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

                                   Form 10-KSB

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

For the fiscal year ended October 31, 2001

                                       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. 333-00588-NY

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

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

   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-KSB or any  amendment to
this Form 10-KSB. [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, 2001, the Registrant had 3,999,650 shares of common stock, par
value $.001 per share, outstanding.


<PAGE>


                                Table of Contents

                                                                            Page

PART I

      ITEM 1. DESCRIPTION OF BUSINESS........................................  1

      ITEM 2. PROPERTIES.....................................................  5

      ITEM 3. LEGAL PROCEEDINGS..............................................  6

      ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS............  6

PART II

      ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
              STOCKHOLDER MATTERS............................................  6

      ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
              AND RESULTS OF OPERATIONS......................................  6

      ITEM 7. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.................... 10

      ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
              AND FINANCIAL DISCLOSURE....................................... 11

PART III

      ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS OF
              COFFEE HOLDING CO., INC........................................ 12

      ITEM 10. EXECUTIVE COMPENSATION........................................ 13

      ITEM 11. SECURITY STOCK OWNERSHIP OF CERTAIN BENEFICIAL
               OWNERS AND MANAGEMENT......................................... 14

      ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS................ 14

PART IV

      ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K.............................. 15

SIGNATURES................................................................... 17


                                      -i-


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                                     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 6
herein.

ITEM 1. DESCRIPTION OF BUSINESS

      Coffee Holding Co., Inc. 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.  Coffee  Holding
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-KSB 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-KSB.

Products

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

      o     Private label coffee

      o     Branded coffee; and

      o     Wholesale green coffee

      Private  label  coffee.  From its facility in Brooklyn,  New York,  Coffee
Holding roasts, blends, packages and distributes coffee under private labels for
companies  throughout the United States and Canada. The coffee is distributed in
cans and brick  packs in a variety of sizes.  As of  October  31,  2001,  Coffee
Holding supplied coffee to


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<PAGE>

approximately 35 different  wholesale and retail  companies,  including three of
the largest  wholesalers in the United States.  Coffee Holding  produces private
label coffee for customers who desire to sell coffee under their own name but do
not want to engage in the manufacturing process. Sellers of private label coffee
seek to  achieve  a  similar  quality  at a lower  cost to the  national  brands
representing a better value for the consumer.

      In the year ended October 31, 2001,  approximately 50% of Coffee Holding's
sales revenue came from private label coffee sales,  compared to 48% of revenues
in fiscal 2000.

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

      Coffee Holding's name brands of coffee are: Cafe Caribe, Cafe Supremo, Don
Manuel,  Fifth  Avenue  and Via Roma.  Coffee  Holding  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.  According to the SRC 2000 U.S.  Hispanic
Market Study,  Hispanic 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.
Coffee  Holding  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  2001,  sales of Coffee  Holding's  branded  coffees  comprised
approximately 8% of its sales revenues. In fiscal 2000, 9% of revenues 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 Coffee  Holding's
warehouse to the small  roasters and gourmet  coffee shop  operators  which then
roast the beans  themselves.  In fiscal 2001,  wholesales  of green coffee beans
accounted for  approximately  42% of Coffee Holding's sales revenues.  In fiscal
2000, approximately 43% of revenues 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.  Coffee
Holding currently has approximately 200 customers in this area, including coffee
houses, single store operators, mall coffee stores and mail order sellers.


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<PAGE>

Raw Materials

      Coffee is a commodity  traded on the  Commodities  and  Futures  Exchange.
Coffee prices are subject to fluctuation.  Over the past five years, the average
price per pound of coffee beans  ranged from  approximately  $.42 to $3.18.  The
price for coffee beans on the  commodities  market as of October 31,  2001,  was
$.44 per pound.

      Coffee Holding  purchases its green coffee from dealers located  primarily
within the United  States.  The dealers  supply Coffee Holding with coffee beans
from many countries,  including Columbia,  Mexico, Kenya, Indonesia,  Brazil and
Ethiopia,  among others.  In fiscal 2001,  substantially all of Coffee Holding's
purchases were from approximately eight dealers. The eight vendors accounted for
72% of total product purchases.  Two of these vendors,  Rothfos  Corporation and
Volcafe,  accounted  for 19% and 13% of  total  purchases,  respectively.  These
vendors  accounted  for  approximately  $69,000 and $16,000 of Coffee  Holding's
accounts  payable at October 31, 2001.  An employee of one of those vendors is a
director of Coffee  Holding.  Purchases from that vendor  totaled  approximately
$2,243,000 and $3,500,000 in 2001 and 2000,  respectively.  Management  does not
believe that the loss of any one vendor would have a material  adverse effect on
Coffee Holding'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  Coffee  Holding  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  Coffee
Holding'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
Coffee Holding 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 Coffee Holding.

      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.

      Coffee  Holding  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 "Management's Discussion and Analysis of Financial Condition and
Results of Operations - 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 Coffee  Holding  anticipates
maintaining  its  registrations.  Coffee  Holding  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 2001,  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.

      Coffee  Holding  historically  has had short term  contracts  with some of
these  customers  (generally  one to two  years in  duration).  Although  Coffee
Holding  believes that it has a strong  mutually  beneficial  relationship  with
those  companies,  there  can be no  assurance  that  these  relationships  will
continue.  Coffee Holding  currently has  agreements  with four of its wholesale
customers (Supervalu, Shurfine International, Cub Foods and Sav-a-lot) in


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<PAGE>

which  Coffee  Holding is the  exclusive  supplier at fixed  prices for lines of
private  label ground  coffee.  The  agreements,  which contain  generally  only
pricing terms, do not set any minimum purchase obligations.  The loss of any one
of these  relationships  would likely have a material  adverse  effect on Coffee
Holding's business and results of operations.

Competition

      The coffee  market is highly  competitive.  Coffee  Holding  competes on a
regular  basis in the  northeastern  United  States  with  other  suppliers  and
distributors  of green  coffee  beans,  whole bean coffee and  roasted  coffees.
Coffee Holding'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 in its
market area are Kroger and the coffee division of Sara Lee. Both Kroger and 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.  However, because Kroger owns the stores in which it sells coffee and
therefore  competes  directly  with  potential  purchasers  of its private label
coffee, many customers will not purchase private label coffee from Kroger.

      Coffee  Holding  believes that it remains  competitive by providing a high
level of quality and customer  service.  This service includes ensuring that the
coffee produced for each label  maintains a consistent  taste and delivering the
coffee on time in the  proper  quantities.  Coffee  Holding  also  provides  its
private  label  customers  with  information  on the coffee  market on a regular
basis.  Private label coffee also competes with all of the branded coffee on the
market. Sara Lee 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,
primarily  in the  northeastern  United  States.  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
Coffee Holding and have a greater  ability to conduct  marketing and promotions.
Coffee  Holding  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.
Additionally,  these competitors do not target the Hispanic consumer market, the
fastest growing demographic in the United States. Coffee Holding believes it can
successfully  compete  in  the  branded  coffee  market  by  targeting  Hispanic
consumers.

      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 Coffee Holding 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 value-added supplier to small roasters,  with
the ability to help them market their  specialty  coffee  products and develop a
customer  base. The assistance  Coffee Holding  provides its customers  includes
training,  coffee blending and market identification.  Because the gourmet green
coffee beans are sold  unroasted to small coffee shops and roasters  that market
their products to local gourmet customers,  Coffee Holding does not believe that
its gourmet  green coffee  customers  compete with its private  label or branded
coffee lines of business.

Marketing

      Coffee  Holding  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.  Coffee Holding also
uses its web site  (www.coffeeholding.com)  as a method of marketing  itself and
its coffee products.


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<PAGE>

      For its private label and brand coffees,  Coffee Holding 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).

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

      Coffee Holding evaluates opportunities for growth consistent with its core
business.  Coffee Holding  recently  established  relationships  with additional
independent  sales  brokers to market Coffee  Holding's  products in the western
United States,  an area of the country where Coffee Holding has historically not
marketed and sold its coffee. Coffee Holding is also considering the possibility
of using web site auctions to market coffee. In addition,  in the future, Coffee
Holding may seek to grow by  acquiring  coffee  companies  or brands which would
complement its core business.

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, 20 of which are employed in the
areas of  coffee  roasting,  blending  and  packaging  and seven of which are in
administration  and sales.  None of its employees are  represented  by unions or
collective  bargaining  agreements.  Coffee Holding's  management  believes that
Coffee Holding  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 Coffee Holding's  executive  offices as well as Coffee Holding's
plant where it roasts,  blends and packages its coffee.  Coffee Holding believes
its headquarters is in good condition.

      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  Coffee   Holding  or  any  of  its  officers,   directors  or
shareholders.  Coffee Holding pays an annual rent of $46,800.  The lease expires
on August 31,  2002,  unless  renewed by Coffee  Holding for an  additional  two
years.

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

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


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ITEM 3. LEGAL PROCEEDINGS

      In the  ordinary  course of its  business,  Coffee  Holding  is a party to
litigation  involving its  operations.  Coffee Holding 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-KSB, no matters were submitted to a vote of security holders.

                                     PART II

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

      Coffee  Holding's  common  stock is not quoted or listed on any  quotation
system or market.  Coffee  Holding does not know of any firm that makes a market
for the common stock.

      The number of  registered  holders  of Coffee  Holding's  common  stock at
October 31, 2001 and at January 23, 2002 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,  Coffee Holding has never paid any
cash  dividends  on  its  common  stock  and  has no  intention  to do so in the
foreseeable future.

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
        RESULTS OF OPERATIONS

Forward-Looking Statements

      The  Private  Securities  Litigation  Reform  Act of 1995  provides a safe
harbor for  forward-looking  statements  made by or on behalf of Coffee Holding.
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 Coffee Holding expects or
anticipates will occur in the future are  forward-looking  statements within the
meaning of the Private  Securities  Litigation  Reform Act. The  forward-looking
statements  are and  will be  based  on  management's  then  current  views  and
assumptions  regarding future events and operating  performance.  Coffee Holding
cannot assure that anticipated results will be achieved since actual results may
differ materially  because of risks and  uncertainties.  Coffee Holding does 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 forward-looking statements:

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


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<PAGE>

      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.  Coffee Holding undertakes no
responsibility  to  update  any  forward-looking  statements  contained  in this
report.

Year Ended  October 31, 2001 (fiscal  2001)  Compared to Year Ended  October 31,
2000 (fiscal 2000)

      Net sales totaled  $20,326,720  in fiscal 2001, an increase of $229,172 or
1.1% from  $20,097,548 in fiscal 2000.  Although net sales  increased only 1.1%,
Coffee  pounds sold  increased  by 2.5 million  pounds,  or 16%, to 18.5 million
pounds in 2001 compared to approximately 16 million pounds in fiscal 2000.

      The number of Coffee Holding's  customers in the gourmet green coffee area
remained at approximately  200 in fiscal 2001. 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.
Because the gourmet  green  coffee  area is the fastest  growing  segment of the
coffee  market,  Coffee  Holding  believes that its customer base and sales will
grow in this area.  Coffee  Holding also believes that  historically  low coffee
prices will  continue to  encourage  consumers to purchase  more higher  quality
gourmet coffee relative to supermarket brands.

      Coffee Holding's selling prices decreased steadily throughout fiscal 2001.
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 2001.  Declines in green coffee purchase prices  eventually led to
declines  in selling  prices.  Selling  prices of products  which use  commodity
coffee react fairly quickly to changes in green coffee purchase prices.  Gourmet
green  coffee  selling  prices  tend to react more slowly to changes in purchase
prices because demand for gourmet coffee is less price sensitive. Coffee Holding
also  experienced  some  pricing  pressure in the private  label area as some of
Coffee Holding's larger competitors cut their prices in order to increase market
share.  Coffee  Holding is unable to predict how long and to what extent pricing
pressure in the private label area will continue.

      Cost of sales in fiscal  2001 was  $16,065,035,  or 79% of net  sales,  as
compared  to  $16,673,790,  or 83% of net  sales in fiscal  2000.  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,  Coffee  Holding is
unable to predict the purchase price of green coffee in fiscal 2002.

      Coffee  Holding's gross profit in fiscal 2001 was $4,261,685,  an increase
of $837,927 or 24% from $3,423,758 in fiscal 2000.  Gross profit as a percentage
of net  sales  increased  by 4% to 21% in fiscal  2001 from 17% in fiscal  2000.
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.

      Total operating expenses increased $514,287, or 19%, to $3,161,916 in 2001
from $2,647,629 in 2000 due to increases in selling,  general and administrative
expenses  and  officer's  salaries.  Selling and  administrative  expenses  were
$2,791,916  in fiscal 2001,  an increase of $474,287 or 20% from  $2,317,629  in
fiscal 2000. As a percentage of net sales, this change represented a 2% increase
from 12% in fiscal  2000 to 14% in  fiscal  2001.  The


                                       7
<PAGE>

increase  was  primarily  attributable  to an  increase  in  shipping  expenses,
advertising and promotional  expenses and  commissions.  Shipping  expenses were
approximately  $100,000  higher in fiscal  2001 due in part to western  shipping
costs  incurred as Coffee  Holding  shipped more products to the western  United
States.  The $120,000 increase in advertising and promotional  expenses was also
due  to  increased  market  efforts  in the  western  United  States.  Increased
commission expenses of approximately $45,000 reflect increased sales in 2001. In
addition, officer's salaries increased $40,000, or 12%, to $370,000 in 2001 from
$330,000 in 2000.

      Interest expense  decreased $59,551 or 15% from $406,859 in fiscal 2000 to
$347,308 in fiscal 2001. The decrease was  attributable  to lower interest rates
on outstanding  borrowings.  Rates of interest on Coffee  Holding's  outstanding
borrowings  are tied to the prime  rate.  As the prime rate  declined  in fiscal
2001,  Coffee Holding's rate of interest  payable on its outstanding  borrowings
also declined.  The lower  contractual  rates on Coffee  Holding's term loan and
line of credit,  each of which was amended in November 2000, also contributed to
the decline. See "--Liquidity and Capital Resources."

      Other  income  (expense),  was a net  expense of  $269,066.  Other  income
(expense)  in fiscal 2000 was a net expense of  $375,795.  The decrease in other
expenses is attributed to the receipt of $47,000 on a litigation  settlement and
a reduction in interest expense.

      Coffee  Holding had income of $830,703  before income taxes in fiscal 2001
compared to income of $400,334  before income taxes in fiscal 2000. The increase
was attributable primarily to the increase in gross profit.

      Coffee Holding's provision for income taxes for the year ended October 31,
2001 totaled $312,825  compared to $119,000 for the year ended October 31, 2000.
The  difference  between the tax provision  computed  based on Coffee  Holding's
pre-tax income and the applicable statutory income tax rate and Coffee Holding's
provisions  for  Federal,  state and local taxes for the year ended  October 31,
2001 and 2000 are set forth below:

                                                             Year Ended
                                                             October 31
                                                     --------------------------
                                                         2001           2000
                                                     -----------    -----------
Tax provision at statutory rate of 34%
     Adjustments for the effects of:...............  $   238,653    $   140,000

     State income taxes, net of Federal benefit....       74,172         45,000
     Net change in valuation allowance.............            -        (66,000)
                                                     -----------    -----------
Provision for income taxes                           $   312,825    $   119,000
                                                     ===========    ===========

      Coffee Holding 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,  Coffee Holding 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 a result, Coffee Holding had net income of $517,878, or $.13 per share,
in fiscal 2001 compared to net income of $281,334,  or $.07 per share, in fiscal
2000.

Liquidity and Capital Resources

      As  of  October  31,  2001,   Coffee   Holding  had  working   capital  of
approximately  $1,678,000,  which increased by $616,000 from its working capital
of  approximately  $1,062,000 as of October 31, 2000, and a total  stockholders'
equity of $743,022,  which  increased by $517,878  from its total  stockholders'
equity of $225,144 as of October 31,  2000.  Coffee  Holding's  working  capital
increased primarily as a result of net income generated.


                                       8
<PAGE>

      As of November  29,  2000,  Coffee  Holding  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
Coffee  Holding'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 6.00% at October 31, 2001).  Interest on the term
loan is payable  monthly at the prime rate plus .75% (an effective rate of 6.25%
at October 31, 2001). Principal payments on the term loan are payable monthly at
$7,276 and beginning  January 1, 2001,  are payable  monthly at $10,000.  Andrew
Gordon and David  Gordon,  directors and officers of Coffee  Holding,  each have
guaranteed borrowings under the credit facility up to $500,000.

      As of October 31, 2001, the line of credit had an  outstanding  balance of
approximately  $2,339,000 as compared to an outstanding balance of $2,618,000 at
October 31, 2000. The outstanding balance under the term loan was $500,000 as at
October 31, 2001, and was $192,000 as at October 31, 2000. Coffee Holding 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 Coffee  Holding's  October 31, 2001 and
2000 balance  sheets based on the amended terms of the credit  facility  whereby
Coffee Holding may either defer payments  until, or make  installment  payments,
through  November 20, 2002.  Coffee Holding was in compliance  with the required
financial covenants at October 31, 2001.

      Coffee  Holding  had loans  payable to its  stockholders,  all of whom are
members of the Gordon family, of $160,980 at October 31, 2001. The loans are due
on  demand  and  bear  interest  at  10%.   Coffee  Holding   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 2001, Coffee Holding's operating activities provided net cash of
approximately  $250,000 as  compared  to fiscal  2000 when net cash  provided by
operating  activities was $2,400. The improved cash flow from operations in 2001
was  primarily  due to the  increase  in net  income  from  $281,334  in 2000 to
$517,878 in 2001.

      During fiscal 2001,  Coffee  Holding used $85,000 of its cash resources to
purchase property and equipment.  These capital expenditures were slightly below
those made in fiscal 2000 Coffee Holding will purchase a state-of-the-art double
line brick pack machine at a cost of approximately  $400,000 in fiscal 2002. The
machine  will allow  Coffee  Holding to increase  its  production  capacity  and
diversify its product mix. Management does not expect to incur other significant
capital expenditures in fiscal 2002.

      Coffee  Holding  also used  approximately  $120,000  of cash in  financing
activities in fiscal 2001, including $278,500 to reduce its bank line of credit,
$46,000  to reduce  capital  lease  obligations,  $84,000  in the  repayment  of
principal and interest on loans to related parties. In addition,  Coffee Holding
earned  $18,480 in  interest  on the  collateral  account to secure  outstanding
borrowings  under  its  credit  facility.  These  uses  were  offset  in part by
additional advances of approximately $308,000 on the new credit facility.

      Coffee  Holding  expects  to fund its  operations,  including  paying  its
liabilities,  funding capital  expenditures and making required  payments on its
debts,  in fiscal 2002 through cash  provided by  operating  activities.  Coffee
Holding  expects that it will generate  sufficient cash to continue its business
for the next twelve  months.  In  additional,  an increase in eligible  accounts
receivable  and  inventory  would  permit  Coffee  Holding  to  make  additional
borrowings  under its line of credit.  Coffee Holding also believes it could, if
necessary, obtain additional loans by mortgaging its headquarters.


                                       9
<PAGE>

Market Risks

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

Interest Rate Risks

      Coffee Holding is subject to market risk from exposure to  fluctuations in
interest rates. At October 31, 2001, Coffee Holding's long-term debt, other than
capitalized leases,  consisted of approximately  $161,000 of fixed rate debt and
approximately  $2,840,000  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.  Coffee  Holding does not expect  changes in interest
rates to have a material effect on results of operations or cash flows in fiscal
2002,  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  Coffee  Holding's  control.
Historically,  Coffee  Holding 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,  Coffee Holding 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  Coffee  Holding to  mitigate  the effect of
changing prices although it generally  remains exposed to loss when prices surge
significantly in a short period of time.  Coffee Holding generally has been able
to  pass  green  coffee  price  increases  through  to  its  customers,  thereby
maintaining its gross profits. However, Coffee Holding cannot predict whether it
will be able to pass inventory price  increases  through to its customers in the
future.

      At October 31, 2001,  Coffee Holding held options covering an aggregate of
6,187,500  pounds of green coffee beans which are  exercisable at prices ranging
from $.425 to $.450 per pound. The fair market value of these options, which was
obtained  from a major  financial  institution,  was  approximately  $46,000  at
October 31, 2001.

      At October 31, 2001, Coffee Holding held longer-term futures contracts for
the  purchase  of  1,950,000  pounds of coffee at an average  price of $.525 per
pound.  The fair market price of coffee  applicable to such  contracts was $.439
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.

ITEM 7. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

See Item 13 herein.


                                       10
<PAGE>

ITEM  8.  CHANGES  IN AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING  AND
          FINANCIAL DISCLOSURE.

      On October 23,  2001,  the  accounting  firm of J.H.  Cohn,  LLP  ("Cohn")
resigned as independent accountants of Coffee Holding.

      For Coffee Holding's fiscal years ended October 31, 2000 and 1999,  Cohn's
report on the financial  statements of Coffee Holding did not contain an adverse
opinion or a  disclaimer  of opinion,  and was not  qualified  or modified as to
uncertainty, audit scope or accounting principles.

      During  Coffee  Holding's  two most  recent  fiscal  years and the interim
period preceding the resignation of Cohn,  there were no  disagreements  between
Coffee  Holding and Cohn on any matter of  accounting  principles  or practices,
financial statement disclosure or auditing scope or procedure.

      During  Coffee  Holding's  two most  recent  fiscal  years and the interim
period  preceding the resignation of Cohn, Cohn did not advise Coffee Holding of
any of the following:

      (i) Internal  controls  necessary for Coffee  Holding to develop  reliable
financial statements did not exist;

      (ii)  Information had come to Cohn's attention that led it to no longer be
able to rely on management's  representations,  or that had made it unwilling to
be associated with the financial statements prepared by management;

      (iii)  The need to  expand  significantly  the  scope of its audit or that
information  had come to its  attention  that if further  investigated  may: (1)
materially  impact the fairness or  reliability  of either a  previously  issued
audit report or the underlying financial statements, or the financial statements
issued or to be issued covering the fiscal  period(s)  subsequent to the date of
the most recent financial  statements covered by an audit report or (2) cause it
to be unwilling to rely on  management's  representations  or be associated with
Coffee Holding's financial statements, or

      (iv)  Information  had  come  to  its  attention  that  it  had  concluded
materially  impacted the  fairness or  reliability  of either:  (1) a previously
issued audit report or the underlying  financial statements or (2) the financial
statements  issued or to be issued covering the fiscal  period(s)  subsequent to
the date of the most recent financial statements covered by an audit report.

      On October  25,  2001,  Coffee  Holding's  Board  Directors  approved  the
engagement of Lazar Levine & Felix, LLP ("Lazar") as Coffee Holding's  principal
accountant  to audit  Coffee  Holding's  financial  statements.  Neither  Coffee
Holding  nor anyone  acting on its  behalf  consulted  with  Lazar  prior to its
engagement regarding (i) the application of accounting principles to a specified
transaction  or the type of audit  opinion  that  might be  rendered  on  Coffee
Holding's  financial  statements for which  disclosure would be required by Item
304(a)(2) of Regulation  S-K or (ii) any matter that was either the subject of a
disagreement  (as  defined  in  Item  304(a)(i)(iv)  of  Regulation  S-K)  or  a
reportable event (as described in Item 304(a)(i)(v) of Regulation S-K).


                                       11
<PAGE>

                                    PART III

ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS OF COFFEE HOLDING CO., INC.

      Set forth below is information  concerning Coffee Holding's  directors and
executive  officers.  Coffee Holding's board of directors  currently consists of
five directors. Directors are elected by a plurality of the votes cast at Coffee
Holding'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......................  40    Chief Executive Officer, President,
                                             Treasurer and Director
David Gordon.......................  37    Executive Vice President, Secretary
                                             and Director
Gerard DeCapua.....................  40    Director
Daniel Dwyer.......................  45    Director
Jorge Arbelaez.....................  58    Director
Sterling Gordon....................  69    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.

      Jorge  Arbelaez  has been the  National  Branded  Sales  Manager of Coffee
Holding since 1985.

      Sterling  Gordon is the Founder of Coffee Holding and has been an employee
of Coffee  Holding since its inception in 1971.  Mr. Gordon has over 40 years of
experience  in  the  coffee  business,   during  which  time  he  has  developed
significant expertise in coffee quality. Sterling Gordon is the Father of Andrew
Gordon and David Gordon.

      Coffee Holding currently does not have any standing committees.


                                       12
<PAGE>

ITEM 10. EXECUTIVE COMPENSATION

      The following table sets forth certain compensation information for Coffee
Holding's chief executive  officer and each other executive officer whose salary
and bonus  compensation  exceeded $100,000 for the fiscal year ended October 31,
2001.

                           Summary Compensation Table

                                                    Annual Compensation
                                             -----------------------------------
Name and                              Fiscal  Salary   Bonus      All Other
Principal Position                     Year    ($)    ($)(1)  Compensation($)(2)
------------------------------------- -----   ------  ------  ------------------
Andrew Gordon                          2001  175,000  30,000      19,838
Chief Executive Officer and President  2000  155,000      --      13,671
                                       1999  160,000  50,000       8,896

David Gordon                           2001  140,000  25,000       7,311
Executive Vice President - Operations  2000  125,000  40,000       6,919
                                       1999  160,000  50,000       6,970

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

      Coffee   Holding's  Board  of  Directors  does  not  have  a  compensation
committee. Salaries and bonuses are determined by the Board of Directors. Andrew
Gordon's base salary for fiscal 2002 is $196,000. David Gordon's base salary for
fiscal 2002 is $160,000.

      No employee has an employment agreement with Coffee Holding.

Stock Option Plan

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


                                       13
<PAGE>

ITEM 11. SECURITY STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

      The following table sets forth information  regarding  ownership of shares
of Coffee  Holding's  common stock, as of January 25, 2002, by each person known
to be the owner of 5% or more of Coffee  Holding's  common stock, by each person
who is a director  or  executive  officer  and by all  directors  and  executive
officers as a group. Except as otherwise  indicated,  each person and each group
shown in the table has sole  voting and  investment  power  with  respect to the
shares of common stock indicated. For purposes of the table below, in accordance
with Rule 13d-3 under the Securities  Exchange Act of 1934, as amended, a person
is deemed to be the  beneficial  owner,  for  purposes  of any  shares of common
stock: (1) over which he or she has or shares, directly or indirectly, voting or
investment power; or (2) of which he or she has the right to acquire  beneficial
ownership  at any time within 60 days after  January 25,  2002.  As used in this
annual  report,  "voting  power" is the power to vote or  direct  the  voting of
shares  and  "investment  power"  includes  the power to  dispose  or direct the
disposition of shares.

                                                               Common Stock
                                                          ----------------------
                                                           Number of  Percentage
                                                            Shares     of Class
                                                          ---------   ----------
Andrew Gordon ........................................      619,500     15.5%
David Gordon .........................................      619,500     15.5%
Gerard DeCapua .......................................          100        *
Daniel Dwyer .........................................          100        *
Jorge Arbelaez .......................................           --        *
Rachelle Gordon(1) ...................................    1,939,600     48.5%
Sterling Gordon(2) ...................................    1,939,600     48.5%
Judy Melnick .........................................      199,600      5.0%

All directors and executive
officers as a group(2) (5 persons) ...................    3,178,800     79.5%

----------
* Less than 1%.
(1)   Includes  199,600  shares  of  common  stock  owned by  Rochelle  Gordon's
      husband,  Sterling Gordon.  Mrs. Gordon is the mother of Andrew Gordon and
      David Gordon.
(2)   Includes 1,740,000 shares of common stock owned by Sterling Gordon's wife,
      Rochelle  Gordon.  Mr.  Gordon is the  father of Andrew  Gordon  and David
      Gordon.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

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

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

      Rachelle  and Sterling Gordon   -   $ 62,881
      David Gordon                    -   $ 93,109
      Andrew Gordon                   -   $  4,990

      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 Coffee
Holding's  borrowings under its outstanding  credit  facilities from Wells Fargo
Business Credit up to $500,000.

      Daniel Dwyer, a director of Coffee Holding,  is a senior coffee trader for
Rothfos  Corporation,  a Coffee trading  company.  Mr. Dwyer is responsible  for
Coffee Holding's account.  Coffee Holding paid Rothfos approximately  $2,243,236
for green coffee purchases in fiscal 2001 and expects to pay it a similar amount
in fiscal 2002.


                                       14
<PAGE>

                                     PART IV

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

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

      1. Financial Statements:

          -    Index to Financial Statements

          -    Report of Independent Certified Public Accountants.

          -    Report of Independent Public Accountants - Predecessor.

          -    Balance sheet as of October 31, 2001

          -    Statements of Operations for the Years Ended October 31, 2001 and
               2000

          -    Statements of Changes in  Stockholders'  Equity  (Deficiency) for
               the Years Ended October 31, 2001, 2000


          -    Statements of Cash Flows for the Years Ended October 31, 2001 and
               2000

          -    Notes to Financial Statements

      (b)   Coffee  Holding  filed a Current  Report on Form 8-K with the SEC on
            October 29, 2001 reporting a change in Coffee Holding's  independent
            public accountants.


                                       15
<PAGE>

      (c)   Exhibits

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

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

10.2        1998 Stock Option Plan (incorporated  herein by reference to Exhibit
            10.2 to  Coffee  Holding'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
            Coffee   Holding   and    NationsCredit    Commercial    Corporation
            (incorporated   herein  by  reference  to  Exhibit  10.3  to  Coffee
            Holding's  Annual  Report on Form  10-K for the  fiscal  year  ended
            October 31, 2000).

10.4        First  Amendment to Loan and Security  Agreement dated as of May 22,
            1998 between Coffee Holding and NationsCredit Commercial Corporation
            (incorporated   herein  by  reference  to  Exhibit  10.3  to  Coffee
            Holding's  Annual  Report on Form  10-K for the  fiscal  year  ended
            October 31, 2000).

10.5        Second  Amendment dated as of November 29, 2000 to Loan and Security
            Agreement  between Coffee  Holding and Wells Fargo Business  Credit,
            Inc., as assignee  (incorporated herein by reference to Exhibit 10.3
            to Coffee  Holding's  Annual Report on Form 10-K for the fiscal year
            ended  October 31,  2000).

10.6        Term Note dated as of November  29,  2000 made by Coffee  Holding in
            favor of Wells Fargo Business  Credit,  Inc. in the principal amount
            of $600,000  (incorporated  herein by  reference  to Exhibit 10.3 to
            Coffee  Holding's  Annual  Report on Form 10-K for the  fiscal  year
            ended October 31, 2000).

16.3        Letter from J. H. Cohn LLP  (incorporated  by  reference  to Exhibit
            16(a)  to the  Form  8-K of  Coffee  Holding  filed  with the SEC on
            October 29, 2001).

              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, 2002 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  principal
     Andrew Gordon      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/ Jorge Arbelaez    Director
----------------------
    Jorge Arbelaez

  /s/ Sterling Gordon   Director
----------------------
    Sterling Gordon


                                       17
<PAGE>


                            COFFEE HOLDING CO., INC.
                        INDEX TO FINANCIAL STATEMENTS

                                                                           PAGE
                                                                           ----

(A) FINANCIAL STATEMENTS:

    REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS                      F-2

    REPORT OF INDEPENDENT ACCOUNTANTS - PREDECESSOR                         F-3

    BALANCE SHEET OCTOBER 31, 2001                                          F-4

    STATEMENTS OF OPERATIONS YEARS ENDED
         OCTOBER 31, 2001 AND 2000                                          F-5

    STATEMENTS OF CHANGES IN STOCKHOLDERS'
         EQUITY (DEFICIENCY) YEARS ENDED
         OCTOBER 31, 2001 AND 2000                                          F-6

    STATEMENTS OF CASH FLOWS YEARS ENDED
         OCTOBER 31, 2001 AND 2000                                          F-7

    NOTES TO FINANCIAL STATEMENTS                                         F-8/16

                                      * * *


                                      F-1
<PAGE>

               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

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

We have audited the accompanying balance sheet of Coffee Holding Co., Inc. as of
October  31,  2001  and  the  related  statements  of  operations,   changes  in
stockholders'  equity and cash flows for the year then  ended.  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 audit.

We conducted our audit in accordance with auditing standards  generally accepted
in the  United  States of  America.  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  audit  provides  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, 2001 and its results of operations  and cash flows for the year then
ended in  conformity  accounting  principles  generally  accepted  in the United
States of America.

                                                 /s/ LAZAR LEVINE & FELIX, LLP
                                                 -------------------------------
                                                     LAZAR LEVINE & FELIX, LLP

New York, New York
December 21, 2001


                                      F-2
<PAGE>

                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

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

We have audited the statements of operations,  changes in  stockholders'  equity
(deficiency)  and cash  flows of Coffee  Holding  Co.,  Inc.  for the year ended
October 31, 2000.  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 audit.

We conducted our audit 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 audit provides a reasonable basis for our opinion.

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

                                                     /s/ J. H. COHN LLP
                                                     ---------------------------
                                                         J. H. COHN LLP

Roseland, New Jersey
December 29, 2000


                                      F-3
<PAGE>

                            COFFEE HOLDING CO., INC.

                                  BALANCE SHEET
                                OCTOBER 31, 2001

<TABLE>
<CAPTION>
                                                         ASSETS
<S>                                                                                  <C>             <C>
Current assets:
     Cash                                                                                            $   199,434
     Due from broker                                                                                     274,565
     Accounts receivable, net of allowance for doubtful accounts of $200,510                           1,901,749
     Inventories                                                                                       1,351,150
     Prepaid expenses and other current assets                                                            40,889
                                                                                                     -----------
         Total current assets                                                                          3,767,787
Property and equipment, at cost, net of accumulated depreciation of $2,423,403                         1,648,798
Cash equivalents restricted under credit facility                                                        279,518
Deposits and other assets                                                                                 16,796
                                                                                                     -----------
                                                                                                     $ 5,712,899
                                                                                                     ===========

                                          LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
     Current portion of term loan                                                                    $   120,000
     Accounts payable and accrued expenses                                                             1,747,366
     Income taxes payable                                                                                222,315
                                                                                                     -----------
         Total current liabilities                                                                     2,089,681
Term loan, net of current portion                                                                        380,000
Line of credit borrowings                                                                              2,339,216
Loans from related parties                                                                               160,980
                                                                                                     -----------
         Total liabilities                                                                             4,969,877

Commitments and contingencies

Stockholders' equity:
     Preferred stock, par value $.001 per share; 10,000,000 shares authorized;
       none issued                                                                  $        --
     Common stock, par value $.001 per share; 30,000,000 shares authorized,
       3,999,650 shares issued and outstanding                                             4,000
     Additional paid-in capital                                                          743,985
     Accumulated deficit                                                                  (4,963)
                                                                                     -----------
         Total stockholders' equity                                                                      743,022
                                                                                                     -----------
                                                                                                     $ 5,712,899
                                                                                                     ===========
</TABLE>

   The accompanying notes are an integral part of these financial statements.


                                      F-4
<PAGE>

                            COFFEE HOLDING CO., INC.

                            STATEMENTS OF OPERATIONS
                      YEARS ENDED OCTOBER 31, 2001 AND 2000

<TABLE>
<CAPTION>
                                                                           2001               2000
                                                                       ------------       ------------
<S>                                                                    <C>                <C>
Net sales                                                              $ 20,326,720       $ 20,097,548

Cost of sales                                                            16,065,035         16,673,790
                                                                       ------------       ------------

Gross profit                                                              4,261,685          3,423,758
                                                                       ------------       ------------

Operating expenses:
     Selling, general and administrative                                  2,791,916          2,317,629
     Officers' salaries                                                     370,000            330,000
                                                                       ------------       ------------
         Totals                                                           3,161,916          2,647,629
                                                                       ------------       ------------

Income from operations                                                    1,099,769            776,129
                                                                       ------------       ------------

Other income (expense):
     Interest income                                                         31,242             31,064
     Litigation settlement                                                   47,000                 --
     Interest expense                                                      (347,308)          (406,859)
                                                                       ------------       ------------
         Totals                                                            (269,066)          (375,795)
                                                                       ------------       ------------

Income before income taxes                                                  830,703            400,334

Provision for income taxes                                                  312,825            119,000
                                                                       ------------       ------------

Net income                                                             $    517,878       $    281,334
                                                                       ============       ============

Basic earnings per share                                               $        .13       $        .07
                                                                       ============       ============

Basic weighted average common shares outstanding                          3,999,650          3,999,650
                                                                       ============       ============
</TABLE>

   The accompanying notes are an integral part of these financial statements.


                                      F-5
<PAGE>

                            COFFEE HOLDING CO., INC.

           STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIENCY)
                      YEARS ENDED OCTOBER 31, 2001 AND 2000

<TABLE>
<CAPTION>
                                                                                             Retained
                                                                          Additional         Earnings
                                                                           Paid - in       (Accumulated
                                                 Common Stock               Capital           Deficit)           Total
                                         ---------------------------      ----------        -----------        ---------
                                               $.001 Par Value
                                         ---------------------------
                                         Number of
                                           Shares            Amount
                                          ---------        ---------
<S>                                       <C>              <C>              <C>              <C>               <C>
Balance, November 1, 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

Net income                                       --               --               --          517,878           517,878
                                          ---------        ---------        ---------        ---------         ---------

Balance, October 31, 2001                 3,999,650        $   4,000        $ 743,985        $  (4,963)        $ 743,022
                                          =========        =========        =========        =========         =========
</TABLE>

   The accompanying notes are an integral part of these financial statements.


                                      F-6
<PAGE>

                            COFFEE HOLDING CO., INC.

                            STATEMENTS OF CASH FLOWS
                      YEARS ENDED OCTOBER 31, 2001 AND 2000

<TABLE>
<CAPTION>
                                                                                    2001                    2000
                                                                                -----------            -----------
<S>                                                                             <C>                    <C>
Operating activities:
     Net income                                                                 $   517,878            $   281,334
     Adjustments to reconcile net income to net cash provided by
         operating activities:
           Depreciation and amortization                                            262,004                252,988
           Bad debts                                                                 34,822                 44,091
         Changes in operating assets and liabilities:
           Due (to) from broker                                                    (136,010)               142,509
           Accounts receivable                                                      130,393                305,645
           Inventories                                                              114,900                 12,435
           Increase (decrease) in prepaid expenses and other
              current assets                                                         27,693                 (9,017)
           Deposits and other assets                                                     --                 10,627
           (Decrease) in accounts payable and accrued expenses                     (817,236)            (1,144,695)
           Income taxes payable                                                     115,823                106,492
                                                                                -----------            -----------
              Net cash provided by operating activities                             250,267                  2,409
                                                                                -----------            -----------

Investing activities:
  Purchases of property and equipment                                               (85,154)               (95,319)
                                                                                -----------            -----------

Financing activities:
   (Increase) in cash and cash equivalents restricted under credit
     facility and mortgage note                                                     (18,480)              (261,038)
   Net advances (principal payments) on term loan                                   307,885                (87,316)
   (Principal payment) net advances under bank line of credit                      (278,486)               172,572
   Principal payments of obligations under capital leases                           (46,161)              (202,743)
   (Repayments to) advances from related parties                                    (84,281)                97,247
   Capital contribution                                                                  --                262,988
                                                                                -----------            -----------
              Net cash (used) in financing activities                              (119,523)               (18,290)
                                                                                -----------            -----------
Net increase (decrease) in cash                                                      45,590               (111,200)
Cash, beginning of year                                                             153,844                265,044
                                                                                -----------            -----------
Cash, end of year                                                               $   199,434            $   153,844
                                                                                ===========            ===========
Supplemental disclosure of cash flow data:
    Interest paid                                                               $   309,463            $   399,045
                                                                                ===========            ===========
    Income taxes paid                                                           $   194,931            $    12,519
                                                                                ===========            ===========
</TABLE>

   The accompanying notes are an integral part of these financial statements.


                                      F-7
<PAGE>

                            COFFEE HOLDING CO., INC.
                          NOTES TO FINANCIAL STATEMENTS
                            OCTOBER 31, 2001 AND 2000

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."
      Accordingly,   the  historical   financial  statements  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.

Note 2 - Summary of significant accounting policies:

      Use of estimates:

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

      Cash equivalents:

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


                                      F-8
<PAGE>

                            COFFEE HOLDING CO., INC.
                          NOTES TO FINANCIAL STATEMENTS
                            OCTOBER 31, 2001 AND 2000

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

      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, 2001,  the Company  held  options  covering an aggregate of
      6,187,500  pounds of green  coffee  beans at prices  ranging from $.425 to
      $.45 per pound. The fair market value of these options, which was obtained
      from a major financial  institution,  was approximately $46,000 at October
      31, 2001.

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

      The  Company  began to  acquire  futures  contracts  during the year ended
      October  31,  2000 with  longer  terms  (generally  three to four  months)
      primarily  for the purpose of  guaranteeing  an  adequate  supply of green
      coffee. At October 31, 2001 and 2000, the Company held longer-term futures
      contracts for the purchase of 1,950,000 and 412,500 pounds of coffee at an
      average  price of $.525 and $1.04 per pound.  The  market  price of coffee
      applicable to such  contracts was $.439 and $.744 per pound at October 31,
      2001 and 2000, respectively.

      Advertising:

      The Company  expenses the cost of advertising  and promotions as incurred.
      Advertising  costs charged to operations  totaled  $193,791 and $70,108 in
      2001 and 2000 respectively.

      Income taxes:

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


                                      F-9
<PAGE>

                            COFFEE HOLDING CO., INC.
                          NOTES TO FINANCIAL STATEMENTS
                            OCTOBER 31, 2001 AND 2000

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 2001 and 2000,  only  historical  basic earnings per share
      amounts are  presented in the  accompanying  statement of  operations  for
      those years.

      The weighted average common shares  outstanding used in the computation of
      basic  earnings  per  share in 2001 and 2000 was the  3,999,650  shares of
      common stock actually outstanding during those years.

      Fair value of financial instruments

      The carrying amounts of cash and cash equivalents, accounts receivable and
      accounts payable  approximate fair value because of the short-term  nature
      of these instruments. Fair value estimates are made at a specific point in
      time, based on relevant market information about the financial  instrument
      when  available.  These  estimates  are  subjective  in nature and involve
      uncertainties and matters of significant judgment and therefore, cannot be
      determined  with  precision.  Changes in assumptions  could  significantly
      affect the estimates.

      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 was required to implement SFAS 133 in the first quarter
      of its fiscal year ending  October 31, 2001.  The adoption of SFAS 133 did
      not have a significant impact on results of operations.


                                      F-10
<PAGE>

                            COFFEE HOLDING CO., INC.
                          NOTES TO FINANCIAL STATEMENTS
                            OCTOBER 31, 2001 AND 2000

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

      Recent accounting pronouncements (Continued):

      In December 1999, the  Securities and Exchange  Commission  ("SEC") issued
      Staff  Accounting  Bulletin  ("SAB")  No.  101,  "Revenue  Recognition  in
      Financial   Statements",   which  provides  guidance  related  to  revenue
      recognition based on interpretations and practices followed by the SEC and
      requires  companies  to report any  changes in  revenue  recognition  as a
      cumulative change in accounting principle at the time of implementation in
      accordance  with  Accounting  Principles  Board  ("APB")  Opinion  No. 20,
      "Accounting Changes".  Subsequently, SAB Nos. 101A and 101B were issued to
      delay  the  implementation  of SAB No.  101 to no later  than  the  fourth
      quarter  of  fiscal  years   beginning   after   December  15,  1999.  The
      implementation  of the  provisions of SAB 101 in 2001 had no effect on the
      Company's financial statements.

      In March 2000, the Financial  Accounting  Standards  Board ("FASB") issued
      Interpretation  No. 44,  "Accounting  for Certain  Transactions  Involving
      Stock  Compensation",  an  interpretation  of Accounting  Principles Board
      ("APB") Opinion No. 25, "Stock Issued to Employees". Interpretation No. 44
      clarifies the  application of APB No. 25 for the definition of an employee
      for purposes of applying APB No. 25, the criteria for determining  whether
      a plan qualifies as a non-compensatory  plan, the accounting  consequences
      of various  modifications  to the terms of a previously fixed stock option
      or award, and the accounting for an exchange of stock compensation  awards
      in a business combination. The adoption of this pronouncement did not have
      a  material  impact on the  Company's  financial  position  or  results of
      operations.

      In July 2001,  the  Financial  Accounting  Standards  Board (FASB)  issued
      Statement   of  Financial   Accounting   Standards   No.  141,   "Business
      Combinations" ("SFAS 141") and Statement of Financial Accounting Standards
      No. 142,  "Goodwill and Other  Intangible  Assets" ("SFAS 142").  SFAS 141
      requires all business  combinations to be accounted for using the purchase
      method  of  accounting  and is  effective  for all  business  combinations
      completed  after June 30, 2001.  This  standard does not have an impact on
      the Company's operating results and financial condition. SFAS 142 requires
      goodwill to be tested for  impairment  under  certain  circumstances,  and
      written-off  when  impaired,  rather  than  being  amortized  as  previous
      standards required.  Furthermore,  SFAS 142 required purchased  intangible
      assets to be  amortized  over their  estimated  useful  lives unless these
      lives are  determined to be  indefinite.  SFAS 142 is effective for fiscal
      years beginning after December 15 2001. Early application is permitted for
      entities  with fiscal years  beginning  after March 15, 2001 provided that
      the first interim period  financial  statements  have not been  previously
      issued.  This new  standard  does not have  any  impact  on the  Company's
      operating results and financial position.

      On October 3, 2001,  the FASB issued  Statement  of  Financial  Accounting
      Standards  No.  144,   "Accounting  for  the  Impairment  or  Disposal  of
      Long-Lived   Assets"  ("SFAS  144"),   that  is  applicable  to  financial
      statements  issued for fiscal years beginning after December 15, 2001. The
      FASB's new rules on asset impairment  supersede SFAS 121,  "Accounting for
      the  Impairment  of  Long-Lived  Assets  and for  Long-Lived  Assets to Be
      Disposed  Of," and portions of  Accounting  Principles  Board  Opinion 30,
      "Reporting  the Results of  Operations."  This standard  provides a single
      accounting model for long-lived assets to be disposed of and significantly
      changes  the  criteria  that would have to be met to  classify an asset as
      held-for-sale. Classification as held-for sale is an important distinction
      since such assets are not  depreciated and are stated at the lower of fair
      value and carrying  amount.  This Standard also requires  expected  future
      operating  losses from  discontinued  operations  to be  displayed  in the
      period(s)  in  which  the  losses  are  incurred,  rather  than  as of the
      measurement  date as presently  required.  This new standard does not have
      any impact on the Company's operating results and financial position.


                                      F-11
<PAGE>

                            COFFEE HOLDING CO., INC.
                          NOTES TO FINANCIAL STATEMENTS
                            OCTOBER 31, 2001 AND 2000

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

      Reclassifications:

      Certain accounts in the 2000 financial  statements have been  reclassified
      to conform to the 2001 presentation.

Note 3 - Inventories:

      Inventories at October 31, 2001 consisted of the following:

                    Packed coffee                 $  364,861
                    Green coffee                     566,873
                    Packaging supplies               419,416
                                                  ----------
                    Totals                        $1,351,150
                                                  ==========

Note 4 - Property and equipment:

      Property and equipment at October 31, 2001 of the following:

                                                        Estimated
                                                       Useful Life
                                                       -----------
Building and improvements                                 30 years   $1,250,350
Machinery and equipment                                    7 years    2,264,544
Machinery and equipment under capital leases               7 years      288,500
Furniture and fixtures                                     7 years      127,807
                                                                     ----------
                                                                      3,931,201
Less accumulated depreciation (including $144,250
  arising from capital leases)                                        2,423,403
                                                                     ----------
                                                                      1,507,798
Land                                                                    141,000
                                                                     ----------
Totals                                                               $1,648,798
                                                                     ==========

      Depreciation  expense  totaled  $262,004  and  $252,988  in 2001 and 2000,
      respectively.

Note 5 - Credit facility and other borrowings:

      Prior Credit Facility:

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

      The line of credit  provided for  borrowings of up to 85% of the Company's
      eligible trade accounts receivable and 60% of its eligible  inventories up
      to a maximum of  $5,000,000.  The  outstanding  balance of  $2,617,702  at
      October 31, 2000  approximated  the maximum  amount that the Company could
      borrow based on its eligible  trade accounts  receivable and  inventories.
      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
                            OCTOBER 31, 2001 AND 2000

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

      Prior Credit Facility (Continued):

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

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

      Current 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 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, 2001 balance sheet based on
      the Company's  ability to either defer payments until, or make installment
      payments  through,  November 20, 2002.  The term loan,  has an outstanding
      balance  of  $500,000  (including  a  current  portion  of  $120,000)  and
      aggregate  borrowings of $2,339,216 were outstanding under its credit line
      facility at October 31,  2001.  The  Company  was in  compliance  with the
      required financial covenants at October 31, 2001

Note 6 - Loans from related parties:

      The Company had loans payable to its stockholders  aggregating $160,980 at
      October  31,  2001.  The  loans  are due on demand  but  payments  are not
      expected  to be  required  in the next  twelve  months.  These  loans bear
      interest at 10% per annum.  Interest expense totaled approximately $22,000
      and $34,000 in 2001 and 2000 respectively.

Note 7 - Income taxes:

      The Company's provision for income taxes in 2001 and 2000 consisted of the
      following:

                                                 2001            2000
                                               --------       --------
          Federal                              $238,653       $ 74,000
          State and local                        74,172         45,000
                                               --------       --------
          Total                                $312,825       $119,000
                                               ========       ========


                                      F-13
<PAGE>

                            COFFEE HOLDING CO., INC.
                          NOTES TO FINANCIAL STATEMENTS
                            OCTOBER 31, 2001 AND 2000

Note 7 - Income taxes (Continued):

      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  2001and  2000 are set forth
      below:

                                                             2001        2000
                                                          ---------   ---------
          Tax provision at statutory rate of 34%          $ 238,653   $ 140,000
          Adjustments for effects of:
          State income taxes, net of Federal tax effect      74,172      45,000
          Net change in valuation allowance                      --     (66,000)
                                                          ---------   ---------
          Provision                                       $ 312,825   $ 119,000
                                                          =========   =========

      The Company  had pre-tax  income of  approximately  $400,000  for the year
      ended October 31, 2000;  however,  it was 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.

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 each of 2001 and 2000. Future minimum rental payments under the
      noncancelable  operating  lease in years  subsequent  to October  31, 2001
      totaled $39,000 which is payable in 2002.

      Capital Lease:

      As of October 31, 2000, the Company  remained  obligated under one capital
      lease for machinery and equipment  that expired in February  2001.  Assets
      under capital  leases are amortized over their  estimated  useful lives of
      seven years. 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 2000 were as
      follows:

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

      Amortization of $41,404 and $99,300, was charged to operations in 2001 and
      2000.  As of October 31,  2001,  the  Company no longer has an  obligation
      under this lease.


                                      F-14
<PAGE>

                            COFFEE HOLDING CO., INC.
                          NOTES TO FINANCIAL STATEMENTS
                            OCTOBER 31, 2001 AND 2000

Note 8 - Commitments and contingencies (Continued):

      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 a
      material  adverse  effect  on  the  Company's   financial   statements  in
      subsequent years.

      During the year 2001, the Company settled a lawsuit in which it originally
      sought  approximately  $100,000  against  a  third  party  for  breach  of
      contract.  The 2001 statement of income  reflects a $47,000  settlement of
      this litigation.

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, 2001,  the Company had cash balances that exceeded
      Federal insurance limits by approximately $280,000. 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  20% and 17% of the  Company's  sales were  derived from one
      customer during 2001 and 2000  respectively.  That customer also accounted
      for approximately $249,575 of the Company's accounts receivable balance at
      October 31,  2001.  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, 2001.

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, 2001, no options had been granted under the Plan.


                                      F-15
<PAGE>

                            COFFEE HOLDING CO., INC.
                          NOTES TO FINANCIAL STATEMENTS
                            OCTOBER 31, 2001 AND 2000

Note 11 - Major vendors:

      During fiscal 2001, substantially all of the Company's purchases were from
      eight  vendors.  The  eight  vendors  accounted  for 72% of total  product
      purchases.  Two of  these  vendors  accounted  for 19%  and  13% of  total
      purchases.  These vendors accounted for approximately  $69,000 and $16,000
      of the Company's  accounts payable at October 31, 2001. An employee of one
      of those vendors is a director of the Company.  Purchases from that vendor
      totaled  approximately   $2,243,000  and  $3,500,000  in  2001  and  2000,
      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-16