DRAFT
                                                                January 25, 2001

                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                            Washington, DC 20549-1004

                                    FORM 10-K

[X]   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
      ACT OF 1934

      For the fiscal year ended October 31, 2000

                                       OR

[_]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
      EXCHANGE ACT OF 1934

      For the transition period from ____________ to _______________.

                           Commission file No. _______

                            COFFEE HOLDING CO., INC.
             (Exact name of registrant as specified in its charter)

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

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

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

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

                                      None
                                (Title of Class)
           Securities registered pursuant to Section 12(g) of the Act:

                                      None
                                (Title of Class)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities and Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No __.

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]

The aggregate market value of the voting common stock held by non-affiliates of
the Registrant cannot be determined as the common stock is not quoted or listed
on any quotation system or market.

As of October 31, 2000, the Registrant had 3,999,650 shares of common stock, par
value $.001 per share, outstanding.


                                       1
<PAGE>

                                     PART I

                            COFFEE HOLDING CO., INC.

      This document contains forward looking statements. Forward looking
statements are based on management's then current views and assumptions
regarding future events and operating performance. These statements are subject
to factors which could cause actual results to differ materially from those
statements. For a more detailed discussion of forward looking statements and the
factors which could cause actual results to differ, please refer to Item 7
herein.

ITEM 1. BUSINESS

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

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

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

      All descriptions of the business of Coffee Holding contained in this Form
10-K prior to the date of the merger describe the operations of the New York
corporation named Coffee Holding Co., Inc. and, from the date of the merger, the
operations of the Nevada corporation currently named Coffee Holding Co., Inc.
Unless otherwise specifically stated herein, all descriptions of Coffee Holding
and its operations contained herein are as of the date of this Form 10-K.

Products

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

         (i)      Private label coffee
         (ii)     Branded coffee; and
         (iii)    Wholesale green coffee

      Private label coffee. Coffee Holding roasts, blends, packages and
distributes coffee under private labels for companies throughout the United
States and Canada. As of October 31, 2000, the Company supplied coffee to
approximately 35 different wholesale and retail companies. Coffee Holding is
currently the leading supplier for three of the largest wholesalers in the
United States.

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

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


                                       2
<PAGE>

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

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

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

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

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

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

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

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

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

      Although the overall coffee market is mature, the green coffee market
represents the fastest growing area of the industry, as the number of gourmet
coffee houses have been increasing in all areas of the United States. The
Company currently has approximately 200 customers in this area.

Raw Materials

      Coffee is a commodity traded on the Commodities and Futures Exchange.
Coffee prices are subject to fluctuation. Over the past five years, the average
price per pound of coffee beans ranged from approximately $.72 to $3.18. The
price for coffee beans on the commodities market as of October 31, 2000, was
$.745

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

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


                                       3
<PAGE>

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

      The Company from time to time engages in the purchase and sale of coffee
futures and option contracts to guard against the effects of fluctuations in the
price of green coffee beans and to supplement its supply of coffee, if
necessary. See "Item 7A - Quantitative and Qualitative Disclosures About Market
Risks" herein.

Trademarks and Domain Names

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

Customers

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

      The Company historically has had short term contracts with some of these
customers (generally one to three years in duration) and although the Company
believes that it has a strong mutually beneficial relationship with those
companies, there can be no assurance that these relationships will continue. The
loss of any one of these relationships would likely have a material adverse
effect on the Company's business and results of operations. In fiscal 2000, the
Company experienced a significant loss in business from one of its largest
wholesale customers. See "Item 7 Management's Discussion and Analysis of
Financial Condition and Results of Operations".

Competition

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

      Private Label Competition. There are approximately four major producers of
coffee for private label sale in the United States. Many other companies produce
coffee for sale on a regional basis. Coffee Holding's main competitors are
Kroger and Chock Full O' Nuts. Both Kroger and Chock Full O' Nuts, a division of
Sara Lee, are larger and have more financing and resources than Coffee Holding
does and therefore are able to devote more resources to product development and
marketing. The Company believes that it remains competitive by providing a high
level of quality and customer service. Private label coffee also competes with
all of the branded coffee on the market. Chock Full O' Nuts also produces
branded coffees which compete directly with their private label products.

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

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


                                       4
<PAGE>

Marketing

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

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

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

Seasonality

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

Employees

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

ITEM 2. PROPERTIES

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

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

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

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

ITEM 3. LEGAL PROCEEDINGS

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

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

      During the fourth quarter of the fiscal year covered by this report on
Form 10-K, no matters were submitted to a vote of security holders.


                                       5
<PAGE>

                                     PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

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

      The number of registered holders of the Company's common stock at October
31, 2000 and at January 23, 2001 was 472.

      In January 1998, prior to the date of the merger with Transpacific, Coffee
Holding, while it was still a privately held "S" corporation, paid a
distribution in the amount of $422,258 to its stockholders to pay personal
income taxes. Since the January 1998 payment, the Company has never paid any
cash dividends on its common stock and has no intention to do so in the
foreseeable future.

ITEM 6. SELECTED FINANCIAL DATA

The  following  selected  data  should be read in  conjunction  with the audited
financial statements of the Company and management's  discussion and analysis of
the Company's  financial  condition and results of operations included elsewhere
herein:

<TABLE>
<CAPTION>
                                                                             As of or for the Year Ended October 31,
                                                           ------------------------------------------------------------------------
                                                               2000                1999                1998                1997
                                                           ------------        ------------        ------------        ------------
<S>                                                        <C>                 <C>                 <C>                 <C>
Operating data:
     Net sales                                              $20,097,548        $ 23,089,592        $ 25,853,791        $ 26,120,519
     Cost of sales                                           16,673,790          19,796,476          24,090,666          22,961,911
                                                           ------------        ------------        ------------        ------------
     Gross profit                                             3,423,758           3,293,116           1,763,125           3,158,608
     Operating expenses                                       2,647,629           2,301,306           2,215,134           2,355,548
                                                           ------------        ------------        ------------        ------------
     Income (loss) from operations                              776,129             991,810            (452,009)            803,060
     Other income (expense), net (A)                           (375,795)           (382,906)           (650,020)           (301,448)
                                                           ------------        ------------        ------------        ------------
     Income (loss) before income taxes                          400,334             608,904          (1,102,029)            501,612
     Provision for income taxes (B)                             119,000                                                      64,173
                                                           ------------        ------------        ------------        ------------
     Net income (loss) (B)                                 $    281,334        $    608,904        $ (1,102,029)       $    437,439
                                                           ============        ============        ============        ============
     Basic earnings per share (B)                          $        .07        $        .15
                                                           ============        ============
     Basic weighted average common
        shares outstanding                                    3,999,650           3,999,650
                                                           ============        ============
Pro forma (B):
     Historical income (loss) before
        income taxes                                                                               $ (1,102,029)       $    501,612
     Unaudited pro forma:
        Provision (credit) for income taxes                                                            (496,000)            226,000
                                                                                                   ------------        ------------
        Net income (loss)                                                                          $   (606,029)       $    275,612
                                                                                                   ============        ============
        Basic income (loss) per share                                                              $       (.15)       $        .07
                                                                                                   ============        ============
        Basic weighted average
           common shares outstanding                                                                  3,999,650           3,999,650
                                                                                                   ============        ============
Dividends                                                  $       --          $       --          $    422,258        $       --
                                                           ============        ============        ============        ============
Balance sheet data:
     Total assets                                          $  5,997,477        $  6,511,598        $  6,524,043        $  6,794,629
                                                           ============        ============        ============        ============
     Long-term obligations (including
        current portion)                                   $  3,101,239        $  3,121,479        $  3,882,804        $  1,486,549
                                                           ============        ============        ============        ============
     Stockholders' equity (deficiency)                     $    225,144        $   (319,178)       $   (928,082)       $    595,432
                                                           ============        ============        ============        ============
</TABLE>

(A)   Includes  consulting  and  professional  fees and other costs  incurred in
      connection with the reverse acquisition totaling $327,087 in fiscal 1998.

(B)   As  further  explained  in  Notes  2 and  7 to  the  financial  statements
      elsewhere herein,  prior to the reverse  acquisition on February 10, 1998,
      the Company had elected to be treated as an "S" Corporation. Therefore, it
      was not  required  to record any  historical  provisions  or  credits  for
      Federal  income taxes,  although it was required to record  provisions for
      state  and local  taxes at full or  reduced  rates,  in  periods  prior to
      February 10, 1998.  The  unaudited  pro forma  provisions  and credits for
      income  taxes in fiscal 1998 and 1997 assume that the Company had not made
      the "S" Corporation elections during any portion of those fiscal years and
      reflect an effective rate of approximately 45% for each period. There were
      no  provisions or credits for income taxes in fiscal 1999 due primarily to
      the  utilization  of  a  portion  of  the  Company's  net  operating  loss
      carryforwards and the inability of the Company to recognize  benefits from
      the remainder as a result of the  uncertainties  related to the extent and
      timing of its future taxable income.  The total provision for income taxes
      in fiscal  2000 was  lower  than  expected  based on  statutory  rates due
      primarily  to the  utilization  of the  remainder  of  the  Company's  net
      operating loss carryforwards.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

Forward-Looking Statements

      The Private Securities Litigation Reform Act of 1995 (the "Act") provides
a safe harbor for forward-looking statements made by or on behalf of the
Company. Coffee Holding and its representatives may from time to time make
written or oral forward-looking statements, including statements contained in
this report and in our other filings with the SEC. These statements use words
such as "believes", "expects", "intends", "plans", "may", "will", "should",
"anticipates" and other similar expressions. All statements which address
operating performance, events or developments that the Company expects or
anticipates will occur in the future are forward-looking statements within the
meaning of the Act. The forward-looking statements are and will be based on
management's then current views and assumptions regarding future events and
operating performance. We cannot assure that anticipated results will be
achieved since actual results may differ materially because of risks and
uncertainties. We do not undertake to revise these statements to reflect
subsequent developments.

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

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

      o     fluctuations in the supply of coffee beans;

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

      o     the effects of any loss of major customers;

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

      o     changes in consumption of coffee; and

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

      You are strongly encouraged to consider these factors when evaluating
forward-looking statements in this annual report. We undertake no responsibility
to update any forward-looking statements contained in this report.

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

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

      The Company experienced a significant loss in business from an important
wholesale customer. This customer's purchases in fiscal 2000 were approximately
one million pounds lower than its purchases in fiscal 1999 which negatively
impacted net sales by approximately $1,000,000. Sales to this customer in fiscal
2001 are expected to be at a level similar to fiscal 2000. The number of the
Company's customers in the gourmet green coffee area increased from
approximately 150 to approximately 200 in fiscal 2000. These customers are
predominately independent gourmet coffee shops. Sales to new customers in this
area historically start slowly because many of these shops are start up
ventures. The Company believes that its customer base and sales will grow in
this area.

      The Company's selling prices decreased steadily throughout fiscal 2000.
Beginning at the end of 1998, the purchase price of green coffee began a gradual
decline that, with the exception of brief price surges, continued through to the
end of fiscal 2000. Declines in green coffee purchase prices eventually led to
declines in selling prices. Selling prices of products which use commodity
coffee react fairly quickly to changes in green coffee purchase prices. Gourmet
green coffee selling prices tend to react more slowly


                                       6
<PAGE>

to changes in purchase prices because demand for gourmet coffee is less price
sensitive. The Company also experienced some pricing pressure in the private
label area as some of the Company's larger competitors cut their prices in order
to increase market share. The Company is unable to predict how long and to what
extent pricing pressure in the private label area will continue.

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

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

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

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

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

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

      The Company's provision for income taxes for the year ended October 31,
2000 totaled $119,000 whereas it had no provision or credit for income taxes for
the year ended October 31, 1999. The difference between the tax provision
computed based on the Company's pre-tax income and the applicable statutory
income tax rate and the Company's provisions for Federal, state and local taxes
for the year ended October 31, 2000 and 1999 are set forth below:

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

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

      As further explained in Note 7 of the notes to the financial statements
elsewhere herein, the Company had estimated net operating loss carryforwards
remaining as of October 31, 1999 of approximately $191,000 available to reduce
future Federal, state and local taxable income. Due to the uncertainties related
to the extent and timing of the Company's future taxable income, the Company


                                       7
<PAGE>

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

      As further explained below, the Company did not record a provision or
credit for income taxes in fiscal 1999 as a result of the utilization of a
portion of its net operating loss carryforwards and the uncertainties as of
October 31, 1999 as to its ability to generate taxable income and utilize the
benefits from its remaining net operating loss carryforwards.

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

Year Ended October 31, 1999 (fiscal 1999) Compared to Year Ended
October 31, 1998 (fiscal 1998)

      Net sales totaled $23,089,592 in fiscal 1999, a decrease of $2,764,199 or
11% from $25,853,791 in fiscal 1998. Although coffee sold increased by
approximately 3 million pounds or 23% from 13 million pounds in fiscal 1998 to
16 million pounds in fiscal 1999, sales revenues decreased primarily due to
lower prices for green coffee sold by the Company.

      Cost of sales in fiscal 1999 was $19,796,476, or 86% of net sales, as
compared to $24,090,666, or 93% of net sales in fiscal 1998. Cost of sales
consists primarily of the cost of green coffee and packaging materials. The
decrease in cost of sales in fiscal 1999 was attributable to lower purchase
prices for green coffee. Beginning around the end of fiscal 1998, the purchase
price of coffee began to decline gradually and fiscal 1999 saw continuing
decreases in the purchase price. As the price of coffee is cyclical and volatile
and subject to many factors, including weather, politics and economics, the
Company is unable to predict the purchase price of coffee in fiscal 2000 and
beyond.

      The Company's gross profit in fiscal 1999 was $3,293,116, an increase of
$1,529,991 or 87% from $1,763,125 in fiscal 1998. Gross profit as a percentage
of net sales increased by 7% to 14% in fiscal 1999 from 7% in fiscal 1998. The
increase in gross profit as a percentage of sales was primarily attributable to
increased margins on sales of private label and wholesale green coffee as
purchase prices for green coffee gradually declined throughout the year.

      Selling and administrative expenses were $1,911,306 in fiscal 1999, a
decrease of $10,558 or 1% from $1,921,864 in fiscal 1998. As a percentage of net
sales, this change represented a 1% increase from 7% in fiscal 1998 to 8% in
fiscal 1999.

      Interest expense increased $23,061 or 6% from $363,445 in fiscal 1998 to
$386,506 in fiscal 1999. The increase in fiscal 1999 was attributable primarily
to additional average borrowings on the Company's credit line. The amount in
fiscal 1998 included costs incurred in connection with the cancellation of a
factoring agreement.

      Other income (expense) in fiscal 1999 was a net expense of $382,906
compared to a net expense of $650,020 in fiscal 1998 which included $327,087 of
consulting and professional fees and other costs incurred in connection with the
reverse acquisition by Transpacific that was effectively completed on February
10, 1998.

      Primarily as a result of the increase in gross profit, the increase in
other operating expenses and the absence of the charge for costs incurred in
connection with the reverse acquisition, the Company had income of $608,904
before income taxes in fiscal 1999 compared to a loss of $1,102,029 before
income taxes in fiscal 1998.

      As further explained in Notes 2 and 7 of the notes to the financial
statements elsewhere herein, the Company was not required to record a provision
for Federal income tax in fiscal 1998 because it had elected to be taxed as an
"S" Corporation prior to the reverse acquisition on February 10, 1998 and it had
a pre-tax loss for the period from February 11, 1998 to October 31, 1998.
Although the Company had potential benefits of approximately $363,000 from the
net operating loss carryforwards as of October 31, 1998, it did not record a
credit for income taxes based on its pre-tax loss due to the uncertainties
related to the extent and timing of its future taxable income. The Company did
not record a provision for income taxes based on its pre-tax income in fiscal
1999 because it used a portion of the benefits available from the net operating
loss carryforwards that were available as of October 31, 1998. Although the
Company had estimated potential benefits of approximately $89,000 from the net
operating loss carryforwards as of October 31,


                                       8
<PAGE>

1999, it did not record a credit for income taxes based on its net operating
loss carryforwards due to the uncertainties related to the extent and timing of
its future taxable income. Since the Company had no historical provisions or
credits for income taxes in fiscal 1999 and 1998, it had historical net income
of $608,904 in fiscal 1999 compared to a historical net loss of $1,102,029 in
fiscal 1998.

      The statement of operations included in the financial statements elsewhere
herein presents an unaudited pro forma credit for income taxes, net loss and
related loss per share information for 1998 assuming the Company had not elected
to be taxed as an "S" Corporation. The Company would have had a credit for
income taxes of approximately $496,000 in fiscal 1998 assuming the "S"
Corporation elections had not been made and it would have been able to carryback
its net operating losses. The unaudited total pro forma credit for Federal,
state and local income taxes reflects an effective rate of approximately 45% in
fiscal 1998 based on the respective statutory rates. On an unaudited pro forma
basis, the Company would have had a net loss of $606,029, or $.15 per share, in
fiscal 1998 compared to the Company's historical net income of $608,904, or $.15
per share, in fiscal 1999.

Liquidity and Capital Resources

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

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

      As of October 31, 2000, the line of credit had an outstanding balance of
$2,618,000, which approximated the maximum amount that the Company could borrow
based on its eligible trade accounts receivable and inventory as of that date as
compared to an outstanding balance of $2,445,000 at October 31, 1999. The
outstanding balance under the term loan was $192,000 as at October 31, 2000, and
was $600,000 as at November 29, 2000 as the Company borrowed the maximum amount
of the term loan upon the amendment of the credit facility. The Company had on
deposit $261,000 in a cash collateral account to secure the outstanding
borrowings under the credit facility. The outstanding balance under the line of
credit and a portion of the outstanding balance under the term loan were
classified as long-term liabilities in the Company's October 31, 2000 balance
sheet based on the amended terms of the credit facility whereby the Company may
either defer payments until, or make installment payments, through November 20,
2002.

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

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

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

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


                                       9
<PAGE>

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

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

Year 2000

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

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS

      Market risks relating to the Company's operations result primarily from
changes in interest rates and commodity prices as further described below.

Interest Rate Risks

      The Company is subject to market risk from exposure to fluctuations in
interest rates. At October 31, 2000, the Company's long-term debt, other than
capitalized leases, consisted of approximately $245,000 of fixed rate debt and
approximately $2,800,000 of variable rate debt under its revolving line of
credit and term loan. Interest on the variable rate debt was payable primarily
at .5% above the prime rate, with a portion of the variable rate debt payable at
 .75% above the prime rate. The Company does not expect changes in interest rates
to have a material effect on results of operations or cash flows in fiscal 2001,
although there can be no assurance that interest rates will not significantly
change.

Commodity Price Risks

      The supply and price of coffee beans are subject to volatility and are
influenced by numerous factors which are beyond the Company's control.
Historically, the Company has used short-term coffee futures and options
contracts primarily for the purpose of partially hedging and minimizing the
effects of changing green coffee prices, as further explained in Note 2 of the
notes to financial statements in this Annual Report. In addition, during the
latter half of fiscal 2000, the Company began to acquire futures contracts with
longer terms (generally three to four months) primarily for the purpose of
guaranteeing an adequate supply of green coffee. The use of these derivative
financial instruments has enabled the Company to mitigate the effect of changing
prices although it generally remains exposed to loss when prices surge
significantly in a short period of time. The Company generally has been able to
pass green coffee price increases through to its customers, thereby maintaining
its gross profits. However, the Company cannot predict whether it will be able
to pass inventory price increases through to its customers in the future.

      At October 31, 2000, the Company held options covering an aggregate of
1,875,000 pounds of green coffee beans which are exercisable at $.725 per pound.
The fair market value of these options, which was obtained from a major
financial institution, was approximately $27,000 at October 31, 2000.

      At October 31, 2000, the Company held longer-term futures contracts for
the purchase of 412,500 pounds of coffee at an average price of $1.04 per pound.
The fair market price of coffee applicable to such contracts was $.744 per pound
at that date. Generally, such contracts are marked to market on a daily basis,
and realized gains and losses are included in cost of sales.


                                       10
<PAGE>

      The table below provides information about the Company's green coffee
inventory and futures contracts that are sensitive to changes in commodity
prices, specifically green coffee prices. For inventory, the table presents the
carrying amount and fair value at October 31, 2000. For the future contracts,
the table presents the notional amounts in pounds, the weighted average contract
prices, and the total dollar contract amount by expected maturity dates, the
latest of which occurs within one year from the reporting date. Contract amounts
are used to calculate the contractual payments and quantity of green coffee to
be exchanged under the futures contracts.

                                                           October 31, 2000
                                                         ---------------------
                                                         Carrying        Fair
                                                          Amount         Value
                                                         --------        -----
On balance sheet commodity position
and related derivatives
    Green coffee inventory                               $813,320       $813,320

                        Fair value

Related derivatives

Futures contracts (long):
    Contract volumes (412,500 pounds)
    Weighted average price (per pound)                                  $   1.04
    Contract amount                                                     $429,000

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

      See Item 14 herein.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE.

      On May 15, 1998, Transpacific dismissed German W. Chacon ("Chacon") who
has been previously engaged as the principal accountant for Transpacific and had
previously audited its financial statements as of September 30, 1997 and for the
period from October 9, 1995 (date of inception) to September 30, 1997.

      Chacon's reports on Transpacific's financial statements for the period
from October 9, 1995 to September 30, 1997 did not contain any adverse opinion
or disclaimer of opinion, qualifications or modifications as to uncertainty,
audit scope or accounting principles.

      There were no disagreements between Transpacific and Chacon on any matter
of accounting principles or practice, financial statement disclosure or auditing
scope or procedure within the period from October 9, 1995 to September 30, 1997
and the subsequent interim period preceding its dismissal which disagreement, if
not resolved to Chacon's satisfaction, would have caused it to make reference to
such disagreement.

      During the period from October 9, 1995 to September 30, 1997 and the
subsequent interim period preceding Chacon's dismissal, there were no
"reportable events" as set forth in Item 304(a)(1)(v) of Regulation S-K.

      On May 15, 1998, Coffee Holding dismissed the accounting firm of Ira D.
Ganzfried & Company ("Ganzfried") which had been previously engaged as the
principal accountants for Coffee Holding and had previously audited its
financial statements as of October 31, 1996 and 1995 and for the years then
ended.


                                       11
<PAGE>

      Ganzfried's reports on Coffee Holding's financial statements for the years
ended October 31, 1996 and 1995 did not contain any adverse opinion or
disclaimer of opinion, qualifications or modifications as to uncertainty, audit
scope or accounting principles.

      There were no disagreements between Coffee Holding and Ganzfried on any
matter of accounting principles or practice, financial statement disclosure or
auditing scope or procedure for the years ended October 31, 1996 and 1995 and
the subsequent interim period preceding its dismissal which disagreement, if not
resolved to Ganzfried's satisfaction, would have caused it to make reference to
such disagreement.

      For the years ended October 31, 1996 and 1995 and the subsequent interim
period preceding Ganzfried's dismissal, there were no "reportable events" as set
forth in Item 304(a)(1)(v) of Regulation S-K.

      The decision to change accountants was approved by the Board of Directors
of the Company following the merger between Transpacific and Coffee Holding. The
Company does not have an audit committee.

      On May 15, 1998, Coffee Holding engaged the accounting firm of J.H. Cohn
LLP as the principal accountant to audit its financial statements in subsequent
years. Neither Coffee Holding nor anyone acting on its behalf consulted with
J.H. Cohn LLP prior to engaging them regarding the application of accounting
principles to a specified transaction or the type of audit opinion that might be
rendered on the Coffee Holding or Transpacific financial statements for which
disclosure would be required by Item 304(a)(2) of Regulation S-K.

                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF COFFEE HOLDING CO., INC.

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

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

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

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

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

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

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

      The Company currently does not have any standing committees.


                                       12
<PAGE>

ITEM 11. EXECUTIVE COMPENSATION

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

                           Summary Compensation Table

                                                   Annual Compensation
                                         ---------------------------------------
Name and                                 Salary      Bonus       All Other
Principal Position      Fiscal Year       ($)        ($)(1)  Compensation ($)(2)
------------------      -----------      ------      ------  -------------------
Andrew Gordon              2000         155,000         -         13,671
Chief Executive            1999         160,000      50,000        8,896
Officer and President      1998         160,000         -         24,379

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

----------
(1)   Amounts shown as bonuses were earned in the fiscal year shown.

(2)   The amounts set forth consist of amounts paid by the Company for the use
      of an automobile and automobile insurance.

      The Company has a stock option plan under which stock options to purchase
shares of Company Common Stock may be granted to the Company's directors,
officers and other key employees and consultants. The Company has reserved
2,000,000 shares of its Common Stock for issuance under the stock option plan.
As of October 31, 2000, no options had been granted under the plan.

Compensation of Directors

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

ITEM 12. SECURITY STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

      The following table sets forth information regarding ownership of shares
of the Company's common stock, as of October 31, 2000, by each person known to
be the owner of 5% or more of the Company's common stock, by each person who is
a director or executive officer and by all directors and executive officers as a
group.

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

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

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


                                       13
<PAGE>

                                                              Common Stock
                                                        ------------------------
                                                        Number of     Percentage
                                                          Shares       of Class
                                                        ---------     ----------
Andrew Gordon(1)                                        1,970,378        49.3%
David Gordon(1)                                         1,970,378        49.3%
Gerard DeCapua                                                100           *
Daniel Dwyer                                                  100           *
Matt Phillips                                                 100           *
Rachelle Gordon(2)                                      1,740,000        43.5%
Rachelle Gordon Grantor
    Retained Annuity Trust                              1,350,878        30.8%
Sterling Gordon                                           199,600         5.0%
Judy Melnick                                              199,600         5.0%

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

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

(1)   Includes 1,350,878 shares held by the Rachelle Gordon Grantor Retained
      Annuity Trust, of which Andrew and David Gordon are the co-trustees with
      the power to vote and dispose of the shares.

(2)   Includes 1,350,878 shares held by the Rachelle Gordon Grantor Retained
      Annuity Trust, of which Ms. Gordon is the grantor and beneficiary.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

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

      At October 31, 2000, the Company had loans payable to certain of its
stockholders and directors and officers in the principal amounts as follows:

      Rachelle Gordon - $38,633
      Sterling Gordon - $47,884
      David Gordon    - $90,371
      Andrew Gordon   - $68,373

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

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

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

                                     PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

      (a) The financial statements and financial statement schedules listed
below are filed as a part of this report. See Index to Financial Statements and
Financial Statement Schedules beginning on Page F-1.

      1.    Financial Statements:

            -     Index to Financial Statements and Financial Statement
                  Schedules

            -     Report of Independent Public Accountants.


                                       14
<PAGE>

            -     Balance sheets as of October 31, 2000 and 1999

            -     Statements of Operations for the Years Ended October 31, 2000,
                  1999 and 1998

            -     Statements of Changes in Stockholders' Equity (Deficiency) for
                  the Years Ended October 31, 2000, 1999 and 1998

            -     Statements of Cash Flows for the Years Ended October 31, 2000,
                  1999 and 1998

            -     Notes to Financial Statements

      2.    Financial Statement Schedules:

      II.   Valuation and Qualifying Accounts and Reserves for the Years Ended
            October 31, 2000, 1999 and 1998

            Other Schedules have been omitted because the information required
            to be set forth therein is not applicable or is shown in the
            financial statements or notes thereto.

      (b) No reports on Form 8-K were filed by the Company during the fourth
quarter ended October 31, 2000.

      (c) Exhibits

Exhibit
Number     Exhibit Name
------     ------------

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

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



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

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

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

10.3*      Loan and Security Agreement dated as of November 21, 1997 between the
           Company and NationsCredit Commercial Corporation.

10.4*      First Amendment to Loan and Security Agreement dated as of May 22,
           1998 between the Company and NationsCredit Commercial Corporation.


10.5*      Second Amendment dated as of November 29, 2000 to Loan and Security
           Agreement between the Company and Wells Fargo Business Credit, Inc.,
           as assignee.

10.6*      Term Note dated as of November 29, 2000 made by the Company in favor
           of Wells Fargo Business Credit, Inc. in the principal amount of
           $600,000.

16.1       Letter from German W. Chacon (incorporated by reference to Exhibit
           16(a) to the Form 8-K of Transpacific International Group Corp. filed
           with the SEC on May 18, 1998).

16.2       Letter from Ira D. Ganzfried & Company (incorporated by reference to
           Exhibit 16(b) to the Form 8-K of Transpacific International Group
           Corp. filed with the SEC on May 18, 1998).

27*        Financial Data Schedule.

----------
*   Filed herewith
**  To be filed by Amendment

                                       15
<PAGE>

              Supplemental Information to be Furnished With Reports
            Filed Pursuant to Section 15(d) of the Act by Registrants
     Which Have Not Registered Securities Pursuant to Section 12 of the Act

      Coffee Holding has not and does not intend to send an annual report to
stockholders or proxy materials to its stockholders.


                                       16
<PAGE>

                                   SIGNATURES

      Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, hereunto duly authorized.

                                          COFFEE HOLDING CO., INC.

                                          By: /s/ Andrew Gordon
                                              ---------------------------------
                                                  Andrew Gordon

      Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed on January 29, 2001 by the following persons on behalf of
the registrant and in the capacities indicated.

      Signature                                  Title
      ---------                                  -----

/s/ Andrew Gordon             Chief Executive Officer, President, Treasurer
----------------------        and Director (principal executive officer and
    Andrew Gordon             principal financial and accounting officer)

/s/ David Gordon              Executive Vice President--Operations, Secretary
----------------------        and Director
    David Gordon

/s/ Gerard DeCapua            Director
----------------------
    Gerard DeCapua

/s/ Dan Dwyer                 Director
----------------------
    Dan Dwyer

/s/ Matt Philips              Director
----------------------
    Matt Phillips


                                       17
<PAGE>

                            COFFEE HOLDING CO., INC.

                        INDEX TO FINANCIAL STATEMENTS AND
                          FINANCIAL STATEMENT SCHEDULE

                                                                          PAGE
                                                                          ----
(A) FINANCIAL STATEMENTS:

    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS                              F-2

    BALANCE SHEETS OCTOBER 31, 2000 AND 1999                              F-3

    STATEMENTS OF OPERATIONS YEARS ENDED
      OCTOBER 31, 2000, 1999 AND 1998                                     F-4

    STATEMENTS OF CHANGES IN STOCKHOLDERS'
      EQUITY (DEFICIENCY) YEARS ENDED
      OCTOBER 31, 2000, 1999 AND 1998                                     F-5

    STATEMENTS OF CASH FLOWS YEARS ENDED
      OCTOBER 31, 2000, 1999 AND 1998                                     F-6

    NOTES TO FINANCIAL STATEMENTS                                      F-7/17

(B) FINANCIAL STATEMENT SCHEDULE:

    II - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
         YEARS ENDED OCTOBER 31, 2000, 1999 AND 1998                      S-1

    Other  schedules are omitted  because of the absence of  conditions  under
    which they are  required or because the required  information  is given in
    the financial statements or notes thereto.

                                      * * *


                                      F-1
<PAGE>

                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

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

We have audited the  accompanying  balance sheets of COFFEE HOLDING CO., INC. as
of October 31, 2000 and 1999, and the related statements of operations,  changes
in stockholders'  equity (deficiency) and cash flows for the years ended October
31, 2000, 1999 and 1998. These financial  statements are the  responsibility  of
the Company's  management.  Our responsibility is to express an opinion on these
financial statements based on our audits.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects,  the financial position of Coffee Holding Co., Inc. as of
October 31, 2000 and 1999,  and its results of operations and cash flows for the
years ended  October 31,  2000,  1999 and 1998,  in  conformity  with  generally
accepted accounting principles.

Our audits  referred  to above  included  the  information  in Schedule II which
presents  fairly,  in all material  respects,  when read in conjunction with the
basic financial  statements taken as a whole, the information required to be set
forth therein.

                                                J. H. COHN LLP

Roseland, New Jersey
December 29, 2000


                                      F-2
<PAGE>

                            COFFEE HOLDING CO., INC.

                                 BALANCE SHEETS
                            OCTOBER 31, 2000 AND 1999

                       ASSETS                            2000            1999
                                                     -----------    -----------
Current assets:
  Cash                                               $   153,844    $   265,044
  Due from broker                                        138,555        281,064
  Accounts receivable, net of allowance for
    doubtful accounts of $200,510 and $227,210         2,066,964      2,416,700
  Inventories                                          1,466,050      1,478,485
  Prepaid expenses and other current assets               68,582         59,565
                                                     -----------    -----------
      Total current assets                             3,893,995      4,500,858
Property and equipment, at cost, net of
  accumulated depreciation of $2,161,398
  and $1,908,410                                       1,825,648      1,983,317
Cash equivalents restricted under credit
  facility                                               261,038
Deposits and other assets                                 16,796         27,423
                                                     -----------    -----------
      Totals                                         $ 5,997,477    $ 6,511,598
                                                     ===========    ===========

                 LIABILITIES AND
        STOCKHOLDERS' EQUITY (DEFICIENCY)

Current liabilities:
  Current portion of term loan                       $   114,552    $    87,312
  Current portion of obligations under
    capital leases                                        46,161        202,743
  Accounts payable and accrued expenses                2,671,094      3,709,297
                                                     -----------    -----------
      Total current liabilities                        2,831,807      3,999,352
Term loan, net of current portion                         77,563        192,119
Line of credit borrowings                              2,617,702      2,445,130
Obligations under capital leases, net
  of current portion                                                     46,161
Loans from related parties                               245,261        148,014
                                                     -----------    -----------
      Total liabilities                                5,772,333      6,830,776
                                                     -----------    -----------
Commitments and contingencies

Stockholders' equity (deficiency):
  Preferred stock, par value $.001 per
    share; 10,000,000 shares
    authorized; none issued                                 --             --
  Common stock, par value $.001 per
    share; 30,000,000 shares
    authorized, 3,999,650 shares issued
    and outstanding                                        4,000          4,000
  Additional paid-in capital                             743,985        480,997
  Accumulated deficit                                   (522,841)      (804,175)
                                                     -----------    -----------
      Total stockholders' equity
        (deficiency)                                     225,144       (319,178)
                                                     -----------    -----------
      Totals                                         $ 5,997,477    $ 6,511,598
                                                     ===========    ===========

See Notes to Financial Statements.


                                      F-3
<PAGE>

                            COFFEE HOLDING CO., INC.

                            STATEMENTS OF OPERATIONS
                   YEARS ENDED OCTOBER 31, 2000, 1999 AND 1998

                                        2000            1999            1998
                                    ------------    ------------    -----------
Net sales                           $ 20,097,548    $ 23,089,592    $25,853,791
Cost of sales                         16,673,790      19,796,476     24,090,666
                                    ------------    ------------    -----------
Gross profit                           3,423,758       3,293,116      1,763,125
                                    ------------    ------------    -----------
Operating expenses:
  Selling and administrative           2,317,629       1,911,306      1,921,864
  Officers' salaries                     330,000         390,000        293,270
                                    ------------    ------------    -----------
        Totals                         2,647,629       2,301,306      2,215,134
                                    ------------    ------------    -----------
Income (loss) from operations            776,129         991,810       (452,009)
                                    ------------    ------------    -----------
Other income (expense):
  Interest income                         31,064           3,600         40,512
  Interest expense                      (406,859)       (386,506)      (363,445)
  Expenses incurred in connection
    with reverse acquisition                                           (327,087)
                                    ------------    ------------    -----------
        Totals                          (375,795)       (382,906)      (650,020)
                                    ------------    ------------    -----------

Income (loss) before income taxes        400,334         608,904     (1,102,029)
Provision for income taxes               119,000
                                    ------------    ------------    -----------
Net income (loss)                   $    281,334    $    608,904    $(1,102,029)
                                    ============    ============    ===========
Basic earnings per share            $        .07    $       .15
                                    ============    ===========
Basic weighted average common
  shares outstanding                   3,999,650       3,999,650
                                    ============    ===========
Unaudited:
  Historical loss before income
    taxes                                                           $(1,102,029)
  Pro forma:
    Credit for income taxes                                            (496,000)
                                                                    -----------
    Net loss                                                        $  (606,029)
                                                                    ===========
    Basic loss per share                                            $      (.15)
                                                                    ===========
    Basic weighted average
      common shares outstanding                                       3,999,650
                                                                    ===========

See Notes to Financial Statements.


                                      F-4
<PAGE>

                            COFFEE HOLDING CO., INC.

           STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIENCY)
                   YEARS ENDED OCTOBER 31, 2000, 1999 AND 1998


<TABLE>
<CAPTION>
                                                        Common Stock
                                 -------------------------------------------------------                   Retained
                                       No Par Value                $.001 Par Value                         Earnings
                                 --------------------------    -------------------------   Additional       (Accum-
                                  Number of                     Number of                   Paid-in         ulated
                                   Shares         Amount         Shares        Amount       Capital         Deficit)       Total
                                 -----------    -----------    -----------   -----------   -----------   -----------    -----------
<S>                              <C>            <C>              <C>         <C>           <C>           <C>            <C>
Balance, November 1, 1997                100    $   460,000                                              $   135,432    $   595,432

Effect of reverse acquisition
  and related transactions              (100)      (460,000)     3,999,650   $     4,000   $   480,997       (24,224)           773

Net loss                                                                                                  (1,102,029)    (1,102,029)

Dividends paid                                                                                              (422,258)      (422,258)
                                 -----------    -----------    -----------   -----------   -----------   -----------    -----------
Balance, October 31, 1998               --             --        3,999,650         4,000       480,997    (1,413,079)      (928,082)

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

Capital contribution                                                                           262,988                      262,988

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

See Notes to Financial Statements.


                                      F-5
<PAGE>

                            COFFEE HOLDING CO., INC.

                            STATEMENTS OF CASH FLOWS
                   YEARS ENDED OCTOBER 31, 2000, 1999 AND 1998

                                            2000         1999           1998
                                        -----------   -----------   -----------
Operating activities:
  Net income (loss)                     $   281,334   $   608,904   $(1,102,029)
  Adjustments to reconcile net income
   (loss) to net cash provided by
   operating activities:
     Depreciation and amortization          252,988       252,925       239,687
     Bad debts                               44,091        12,210        53,391
     Write-off of deferred mortgage
      financing costs                                      55,063
     Changes in operating assets
      and liabilities:
       Due from broker                      142,509      (130,472)      273,307
       Accounts receivable                  305,645      (185,112)      561,012
       Inventories                           12,435      (118,531)       19,429
       Prepaid expenses and other
        current assets                       (9,017)       (2,367)      (30,132)
       Deposits and other assets             10,627        71,900       (42,132)
       Accounts payable and
        accrued expenses                 (1,038,203)      139,976     1,360,674
                                        -----------   -----------   -----------
        Net cash provided by
         operating activities                 2,409       704,496     1,333,207
                                        -----------   -----------   -----------
Investing activities - purchases
  of property and equipment                 (95,319)     (111,092)     (347,260)
                                        -----------   -----------   -----------
Financing activities:
  Principal payments on mortgage
    note payable                                         (600,000)      (50,000)
  (Increase) decrease in cash and
    cash equivalents restricted under
    credit facility and mortgage note      (261,038)      432,965      (366,895)
  Principal payments on term loan           (87,316)      (87,312)      (87,312)
  Net advances under bank line of credit    172,572       124,617       271,340
  Principal payments of obligations
    under capital leases                   (202,743)     (215,447)     (185,483)
  Advances from (repayments to)
    related parties                          97,247        16,817      (344,018)
  Dividends paid                                                       (422,258)
  Capital contribution                      262,988
                                        -----------   -----------   -----------
        Net cash used in financing
          activities                        (18,290)     (328,360)   (1,184,626)
                                        -----------   -----------   -----------
Net increase (decrease) in cash            (111,200)      265,044      (198,679)
Cash, beginning of year                     265,044          --         198,679
                                        -----------   -----------   -----------
Cash, end of year                       $   153,844   $   265,044   $      --
                                        ===========   ===========   ===========
Supplemental disclosure of
 cash flow data:
  Interest paid                         $   399,045   $   335,267   $   334,567
                                        ===========   ===========   ===========
  Income taxes paid                     $    12,519   $       904   $   104,664
                                        ===========   ===========   ===========

See Notes to Financial Statements.


                                      F-6
<PAGE>

                            COFFEE HOLDING CO., INC.

                          NOTES TO FINANCIAL STATEMENTS

Note 1 - Business activities and reverse acquisition:

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

      On February 10, 1998, the holders of all of the shares of Coffee's  common
      stock  consummated an exchange (the "Exchange") of their shares for shares
      of   common   stock   of    Transpacific    International    Group   Corp.
      ("Transpacific").  Transpacific  was  incorporated in Nevada on October 9,
      1995 and organized  originally as a "blind pool" or "blank check"  company
      for the purpose of either merging with or acquiring an operating  company.
      It had been a  development  stage  company with no  significant  operating
      activities or assets and liabilities prior to the Exchange.

      Transpacific, which had, effectively, 999,650 outstanding shares of common
      stock (with a par value of $.001 per share) prior to the Exchange,  issued
      3,000,000 shares of common stock in exchange for all of the 100 issued and
      outstanding shares of common stock (no par value) of Coffee. Concurrently,
      Coffee  was merged  into  Transpacific  (the  "Merger")  and  Transpacific
      changed its name to Coffee Holding Co., Inc.

      Coffee  Holding  Co.,  Inc.  after the  Exchange,  the Merger and the name
      change is referred to below as the  "Company" or the  "Combined  Company."
      The "Company" is also used to refer to Coffee  Holding Co., Inc.  prior to
      the Exchange, the Merger and the name change.

      The  stockholders  of Coffee also owned 540,040  shares of common stock of
      Transpacific prior to the Exchange and, accordingly, they owned a total of
      3,540,400  or 88.5% of the  outstanding  shares  of the  Combined  Company
      immediately  after  the  Exchange.  Therefore,  the  Merger  was  treated,
      effective as of February 10, 1998,  as a "purchase  business  combination"
      and a "reverse  acquisition" for accounting purposes in which Transpacific
      was the "legal  acquirer" and Coffee was the  "accounting  acquirer."  The
      carrying values of the assets and liabilities of Transpacific,  which were
      immaterial,  were  recorded  at their  historical  carrying  values  as of
      February  10,  1998.  Accordingly,  the  historical  financial  statements
      included herein only reflect the operations of Coffee for the period prior
      to February 10, 1998.  All references to numbers of shares of common stock
      as of the dates or for periods prior to the Exchange have been restated to
      reflect the number of common shares of Transpacific  effectively exchanged
      for common shares of Coffee.

      Consulting  and  professional  fees and other costs incurred in connection
      with the reverse acquisition  totaling $327,087 were charged to expense in
      1998.

      Information  as to the  unaudited  pro forma  results of operations of the
      Company assuming the Merger had been consummated as of, and the results of
      operations of  Transpacific  had been included from,  November 1, 1997 has
      not been  presented  because  such pro  forma  results  would  not  differ
      materially from the historical results of operations for 1998 reflected in
      the accompanying historical statements of operations.


                                      F-7
<PAGE>

                            COFFEE HOLDING CO., INC.

                          NOTES TO FINANCIAL STATEMENTS

Note 2 - Summary of significant accounting policies:

      Use of estimates:

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

      Cash equivalents:

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

      Inventories:

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

      Property and equipment:

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

      Hedging:

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

            At October 31, 2000, the Company held options  (generally with terms
            of two months or less) covering an aggregate of 1,875,000  pounds of
            green  coffee  beans at a price of $.725 per pound.  At October  31,
            1999,  the Company held  options  covering an aggregate of 3,525,000
            pounds of green  coffee  beans at prices  ranging from $.85 to $1.05
            per  pound.  The  fair  market  value of these  options,  which  was
            obtained  from a  major  financial  institution,  was  approximately
            $27,000 and $271,000 at October 31, 2000 and 1999, respectively.

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


                                      F-8
<PAGE>

                            COFFEE HOLDING CO., INC.

                          NOTES TO FINANCIAL STATEMENTS

Note 2 - Summary of significant accounting policies (continued):

      Deferred financing costs:

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

      Advertising:

            The Company  expenses  the cost of  advertising  and  promotions  as
            incurred.  Advertising costs charged to operations  totaled $70,108,
            $92,924 and $140,397 in 2000, 1999 and 1998, respectively.

      Income taxes:

            The  Company  accounts  for income  taxes  pursuant to the asset and
            liability  method  which  requires  deferred  income  tax assets and
            liabilities  to  be  computed  annually  for  temporary  differences
            between  the  financial  statement  and  tax  bases  of  assets  and
            liabilities that will result in taxable or deductible amounts in the
            future based on enacted tax laws and rates applicable to the periods
            in which the  differences  are  expected to affect  taxable  income.
            Valuation  allowances  are  established  when  necessary  to  reduce
            deferred  tax  assets to the amount  expected  to be  realized.  The
            income tax provision or credit is the tax payable or refundable  for
            the period  plus or minus the change  during the period in  deferred
            tax assets and liabilities.

            Prior to the Merger on February 10, 1998,  Coffee,  with the consent
            of its stockholders, had elected to be treated as an "S" Corporation
            under the Internal Revenue Code.  Accordingly,  the Company's income
            or loss prior to that date was  allocated  to Coffee's  stockholders
            for  inclusion  in  their  personal   Federal  income  tax  returns.
            Therefore,  the  Company was not  required to record any  historical
            provision or credit for Federal income taxes for the period prior to
            February 10, 1998.

            The Company had also elected to be treated as an "S" Corporation for
            New York state income tax purposes.  However, New York imposes a tax
            on "S"  Corporation  income at a reduced rate and New York City does
            not recognize "S" Corporations.  Therefore, the Company was required
            to record  appropriate  historical  provisions and credits for state
            and local income taxes in periods  prior and  subsequent to February
            10, 1998.


                                      F-9
<PAGE>

                            COFFEE HOLDING CO., INC.

                          NOTES TO FINANCIAL STATEMENTS

Note 2 - Summary of significant accounting policies (continued):

      Stock options:

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

      Earnings (loss) per share:

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

            Since the Company had elected to be taxed as an "S" Corporation,  it
            was not required to provide for Federal income taxes and it was only
            required to provide for state  income  taxes at a reduced rate prior
            to the date of the Exchange.  SEC rules and regulations prohibit the
            presentation  of  earnings  (loss)  per  common  share  amounts on a
            historical  basis for the periods  during which the "S"  Corporation
            elections were in effect;  instead, they require the presentation of
            basic and,  if  applicable,  diluted  unaudited  pro forma  earnings
            (loss) per common share amounts in the  statements of operations for
            such periods  assuming  that the Company had been subject to Federal
            and  state  income  taxes at  statutory  rates  applicable  to those
            companies  that had not made "S"  Corporation  elections.  Since the
            Company  had elected to be taxed as an "S"  Corporation  for part of
            1998 and it had no potentially  dilutive  securities  outstanding in
            1998,  only the  unaudited  pro  forma  loss  per  share  amount  is
            presented in the accompanying statement of operations for that year.


                                      F-10
<PAGE>

                            COFFEE HOLDING CO., INC.

                          NOTES TO FINANCIAL STATEMENTS

Note 2 - Summary of significant accounting policies (concluded):

      Earnings (loss) per share (concluded):

            The  weighted   average  common  shares   outstanding  used  in  the
            computation  of basic  earnings  per  share in 2000 and 1999 was the
            3,999,650 shares of common stock actually  outstanding  during those
            years.  The weighted  average common shares  outstanding used in the
            computation  of unaudited pro forma basic loss per share in 1998 was
            also  3,999,650  based on the assumption  that the 3,999,650  shares
            effectively issued as of February 10, 1998, the date of the Exchange
            (see Note 1), had been outstanding from the beginning of that year.

      Recent accounting pronouncements:

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

            The FASB and the  Accounting  Standards  Executive  Committee of the
            American  Institute  of  Certified  Public  Accountants  had  issued
            certain other accounting  pronouncements as of October 31, 2000 that
            will become effective in subsequent  periods.  In December 1999, the
            Securities and Exchange  Commission issued Staff Accounting Bulletin
            No. 101, "Revenue Recognition in Financial  Statements" ("SAB 101").
            SAB  101  summarizes  certain  staff  views  in  applying  generally
            accepted  accounting  principles to revenue recognition in financial
            statements.  The Company  will be required to  implement  SAB 101 no
            later than the fourth  quarter of its fiscal year ending October 31,
            2001.  However,  management of the Company does not believe that any
            of those other pronouncements would have significantly  affected the
            Company's financial accounting  measurements or disclosures had they
            been in effect  during the years ended  October 31,  2000,  1999 and
            1998 or that they will  have a  significant  affect at the time they
            become effective.

      Reclassifications:

            Certain accounts in the 1999 and 1998 financial statements have been
            reclassified to conform to the 2000 presentation.


Note 3 - Inventories:

      Inventories at October 31, 2000 and 1999 consisted of the following:

                                              2000           1999
                                           ----------     ----------
            Packed coffee                  $  280,764     $  211,620
            Green coffee                      813,320        892,344
            Packaging supplies                371,966        374,521
                                           ----------     ----------
               Totals                      $1,466,050     $1,478,485
                                           ==========     ==========


                                      F-11
<PAGE>

                            COFFEE HOLDING CO., INC.

                          NOTES TO FINANCIAL STATEMENTS

Note 4 - Property and equipment:

      Property  and  equipment  at October  31, 2000 and 1999  consisted  of the
      following:

                                           Estimated
                                           Useful Life     2000          1999
                                           -----------  ----------    ----------
      Building and improvements             30 years    $1,244,285    $1,232,659
      Machinery and equipment                7 years     2,194,351     1,709,915
      Machinery and equipment under
         capital leases                      7 years       288,500       694,609
      Furniture and fixtures                 7 years       118,910       113,544
                                                        ----------    ----------
                                                         3,846,046     3,750,727
      Less accumulated depreciation
         (including $103,035 and $206,859
         arising from capital leases)                    2,161,398     1,908,410
                                                        ----------    ----------
                                                         1,684,648     1,842,317
      Land                                                 141,000       141,000
                                                        ----------    ----------
             Totals                                     $1,825,648    $1,983,317
                                                        ==========    ==========

      Depreciation  totaled  $252,988,  $251,204 and $234,525 in 2000,  1999 and
      1998, respectively.

      During  1998,  the Company  effectively  acquired  equipment  at a cost of
      $288,500  by  incurring   capital   lease   obligations.   These   noncash
      transactions are not reflected in the accompanying  1998 statement of cash
      flows.

Note 5 - Credit facility and other borrowings:

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

      The line of credit  provided for  borrowings of up to 85% of the Company's
      eligible trade accounts receivable and 60% of its eligible  inventories up
      to a maximum of  $5,000,000.  The  outstanding  balance of $2,617,702  and
      $2,445,130 at October 31, 2000 and 1999,  respectively,  approximated  the
      maximum  amount that the Company could borrow based on its eligible  trade
      accounts  receivable and inventories as of each date. Interest was payable
      monthly at the prime rate plus 1% (an  effective  rate of 10.5% at October
      31, 2000).


                                      F-12
<PAGE>

                            COFFEE HOLDING CO., INC.

                          NOTES TO FINANCIAL STATEMENTS

Note 5 - Credit facility and other borrowings (concluded):

      The term loan,  which had an outstanding  balance of $192,115 and $279,431
      (including a current  portion of $114,552 and $87,312) at October 31, 2000
      and 1999,  respectively,  provided for  borrowings of up to the greater of
      80% of the cost of eligible  equipment or $500,000.  Principal was payable
      in monthly  installments  of $7,276  plus  interest  which was also at the
      prime rate plus 1%.

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

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

      The Company was obligated for variable  rate  borrowings  under a $600,000
      mortgage  note until it was prepaid in March 1999.  The Company  wrote off
      deferred  financing costs of approximately  $55,000 in connection with the
      prepayment of the mortgage note in 1999, and it incurred costs of $113,000
      in connection  with the  cancellation  of a factoring  agreement that were
      charged to interest  expense in 1998.  During 1998, the Company  increased
      its  obligations  under the credit  facility  and  decreased  the  balance
      payable to its factor  through a direct  transfer of  $2,503,288  from the
      bank to the factor.  This was a noncash  transaction that is not reflected
      in the accompanying 1998 statement of cash flows.


                                      F-13
<PAGE>

                            COFFEE HOLDING CO., INC.

                          NOTES TO FINANCIAL STATEMENTS

Note 6 - Loans from related parties:

      The Company had loans payable to its stockholders of $245,261 and $148,014
      at October  31, 2000 and 1999,  respectively.  The loans are due on demand
      and bear interest at 10%. Interest expense totaled approximately  $34,000,
      $12,000 and $12,000 in 2000, 1999 and 1998, respectively.

Note 7 - Income taxes:

      The Company's  historical  provision for income taxes in 2000 consisted of
      the following:

                                                              2000
                                                            --------
            Federal                                         $ 72,000
            State and local                                   47,000
                                                            --------
                Total historical                            $119,000
                                                            ========

      The Company had no historical provision or credit for income taxes in 1999
      and 1998.

      The differences  between the tax provision or credit computed based on the
      Company's  historical pre-tax income or loss and the applicable  statutory
      income tax rate and the Company's  historical  provisions  and credits for
      Federal,  state and  local  income  taxes for 2000,  1999 and 1998 are set
      forth below:

                                                 2000        1999        1998
                                              ---------   ---------   ---------
      Tax provision (credit) at statutory
         rate of 34%                          $ 140,000   $ 207,000   $(374,000)
      Adjustments for effects of:
         State income taxes, net of Federal
             tax effect                          45,000      67,000
         "S" Corporation election and
             termination of "S" Corporation
             election                                                    11,000
         Net change in valuation allowance      (66,000)   (274,000)    363,000
                                              ---------   ---------   ---------
      Historical provision                    $ 119,000   $    --     $    --
                                              =========   =========   =========

      As  explained  in Note 2,  prior to  February  10,  1998,  the date of the
      Exchange,  the Company had elected to be taxed as an "S" Corporation  and,
      accordingly,  it was not required to provide for any Federal income tax on
      its historical income before income taxes of approximately  $1,028,000 for
      the period from November 1, 1997 to February 10, 1998.


                                      F-14
<PAGE>

                            COFFEE HOLDING CO., INC.

                          NOTES TO FINANCIAL STATEMENTS

Note 7 - Income taxes (continued):

      Although  the Company  became  subject to Federal,  state and local income
      taxes at full  statutory  rates for periods  subsequent to the date of the
      Exchange,  it had a historical  loss before income taxes of  approximately
      $2,130,000 for the period from February 11, 1998 to October 31, 1998; as a
      result of that loss and certain other elections related to the termination
      of its "S"  Corporation  election,  the  Company  had net  operating  loss
      carryforwards as of October 31, 1998 of approximately  $800,000  available
      to reduce future Federal,  state and local taxable  income.  There were no
      other  material  temporary  differences as of October 31, 1998. Due to the
      uncertainties  related to the extent  and timing of the  Company's  future
      taxable   income,   the  Company   offset  the   deferred  tax  assets  of
      approximately $363,000 attributable to the potential benefits from the net
      operating  loss  carryforwards  as of October  31,  1998 by an  equivalent
      valuation allowance and, accordingly, it did not recognize any credits for
      income taxes for the period from February 11, 1998 to October 31, 1998. As
      a result of recording the valuation  allowance of  approximately  $363,000
      for the period after February 10, 1998, and the "S"  Corporation  election
      for the period  through  February 10, 1998,  the Company did not recognize
      any  provisions or credits for income taxes for the year ended October 31,
      1998.

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

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



                                      F-15
<PAGE>

                            COFFEE HOLDING CO., INC.

                          NOTES TO FINANCIAL STATEMENTS

Note 7 - Income taxes (concluded):

      The  Company's  "S"  Corporation  election was in effect for part of 1998.
      Unaudited  pro forma  historical  credits for income  taxes  assuming  the
      Exchange  had  occurred on November 1, 1997 and the Company was subject to
      Federal,  state and local income taxes at full statutory  rates for all of
      1998 are set forth below:

                                                              1998
                                                            --------
            Federal                                         $310,000
            State and local                                  186,000
                                                            --------
                Total pro forma (unaudited)                 $496,000
                                                            ========

      The  unaudited  total  pro forma  credit  for  income  taxes  reflects  an
      effective rate for Federal,  state and local income taxes of approximately
      45% for 1998.

Note 8 - Commitments and contingencies:

      Operating lease:

            The Company occupies  warehouse  facilities under an operating lease
            which expires on August 31, 2002 unless renewed at the option of the
            Company for an additional two years.  The lease requires the Company
            to pay utilities  and other  maintenance  expenses.  Rent charged to
            operations  amounted  to  $46,800  in 2000,  1999 and  1998.  Future
            minimum rental payments under the  noncancelable  operating lease in
            years  subsequent  to October 31,  2000  totaled  $85,800,  of which
            $46,800 is payable in 2001 and $39,000 is payable in 2002.

      Capital leases:

            As of October 31, 2000,  the Company  remained  obligated  under one
            capital lease for  machinery and equipment  that expires in February
            2001. Assets under capital leases are amortized over their estimated
            useful lives of seven years.  Amortization  of $99,300,  $96,271 and
            $77,246  was  charged  to  operations   in  2000,   1999  and  1998,
            respectively.  The future minimum lease payments under the remaining
            capital  lease as of October 31,  2000 and the net present  value of
            the future  minimum  lease  payments  through the  expiration of the
            lease in 2001 were as follows:

            Total minimum lease payments                     $47,043
            Less amount representing interest                    882
                                                             -------
            Present value of net minimum lease payments      $46,161
                                                             =======

      Legal proceedings:

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


                                      F-16
<PAGE>

                            COFFEE HOLDING CO., INC.

                          NOTES TO FINANCIAL STATEMENTS

Note 9 - Concentrations of credit risk:

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

      Approximately  17%, 20% and 20% of the  Company's  sales were derived from
      one customer during 2000, 1999 and 1998, respectively.  That customer also
      accounted for approximately  $121,000 of the Company's accounts receivable
      balance at October 31, 2000. Concentrations of credit risk with respect to
      other  trade  receivables  are  limited  due to the  short  payment  terms
      generally  extended  by the  Company;  by ongoing  credit  evaluations  of
      customers;  and by  maintaining  an allowance  for doubtful  accounts that
      management believes will adequately provide for credit losses.

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

Note 10- Stock option plan:

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

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

Note 11- Major vendors:

      During 2000,  substantially all of the Company's  purchases were from nine
      vendors.  The nine vendors also  accounted  for  substantially  all of the
      Company's  accounts  payable at October  31,  2000.  An employee of one of
      those  vendors is a director of the  Company.  Purchases  from that vendor
      totaled approximately $3,500,000,  $4,400,000 and $4,500,000 in 2000, 1999
      and 1998,  respectively.  Management does not believe that the loss of any
      one  vendor  would  have  a  material  adverse  effect  on  the  Company's
      operations due to the availability of alternate suppliers.

                                      * * *


                                      F-17
<PAGE>

                            COFFEE HOLDING CO., INC.

          SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES

                   YEARS ENDED OCTOBER 31, 2000, 1999 AND 1998

                                                              De-
                                 Balance at   Additions-   ductions     Balance
                                 Beginning     Charged       From       at End
                                  of Year     to Income    Reserves     of Year
                                 --------     --------     --------     --------
2000:
  Allowance for
  doubtful accounts              $227,210     $ 44,091     $ 70,791     $200,510
                                 ========     ========     ========     ========
1999:
  Allowance for
  doubtful accounts              $215,000     $ 12,210                  $227,210
                                 ========     ========                  ========
1998:
  Allowance for
  doubtful accounts              $254,317     $ 53,391     $ 92,708     $215,000
                                 ========     ========     ========     ========


                                       S-1
<PAGE>

                                INDEX TO EXHIBITS

10.4  First Amendment to Loan and Security Agreement dated as of May 22, 1998
      between the Company and NationsCredit Commercial Corporation.

10.5  Second Amendment dated as of November 29, 2000 to Loan and Security
      Agreement between the Company and Wells Fargo Business Credit, Inc., as
      assignee.

10.6  Term Note dated as of November 29, 2000 made by the Company in favor of
      Wells Fargo Business Credit, Inc. in the principal amount of $600,000.

27    Financial Data Schedule


                                       18