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<SEC-DOCUMENT>0001116502-08-000962.txt : 20080613
<SEC-HEADER>0001116502-08-000962.hdr.sgml : 20080613
<ACCEPTANCE-DATETIME>20080613110724
ACCESSION NUMBER:		0001116502-08-000962
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		2
CONFORMED PERIOD OF REPORT:	20080613
ITEM INFORMATION:		Results of Operations and Financial Condition
ITEM INFORMATION:		Financial Statements and Exhibits
FILED AS OF DATE:		20080613
DATE AS OF CHANGE:		20080613

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:			1031

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-32491
		FILM NUMBER:		08897386

	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>8-K
<SEQUENCE>1
<FILENAME>coffeeholding8k.htm
<DESCRIPTION>CURRENT REPORT
<TEXT>
<!doctype html public "-//IETF//DTD HTML//EN">
<HTML>
<HEAD>
<TITLE>UNITED STATES</TITLE>
<META NAME="author" CONTENT="RRD">
<META NAME="date" CONTENT="06/12/2008">
</HEAD>
<BODY style="line-height:12pt; font-family:Times New Roman; font-size:10pt; color:#000000">
<P style="margin:0px"><BR></P>
<P style="margin-top:0px; margin-bottom:2.2px; padding-bottom:4px; border-bottom:4px solid #000000" align=right>&nbsp;</P>
<P style="margin:0px; padding-top:4px; border-top:1.333px solid #000000" align=right>&nbsp;</P>
<P style="line-height:18pt; margin:0px; font-size:16pt" align=center><B>UNITED STATES</B></P>
<P style="line-height:18pt; margin:0px; font-size:16pt" align=center><B>SECURITIES AND EXCHANGE COMMISSION</B></P>
<P style="margin-top:0px; margin-bottom:8.133px" align=center><B>Washington, D.C. 20549</B></P>
<P style="line-height:18pt; margin-top:0px; margin-bottom:14.2px; font-size:16pt" align=center><B>FORM 8-K</B></P>
<P style="margin:0px" align=center><B>CURRENT REPORT</B></P>
<P style="margin:0px" align=center><B>Pursuant to Section&nbsp;13 or 15(d) of </B></P>
<P style="margin-top:0px; margin-bottom:8.867px" align=center><B>The Securities Exchange Act of 1934</B></P>
<P style="margin:0px" align=center><B>Date of Report (Date of earliest event reported): June&nbsp;13, 2008</B></P>
<P style="margin:0px"><BR></P>
<TABLE style="font-size:10pt" cellspacing=0 align=center><TR height=0 style="font-size:0"><TD width=690></TD></TR>
<TR><TD valign=top width=690><P style="line-height:normal; margin-top:16px; margin-bottom:0px; font-size:18pt" align=center><B><U>COFFEE HOLDING CO., INC</U></B><FONT style="font-size:12pt"><U>.</U></FONT></P>
</TD></TR>
<TR><TD valign=top width=690><P style="line-height:10pt; margin-top:2.667px; margin-bottom:0px; font-size:8pt" align=center>(Exact name of registrant as specified in its charter)</P>
</TD></TR>
</TABLE>
<P style="margin:0px"><BR></P>
<TABLE style="font-size:10pt" cellspacing=0 align=center><TR height=0 style="font-size:0"><TD width=240></TD><TD width=240></TD><TD width=210></TD></TR>
<TR><TD valign=top width=240><P style="margin-top:6.667px; margin-bottom:0px" align=center><B><U>Nevada</U></B></P>
</TD><TD valign=top width=240><P style="margin-top:6.667px; margin-bottom:0px" align=center><B><U>001-32491</U></B></P>
</TD><TD valign=top width=210><P style="margin-top:6.667px; margin-bottom:0px" align=center><B><U>11-2238111</U></B></P>
</TD></TR>
<TR><TD valign=top width=240><P style="line-height:10pt; margin-top:2.667px; margin-bottom:0px; padding-left:13.467px; font-size:8pt" align=center>(State or other jurisdiction</P>
</TD><TD valign=top width=240><P style="line-height:10pt; margin-top:2.667px; margin-bottom:0px; font-size:8pt" align=center>(Commission</P>
</TD><TD valign=top width=210><P style="line-height:10pt; margin-top:2.667px; margin-bottom:0px; font-size:8pt" align=center>(IRS Employer</P>
</TD></TR>
<TR><TD valign=top width=240><P style="line-height:10pt; margin:0px; padding-left:26.933px; font-size:8pt" align=center>of incorporation)</P>
</TD><TD valign=top width=240><P style="line-height:10pt; margin:0px; font-size:8pt" align=center>File Number)</P>
</TD><TD valign=top width=210><P style="line-height:10pt; margin:0px; font-size:8pt" align=center>Identification No.)</P>
</TD></TR>
</TABLE>
<P style="margin:0px"><BR></P>
<TABLE style="font-size:10pt" cellspacing=0 align=center><TR height=0 style="font-size:0"><TD width=480></TD><TD width=210></TD></TR>
<TR><TD valign=top width=480><P style="margin-top:13.333px; margin-bottom:0px" align=center><B><U>4401 First Avenue, Brooklyn, New York</U></B></P>
</TD><TD valign=top width=210><P style="margin-top:13.333px; margin-bottom:0px" align=center><B><U>11232-0005</U></B></P>
</TD></TR>
<TR><TD valign=top width=480><P style="line-height:10pt; margin-top:2.667px; margin-bottom:0px; font-size:8pt" align=center>(Address of principal executive offices)</P>
</TD><TD valign=top width=210><P style="line-height:10pt; margin-top:2.667px; margin-bottom:0px; font-size:8pt" align=center>(Zip Code)</P>
</TD></TR>
</TABLE>
<P style="margin:0px"><BR></P>
<P style="margin:0px" align=center>Registrant&#146;s telephone number, including area code: (718) 832-0800</P>
<P style="margin:0px"><BR></P>
<TABLE style="font-size:10pt" cellspacing=0 align=center><TR height=0 style="font-size:0"><TD width=690></TD></TR>
<TR><TD valign=top width=690><P style="margin-top:6.667px; margin-bottom:0px" align=center><B><U>Not Applicable</U></B></P>
</TD></TR>
<TR><TD valign=top width=690><P style="line-height:10pt; margin-top:2.667px; margin-bottom:0px; font-size:8pt" align=center>(Former name or former address, if changed since last report.)</P>
</TD></TR>
</TABLE>
<P style="margin-top:6.667px; margin-bottom:6.667px">Check the appropriate box below if the Form&nbsp;8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):</P>
<P style="margin-top:0px; margin-bottom:7.867px; font-family:Wingdings">&#168;<FONT style="font-family:Times New Roman"> Written communications pursuant to Rule&nbsp;425 under the Securities Act (17 CFR 230.425)</FONT></P>
<P style="margin-top:0px; margin-bottom:7.733px; font-family:Wingdings">&#168;<FONT style="font-family:Times New Roman"> Soliciting material pursuant to Rule&nbsp;14a-12 under the Exchange Act (17 CFR 240.14a-12)</FONT></P>
<P style="margin-top:0px; margin-bottom:7.733px; font-family:Wingdings">&#168;<FONT style="font-family:Times New Roman"> Pre-commencement communications pursuant to Rule&nbsp;14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))</FONT></P>
<P style="margin-top:0px; margin-bottom:8.867px; font-family:Wingdings">&#168;<FONT style="font-family:Times New Roman"> Pre-commencement communications pursuant to Rule&nbsp;13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))</FONT></P>
<P style="margin-top:0px; margin-bottom:2.2px; padding-bottom:4px; border-bottom:1.333px solid #000000">&nbsp;</P>
<P style="margin:0px; padding-top:4px; border-top:4px solid #000000">&nbsp;</P>
<P style="margin-top:0px; margin-bottom:8.867px"><BR></P>
<P style="margin-top:0px; margin-bottom:8.867px"><BR>
<BR></P>
<HR style="margin-top:9.6px; margin-bottom:9.6px" noshade size=1.333>
<P style="margin-top:0px; margin-bottom:-16px; page-break-before:always"><B>Item 2.02</B></P>
<P style="margin-top:0px; margin-bottom:8.867px; text-indent:72px"><B>Results of Operations and Financial Condition.</B></P>
<P style="margin-top:0px; margin-bottom:8.867px; padding-left:48px" align=justify>On June&nbsp;13, 2008, Coffee Holding Co., Inc. issued a press release disclosing certain information regarding its results of operations for the three and six months ended April&nbsp;30, 2008. A copy of the press release is attached as exhibit 99.1.</P>
<P style="margin-top:0px; margin-bottom:-16px; padding-left:72px; text-indent:-72px" align=justify><B>Item 9.01</B></P>
<P style="margin-top:0px; margin-bottom:8.867px; padding-left:72px" align=justify><B>Financial Statements and Exhibits.</B></P>
<P style="margin-top:0px; margin-bottom:-16px; padding-left:96px; text-indent:-48px" align=justify>(d)</P>
<P style="margin-top:0px; margin-bottom:8.867px; padding-left:96px" align=justify>The following exhibit is furnished with this report:</P>
<TABLE style="font-size:10pt" cellspacing=0 align=center><TR height=0 style="font-size:0"><TD width=102.867></TD><TD width=26.333></TD><TD width=494.8></TD></TR>
<TR><TD style="border-bottom:1px solid #000000" valign=bottom width=102.867><P style="margin:0px" align=center><B>Exhibit&nbsp;No.</B></P>
</TD><TD style="border-bottom:1px solid #FFFFFF" valign=bottom width=26.333><P style="margin:0px"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</B></P>
</TD><TD style="border-bottom:1px solid #000000" valign=bottom width=494.8><P style="margin:0px"><B>Description</B></P>
</TD></TR>
<TR><TD valign=bottom width=102.867><P>&nbsp;</P></TD><TD valign=bottom width=26.333><P>&nbsp;</P></TD><TD valign=bottom width=494.8><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=102.867><P style="margin:0px; color:#0000FF" align=center><A HREF="exhibit991.htm"><U>99.1</U></A><FONT style="color:#000000"></FONT></P>
</TD><TD valign=bottom width=26.333><P>&nbsp;</P></TD><TD valign=bottom width=494.8><P style="margin:0px">Coffee Holding Co., Inc. press release dated June&nbsp;13, 2008</P>
</TD></TR>
</TABLE>
<P style="margin-top:0px; margin-bottom:8.867px" align=center><BR>
<BR></P>
<P style="margin:0px" align=center>2</P>
<P style="margin:0px"><BR></P>
<HR style="margin-top:9.6px; margin-bottom:9.6px" noshade size=1.333>
<P style="margin-top:0px; margin-bottom:8.867px; padding-left:96px; text-indent:-84px; page-break-before:always" align=center><B>SIGNATURES</B></P>
<P style="margin-top:0px; margin-bottom:8.867px; text-indent:48px">Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.</P>
<TABLE style="font-size:10pt" cellspacing=0 align=center><TR height=0 style="font-size:0"><TD width=344.133></TD><TD width=23.933></TD><TD width=255.933></TD></TR>
<TR><TD valign=top width=344.133><P style="margin:0px">Dated: June&nbsp;13, 2008</P>
</TD><TD valign=top width=23.933><P>&nbsp;</P></TD><TD valign=top width=255.933><P style="margin:0px"><B>COFFEE HOLDING CO., INC.</B></P>
</TD></TR>
<TR><TD valign=top width=344.133><P>&nbsp;</P></TD><TD valign=top width=23.933><P>&nbsp;</P></TD><TD valign=top width=255.933><P>&nbsp;</P></TD></TR>
<TR><TD valign=top width=344.133><P>&nbsp;</P></TD><TD valign=top width=23.933><P style="margin:0px">By:</P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=255.933><P style="line-height:normal; margin:0px">/s/A<FONT style="font-size:6pt">NDREW</FONT> G<FONT style="font-size:6pt">ORDON</FONT></P>
</TD></TR>
<TR><TD valign=top width=344.133><P>&nbsp;</P></TD><TD valign=top width=23.933><P>&nbsp;</P></TD><TD valign=top width=255.933><P style="margin:0px">Name: Andrew Gordon </P>
</TD></TR>
<TR><TD valign=top width=344.133><P>&nbsp;</P></TD><TD valign=top width=23.933><P>&nbsp;</P></TD><TD valign=top width=255.933><P style="margin:0px">Title:President and Chief Executive Officer</P>
</TD></TR>
</TABLE>
<P style="margin:0px"><BR>
<BR></P>
<P style="margin:0px" align=center>3</P>
<P style="margin:0px"><BR></P>
<HR style="margin-top:9.6px; margin-bottom:9.6px" noshade size=1.333>
<P style="margin-top:0px; margin-bottom:8.867px; page-break-before:always" align=center><B>EXHIBIT INDEX</B></P>
<TABLE style="font-size:10pt" cellspacing=0 align=center><TR height=0 style="font-size:0"><TD width=102.867></TD><TD width=26.333></TD><TD width=494.8></TD></TR>
<TR><TD style="border-bottom:1px solid #000000" valign=bottom width=102.867><P style="margin:0px" align=center><B>Exhibit&nbsp;No.</B></P>
</TD><TD style="border-bottom:1px solid #FFFFFF" valign=bottom width=26.333><P style="margin:0px"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</B></P>
</TD><TD style="border-bottom:1px solid #000000" valign=bottom width=494.8><P style="margin:0px"><B>Description</B></P>
</TD></TR>
<TR><TD valign=bottom width=102.867><P>&nbsp;</P></TD><TD valign=bottom width=26.333><P>&nbsp;</P></TD><TD valign=bottom width=494.8><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=102.867><P style="margin:0px; color:#0000FF" align=center><A HREF="exhibit991.htm"><U>99.1</U></A><FONT style="color:#000000"></FONT></P>
</TD><TD valign=bottom width=26.333><P>&nbsp;</P></TD><TD valign=bottom width=494.8><P style="margin:0px">Coffee Holding Co., Inc. press release dated June&nbsp;13, 2008</P>
</TD></TR>
</TABLE>
<P style="margin:0px"><BR></P>
<P style="margin:0px"><BR>
<BR></P>
<P style="margin:0px"><BR></P>
<P style="margin:0px"><BR></P>
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<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>2
<FILENAME>exhibit991.htm
<DESCRIPTION>PRESS RELEASE
<TEXT>
<!doctype html public "-//IETF//DTD HTML//EN">
<HTML>
<HEAD>
<TITLE>COFFEE HOLDING CO</TITLE>
<META NAME="author" CONTENT="Lazar Levine &amp; Felix">
<META NAME="date" CONTENT="06/12/2008">
</HEAD>
<BODY style="line-height:12pt; font-family:Times New Roman; font-size:10pt; color:#000000">
<A NAME="_Ref3977756"></A><P style="line-height:13pt; margin:0px; font-size:11pt" align=right><B>Exhibit 99.1</B></P>
<P style="margin:0px"><BR></P>
<P style="line-height:13pt; margin-top:0px; margin-bottom:14.667px; font-size:11pt"><B>FOR IMMEDIATE RELEASE</B></P>
<P style="line-height:13pt; margin:0px; font-size:11pt">Contact: Andrew Gordon, President &amp; CEO</P>
<P style="line-height:13pt; margin-top:0px; margin-bottom:9.8px; font-size:11pt">Telephone: (718) 832-0800</P>
<P style="line-height:14pt; margin-top:0px; margin-bottom:10.667px; font-size:12pt" align=center><B>Coffee Holding Co., Inc. Reports Second Quarter and Six Month Results</B></P>
<P style="line-height:13pt; margin-top:0px; margin-bottom:9.8px; text-indent:48px; font-size:11pt">BROOKLYN, New York &#150; June&nbsp;13, 2008. Coffee Holding Co., Inc. (AMEX: JVA) today announced its operating results for the three and six months ended April&nbsp;30, 2008. In this release, the Company:</P>
<P style="line-height:13pt; margin-top:0px; margin-bottom:-17.333px; padding-left:80px; text-indent:-32px; font-family:Symbol; font-size:11pt">&#183;</P>
<P style="line-height:13pt; margin-top:0px; margin-bottom:9.8px; padding-left:80px; font-size:11pt">Reports net sales of $18,169,441 for the quarter and $33,131,982 for the six months ended April&nbsp;30, 2008;</P>
<P style="line-height:13pt; margin-top:0px; margin-bottom:-17.333px; padding-left:80px; text-indent:-32px; font-family:Symbol; font-size:11pt">&#183;</P>
<P style="line-height:13pt; margin-top:0px; margin-bottom:9.8px; padding-left:80px; font-size:11pt">Reports sales growth of 28.0% for the quarter and 23.5% for the six months ended April&nbsp;30, 2008 compared to the three and six month periods ended April&nbsp;30, 2007; and</P>
<A NAME="OLE_LINK1"></A><P style="line-height:13pt; margin-top:0px; margin-bottom:-17.333px; padding-left:80px; text-indent:-32px; font-family:Symbol; font-size:11pt">&#183;</P>
<P style="line-height:13pt; margin-top:0px; margin-bottom:9.8px; padding-left:80px; font-size:11pt">Reports net losses of $2,044,178 for the quarter and $1,861,913 for the six months ended April&nbsp;30, 2008.</P>
<P style="line-height:13pt; margin-top:0px; margin-bottom:14.667px; text-indent:48px; font-size:11pt">Net sales totaled $18,169,441 for the three months ended April&nbsp;30, 2008, an increase of $3,975,068, or 28.0%, from $14,194,373 for the three months ended April&nbsp;30, 2007. Net sales totaled $33,131,982 for the six months ended April&nbsp;30, 2008, an increase of $6,302,497, or 23.5%, from $26,829,485 for the six months ended April&nbsp;30, 2007. The increase in net sales for each period reflects increased amounts of green coffee, branded coffee and private label coffee sold as well as increased sales prices compared to the three and six month periods of 2007.</P>
<P style="line-height:13pt; margin-top:0px; margin-bottom:14.667px; text-indent:48px; font-size:11pt">The Company had a net loss of $2,044,178, or $0.37 per share (basic and diluted), for the three months ended April&nbsp;30, 2008 compared to net income of $338,888, or $0.06 per share (basic and diluted), for the three months ended April&nbsp;30, 2007. For the six months ended April&nbsp;30, 2008, the Company had a net loss of $1,861,913, or $0.34 per share (basic and diluted), compared to net income of $648,592, or $0.12 per share (basic and diluted), for the 2007 period. The losses for the three and six month periods ended April&nbsp;30, 2008 were due to sharp increases in cost of sales that resulted from higher coffee prices and losses on options and futures contracts. As a result, cost of sales exceeded net sales for the quarter ended April&nbsp;30, 2008 and were 99.4% of net sales for the six months ended April&nbsp;30, 2008. Net losses on options and futures contracts equaled $2,082,679 for the second 
quarter of fiscal 2008 and $1,489,236 for the six months ended April&nbsp;30, 2008.</P>
<P style="line-height:13pt; margin-top:0px; margin-bottom:14.667px; text-indent:48px; font-size:11pt">Commenting on the Company&#146;s losses on options and futures contracts, President and Chief Executive Officer Andrew Gordon said, &#147;The increased investment by index funds in crop futures during the first few months of 2008 placed a major financial strain on commercial participants in many markets, including coffee. The price spike and subsequent market crash saw coffee prices surge over $0.35 (26%) and then collapse within a five week period. This spike prevented many companies, including ourselves, from adequately managing risk during this time. We were unable to defend our hedge and pricing positions due to the excess speculation involved in our market. The end result was a significant loss on our hedge positions as well as an inadequately priced physical coffee position. Fortunately, both our hedging losses as well as high priced physicals have been washed through our income statement during this p
eriod.&#148;</P>
<P style="line-height:13pt; margin-top:0px; margin-bottom:14.667px; text-indent:48px; font-size:11pt">&#147;Going forward, we anticipate a return to &#145;business as usual&#146; for our company,&#148; said Mr.&nbsp;Gordon. &#147;We continue to see our revenues increase annually and we have a record of profitability during ten of the last twelve quarters since going public. Our balance sheet remains strong even after having paid out a $0.28 per share cash dividend in February&nbsp;as well as the extraordinary loss incurred during this past fiscal period. We stand behind our stock and believe its current market price is by no means representative of its </P>
<P style="margin-top:0px; margin-bottom:14.667px"><BR>
<BR></P>
<P style="line-height:13pt; margin:0px; font-size:11pt" align=center>1</P>
<P style="margin:0px"><BR></P>
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<P style="line-height:13pt; margin-top:0px; margin-bottom:14.667px; font-size:11pt">true value. For that reason, we will continue as a company to buy our stock back as part of our publicly announced share repurchase program at every available opportunity.&#148;</P>
<P style="line-height:13pt; margin-top:0px; margin-bottom:14.667px; text-indent:48px; font-size:11pt">&#147;Finally, our much anticipated rollout of Entenmann&#146;s branded coffee products occurred during this last quarter. Although we experienced significant onetime costs in packaging development and slotting (product placement) in conjunction with the rollout, those costs were neither excessive nor unanticipated. More importantly, the initial results both in sales and consumer feedback on the product line are extremely positive and give us a strong indication as to how successful Entenmann&#146;s coffee will be in the marketplace over the next several years.&#148;</P>
<P style="line-height:13pt; margin-top:0px; margin-bottom:9.8px; text-indent:48px; font-size:11pt">&#147;We realize the results for this period obviously are unacceptable to both our management and our shareholder base,&#148; concluded Mr.&nbsp;Gordon. &#147;In our 38 years of existence, we have never underperformed and incurred losses of this magnitude. We firmly believe we will never see a repeat of this performance again. We look forward to a fresh start this upcoming quarter.&#148;</P>
<P style="line-height:13pt; margin-top:0px; margin-bottom:9.8px; font-size:11pt"><I>About Coffee Holding</I></P>
<P style="line-height:13pt; margin-top:0px; margin-bottom:9.8px; text-indent:48px; font-size:11pt">Coffee Holding is a leading integrated wholesale coffee roaster and dealer in the United States and one of the few coffee companies that offers a broad array of coffee products across the entire spectrum of consumer tastes, preferences and price points. Coffee Holding has been a family operated business for three generations and has remained profitable through varying cycles in the coffee industry and the economy. The Company&#146;s private label and branded coffee products are sold throughout the United States, Canada and abroad to supermarkets, wholesalers, and individually owned and multi unit retail customers.</P>
<P style="line-height:13pt; margin:0px; text-indent:48px; font-size:11pt"><I>Any statements that are not historical facts contained in this release are &#147;forward-looking statements&#148; within the meaning of the Private Securities Litigation Reform Act of 1995. It is possible that the assumptions made by management for purposes of such statements may not materialize. Actual results may differ materially from those projected or implied in any forward-looking statements. Such statements may involve risks and uncertainties, including but not limited to those relating to product demand, pricing, market acceptance, the effect of economic conditions, intellectual property rights, the outcome of competitive products, risks in product development, the results of financing efforts, the ability to complete transactions, and other factors discussed from time to time in the Company&#146;s Securities and Exchange Commission filings. The Company undertakes no obligation to update or revise any forward-looking stateme
nt for events or circumstances after the date on which such statement is made.</I></P>
<P style="margin:0px"><BR>
<BR></P>
<P style="line-height:13pt; margin:0px; font-size:11pt" align=center>2</P>
<P style="margin:0px"><BR></P>
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<P style="margin:0px; page-break-before:always"><BR></P>
<P style="margin:0px"><BR></P>
<P style="line-height:13pt; margin:0px; font-size:11pt" align=center><B>COFFEE HOLDING CO., INC.</B></P>
<P style="line-height:13pt; margin:0px; font-size:11pt" align=center><B>CONDENSED CONSOLIDATED BALANCE SHEETS</B></P>
<P style="line-height:13pt; margin:0px; font-size:11pt" align=center><B>APRIL 30, 2008 AND OCTOBER 31, 2007</B></P>
<P style="margin:0px" align=center><BR></P>
<TABLE style="font-size:10pt" cellspacing=0 align=center><TR height=0 style="font-size:0"><TD width=522.067></TD><TD width=16.667></TD><TD width=6.667></TD><TD width=73.4></TD><TD width=16.667></TD><TD width=6.667></TD><TD width=73.4></TD><TD width=4.467></TD></TR>
<TR><TD valign=bottom width=522.067><P>&nbsp;</P></TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom colspan=2 rowspan=2><P style="line-height:10pt; margin:0px; font-size:8pt" align=center><B>April&nbsp;30,<BR>
2008</B></P>
</TD><TD style="border-bottom:1px solid #FFFFFF" valign=bottom width=16.667><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom colspan=2 rowspan=2><P style="line-height:10pt; margin:0px; font-size:8pt" align=center>October&nbsp;31,<BR>
2007</P>
</TD><TD style="border-bottom:1px solid #FFFFFF" valign=bottom width=4.467><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=522.067><P>&nbsp;</P></TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=4.467><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=522.067><P>&nbsp;</P></TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom colspan=2><P style="line-height:10pt; margin:0px; font-size:8pt" align=center><B>(unaudited)</B></P>
</TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom colspan=2><P style="line-height:10pt; margin:0px; font-size:8pt" align=center>(audited)</P>
</TD><TD valign=bottom width=4.467><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=522.067><P style="margin:0px; padding-left:8px; text-indent:-8px" align=center><B>- ASSETS -</B></P>
</TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=73.4><P>&nbsp;</P></TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=73.4><P>&nbsp;</P></TD><TD valign=bottom width=4.467><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=522.067><P style="margin:0px; padding-left:8px; text-indent:-8px"><B>CURRENT ASSETS:</B></P>
</TD><TD valign=bottom width=16.667><P style="margin:0px"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</B></P>
</TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=73.4><P>&nbsp;</P></TD><TD valign=bottom width=16.667><P style="margin:0px"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</B></P>
</TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=73.4><P>&nbsp;</P></TD><TD valign=bottom width=4.467><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=522.067><P style="margin:0px; padding-left:24px; text-indent:-8px">Cash</P>
</TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P style="margin:0px"><B>$</B></P>
</TD><TD valign=bottom width=73.4><P style="margin:0px" align=right><B>1,617,413</B></P>
</TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P style="margin:0px">$</P>
</TD><TD valign=bottom width=73.4><P style="margin:0px" align=right>890,649</P>
</TD><TD valign=bottom width=4.467><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=522.067><P style="margin:0px; padding-left:24px; text-indent:-8px">Commodities held at broker</P>
</TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=73.4><P style="margin:0px" align=right><B>832,218</B></P>
</TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=73.4><P style="margin:0px" align=right>3,468,530</P>
</TD><TD valign=bottom width=4.467><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=522.067><P style="margin:0px; padding-left:24px; text-indent:-8px">Accounts receivable, net of allowance for doubtful accounts of $127,464 and $136,781 for 2008 and 2007, respectively</P>
</TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=73.4><P style="margin:0px" align=right><B>5,651,787</B></P>
</TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=73.4><P style="margin:0px" align=right>7,130,467</P>
</TD><TD valign=bottom width=4.467><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=522.067><P style="margin:0px; padding-left:24px; text-indent:-8px">Inventories</P>
</TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=73.4><P style="margin:0px" align=right><B>4,471,463</B></P>
</TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=73.4><P style="margin:0px" align=right>4,472,097</P>
</TD><TD valign=bottom width=4.467><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=522.067><P style="margin:0px; padding-left:24px; text-indent:-8px">Prepaid expenses and other current assets</P>
</TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=73.4><P style="margin:0px" align=right><B>346,740</B></P>
</TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=73.4><P style="margin:0px" align=right>502,240</P>
</TD><TD valign=bottom width=4.467><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=522.067><P style="margin:0px; padding-left:24px; text-indent:-8px">Prepaid and refundable taxes</P>
</TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=73.4><P style="margin:0px" align=right><B>267,462</B></P>
</TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=73.4><P style="margin:0px" align=right>236,406</P>
</TD><TD valign=bottom width=4.467><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=522.067><P style="margin:0px; padding-left:24px; text-indent:-8px">Deferred income tax asset</P>
</TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=6.667><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=73.4><P style="margin:0px" align=right><B>1,331,000</B></P>
</TD><TD style="border-bottom:1px solid #FFFFFF" valign=bottom width=16.667><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=6.667><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=73.4><P style="margin:0px" align=right>279,000</P>
</TD><TD style="border-bottom:1px solid #FFFFFF" valign=bottom width=4.467><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=522.067><P style="margin:0px; padding-left:8px; text-indent:-8px">TOTAL CURRENT ASSETS</P>
</TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=73.4><P style="margin:0px" align=right><B>14,518,083</B></P>
</TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=73.4><P style="margin:0px" align=right>16,979,389</P>
</TD><TD valign=bottom width=4.467><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=522.067><P>&nbsp;</P></TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=73.4><P>&nbsp;</P></TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=73.4><P>&nbsp;</P></TD><TD valign=bottom width=4.467><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=522.067><P style="margin:0px; padding-left:8px; text-indent:-8px">Property and equipment, at cost, net of accumulated depreciation of $4,731,184 and $4,542,490 for 2008 and 2007, respectively</P>
</TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=73.4><P style="margin:0px" align=right><B>2,953,925</B></P>
</TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=73.4><P style="margin:0px" align=right>2,651,960</P>
</TD><TD valign=bottom width=4.467><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=522.067><P style="margin:0px; padding-left:8px; text-indent:-8px">Deposits and other assets</P>
</TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=6.667><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=73.4><P style="margin:0px" align=right><B>489,066</B></P>
</TD><TD style="border-bottom:1px solid #FFFFFF" valign=bottom width=16.667><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=6.667><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=73.4><P style="margin:0px" align=right>765,368</P>
</TD><TD style="border-bottom:1px solid #FFFFFF" valign=bottom width=4.467><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=522.067><P style="margin:0px; padding-left:40px; text-indent:-8px"><B>TOTAL ASSETS</B></P>
</TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD style="border-bottom:3px double #000000" valign=bottom width=6.667><P style="margin:0px"><B>$</B></P>
</TD><TD style="border-bottom:3px double #000000" valign=bottom width=73.4><P style="margin:0px" align=right><B>17,961,074</B></P>
</TD><TD style="border-bottom:3px double #FFFFFF" valign=bottom width=16.667><P>&nbsp;</P></TD><TD style="border-bottom:3px double #000000" valign=bottom width=6.667><P style="margin:0px">$</P>
</TD><TD style="border-bottom:3px double #000000" valign=bottom width=73.4><P style="margin:0px" align=right>20,396,717</P>
</TD><TD style="border-bottom:3px double #FFFFFF" valign=bottom width=4.467><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=522.067><P>&nbsp;</P></TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=73.4><P>&nbsp;</P></TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=73.4><P>&nbsp;</P></TD><TD valign=bottom width=4.467><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=522.067><P style="margin:0px; padding-left:8px; text-indent:-8px" align=center><B>- LIABILITIES AND STOCKHOLDERS' EQUITY -</B></P>
</TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=73.4><P>&nbsp;</P></TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=73.4><P>&nbsp;</P></TD><TD valign=bottom width=4.467><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=522.067><P>&nbsp;</P></TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=73.4><P>&nbsp;</P></TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=73.4><P>&nbsp;</P></TD><TD valign=bottom width=4.467><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=522.067><P style="margin:0px; padding-left:8px; text-indent:-8px"><B>CURRENT LIABILITIES:</B></P>
</TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=73.4><P>&nbsp;</P></TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=73.4><P>&nbsp;</P></TD><TD valign=bottom width=4.467><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=522.067><P style="margin:0px; padding-left:24px; text-indent:-8px">Accounts payable and accrued expenses</P>
</TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P style="margin:0px"><B>$</B></P>
</TD><TD valign=bottom width=73.4><P style="margin:0px" align=right><B>6,326,167</B></P>
</TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P style="margin:0px">$</P>
</TD><TD valign=bottom width=73.4><P style="margin:0px" align=right>6,791,690</P>
</TD><TD valign=bottom width=4.467><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=522.067><P style="margin:0px; padding-left:24px; text-indent:-8px">Line of credit borrowings</P>
</TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=73.4><P style="margin:0px" align=right><B>2,556,762</B></P>
</TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=73.4><P style="margin:0px" align=right>897,191</P>
</TD><TD valign=bottom width=4.467><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=522.067><P style="margin:0px; padding-left:24px; text-indent:-8px">Income taxes payable</P>
</TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=6.667><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=73.4><P style="margin:0px" align=right>&#151;</P>
</TD><TD style="border-bottom:1px solid #FFFFFF" valign=bottom width=16.667><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=6.667><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=73.4><P style="margin:0px" align=right>9,161</P>
</TD><TD style="border-bottom:1px solid #FFFFFF" valign=bottom width=4.467><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=522.067><P style="margin:0px; padding-left:8px; text-indent:-8px">TOTAL CURRENT LIABILITIES</P>
</TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=73.4><P style="margin:0px" align=right><B>8,882,929</B></P>
</TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=73.4><P style="margin:0px" align=right>7,698,042</P>
</TD><TD valign=bottom width=4.467><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=522.067><P>&nbsp;</P></TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=73.4><P>&nbsp;</P></TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=73.4><P>&nbsp;</P></TD><TD valign=bottom width=4.467><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=522.067><P style="margin:0px; padding-left:8px; text-indent:-8px">Deferred income tax liabilities</P>
</TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=73.4><P style="margin:0px" align=right><B>27,000</B></P>
</TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=73.4><P style="margin:0px" align=right>145,000</P>
</TD><TD valign=bottom width=4.467><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=522.067><P style="margin:0px; padding-left:8px; text-indent:-8px">Deferred compensation payable</P>
</TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=6.667><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=73.4><P style="margin:0px" align=right><B>394,020</B></P>
</TD><TD style="border-bottom:1px solid #FFFFFF" valign=bottom width=16.667><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=6.667><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=73.4><P style="margin:0px" align=right>351,332</P>
</TD><TD style="border-bottom:1px solid #FFFFFF" valign=bottom width=4.467><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=522.067><P style="margin:0px; padding-left:8px; text-indent:-8px">TOTAL LIABILITIES</P>
</TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=6.667><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=73.4><P style="margin:0px" align=right><B>9,303,949</B></P>
</TD><TD style="border-bottom:1px solid #FFFFFF" valign=bottom width=16.667><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=6.667><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=73.4><P style="margin:0px" align=right>8,194,374</P>
</TD><TD style="border-bottom:1px solid #FFFFFF" valign=bottom width=4.467><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=522.067><P>&nbsp;</P></TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=73.4><P>&nbsp;</P></TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=73.4><P>&nbsp;</P></TD><TD valign=bottom width=4.467><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=522.067><P style="margin:0px; padding-left:8px; text-indent:-8px"><B>MINORITY INTEREST</B></P>
</TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=73.4><P style="margin:0px" align=right><B>&#151;</B></P>
</TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=73.4><P style="margin:0px" align=right>&#151;</P>
</TD><TD valign=bottom width=4.467><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=522.067><P>&nbsp;</P></TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=73.4><P>&nbsp;</P></TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=73.4><P>&nbsp;</P></TD><TD valign=bottom width=4.467><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=522.067><P style="margin:0px; padding-left:8px; text-indent:-8px"><B>COMMITMENTS AND CONTINGENCIES</B></P>
</TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=73.4><P>&nbsp;</P></TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=73.4><P>&nbsp;</P></TD><TD valign=bottom width=4.467><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=522.067><P>&nbsp;</P></TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=73.4><P>&nbsp;</P></TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=73.4><P>&nbsp;</P></TD><TD valign=bottom width=4.467><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=522.067><P style="margin:0px; padding-left:8px; text-indent:-8px"><B>STOCKHOLDERS' EQUITY:</B></P>
</TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=73.4><P>&nbsp;</P></TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=73.4><P>&nbsp;</P></TD><TD valign=bottom width=4.467><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=522.067><P style="margin:0px; padding-left:24px; text-indent:-8px">Preferred stock, par value $.001 per share; 10,000,000 shares authorized; none issued</P>
</TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=73.4><P style="margin:0px" align=right><B>&#151;</B></P>
</TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=73.4><P style="margin:0px" align=right>&#151;</P>
</TD><TD valign=bottom width=4.467><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=522.067><P style="margin:0px; padding-left:24px; text-indent:-8px">Common stock, par value $.001 per share; 30,000,000 shares authorized, 5,529,830 shares issued; 5,480,216 shares outstanding for 2008 and 5,514,930 shares outstanding in 2007</P>
</TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=73.4><P style="margin:0px" align=right><B>5,530</B></P>
</TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=73.4><P style="margin:0px" align=right>5,530</P>
</TD><TD valign=bottom width=4.467><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=522.067><P style="margin:0px; padding-left:24px; text-indent:-8px">Additional paid-in capital</P>
</TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=73.4><P style="margin:0px" align=right><B>7,327,023</B></P>
</TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=73.4><P style="margin:0px" align=right>7,327,023</P>
</TD><TD valign=bottom width=4.467><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=522.067><P style="margin:0px; padding-left:24px; text-indent:-8px">Retained earnings</P>
</TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=73.4><P style="margin:0px" align=right><B>1,539,986</B></P>
</TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=73.4><P style="margin:0px" align=right>4,946,467</P>
</TD><TD valign=bottom width=4.467><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=522.067><P style="margin:0px; padding-left:24px; text-indent:-8px">Less: Treasury stock, 49,614 and 14,900 common shares, at cost for 2008 and 2007, respectively</P>
</TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=6.667><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=73.4><P style="margin:0px" align=right><B>(215,414</B></P>
</TD><TD style="border-bottom:1px solid #FFFFFF" valign=bottom width=16.667><P style="margin:0px"><B>)</B></P>
</TD><TD style="border-bottom:1px solid #000000" valign=bottom width=6.667><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=73.4><P style="margin:0px" align=right>(76,677</P>
</TD><TD style="border-bottom:1px solid #FFFFFF" valign=bottom width=4.467><P style="margin:0px">)</P>
</TD></TR>
<TR><TD valign=bottom width=522.067><P style="margin:0px; padding-left:8px; text-indent:-8px">TOTAL STOCKHOLDERS&#146; EQUITY</P>
</TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=6.667><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=73.4><P style="margin:0px" align=right><B>8,657,125</B></P>
</TD><TD style="border-bottom:1px solid #FFFFFF" valign=bottom width=16.667><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=6.667><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=73.4><P style="margin:0px" align=right>12,202,343</P>
</TD><TD style="border-bottom:1px solid #FFFFFF" valign=bottom width=4.467><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=522.067><P style="margin:0px; padding-left:40px; text-indent:-8px"><B>TOTAL LIABILITIES AND STOCKHOLDERS&#146; EQUITY</B></P>
</TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD style="border-bottom:3px double #000000" valign=bottom width=6.667><P style="margin:0px"><B>$</B></P>
</TD><TD style="border-bottom:3px double #000000" valign=bottom width=73.4><P style="margin:0px" align=right><B>17,961,074</B></P>
</TD><TD style="border-bottom:3px double #FFFFFF" valign=bottom width=16.667><P>&nbsp;</P></TD><TD style="border-bottom:3px double #000000" valign=bottom width=6.667><P style="margin:0px">$</P>
</TD><TD style="border-bottom:3px double #000000" valign=bottom width=73.4><P style="margin:0px" align=right>20,396,717</P>
</TD><TD style="border-bottom:3px double #FFFFFF" valign=bottom width=4.467><P>&nbsp;</P></TD></TR>
</TABLE>
<P style="margin:0px"><BR></P>
<P style="margin:0px" align=center><BR>
<BR></P>
<P style="line-height:13pt; margin:0px; font-size:11pt" align=center>3</P>
<P style="margin:0px"><BR></P>
<HR style="margin-top:9.6px; margin-bottom:9.6px" noshade size=1.333>
<P style="margin:0px; page-break-before:always"><BR></P>
<P style="margin:0px"><BR></P>
<P style="line-height:13pt; margin:0px; font-size:11pt" align=center><B>COFFEE HOLDING CO., INC.</B></P>
<P style="line-height:13pt; margin:0px; font-size:11pt" align=center><B>CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS</B></P>
<P style="line-height:13pt; margin-top:0px; margin-bottom:7.333px; font-size:11pt" align=center><B>(Unaudited)</B></P>
<TABLE style="font-size:10pt" cellspacing=0 align=center><TR height=0 style="font-size:0"><TD width=382.133></TD><TD width=16.667></TD><TD width=6.667></TD><TD width=60></TD><TD width=16.667></TD><TD width=6.667></TD><TD width=60></TD><TD width=16.667></TD><TD width=6.667></TD><TD width=60></TD><TD width=16.667></TD><TD width=6.667></TD><TD width=60.067></TD><TD width=4.467></TD></TR>
<TR><TD valign=bottom width=382.133><P>&nbsp;</P></TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom colspan=5 rowspan=2><P style="line-height:10pt; margin:0px; font-size:8pt" align=center><B>Six Months Ended<BR>
April&nbsp;30</B>,</P>
</TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom colspan=5 rowspan=2><P style="line-height:10pt; margin:0px; font-size:8pt" align=center><B>Three Months Ended<BR>
April 30,</B></P>
</TD><TD valign=bottom width=4.467><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=382.133><P>&nbsp;</P></TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=4.467><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=382.133><P>&nbsp;</P></TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom colspan=2><P style="line-height:10pt; margin:0px; font-size:8pt" align=center><B>2008</B></P>
</TD><TD style="border-bottom:1px solid #FFFFFF" valign=bottom width=16.667><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom colspan=2><P style="line-height:10pt; margin:0px; font-size:8pt" align=center>2007</P>
</TD><TD style="border-bottom:1px solid #FFFFFF" valign=bottom width=16.667><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom colspan=2><P style="line-height:10pt; margin:0px; font-size:8pt" align=center><B>2008</B></P>
</TD><TD style="border-bottom:1px solid #FFFFFF" valign=bottom width=16.667><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom colspan=2><P style="line-height:10pt; margin:0px; font-size:8pt" align=center>2007</P>
</TD><TD style="border-bottom:1px solid #FFFFFF" valign=bottom width=4.467><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=382.133><P style="margin:0px; padding-left:8px; text-indent:-8px"><B>NET SALES</B></P>
</TD><TD valign=bottom width=16.667><P style="margin:0px"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</B></P>
</TD><TD valign=bottom width=6.667><P style="margin:0px"><B>$</B></P>
</TD><TD valign=bottom width=60><P style="margin:0px" align=right><B>33,131,982</B></P>
</TD><TD valign=bottom width=16.667><P style="margin:0px"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</B></P>
</TD><TD valign=bottom width=6.667><P style="margin:0px">$</P>
</TD><TD valign=bottom width=60><P style="margin:0px" align=right>26,829,485</P>
</TD><TD valign=bottom width=16.667><P style="margin:0px">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</P>
</TD><TD valign=bottom width=6.667><P style="margin:0px"><B>$</B></P>
</TD><TD valign=bottom width=60><P style="margin:0px" align=right><B>18,169,441</B></P>
</TD><TD valign=bottom width=16.667><P style="margin:0px"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</B></P>
</TD><TD valign=bottom width=6.667><P style="margin:0px">$</P>
</TD><TD valign=bottom width=60.067><P style="margin:0px" align=right>14,194,373</P>
</TD><TD valign=bottom width=4.467><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=382.133><P>&nbsp;</P></TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=60><P>&nbsp;</P></TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=60><P>&nbsp;</P></TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=60><P>&nbsp;</P></TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=60.067><P>&nbsp;</P></TD><TD valign=bottom width=4.467><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=382.133><P style="margin:0px; padding-left:8px; text-indent:-8px"><B>COST OF SALES</B></P>
</TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=6.667><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=60><P style="margin:0px" align=right><B>32,925,925</B></P>
</TD><TD style="border-bottom:1px solid #FFFFFF" valign=bottom width=16.667><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=6.667><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=60><P style="margin:0px" align=right>22,553,727</P>
</TD><TD style="border-bottom:1px solid #FFFFFF" valign=bottom width=16.667><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=6.667><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=60><P style="margin:0px" align=right><B>19,843,502</B></P>
</TD><TD style="border-bottom:1px solid #FFFFFF" valign=bottom width=16.667><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=6.667><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=60.067><P style="margin:0px" align=right>12,087,210</P>
</TD><TD style="border-bottom:1px solid #FFFFFF" valign=bottom width=4.467><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=382.133><P>&nbsp;</P></TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=60><P>&nbsp;</P></TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=60><P>&nbsp;</P></TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=60><P>&nbsp;</P></TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=60.067><P>&nbsp;</P></TD><TD valign=bottom width=4.467><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=382.133><P style="margin:0px; padding-left:8px; text-indent:-8px"><B>GROSS PROFIT (LOSS)</B></P>
</TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=6.667><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=60><P style="margin:0px" align=right><B>206,057</B></P>
</TD><TD style="border-bottom:1px solid #FFFFFF" valign=bottom width=16.667><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=6.667><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=60><P style="margin:0px" align=right>4,275,758</P>
</TD><TD style="border-bottom:1px solid #FFFFFF" valign=bottom width=16.667><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=6.667><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=60><P style="margin:0px" align=right><B>(1,674,061</B></P>
</TD><TD style="border-bottom:1px solid #FFFFFF" valign=bottom width=16.667><P style="margin:0px"><B>)</B></P>
</TD><TD style="border-bottom:1px solid #000000" valign=bottom width=6.667><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=60.067><P style="margin:0px" align=right>2,107,163</P>
</TD><TD style="border-bottom:1px solid #FFFFFF" valign=bottom width=4.467><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=382.133><P>&nbsp;</P></TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=60><P>&nbsp;</P></TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=60><P>&nbsp;</P></TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=60><P>&nbsp;</P></TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=60.067><P>&nbsp;</P></TD><TD valign=bottom width=4.467><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=382.133><P style="margin:0px; padding-left:8px; text-indent:-8px"><B>OPERATING EXPENSES:</B></P>
</TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=60><P>&nbsp;</P></TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=60><P>&nbsp;</P></TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=60><P>&nbsp;</P></TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=60.067><P>&nbsp;</P></TD><TD valign=bottom width=4.467><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=382.133><P style="margin:0px; padding-left:24px; text-indent:-8px">Selling and administrative</P>
</TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=60><P style="margin:0px" align=right><B>2,919,356</B></P>
</TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=60><P style="margin:0px" align=right>2,877,929</P>
</TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=60><P style="margin:0px" align=right><B>1,540,432</B></P>
</TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=60.067><P style="margin:0px" align=right>1,487,239</P>
</TD><TD valign=bottom width=4.467><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=382.133><P style="margin:0px; padding-left:24px; text-indent:-8px">Writedown of amount due from dissolved joint venture</P>
</TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=60><P style="margin:0px" align=right><B>&#151;</B></P>
</TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=60><P style="margin:0px" align=right>242,000</P>
</TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=60><P style="margin:0px" align=right><B>&#151;</B></P>
</TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=60.067><P style="margin:0px" align=right><B>&#151;</B></P>
</TD><TD valign=bottom width=4.467><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=382.133><P style="margin:0px; padding-left:24px; text-indent:-8px">Officers&#146; salaries</P>
</TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=6.667><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=60><P style="margin:0px" align=right><B>299,700</B></P>
</TD><TD style="border-bottom:1px solid #FFFFFF" valign=bottom width=16.667><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=6.667><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=60><P style="margin:0px" align=right>234,449</P>
</TD><TD style="border-bottom:1px solid #FFFFFF" valign=bottom width=16.667><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=6.667><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=60><P style="margin:0px" align=right><B>138,323</B></P>
</TD><TD style="border-bottom:1px solid #FFFFFF" valign=bottom width=16.667><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=6.667><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=60.067><P style="margin:0px" align=right>117,437</P>
</TD><TD style="border-bottom:1px solid #FFFFFF" valign=bottom width=4.467><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=382.133><P style="margin:0px; padding-left:8px; text-indent:-8px">TOTALS</P>
</TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=6.667><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=60><P style="margin:0px" align=right><B>3,219,056</B></P>
</TD><TD style="border-bottom:1px solid #FFFFFF" valign=bottom width=16.667><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=6.667><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=60><P style="margin:0px" align=right>3,354,378</P>
</TD><TD style="border-bottom:1px solid #FFFFFF" valign=bottom width=16.667><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=6.667><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=60><P style="margin:0px" align=right><B>1,678,755</B></P>
</TD><TD style="border-bottom:1px solid #FFFFFF" valign=bottom width=16.667><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=6.667><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=60.067><P style="margin:0px" align=right>1,604,676</P>
</TD><TD style="border-bottom:1px solid #FFFFFF" valign=bottom width=4.467><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=382.133><P style="margin:0px; padding-left:8px; text-indent:-8px"><B>INCOME (LOSS) FROM OPERATIONS</B></P>
</TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=6.667><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=60><P style="margin:0px" align=right><B>(3,012,999</B></P>
</TD><TD style="border-bottom:1px solid #FFFFFF" valign=bottom width=16.667><P style="margin:0px"><B>)</B></P>
</TD><TD style="border-bottom:1px solid #000000" valign=bottom width=6.667><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=60><P style="margin:0px" align=right>921,380</P>
</TD><TD style="border-bottom:1px solid #FFFFFF" valign=bottom width=16.667><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=6.667><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=60><P style="margin:0px" align=right><B>(3,352,816</B></P>
</TD><TD style="border-bottom:1px solid #FFFFFF" valign=bottom width=16.667><P style="margin:0px"><B>)</B></P>
</TD><TD style="border-bottom:1px solid #000000" valign=bottom width=6.667><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=60.067><P style="margin:0px" align=right>502,487</P>
</TD><TD style="border-bottom:1px solid #FFFFFF" valign=bottom width=4.467><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=382.133><P>&nbsp;</P></TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=60><P>&nbsp;</P></TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=60><P>&nbsp;</P></TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=60><P>&nbsp;</P></TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=60.067><P>&nbsp;</P></TD><TD valign=bottom width=4.467><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=382.133><P style="margin:0px; padding-left:8px; text-indent:-8px"><B>OTHER INCOME (EXPENSE)</B></P>
</TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=60><P>&nbsp;</P></TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=60><P>&nbsp;</P></TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=60><P>&nbsp;</P></TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=60.067><P>&nbsp;</P></TD><TD valign=bottom width=4.467><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=382.133><P style="margin:0px; padding-left:24px; text-indent:-8px">Interest income</P>
</TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=60><P style="margin:0px" align=right><B>34,328</B></P>
</TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=60><P style="margin:0px" align=right>66,576</P>
</TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=60><P style="margin:0px" align=right><B>10,057</B></P>
</TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=60.067><P style="margin:0px" align=right>32,460</P>
</TD><TD valign=bottom width=4.467><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=382.133><P style="margin:0px; padding-left:24px; text-indent:-8px">Dividend income</P>
</TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=60><P style="margin:0px" align=right><B>9,331</B></P>
</TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=60><P style="margin:0px" align=right>&#151;</P>
</TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=60><P style="margin:0px" align=right><B>9,331</B></P>
</TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=60.067><P style="margin:0px" align=right>&#151;</P>
</TD><TD valign=bottom width=4.467><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=382.133><P style="margin:0px; padding-left:24px; text-indent:-8px">Equity in loss from dissolved joint venture</P>
</TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=60><P style="margin:0px" align=right><B>&#151;</B></P>
</TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=60><P style="margin:0px" align=right>(93,939</P>
</TD><TD valign=bottom width=16.667><P style="margin:0px">)</P>
</TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=60><P style="margin:0px" align=right><B>&#151;</B></P>
</TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=60.067><P style="margin:0px" align=right>(30,000</P>
</TD><TD valign=bottom width=4.467><P style="margin:0px">)</P>
</TD></TR>
<TR><TD valign=bottom width=382.133><P style="margin:0px; padding-left:24px; text-indent:-8px">Writedown of investment in dissolved joint venture</P>
</TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=60><P style="margin:0px" align=right><B>&#151;</B></P>
</TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=60><P style="margin:0px; padding-left:8px; text-indent:-8px" align=right>(33,000</P>
</TD><TD valign=bottom width=16.667><P style="margin:0px">)</P>
</TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=60><P style="margin:0px" align=right><B>&#151;</B></P>
</TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=60.067><P style="margin:0px" align=right>&#151;</P>
</TD><TD valign=bottom width=4.467><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=382.133><P style="margin:0px; padding-left:24px; text-indent:-8px">Management fee income</P>
</TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=60><P style="margin:0px" align=right><B>&#151;</B></P>
</TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=60><P style="margin:0px" align=right>12,046</P>
</TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=60><P style="margin:0px" align=right><B>&#151;</B></P>
</TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=60.067><P style="margin:0px" align=right>&#151;</P>
</TD><TD valign=bottom width=4.467><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=382.133><P style="margin:0px; padding-left:24px; text-indent:-8px">Impairment loss &#150; leasehold improvements</P>
</TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=60><P style="margin:0px" align=right><B>&#151;</B></P>
</TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=60><P style="margin:0px" align=right>(31,892</P>
</TD><TD valign=bottom width=16.667><P style="margin:0px">)</P>
</TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=60><P style="margin:0px" align=right><B>&#151;</B></P>
</TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=60.067><P style="margin:0px" align=right>(31,892</P>
</TD><TD valign=bottom width=4.467><P style="margin:0px">)</P>
</TD></TR>
<TR><TD valign=bottom width=382.133><P style="margin:0px; padding-left:24px; text-indent:-8px">Interest expense</P>
</TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=6.667><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=60><P style="margin:0px" align=right><B>(61,432</B></P>
</TD><TD style="border-bottom:1px solid #FFFFFF" valign=bottom width=16.667><P style="margin:0px"><B>)</B></P>
</TD><TD style="border-bottom:1px solid #000000" valign=bottom width=6.667><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=60><P style="margin:0px" align=right>(56,406</P>
</TD><TD valign=bottom width=16.667><P style="margin:0px">)</P>
</TD><TD style="border-bottom:1px solid #000000" valign=bottom width=6.667><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=60><P style="margin:0px" align=right><B>(32,426</B></P>
</TD><TD style="border-bottom:1px solid #FFFFFF" valign=bottom width=16.667><P style="margin:0px"><B>)</B></P>
</TD><TD style="border-bottom:1px solid #000000" valign=bottom width=6.667><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=60.067><P style="margin:0px" align=right>(32,174</P>
</TD><TD style="border-bottom:1px solid #FFFFFF" valign=bottom width=4.467><P style="margin:0px">)</P>
</TD></TR>
<TR><TD valign=bottom width=382.133><P>&nbsp;</P></TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=6.667><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=60><P style="margin:0px" align=right><B>(17,773</B></P>
</TD><TD style="border-bottom:1px solid #FFFFFF" valign=bottom width=16.667><P style="margin:0px"><B>)</B></P>
</TD><TD style="border-bottom:1px solid #000000" valign=bottom width=6.667><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=60><P style="margin:0px" align=right>(136,615</P>
</TD><TD valign=bottom width=16.667><P style="margin:0px">)</P>
</TD><TD style="border-bottom:1px solid #000000" valign=bottom width=6.667><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=60><P style="margin:0px" align=right><B>(13,038</B></P>
</TD><TD style="border-bottom:1px solid #FFFFFF" valign=bottom width=16.667><P style="margin:0px"><B>)</B></P>
</TD><TD style="border-bottom:1px solid #000000" valign=bottom width=6.667><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=60.067><P style="margin:0px" align=right>(61,606</P>
</TD><TD style="border-bottom:1px solid #FFFFFF" valign=bottom width=4.467><P style="margin:0px">)</P>
</TD></TR>
<TR><TD valign=bottom width=382.133><P style="margin:0px; padding-left:8px; text-indent:-8px"><B>INCOME (LOSS) BEFORE BENEFIT FROM (PROVISION) FOR INCOME TAX EXPENSE AND MINORITY INTEREST IN SUBSIDIARY</B></P>
</TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=60><P style="margin:0px" align=right><B>(3,030,772</B></P>
</TD><TD valign=bottom width=16.667><P style="margin:0px"><B>)</B></P>
</TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=60><P style="margin:0px" align=right>784,765</P>
</TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=60><P style="margin:0px" align=right><B>(3,365,854</B></P>
</TD><TD valign=bottom width=16.667><P style="margin:0px"><B>)</B></P>
</TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=60.067><P style="margin:0px" align=right>440,881</P>
</TD><TD valign=bottom width=4.467><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=382.133><P>&nbsp;</P></TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=60><P>&nbsp;</P></TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=60><P>&nbsp;</P></TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=60><P>&nbsp;</P></TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=60.067><P>&nbsp;</P></TD><TD valign=bottom width=4.467><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=382.133><P style="margin:0px; padding-left:24px; text-indent:-8px">Benefit (provision) for income tax expense</P>
</TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=6.667><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=60><P style="margin:0px" align=right><B>1,169,949</B></P>
</TD><TD style="border-bottom:1px solid #FFFFFF" valign=bottom width=16.667><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=6.667><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=60><P style="margin:0px" align=right>(140,050</P>
</TD><TD style="border-bottom:1px solid #FFFFFF" valign=bottom width=16.667><P style="margin:0px">)</P>
</TD><TD style="border-bottom:1px solid #000000" valign=bottom width=6.667><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=60><P style="margin:0px" align=right><B>1,312,000</B></P>
</TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=6.667><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=60.067><P style="margin:0px" align=right>(102,200</P>
</TD><TD style="border-bottom:1px solid #FFFFFF" valign=bottom width=4.467><P style="margin:0px">)</P>
</TD></TR>
<TR><TD valign=bottom width=382.133><P>&nbsp;</P></TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=60><P>&nbsp;</P></TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=60><P>&nbsp;</P></TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=60><P>&nbsp;</P></TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=60.067><P>&nbsp;</P></TD><TD valign=bottom width=4.467><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=382.133><P style="margin:0px; padding-left:8px; text-indent:-8px"><B>INCOME (LOSS) BEFORE MINORITY INTEREST</B></P>
</TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=60><P style="margin:0px" align=right><B>(1,860,823</B></P>
</TD><TD valign=bottom width=16.667><P style="margin:0px"><B>)</B></P>
</TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=60><P style="margin:0px" align=right>644,715</P>
</TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=60><P style="margin:0px" align=right><B>(2,053,854</B></P>
</TD><TD valign=bottom width=16.667><P style="margin:0px"><B>)</B></P>
</TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=60.067><P style="margin:0px" align=right>338,681</P>
</TD><TD valign=bottom width=4.467><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=382.133><P>&nbsp;</P></TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=60><P>&nbsp;</P></TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=60><P>&nbsp;</P></TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=60><P>&nbsp;</P></TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=60.067><P>&nbsp;</P></TD><TD valign=bottom width=4.467><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=382.133><P style="margin:0px; padding-left:24px; text-indent:-8px">Minority interest in earnings (loss) of subsidiary</P>
</TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=6.667><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=60><P style="margin:0px" align=right><B>(1,090</B></P>
</TD><TD style="border-bottom:1px solid #FFFFFF" valign=bottom width=16.667><P style="margin:0px"><B>)</B></P>
</TD><TD style="border-bottom:1px solid #000000" valign=bottom width=6.667><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=60><P style="margin:0px" align=right>3,877</P>
</TD><TD style="border-bottom:1px solid #FFFFFF" valign=bottom width=16.667><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=6.667><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=60><P style="margin:0px" align=right><B>9,676</B></P>
</TD><TD style="border-bottom:1px solid #FFFFFF" valign=bottom width=16.667><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=6.667><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=60.067><P style="margin:0px" align=right>207</P>
</TD><TD style="border-bottom:1px solid #FFFFFF" valign=bottom width=4.467><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=382.133><P>&nbsp;</P></TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=60><P>&nbsp;</P></TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=60><P>&nbsp;</P></TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=60><P>&nbsp;</P></TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=60.067><P>&nbsp;</P></TD><TD valign=bottom width=4.467><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=382.133><P style="margin:0px; padding-left:8px; text-indent:-8px"><B>NET INCOME (LOSS)</B></P>
</TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=60><P style="margin:0px" align=right><B>(1,861,913</B></P>
</TD><TD valign=bottom width=16.667><P style="margin:0px"><B>)</B></P>
</TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=60><P style="margin:0px" align=right>648,592</P>
</TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=60><P style="margin:0px" align=right><B>(2,044,178</B></P>
</TD><TD valign=bottom width=16.667><P style="margin:0px"><B>)</B></P>
</TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=60.067><P style="margin:0px" align=right>338,888</P>
</TD><TD valign=bottom width=4.467><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=382.133><P>&nbsp;</P></TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=60><P>&nbsp;</P></TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=60><P>&nbsp;</P></TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=60><P>&nbsp;</P></TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=60.067><P>&nbsp;</P></TD><TD valign=bottom width=4.467><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=382.133><P style="margin:0px; padding-left:8px; text-indent:-8px">Retained earnings-beginning</P>
</TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=60><P style="margin:0px" align=right><B>4,946,467</B></P>
</TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=60><P style="margin:0px" align=right>4,009,150</P>
</TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=60><P style="margin:0px" align=right><B>3,584,164</B></P>
</TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=60.067><P style="margin:0px" align=right>4,318,854</P>
</TD><TD valign=bottom width=4.467><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=382.133><P style="margin:0px; padding-left:8px; text-indent:-8px">Dividend declared</P>
</TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=6.667><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=60><P style="margin:0px" align=right><B>(1,544,568</B></P>
</TD><TD style="border-bottom:1px solid #FFFFFF" valign=bottom width=16.667><P style="margin:0px"><B>)</B></P>
</TD><TD style="border-bottom:1px solid #000000" valign=bottom width=6.667><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=60><P style="margin:0px" align=right>&#151;</P>
</TD><TD style="border-bottom:1px solid #FFFFFF" valign=bottom width=16.667><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=6.667><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=60><P style="margin:0px" align=right><B>&#151;</B></P>
</TD><TD style="border-bottom:1px solid #FFFFFF" valign=bottom width=16.667><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=6.667><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=60.067><P style="margin:0px" align=right>&#151;</P>
</TD><TD style="border-bottom:1px solid #FFFFFF" valign=bottom width=4.467><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=382.133><P style="margin:0px; padding-left:8px; text-indent:-8px"><B>RETAINED EARNINGS - ENDING</B></P>
</TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD style="border-bottom:3px double #000000" valign=bottom width=6.667><P style="margin:0px"><B>$</B></P>
</TD><TD style="border-bottom:3px double #000000" valign=bottom width=60><P style="margin:0px" align=right><B>1,539,986</B></P>
</TD><TD style="border-bottom:3px double #FFFFFF" valign=bottom width=16.667><P>&nbsp;</P></TD><TD style="border-bottom:3px double #000000" valign=bottom width=6.667><P style="margin:0px">$</P>
</TD><TD style="border-bottom:3px double #000000" valign=bottom width=60><P style="margin:0px" align=right>4,657,742</P>
</TD><TD style="border-bottom:3px double #FFFFFF" valign=bottom width=16.667><P>&nbsp;</P></TD><TD style="border-bottom:3px double #000000" valign=bottom width=6.667><P style="margin:0px"><B>$</B></P>
</TD><TD style="border-bottom:3px double #000000" valign=bottom width=60><P style="margin:0px" align=right><B>1,539,986</B></P>
</TD><TD style="border-bottom:3px double #FFFFFF" valign=bottom width=16.667><P>&nbsp;</P></TD><TD style="border-bottom:3px double #000000" valign=bottom width=6.667><P style="margin:0px">$</P>
</TD><TD style="border-bottom:3px double #000000" valign=bottom width=60.067><P style="margin:0px" align=right>4,657,742</P>
</TD><TD style="border-bottom:3px double #FFFFFF" valign=bottom width=4.467><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=382.133><P>&nbsp;</P></TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=60><P>&nbsp;</P></TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=60><P>&nbsp;</P></TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=60><P>&nbsp;</P></TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=60.067><P>&nbsp;</P></TD><TD valign=bottom width=4.467><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=382.133><P style="margin:0px; padding-left:8px; text-indent:-8px">Basic and diluted earnings (loss) per share</P>
</TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD style="border-bottom:3px double #000000" valign=bottom width=6.667><P style="margin:0px"><B>$</B></P>
</TD><TD style="border-bottom:3px double #000000" valign=bottom width=60><P style="margin:0px" align=right><B>(.34</B></P>
</TD><TD style="border-bottom:3px double #FFFFFF" valign=bottom width=16.667><P style="margin:0px"><B>)</B></P>
</TD><TD style="border-bottom:3px double #000000" valign=bottom width=6.667><P style="margin:0px">$</P>
</TD><TD style="border-bottom:3px double #000000" valign=bottom width=60><P style="margin:0px" align=right>.12</P>
</TD><TD style="border-bottom:3px double #FFFFFF" valign=bottom width=16.667><P>&nbsp;</P></TD><TD style="border-bottom:3px double #000000" valign=bottom width=6.667><P style="margin:0px"><B>$</B></P>
</TD><TD style="border-bottom:3px double #000000" valign=bottom width=60><P style="margin:0px" align=right><B>(.37</B></P>
</TD><TD style="border-bottom:3px double #FFFFFF" valign=bottom width=16.667><P style="margin:0px"><B>)</B></P>
</TD><TD style="border-bottom:3px double #000000" valign=bottom width=6.667><P style="margin:0px">$</P>
</TD><TD style="border-bottom:3px double #000000" valign=bottom width=60.067><P style="margin:0px" align=right>.06</P>
</TD><TD style="border-bottom:3px double #FFFFFF" valign=bottom width=4.467><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=382.133><P>&nbsp;</P></TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=60><P>&nbsp;</P></TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=60><P>&nbsp;</P></TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=60><P>&nbsp;</P></TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=60.067><P>&nbsp;</P></TD><TD valign=bottom width=4.467><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=382.133><P style="margin:0px; padding-left:8px; text-indent:-8px">Weighted average common shares outstanding:</P>
</TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=60><P>&nbsp;</P></TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=60><P>&nbsp;</P></TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=60><P>&nbsp;</P></TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD valign=bottom width=6.667><P>&nbsp;</P></TD><TD valign=bottom width=60.067><P>&nbsp;</P></TD><TD valign=bottom width=4.467><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=382.133><P style="margin:0px; padding-left:56px; text-indent:-8px">Basic</P>
</TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD style="border-bottom:3px double #000000" valign=bottom width=6.667><P>&nbsp;</P></TD><TD style="border-bottom:3px double #000000" valign=bottom width=60><P style="margin:0px" align=right><B>5,497,254</B></P>
</TD><TD style="border-bottom:3px double #FFFFFF" valign=bottom width=16.667><P>&nbsp;</P></TD><TD style="border-bottom:3px double #000000" valign=bottom width=6.667><P>&nbsp;</P></TD><TD style="border-bottom:3px double #000000" valign=bottom width=60><P style="margin:0px" align=right>5,529,830</P>
</TD><TD style="border-bottom:3px double #FFFFFF" valign=bottom width=16.667><P>&nbsp;</P></TD><TD style="border-bottom:3px double #000000" valign=bottom width=6.667><P>&nbsp;</P></TD><TD style="border-bottom:3px double #000000" valign=bottom width=60><P style="margin:0px" align=right><B>5,497,254</B></P>
</TD><TD style="border-bottom:3px double #FFFFFF" valign=bottom width=16.667><P>&nbsp;</P></TD><TD style="border-bottom:3px double #000000" valign=bottom width=6.667><P>&nbsp;</P></TD><TD style="border-bottom:3px double #000000" valign=bottom width=60.067><P style="margin:0px" align=right>5,529,830</P>
</TD><TD style="border-bottom:3px double #FFFFFF" valign=bottom width=4.467><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=382.133><P style="margin:0px; padding-left:56px; text-indent:-8px">Diluted</P>
</TD><TD valign=bottom width=16.667><P>&nbsp;</P></TD><TD style="border-bottom:3px double #000000" valign=bottom width=6.667><P>&nbsp;</P></TD><TD style="border-bottom:3px double #000000" valign=bottom width=60><P style="margin:0px" align=right><B>5,497,254</B></P>
</TD><TD style="border-bottom:3px double #FFFFFF" valign=bottom width=16.667><P>&nbsp;</P></TD><TD style="border-bottom:3px double #000000" valign=bottom width=6.667><P>&nbsp;</P></TD><TD style="border-bottom:3px double #000000" valign=bottom width=60><P style="margin:0px" align=right>5,599,830</P>
</TD><TD style="border-bottom:3px double #FFFFFF" valign=bottom width=16.667><P>&nbsp;</P></TD><TD style="border-bottom:3px double #000000" valign=bottom width=6.667><P>&nbsp;</P></TD><TD style="border-bottom:3px double #000000" valign=bottom width=60><P style="margin:0px" align=right><B>5,497,254</B></P>
</TD><TD style="border-bottom:3px double #FFFFFF" valign=bottom width=16.667><P>&nbsp;</P></TD><TD style="border-bottom:3px double #000000" valign=bottom width=6.667><P>&nbsp;</P></TD><TD style="border-bottom:3px double #000000" valign=bottom width=60.067><P style="margin:0px" align=right><B>5,529,830</B></P>
</TD><TD style="border-bottom:3px double #FFFFFF" valign=bottom width=4.467><P>&nbsp;</P></TD></TR>
</TABLE>
<P style="margin:0px"><BR>
<BR></P>
<P style="line-height:13pt; margin:0px; font-size:11pt" align=center>4</P>
<P style="margin:0px"><BR></P>
<HR style="margin-top:9.6px; margin-bottom:9.6px" noshade size=1.333>
<P style="margin:0px; page-break-before:always"><BR></P>
<P style="margin:0px"><BR></P>
<P style="line-height:13pt; margin:0px; font-size:11pt" align=center><B>COFFEE HOLDING CO., INC.</B></P>
<P style="line-height:13pt; margin:0px; font-size:11pt" align=center><B>CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS</B></P>
<P style="line-height:13pt; margin:0px; font-size:11pt" align=center><B>SIX MONTHS ENDED APRIL 30, 2008 AND 2007 </B></P>
<P style="line-height:13pt; margin-top:0px; margin-bottom:7.333px; font-size:11pt" align=center><B>(Unaudited)</B></P>
<TABLE style="font-size:10pt" cellspacing=0 align=center><TR height=0 style="font-size:0"><TD width=517.733></TD><TD width=18.733></TD><TD width=7.467></TD><TD width=72.4></TD><TD width=18.733></TD><TD width=7.467></TD><TD width=72.4></TD><TD width=5.067></TD></TR>
<TR><TD valign=bottom width=517.733><P>&nbsp;</P></TD><TD valign=bottom width=18.733><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom colspan=2><P style="line-height:10pt; margin:0px; font-size:8pt" align=center><B>2008</B></P>
</TD><TD style="border-bottom:1px solid #FFFFFF" valign=bottom width=18.733><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom colspan=2><P style="line-height:10pt; margin:0px; font-size:8pt" align=center><B>2007</B></P>
</TD><TD style="border-bottom:1px solid #FFFFFF" valign=bottom width=5.067><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=517.733><P style="margin:0px; padding-left:8px; text-indent:-8px"><B>OPERATING ACTIVITIES:</B></P>
</TD><TD valign=bottom width=18.733><P style="margin:0px"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</B></P>
</TD><TD valign=bottom width=7.467><P>&nbsp;</P></TD><TD valign=bottom width=72.4><P>&nbsp;</P></TD><TD valign=bottom width=18.733><P style="margin:0px"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</B></P>
</TD><TD valign=bottom width=7.467><P>&nbsp;</P></TD><TD valign=bottom width=72.4><P>&nbsp;</P></TD><TD valign=bottom width=5.067><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=517.733><P style="margin:0px; padding-left:24px; text-indent:-8px">Net (loss) income</P>
</TD><TD valign=bottom width=18.733><P>&nbsp;</P></TD><TD valign=bottom width=7.467><P style="margin:0px"><B>$</B></P>
</TD><TD valign=bottom width=72.4><P style="margin:0px" align=right><B>(1,861,913</B></P>
</TD><TD valign=bottom width=18.733><P style="margin:0px"><B>)</B></P>
</TD><TD valign=bottom width=7.467><P style="margin:0px">$</P>
</TD><TD valign=bottom width=72.4><P style="margin:0px" align=right>648,592</P>
</TD><TD valign=bottom width=5.067><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=517.733><P style="margin:0px; padding-left:24px; text-indent:-8px">Adjustments to reconcile net income to net cash provided by operating activities:</P>
</TD><TD valign=bottom width=18.733><P>&nbsp;</P></TD><TD valign=bottom width=7.467><P>&nbsp;</P></TD><TD valign=bottom width=72.4><P>&nbsp;</P></TD><TD valign=bottom width=18.733><P>&nbsp;</P></TD><TD valign=bottom width=7.467><P>&nbsp;</P></TD><TD valign=bottom width=72.4><P>&nbsp;</P></TD><TD valign=bottom width=5.067><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=517.733><P style="margin:0px; padding-left:56px; text-indent:-8px">Depreciation and amortization</P>
</TD><TD valign=bottom width=18.733><P>&nbsp;</P></TD><TD valign=bottom width=7.467><P>&nbsp;</P></TD><TD valign=bottom width=72.4><P style="margin:0px" align=right><B>262,086</B></P>
</TD><TD valign=bottom width=18.733><P>&nbsp;</P></TD><TD valign=bottom width=7.467><P>&nbsp;</P></TD><TD valign=bottom width=72.4><P style="margin:0px" align=right>165,478</P>
</TD><TD valign=bottom width=5.067><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=517.733><P style="margin:0px; padding-left:56px; text-indent:-8px">Writedown of amount due from dissolved joint venture</P>
</TD><TD valign=bottom width=18.733><P>&nbsp;</P></TD><TD valign=bottom width=7.467><P>&nbsp;</P></TD><TD valign=bottom width=72.4><P style="margin:0px" align=right><B>&#151;</B></P>
</TD><TD valign=bottom width=18.733><P>&nbsp;</P></TD><TD valign=bottom width=7.467><P>&nbsp;</P></TD><TD valign=bottom width=72.4><P style="margin:0px" align=right>242,000</P>
</TD><TD valign=bottom width=5.067><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=517.733><P style="margin:0px; padding-left:56px; text-indent:-8px">Loss from dissolved joint venture</P>
</TD><TD valign=bottom width=18.733><P>&nbsp;</P></TD><TD valign=bottom width=7.467><P>&nbsp;</P></TD><TD valign=bottom width=72.4><P style="margin:0px" align=right><B>&#151;</B></P>
</TD><TD valign=bottom width=18.733><P>&nbsp;</P></TD><TD valign=bottom width=7.467><P>&nbsp;</P></TD><TD valign=bottom width=72.4><P style="margin:0px" align=right>93,939</P>
</TD><TD valign=bottom width=5.067><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=517.733><P style="margin:0px; padding-left:56px; text-indent:-8px">Writedown of investment in dissolved joint venture</P>
</TD><TD valign=bottom width=18.733><P>&nbsp;</P></TD><TD valign=bottom width=7.467><P>&nbsp;</P></TD><TD valign=bottom width=72.4><P style="margin:0px" align=right><B>&#151;</B></P>
</TD><TD valign=bottom width=18.733><P>&nbsp;</P></TD><TD valign=bottom width=7.467><P>&nbsp;</P></TD><TD valign=bottom width=72.4><P style="margin:0px" align=right>33,000</P>
</TD><TD valign=bottom width=5.067><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=517.733><P style="margin:0px; padding-left:56px; text-indent:-8px">Deferred income taxes</P>
</TD><TD valign=bottom width=18.733><P>&nbsp;</P></TD><TD valign=bottom width=7.467><P>&nbsp;</P></TD><TD valign=bottom width=72.4><P style="margin:0px" align=right><B>(1,170,000</B></P>
</TD><TD valign=bottom width=18.733><P style="margin:0px"><B>)</B></P>
</TD><TD valign=bottom width=7.467><P>&nbsp;</P></TD><TD valign=bottom width=72.4><P style="margin:0px" align=right>(233,550</P>
</TD><TD valign=bottom width=5.067><P style="margin:0px">)</P>
</TD></TR>
<TR><TD valign=bottom width=517.733><P style="margin:0px; padding-left:56px; text-indent:-8px">Impairment loss</P>
</TD><TD valign=bottom width=18.733><P>&nbsp;</P></TD><TD valign=bottom width=7.467><P>&nbsp;</P></TD><TD valign=bottom width=72.4><P style="margin:0px" align=right><B>&#151;</B></P>
</TD><TD valign=bottom width=18.733><P>&nbsp;</P></TD><TD valign=bottom width=7.467><P>&nbsp;</P></TD><TD valign=bottom width=72.4><P style="margin:0px" align=right>31,892</P>
</TD><TD valign=bottom width=5.067><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=517.733><P style="margin:0px; padding-left:40px; text-indent:-8px">Changes in operating assets and liabilities:</P>
</TD><TD valign=bottom width=18.733><P>&nbsp;</P></TD><TD valign=bottom width=7.467><P>&nbsp;</P></TD><TD valign=bottom width=72.4><P>&nbsp;</P></TD><TD valign=bottom width=18.733><P>&nbsp;</P></TD><TD valign=bottom width=7.467><P>&nbsp;</P></TD><TD valign=bottom width=72.4><P>&nbsp;</P></TD><TD valign=bottom width=5.067><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=517.733><P style="margin:0px; padding-left:56px; text-indent:-8px">Commodities held at broker</P>
</TD><TD style="border-bottom:3px double #FFFFFF" valign=bottom width=18.733><P>&nbsp;</P></TD><TD valign=bottom width=7.467><P>&nbsp;</P></TD><TD valign=bottom width=72.4><P style="margin:0px" align=right><B>2,636,312</B></P>
</TD><TD valign=bottom width=18.733><P>&nbsp;</P></TD><TD valign=bottom width=7.467><P>&nbsp;</P></TD><TD valign=bottom width=72.4><P style="margin:0px" align=right>902,375</P>
</TD><TD valign=bottom width=5.067><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=517.733><P style="margin:0px; padding-left:56px; text-indent:-8px">Accounts receivable</P>
</TD><TD valign=bottom width=18.733><P>&nbsp;</P></TD><TD valign=bottom width=7.467><P>&nbsp;</P></TD><TD valign=bottom width=72.4><P style="margin:0px" align=right><B>1,478,680</B></P>
</TD><TD valign=bottom width=18.733><P>&nbsp;</P></TD><TD valign=bottom width=7.467><P>&nbsp;</P></TD><TD valign=bottom width=72.4><P style="margin:0px" align=right>1,703,288</P>
</TD><TD valign=bottom width=5.067><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=517.733><P style="margin:0px; padding-left:56px; text-indent:-8px">Inventories</P>
</TD><TD valign=bottom width=18.733><P>&nbsp;</P></TD><TD valign=bottom width=7.467><P>&nbsp;</P></TD><TD valign=bottom width=72.4><P style="margin:0px" align=right><B>634</B></P>
</TD><TD valign=bottom width=18.733><P>&nbsp;</P></TD><TD valign=bottom width=7.467><P>&nbsp;</P></TD><TD valign=bottom width=72.4><P style="margin:0px" align=right>(1,039,129</P>
</TD><TD valign=bottom width=5.067><P style="margin:0px">)</P>
</TD></TR>
<TR><TD valign=bottom width=517.733><P style="margin:0px; padding-left:56px; text-indent:-8px">Prepaid expenses and other current assets</P>
</TD><TD valign=bottom width=18.733><P>&nbsp;</P></TD><TD valign=bottom width=7.467><P>&nbsp;</P></TD><TD valign=bottom width=72.4><P style="margin:0px" align=right><B>155,500</B></P>
</TD><TD valign=bottom width=18.733><P>&nbsp;</P></TD><TD valign=bottom width=7.467><P>&nbsp;</P></TD><TD valign=bottom width=72.4><P style="margin:0px" align=right>(416,149</P>
</TD><TD valign=bottom width=5.067><P style="margin:0px">)</P>
</TD></TR>
<TR><TD valign=bottom width=517.733><P style="margin:0px; padding-left:56px; text-indent:-8px">Prepaid and refundable income taxes</P>
</TD><TD valign=bottom width=18.733><P>&nbsp;</P></TD><TD valign=bottom width=7.467><P>&nbsp;</P></TD><TD valign=bottom width=72.4><P style="margin:0px" align=right><B>(31,056</B></P>
</TD><TD valign=bottom width=18.733><P style="margin:0px"><B>)</B></P>
</TD><TD valign=bottom width=7.467><P>&nbsp;</P></TD><TD valign=bottom width=72.4><P style="margin:0px" align=right>295,293</P>
</TD><TD valign=bottom width=5.067><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=517.733><P style="margin:0px; padding-left:56px; text-indent:-8px">Accounts payable and accrued expenses</P>
</TD><TD valign=bottom width=18.733><P>&nbsp;</P></TD><TD valign=bottom width=7.467><P>&nbsp;</P></TD><TD valign=bottom width=72.4><P style="margin:0px" align=right><B>(465,523</B></P>
</TD><TD valign=bottom width=18.733><P style="margin:0px"><B>)</B></P>
</TD><TD valign=bottom width=7.467><P>&nbsp;</P></TD><TD valign=bottom width=72.4><P style="margin:0px" align=right>(776,221</P>
</TD><TD valign=bottom width=5.067><P style="margin:0px">)</P>
</TD></TR>
<TR><TD valign=bottom width=517.733><P style="margin:0px; padding-left:56px; text-indent:-8px">Due from dissolved joint venture</P>
</TD><TD valign=bottom width=18.733><P>&nbsp;</P></TD><TD valign=bottom width=7.467><P>&nbsp;</P></TD><TD valign=bottom width=72.4><P style="margin:0px" align=right><B>&#151;</B></P>
</TD><TD valign=bottom width=18.733><P>&nbsp;</P></TD><TD valign=bottom width=7.467><P>&nbsp;</P></TD><TD valign=bottom width=72.4><P style="margin:0px" align=right>(146,372</P>
</TD><TD valign=bottom width=5.067><P style="margin:0px">)</P>
</TD></TR>
<TR><TD valign=bottom width=517.733><P style="margin:0px; padding-left:56px; text-indent:-8px">Deposits and other assets</P>
</TD><TD valign=bottom width=18.733><P>&nbsp;</P></TD><TD valign=bottom width=7.467><P>&nbsp;</P></TD><TD valign=bottom width=72.4><P style="margin:0px" align=right><B>20,940</B></P>
</TD><TD valign=bottom width=18.733><P>&nbsp;</P></TD><TD valign=bottom width=7.467><P>&nbsp;</P></TD><TD valign=bottom width=72.4><P style="margin:0px" align=right>17,898</P>
</TD><TD valign=bottom width=5.067><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=517.733><P style="margin:0px; padding-left:56px; text-indent:-8px">Income taxes payable</P>
</TD><TD valign=bottom width=18.733><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=7.467><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=72.4><P style="margin:0px" align=right><B>(9,161</B></P>
</TD><TD style="border-bottom:1px solid #FFFFFF" valign=bottom width=18.733><P style="margin:0px"><B>)</B></P>
</TD><TD style="border-bottom:1px solid #000000" valign=bottom width=7.467><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=72.4><P style="margin:0px" align=right>74,707</P>
</TD><TD style="border-bottom:1px solid #FFFFFF" valign=bottom width=5.067><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=517.733><P>&nbsp;</P></TD><TD valign=bottom width=18.733><P>&nbsp;</P></TD><TD valign=bottom width=7.467><P>&nbsp;</P></TD><TD valign=bottom width=72.4><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #FFFFFF" valign=bottom width=18.733><P>&nbsp;</P></TD><TD valign=bottom width=7.467><P>&nbsp;</P></TD><TD valign=bottom width=72.4><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #FFFFFF" valign=bottom width=5.067><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=517.733><P style="margin:0px; padding-left:8px; text-indent:-8px"><I>Net cash provided by operating activities</I></P>
</TD><TD valign=bottom width=18.733><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=7.467><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=72.4><P style="margin:0px" align=right><B>1,016,499</B></P>
</TD><TD style="border-bottom:1px solid #FFFFFF" valign=bottom width=18.733><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=7.467><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=72.4><P style="margin:0px" align=right>1,597,041</P>
</TD><TD style="border-bottom:1px solid #FFFFFF" valign=bottom width=5.067><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=517.733><P>&nbsp;</P></TD><TD valign=bottom width=18.733><P>&nbsp;</P></TD><TD valign=bottom width=7.467><P>&nbsp;</P></TD><TD valign=bottom width=72.4><P>&nbsp;</P></TD><TD valign=bottom width=18.733><P>&nbsp;</P></TD><TD valign=bottom width=7.467><P>&nbsp;</P></TD><TD valign=bottom width=72.4><P>&nbsp;</P></TD><TD valign=bottom width=5.067><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=517.733><P style="margin:0px; padding-left:8px; text-indent:-8px"><B>INVESTING ACTIVITIES:</B></P>
</TD><TD valign=bottom width=18.733><P>&nbsp;</P></TD><TD valign=bottom width=7.467><P>&nbsp;</P></TD><TD valign=bottom width=72.4><P>&nbsp;</P></TD><TD valign=bottom width=18.733><P>&nbsp;</P></TD><TD valign=bottom width=7.467><P>&nbsp;</P></TD><TD valign=bottom width=72.4><P>&nbsp;</P></TD><TD valign=bottom width=5.067><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=517.733><P style="margin:0px; padding-left:24px; text-indent:-8px">Purchases of property and equipment</P>
</TD><TD valign=bottom width=18.733><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=7.467><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=72.4><P style="margin:0px" align=right><B>(267,091</B></P>
</TD><TD style="border-bottom:1px solid #FFFFFF" valign=bottom width=18.733><P style="margin:0px"><B>)</B></P>
</TD><TD style="border-bottom:1px solid #000000" valign=bottom width=7.467><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=72.4><P style="margin:0px" align=right>(188,575</P>
</TD><TD style="border-bottom:1px solid #FFFFFF" valign=bottom width=5.067><P style="margin:0px">)</P>
</TD></TR>
<TR><TD valign=bottom width=517.733><P>&nbsp;</P></TD><TD valign=bottom width=18.733><P>&nbsp;</P></TD><TD valign=bottom width=7.467><P>&nbsp;</P></TD><TD valign=bottom width=72.4><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #FFFFFF" valign=bottom width=18.733><P>&nbsp;</P></TD><TD valign=bottom width=7.467><P>&nbsp;</P></TD><TD valign=bottom width=72.4><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #FFFFFF" valign=bottom width=5.067><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=517.733><P style="margin:0px; padding-left:8px; text-indent:-8px"><I>Net cash used in investing activities</I></P>
</TD><TD valign=bottom width=18.733><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=7.467><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=72.4><P style="margin:0px" align=right><B>(267,091</B></P>
</TD><TD style="border-bottom:1px solid #FFFFFF" valign=bottom width=18.733><P style="margin:0px"><B>)</B></P>
</TD><TD style="border-bottom:1px solid #000000" valign=bottom width=7.467><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=72.4><P style="margin:0px" align=right>(188,575</P>
</TD><TD style="border-bottom:1px solid #FFFFFF" valign=bottom width=5.067><P style="margin:0px">)</P>
</TD></TR>
<TR><TD valign=bottom width=517.733><P>&nbsp;</P></TD><TD valign=bottom width=18.733><P>&nbsp;</P></TD><TD valign=bottom width=7.467><P>&nbsp;</P></TD><TD valign=bottom width=72.4><P>&nbsp;</P></TD><TD valign=bottom width=18.733><P>&nbsp;</P></TD><TD valign=bottom width=7.467><P>&nbsp;</P></TD><TD valign=bottom width=72.4><P>&nbsp;</P></TD><TD valign=bottom width=5.067><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=517.733><P style="margin:0px; padding-left:8px; text-indent:-8px"><B>FINANCING ACTIVITIES:</B></P>
</TD><TD valign=bottom width=18.733><P>&nbsp;</P></TD><TD valign=bottom width=7.467><P>&nbsp;</P></TD><TD valign=bottom width=72.4><P>&nbsp;</P></TD><TD valign=bottom width=18.733><P>&nbsp;</P></TD><TD valign=bottom width=7.467><P>&nbsp;</P></TD><TD valign=bottom width=72.4><P>&nbsp;</P></TD><TD valign=bottom width=5.067><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=517.733><P style="margin:0px; padding-left:24px; text-indent:-8px">Advances under bank line of credit</P>
</TD><TD valign=bottom width=18.733><P>&nbsp;</P></TD><TD valign=bottom width=7.467><P>&nbsp;</P></TD><TD valign=bottom width=72.4><P style="margin:0px" align=right><B>30,855,020</B></P>
</TD><TD valign=bottom width=18.733><P>&nbsp;</P></TD><TD valign=bottom width=7.467><P>&nbsp;</P></TD><TD valign=bottom width=72.4><P style="margin:0px" align=right>23,967,150</P>
</TD><TD valign=bottom width=5.067><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=517.733><P style="margin:0px; padding-left:24px; text-indent:-8px">Principal payments under bank line of credit</P>
</TD><TD valign=bottom width=18.733><P>&nbsp;</P></TD><TD valign=bottom width=7.467><P>&nbsp;</P></TD><TD valign=bottom width=72.4><P style="margin:0px" align=right><B>(29,195,449</B></P>
</TD><TD valign=bottom width=18.733><P style="margin:0px"><B>)</B></P>
</TD><TD valign=bottom width=7.467><P>&nbsp;</P></TD><TD valign=bottom width=72.4><P style="margin:0px" align=right>(24,806,079</P>
</TD><TD valign=bottom width=5.067><P style="margin:0px">)</P>
</TD></TR>
<TR><TD valign=bottom width=517.733><P style="margin:0px; padding-left:24px; text-indent:-8px">Payment of dividend</P>
</TD><TD valign=bottom width=18.733><P>&nbsp;</P></TD><TD valign=bottom width=7.467><P>&nbsp;</P></TD><TD valign=bottom width=72.4><P style="margin:0px" align=right><B>(1,544,568</B></P>
</TD><TD valign=bottom width=18.733><P style="margin:0px"><B>)</B></P>
</TD><TD valign=bottom width=7.467><P>&nbsp;</P></TD><TD valign=bottom width=72.4><P style="margin:0px" align=right>&#151;</P>
</TD><TD valign=bottom width=5.067><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=517.733><P style="margin:0px; padding-left:24px; text-indent:-8px">Purchase of treasury stock</P>
</TD><TD valign=bottom width=18.733><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=7.467><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=72.4><P style="margin:0px" align=right><B>(138,737</B></P>
</TD><TD style="border-bottom:1px solid #FFFFFF" valign=bottom width=18.733><P style="margin:0px"><B>)</B></P>
</TD><TD style="border-bottom:1px solid #000000" valign=bottom width=7.467><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=72.4><P style="margin:0px" align=right>&#151;</P>
</TD><TD style="border-bottom:1px solid #FFFFFF" valign=bottom width=5.067><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=517.733><P>&nbsp;</P></TD><TD valign=bottom width=18.733><P>&nbsp;</P></TD><TD valign=bottom width=7.467><P>&nbsp;</P></TD><TD valign=bottom width=72.4><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #FFFFFF" valign=bottom width=18.733><P>&nbsp;</P></TD><TD valign=bottom width=7.467><P>&nbsp;</P></TD><TD valign=bottom width=72.4><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #FFFFFF" valign=bottom width=5.067><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=517.733><P style="margin:0px; padding-left:8px; text-indent:-8px"><I>Net cash used in financing activities</I></P>
</TD><TD valign=bottom width=18.733><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=7.467><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=72.4><P style="margin:0px" align=right><B>(23,734</B></P>
</TD><TD style="border-bottom:1px solid #FFFFFF" valign=bottom width=18.733><P style="margin:0px"><B>)</B></P>
</TD><TD style="border-bottom:1px solid #000000" valign=bottom width=7.467><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=72.4><P style="margin:0px" align=right>(838,929</P>
</TD><TD style="border-bottom:1px solid #FFFFFF" valign=bottom width=5.067><P style="margin:0px">)</P>
</TD></TR>
<TR><TD valign=bottom width=517.733><P>&nbsp;</P></TD><TD valign=bottom width=18.733><P>&nbsp;</P></TD><TD valign=bottom width=7.467><P>&nbsp;</P></TD><TD valign=bottom width=72.4><P>&nbsp;</P></TD><TD valign=bottom width=18.733><P>&nbsp;</P></TD><TD valign=bottom width=7.467><P>&nbsp;</P></TD><TD valign=bottom width=72.4><P>&nbsp;</P></TD><TD valign=bottom width=5.067><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=517.733><P style="margin:0px; padding-left:8px; text-indent:-8px"><B>MINORITY INTEREST</B></P>
</TD><TD valign=bottom width=18.733><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=7.467><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=72.4><P style="margin:0px" align=right><B>1,090</B></P>
</TD><TD style="border-bottom:1px solid #FFFFFF" valign=bottom width=18.733><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=7.467><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=72.4><P style="margin:0px" align=right>(3,877</P>
</TD><TD style="border-bottom:1px solid #FFFFFF" valign=bottom width=5.067><P style="margin:0px">)</P>
</TD></TR>
<TR><TD valign=bottom width=517.733><P>&nbsp;</P></TD><TD valign=bottom width=18.733><P>&nbsp;</P></TD><TD valign=bottom width=7.467><P>&nbsp;</P></TD><TD valign=bottom width=72.4><P>&nbsp;</P></TD><TD valign=bottom width=18.733><P>&nbsp;</P></TD><TD valign=bottom width=7.467><P>&nbsp;</P></TD><TD valign=bottom width=72.4><P>&nbsp;</P></TD><TD valign=bottom width=5.067><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=517.733><P style="margin:0px; padding-left:8px; text-indent:-8px"><B>NET INCREASE IN CASH</B></P>
</TD><TD valign=bottom width=18.733><P>&nbsp;</P></TD><TD valign=bottom width=7.467><P>&nbsp;</P></TD><TD valign=bottom width=72.4><P style="margin:0px" align=right><B>726,764</B></P>
</TD><TD valign=bottom width=18.733><P>&nbsp;</P></TD><TD valign=bottom width=7.467><P>&nbsp;</P></TD><TD valign=bottom width=72.4><P style="margin:0px" align=right>565,660</P>
</TD><TD valign=bottom width=5.067><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=517.733><P>&nbsp;</P></TD><TD valign=bottom width=18.733><P>&nbsp;</P></TD><TD valign=bottom width=7.467><P>&nbsp;</P></TD><TD valign=bottom width=72.4><P>&nbsp;</P></TD><TD valign=bottom width=18.733><P>&nbsp;</P></TD><TD valign=bottom width=7.467><P>&nbsp;</P></TD><TD valign=bottom width=72.4><P>&nbsp;</P></TD><TD valign=bottom width=5.067><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=517.733><P style="margin:0px; padding-left:24px; text-indent:-8px">Cash, beginning of year</P>
</TD><TD valign=bottom width=18.733><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=7.467><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=72.4><P style="margin:0px" align=right><B>890,649</B></P>
</TD><TD style="border-bottom:1px solid #FFFFFF" valign=bottom width=18.733><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=7.467><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=72.4><P style="margin:0px" align=right>1,112,165</P>
</TD><TD style="border-bottom:1px solid #FFFFFF" valign=bottom width=5.067><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=517.733><P>&nbsp;</P></TD><TD valign=bottom width=18.733><P>&nbsp;</P></TD><TD valign=bottom width=7.467><P>&nbsp;</P></TD><TD valign=bottom width=72.4><P>&nbsp;</P></TD><TD valign=bottom width=18.733><P>&nbsp;</P></TD><TD valign=bottom width=7.467><P>&nbsp;</P></TD><TD valign=bottom width=72.4><P>&nbsp;</P></TD><TD valign=bottom width=5.067><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=517.733><P style="margin:0px; padding-left:8px; text-indent:-8px"><B>CASH, END OF PERIOD</B></P>
</TD><TD valign=bottom width=18.733><P>&nbsp;</P></TD><TD style="border-bottom:3px double #000000" valign=bottom width=7.467><P style="margin:0px"><B>$</B></P>
</TD><TD style="border-bottom:3px double #000000" valign=bottom width=72.4><P style="margin:0px" align=right><B>1,617,413</B></P>
</TD><TD style="border-bottom:3px double #FFFFFF" valign=bottom width=18.733><P>&nbsp;</P></TD><TD style="border-bottom:3px double #000000" valign=bottom width=7.467><P style="margin:0px">$</P>
</TD><TD style="border-bottom:3px double #000000" valign=bottom width=72.4><P style="margin:0px" align=right>1,677,825</P>
</TD><TD style="border-bottom:3px double #FFFFFF" valign=bottom width=5.067><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=517.733><P>&nbsp;</P></TD><TD valign=bottom width=18.733><P>&nbsp;</P></TD><TD valign=bottom width=7.467><P>&nbsp;</P></TD><TD valign=bottom width=72.4><P>&nbsp;</P></TD><TD valign=bottom width=18.733><P>&nbsp;</P></TD><TD valign=bottom width=7.467><P>&nbsp;</P></TD><TD valign=bottom width=72.4><P>&nbsp;</P></TD><TD valign=bottom width=5.067><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=517.733><P style="margin:0px; padding-left:8px; text-indent:-8px"><B>SUPPLEMENTAL DISCLOSURE OF CASH FLOW DATA:</B></P>
</TD><TD valign=bottom width=18.733><P>&nbsp;</P></TD><TD valign=bottom width=7.467><P>&nbsp;</P></TD><TD valign=bottom width=72.4><P>&nbsp;</P></TD><TD valign=bottom width=18.733><P>&nbsp;</P></TD><TD valign=bottom width=7.467><P>&nbsp;</P></TD><TD valign=bottom width=72.4><P>&nbsp;</P></TD><TD valign=bottom width=5.067><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=517.733><P style="margin:0px; padding-left:24px; text-indent:-8px">Interest paid</P>
</TD><TD valign=bottom width=18.733><P>&nbsp;</P></TD><TD style="border-bottom:3px double #000000" valign=bottom width=7.467><P style="margin:0px"><B>$</B></P>
</TD><TD style="border-bottom:3px double #000000" valign=bottom width=72.4><P style="margin:0px" align=right><B>58,557</B></P>
</TD><TD style="border-bottom:3px double #FFFFFF" valign=bottom width=18.733><P>&nbsp;</P></TD><TD style="border-bottom:3px double #000000" valign=bottom width=7.467><P style="margin:0px">$</P>
</TD><TD style="border-bottom:3px double #000000" valign=bottom width=72.4><P style="margin:0px" align=right>43,351</P>
</TD><TD style="border-bottom:3px double #FFFFFF" valign=bottom width=5.067><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=517.733><P style="margin:0px; padding-left:24px; text-indent:-8px">Income taxes paid</P>
</TD><TD valign=bottom width=18.733><P>&nbsp;</P></TD><TD style="border-bottom:3px double #000000" valign=bottom width=7.467><P style="margin:0px"><B>$</B></P>
</TD><TD style="border-bottom:3px double #000000" valign=bottom width=72.4><P style="margin:0px" align=right><B>12,255</B></P>
</TD><TD style="border-bottom:3px double #FFFFFF" valign=bottom width=18.733><P>&nbsp;</P></TD><TD style="border-bottom:3px double #000000" valign=bottom width=7.467><P style="margin:0px">$</P>
</TD><TD style="border-bottom:3px double #000000" valign=bottom width=72.4><P style="margin:0px" align=right>&#151;</P>
</TD><TD style="border-bottom:3px double #FFFFFF" valign=bottom width=5.067><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=517.733><P>&nbsp;</P></TD><TD valign=bottom width=18.733><P>&nbsp;</P></TD><TD valign=bottom width=7.467><P>&nbsp;</P></TD><TD valign=bottom width=72.4><P>&nbsp;</P></TD><TD valign=bottom width=18.733><P>&nbsp;</P></TD><TD valign=bottom width=7.467><P>&nbsp;</P></TD><TD valign=bottom width=72.4><P>&nbsp;</P></TD><TD valign=bottom width=5.067><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=517.733><P style="margin:0px; padding-left:8px; text-indent:-8px"><B>SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING ACTIVITIES:</B></P>
</TD><TD valign=bottom width=18.733><P>&nbsp;</P></TD><TD valign=bottom width=7.467><P>&nbsp;</P></TD><TD valign=bottom width=72.4><P>&nbsp;</P></TD><TD valign=bottom width=18.733><P>&nbsp;</P></TD><TD valign=bottom width=7.467><P>&nbsp;</P></TD><TD valign=bottom width=72.4><P>&nbsp;</P></TD><TD valign=bottom width=5.067><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=517.733><P style="margin:0px; padding-left:24px; text-indent:-8px">The Company utilized its deposit for the purchase of machinery and equipment</P>
</TD><TD valign=bottom width=18.733><P>&nbsp;</P></TD><TD style="border-bottom:3px double #000000" valign=bottom width=7.467><P style="margin:0px"><B>$</B></P>
</TD><TD style="border-bottom:3px double #000000" valign=bottom width=72.4><P style="margin:0px" align=right><B>296,960</B></P>
</TD><TD style="border-bottom:3px double #FFFFFF" valign=bottom width=18.733><P>&nbsp;</P></TD><TD style="border-bottom:3px double #000000" valign=bottom width=7.467><P style="margin:0px">$</P>
</TD><TD style="border-bottom:3px double #000000" valign=bottom width=72.4><P style="margin:0px" align=right>328,388</P>
</TD><TD style="border-bottom:3px double #FFFFFF" valign=bottom width=5.067><P>&nbsp;</P></TD></TR>
</TABLE>
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<P style="margin:0px"><BR>
<BR></P>
<P style="line-height:13pt; margin:0px; font-size:11pt" align=center>5</P>
<P style="margin:0px"><BR></P>
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