts to dealers as they may determine.

         4. Covenants of the Company. The Company acknowledges, covenants and
agrees with the Underwriters that:

                  (a) The Registration Statement and any amendments thereto have
been declared effective, and if Rule 430A is used or the filing of the
Prospectus is otherwise required under Rule 424(b), the Company will file the
Prospectus (properly completed if Rule 430A has been used) pursuant to Rule
424(b) within the prescribed time period and will provide evidence satisfactory
to the Representative of such timely filing.

                  The Company will notify the Representative immediately (and,
if requested by the Representative, will confirm such notice in writing): (i)
when any amendments to the Registration Statement become effective, (ii) of any
request by the Commission for any amendment of or supplement to the Registration
Statement or the Prospectus or for any additional information, (iii) of the
Company's intention to file or prepare any supplement or amendment to the
Registration Statement or the Prospectus, (iv) of the mailing or the delivery to
the Commission for filing of any amendment of or supplement to the Registration
Statement or the Prospectus, including but not limited to Rule 462(b) under the
Securities Act, (v) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or any post-effective
amendment thereto or of the initiation, or the threatening, of any proceedings
therefor, it being understood that the Company shall make every effort to avoid
the issuance of any such stop order, (vi) of the receipt of any comments from
the Commission, and (vii) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Shares for sale in any
jurisdiction or the initiation or threatening of any proceeding for that
purpose. If the Commission shall propose or enter a stop order at any time, the
Company will make every reasonable effort to prevent the issuance of any such
stop order and, if issued, to obtain the lifting of such order as soon as
possible. The Company will not file any amendment to the Registration Statement

<PAGE>

                                                                     Maxim Group
                                                        ______________ ___, 2004
                                                                   Page 18 of 36


or any amendment of or supplement to the Prospectus (including the prospectus
required to be filed pursuant to Rule 424(b)) that differs from the Prospectus
on file at the time of the effectiveness of the Registration Statement or file
any document under the Exchange Act if such document would be deemed to be
incorporated by reference into the Prospectus to which the Representative shall
object in writing after being timely furnished in advance a copy thereof. The
Company will provide the Representative with copies of all such amendments,
filings and other documents a sufficient time prior to any filing or other
publication thereof to permit the Representative a reasonable opportunity to
review and comment thereon.

                  (b) The Company shall comply with the Securities Act, the
Exchange Act and all applicable Rules and Regulations to permit completion of
the distribution as contemplated in this Agreement, the Registration Statement
and the Prospectus. If, at any time when a Prospectus relating to the Shares is
required to be delivered under the Securities Act, the Exchange Act and all
applicable Rules and Regulations in connection with the sales of Shares, any
event shall have occurred as a result of which the Prospectus as then amended or
supplemented would, in the judgment of the Underwriters or the Company, include
an untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances existing at the time of delivery to the
purchaser, not misleading, or if, to comply with the Securities Act, the
Exchange Act or the Rules and Regulations, it shall be necessary at any time to
amend or supplement the Prospectus or Registration Statement, or to file any
document which is an exhibit to the Registration Statement or the Prospectus or
in any amendment thereof or supplement thereto, the Company will notify the
Representative promptly and prepare and file with the Commission, subject to
Section 4(a) hereof, an appropriate amendment or supplement (in form and
substance satisfactory to the Representative) which will correct such statement
or omission or which will effect such compliance and will use its best efforts
to have any amendment to the Registration Statement declared effective as soon
as possible.

                  (c) The Company will promptly deliver to the Underwriters and
Underwriters' Counsel a signed copy of the Registration Statement, as initially
filed and all amendments thereto, including all consents and exhibits filed
therewith, and will maintain in the Company's files manually signed copies of
such documents for at least five (5) years after the date of filing thereof. The
Company will promptly deliver to each of the Underwriters such number of copies
of any Preliminary Prospectus, the Prospectus, the Registration Statement, and
all amendments of and supplements to such documents, if any, and all documents
which are exhibits to the Registration Statement and Prospectus or any amendment
thereof or supplement thereto, as the Underwriters may reasonably request. Prior
to 10:00 A.M., New York time, on the business day next succeeding the date of
this Agreement and from time to time thereafter, the Company will furnish the
Underwriters with copies of the Prospectus in New York City in such quantities
as the Underwriters may reasonably request.
<PAGE>

                                                                     Maxim Group
                                                        ______________ ___, 2004
                                                                   Page 19 of 36


                  (d) The Company consents to the use and delivery of the
Preliminary Prospectus by the Underwriters in accordance with Rule 430 and
Section 5(b) of the Securities Act.

                  (e) If the Company elects to rely on Rule 462(b) under the
Securities Act, the Company shall both file a Rule 462(b) Registration Statement
with the Commission in compliance with Rule 462(b) and pay the applicable fees
in accordance with Rule 111 of the Act by the earlier of: (i) 10:00 p.m., New
York City time, on the date of this Agreement, and (ii) the time that
confirmations are given or sent, as specified by Rule 462(b)(2).

                  (f) The Company will use its best efforts, in cooperation with
the Representative, at or prior to the time of effectiveness of the Registration
Statement, to qualify the Shares for offering and sale under the securities laws
relating to the offering or sale of the Shares of such jurisdictions, domestic
or foreign, as the Representative may designate and to maintain such
qualification in effect for so long as required for the distribution thereof,
except that in no event shall the Company be obligated in connection therewith
to qualify as a foreign corporation or to execute a general consent to service
of process.

                  (g) The Company will make generally available to its security
holders and to the Underwriters as soon as practicable, but in any event not
later than twelve (12) months after the effective date of the Registration
Statement (as defined in Rule 158(c) under the Securities Act), an earnings
statement of the Company (which need not be audited) complying with Section
11(a) of the Securities Act and the Rules and Regulations (including, at the
option of the Company, Rule 158).

                  (h) During the twelve (12) months following the First Closing
Date, without the consent of the Representative which shall not be unreasonably
withheld: the Company will not file any registration statement relating to the
offer or sale of any of the Company's securities, including any Registration
Statement on Form S-8. Notwithstanding the foregoing, the Company shall be
permitted to file a Registration Statement on Form S-8 with respect to the
Company's stock option plan described in the Registration Statement.

                  (i) For a period of nine (9) months from the date of the
Prospectus, the Company shall not, directly or indirectly, (1) offer for sale,
sell, pledge or otherwise dispose of (or enter into any transaction or device
which is designed to, or could be expected to, result in the disposition by any
Person at any time in the future of) any Relevant Securities (other than (x) the
Shares, (y) the grant of options to purchase shares of Common Stock under its
existing stock option plan and the issuance of Common Stock to employees or
prospective employees as incentive compensation in an amount (with respect to
the shares of Common Stock underlying the option grants and the issuance of
Common Stock to employees or prospective employees) not to exceed 100,000 shares
of Common Stock in the aggregate; and (z) the issuance of shares of Common Stock
pursuant to currently outstanding options, warrants or rights), or (2) enter
into any swap or other derivatives transaction that transfers to another, in
whole or in part, any of the economic benefits or risks of ownership of such
shares of Common Stock or other Relevant Securities, whether any such
<PAGE>

                                                                     Maxim Group
                                                        ______________ ___, 2004
                                                                   Page 20 of 36


transaction described in clause (1) or (2) above is to be settled by delivery of
Common Stock or other securities, in cash or otherwise, in each case, without
the prior written consent of the Representative; and to cause each officer,
director and each shareholder of the Company set forth on Annex III hereto to
furnish to the Company, prior to the First Closing Date, a letter or letters,
substantially in the form of Annex II hereto. During the nine (9) month period
from the date of the final Prospectus, the Company shall obtain an executed
letter in the form of Annex II from each new officer and director who has not
previously executed such a letter.

                  (j) During the twelve (12) month period following the First
Closing Date, without the consent of the Representative, which consent shall not
be unreasonably withheld, no holders of registration rights relating to
securities of the Company will exercise any such registration rights. The
Company will deliver to the Representative the agreements of such holders of
registration rights to the foregoing effect prior to the First Closing Date in
the form reasonably agreeable to the Representative.

                  (k) During the twelve (12) month period following the First
Closing Date, the Company will not offer or sell any convertible securities
convertible at a price that may, at the time of conversion, be less than the
Fair Market Value of the Common Stock of the date of the original sale. For
purposes of this Section 4, the term "FAIR MARKET VALUE" shall mean the last
sale price of the Common Stock, during normal operating hours, as reported on
AMEX.

                  (l) For a period of one year from the effective date of the
Registration Statement, the Company, at its expense, shall provide the
Representative on a weekly basis with a copy of the Company's weekly transfer
sheets from the previous week and securities positions listings.

                  (m) During the period of three (3) years from the effective
date of the Registration Statement, the Company will furnish to the Underwriters
copies of all reports or other communications (financial or other) furnished to
security holders or from time to time published or publicly disseminated by the
Company, and will deliver to the Underwriters: (i) as soon as they are
available, copies of any reports, financial statements and proxy or information
statements furnished to or filed with the Commission or any national securities
exchange on which any class of securities of the Company is listed; and (ii)
such additional information concerning the business and financial condition of
the Company as the Representative may from time to time reasonably request.

                  (n) The Company will not issue press releases or engage in any
other publicity, without the Representative's prior written consent, for a
period ending at 5:00 p.m. New York time on the first business day following the
thirtieth (30th) day following the First Closing Date, other than normal and
customary releases issued in the ordinary course of the Company's business.
<PAGE>

                                                                     Maxim Group
                                                        ______________ ___, 2004
                                                                   Page 21 of 36


                  (o) On or prior to the First Closing Date, the Company will
have engaged and will continue to engage for no less than one (1) year from the
date of the First Closing Date, a financial public relations firm mutually
acceptable to the Company and the Representative. The Company further agrees to
consult with the Representative as is customary within the securities industry
prior to distribution to third parties of any financial information, news
releases, and/or other publicity regarding the Company, its business, or any
terms of the Offering, it being agreed that the Company shall give the
Representative no less than twelve (12) hours prior notice of any such
distribution and a reasonable opportunity during or prior to such period to
review the contents of the proposed distribution.

                  (p) The Company has or will retain a transfer agent reasonably
acceptable to the Representative for the Shares and shall continue to retain
such transfer agent for a period of three (3) years following the Closing Date.
Notwithstanding the foregoing, the Representative agrees that OTR, Inc. is a
transfer agent reasonably acceptable to it.

                  (q) The Company will apply the net proceeds from the sale of
the Shares as set forth under the caption "Use of Proceeds" in the Prospectus.
Without the written consent of the Representative, no proceeds of the Offering
will be used to pay outstanding loans from officers, directors or shareholders
or to pay any accrued salaries or bonuses to any employees or former employees.

                  (r) The Company will maintain the listing of the Shares on
AMEX or other national securities exchange acceptable to the Representative for
a period of at least five (5) years from the date of this Agreement.

                  (s) The Company, during the period when the Prospectus is
required to be delivered under the Securities Act or the Exchange Act, will file
all documents required to be filed with the Commission pursuant to the
Securities Act, the Exchange Act and the Rules and Regulations within the time
periods required thereby.

                  (t) The Company will use its best efforts to perform all of
its obligations under this Agreement prior to the First Closing Date or any
Additional Closing Date, as the case may be, and to satisfy all conditions
precedent to the delivery of the Firm Shares and the Additional Shares.

                  (u) The Company will not take, and will cause its Affiliates
not to take, directly or indirectly, any action which constitutes or is designed
to cause or result in, or which could reasonably be expected to constitute,
cause or result in, the stabilization or manipulation of the price of any
security to facilitate the sale or resale of the Shares.

                  (v) The Company shall cause to be prepared and delivered to
the Representative, at its expense, within one (1) business day from the
effective date of this Agreement, an Electronic Prospectus to be used by the
Underwriters in connection with the Offering. As used herein, the term
"ELECTRONIC PROSPECTUS" means a form of prospectus, and any amendment or

<PAGE>

                                                                     Maxim Group
                                                        ______________ ___, 2004
                                                                   Page 22 of 36


supplement thereto, that meets each of the following conditions: (i) it shall be
encoded in an electronic format, satisfactory to the Representative, that may be
transmitted electronically by the other Underwriters to offerees and purchasers
of the Shares for at least the period during which a Prospectus relating to the
Shares is required to be delivered under the Securities Act; (ii) it shall
disclose the same information as the paper prospectus and prospectus filed
pursuant to EDGAR, except to the extent that graphic and image material cannot
be disseminated electronically, in which case such graphic and image material
shall be replaced in the electronic prospectus with a fair and accurate
narrative description or tabular representation of such material, as
appropriate; and (iii) it shall be in or convertible into a paper format or an
electronic format, satisfactory to the Representative, that will allow
recipients thereof to store and have continuously ready access to the prospectus
at any future time, without charge to such recipients (other than any fee
charged for subscription to the Internet as a whole and for on-line time). The
Company hereby confirms that it has included or will include in the Prospectus
filed pursuant to EDGAR or otherwise with the Commission and in the Registration
Statement at the time it was declared effective an undertaking that, upon
receipt of a request by an investor or his or her representative within the
period when a prospectus relating to the Shares is required to be delivered
under the Securities Act, the Company shall transmit or cause to be transmitted
promptly, without charge, a paper copy of the Prospectus.

                  (w) The Company will reserve and keep available that maximum
number of its authorized but unissued securities which are issuable upon
exercise of the Stock Purchase Warrant outstanding from time to time.

                  (x) The Company shall take all actions as shall be necessary
to ensure that it shall not become an "investment company" as defined in the
Investment Company Act of 1940, as amended, and the rules and regulations of the
Commission thereunder.

         5. Consideration; Payment of Expenses.

                  (a) In consideration of the services to be provided for
hereunder, the Company shall pay and/or issue to the Representative or the
Underwriters, as the case may be, or their respective designees their pro rata
portion (based on the Shares purchased) of the following compensation:

                           (i) A cash fee equal to ten percent (10%) of the
gross proceeds of the Offering (including proceeds from the sale of Additional
Shares, if any), which fee is to be paid by means of a discount from the public
offering price in the Offering or, at the Representative's option, as a cash fee
at the First Closing (with respect to the gross proceeds from the sale of the
Firm Shares and the Additional Shares, if any, at the First Closing) and at each
Additional Closing (with respect to the gross proceeds from the sale of the
Additional Shares at such Additional Closing);

                           (ii) A non-accountable expense allowance, to the
Representative on behalf of itself and not on behalf of the Underwriters, equal
to three percent (3%) of the gross proceeds of the Offering (including proceeds
<PAGE>

                                                                     Maxim Group
                                                        ______________ ___, 2004
                                                                   Page 23 of 36


from the sale of Additional Shares, if any). The Company has heretofore paid a
$50,000 advance to the Representative, which shall be applied against the
non-accountable expense allowance; and

                           (iii) The Stock Purchase Warrant to the
Representative as set forth in Section 12 of this Agreement.

                  (b) The Representative reserves the right to reduce any item
of the Underwriters' compensation or adjust the terms thereof as specified
herein in the event that a determination shall be made by the NASD to the effect
that the Underwriters' aggregate compensation is in excess of NASD rules or that
the terms thereof require adjustment.

                  (c) Whether or not the transactions contemplated by this
Agreement, the Registration Statement and the Prospectus are consummated or this
Agreement is terminated (regardless of the reason for such termination), the
Company hereby agrees to pay all costs and expenses incident to the performance
of its obligations hereunder, including the following:

                           (i) all expenses in connection with the preparation,
printing, "edgarization" and filing of the Registration Statement, any
Preliminary Prospectus and the Prospectus and any and all amendments and
supplements thereto and the mailing and delivering of copies thereof to the
Underwriters and dealers;

                           (ii) the fees, disbursements and expenses of the
Company's counsel and accountants in connection with the registration of the
Shares under the Securities Act and the Offering;

                           (iii) the cost of producing this Agreement and any
agreement among Underwriters, the blue sky survey and memorandum, closing
documents and other instruments, agreements or documents (including any
compilations thereof) in connection with the Offering and the cost of five (5)
bound volumes of such documents for the Representative;

                           (iv) all expenses in connection with the
qualification of the Shares for offering and sale under state or foreign
securities or blue sky laws, including the fees and disbursements of
Underwriters' Counsel in connection with such qualification and in connection
with any blue sky survey undertaken by such counsel;

                           (v) the filing fees incident to, and the fees and
disbursements of Underwriters' Counsel in connection with, securing any required
review by the NASD of the terms of the Offering;

                           (vi) all fees and expenses in connection with listing
the Shares on AMEX;
<PAGE>

                                                                     Maxim Group
                                                        ______________ ___, 2004
                                                                   Page 24 of 36


                           (vii) all travel expenses of the Company's officers
and employees and any other expense of the Company incurred in connection with
attending or hosting meetings with prospective purchasers of the Shares ("ROAD
SHOW EXPENSES");

                           (viii) any stock transfer taxes incurred in
connection with this Agreement or the Offering;

                           (ix) the cost of preparing stock certificates
representing the Shares;

                           (x) the cost and charges of any transfer agent or
registrar for the Shares;

                           (xi) the cost of two (2) "tombstone" advertisements
to be placed in appropriate daily or weekly periodicals of the Representative's
choice (i.e., The Wall Street Journal and The New York Times); and

                           (xii) all other costs and expenses incident to the
performance of the Company obligations hereunder which are not otherwise
specifically provided for in this Section 5.

Notwithstanding the foregoing, unless otherwise approved in advance by the
Company, the fees and expenses of Underwriters' Counsel payable by the Company
under subparagraphs (iv) and (v), excluding filing fees in either case, shall be
limited to $15,000 ($10,000 of which was paid upon the initial filing of the
Registration Statement) plus disbursements.

                  (d) The Company shall also pay, as due, state registration,
qualification and filing fees, and accountable out-of-pocket disbursements in
connection with such registration, qualification or filing.

                  (e) It is understood, however, that except as provided in this
Section or elsewhere in this Agreement, the Underwriters will pay all of their
own costs and expenses, including the fees of their counsel. Notwithstanding
anything to the contrary in this Section 5, in the event that this Agreement is
terminated as a result of the failure of the Company to satisfy the conditions
set forth in Section 6 or pursuant to 11(b) hereof, or subsequent to a Material
Adverse Change, the Company will pay all accountable expenses of the
Underwriters (including but not limited to fees and disbursements of counsel to
the Underwriters) incurred in connection herewith.

                  (f) No person is entitled either directly or indirectly to
compensation from the Company, from the Underwriters or from any other person
for services as a finder in connection with the proposed offering, and the
Company agrees to indemnify and hold harmless the Underwriters, against any
losses, claims, damages or liabilities, joint or several (which shall, for all
purposes of this Agreement, include, but not be limited to, all costs of defense
and investigation and all attorneys' fees), to which the Underwriters may become
subject insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon the claim of any person (other

<PAGE>

                                                                     Maxim Group
                                                        ______________ ___, 2004
                                                                   Page 25 of 36


than an employee of the party claiming indemnity) or entity that he or it is
entitled to a finder's fee in connection with the proposed offering by reason of
such person's or entity's influence or prior contact with the indemnifying
party.

         6. Conditions of Underwriters' Obligations. The obligations of the
Underwriters to purchase and pay for the Firm Shares and the Additional Shares
as provided herein shall be subject to: (i) the accuracy of the representations
and warranties of the Company herein contained, as of the date hereof and as of
each Closing Date, (ii) the absence of any misstatement or omission from any
certificates, opinions, written statements or letters furnished to the
Representative or to Underwriters' Counsel pursuant to this Section 6, (iii) the
performance by the Company of its obligations hereunder, and (iv) each of the
following additional conditions set forth in Section 6 hereof. For purposes of
this Section 6, the term "Closing" shall refer to the First Closing Date for the
Firm Shares and any Additional Closing Date, if different, for the Additional
Shares, and each of the foregoing and following conditions must be satisfied as
of each Closing.

                  (a) The Registration Statement shall have become effective and
all necessary regulatory or listing approvals shall have been received not later
than 5:30 P.M., New York time, on the date of this Agreement, or at such later
time and date as shall have been consented to in writing by the Representative.
If the Company shall have elected to rely upon Rule 430A under the Securities
Act, the Prospectus shall have been filed with the Commission in a timely
fashion in accordance with the terms hereof and a form of the Prospectus
containing information relating to the description of the Shares and the method
of distribution and similar matters shall have been filed with the Commission
pursuant to Rule 424(b) within the applicable time period; and, at or prior to
the Closing Date or the actual time of the Closing, no stop order suspending the
effectiveness of the Registration Statement or any post-effective amendment
thereof shall have been issued and no proceedings therefor shall have been
initiated or threatened by the Commission.

                  (b) The Representative shall have received the favorable
written opinion of Thacher Proffitt & Wood LLP, legal counsel for the Company,
dated as of each Closing Date addressed to the Underwriters in the form attached
hereto as Annex I.

                  (c) All proceedings taken in connection with the sale of the
Firm Shares and the Additional Shares as herein contemplated shall be
satisfactory in form and substance to the Representative and to Underwriters'
Counsel, and the Underwriters shall have received from such counsel a signed
opinion, dated as of each Closing Date, in form and substance satisfactory to
the Representative. The Company shall have furnished to Underwriters' Counsel
such documents as it may reasonably request for the purpose of enabling it to
render such opinion.

                  (d) The Representative shall have received a certificate of
the Chief Executive Officer and Chief Financial Officer of the Company, dated as
of each Closing Date, to the effect that: (i) the condition set forth in
subsection (a) of this Section 6 has been satisfied, (ii) as of the date hereof
and as of each Closing Date, the representations and warranties of the Company

<PAGE>

                                                                     Maxim Group
                                                        ______________ ___, 2004
                                                                   Page 26 of 36


set forth in Section 1 hereof are accurate, (iii) as of each Closing Date, all
agreements, conditions and obligations of the Company to be performed or
complied with hereunder on or prior thereto have been duly performed or complied
with, (iv) the Company has not sustained any material loss or interference with
their respective businesses, whether or not covered by insurance, or from any
labor dispute or any legal or governmental proceeding, (v) no stop order
suspending the effectiveness of the Registration Statement or any post-effective
amendment thereof has been issued and no proceedings therefor have been
initiated or threatened by the Commission, (vi) there are no pro forma or as
adjusted financial statements that are required to be included or incorporated
by reference in the Registration Statement and the Prospectus pursuant to the
Rules and Regulations which are not so included or incorporated by reference,
and (vii) subsequent to the respective dates as of which information is given in
the Registration Statement and the Prospectus there has not occurred any
Material Adverse Change.

                  (e) On the date of this Agreement and on each Closing Date,
the Representative shall have received a "cold comfort" letter from Lazar Levine
& Felx LLP, independent public accountants for the Company, dated, respectively,
as of the date of the date of delivery and addressed to the Underwriters and in
form and substance satisfactory to the Representative and Underwriters' Counsel,
confirming that they are independent certified public accountants with respect
to the Company within the meaning of the Securities Act and the Rules and
Regulations, and stating, as of the date of delivery (or, with respect to
matters involving changes or developments since the respective dates as of which
specified financial information is given in the Prospectus, as of a date not
more than five (5) days prior to the date of such letter), the conclusions and
findings of such firm with respect to the financial information and other
matters relating to the Registration Statement covered by such letter and, with
respect to letters issued in respect of an Additional Closing Date, confirming
the conclusions and findings set forth in such prior letter(s).

                  (f) Subsequent to the execution and delivery of this Agreement
or, if earlier, the dates as of which information is given in the Registration
Statement (exclusive of any amendment thereof) and the Prospectus (exclusive of
any supplement thereto), there shall not have been any change in the capital
stock or long-term debt of the Company or any change or development involving a
change, whether or not arising from transactions in the ordinary course of
business, in the business, condition (financial or otherwise), results of
operations, shareholders' equity, properties or prospects of the Company,
including but not limited to the occurrence of any fire, flood, storm,
explosion, accident, act of war or terrorism or other calamity, the effect of
which, in any such case described above, is, in the sole judgment of the
Representative, so material and adverse as to make it impracticable or
inadvisable to proceed with the Offering on the terms and in the manner
contemplated in the Prospectus (exclusive of any supplement).

                  (g) The Representative shall have received a duly executed
lock-up agreement from each officer, director and shareholder of the Company set
forth on Annex III, in each case substantially in the form attached hereto as
Annex II.
<PAGE>

                                                                     Maxim Group
                                                        ______________ ___, 2004
                                                                   Page 27 of 36


                  (h) The Representative shall have received a duly executed
management confirmation letter from the Company's directors and officers
relating to certain information appearing in the Registration Statement, which
letter shall be in the form previously delivered to the Representative in
connection with the filing of the Preliminary Prospectus.

                  (i) The Shares shall have been approved for listing on AMEX.

                  (j) The NASD shall have confirmed that it it is satisfied with
respect to the fairness and reasonableness of the underwriting terms and
arrangements.

                  (k) No action shall have been taken and no statute, rule,
regulation or order shall have been enacted, adopted or issued by any federal,
state or foreign governmental or regulatory authority that would, as of each
Closing Date, prevent the issuance or sale of the Shares; and no injunction or
order of any federal, state or foreign court shall have been issued that would,
as of each Closing Date, prevent the issuance or sale of the Shares.

                  (l) The Company shall have furnished the Underwriters and
Underwriters' Counsel with such other certificates, opinions or other documents
as they may have reasonably requested.

                  (m) On the First Closing Date and simultaneously with the
delivery of the Shares, the Company shall execute and deliver to the
Representative, individually and not as representative of the Underwriters, the
Stock Purchase Warrant. The Stock Purchase Warrant will be substantially in the
form of the Stock Purchase Warrant filed as an exhibit to the Registration
Statement.

                  If any of the conditions specified in this Section 6 shall not
have been fulfilled when and as required by this Agreement, or if any of the
certificates, opinions, written statements or letters furnished to the
Representative or to Underwriters' Counsel pursuant to this Section 6 shall not
be satisfactory in form and substance to the Representative and to Underwriters'
Counsel, all obligations of the Underwriters hereunder may be cancelled by the
Representative at, or at any time prior to, the consummation of the First
Closing, and the obligations of the Underwriters to purchase any Additional
Shares may be cancelled by the Representative at, or at any time prior to, the
Additional Closing Date. Notice of such cancellation shall be given to the
Company in writing, or by telephone. Any such telephone notice shall be
confirmed promptly thereafter in writing.

         7. Indemnification.

                  (a) The Company shall indemnify and hold harmless each
Underwriter and each Person, if any, who controls each Underwriter within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act,
against any and all losses, liabilities, claims, damages and expenses whatsoever
as incurred (including but not limited to attorneys' fees and reimbursement of
any and all expenses whatsoever incurred in investigating, preparing or

<PAGE>

                                                                     Maxim Group
                                                        ______________ ___, 2004
                                                                   Page 28 of 36


defending against any litigation, commenced or threatened, or any claim
whatsoever, and any and all amounts paid in settlement of any claim or
litigation) to which they or any of them may become subject under the Securities
Act, the Exchange Act or otherwise, insofar as such losses, liabilities, claims,
damages or expenses (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement, as originally filed or any amendment
thereof, or any related Preliminary Prospectus or the Prospectus, or in any
supplement thereto or amendment thereof, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading;
provided, however, that the Company will not be liable in any such case to the
extent but only to the extent that any such loss, liability, claim, damage or
expense arises out of or is based upon any such untrue statement or alleged
untrue statement or omission or alleged omission made therein in reliance upon
and in conformity with written information furnished to the Company by or on
behalf of any Underwriter through the Representative expressly for use therein.
The parties agree that such information provided by or on behalf of any
Underwriter through the Representative consists solely of the material referred
to in the last sentence of Section 1(b) hereof. This indemnity agreement will be
in addition to any liability, which the Company may otherwise have, including
but not limited to other liability under this Agreement.

                  (b) Each Underwriter, severally and not jointly, shall
indemnify and hold harmless the Company, each of the directors of the Company,
each of the officers of the Company who shall have signed the Registration
Statement, and each other Person, if any, who controls the Company within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act,
against any losses, liabilities, claims, damages and expenses whatsoever as
incurred (including but not limited to attorneys' fees and any and all expenses
whatsoever incurred in investigating, preparing or defending against any
litigation, commenced or threatened, or any claim whatsoever, and any and all
amounts paid in settlement of any claim or litigation) to which they or any of
them may become subject under the Securities Act, the Exchange Act or otherwise,
insofar as such losses, liabilities, claims, damages or expenses (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement, as
originally filed or any amendment thereof, or any related Preliminary Prospectus
or the Prospectus, or in any amendment thereof or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, in each case to the extent, but only to the extent, that
any such loss, liability, claim, damage or expense arises out of or is based
upon any such untrue statement or alleged untrue statement or omission or
alleged omission made therein in reliance upon and in conformity with
information furnished in writing to the Company by or on behalf of such
Underwriter through the Representative specifically for use therein; provided,
however, that in no case shall any Underwriter be liable or responsible for any
amount in excess of the underwriting discount applicable to the Shares to be
purchased by such Underwriter hereunder. The parties agree that such information
provided by or on behalf of any Underwriter through the Representative consists
solely of the material referred to in the last sentence of Section 1(b) hereof.
<PAGE>

                                                                     Maxim Group
                                                        ______________ ___, 2004
                                                                   Page 29 of 36


                  (c) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of any claims or the commencement of any
action, such indemnified party shall, if a claim in respect thereof is to be
made against the indemnifying party under such subsection, notify each party
against whom indemnification is to be sought in writing of the claim or the
commencement thereof (but the failure so to notify an indemnifying party shall
not relieve the indemnifying party from any liability which it may have under
this Section 7 to the extent that it is not materially prejudiced as a result
thereof and in any event shall not relieve it from any liability that such
indemnifying party may have otherwise than on account of the indemnity agreement
hereunder). In case any such claim or action is brought against any indemnified
party, and it notifies an indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate, at its own expense, in the
defense of such action, and to the extent it may elect by written notice
delivered to the indemnified party promptly after receiving the aforesaid notice
from such indemnified party, to assume the defense thereof with counsel
satisfactory to such indemnified party; provided however, that counsel to the
indemnifying party shall not (except with the written consent of the indemnified
party) also be counsel to the indemnified party. Notwithstanding the foregoing,
the indemnified party or parties shall have the right to employ its or their own
counsel in any such case, but the fees and expenses of such counsel shall be at
the expense of such indemnified party or parties unless (i) the employment of
such counsel shall have been authorized in writing by one of the indemnifying
parties in connection with the defense of such action, (ii) the indemnifying
parties shall not have employed counsel to have charge of the defense of such
action within a reasonable time after notice of commencement of the action,
(iii) the indemnifying party does not diligently defend the action after
assumption of the defense, or (iv) such indemnified party or parties shall have
reasonably concluded that there may be defenses available to it or them which
are different from or additional to those available to one or all of the
indemnifying parties (in which case the indemnifying parties shall not have the
right to direct the defense of such action on behalf of the indemnified party or
parties), in any of which events such fees and expenses shall be borne by the
indemnifying parties. No indemnifying party shall, without the prior written
consent of the indemnified parties, effect any settlement or compromise of, or
consent to the entry of judgment with respect to, any pending or threatened
claim, investigation, action or proceeding in respect of which indemnity or
contribution may be or could have been sought by an indemnified party under this
Section 7 or Section 8 hereof (whether or not the indemnified party is an actual
or potential party thereto), unless (x) such settlement, compromise or judgment
(i) includes an unconditional release of the indemnified party from all
liability arising out of such claim, investigation, action or proceeding and
(ii) does not include a statement as to or an admission of fault, culpability or
any failure to act, by or on behalf of the indemnified party, and (y) the
indemnifying party confirms in writing its indemnification obligations hereunder
with respect to such settlement, compromise or judgment.

         8. Contribution. In order to provide for contribution in circumstances
in which the indemnification provided for in Section 7 hereof is for any reason
held to be unavailable from any indemnifying party or is insufficient to hold
harmless a party indemnified thereunder, the Company and the Underwriters shall

<PAGE>

                                                                     Maxim Group
                                                        ______________ ___, 2004
                                                                   Page 30 of 36


contribute to the aggregate losses, claims, damages, liabilities and expenses of
the nature contemplated by such indemnification provision (including any
investigation, legal and other expenses incurred in connection with, and any
amount paid in settlement of, any action, suit or proceeding or any claims
asserted, but after deducting in the case of losses, claims, damages,
liabilities and expenses suffered by the Company, any contribution received by
the Company from Persons, other than the Underwriters, who may also be liable
for contribution, including Persons who control the Company within the meaning
of Section 15 of the Securities Act or Section 20 of the Exchange Act, officers
of the Company who signed the Registration Statement and directors of the
Company) as incurred to which the Company and one or more of the Underwriters
may be subject, in such proportions as is appropriate to reflect the relative
benefits received by the Company and such Underwriters from the Offering or, if
such allocation is not permitted by applicable law, in such proportions as are
appropriate to reflect not only the relative benefits referred to above but also
the relative fault of the Company and the Underwriters in connection with the
statements or omissions which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company and the Underwriters shall be
deemed to be in the same proportion as (x) the total proceeds from the Offering
(net of underwriting discounts and commissions but before deducting expenses)
received by the Company bears to (y) the underwriting discount or commissions
received by the Underwriters, in each case as set forth in the table on the
cover page of the Prospectus. The relative fault of each of the Company and of
the Underwriters shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company and the Underwriters agree that it would not
be just and equitable if contribution pursuant to this Section 8 were determined
by pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation which does not take account
of the equitable considerations referred to above in this Section. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 8 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any judicial, regulatory or other legal or
governmental agency or body, commenced or threatened, or any claim whatsoever
based upon any such untrue or alleged untrue statement or omission or alleged
omission. Notwithstanding the provisions of this Section 8: (i) no Underwriter
shall be required to contribute any amount in excess of the amount by which the
discounts and commissions applicable to the Shares underwritten by it and
distributed to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission and (ii) no Person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any Person who was
not guilty of such fraudulent misrepresentation. For purposes of this Section 8,
each Person, if any, who controls an Underwriter within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act shall have the same
rights to contribution as such Underwriter, and each Person, if any, who
controls the Company within the meaning of Section 15 of the Securities Act or

<PAGE>

                                                                     Maxim Group
                                                        ______________ ___, 2004
                                                                   Page 31 of 36


Section 20 of the Exchange Act, each officer of the Company who shall have
signed the Registration Statement and each director of the Company shall have
the same rights to contribution as the Company, subject in each case to clauses
(i) and (ii) of the immediately preceding sentence. Any party entitled to
contribution will, promptly after receipt of notice of commencement of any
action, suit or proceeding against such party in respect of which a claim for
contribution may be made against another party or parties, notify each party or
parties from whom contribution may be sought, but the omission to so notify such
party or parties shall not relieve the party or parties from whom contribution
may be sought from any obligation it or they may have under this Section 8 or
otherwise. The obligations of the Underwriters to contribute pursuant to this
Section 8 are several in proportion to the respective number of Shares to be
purchased by each of the Underwriters hereunder and not joint.

         9. Underwriter Default.

                  (a) If any Underwriter or Underwriters shall default in its or
their obligation to purchase Firm Shares or Additional Shares hereunder, and if
the Firm Shares or Additional Shares with respect to which such default relates
(the "DEFAULT SHARES") do not (after giving effect to arrangements, if any, made
by the Representative pursuant to subsection (b) below) exceed in the aggregate
10% of the number of Firm Shares or Additional Shares, each non-defaulting
Underwriter, acting severally and not jointly, agrees to purchase from the
Company that number of Default Shares that bears the same proportion of the
total number of Default Shares then being purchased as the number of Firm Shares
set forth opposite the name of such Underwriter on Schedule A hereto bears to
the aggregate number of Firm Shares set forth opposite the names of the
non-defaulting Underwriters, subject, however, to such adjustments to eliminate
fractional shares as the Representative in its sole discretion shall make.

                  (b) In the event that the aggregate number of Default Shares
exceeds 10% of the number of Firm Shares or Additional Shares, as the case may
be, the Representative may in its discretion arrange for itself or for another
party or parties (including any non-defaulting Underwriter or Underwriters who
so agree) to purchase the Default Shares on the terms contained herein. In the
event that within five calendar days after such a default the Representative
does not arrange for the purchase of the Default Shares as provided in this
Section 9, this Agreement or, in the case of a default with respect to the
Additional Shares, the obligations of the Underwriters to purchase and of the
Company to sell the Additional Shares shall thereupon terminate, without
liability on the part of the Company with respect to such Additional Shares
(except as otherwise provided herein) or the Underwriters, but nothing in this
Agreement shall relieve a defaulting Underwriter or Underwriters of its or their
liability, if any, to the other Underwriters and the Company for damages
occasioned by its or their default hereunder.

                  (c) In the event that any Default Shares are to be purchased
by the non-defaulting Underwriters, or are to be purchased by another party or
parties as aforesaid, the Representative or the Company shall have the right to
postpone the First Closing Date or any Additional Closing Date, as the case may
be, for a period, not exceeding five (5) business days, in order to effect

<PAGE>

                                                                     Maxim Group
                                                        ______________ ___, 2004
                                                                   Page 32 of 36


whatever changes may thereby be made necessary in the Registration Statement or
the Prospectus or in any other documents and arrangements, and the Company
agrees to file promptly any amendment or supplement to the Registration
Statement or the Prospectus which, in the reasonable opinion of Underwriters'
Counsel, may thereby be made necessary or advisable. The term "Underwriter" as
used in this Agreement shall include any party substituted under this Section 9
with like effect as if it had originally been a party to this Agreement with
respect to such Firm Shares and Additional Shares.

         10. Survival of Representations and Agreements. All representations and
warranties, covenants and agreements of the Company and the Underwriters
contained in this Agreement or in certificates of officers of the Company
submitted pursuant hereto, including the covenants contained in Section 4, the
agreements contained in Section 5, the indemnity agreements contained in Section
7 and the contribution agreements contained in Section 8 hereof, shall remain
operative and in full force and effect regardless of any investigation made by
or on behalf of any Underwriter or any controlling Person thereof or by or on
behalf of the Company, any of its officers and directors or any controlling
Person thereof, and shall survive delivery of and payment for the Shares to and
by the Underwriters. The representations contained in Section 1 hereof and the
covenants and agreements contained in Sections 5, 7, 8, this Section 10 and
Sections 14 and 15 hereof shall survive any termination of this Agreement,
including any termination pursuant to Section 9 or 11 hereof.

         11. Effective Date of Agreement; Termination.

                  (a) This Agreement shall become effective upon the later of:
(i) receipt by the Representative and the Company of notification of the
effectiveness of the Registration Statement or (ii) the execution of this
Agreement. Notwithstanding any termination of this Agreement, the provisions of
this Section 11 and of Sections 1, 4 through 16, inclusive, shall remain in full
force and effect at all times after the execution hereof.

                  (b) The Representative shall have the right to terminate this
Agreement at any time prior to the First Closing Date or to terminate the
obligations of the Underwriters to purchase the Additional Shares at any time
prior to the consummation of any closing to occur on any Additional Closing
Date, as the case may be, if: (i) any domestic or international event or act or
occurrence has materially disrupted, or in the opinion of the Representative
will in the immediate future materially disrupt, the market for the Company's
securities or securities in general; or (ii) trading on the New York Stock
Exchange, The NASDAQ National Market or AMEX shall have been suspended or been
made subject to material limitations, or minimum or maximum prices for trading
shall have been fixed, or maximum ranges for prices for securities shall have
been required, on the New York Stock Exchange, The NASDAQ National Market or
AMEX or by order of the Commission or any other governmental authority having
jurisdiction; or (iii) a banking moratorium has been declared by any state or
federal authority or if any material disruption in commercial banking or
securities settlement or clearance services shall have occurred; or (iv) (A)
there shall have occurred any outbreak or escalation of hostilities or acts of
terrorism involving the United States or there is a declaration of a national

<PAGE>

                                                                     Maxim Group
                                                        ______________ ___, 2004
                                                                   Page 33 of 36


emergency or war by the United States or (B) there shall have been any other
calamity or crisis or any change in political, financial or economic conditions
if the effect of any such event in (A) or (B), in the judgment of the
Representative, makes it impracticable or inadvisable to proceed with the
offering, sale and delivery of the Firm Shares or the Additional Shares, as the
case may be, on the terms and in the manner contemplated by the Prospectus.

                  (c) Any notice of termination pursuant to this Section 11
shall be in writing.

                  (d) If this Agreement shall be terminated pursuant to any of
the provisions hereof (other than pursuant to Section 9(b) hereof), or if the
sale of the Shares provided for herein is not consummated because any condition
to the obligations of the Underwriters set forth herein is not satisfied or
because of any refusal, inability or failure on the part of the Company to
perform any agreement herein or comply with any provision hereof, the Company
will, subject to demand by the Representative, reimburse the Underwriters for
all out-of-pocket expenses (including the fees and expenses of their counsel),
incurred by the Underwriters in connection herewith.

         12. Stock Purchase Warrant.

                  At or before the First Closing Date, the Company will sell to
the Representative, individually, and not on behalf of the Underwriters, or its
designees, as permitted by the NASD, for a consideration of $________, and upon
the terms and conditions set forth in the form of Stock Purchase Warrant annexed
as an exhibit to the Registration Statement, a Stock Purchase Warrant to
purchase an aggregate of _______ shares of Common Stock of the Company. In the
event of conflict in the terms of this Agreement and the Stock Purchase Warrant,
the language of the Stock Purchase Warrant shall control.


         13. Notices. All communications hereunder, except as may be otherwise
specifically provided herein, shall be in writing, and:

                  (a) if sent to the Representative or any Underwriter, shall be
mailed, delivered, or faxed and confirmed in writing, to Maxim Group LLC, 405
Lexington, New York, New York 10174, Attention: Clifford A. Teller, Managing
Director, with a copy to Underwriters' Counsel at Lowenstein Sandler PC, 65
Livingston Avenue, Roseland, New Jersey 07068, Attention: Steven M. Skolnick,
Esq.; and

                  (b) if sent to the Company, shall be mailed, delivered, or
faxed and confirmed in writing to the Company and its counsel at the addresses
set forth in the Registration Statement,

provided, however, that any notice to an Underwriter pursuant to Section 7 shall
be delivered or sent by mail or facsimile transmission to such Underwriter at
its address set forth in its acceptance facsimile to the Representative, which
address will be supplied to any other party hereto by the Representative upon
request. Any such notices and other communications shall take effect at the time
of receipt thereof.
<PAGE>

                                                                     Maxim Group
                                                        ______________ ___, 2004
                                                                   Page 34 of 36


         14. Parties. This Agreement shall inure solely to the benefit of, and
shall be binding upon, the Underwriters, the Company and the controlling
Persons, directors, officers, employees and agents referred to in Sections 7 and
8 hereof, and their respective successors and assigns, and no other Person shall
have or be construed to have any legal or equitable right, remedy or claim under
or in respect of or by virtue of this Agreement or any provision herein
contained. This Agreement and all conditions and provisions hereof are intended
to be for the sole and exclusive benefit of the parties hereto and said
controlling Persons and their respective successors, officers, directors, heirs
and legal Representative, and it is not for the benefit of any other Person. The
term "successors and assigns" shall not include a purchaser, in its capacity as
such, of Shares from any of the Underwriters.

         15. Governing Law. This Agreement shall be deemed to have been executed
and delivered in New York and both this Agreement and the transactions
contemplated hereby shall be governed as to validity, interpretation,
construction, effect, and in all other respects by the laws of the State of New
York, without regard to the conflicts of laws principals thereof (other than
Section 5-1401 of The New York General Obligations Law). Each of the
Underwriters and the Company: (a) agrees that any legal suit, action or
proceeding arising out of or relating to this Agreement and/or the transactions
contemplated hereby shall be instituted exclusively in the Supreme Court of the
State of New York, New York County, or in the United States District Court for
the Southern District of New York, (b) waives any objection which it may have or
hereafter to the venue of any such suit, action or proceeding, and (c)
irrevocably consents to the jurisdiction of Supreme Court of the State of New
York, New York County, or in the United States District Court for the Southern
District of New York in any such suit, action or proceeding. Each of the
Underwriters and the Company further agrees to accept and acknowledge service of
any and all process which may be served in any such suit, action or proceeding
in the Supreme Court of the State of New York, New York County, or in the United
States District Court for the Southern District of New York and agrees that
service of process upon the Company mailed by certified mail to the Company's
address or delivered by Federal Express via overnight delivery shall be deemed
in every respect effective service of process upon the Company, in any such
suit, action or proceeding, and service of process upon the Underwriters mailed
by certified mail to the Underwriters' address or delivered by Federal Express
via overnight delivery shall be deemed in every respect effective service
process upon the Underwriter, in any such suit, action or proceeding. THE
COMPANY (ON BEHALF OF ITSELF, AND, TO THE FULLEST EXTENT PERMITTED BY LAW, ON
BEHALF OF ITS RESPECTIVE EQUITY HOLDERS AND CREDITORS) HEREBY WAIVES ANY RIGHT
IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY CLAIM BASED UPON, ARISING OUT
OF OR IN CONNECTION WITH THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED BY
THIS AGREEMENT, THE REGISTRATION STATEMENT AND THE PROSPECTUS.

         16. Entire Agreement. This Agreement, together with the schedules,
annexes and exhibits attached hereto as the same may be amended from time to
time in accordance with the terms hereof and together with the engagement
letter, dated as of March 17, 2004, by and between the Company and the

<PAGE>

                                                                     Maxim Group
                                                        ______________ ___, 2004
                                                                   Page 35 of 36


Representative (the "ENGAGEMENT LETTER"), contains the entire agreement among
the parties hereto relating to the subject matter hereof and there are no other
or further agreements outstanding not specifically mentioned herein. The Company
and the Representative agree that the terms of the Engagement Letter shall
survive the termination of this Agreement.

         17. Severability. If any term or provision of this Agreement or the
performance thereof shall be invalid or unenforceable to any extent, such
invalidity or unenforceability shall not affect or render invalid or
unenforceable any other provision of this Agreement and this Agreement shall be
valid and enforced to the fullest extent permitted by law.

         18. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same instrument. Delivery of
a signed counterpart of this Agreement by facsimile transmission shall
constitute valid and sufficient delivery thereof.

         19. Headings. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.

         20. Time is of the Essence. Time shall be of the essence of this
Agreement. As used herein, the term "business day" shall mean any day when the
Commission's office in Washington, D.C. is open for business.



                            [Signature Pages Follow]


<PAGE>

                                                                     Maxim Group
                                                        ______________ ___, 2004
                                                                   Page 36 of 36


         If the foregoing correctly sets forth your understanding, please so
indicate in the space provided below for that purpose, whereupon this letter
shall constitute a binding agreement among us.

                                            Very truly yours,

                                            COFFEE HOLDING CO., INC.



                                            By: ________________________________
                                                Name:
                                                Title:


<PAGE>


                                                                     Maxim Group
                                                        ______________ ___, 2004
                                                                   Page 37 of 37


ACCEPTED BY THE REPRESENTATIVE, ACTING FOR ITESLF AND AS
REPRESENTATIVE OF THE UNDERWRITERS NAMED ON SCHEDULE A ATTACHED HERETO,
AS OF THE DATE FIRST WRITTEN ABOVE:

MAXIM GROUP LLC



By: _______________________________________
    Name:  Clifford Teller
    Title: Managing Director





               [End of Signature Pages to Underwriting Agreement]



<PAGE>




                                   SCHEDULE A

                                  UNDERWRITERS

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
                UNDERWRITER                    TOTAL NUMBER OF FIRM SHARES      NUMBER OF ADDITIONAL SHARES TO BE
                                                     TO BE PURCHASED         PURCHASED IF OPTION IS FULLY EXERCISED
- ---------------------------------------------------------------------------------------------------------------------
<S>                                            <C>                           <C>
Maxim Group LLC
- ---------------------------------------------------------------------------------------------------------------------

- ---------------------------------------------------------------------------------------------------------------------
TOTAL
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>






</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.2
<SEQUENCE>3
<FILENAME>b332774ex_4-2.txt
<DESCRIPTION>EXHIBIT 4,2
<TEXT>
<PAGE>

                                                                     EXHIBIT 4.2

THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
OR ANY OTHER SECURITIES LAWS AND MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED,
PLEDGED OR HYPOTHECATED IN THE ABSENCE OF (1) AN EFFECTIVE REGISTRATION
STATEMENT COVERING SUCH SECURITIES UNDER THE SECURITIES ACT AND ANY OTHER
APPLICABLE SECURITIES LAWS, OR (2) AN OPINION OF COUNSEL REASONABLY SATISFACTORY
TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.

                            COFFEE HOLDING CO., INC.

                                     WARRANT

                         160,000 SHARES OF COMMON STOCK

                               [          ], 2004

         This WARRANT (this "WARRANT") of Coffee Holding Co., Inc., a
corporation duly organized and validly existing under the laws of the State of
Nevada (the "COMPANY"), is being issued pursuant to that certain Underwriting
Agreement, dated as of [ ], 2004, by and between the Company and Maxim Group LLC
(the "UNDERWRITER") relating to a firm commitment public offering (the
"OFFERING") of 1,600,000 shares of common stock, par value $0.01 per share (the
"COMMON STOCK"), of the Company underwritten by the Underwriter.

         FOR VALUE RECEIVED, the Company hereby grants to Maxim Group LLC and
its permitted successors and assigns (collectively, the "HOLDER") the right to
purchase from the Company up to ONE HUNDRED SIXTY THOUSAND (160,000) shares of
Common Stock (such shares underlying this Warrant, the "WARRANT SHARES"), at a
per share purchase price equal to $[ ] [120% OF THE PUBLIC OFFERING PRICE] (the
"EXERCISE PRICE"), subject to the terms, conditions and adjustments set forth
below in this Warrant.

         1. Vesting of Warrant. This Warrant shall vest and become exercisable
on the first anniversary of the Base Date (the "VESTING DATE"). For purposes of
this Warrant, the "BASE DATE" shall mean [ ], 2004. Except as otherwise provided
for herein or as permitted by applicable rules of the National Association of
Securities Dealers, Inc., this Warrant shall not be sold, transferred, assigned,
pledged or hypothecated prior to the Vesting Date.

         2. Expiration of Warrant. This Warrant shall expire on the five (5)
year anniversary of the Base Date (the "EXPIRATION DATE").

         3. Exercise of Warrant. This Warrant shall be exercisable pursuant to
the terms of this Section 3.


<PAGE>

                  3.1 Manner of Exercise.

                  (a) This Warrant may only be exercised by the Holder hereof on
or after the Vesting Date and on or prior to the Expiration Date, in accordance
with the terms and conditions hereof, in whole or in part (but not as to
fractional shares) with respect to any portion of this Warrant, during the
Company's normal business hours on any day other than a Saturday or a Sunday or
a day on which commercial banking institutions in New York, New York are
authorized by law to be closed (a "BUSINESS DAY"), by surrender of this Warrant
to the Company at its office maintained pursuant to Section 10.2(a) hereof,
accompanied by a written exercise notice in the form attached as Exhibit A to
this Warrant (or a reasonable facsimile thereof) duly executed by the Holder,
together with the payment of the aggregate Exercise Price for the number of
Warrant Shares purchased upon exercise of this Warrant. Upon surrender of this
Warrant, the Company shall cancel this Warrant document and shall, in the event
of partial exercise, replace it with a new Warrant document in accordance with
Section 3.3

                  (b) Except as provided for below, each exercise of this
Warrant must be accompanied by payment in full of the aggregate Exercise Price
in cash by check or wire transfer in immediately available funds for the number
of Warrant Shares being purchased by the Holder upon such exercise. The
aggregate Exercise Price for the number of Warrant Shares being purchased may,
however, also be paid in full or in part at the election of the Holder: (i) in
the form of Common Stock owned by the Holder (based on the Fair Market Value (as
defined below) of such Common Stock on the date of exercise), (ii) in the form
of Warrant Shares withheld by the Company from the Warrant Shares otherwise to
be received upon exercise of this Warrant having an aggregate Fair Market Value
on the date of exercise equal to the aggregate Exercise Price of the Warrant
Shares being purchased by the Holder, or (iii) by a combination of the
foregoing, provided that the combined value of all cash and the Fair Market
Value of any shares surrendered to the Company is at least equal to the
aggregate Exercise Price for the number of Warrant Shares being purchased by the
Holder.

                  (c) For purposes of this Warrant, the term "FAIR MARKET VALUE"
means, with respect to a particular date, the average closing price of the
Common Stock for the immediately preceding ten (10) trading days on the
principal securities exchange or market on which shares of Common Stock are
listed or quoted, if the shares of Common Stock are so listed or quoted or, if
not so listed or quoted, as determined by the Company in good faith and in a
reasonable manner, based on the information available to it.

                  3.2 When Exercise Effective. Each exercise of this Warrant
shall be deemed to have been effected immediately prior to the close of business
on the Business Day on which this Warrant shall have been duly surrendered to
the Company as provided in Sections 3.1 and 12 hereof, and, at such time, the
Holder in whose name any certificate or certificates for Warrant Shares shall be
issuable upon exercise as provided in Section 3.3 hereof shall be deemed to have
become the holder or holders of record thereof of the number of Warrant Shares
purchased upon exercise of this Warrant.

                  3.3 Delivery of Common Stock Certificates and New Warrant. As
soon as reasonably practicable after each exercise of this Warrant, in whole or
in part, and in any event within five (5) Business Days thereafter, the Company,
at its expense (including the payment by it of any applicable issue taxes), will
cause to be issued in the name of and delivered to the Holder hereof or, subject
to Sections 9 and 10 hereof, as the Holder (upon payment by the Holder of any
applicable transfer taxes) may direct:



                                       2
<PAGE>

                  (a) a certificate or certificates (with appropriate
restrictive legends, as applicable) for the number of duly authorized, validly
issued, fully paid and nonassessable Warrant Shares to which the Holder shall be
entitled upon exercise; and

                  (b) in case exercise is in part only, a new Warrant document
of like tenor, dated the date hereof, for the remaining number of Warrant Shares
issuable upon exercise of this Warrant after giving effect to the partial
exercise of this Warrant (including the delivery of any Warrant Shares as
payment of the Exercise Price for such partial exercise of this Warrant).

         4. Certain Adjustments. For so long as this Warrant is outstanding:

                  4.1 Mergers or Consolidations. If at any time after the date
hereof there shall be a capital reorganization (other than a combination or
subdivision of Common Stock otherwise provided for herein) resulting in a
reclassification to or change in the terms of securities issuable upon exercise
of this Warrant (a "REORGANIZATION"), or a merger or consolidation of the
Company with another corporation, association, partnership, organization,
business, individual, government or political subdivision thereof or a
governmental agency (a "PERSON" or the "PERSONS") (other than a merger with
another Person in which the Company is a continuing corporation and which does
not result in any reclassification or change in the terms of securities issuable
upon exercise of this Warrant or a merger effected exclusively for the purpose
of changing the domicile of the Company) (a "MERGER"), then, as a part of such
Reorganization or Merger, lawful provision and adjustment shall be made so that
the Holder shall thereafter be entitled to receive, upon exercise of this
Warrant, the number of shares of stock or any other equity or debt securities or
property receivable upon such Reorganization or Merger by a holder of the number
of shares of Common Stock which might have been purchased upon exercise of this
Warrant immediately prior to such Reorganization or Merger. In any such case,
appropriate adjustment shall be made in the application of the provisions of
this Warrant with respect to the rights and interests of the Holder after the
Reorganization or Merger to the end that the provisions of this Warrant
(including adjustment of the Exercise Price then in effect and the number of
Warrant Shares) shall be applicable after that event, as near as reasonably may
be, in relation to any shares of stock, securities, property or other assets
thereafter deliverable upon exercise of this Warrant. The provisions of this
Section 4.1 shall similarly apply to successive Reorganizations and/or Mergers.

                  4.2 Splits and Subdivisions; Dividends. In the event the
Company should at any time or from time to time effectuate a split or
subdivision of the outstanding shares of Common Stock or pay a dividend in or
make a distribution payable in additional shares of Common Stock or other
securities or rights convertible into, or entitling the holder thereof to
receive, directly or indirectly, additional shares of Common Stock (hereinafter
referred to as the "COMMON STOCK EQUIVALENTS") without payment of any
consideration by such holder for the additional shares of Common Stock or Common
Stock Equivalents (including the additional shares of Common Stock issuable upon
conversion or exercise thereof), then, as of the applicable record date (or the
date of such distribution, split or subdivision if no record date is fixed), the
per share Exercise Price shall be appropriately decreased and the number of
Warrant Shares shall be appropriately increased in proportion to such increase
(or potential increase) of outstanding shares; provided, however, that no
adjustment shall be made in the event the split, subdivision, dividend or
distribution is not effectuated.


                                       3
<PAGE>

                  4.3 Combination of Shares. If the number of shares of Common
Stock outstanding at any time after the date hereof is decreased by a
combination of the outstanding shares of Common Stock, the per share Exercise
Price shall be appropriately increased and the number of shares of Warrant
Shares shall be appropriately decreased in proportion to such decrease in
outstanding shares.

                  4.4 Adjustments for Other Distributions. In the event the
Company shall declare a distribution payable in securities of other Persons,
evidences of indebtedness issued by the Company or other Persons, assets
(excluding cash dividends or distributions to the holders of Common Stock paid
out of current or retained earnings and declared by the Company's board of
directors) or options or rights not referred to in Sections 4.1, 4.2 or 4.3,
then, in each such case for the purpose of this Section 4.4, upon exercise of
this Warrant, the Holder shall be entitled to a proportionate share of any such
distribution as though the Holder was the actual record holder of the number of
Warrant Shares as of the record date fixed for the determination of the holders
of Common Stock of the Company entitled to receive such distribution.

         5. No Impairment. The Company will not, by amendment of its articles of
incorporation or by-laws or through any consolidation, merger, reorganization,
transfer of assets, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms of this Warrant, but will at all times in good faith assist in the
carrying out of all of the terms and in the taking of all actions necessary or
appropriate in order to protect the rights of the Holder against impairment.

         6. Chief Financial Officer's Report as to Adjustments. With respect to
each adjustment pursuant to Section 4 of this Warrant, the Company, at its
expense, will promptly compute the adjustment or re-adjustment in accordance
with the terms of this Warrant and cause its Chief Financial Officer to certify
the computation (other than any computation of the fair value of property of the
Company, as the case may be) and prepare a report setting forth, in reasonable
detail, the event requiring the adjustment or re-adjustment and the amount of
such adjustment or re-adjustment, the method of calculation thereof and the
facts upon which the adjustment or re-adjustment is based, and the Exercise
Price and the number of Warrant Shares or other securities purchasable hereunder
after giving effect to such adjustment or re-adjustment, which report shall be
mailed by first class mail, postage prepaid to the Holder. The Company will also
keep copies of all reports at its office maintained pursuant to Section 10.2(a)
hereof and will cause them to be available for inspection at the office during
normal business hours upon reasonable notice by the Holder or any prospective
purchaser of the Warrant designated by the Holder thereof.



                                       4
<PAGE>

         7. Reservation of Shares. The Company shall, solely for the purpose of
effecting the exercise of this Warrant, at all times during the term of this
Warrant, reserve and keep available out of its authorized shares of Common
Stock, free from all taxes, liens and charges with respect to the issue thereof
and not subject to preemptive rights or other similar rights of shareholders of
the Company, such number of its shares of Common Stock as shall from time to
time be sufficient to effect in full the exercise of this Warrant. If at any
time the number of authorized but unissued shares of Common Stock shall not be
sufficient to effect in full the exercise of this Warrant, in addition to such
other remedies as shall be available to Holder, the Company will promptly take
such corporate action as may, in the opinion of its counsel, be necessary to
increase the number of authorized but unissued shares of Common Stock to such
number of shares as shall be sufficient for such purposes, including without
limitation, using its Best Efforts (as defined in Section 14 hereof) to obtain
the requisite shareholder approval necessary to increase the number of
authorized shares of Common Stock. The Company hereby represents and warrants
that all shares of Common Stock issuable upon exercise of this Warrant shall be
duly authorized and, when issued and paid for upon exercise, shall be validly
issued, fully paid and nonassessable.

         8. Registration and Listing.

                  8.1 Definition of Registrable Securities; Majority. As used
herein, the term "REGISTRABLE SECURITIES" means any shares of Common Stock
issuable upon the exercise of this Warrant, until the date (if any) on which
such shares shall have been transferred or exchanged and new certificates for
them not bearing a legend restricting further transfer shall have been delivered
by the Company and subsequent disposition of them shall not require registration
or qualification of them under the Securities Act or any similar state law then
in force. For purposes of this Warrant, the term "MAJORITY", in reference to the
holders of Registrable Securities, shall mean in excess of fifty percent (50%)
of the then outstanding Warrant Shares (assuming the exercise of the entire
Warrant) that (i) are not held by the Company, an affiliate, officer, creditor,
employee or agent thereof or any of their respective affiliates, members of
their family, Persons acting as nominees or in conjunction therewith and (ii)
have not be resold to the public pursuant to a registration statement filed
under the Securities Act.

                  8.2 Required Registration.

                  (a) At any time on or after the one year anniversary of the
Base Date and on or before the five (5) year anniversary of the Base Date, but
in no event on not more than one (1) occasion, upon the written request of the
holders of the Registrable Securities representing a Majority of such
securities, the Company will use its Best Efforts to effect the registration of
the respective shares of the holders of Registrable Securities under the
Securities Act to the extent requisite to permit the disposition thereof as
expeditiously as reasonably possible, but in no event later than 120 days from
the date of such request.

                  (b) Registration of Registrable Securities under this Section
8.2 shall be on such appropriate registration form: (i) as shall be selected by
the Company, and (ii) as shall permit the disposition of such Registrable
Securities in accordance with this Section 8.2. The Company agrees to include in
any such registration statement all information which the requesting holders of
Registrable Securities shall reasonably request, which is required to be
contained therein. The Company will pay all Registration Expenses in connection
with each registration of Registrable Securities pursuant to this Section 8.2.



                                       5
<PAGE>

                  (c) A registration requested pursuant to this Section 8.2
shall not be deemed to have been effected: (i) unless a registration statement
with respect thereto has become effective or (ii) if, after it has become
effective, such registration is interfered with by any stop order, injunction or
other order or requirement of the Securities and Exchange Commission (the "SEC")
or other governmental agency or court of competent jurisdiction for any reason,
other than by reason of some act or omission by a holder of Registrable
Securities.

                  8.3 Incidental Registration Rights.

                  (a) If the Company, at any time on or after the one year
anniversary of the Base Date and on or before the five (5) year anniversary of
the Base Date, proposes to register any of its securities under the Securities
Act (other than in connection with a registration on Form S-4 or S-8 or any
successor forms) whether for its own account or for the account of any holder or
holders of its shares other than Registrable Securities (any shares of such
holder or holders (but not those of the Company and not Registrable Securities)
with respect to any registration are referred to herein as, "OTHER SHARES"), the
Company shall each such time give prompt (but not less than thirty (30) days
prior to the anticipated effectiveness thereof) written notice to the holders of
Registrable Securities of its intention to do so; provided, however, that in no
event shall the Company have the obligation to send any such notice, and the
holders of Registrable Securities will not have any registration rights under
this Section 8.3, if registration rights have been exercised two (2) times
pursuant to this Section 8.3 (except if the Company elected not to proceed with
any such registrations, withdrew such registrations or otherwise failed to
effect the offerings covered by such registrations). Upon the written request of
any such holder of Registrable Securities made within twenty (20) days after the
receipt of any such notice (which request shall specify the Registrable
Securities intended to be disposed of by such holder), except as set forth in
Section 8.3(b), the Company will use its Best Efforts to effect the registration
under the Securities Act of all of the Registrable Securities which the Company
has been so requested to register by such holder, to the extent requisite to
permit the disposition of the Registrable Securities so to be registered, by
inclusion of such Registrable Securities in the registration statement which
covers the securities which the Company proposes to register; provided, however,
that if, at any time after giving written notice of its intention to register
any securities and prior to the effective date of the registration statement
filed in connection with such registration, the Company shall determine for any
reason in its sole discretion either to not register, to delay or to withdraw
registration of such securities, the Company may, at its election, give written
notice of such determination to such holder and, thereupon, (i) in the case of a
determination not to register, shall be relieved of its obligation to register
any Registrable Securities in connection with such registration (but not from
its obligation to pay the Registration Expenses in connection therewith),
without prejudice, however, to the rights of the holders of Registrable
Securities entitled to request that such registration be effected as a
registration under Section 8.2, (ii) in the case of a determination to delay
registration, shall be permitted to delay registering any Registrable Securities
for the same period as the delay in registering such other securities (including
the Other Shares), without prejudice, however, to the rights of the holders of
Registrable Securities entitled to request that such registration be effected as
a registration under Section 8.2 and (iii) in the case of a determination to
withdraw registration, shall be permitted to withdraw registration, without
prejudice, however, to the rights of the holders of Registrable Securities
entitled to request that such registration be effected as a registration under
Section 8.2. No registration effected under this Section 8.3 shall relieve the
Company of its obligation to effect any registration upon request under Section
8.2, nor shall any such registration hereunder be deemed to have been effected
pursuant to Section 8.2. The Company will pay all Registration Expenses in
connection with each registration of Registrable Securities pursuant to this
Section 8.3.


                                       6
<PAGE>

                  (b) If the Company at any time proposes to register any of its
securities under the Securities Act as contemplated by this Section 8.3 and such
securities are to be distributed by or through one or more underwriters, the
Company will, if requested by a holder of Registrable Securities, use its Best
Efforts to arrange for such underwriters to include all the Registrable
Securities to be offered and sold by such holder among the securities to be
distributed by such underwriters, provided that if the managing underwriter of
such underwritten offering shall inform the Company by letter of its belief that
inclusion in such distribution of all or a specified number of such securities
proposed to be distributed by such underwriters would interfere with the
successful marketing of the securities being distributed by such underwriters
(such letter to state the basis of such belief and the approximate number of
such Registrable Securities, such Other Shares and shares held by the Company
proposed so to be registered which may be distributed without such effect), then
the Company may, upon written notice to such holder, the other holders of
Registrable Securities, and holders of such Other Shares, reduce pro rata in
accordance with the number of shares of Common Stock desired to be included in
such registration (if and to the extent stated by such managing underwriter to
be necessary to eliminate such effect) the number of such Registrable Securities
and Other Shares the registration of which shall have been requested by each
holder thereof so that the resulting aggregate number of such Registrable
Securities and Other Shares so included in such registration, together with the
number of securities to be included in such registration for the account of the
Company, shall be equal to the number of shares stated in such managing
underwriter's letter.

                  8.4 Registration Procedures. Whenever the holders of
Registrable Securities have properly requested that any Registrable Securities
be registered pursuant to the terms of this Warrant, the Company shall use its
Best Efforts to effect the registration and the sale of such Registrable
Securities in accordance with the intended method of disposition thereof, and
pursuant thereto the Company shall as expeditiously as possible:

                  (a) prepare and file with the SEC a registration statement
with respect to such Registrable Securities and use its Best Efforts to cause
such registration statement to become effective;

                  (b) notify such holders of the effectiveness of each
registration statement filed hereunder and prepare and file with the SEC such
amendments and supplements to such registration statement and the prospectus
used in connection therewith as may be necessary to (i) keep such registration
statement effective and the prospectus included therein usable for a period
commencing on the date that such registration statement is initially declared
effective by the SEC and ending on the date when all Registrable Securities
covered by such registration statement have been sold pursuant to the
registration statement or cease to be Registrable Securities, and (ii) comply
with the provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement during such period in
accordance with the intended methods of disposition by the sellers thereof set
forth in such registration statement;



                                       7
<PAGE>

                  (c) furnish to such holders such number of copies of such
registration statement, each amendment and supplement thereto, the prospectus
included in such registration statement (including each preliminary prospectus)
and such other documents as such seller may reasonably request in order to
facilitate the disposition of the Registrable Securities owned by such holders;

                  (d) use its Best Efforts to register or qualify such
Registrable Securities under such other securities or blue sky laws of such
jurisdictions as such holders reasonably request and do any and all other acts
and things which may be reasonably necessary or advisable to enable such holders
to consummate the disposition in such jurisdictions of the Registrable
Securities owned by such holders; provided, however, that the Company shall not
be required to: (i) qualify generally to do business in any jurisdiction where
it would not otherwise be required to qualify but for this subparagraph; (ii)
subject itself to taxation in any such jurisdiction; or (iii) consent to general
service of process in any such jurisdiction;

                  (e) notify such holders, at any time when a prospectus
relating thereto is required to be delivered under the Securities Act, of the
happening of any event as a result of which the prospectus included in such
registration statement contains an untrue statement of a material fact or omits
any material fact necessary to make the statements therein, in light of the
circumstances in which they are made, not materially misleading, and, at the
reasonable request of such holders, the Company shall prepare a supplement or
amendment to such prospectus so that, as thereafter delivered to the purchasers
of such Registrable Securities, such prospectus shall not contain an untrue
statement of a material fact or omit to state any material fact necessary to
make the statements therein, in light of the circumstances in which they are
made, not materially misleading;

                  (f) provide a transfer agent and registrar for all such
Registrable Securities not later than the effective date of such registration
statement;

                  (g) make available for inspection by any underwriter
participating in any disposition pursuant to such registration statement, and
any attorney, accountant or other agent retained by any such underwriter, all
financial and other records, pertinent corporate documents and properties of the
Company, and cause the Company's officers, directors, managers, employees and
independent accountants to supply all information reasonably requested by any
such underwriter, attorney, accountant or agent in connection with such
registration statement;

                  (h) otherwise use its Best Efforts to comply with all
applicable rules and regulations of the SEC, and make available to its security
holders, as soon as reasonably practicable, an earnings statement of the
Company, which earnings statement shall satisfy the provisions of Section 11(a)
of the Securities Act and, at the option of the Company, Rule 158 thereunder;


                                       8
<PAGE>

                  (i) in the event of the issuance of any stop order suspending
the effectiveness of a registration statement, or of any order suspending or
preventing the use of any related prospectus or suspending the qualification of
any Registrable Securities included in such registration statement for sale in
any jurisdiction, the Company shall use its Best Efforts promptly to obtain the
withdrawal of such order;

                  (j) use its Best Efforts to cause any Registrable Securities
covered by such registration statement to be registered with or approved by such
other governmental agencies or authorities as may be necessary to enable the
sellers thereof to consummate the disposition of such Registrable Securities;
and

                  (k) if the offering is underwritten, use its Best Efforts to
furnish on the date that Registrable Securities are delivered to the
underwriters for sale pursuant to such registration, an opinion dated such date
of counsel representing the Company for the purposes of such registration,
addressed to the underwriters covering such issues as are reasonably required by
such underwriters.

                  8.5 Listing. The Company shall secure the listing of the
Common Stock underlying this Warrant upon each national securities exchange or
automated quotation system upon which shares of Common Stock are then listed
(subject to official notice of issuance) and shall maintain such listing of
shares of Common Stock. The Company shall at all times comply in all material
respects with the Company's reporting, filing and other obligations under the
by-laws or rules of the American Stock Exchange (or such other national
securities exchange or market on which the Common Stock may then be listed, as
applicable).

                  8.6 Expenses. The Company shall pay all Registration Expenses
relating to the registration and listing obligations set forth in this Section
8. For purposes of this Warrant, the term "REGISTRATION EXPENSES" means: (a) all
registration, filing and NASD fees, (b) all reasonable fees and expenses of
complying with securities or blue sky laws, (c) all word processing, duplicating
and printing expenses, (d) the fees and disbursements of counsel for the Company
and of its independent public accountants, including the expenses of any special
audits or "cold comfort" letters required by or incident to such performance and
compliance, (e) premiums and other costs of policies of insurance (if any)
against liabilities arising out of the public offering of the Registrable
Securities being registered if the Company desires such insurance, if any, and
(f) fees and disbursements of one counsel for the selling holders of Registrable
Securities; provided however, that, in any case where Registration Expenses are
not to be borne by the Company, such expenses shall not include (and such
expenses shall be borne by the Company): (i) salaries of Company personnel or
general overhead expenses of the Company, (ii) auditing fees, (iii) premiums or
other expenses relating to liability insurance required by underwriters of the
Company, or (iv) other expenses for the preparation of financial statements or
other data, to the extent that any of the foregoing either is normally prepared
by the Company in the ordinary course of its business or would have been
incurred by the Company had no public offering taken place. Registration
Expenses shall not include any underwriting discounts and commissions which may
be incurred in the sale of any Registrable Securities and transfer taxes of the
selling holders of Registrable Securities.


                                       9
<PAGE>

                  8.7 Restrictions. The Company shall not be obligated to effect
a registration pursuant to Section 8.2 during the period beginning on the date
sixty (60) days prior to the Company's good faith estimate of the date of filing
of, and ending on a date one hundred twenty (120) days after the effective date
of, a Company-initiated registration (other than a registration pursuant to Form
S-8), provided that: (i) if the holder of Registrable Securities elects to have
all or some of its Registrable Securities included in the registration pursuant
to Section 8.3 hereof, such Registrable Securities are included in the
Company-initiated registration statement only to the extent required hereunder
and (ii) the Company is actively employing in Best Efforts to cause such
registration to become effective.

                  8.8 Information Provided by Holders. Any holder of Registrable
Securities included in any registration shall furnish to the Company such
information as the Company may reasonably request in writing to enable the
Company to comply with the provisions hereof in connection with any registration
referred to in this Warrant. In the event that a holder of Registrable
Securities fails to provide such information on a timely basis, and in any event
within seven (7) Business Days of the Company's written request, then the
Company shall be entitled to exclude the Registrable Securities of such holder
from such registration and the Company shall nevertheless be deemed to have
satisfied its obligations hereunder with respect to such registration.

         9. Restrictions on Transfer.

                  9.1 Restrictive Legends. This Warrant and each Warrant issued
upon transfer or in substitution for this Warrant pursuant to Section 10 hereof,
each certificate for Common Stock issued upon the exercise of the Warrant and
each certificate issued upon the transfer of any such Common Stock shall be
transferable only upon satisfaction of the conditions specified in this Section
9. Each of the foregoing securities shall be stamped or otherwise imprinted with
a legend reflecting the restrictions on transfer set forth herein and any
restrictions required under the Securities Act or other applicable securities
laws.

                  9.2 Notice of Proposed Transfer. Prior to any transfer of any
securities which are not registered under an effective registration statement
under the Securities Act ("RESTRICTED SECURITIES"), which transfer may only
occur if there is an exemption from the registration provisions of the
Securities Act and all other applicable securities laws, the Holder will give
written notice to the Company of the Holder's intention to effect a transfer
(and shall describe the manner and circumstances of the proposed transfer). The
following provisions shall apply to any proposed transfer of Restricted
Securities:

                           (i) If in the opinion of counsel for the Holder
reasonably satisfactory to the Company the proposed transfer may be effected
without registration of the Restricted Securities under the Securities Act
(which opinion shall state in detail the basis of the legal conclusions reached
therein), the Holder shall thereupon be entitled to transfer the Restricted
Securities in accordance with the terms of the notice delivered by the Holder to
the Company. Each certificate representing the Restricted Securities issued upon
or in connection with any transfer shall bear the restrictive legends required
by Section 9.1 hereof.


                                       10
<PAGE>

                           (ii) If the opinion called for in (i) above is not
delivered, the Holder shall not be entitled to transfer the Restricted
Securities until either (x) receipt by the Company of a further notice from such
Holder pursuant to the foregoing provisions of this Section 9.2 and fulfillment
of the provisions of clause (i) above, or (y) such Restricted Securities have
been effectively registered under the Securities Act.

                  9.3 Certain Other Transfer Restrictions. Notwithstanding any
other provision of this Section 9: (i) prior to the Vesting Date, this Warrant
or the Restricted Securities thereunder may only be transferred or assigned to
the persons permitted under NASD Rule 2710(g), and (ii) no opinion of counsel
shall be necessary for a transfer of Restricted Securities by the holder thereof
to any Person employed by or owning equity in the Holder, if the transferee
agrees in writing to be subject to the terms hereof to the same extent as if the
transferee were the original purchaser hereof and such transfer is permitted
under applicable securities laws.

                  9.4 Termination of Restrictions. Except as set forth in
Section 9.3 hereof, the restrictions imposed by this Section 9 upon the
transferability of Restricted Securities shall cease and terminate as to any
particular Restricted Securities: (a) which shall have been effectively
registered under the Securities Act, or (b) when, in the opinions of both
counsel for the holder thereof and counsel for the Company, such restrictions
are no longer required in order to insure compliance with the Securities Act or
Section 10 hereof. Whenever such restrictions shall cease and terminate as to
any Restricted Securities, the Holder thereof shall be entitled to receive from
the Company, without expense (other than applicable transfer taxes, if any), new
securities of like tenor not bearing the applicable legends required by Section
9.1 hereof.

         10. Ownership, Transfer and Substitution of Warrant.

                  10.1 Ownership of Warrant. The Company may treat any Person in
whose name this Warrant is registered in the Warrant Register maintained
pursuant to Section 10.2(b) hereof as the owner and holder thereof for all
purposes, notwithstanding any notice to the contrary, except that, if and when
any Warrant is properly assigned in blank, the Company may (but shall not be
obligated to) treat the bearer thereof as the owner of such Warrant for all
purposes, notwithstanding any notice to the contrary. Subject to Sections 9 and
10 hereof, this Warrant, if properly assigned, may be exercised by a new holder
without a new Warrant first having been issued.

                  10.2 Office; Exchange of Warrant.

                  (a) The Company will maintain its principal office at the
location identified in the prospectus relating to the Offering or at such other
offices as set forth in the Company's most current filing (as of the date notice
is to be given) under the Exchange Act or as the Company otherwise notifies the
Holder.

                  (b) The Company shall cause to be kept at its office
maintained pursuant to Section 10.2(a) hereof a Warrant Register for the
registration and transfer of the Warrant. The name and address of the holder of
the Warrant, the transfers thereof and the name and address of the transferee of
the Warrant shall be registered in such Warrant Register. The Person in whose
name the Warrant shall be so registered shall be deemed and treated as the owner
and holder thereof for all purposes of this Warrant, and the Company shall not
be affected by any notice or knowledge to the contrary.


                                       11
<PAGE>

                  (c) Upon the surrender of this Warrant, properly endorsed, for
registration of transfer or for exchange at the office of the Company maintained
pursuant to Section 10.2(a) hereof, the Company at its expense will (subject to
compliance with Section 9 hereof, if applicable) execute and deliver to or upon
the order of the Holder thereof a new Warrant of like tenor, in the name of such
holder or as such holder (upon payment by such holder of any applicable transfer
taxes) may direct, calling in the aggregate on the face thereof for the number
of shares of Common Stock called for on the face of the Warrant so surrendered
(after giving effect to any previous adjustment(s) to the number of Warrant
Shares).

                  10.3 Replacement of Warrant. Upon receipt of evidence
reasonably satisfactory to the Company of the loss, theft, destruction or
mutilation of this Warrant and, in the case of any such loss, theft or
destruction of this Warrant, upon delivery of indemnity reasonably satisfactory
to the Company in form and amount or, in the case of any mutilation, upon
surrender of this Warrant for cancellation at the office of the Company
maintained pursuant to Section 10.2(a) hereof, the Company, at its expense, will
execute and deliver, in lieu thereof, a new Warrant of like tenor and dated the
date hereof.

         11. No Rights or Liabilities as Stockholder. No Holder shall be
entitled to vote or receive dividends or be deemed the holder of any shares of
Common Stock or any other securities of the Company which may at any time be
issuable on the exercise hereof for any purpose, nor shall anything contained
herein be construed to confer upon the Holder, as such, any of the rights of a
stockholder of the Company or any right to vote for the election of directors or
upon any matter submitted to stockholders at any meeting thereof, or to give or
withhold consent to any corporate action (whether upon any recapitalization,
issuance of stock, reclassification of stock, change of par value,
consolidation, merger, conveyance, or otherwise) or to receive notice of
meetings, or to receive dividends or subscription rights or otherwise until the
Warrant shall have been exercised and the shares of Common Stock purchasable
upon the exercise hereof shall have become deliverable, as provided herein. The
Holder will not be entitled to share in the assets of the Company in the event
of a liquidation, dissolution or the winding up of the Company.

         12. Notices. Any notice or other communication in connection with this
Warrant shall be given in writing and directed to the parties hereto as follows:
(a) if to the Holder, c/o Maxim Group LLC, 405 Lexington Avenue, New York, NY
10174, Attn: Anthony Sarkis, Fax No: (212) 895-2555; or (b) if to the Company,
to the attention of its Chief Executive Officer at its office maintained
pursuant to Section 10.2(a) hereof; provided, that the exercise of the Warrant
shall also be effected in the manner provided in Section 3 hereof. Notices shall
be deemed properly delivered and received when delivered to the notice party (i)
if personally delivered, upon receipt or refusal to accept delivery, (ii) if
sent via facsimile, upon mechanical confirmation of successful transmission
thereof generated by the sending telecopy machine, (iii) if sent by a commercial
overnight courier for delivery on the next Business Day, on the first Business
Day after deposit with such courier service, or (iv) if sent by registered or
certified mail, five (5) Business Days after deposit thereof in the U.S. mail.


                                       12
<PAGE>

         13. Payment of Taxes. The Company will pay all documentary stamp taxes
attributable to the issuance of shares of Common Stock underlying this Warrant
upon exercise of this Warrant; provided, however, that the Company shall not be
required to pay any tax which may be payable in respect of any transfer involved
in the transfer or registration of this Warrant or any certificate for shares of
Common Stock underlying this Warrant in a name other that of the Holder. The
Holder is responsible for all other tax liability that may arise as a result of
holding or transferring this Warrant or receiving shares of Common Stock
underlying this Warrant upon exercise hereof.

         14. Miscellaneous. This Warrant and any term hereof may be changed,
waived, discharged or terminated only by an instrument in writing signed by the
party against which enforcement of the change, waiver, discharge or termination
is sought. This Warrant shall be construed and enforced in accordance with and
governed by the laws of the State of New York. The section headings in this
Warrant are for purposes of convenience only and shall not constitute a part
hereof. When used herein, the term "BEST EFFORTS" means, with respect to the
applicable obligation of the Company, the highest standard of diligence
recognized under Nevada law for similarly situated, publicly-traded companies.




                            [Signature Page Follows]



                                       13
<PAGE>


         IN WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed as of the date first above written.


                                        COFFEE HOLDING CO., INC.



                                        By:
                                            ------------------------------
                                            Name:
                                            Title:






                    [Signature Page to Underwriter's Warrant]



                                       14
<PAGE>


                                    EXHIBIT A
                             FORM OF EXERCISE NOTICE
                 [To be executed only upon exercise of Warrant]

To COFFEE HOLDING CO., INC.:

                  The undersigned registered holder of the within Warrant hereby
irrevocably exercises the Warrant pursuant to Section 3.1 of the Warrant with
respect to __________ Warrant Shares, at an exercise price per share of $____,
and requests that the certificates for such Warrant Shares be issued, subject to
Sections 9 and 10, in the name of, and delivered to:

                  ___________________________________

                  ___________________________________

                  ___________________________________

                  ___________________________________

                  The undersigned is hereby making payment for the Warrant
Shares in the following manner: _______________________ [describe desired
payment method as provided for in 3.1 of the Warrant].

                  The undersigned hereby represents and warrants that it is, and
has been since its acquisition of the Warrant, the record and beneficial owner
of the Warrant.

Dated: _______________


                  ________________________________________
                  Print or Type Name

                  ________________________________________
                  (Signature must conform in all respects
                  to name of holder as specified on the
                  face of Warrant)

                  ________________________________________
                  (Street Address)

                  ________________________________________
                  (City)          (State)      (Zip Code)



<PAGE>


                                    EXHIBIT B
                               FORM OF ASSIGNMENT
                 [To be executed only upon transfer of Warrant]

                  For value received, the undersigned registered holder of the
within Warrant hereby sells, assigns and transfers unto _____________________
[include name and addresses] the rights represented by the Warrant to purchase
__________ shares of Common Stock of COFFEE HOLDING CO., INC. to which the
Warrant relates, and appoints _____________________ Attorney to make such
transfer on the books of COFFEE HOLDING CO., INC. maintained for the purpose,
with full power of substitution in the premises.


       Dated:                           ________________________________________
                                        (Signature must conform in all respects
                                        to name of holder as specified on the
                                        face of Warrant)

                                        ----------------------------------------
                                        (Street Address)

                                        ----------------------------------------
                                        (City)        (State)      (Zip Code)

       Signed in the presence of:

                                        ----------------------------------------
                                        (Signature of Transferee)

                                        ----------------------------------------
                                        (Street Address)

                                        ----------------------------------------
                                        (City)        (State)      (Zip Code)
       Signed in the presence of:







</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.17
<SEQUENCE>4
<FILENAME>b332774_ex10-17.txt
<DESCRIPTION>CORPORATE BRANDS AGREEMENT
<TEXT>
<PAGE>

                                                                   Exhibit 10.17

                           CORPORATE BRANDS AGREEMENT

         THIS AGREEMENT ("Agreement") is made and entered into as of this 30th
day of March, 2004, by and between ALBERTSON'S, INC., a Delaware corporation,
with principal offices located at 250 Parkcenter Boulevard, Boise Idaho 83706
(hereafter referred to as "Albertson's"), and COFFEE HOLDING COMPANY, INC.,
a(n), Nevada corporation with its principal office located at 4401 First Avenue,
Brooklyn, NY 11232 (hereinafter referred to as "Supplier").

         It is agreed as follows:

         1. Supply Relationship.

                  (a) Supplier offers to sell and ship CANNED COFFEE in
         packaged, saleable condition to Albertson's as Albertson's may choose
         to order for the Products specified by Albertson's and agreed to by
         Supplier for Albertson's private label brands as designated by
         Albertson's ("Products"), on the terms and conditions set forth below.
         Supplier shall not divert, sell or salvage the Products to any other
         third party.

                  (b) This Agreement is not intended to bind Albertson's to
         purchase any specific quantity of Product or to bind Supplier to make
         available any specific quantity of Products. This Agreement is intended
         to define the terms on which any Product is purchased and accepted.

                  (c) Supplier warrants that the terms and conditions of sale
         herein offered to Albertson's by Supplier are being offered on
         proportionally equal terms to other customers of Supplier in
         competition with Albertson's for Products of like type and quantity and
         that during all shortages, pro-rates, and/or other sales restrictions
         Albertson's shall receive prompt notice and its equal and fair share of
         product offered for sale by Supplier to others.

         2. Payment Terms. Payment Terms of the gross invoice amount to
Albertson's with respect to Products shall be 2% / 15 NET 35 DAYS of Albertson's
receipt of Products and funds are considered received by Supplier when funds are
wired by Albertson's

         3. Product Compliance with Laws and Specifications. Supplier agrees to
comply with all applicable federal, state, and local laws, rules, and
regulations regarding its performance under this Agreement, including but not
limited to, those laws related to payment of employee-related taxes, such as
social security, FICA, and workers' compensation and wage and hour laws.
Supplier is strictly prohibited from utilizing any undocumented workers to
perform any of its duties hereunder and shall keep on file Forms 1-9 and related
documentation for all of its employees. Supplier's Products and/or all packaging
provided hereunder are hereby guaranteed, as of the date of shipment or
delivery, (a) not to be adulterated or misbranded within the meaning of the
Federal Food, Drug and Cosmetic Act, as amended, or within the meaning of
applicable federal or state laws or municipal ordinance in which the definitions
of adulteration are substantially the same as those contained in the above Act;
(b) not to be Products which may not, under the provisions of section 405 or 505
of the said Act, be introduced into interstate commerce; and (c) comply in all
respects with the pure food and drug laws of all states, including but not
limited to California's Health and Safety Code, Section 25249.5 et. seq., as
amended (commonly known as "Proposition 65"); the Federal Hazardous Substance
Act; the Federal Insecticide; Fungicide and Rodenticide Act; and the Nutrition
Labeling and Education Act. The Products comprising each shipment or delivery
hereafter made by Supplier to Albertson's are hereby guaranteed, as of the date
of such shipment or delivery, not to be misbranded.

<PAGE>

         4. Pricing Terms. Prices are listed on the attached Exhibit "A". In the
event Supplier desires to make a pricing change to any Product provided
hereunder, Supplier shall provide Albertson's with written documentation which
substantiates any requested pricing change. Price changes will only be
considered if changes are a direct result of a substantial increase in raw good
acquisition costs for materials needed to produce the finished Product. Any
request for a price increase shall be provided at least sixty (60) days in
advance of the requested implementation date. Albertson's reserves the right to
request additional information reasonably necessary to evaluate the validity of
a proposed price increase. Any price increase shall be effective only after
Albertson's has reviewed Supplier's documentation, and supplemental information,
if requested, and only upon Albertson's written approval. The prices offered or
quoted by Supplier to Albertson's shall include all duties and all sales,
excise, or similar taxes and charges which are now, or may hereafter be, levied,
imposed or charged (whether by federal, state, municipal or other public
authority) with respect to the sales of the Products hereunder. Supplier shall
pay all such duties, taxes, and surcharges levied, imposed or charged for
Product sold under this Agreement without any additional charge to Albertson's.

         5. Electronic Data Interchange / Electronic Funds Transfer. Albertson's
requires suppliers to transmit invoices via electronic data interchange or other
mutually acceptable electronic format (i.e., PC upload or EIS) (generically
"EDI") and to receive payment for invoices by way of an electronic funds
transfer (e.g. wire transfer or automatic clearing house) (generically "EFT").
Supplier is solely responsible for Supplier's technical upgrade costs or other
similar expenses related to EDI/EFT processes which may be necessary for
Supplier to communicate with Albertson's system. All EFT remittance information
will be transmitted in an unbundled format.

         6. Deliveries. For shipments of Products by common or contract carrier,
but not for shipments made under Albertson's backhaul program, Supplier will
ensure that the bill of lading states: "SHIPPING COSTS HAVE BEEN PREPAID -
CARRIER WILL HAVE NO RECOURSE AGAINST ALBERTSON'S", or words of similar effect
and meaning. For Shipments of Products by common or contract carrier, title and
risk of loss or damage to Products shall pass to Albertson's upon delivery
thereof by Supplier at Albertson's destination as designated in the applicable
purchase order.

<PAGE>

         7. Service Level. Supplier shall make deliveries of Products ordered by
Albertson's, F.O.B. Albertson's destination as designated in the applicable
Purchase Order, SEVEN (7) TO TEN (10) calendar days after Supplier's receipt of
such Purchase Order. Throughout the Term, Supplier will maintain a 98% Service
Level. For purpose of this Agreement, "Service Level" means that Supplier shall,
on the requested delivery date, supply Albertson's with all Product it may
choose to order within mutually agreed upon lead times, set forth on the
Purchase Order. For purposes of this Agreement, a 98% Service Level shall be
measured by (a) comparing the total quantity of Products shipped and received by
Albertson's to the total quantity ordered by Albertson's on any four (4)
consecutive week basis, (as determined by total SKU's ordered to SKU's received)
and by (b) comparing the total of requested delivery dates to the total actual
delivery dates on the same consecutive four (4) week basis. If Supplier fails to
maintain a 98% Service Level for any four (4) consecutive weeks, Albertson's
shall put Supplier on notice that Supplier is in breach of its Service Level
requirement. If Supplier's Service Level continues to be below 98% for another
four (4) consecutive weeks (for a total of eight (8) consecutive weeks), as
measured by both (a) the accuracy of amounts shipped and received compared to
the amounts ordered and (b) the timeliness of deliveries, Albertson's reserves
the right to terminate this Agreement upon seven (7) days written notice.
Notwithstanding anything in this Agreement to the contrary, the provisions of
Section 13(a)(iv) shall not apply to Service Level breaches and only the
provisions of this Section 7(b) shall control with respect to cure / termination
rights hereunder. Supplier agrees to maintain adequate retail support with
Albertson's retail stores and shall promptly notify Albertson's of any problems
which may affect Service Level.

         8. Deduction Disputes. Supplier must bring to Albertson's attention in
writing any deduction taken by Albertson's, which Supplier belies to be in
error, within ninety (90) days of the deduction. Failure on the part of Supplier
to dispute such deduction in writing within ninety (90) days of the deduction
will forever bar Supplier from disputing such deduction.

         9. Manufacturer. Except where Supplier is the importer of the Product,
Supplier shall be the actual manufacture of Products. No subcontracts,
co-manufacturer, alternate manufacturer or co-op agreements may be entered or
used by Supplier or importer, as applicable, unless the name, quantities,
quality type, code of products and actual manufacturer's and or packer's name is
supplied as part of this Agreement, and is previously approved in writing by
Albertson's.

         10. Quality. All Product purchased hereunder shall conform to the
quality specifications governing production of Product for Albertson's and all
applicable local, state and federal law and regulations. Supplier shall not
change the ingredients, formulation, packaging or the location of the
manufacturing facility of any Products without the prior written consent of
Albertson's.. Within 12 months of the date of this contract, Supplier shall pay
for Albertsons to audit any of the Supplier's manufacturing facilities that have
not been audited by Albertsons.

<PAGE>

         11. Product Reclamation. Supplier aggress that all Products designated
by Albertson's as damaged, out-of-code, or otherwise unsaleable (including
voluntary and involuntary recalls) shall be sent to Albertson's reclamation
center and Supplier agrees to abide by all applicable procedures established by
Albertson's for this reclamation process. Supplier agrees to abide by
Albertson's National Reclamation Policy.

         12. Term. The term of this Agreement shall be for one (1) year
commencing on the date first above written and shall automatically renew for
subsequent terms thereafter unless terminated as provided below.

         13. Termination. Either party may terminate this Agreement, in whole or
as to any particular Product, at any time under one of the following options in
which event the terms of this Section 13 shall apply:

                  (a) without cause upon ninety (90) days' advance written
         notice to the other party;

                  (b) immediately if the other party is or shall: (i) be or
         become insolvent or unable to pay its debts as they mature within the
         meaning of the United States Bankruptcy Code or any successor statute;
         or (ii) make an assignment for the benefit of its creditors; or (iii)
         file or have filed against it, voluntarily or involuntarily, a petition
         under the United States Bankruptcy Code or any successor statute unless
         such petition is stayed or discharged within ninety (90) days; or (iv)
         have a receiver appointed with respect to all or substantially all of
         its assets;

                  (c) upon thirty (30) days notice if the other party fails to
         fulfill any material obligation on its part to be performed under this
         Agreement, or is determined to be in breach of its representations and
         warranties in this Agreement in any material respect, provided the
         breaching party has not cured the breach within the thirty (30) days to
         the sole, reasonable satisfaction of the non-breaching party; provided,
         however, that there shall not be a default within the meaning of this
         Section 13 if the breaching party promptly commences to cure such
         breach within such thirty (30) day period and thereafter diligently
         pursues such cure to completion; provided further, however, that the
         period of cure shall in no event exceed sixty (60) days.

         In the event of Termination, notice to the other party shall be sent
via certified mail to the address listed on page 1 (if to Albertson's: send to
the attention of Vice President, Corporate Brands, with a copy of the notice
sent to this attention of the Legal Department #74200B and if to Supplier; send
to the attention of Andrew Gordon ____________________________________________).
Notice shall be deemed received four (4) calendar days after deposit into first
class mail.

         Upon termination of this Agreement for any reason, all prices shall
remain at the same level they were when notice was provided through the date of
termination. In the event Albertson's terminates this Agreement in while or as
to any particular Product without cause, or Supplier terminates this Agreement
in whole or as to any particular Product for cause, Albertson's shall order
through a wholesaler, or directly from Supplier, the existing supply of packed,
labeled and cased salable Products. Notwithstanding the foregoing, Albertson's
agrees to purchase not more than an average of ninety (90) day supply of Product
calculated by summing the Products purchased by Albertson's during the
immediately preceding four (4) fiscal quarters and dividing that sum by four
(4). In the event Albertson's terminates this Agreement for cause, or Supplier
terminates this Agreement without cause, Albertson's, in its sole discretion,
shall have the option to purchase or not, all or any part of the existing supply
of packed, labeled and cased salable Products up to a maximum amount equal to
the average ninety (90) day supply described above. In no event shall
Albertson's be obligated to purchase packaging, raw or unlabeled Products.

<PAGE>

         14. Indemnification. Supplier agrees to indemnify, defend and hold
Albertson's, its affiliates, directors, associates, agents, and representatives
harmless from and against any and all claims, demands, liabilities, damages,
losses, costs and expenses, including, without limitation, costs and expenses of
investigation and settlement and attorney's fees and expenses (collectively,
"Claims"), to the extent such Claims are alleged to arise from: (i) any act or
omission by Supplier, or its agents and/or brokers, relating to or affecting the
condition, quality or character of any Product; (ii) the formulation of any
Product violating any patent, trade secret or other proprietary right of any
third party; (iii) trademark, copyright, trade dress or patent infringement,
(iv) a defect in the formulation of any Product causing illness, personal injury
or death, provided that such Product has not been altered, adulterated or
tampered with after leaving Suppliers possession; (v) the formulation of any
Product by Supplier violating any applicable federal or state food and drug or
consumer safety law, provided that such Product has not been altered,
adulterated or tampered with after leaving Supplier's possession; or (vi)
Supplier's performance under this Agreement or a breach by Supplier of any of
its representations, warranties, covenants or obligations under this Agreement.
Albertson's shall have the right to actively participate in the defense of any
Claim including, selection of counsel, formulation of strategy, and approval of
any settlement reached.

         15. Insurance. Supplier shall maintain (and shall cause each of its
agents, independent contractors and subcontractors performing any services
hereunder to maintain) at all times at its sole cost and expense at least the
following insurance covering its obligations under this Agreement:

         Commercial General Liability including but not limited to (i) injury to
         person, (ii) damage to property, (iii) contractual liability coverage,
         (iv) personal and advertising injury liability (v) products liability
         coverage including a broad form vendor's endorsement (additional
         insured-vendor), in an amount not less than Five Million Dollars
         ($5,000,000) for each occurrence listing Albertson's, Inc., its
         affiliates and wholly-owned subsidiaries as an additional insured.

                  If and only if Supplier's agents, independent contractors,
         subcontractors or employees will deliver Products directly to
         Albertson's stores, warehouses or other facilities, Suppliers shall
         maintain or cause each of its agents, independent contractors and
         subcontractors performing any services hereunder to maintain Worker's
         Compensation at statutory limits and Employer's Liability at limits not
         less than One Million Dollars ($1,000,000) and Business Automobile
         Liability for owned, hired, and non-owned vehicles in an amount not
         less than Five Million Dollars ($5,000,000) for each accident listing
         Albertson's, Inc., its affiliates and wholly-owned subsidiaries as an
         additional insured.

<PAGE>

         This insurance shall be issued by companies licensed to do business in
the state(s) where services are rendered. Upon execution of this Agreement and
PRIOR to commencement of this Agreement, Supplier shall provide Albertson's with
a Certificate of Insurance which shall indicate all insurance coverage required
by the provisions herein and that Albertson's will be provided with thirty (30)
days' written notice prior to substantial modification or cancellation of such
policy. Such Certificate of Insurance shall be updated annually and shall be
sent to: Albertson's, Inc., 250 Parkcenter Blvd., Boise, ID 83706, Attn: Records
Center.

         Failure by Supplier to require and verify its agents and independent
contractors compliance with the insurance requirements will be considered a
breach of this Agreement.

         16. Intellectual Property. It is understood and agreed by and between
the parties hereto that Albertsons' shall have all right, title and interest in
and to the label, design, trademark, and trade name used on the Products,
excluding registered trademarks which are the property of Supplier, and Supplier
shall not claim any such rights in these items. All art, plates, negatives or
designs prepared for Albertson's by either Albertson's, Supplier or
Albertson's/Supplier's printer, lithographer, or bag, box or carton manufacturer
shall be the property of Albertson's and shall remain Albertson's property upon
notice of termination of this Agreement by either party. It is expressly agreed
and understood that these items (and shipping) are inherent in the cost of doing
business, and Albertson's shall not reimburse Supplier for these items.

         17. Diversity. Albertson's values relationships with suppliers that
share our value of diversity in all aspects of running a good business.
Albertson's is developing a goal centered, best in class diversity sourcing
programs. It is Albertson's intent to engage in tier one suppliers in reporting
on second tier spend which is done primarily with minority and women owned
businesses. Albertson's Diversity Department will work with suppliers to develop
a schedule of reporting/sharing of information, pertinent to diversity goals and
purchasing activity. Requests for such information will be of a nature that
enhances Albertson's efforts to meet our objectives in this strategic area of
interest. Throughout the term of this Agreement, Supplier will be required to
periodically report to Albertson's Supplier' diversity spend and such reports
will be provided upon request in a format and containing contents which is
mutually agreed upon by the parties.

         18. Supplies. Albertson's reserves the right to purchase and sell to
Supplier all packaging supplies for its Products, labels, cartons, boxes or
bags. These supplies are the property of Albertson's and sale of supplies shall
be at a competitive price with Products of equal type and quality. These
supplies may be used by Supplier only so long as this Agreement is in effect. No
Products, trademarks, titles or prepacked labeled merchandise of Albertson's may
be sold, salvaged, exported, or used by the Supplier without written consent or
Albertson's.

<PAGE>

         19. Embargo or Bans. Albertson's shall not be held liable for product
or packaging not delivered to Albertson's as a result of any government embargo,
ban, prohibition or condemnation.

         20. Survival. All covenants, conditions, warranties, uncompleted
obligations and indemnifications contained in this Agreement which may involve
performance subsequent to any termination of this Agreement, or which cannot be
ascertained or fully performed until after termination of this Agreement shall
survive.

         21. Amendments and Conflicting Terms. Provisions of this Agreement may
be modified, amended or waived only by a written document specifically
identifying this Agreement and signed by an authorized representative of each
party. Without limitation, to the extent the terms and conditions or spirit of
this Agreement conflict with the terms and conditions on any purchase order,
shipping order form, bill of lading, receipt or the like, the terms and
conditions of this Agreement shall be controlling.

         22. Attorneys' Fees. In the event of any claim, dispute, or legal
proceeding arising out of or relating to this Agreement, the party prevailing in
such dispute shall be entitled to recover all reasonable fees and expenses
(including, without limitation, costs of investigation, reasonable attorneys'
fees and litigation expenses) incurred in connection therewith.

         23. Entire Agreement. This Agreement is intended by the parties to be
the entire agreement between the parties with respect to this specified Products
and Products identified above and is inclusive of all understandings between the
parties related to the subject matter hereof. No other agreements, whether oral,
written or implied shall be of any force and effect.

         24. Assignment. This Agreement is binding upon the parties hereto,
their successors and assigns. Notwithstanding anything to the contrary, in the
event of sale, dissolution, acquisition, or merger of Supplier, Albertson's
shall be notified pursuant to Section 13 within thirty (30) days and may, at its
sole option, elect to terminate this Agreement. This Agreement may not be
otherwise assigned without the prior written consent of Albertson's or Supplier
as the case may require.

         25. Control. In the event of a dispute between Albertson's and Supplier
as to amount due hereunder, Albertson's reporting and purchase records shall be
used to calculate any amounts owed.

         26. Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed original, but all of which taken together shall
constitute one and the same instrument.

<PAGE>

         27. Headings. The titles or section headings of the various provisions
of this Agreement are intended solely for convenience and ease of reference and
shall not in any manner amplify, limit, modify or otherwise be used in, the
interpretation of any such provisions.

         28. Permits and Licensing. Supplier shall obtain and maintain, at its
sole cost and expense, all permits and licenses required to provide the Products
contemplated herein.

         29. Authorized Representatives. The undersigned represent that they are
authorized to execute this Agreement on behalf of the parties named herein.

ALBERTSON'S, INC.                                   COFFEE HOLDING COMPANY, INC.
On behalf of itself and its affiliates and
wholly-owned subsidiaries


By: /s/ J. Sean McKinless                           By: /s/ Andrew Gordon
    ---------------------                               -----------------
    J. Sean McKinless                                   Andrew Gordon
    Group Vice President, Strategic                     President and CEO
    Procurement

<PAGE>

                                   Exhibit "A"


- -------------------------------------------------------------------------------
Where indicated below, Confidential Information has been omitted
pursuant to a request for confidential treatment and filed separately
with the U.S. Securities and Exchange Commission.
- -------------------------------------------------------------------------------

Albertsons




        DIRECTIONS:
          1) Fill in freight rate ($/100 lbs) - Blended and DC
          2) Fill in Case Weight (lb) and FOB Case Cost ($)
          3) Adjust Pack size if necessary
          4) Delivered cost will compute automatically
          5) Input Vendor Name: Coffee Holding Company

        DATA ENTRY GUIDELINES:
          o  Enter values in green shaded areas only
          o  Please do not format the input data
          o  Correct Inputs: 20 or 0.20
          o  Incorrect Inputs: $20, 20%, etc.
          o  Please do not modify the worksheets without pre-approval from the
             Albertsons Category Manager



Bidsheet Revisions
All revisions highlighted in yellow

RFP# Additions:
35001, 35006, 350011, 350016, 350021, 350026, 350031, 350036, 350042, 350043,
350052, 350053, 350059


                       -------------------------------------
                                 FREIGHT BRACKETS
                       -------------------------------------
   DC     City            T/L    20K lbs  10K lbs   5K lbs
- ------------------------------------------------------------
  BLEND   RATE
- ------------------------------------------------------------
  8220    Phoenix
- ------------------------------------------------------------
  8231    Salt Lake
- ------------------------------------------------------------
  8243    Plant City
- ------------------------------------------------------------
  8252    Portland
- ------------------------------------------------------------
  8261    Brea                           *
- ------------------------------------------------------------
  8272    Sacramento
- ------------------------------------------------------------
  8281    Aurora
- ------------------------------------------------------------
  8290    Ft. Worth
- ------------------------------------------------------------
  8770    Mel. Park
- ------------------------------------------------------------
  8790    Lancaster
- ------------------------------------------------------------
  8795    Vacaville
- ------------------------------------------------------------

<PAGE>
<TABLE>
<CAPTION>

- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                  Est.        Case
                                                                           Unit                     Brand         Case       Weight
 DC        City         RFP#               Item Description                Size     UOM    Pack     Target       Volume       (lb)
- ------------------------------------------------------------------------------------------------------------------------------------
<S>       <C>              <C>      <C>                                   <C>       <C>    <C>      <C>          <C>         <C>
 8220     PHOENIX       35001       ALB INSTANT COFFEE CRYSTALS            8.0        z      12     Folgers        *           *
                     ...............................................................................................................
                        35002       ALB SPEC RST COFFEE CAN FAC           11.5        z      12     Folgers        *           *
                     ...............................................................................................................
                        35003       ALB GROUND COFFEE CAN FAC             13.0        z      12     Folgers        *           *
                     ...............................................................................................................
                        35004       ALB DECAF COFFEE FAC                  13.0        z      12     Folgers        *           *
                     ...............................................................................................................
                        35005       ALB GROUND COFFEE FAC                 39.0        z       6     Folgers        *           *
- ------------------------------------------------------------------------------------------------------------------------------------
 8231    SALT LAKE      35006       ALB INSTANT COFFEE CRYSTALS            8.0        z      12     Folgers        *           *
                     ...............................................................................................................
                        35007       ALB SPEC RST COFFEE CAN FAC           11.5        z      12     Folgers        *           *
                     ...............................................................................................................
                        35008       ALB GROUND COFFEE CAN FAC             13.0        z      12     Folgers        *           *
                     ...............................................................................................................
                        35009       ALB DECAF COFFEE FAC                  13.0        z      12     Folgers        *           *
                     ...............................................................................................................
                        35010       ALB GROUND COFFEE FAC                 39.0        z       6     Folgers        *           *
- ------------------------------------------------------------------------------------------------------------------------------------
 8243    PLANT CITY     35011       ALB INSTANT COFFEE CRYSTALS            8.0        z      12     Folgers        *           *
                     ...............................................................................................................
                        35012       ALB GROUND COFFEE BRICK FAC           11.5        z      12     Folgers        *           *
                     ...............................................................................................................
                        35013       ALB GROUND COFFEE CAN FAC             13.0        z      12     Folgers        *           *
                     ...............................................................................................................
                        35014       ALB DECAF COFFEE FAC                  13.0        z      12     Folgers        *           *
                     ...............................................................................................................
                        35015       ALB GROUND COFFEE FAC                 39.0        z       6     Folgers        *           *
- ------------------------------------------------------------------------------------------------------------------------------------

<CAPTION>

                                                                                -------------------------------------------------
                                                                                              DC DELIVERED PRICES
- ---------------------------------------------------------------------------------------------------------------------------------
                                                                    FOB Case
                                                                      Cost
 DC        City         RFP#               Item Description             $         T/L        20K lbs      10K lbs       5K lbs
- ---------------------------------------------------------------------------------------------------------------------------------
<S>       <C>           <C>         <C>                             <C>          <C>         <C>          <C>           <C>
 8220     PHOENIX       35001       ALB INSTANT COFFEE CRYSTALS         *          *            *            *            *
                     ............................................................................................................
                        35002       ALB SPEC RST COFFEE CAN FAC         *          *            *            *            *
                     ............................................................................................................
                        35003       ALB GROUND COFFEE CAN FAC           *          *            *            *            *
                     ............................................................................................................
                        35004       ALB DECAF COFFEE FAC                *          *            *            *            *
                     ............................................................................................................
                        35005       ALB GROUND COFFEE FAC               *          *            *            *            *
- ---------------------------------------------------------------------------------------------------------------------------------
 8231    SALT LAKE      35006       ALB INSTANT COFFEE CRYSTALS         *          *            *            *            *
                     ............................................................................................................
                        35007       ALB SPEC RST COFFEE CAN FAC         *          *            *            *            *
                     ............................................................................................................
                        35008       ALB GROUND COFFEE CAN FAC           *          *            *            *            *
                     ............................................................................................................
                        35009       ALB DECAF COFFEE FAC                *          *            *            *            *
                     ............................................................................................................
                        35010       ALB GROUND COFFEE FAC               *          *            *            *            *
- ---------------------------------------------------------------------------------------------------------------------------------
 8243    PLANT CITY     35011       ALB INSTANT COFFEE CRYSTALS         *          *            *            *            *
                     ............................................................................................................
                        35012       ALB GROUND COFFEE BRICK FAC         *          *            *            *            *
                     ............................................................................................................
                        35013       ALB GROUND COFFEE CAN FAC           *          *            *            *            *
                     ............................................................................................................
                        35014       ALB DECAF COFFEE FAC                *          *            *            *            *
                     ............................................................................................................
                        35015       ALB GROUND COFFEE FAC               *          *            *            *            *
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>

<TABLE>
<CAPTION>

- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                  Est.        Case
                                                                           Unit                     Brand         Case       Weight
 DC        City         RFP#               Item Description                Size     UOM    Pack     Target       Volume       (lb)
- ------------------------------------------------------------------------------------------------------------------------------------
<S>       <C>              <C>      <C>                                   <C>       <C>    <C>      <C>          <C>         <C>
 8252     PORTLAND         35016    ALB INSTANT COFFEE CRYSTALS            8.0        z      12     Folgers        *           *
                     ..............................................................................................................
                           35017    ALB SPEC RST COFFEE CAN FAC           11.5        z      12     Folgers        *           *
                     ..............................................................................................................
                           35018    ALB GROUND COFFEE CAN FAC             13.0        z      12     Folgers        *           *
                     ..............................................................................................................
                           35019    ALB DECAF COFFEE FAC                  13.0        z      12     Folgers        *           *
                     ..............................................................................................................
                           35020    ALB GROUND COFFEE FAC                 39.0        z       6     Folgers        *           *
- -----------------------------------------------------------------------------------------------------------------------------------
 8261     BREA             35021    ALB INSTANT COFFEE CRYSTALS            8.0        z      12     Folgers        *           *
                     ..............................................................................................................
                           35022    ALB SPEC RST COFFEE CAN FAC           11.5        z      12     Folgers        *           *
                     ..............................................................................................................
                           35023    ALB GROUND COFFEE CAN FAC             13.0        z      12     Folgers        *           *
                     ..............................................................................................................
                           35024    ALB DECAF COFFEE FAC                  13.0        z      12     Folgers        *           *
                     ..............................................................................................................
                           35025    ALB GROUND COFFEE FAC                 39.0        z       6     Folgers        *           *
- -----------------------------------------------------------------------------------------------------------------------------------
 8272     SACRAMENTO       35026    ALB INSTANT COFFEE CRYSTALS            8.0        z      12     Folgers        *           *
                     ..............................................................................................................
                           35027    ALB SPEC RST COFFEE CAN FAC           11.5        z      12     Folgers        *           *
                     ..............................................................................................................
                           35028    ALB GROUND COFFEE CAN FAC             13.0        z      12     Folgers        *           *
                     ..............................................................................................................
                           35029    ALB DECAF COFFEE FAC                  13.0        z      12     Folgers        *           *
                     ..............................................................................................................
                           35030    ALB GROUND COFFEE FAC                 39.0        z       6     Folgers        *           *
- -----------------------------------------------------------------------------------------------------------------------------------
 8281     AURORA           35031    ALB INSTANT COFFEE CRYSTALS            8.0        z      12     Folgers        *           *
                     ..............................................................................................................
                           35032    ALB SPEC RST COFFEE CAN FAC           11.5        z      12     Folgers        *           *
                     ..............................................................................................................
                           35033    ALB GROUND COFFEE CAN FAC             13.0        z      12     Folgers        *           *
                     ..............................................................................................................
                           35034    ALB DECAF COFFEE FAC                  13.0        z      12     Folgers        *           *
                     ..............................................................................................................
                           35035    ALB GROUND COFFEE FAC                 39.0        z       6     Folgers        *           *
- -----------------------------------------------------------------------------------------------------------------------------------
 8290     FT. WORTH        35036    ALB INSTANT COFFEE CRYSTALS            8.0        z      12     Folgers        *           *
                     ..............................................................................................................
                           35037    ALB SPEC RST COFFEE CAN FAC           11.5        z      12     Folgers        *           *
                     ..............................................................................................................
                           35038    ALB GROUND COFFEE CAN FAC             13.0        z      12     Folgers        *           *
                     ..............................................................................................................
                           35039    ALB DECAF COFFEE FAC                  13.0        z      12     Folgers        *           *
                     ..............................................................................................................
                           35040    ALB GROUND COFFEE FAC                 39.0        z       6     Folgers        *           *
- -----------------------------------------------------------------------------------------------------------------------------------
 8770     MEL. PARK        35041    JEWEL COFFEE INSTANT DECAF             4.0        z      12     Folgers        *           *
                     ..............................................................................................................
                           35042    JEWEL COFFEE INSTANT                   8.0        oz     12     Folgers        *           *
                     ..............................................................................................................
                           35043    JEWEL COFFEE INSTANT DECAF             8.0        oz     12     Folgers        *           *
                     ..............................................................................................................
                           35044    JEWEL COFFEE FAC                      13.0         z     12     Folgers        *           *
                     ..............................................................................................................
                           35045    JEWEL DECAF COFFEE FAC                13.0         z     12     Folgers        *           *
                     ..............................................................................................................
                           35046    JEWEL 100% COLOMBIAN COFFEE           24.0         z     12     Folgers        *           *
                     ..............................................................................................................
                           35047    JEWEL COFFEE DECAF                    26.0         z     12     Folgers        *           *
                     ..............................................................................................................
                           35048    JEWEL COFFEE FACM                     26.0         z     12     Folgers        *           *
                     ..............................................................................................................
                           35049    JEWEL COFFEE WHOLE BEAN               39.0         z      6     Folgers        *           *
                     ..............................................................................................................
                           35050    JEWEL COFFEE FAC                      39.0         z      8     Folgers        *           *
- -----------------------------------------------------------------------------------------------------------------------------------
 8790     LANCASTER        35051    ACME COFFEE INSTANT DECAF              4.0         z     12     Folgers        *           *
                     ..............................................................................................................
                           35052    ACME COFFEE INSTANT                    4.0        oz     12     Folgers        *           *
                     ..............................................................................................................
                           35053    ACME COFFEE INSTANT                    8.0        oz     12     Folgers        *           *
                     ..............................................................................................................
                           35054    ACME COFFEE FRENCH ROAST              11.5         z     12     Folgers        *           *
                     ..............................................................................................................
                           35055    ACME SPEC RST COFFEE CAN FAC          11.5         z     12     Folgers        *           *
                     ..............................................................................................................
                           35056    ACME COFFEE DECAF FAC                 13.0         z     24     Folgers        *           *
                     ..............................................................................................................
                           35057    ACME COFFEE FAC                       13.0         z     24     Folgers        *           *
                     ..............................................................................................................
                           35058    ACME COFFEE FAC                       39.0         z      6     Folgers        *           *
- -----------------------------------------------------------------------------------------------------------------------------------

<CAPTION>
                                                                                -------------------------------------------------
                                                                                              DC DELIVERED PRICES
- ---------------------------------------------------------------------------------------------------------------------------------
                                                                    FOB Case
                                                                      Cost
 DC        City         RFP#               Item Description             $         T/L        20K lbs      10K lbs       5K lbs
- ---------------------------------------------------------------------------------------------------------------------------------
<S>       <C>           <C>         <C>                             <C>          <C>         <C>          <C>           <C>
 8252     PORTLAND         35016    ALB INSTANT COFFEE CRYSTALS         *          *            *            *            *
                     ............................................................................................................
                           35017    ALB SPEC RST COFFEE CAN FAC         *          *            *            *            *
                     ............................................................................................................
                           35018    ALB GROUND COFFEE CAN FAC           *          *            *            *            *
                     ............................................................................................................
                           35019    ALB DECAF COFFEE FAC                *          *            *            *            *
                     ............................................................................................................
                           35020    ALB GROUND COFFEE FAC               *          *            *            *            *
- ---------------------------------------------------------------------------------------------------------------------------------
 8261     BREA             35021    ALB INSTANT COFFEE CRYSTALS         *          *            *            *            *
                     ............................................................................................................
                           35022    ALB SPEC RST COFFEE CAN FAC         *          *            *            *            *
                     ............................................................................................................
                           35023    ALB GROUND COFFEE CAN FAC           *          *            *            *            *
                     ............................................................................................................
                           35024    ALB DECAF COFFEE FAC                *          *            *            *            *
                     ............................................................................................................
                           35025    ALB GROUND COFFEE FAC               *          *            *            *            *
- ---------------------------------------------------------------------------------------------------------------------------------
 8272     SACRAMENTO       35026    ALB INSTANT COFFEE CRYSTALS         *          *            *            *            *
                     ............................................................................................................
                           35027    ALB SPEC RST COFFEE CAN FAC         *          *            *            *            *
                     ............................................................................................................
                           35028    ALB GROUND COFFEE CAN FAC           *          *            *            *            *
                     ............................................................................................................
                           35029    ALB DECAF COFFEE FAC                *          *            *            *            *
                     ............................................................................................................
                           35030    ALB GROUND COFFEE FAC               *          *            *            *            *
- ---------------------------------------------------------------------------------------------------------------------------------
 8281     AURORA           35031    ALB INSTANT COFFEE CRYSTALS         *          *            *            *            *
                     ............................................................................................................
                           35032    ALB SPEC RST COFFEE CAN FAC         *          *            *            *            *
                     ............................................................................................................
                           35033    ALB GROUND COFFEE CAN FAC           *          *            *            *            *
                     ............................................................................................................
                           35034    ALB DECAF COFFEE FAC                *          *            *            *            *
                     ............................................................................................................
                           35035    ALB GROUND COFFEE FAC               *          *            *            *            *
- ---------------------------------------------------------------------------------------------------------------------------------
 8290     FT. WORTH        35036    ALB INSTANT COFFEE CRYSTALS         *          *            *            *            *
                     ............................................................................................................
                           35037    ALB SPEC RST COFFEE CAN FAC         *          *            *            *            *
                     ............................................................................................................
                           35038    ALB GROUND COFFEE CAN FAC           *          *            *            *            *
                     ............................................................................................................
                           35039    ALB DECAF COFFEE FAC                *          *            *            *            *
                     ............................................................................................................
                           35040    ALB GROUND COFFEE FAC               *          *            *            *            *
- ---------------------------------------------------------------------------------------------------------------------------------
 8770     MEL. PARK        35041    JEWEL COFFEE INSTANT DECAF          *          *            *            *            *
                     ............................................................................................................
                           35042    JEWEL COFFEE INSTANT                *          *            *            *            *
                     ............................................................................................................
                           35043    JEWEL COFFEE INSTANT DECAF          *          *            *            *            *
                     ............................................................................................................
                           35044    JEWEL COFFEE FAC                    *          *            *            *            *
                     ............................................................................................................
                           35045    JEWEL DECAF COFFEE FAC              *          *            *            *            *
                     ............................................................................................................
                           35046    JEWEL 100% COLOMBIAN COFFEE         *          *            *            *            *
                     ............................................................................................................
                           35047    JEWEL COFFEE DECAF                  *          *            *            *            *
                     ............................................................................................................
                           35048    JEWEL COFFEE FACM                   *          *            *            *            *
                     ............................................................................................................
                           35049    JEWEL COFFEE WHOLE BEAN             *          *            *            *            *
                     ............................................................................................................
                           35050    JEWEL COFFEE FAC                    *          *            *            *            *
- ---------------------------------------------------------------------------------------------------------------------------------
 8790     LANCASTER        35051    ACME COFFEE INSTANT DECAF           *          *            *            *            *
                     ............................................................................................................
                           35052    ACME COFFEE INSTANT                 *          *            *            *            *
                     ............................................................................................................
                           35053    ACME COFFEE INSTANT                 *          *            *            *            *
                     ............................................................................................................
                           35054    ACME COFFEE FRENCH ROAST            *          *            *            *            *
                     ............................................................................................................
                           35055    ACME SPEC RST COFFEE CAN FAC        *          *            *            *            *
                     ............................................................................................................
                           35056    ACME COFFEE DECAF FAC               *          *            *            *            *
                     ............................................................................................................
                           35057    ACME COFFEE FAC                     *          *            *            *            *
                     ............................................................................................................
                           35058    ACME COFFEE FAC                     *          *            *            *            *
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                  Est.        Case
                                                                           Unit                     Brand         Case       Weight
 DC        City         RFP#               Item Description                Size     UOM    Pack     Target       Volume       (lb)
- ------------------------------------------------------------------------------------------------------------------------------------
<S>       <C>              <C>      <C>                                   <C>       <C>    <C>      <C>          <C>         <C>
 8795     VACAVILLE        35059    ALB INSTANT COFFEE CRYSTALS            8.0        z      12     Folgers        *           *
                     ..............................................................................................................
                           35060    ALB SPEC RST COFFEE CAN FAC           11.5        z      12     Folgers        *           *
                     ..............................................................................................................
                           35061    ALB GROUND COFFEE CAN FAC             13.0        z      12     Folgers        *           *
                     ..............................................................................................................
                           35062    ALB DECAF COFFEE FAC                  13.0        z      12     Folgers        *           *
                     ..............................................................................................................
                           35063    ALB GROUND COFFEE FAC                 39.0        z       6     Folgers        *           *
- -----------------------------------------------------------------------------------------------------------------------------------
 OTHER      ITEMS
                     ..............................................................................................................

                     ..............................................................................................................

                     ..............................................................................................................

                     ..............................................................................................................

                     ..............................................................................................................

- -----------------------------------------------------------------------------------------------------------------------------------

<CAPTION>
                                                                                -------------------------------------------------
                                                                                              DC DELIVERED PRICES
- ---------------------------------------------------------------------------------------------------------------------------------
                                                                    FOB Case
                                                                      Cost
 DC        City         RFP#               Item Description             $         T/L        20K lbs      10K lbs       5K lbs
- ---------------------------------------------------------------------------------------------------------------------------------
<S>       <C>           <C>         <C>                             <C>          <C>         <C>          <C>           <C>
 8795     VACAVILLE        35059    ALB INSTANT COFFEE CRYSTALS         *          *            *            *            *
                     ............................................................................................................
                           35060    ALB SPEC RST COFFEE CAN FAC         *          *            *            *            *
                     ............................................................................................................
                           35061    ALB GROUND COFFEE CAN FAC           *          *            *            *            *
                     ............................................................................................................
                           35062    ALB DECAF COFFEE FAC                *          *            *            *            *
                     ............................................................................................................
                           35063    ALB GROUND COFFEE FAC               *          *            *            *            *
- ---------------------------------------------------------------------------------------------------------------------------------
 OTHER      ITEMS
                     ............................................................................................................

                     ............................................................................................................

                     ............................................................................................................

                     ............................................................................................................

                     ............................................................................................................

- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>





- -------------------------------------------------------------------------------
*   Confidential Information has been omitted pursuant to a
request for confidential treatment and filed separately with the U.S.
Securities and Exchange Commission.
- -------------------------------------------------------------------------------



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.1
<SEQUENCE>5
<FILENAME>b332774_ex23-1.txt
<DESCRIPTION>CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
<TEXT>
<PAGE>

                                  Exhibit 23.1


              CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS


We hereby consent to the reference to our firm under the caption "Experts" and
to the use of our report dated December 10, 2003 in the registration statement
on Form SB-2/A - Amendment #2 of Coffee Holding Co., Inc. to be submitted to the
Securities and Exchange Commission on or about October 22, 2004.


                                               /S/ LAZAR LEVINE & FELIX LLP
                                               ----------------------------
                                                   LAZAR LEVINE & FELIX LLP




New York, NY
October 22, 2004


</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
