U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                              ---------------------

                                   FORM 10-QSB

(Mark One)

      |X|   QUARTERLY  REPORT  PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
            EXCHANGE ACT OF 1934

      For the quarterly period ended July 31, 2005

                                       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 number 001-32491

                            Coffee Holding Co., Inc.
             (Exact name of registrant as specified in its charter)

                 Nevada                                      11-2238111
     (State or other jurisdiction of                      (I.R.S. Employer
     incorporation or organization)                      Identification No.)

                4401 First Avenue, Brooklyn, New York 11232-0005
                    (Address of principal executive offices)
                                   (Zip Code)

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

                                       N/A
--------------------------------------------------------------------------------
              (Former name, former address and former fiscal year,
                          if changed from last Report)

      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  Exchange  Act of
1934 during the  preceding  twelve  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  whether  the  registrant  is a shell  company (as
defined in Rule 12b-2 of the Exchange Act. Yes |_| No |X| .

      Indicate the number of shares  outstanding of each of the issuer's classes
of common stock as of the latest practicable date.

                                                   Outstanding at
           Class                                   August 31, 2005
      ---------------                              ---------------
      Common Stock,
      par value $.001                                 5,529,830


<PAGE>

                                                                            PAGE

ITEM 1.  FINANCIAL STATEMENTS.................................................1

Condensed Balance Sheets
   July 31, 2005 (unaudited) and October 31, 2004.............................1

Condensed Statements of Income
   Three and Nine Months Ended July 31, 2005 and 2004 (unaudited).............2

Condensed Statements of Cash Flows
   Nine Months Ended July 31, 2005 and 2004 (unaudited).......................3

Notes To Condensed Financial Statements.......................................4

ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION...........8

ITEM 3.   CONTROLS AND PROCEDURES............................................18

                                     PART II

ITEM 1.   LEGAL PROCEEDINGS .................................................19

ITEM 2.   UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS .......19

ITEM 3.   DEFAULTS UPON SENIOR SECURITIES ...................................19

ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS ...............19

ITEM 5.   OTHER INFORMATION .................................................19

ITEM 6.   EXHIBITS...........................................................20

SIGNATURES...................................................................21


                                       i
<PAGE>

                         PART I - FINANCIAL INFORMATION

Item I.  Financial Statements
                            COFFEE HOLDING CO., INC.
                            CONDENSED BALANCE SHEETS
                       JULY 31, 2005 AND OCTOBER 31, 2004


<TABLE>
<CAPTION>
                                                                                         July 31, 2005   October 31, 2004
                                                                                        ---------------  ----------------
                                                                                          (unaudited)
<S>                                                                                     <C>              <C>
                                   - ASSETS -
CURRENT ASSETS:
     Cash                                                                               $     1,234,142  $      642,145
     Due from broker                                                                          2,154,937         873,901
     Accounts receivable, net of allowance for doubtful accounts of $420,349
       for 2005 and $150,349 for 2004                                                         4,070,460       4,005,755
     Inventories                                                                              3,559,831       2,258,289
     Prepaid expenses and other current assets                                                  434,620         676,395
     Deferred tax asset                                                                         238,200         136,900
                                                                                        ---------------  --------------
         TOTAL CURRENT ASSETS                                                                11,692,190       8,593,385

Property and equipment, at cost, net of accumulated depreciation of
    $3,635,827 and $3,354,418 for 2005 and 2004, respectively                                 2,363,463       2,286,936
Deposits and other assets                                                                        41,521          33,496
                                                                                        ---------------  --------------
               TOTAL ASSETS                                                             $    14,097,174  $   10,913,817
                                                                                        ===============  ==============

                    - LIABILITIES AND STOCKHOLDERS' EQUITY -
CURRENT LIABILITIES:
     Current portion of term loan                                                       $          -     $      252,000
     Current portion of obligations under capital lease                                           9,216         111,060
     Line of credit borrowings                                                                1,328,161       2,685,045
     Accounts payable and accrued expenses                                                    2,681,050       4,658,836
     Income taxes payable - current                                                               -             160,000
                                                                                        ---------------  --------------
         TOTAL CURRENT LIABILITIES                                                            4,018,427       7,866,941

Obligations under capital lease, net of current portion                                              --           5,855
Income taxes payable - deferred                                                                  69,500          45,200
                                                                                        ---------------  --------------
         TOTAL LIABILITIES                                                                    4,087,927       7,917,996
                                                                                        ---------------  --------------

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, 5,529,830 and 3,999,650 shares issued and
       outstanding for 2005 and 2004, respectively                                                5,530           4,000
     Additional paid-in capital                                                               7,327,023         867,887
     Retained earnings                                                                        2,676,694       2,123,934
                                                                                        ---------------  --------------
         TOTAL STOCKHOLDERS' EQUITY                                                          10,009,247       2,995,821
                                                                                        ---------------  --------------
                 TOTAL LIABILITIES AND STOCKHOLDERS EQUITY                              $    14,097,174  $   10,913,817
                                                                                        ===============  ==============
</TABLE>

                  See notes to Condensed Financial Statements.


                                       1
<PAGE>

                            COFFEE HOLDING CO., INC.
                         CONDENSED STATEMENTS OF INCOME
               THREE AND NINE MONTHS ENDED JULY 31, 2005 AND 2004
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                                 Nine Months Ended                  Three Months Ended
                                                                      July 31,                           July, 31
                                                               2005              2004             2005             2004
                                                         ---------------   ---------------   ---------------  --------------
<S>                                                      <C>               <C>               <C>              <C>
NET SALES                                                $    29,016,190   $    18,577,528   $    10,782,680  $    6,396,568

COST OF SALES                                                 23,657,607        13,892,695         9,749,222       5,421,709
                                                         ---------------   ---------------   ---------------  --------------

GROSS PROFIT                                                   5,358,583         4,684,833         1,033,458         974,859
                                                         ---------------   ---------------   ---------------  --------------

OPERATING EXPENSES:
     Selling and administrative                                3,801,669         3,091,110         1,420,090       1,036,381
     Bad debt expense                                            270,000                --           270,000              --
     Officers' salaries                                          399,271           370,424           135,975         123,475
                                                         ---------------   ---------------   ---------------  --------------
         TOTALS                                                4,470,940         3,461,534         1,826,065       1,159,856
                                                         ---------------   ---------------   ---------------  --------------

INCOME (LOSS) FROM OPERATIONS                                    887,643         1,223,299          (792,607)       (184,997)
                                                         ---------------   ---------------   ---------------  --------------

OTHER INCOME (EXPENSE)
   Interest income                                                25,426             9,195            18,219           2,692

   Interest expense                                              (88,130)         (137,846)          (24,908)        (56,250)
                                                         ----------------  ----------------  ---------------  --------------
                                                                 (62,704)         (128,651)           (6,689)        (53,558)
                                                         ----------------  ----------------  ---------------  --------------

INCOME (LOSS) BEFORE INCOME TAXES                                824,939         1,094,648          (799,296)       (238,555)

   Provision (benefit) for income taxes                          272,179           482,100          (351,421)       (113,100)
                                                         ---------------   ---------------   ---------------  --------------

NET INCOME (LOSS)                                        $       552,760   $       612,548   $      (447,875) $     (125,455)
                                                         ===============   ===============   ===============  ==============

Basic and diluted earnings (loss) per share              $           .12   $           .15   $          (.08)  $        (.03)
                                                         ===============   ===============   ===============  ==============

Weighted average common shares outstanding:

       Basic                                                   4,448,864         3,999,650         5,332,644       3,999,650
                                                         ===============   ===============   ===============  ==============
       Diluted                                                 4,508,757         3,999,650         5,332,644       3,999,650
                                                         ===============   ===============   ===============  ==============
</TABLE>


                  See notes to Condensed Financial Statements.


                                       2
<PAGE>

                            COFFEE HOLDING CO., INC.
                       CONDENSED STATEMENTS OF CASH FLOWS
                    NINE MONTHS ENDED JULY 31, 2005 AND 2004
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                           2005              2004
                                                                                     ---------------   ---------------
<S>                                                                                  <C>               <C>
OPERATING ACTIVITIES:
     Net income                                                                      $       552,760   $       612,548
     Adjustments to reconcile net income to net cash provided by (used in)
         operating activities:
            Depreciation and amortization                                                    281,409           290,653
            Bad debts (recovery)                                                             270,000           (19,086)
            Deferred taxes                                                                   (77,000)            9,100
         Changes in operating assets and liabilities:
           Due from broker                                                                (1,281,036)          574,333
           Accounts receivable                                                              (334,705)         (289,637)
           Inventories                                                                    (1,301,542)         (994,281)
           Prepaid expenses and other current assets                                         266,425            71,576
           Accounts payable and accrued expenses                                          (1,977,785)          370,419
           Income taxes payable                                                             (160,000)           89,156
                                                                                     ---------------   ---------------
              Net cash (used in) provided by operating activities                         (3,761,475)          714,781
                                                                                     ---------------   ---------------

INVESTING ACTIVITIES:
     Purchases of property and equipment                                                    (357,936)         (908,093)
     Disposal of fixed assets                                                                     --           (25,624)
     Security deposits                                                                        (8,025)          (19,200)
                                                                                     ---------------   ---------------
              Net cash (used in) investing activities                                       (365,961)         (952,917)
                                                                                     ---------------   ---------------

FINANCING ACTIVITIES:
     Principal payments on term loan                                                        (252,000)          (63,000)
     Advances under bank line of credit                                                   17,315,427        19,912,579
     Net proceeds from IPO                                                                 6,436,016                --
     Principal payments under bank line of credit                                        (18,672,311)      (19,392,984)
     Principal payments of obligations under capital leases                                 (107,699)          (97,110)
     Payments to related parties                                                                  --           (91,137)
                                                                                     ---------------   ---------------
              Net cash provided by financing activities                                    4,719,433           268,348
                                                                                     ---------------   ---------------


NET INCREASE IN CASH                                                                         591,997            30,212

    Cash, beginning of year                                                                  642,145            73,832
                                                                                     ---------------   ---------------

CASH, END OF PERIOD                                                                  $     1,234,142   $       104,044
                                                                                     ===============   ===============

SUPPLEMENTAL DISCLOSURE OF CASH FLOW DATA:
    Interest paid                                                                    $        81,495   $       137,846
                                                                                     ===============   ===============
    Income taxes paid                                                                $       297,145   $       194,300
                                                                                     ===============   ===============
</TABLE>


    On June 10, 2005,  10,000 shares of restricted stock valued at  $24,650 were
    issued for services to be rendered.

                  See notes to Condensed Financial Statements.


                                       3
<PAGE>

                            COFFEE HOLDING CO., INC.
                          NOTES TO FINANCIAL STATEMENTS
                             July 31, 2005 AND 2004
                                   (Unaudited)

NOTE   1   -      BUSINESS ACTIVITIES:

                  Coffee Holding Co., Inc. (the "Company"),  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  coffee.  The  Company's  sales are  primarily  to
                  customers that are located throughout the United States.


NOTE   2   -      BASIS OF PRESENTATION:

                  In the  opinion  of  management,  the  accompanying  unaudited
                  condensed   financial   statements  reflect  all  adjustments,
                  consisting of normal recurring accruals,  necessary to present
                  fairly the  financial  position  of the Company as of July 31,
                  2005,  its results of operations for the three and nine months
                  ended  July 31,  2005 and 2004 and its cash flows for the nine
                  months ended July 31, 2005 and 2004.  Information  included in
                  the balance sheet as of October 31, 2004 has been derived from
                  the Company's  audited balance sheet included in the Company's
                  Annual  Report on Form  10-KSB for the year ended  October 31,
                  2004 (the "Form 10-KSB")  previously filed with the Securities
                  and Exchange Commission (the "SEC"). Pursuant to the rules and
                  regulations  of the  SEC  for  interim  financial  statements,
                  certain  information  and  disclosures  normally  included  in
                  financial  statements  prepared in accordance  with accounting
                  principles  generally accepted in the United States of America
                  have been condensed or omitted from these financial statements
                  unless  significant  changes have taken place since the end of
                  the most recent  fiscal  year.  Accordingly,  these  unaudited
                  condensed  financial  statements should be read in conjunction
                  with  the   audited   financial   statements   and  the  other
                  information in the Form 10-KSB.

                  Operating results for the three and nine months ended July 31,
                  2005 are not necessarily indicative of the results that may be
                  expected for the year ending October 31, 2005.


NOTE   3   -      INVENTORIES:

                  Inventories at July 31, 2005 and October 31, 2004 consisted of
                  the following:

                                            July 31, 2005   October 31, 2004
                                           --------------   ----------------
                   Packed coffee           $      940,482   $      668,413
                   Green coffee                 1,870,008        1,051,223
                   Packaging supplies             749,341          538,653
                                           --------------   --------------
                   Totals                  $    3,559,831   $    2,258,289
                                           ==============   ==============

NOTE   4   -      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 increase  earnings  volatility in any particular
                  period.


                                       4
<PAGE>

                            COFFEE HOLDING CO., INC.
                          NOTES TO FINANCIAL STATEMENTS
                             July 31, 2005 AND 2004
                                   (Unaudited)

NOTE   4   -      HEDGING (Continued):

                  At July 31, 2005, the Company held 60 options  (generally with
                  terms  of  two  months  or  less)  covering  an  aggregate  of
                  2,250,000 pounds of green coffee beans at a price of $1.05 per
                  pound.  The fair  market  value of these  options,  which  was
                  obtained  from major  financial  institutions,  was $84,375 at
                  July 31, 2005.

                  At July 31, 2004, the Company held 118 options (generally with
                  terms  of  two  months  or  less)  covering  an  aggregate  of
                  4,425,000 pounds of green coffee beans at a price of $.675 and
                  $.725 per pound. The fair market value of these options, which
                  was obtained from a major financial institution,  was $150,038
                  at July 31, 2004.

                  The Company  acquires  futures  contracts  with  longer  terms
                  (generally three to four months)  primarily for the purpose of
                  guaranteeing an adequate supply of green coffee.

                  At July 31, 2005,  the Company held 192 futures  contracts for
                  the purchase of 7,200,000  pounds of coffee at prices  ranging
                  from  $.9975  up  to  $1.15  per  pound  for  September   2005
                  contracts.  The  market  price of  coffee  applicable  to such
                  contracts was $1.02 per pound at that date.

                  At July 31, 2004,  the Company held 53 futures  contracts  for
                  the purchase of 1,987,500 pounds of coffee at an average price
                  of $ .707 per pound for September 2004  contracts.  The market
                  price of coffee  applicable  to such  contracts  was $.665 per
                  pound at that date.

                  Included  in cost of sales and due from  broker  for the three
                  and nine  months  ended July 31,  2005 and 2004,  the  Company
                  recorded    realized   and   unrealized   gains   and   losses
                  respectively, on these contracts as follows:

                                                    Three Months Ended July 31,
                                                       2005             2004
                                                   ------------    -------------
                  Gross realized gains             $   444,543     $    588,557
                  Gross realized losses            $  (383,584)    $   (945,463)
                  Unrealized gains and (losses)    $  (767,089)    $      7,519

                                                    Nine Months Ended July 31,
                                                       2005             2004
                                                   ------------    -------------
                  Gross realized gains             $ 2,757,254     $  2,122,367
                  Gross realized losses            $(2,219,387)    $ (1,083,318)
                  Unrealized gains and (losses)    $  (283,575)    $   (318,755)



                                       5
<PAGE>

                            COFFEE HOLDING CO., INC.
                          NOTES TO FINANCIAL STATEMENTS
                             July 31, 2005 AND 2004
                                   (Unaudited)

NOTE   5   -      LINE OF CREDIT;

                  In  November  2004,  the  Company  agreed  to a new  financing
                  arrangement  with "Merrill Lynch Business  Financial  Services
                  Inc." and  terminated  its prior  agreement  with `Wells Fargo
                  Business Credit". This new line of credit was originally to be
                  for a maximum  $4,000,000,  expire  on  October  31,  2005 and
                  require  monthly  interest  payments  at a rate of LIBOR  plus
                  2.4%. This loan is secured by a blanket lien on all the assets
                  of the  Company  and  the  personal  guarantees  of two of the
                  Company's  officer/shareholders  and also requires the Company
                  to comply with  various  financial  covenants.  On January 27,
                  2005,  this  agreement  was  amended to (a) reduce the maximum
                  line to $3,500,000,  and (b) reduce the interest rate to LIBOR
                  plus 2.15%.  In March 2005, this Agreement was further amended
                  to increase the maximum  availability under the line of credit
                  to  $4,000,000.  As of  July  31,  2005,  the  Company  was in
                  compliance  with all financial  covenants.  In April 2005, the
                  Company  entered into an additional term loan - line of credit
                  with Merrill Lynch Business Financial Services,  Inc. in order
                  to finance the purchase of roasting equipment.  This term loan
                  was paid in full during the current quarter.

NOTE   6   -      OBLIGATIONS UNDER CAPITAL LEASES:

                  The Company is a lessee of  machinery  and  equipment  under a
                  capital  lease,  which  expires in July  2006.  The assets and
                  liabilities  under capital leases are recorded at the lower of
                  the present  value of the minimum  lease  payments or the fair
                  value of the asset. The assets are being  depreciated over the
                  lease term.

                  Depreciation   expense  of  assets  under  capital  lease  are
                  included in  depreciation  expense and amounted to $15,228 and
                  $45,684,  for the three  months and nine months ended July 31,
                  2005 and $15,228  and  $45,684  for the three  months and nine
                  months ended July 31, 2004, respectively

                  The  interest  rates on the capital  leases vary from 6.75% to
                  7.6% per annum, which  approximates the Company's  incremental
                  rate of borrowing at the time the lease was entered into.


NOTE   7   -      EARNINGS PER SHARE:

                  The Company  presents  "basic"  and,  "diluted"  earnings  per
                  common  share  pursuant  to the  provisions  of  Statement  of
                  Financial  Accounting Standards No. 128, "Earnings per Share".
                  Basic  earnings  per  share is  based on the  weighted-average
                  number of common shares  outstanding and diluted  earnings per
                  share is based on the weighted-average number of common shares
                  outstanding   plus  all  potential   diluitive  common  shares
                  outstanding.


NOTE   8   -      ECONOMIC DEPENDENCY:

                  For the nine months ended July 31, 2005, sales to one customer
                  were in excess of 10% of the Company's  total sales.  Sales to
                  this   customer   were   approximately   $8,690,000   and  the
                  corresponding  accounts  receivable at July 31, 2005 from this
                  customer was approximately $944,000.

                  For the nine months ended July 31, 2004, sales to one customer
                  were in excess of 10% of the Company's  total sales.  Sales to
                  this   customer   were   approximately   $4,025,000   and  the
                  corresponding  accounts  receivable at July 31, 2004 from this
                  customer was approximately $344,000.


                                       6
<PAGE>

                            COFFEE HOLDING CO., INC.
                          NOTES TO FINANCIAL STATEMENTS
                             July 31, 2005 AND 2004
                                   (Unaudited)


NOTE   8   -      ECONOMIC DEPENDENCY (Continued):

                  For the nine months  ended July 31, 2005,  purchases  from one
                  supplier,  were  in  excess  of  10% of  the  Company's  total
                  purchases.  Purchases  from this supplier  were  approximately
                  $10,487,000  and the  corresponding  accounts  payable to this
                  supplier at July 31, 2005 was approximately $188,000.

                  For the nine months  ended July 31, 2004,  purchases  from two
                  suppliers,  were  in  excess  of 10% of  the  Company's  total
                  purchases.  Purchases from these suppliers were  approximately
                  $5,071,000  and  $1,381,000  and  the  corresponding  accounts
                  payable to these suppliers at July 31, 2004 were approximately
                  $390,000 and $36,000, respectively.

NOTE   9   -      INITIAL PUBLIC OFFERING:

                  The Company  entered  into an  agreement  with Maxim Group LLC
                  ("Maxim")  for  Maxim  to  serve  as the  Company's  financial
                  advisors and lead managing  underwriter  for a public offering
                  of the Company's common stock. Subsequently,  Maxim and Joseph
                  Stevens & Company,  Inc.  ("Joseph  Stevens")  entered into an
                  agreement  pursuant to which Joseph  Stevens  agreed to act as
                  managing  underwriter  and Maxim agreed to  participate in the
                  underwriting  syndicate  for the  offering.  The  offering  of
                  1,400,000 shares concluded on May 6, 2005 and on June 16, 2005
                  the  underwriters  exercised  their right to purchase  210,000
                  additional shares of common stock (the over-allotment  option)
                  at the public  offering price less the  underwriting  discount
                  (ten  percent).  An  aggregate  of  1,610,000  shares  of  the
                  Company's common stock were sold in the offering at a price of
                  $5.00 per  share.  The  Company  paid  $25,000  to Maxim  upon
                  execution of the agreement and paid an additional $25,000 upon
                  the filing of a  registration  statement for the offering with
                  the United States  Securities and Exchange  Commission,  which
                  amount was split between Joseph Stevens and Maxim. The Company
                  paid to Joseph  Stevens  and Maxim a  non-accountable  expense
                  allowance  less  amounts  previously  paid to Maxim,  equal to
                  three  percent of the gross  proceeds  derived from the public
                  offering.  The Company  also sold to Joseph  Stevens and Maxim
                  for an aggregate of $100,  warrants to purchase  70,000 shares
                  of common  stock at a price of $6.00 per share.  The  warrants
                  are  exercisable  for a  period  of  five  years  and  contain
                  provisions for cashless exercise,  anti-dilution and piggyback
                  registration rights.


NOTE  10   -      NON-QUALIFIED DEFERRED COMPENSATION PLAN:

                  In January 2005, the Company  established  the "Coffee Holding
                  Co.,   Inc.   Non-Qualified   Deferred   Compensation   Plan".
                  Currently,  there is only one participant in the plan.  Within
                  the plan  guidelines,  this employee is deferring a portion of
                  his current salary and bonus.


                                       7
<PAGE>

Item 2.     Management's Discussion and Analysis or Plan of Operation

Cautionary Note on Forward Looking Statements

      This report contains forward-looking  statements made pursuant to the safe
harbor  provisions  of the  Private  Securities  Litigation  Reform Act of 1995.
Forward-looking  statements  typically  are  identified  by use of terms such as
"may," "will," "should," "plan," "expect," "anticipate,"  "estimate" and similar
words,  although some  forward-looking  statements  are  expressed  differently.
Forward-looking  statements represent our management's judgment regarding future
events.   Although  we  believe   that  the   expectations   reflected  in  such
forward-looking  statements are  reasonable,  we can give no assurance that such
expectations  will prove to be correct.  All statements other than statements of
historical  fact  included  in this report  regarding  our  financial  position,
business  strategy,  products,  products under  development,  markets,  budgets,
plans, or objectives for future operations are  forward-looking  statements.  We
cannot guarantee the accuracy of the forward-looking  statements, and you should
be aware that our actual results could differ materially from those contained in
the forward-looking  statements.  We do not undertake and specifically  disclaim
any obligation to revise or update any forward-looking statements to reflect the
occurrence of anticipated or  unanticipated  events or  circumstances  after the
date of such  statements.  These risks could cause our actual results for fiscal
year  2005  and  beyond  to  differ  materially  from  those  expressed  in  any
forward-looking statements by, or on behalf of, us.

Overview

      We are an  integrated  wholesale  coffee  roaster and dealer in the United
States.  Our  operations  have primarily  focused on the following  areas of the
coffee industry:

      o     the sale of wholesale specialty green coffee;

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

      o     the  roasting,  blending,  packaging and sale of our seven brands of
            coffee.

      Our operating results are affected by a number of factors including:

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

      o     our ability to retain existing customers and attract new customers;

      o     fluctuations  in purchase  prices and supply of green  coffee and in
            the selling prices of our products;

      o     the success of our hedging strategy; and

      o     our  ability to manage  inventory  and  fulfillment  operations  and
            maintain gross margins.


                                       8
<PAGE>

      Our net  sales  are  driven  primarily  by the  success  of our  sales and
marketing  efforts and our ability to retain existing  customers and attract new
customers.  For this reason,  we have made the  strategic  decision to invest in
measures that will  increase net sales.  In February  2004, we acquired  certain
assets of Premier  Roasters.  We also hired a West Coast Brand Manager to market
our S&W brand  and to  increase  sales of S&W  coffee  to new  customers  and we
increased our  attendance at trade shows to promote our food service and private
label coffee  business.  We also re-launched and repositioned our branded coffee
through label redesigns and new distribution.  As a result of these efforts, net
sales increased in our specialty green coffee,  private label and branded coffee
business  lines  in  both  dollars  and  pounds  sold  since  the  date  of  the
acquisition.  In addition, we increased the number of our customers in all three
areas.

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

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

      In  February  2004,  we acquired  certain  assets of Premier  Roasters,  a
roaster-dealer located in La Junta, Colorado, for $825,000. The assets purchased
by us include all of the  operating  equipment  located at Premier  Roasters' La
Junta and Rocky  Ford,  Colorado  locations,  as well as all  labels  for all of
Premier  Roasters' coffee products.  In connection with the acquisition of these
assets, we reached an agreement with the City of La Junta, Colorado on a 20-year
lease for a 50,000  square foot  facility  in La Junta.  We are using the assets
that we purchased to expand our integrated  wholesale  coffee roaster and dealer
operations to the Western United States. In connection with this transaction, we
also  entered  into a licensing  agreement  with Del Monte  Corporation  for the
exclusive right to use the S&W and IL CLASSICO  trademarks,  including  Premium,
Premium Decaf,  French Roast,  Colombian,  Colombian  Decaf,  Swiss Water Decaf,
Kona, and Mellow'd Roast lines, in connection  with the production,  manufacture
and sale of ground  coffee for  distribution  to retail  customers in the United
States and certain other countries approved by Del Monte Corporation.


                                       9
<PAGE>

      We believe that our new La Junta,  Colorado facility will allow us to grow
our  business and  increase  sales to new and existing  customers in the Western
United  States.  By  operating  out of two  facilities,  we will  now be able to
compete  aggressively  throughout  the  United  States  as we  have  gained  new
economies of scale in both manufacturing and logistical  efficiencies which were
unavailable in the past while operating solely out of our New York facility.  In
addition, we believe that we are not as susceptible to manufacturing  disruption
as some of our  competitors  who utilize  only one  facility.  We also intend to
broaden our customer base and increase  penetration  with existing  customers by
expanding  the  S&W  label  from a  well-known  brand  on the  West  coast  to a
well-known brand throughout the entire continental United States.

      On May 6, 2005,  we concluded the public  offering of 1,400,000  shares of
our  common  stock at a price  of  $5.00  per  share  and on June  16,  2005 the
underwriters  exercised their option to purchase an additional 210,000 shares of
our common stock at a price of $5.00 per share. After underwriting discounts and
commissions  and offering  expenses,  we received net proceeds of  approximately
$6.4 million in the offering,  after giving effect to the over-allotment option.
While we have not yet used all of the  offering  proceeds,  we used  some of the
proceeds to pay down bank debt, to build up our  inventories for sales expansion
and for  general  corporate  purposes,  including  working  capital  and capital
expenditures.  We also  intend to use certain  proceeds  to  implement a branded
sales and marketing campaign,  to purchase equipment for our La Junta,  Colorado
facility and to grow our food service distribution.  As strategic  opportunities
arise, we may use the proceeds of the offering to fund  acquisitions,  licensing
and other strategic alliances.

Critical Accounting Policies and Estimates

      The  preparation  of  financial  statements  and  related  disclosures  in
conformity with accounting  principles  generally  accepted in the United States
requires  management to make estimates and  assumptions  that affect the amounts
reported in the financial statements and accompanying notes.  Estimates are used
for, but not limited to, the accounting for the allowance for doubtful accounts,
inventories, income taxes and loss contingencies. Management bases its estimates
on historical  experience and on various other  assumptions that are believed to
be reasonable  under the  circumstances.  Actual results could differ from these
estimates under different assumptions or conditions.

      We believe the following critical accounting  policies,  among others, may
be impacted  significantly  by judgment,  assumptions  and estimates used in the
preparation of the financial statements:

      o     We recognize  revenue in  accordance  with  Securities  and Exchange
            Commission Staff Accounting Bulletin No. 104, "Revenue  Recognition"
            ("SAB 104").  Under SAB 104,  revenue is  recognized at the point of
            passage  to the  customer  of title and risk of loss,  when there is
            persuasive   evidence  of  an   arrangement,   the  sales  price  is
            determinable,   and  collection  of  the  resulting   receivable  is
            reasonably  assured.  We generally  recognize revenue at the time of
            shipment. Sales are reflected net of discounts and returns.


                                       10
<PAGE>

      o     Our  allowance  for doubtful  accounts is  maintained to provide for
            losses arising from customers'  inability to make required payments.
            If there is deterioration of our customers' credit worthiness and/or
            there is an increase in the length of time that the  receivables are
            past due greater than the historical  assumptions  used,  additional
            allowances  may be  required.  For  example,  every  additional  one
            percent of our accounts receivable that becomes  uncollectible would
            reduce our operating income by approximately $45,000.

      o     Inventories are stated at cost (determined on a first-in,  first-out
            basis).  Based on our  assumptions  about  future  demand and market
            conditions,  inventories  are subject to be  written-down  to market
            value. If our  assumptions  about future demand change and/or actual
            market   conditions  are  less   favorable  than  those   projected,
            additional write-downs of inventories may be required.

      o     We  account  for  income  taxes  in  accordance  with  Statement  of
            Financial  Accounting  Standards  No.  109,  "Accounting  for Income
            Taxes" ("SFAS No. 109"). Under SFAS No. 109, deferred tax assets and
            liabilities are determined based on the  liabilities,  using enacted
            tax  rates  in  effect  for the year in which  the  differences  are
            expected  to  reverse.  Deferred  tax  assets are  reflected  on the
            balance sheet when it is determined  that it is more likely than not
            that the asset will be realized.  Accordingly,  our net deferred tax
            asset of  $168,700  could need to be written off if we do not remain
            profitable.

Comparison of Results of Operations

Three  Months  Ended July 31, 2005  Compared to the Three  Months Ended July 31,
2004

      Net Sales.  Net sales totaled  $10,782,680 for the three months ended July
31,  2005,  an increase of  $4,386,112  or 68.6% from  $6,396,568  for the three
months ended July 31, 2004. The increase in net sales reflects  increased  sales
of green coffee of approximately  $4.0 million.  Our customers are predominately
independent  gourmet/specialty  roasters,  some of whom  own  their  own  retail
outlets.  Sales to new customers in this area historically  start slowly because
many of these  companies  are start up  ventures.  Because the  specialty  green
coffee area is the fastest growing segment of the coffee market, we believe that
our  customer  base and sales will grow in this area.  The increase in net sales
also reflects  increased sales of branded and private label coffee. The increase
in the  price of the  underlying  commodity  (coffee)  also  contributed  to the
increase in net sales.

      Cost of Sales.  Cost of sales for the three months ended July 31, 2005 was
$9,749,222  or 90.4% of net sales,  as  compared to  $5,421,709  or 84.8% of net
sales for the three months ended July 31, 2004. Cost of sales consists primarily
of the cost of green coffee and packaging  materials and realized and unrealized
gains or losses on hedging  activity.  The  increase  in cost of sales  reflects
increased purchases of green coffee in the amount of approximately $5.0 million,
an unrealized  hedging loss of $767,089 compared to an unrealized gain of $7,519
for the three months ended July 31, 2004 and higher green coffee  prices  during
the period as prices increased from a range of $.66 to $.69 per pound to a range
of $1.02 to $1.28  per pound  year to year,  offset  in part by an  increase  of
$417,865 in net realized gains on futures  contracts.  As the price of coffee is
cyclical and volatile and subject to many factors,  including weather,  politics
and  economics,  we are unable to predict the purchase price of green coffee for
fiscal 2005. We 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 at  favorable  prices  beginning  in the latter  half of
fiscal 2000 and  continuing  through  fiscal 2004.  As the price of green coffee
beans  continued  to  increase,  we used our  favorable  inventory  position  to
increase our margins.  The use of these  derivative  financial  instruments  has
enabled us to mitigate the effect of changing prices during those periods and to
be more  competitive  with our  pricing.  However,  we had net losses on futures
contracts of $706,130  for the three months ended July 31, 2005  compared to net
losses of $349,387  for the  comparable  period in 2004 as green  coffee  prices
declined by 20.3% during June 2005.


                                       11
<PAGE>

      Gross Profit. Gross profit for the three months ended July 31, 2005 was
$1,033,458, an increase of $58,599, or 6.0%, from $974,859 for the three months
ended July 31, 2004. Gross profit as a percentage of net sales decreased by 5.6%
to 9.6% for the three months ended July 31, 2005 from 15.2% for the same period
in 2004. The decrease in gross profit as a percentage of net sales was primarily
attributable to an increase in cost of sales due to increased sales levels
during the three months of 2005 compared to the three months of 2004. As
discussed above, the 20.3% decline in green coffee prices during June 2005
resulted in an unrealized trading loss and resulted in us having to sell higher
cost inventory at lower prices, thereby reducing our margins during the quarter.
Despite this 20.3% drop in green coffee prices, our margins decreased only 5.6%.

      Operating  Expenses.   Total  operating  expenses  increased  $666,209  to
$1,826,065 for the three months ended July 31, 2005 from $1,159,856 for the same
period  in  2004  primarily  due to  increases  in  selling  and  administrative
expenses.  Selling and  administrative  expenses  increased $383,709 or 37.0% to
$1,420,090 for the three months ended July 31, 2005 from $1,036,381 for the same
period in 2004.  The increase in selling and  administrative  expenses  reflects
several  factors,  including  increases of  approximately  $64,000 in utilities,
$60,000 in  professional  fees,  $44,000 in insurance and  benefits,  $27,000 in
investor  relations costs, and $21,000 in shipping  expenses.  The increase also
reflects increased expenses for trade shows and demos, travel and entertainment,
and  factory  salaries  due to  higher  levels  of sales  production.  Operating
expenses  for the three  months  ended  July 31,  2005 also  included a $270,000
increase in the allowance  for doubtful  accounts to cover  potential  nonpaying
customers.

      The  increase  in shipping  expenses  reflects  the  increase in pounds of
coffee  sold,  higher rates caused by  increased  fuel  surcharges  and gasoline
prices,  and the addition of new  customers  during the period.  We believe that
these  changes  reflect our  strategic  decision to invest in measures that will
increase net sales on a present and future basis.  The increase in utilities and
insurance and benefits  reflect the increased costs of operating two facilities.
The increase in investor  relations costs is due to the retention of an investor
relations firm after our initial public offering.


                                       12
<PAGE>

      Officers'  salaries  increased  $12,500 to $135,975  for the three  months
ended July 31, 2005 from $123,475 for the three months ended July 31, 2004.

      Other Expense.  Other expense-net  decreased $46,869 or 87.5% from $53,558
for the three  months  ended July 31, 2004 to $6,689 for the three  months ended
July 31, 2005, due to decreased borrowings between the periods.

      Loss Before Taxes.  We had a loss of $799,296  before income taxes for the
three months ended July 31, 2005  compared to a loss of $238,555  before  income
taxes for the three months ended July 31,  2004.  The increase was  attributable
primarily to an increase in cost of sales due to increased  sales and  increased
net losses on futures contracts.

      Income Taxes. Our benefit for income taxes for the three months ended July
31, 2005 totaled  $351,421  compared to $113,100 for the three months ended July
31, 2004 as a result of the increased loss before taxes.

      Net Loss. Net loss increased  $322,420,  or 257.0%,  to $447,875 or $(.08)
per share for the three  months  ended July 31,  2005  compared  to  $125,455 or
$(.03) per share for the three months  ended July 31, 2004.  The increase in net
loss  primarily  reflects  an  increase  in cost of sales,  an  increase  in the
allowance  for  doubtful  accounts in the amount of $270,000 to cover  potential
nonpaying customers,  and other increased operating expenses,  offset in part by
increased sales.

Nine Months Ended July 31, 2005 Compared to the Nine Months Ended July 31, 2004

      Net Sales.  Net sales totaled  $29,016,190  for the nine months ended July
31, 2005,  an increase of  $10,438,662  or 56.2% from  $18,577,528  for the nine
months ended July 31, 2004. The increase in net sales reflects  increased  sales
of green coffee of approximately $10.0 million.  Our customers are predominately
independent  gourmet/specialty  roasters,  some of whom  own  their  own  retail
outlets.  Sales to new customers in this area historically  start slowly because
many of these  companies  are start up  ventures.  Because the  specialty  green
coffee area is the fastest growing segment of the coffee market, we believe that
our  customer  base and sales will grow in this area.  The increase in net sales
also reflects  increased sales of branded and private label coffee. The increase
in the  price of the  underlying  commodity  (coffee)  also  contributed  to the
increase in net sales.

      Cost of Sales.  Cost of sales for the nine months  ended July 31, 2005 was
$23,657,607  or 81.5% of net sales,  as compared to  $13,892,695 or 74.8% of net
sales for the nine months ended July 31, 2004. Cost of sales consists  primarily
of the cost of green coffee and packaging  materials and realized and unrealized
gains or losses on hedging  activity.  The  increase  in cost of sales  reflects
increased purchases of green coffee in the amount of approximately $9.0 million,
a decrease of $501,182 in realized gains on hedging activities, and higher green
coffee prices during the period as prices increased from a range of $.66 to $.69
per  pound to a range of $1.02 to $1.28  per  pound  year to year,  offset  by a
decrease of $35,180 in unrealized losses on hedging activities.  As the price of
coffee is cyclical and volatile and subject to many factors,  including weather,
politics and  economics,  we are unable to predict the  purchase  price of green
coffee for fiscal 2005. We 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 at favorable prices beginning in the latter half
of fiscal 2000 and continuing  through fiscal 2004. As the price of green coffee
beans  continued  to  increase,  we used our  favorable  inventory  position  to
increase our margins.  The use of these  derivative  financial  instruments  has
enabled us to mitigate the effect of changing prices during these periods and to
be more  competitive  with our  pricing.  However,  we had net losses on futures
contracts of $254,292  for the nine months  ended July 31, 2005  compared to net
gains of  $720,294  for the  comparable  period in 2004 as green  coffee  prices
declined by 20.3% during June 2005.


                                       13
<PAGE>

      Gross  Profit.  Gross  profit for the nine months  ended July 31, 2005 was
$5,358,583,  an increase of $673,750,  or 14.4%,  from  $4,684,833  for the nine
months ended July 31, 2004.  Gross profit as a percentage of net sales decreased
by 6.7% to 18.5% for the nine months ended July 31, 2005 from 25.2% for the same
period in 2004.  The  increase in gross  profit was  primarily  attributable  to
increased  net sales during the first nine months of 2005  compared to the first
nine months of 2004,  while the decrease in gross profit as a percentage  of net
sales was due to an  increase in costs of sales due to higher  green  coffee and
packaging costs,  partially offset by higher selling prices. As discussed above,
the 20.3%  decline  in green  coffee  prices  during  June 2005  resulted  in an
unrealized  trading loss and resulted in us having to sell higher cost inventory
at lower prices,  thereby reducing our margins during the quarter.  Despite this
20.3% drop in green coffee prices, our margins decreased only 6.7%.

      Operating Expenses. Total operating expenses increased $1,009,406 or 29.2%
to $4,470,940  for the nine months ended July 31, 2005 from  $3,461,534  for the
same period in 2004  primarily  due to increases  in selling and  administrative
expenses.  Selling and  administrative  expenses  increased $710,559 or 23.0% to
$3,801,669 for the nine months ended July 31, 2005 from  $3,091,110 for the same
period in 2004.  The increase in selling and  administrative  expenses  reflects
several factors,  including  increases of  approximately  $194,000 in utilities,
$187,000 in shipping  expenses,  $120,000 in insurance and benefits,  $63,000 in
professional   fees,  $48,000  in  packaging   development  costs,   $28,000  in
commissions and $27,000 in investor  relations costs. The increase also reflects
increased  expenses  for trade  shows and demos,  travel and  entertainment  and
factory salaries due to higher levels of sales  production.  Operating  expenses
for the nine months ended July 31, 2005 also included a $270,000 increase in the
allowance for doubtful accounts to cover potential nonpaying customers.

      The  increase  in shipping  expenses  reflects  the  increase in pounds of
coffee  sold,  higher rates caused by  increased  fuel  surcharges  and gasoline
prices,  and the addition of new  customers  during the period.  We believe that
these  changes  reflect our  strategic  decision to invest in measures that will
increase net sales on a present and future basis. The increases in utilities and
insurance and benefits  reflect the increased costs of operating two facilities.
The  increase  in  commissions  reflects  higher  net  sales  made by  employees
receiving  commission-based  compensation.  The  increase in investor  relations
costs is due to the  retention of an investor  relations  firm after our initial
public offering.

      Officers' salaries increased $28,847 to $399,271 for the nine months ended
July 31, 2005 from $370,424 for the nine months ended July 31, 2004.


                                       14
<PAGE>

      Other Expense.  Other expense-net decreased $65,947 or 51.3% from $128,651
for the nine months  ended July 31,  2004 to $62,704  for the nine months  ended
July 31, 2005, due to decreased borrowings between the periods.

      Income Before Taxes. We had income of $824,939 before income taxes for the
nine months ended July 31, 2005 compared to income of  $1,094,648  before income
taxes for the nine months  ended July 31, 2004.  The  decrease was  attributable
primarily to an increase in cost of sales and  overhead,  net of the increase in
sales.

      Income  Taxes.  Our  provision  for income taxes for the nine months ended
July 31, 2005 totaled $272,179 (33.0% of income before income taxes) compared to
$482,100  (44.0% of income  before  income taxes) for the nine months ended July
31, 2004 as a result of decreased income before taxes.

      Net Income. Net income decreased $59,788, or 9.8%, to $552,760 or $.12 per
share for the nine months  ended July 31, 2005  compared to $612,548 or $.15 per
share for the nine  months  ended  July 31,  2004.  The  decrease  in net income
primarily  reflects an increase in cost of sales,  an increase in the  allowance
for  doubtful  accounts  to  cover  potential  nonpaying  customers,  and  other
increased operating expenses, offset in part by an increase in net sales.

Liquidity and Capital Resources

      As  of  July  31,  2005,  we  had  working  capital  of  $7,673,763  which
represented  a $6,947,319  increase  from our working  capital of $726,444 as of
October 31, 2004, and total stockholders' equity of $10,009,247, which increased
by $7,013,426  from our total  stockholders'  equity of $2,995,821 as of October
31, 2004. Our working capital increased  primarily due to proceeds from the IPO,
a  $1,301,542  increase in  inventories,  an increase in cash due from broker of
$1,281,036, a decrease in accounts payable and accrued expenses of $1,977,786, a
decrease  in  line of  credit  and  term  loan - line of  credit  borrowings  of
$1,608,884,  a decrease in  obligations  under  capital  leases of  $101,844,  a
decrease in income  taxes  payable of $160,000,  partially  offset by a $270,000
increase  allowance  for doubtful  accounts and an increase in cash of $591,997.
Total  stockholders'  equity  increased  due to  the  initial  public  offering,
partially offset by the net loss for the reported periods.

      As of October 31, 2004, we had a credit facility with Wells Fargo Business
Credit for a  revolving  line of credit of up to  $5,000,000  based on  eligible
trade  accounts  receivable  and  inventories  and a term loan of up to $750,000
based on eligible equipment. The line of credit provided for borrowings of up to
85% of our eligible trade accounts receivable and 60% of eligible inventories.

      In November 2004, we refinanced our credit facility by entering into a new
financing  arrangement with Merrill Lynch Business  Financial  Services Inc. and
terminating our prior agreement with Wells Fargo Business Credit.  This new line
of credit is for a maximum  of  $4,000,000,  expires  on  October  31,  2005 and
requires monthly  interest  payments at a rate of LIBOR plus 2.15% (an effective
rate of 5.84% at July 31,  2005).  This line of credit is  secured  by a blanket
lien on all of our assets and the personal guarantees of Andrew Gordon and David
Gordon,  two  of our  officers  and  directors.  As of  July  31,  2005,  we had
$1,328,161  outstanding  under  the  new  line  of  credit  as  compared  to  an
outstanding  balance  of  $2,685,045  under  the Wells  Fargo  line of credit at
October 31, 2004.


                                       15
<PAGE>

      The new credit facility contains  covenants that place restrictions on our
operations.  Among other things, these covenants: require us to maintain certain
financial  ratios;  require us to maintain a minimum net worth;  and prohibit us
from merging with or into other companies, acquiring all or substantially all of
the assets of other companies, or selling all or substantially all of our assets
without the consent of the lender. These restrictions could adversely impact our
ability to implement our business plan, or raise additional  capital, if needed.
In addition,  if we default under our existing  credit facility or if our lender
demands  payment  of a  portion  or all of our  indebtedness,  we may  not  have
sufficient  funds  to make  such  payments.  As of  July  31,  2005,  we were in
compliance with all covenants contained in the credit facility.

      We also lease machinery and equipment under capital leases which expire in
July 2006.  The interest rates on the capital leases vary from 6.75% to 7.6% per
annum. The outstanding  balance on the capital leases  aggregated $9,216 at July
31, 2005 compared to $116,915 at October 31, 2004.

      For the nine months ended July 31, 2005, our operating activities used net
cash of  $3,761,475  as  compared  to the nine  months  ended July 31, 2004 when
operating activities provided net cash of $714,781. The decreased cash flow from
operations  for the nine  months  ended  July 31,  2005 was  primarily  due to a
decrease in accounts payable and accrued expenses of $1,977,785,  an increase of
$1,301,542  in  inventories,  a $1,281,036  increase in cash due from broker,  a
$334,705 increase in accounts receivable and a $160,000 decrease in income taxes
payable.

      For the nine months ended July 31, 2005, our investing activities used net
cash of $365,961  as  compared  to the nine months  ended July 31, 2004 when net
cash used by  investing  activities  was  $952,917.  The  reduction in cash flow
utilized by investing activities reflects the purchase of property and equipment
from Premier  Roasters in February  2004.  During the nine months ended July 31,
2005,  we  purchased  a gas-fired  fully-automatic  controlled  coffee  roasting
machine for the Colorado facility for approximately $338,000.

      For the nine months ended July 31, 2005, our financing activities provided
net cash of  $4,719,433  as compared to the nine months ended July 31, 2004 when
net cash provided by financing activities was $268,348.  The increased cash flow
from  financing  activities  was  primarily  due to net proceeds from our public
offering of common stock.  On May 6, 2005,  we concluded the public  offering of
1,400,000  shares of our common  stock at a price of $5.00 per share and on June
16, 2005 the  underwriters  exercised  their  option to  purchase an  additional
210,000  shares  of our  common  stock  at a price  of $5.00  per  share.  After
underwriting  discounts and commissions and offering  expenses,  we received net
proceeds  of   $6,436,016   in  the   offering,   after  giving  effect  to  the
over-allotment  option.  Net  payments  on  our  line  of  credit  increased  to
$1,356,884  for the nine months  ended July 31, 2005  compared to net funding of
$519,595 for the nine months ended July 31, 2004.

      In February,  2004,  we acquired  certain  assets of Premier  Roasters for
$825,000.  In addition,  we entered into an agreement with the City of La Junta,
Colorado to lease a 50,000 square foot facility for $8,341 per month.  We do not
believe  that the purchase  price or costs  associated  with  operating a second
facility  will have a  material  effect  on our  future  cash flow or  liquidity
position.  We  believe  that the costs  associated  with  operating  the  second
facility will be mitigated by the new  economies of scale in both  manufacturing
and logistical  efficiencies  which were unavailable in the past while operating
solely out of our New York  facility  and  increased  sales to new and  existing
customers in the Western United States.


                                       16
<PAGE>

      We  expect  to fund our  operations,  including  paying  our  liabilities,
funding capital  expenditures and making required payments on our debts, through
October 31, 2005 with the proceeds  from our public  offering,  cash provided by
operating  activities  and the  use of our  credit  facility.  In  addition,  an
increase in eligible  accounts  receivable and inventory would permit us to make
additional  borrowings  under our line of credit.  We also believe we could,  if
necessary, obtain additional loans by mortgaging our headquarters.

Market Risks

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

Interest Rate Risks

      We are subject to market risk from  exposure to  fluctuations  in interest
rates.  At July 31, 2005, our debt consisted of $9,216 of fixed rate debt on the
capital leases and $1,328,161 of variable rate debt under our line of credit and
term loan - line of credit. At July 31, 2005, interest on the variable rate debt
was payable primarily at 5.84% (or 2.15% above LIBOR) for the line of credit. We
do not expect changes in interest rates to have a material  effect on results of
operations or cash flows in fiscal 2005, 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 our control.  Historically,  we
have used  short-term  coffee  futures and options  contracts  primarily for the
purpose of partially hedging and minimizing the effects of changing green coffee
prices, as further explained in Note 4 of the notes to financial statements.  In
addition,  during the latter half of fiscal  2000,  we 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  us to  mitigate  the effect of
changing prices although we generally remain exposed to loss when prices decline
significantly  in a short period of time or remain at higher levels,  preventing
us from obtaining  inventory at favorable prices. We generally have been able to
pass green coffee price increases through to customers,  thereby maintaining our
gross  profits.  However,  we  cannot  predict  whether  we will be able to pass
inventory price increases through to our customers in the future.

      At July 31, 2005, we held 60 options  (generally  with terms of two months
or less)  covering an aggregate  of 2,250,000  pounds of green coffee beans at a
price of $1.05 per pound.  The fair  market  value of these  options,  which was
obtained from major financial institutions, was $84,375 at July 31, 2005.


                                       17
<PAGE>

      We acquire futures  contracts with longer terms  (generally  three to four
months)  primarily for the purpose of  guaranteeing  an adequate supply of green
coffee.  At July 31,  2005,  we held 192 futures  contracts  for the purchase of
7,200,000  pounds of coffee at prices  ranging from $.9975 up to $1.15 per pound
for  September  2005  contracts.  The market price of coffee  applicable to such
contracts was $1.02 per pound at that date.

Off-Balance Sheet Arrangements

      We do not  have  any  off-balance  sheet  arrangements  that  have  or are
reasonably likely to have a current or future effect on our financial condition,
changes in financial  condition,  revenues or expenses,  results of  operations,
liquidity,  capital  expenditures  or  capital  resources  that is  material  to
investors.

Item 3. Controls and Procedures

      Management,  including our President,  Chief  Executive  Officer and Chief
Financial  Officer,  has evaluated the effectiveness of our disclosure  controls
and procedures (as defined in Exchange Act Rules  13a-15(e) and 15d-15(e)) as of
the end of the period covered by this report.  Based upon that  evaluation,  the
President,  Chief Executive  Officer and Chief Financial  Officer concluded that
the disclosure controls and procedures were effective to ensure that information
required  to be  disclosed  in the  reports  that we file and  submit  under the
Exchange Act is (i)  recorded,  processed,  summarized  and reported as and when
required and (ii)  accumulated  and  communicated  to the Company's  management,
including its principal  executive officer and principal  financial officer,  as
appropriate to allow timely discussions regarding disclosure.

      There  have  been  no  changes  in our  internal  control  over  financial
reporting  identified in connection with the evaluation that occurred during our
last fiscal quarter that has materially  affected,  or that is reasonably likely
to materially affect, our internal control over financial reporting.


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<PAGE>

                          Part II -- OTHER INFORMATION

Item 1. Legal Proceedings

      None

Item 2. Unregistered Sales of Equity in Securities and Use of Proceeds

      On May 6, 2005,  we concluded the public  offering of 1,400,000  shares of
our  common  stock at a price  of  $5.00  per  share  and on June  16,  2005 the
underwriters  exercised their option to purchase an additional 210,000 shares of
our common stock at a price of $5.00 per share. After underwriting discounts and
commissions and offering expenses, we received net proceeds of $6,436,016 in the
offering,  after giving effect to the over-allotment  option.  While we have not
yet used all of the offering proceeds,  we used some of the proceeds to pay down
bank debt,  to build up our  inventories  for sales  expansion  and for  general
corporate purposes, including working capital and capital expenditures.  We also
intend to use  certain  proceeds  to  implement  a branded  sales and  marketing
campaign,  to purchase equipment for our La Junta, Colorado facility and to grow
our food service distribution.  As strategic opportunities arise, we may use the
proceeds of the offering to fund  acquisitions,  licensing  and other  strategic
alliances.

      In June 2005 we entered into an agreement with an investor  relations firm
and on June 10, 2005 our Board of  Directors  authorized  the issuance of 10,000
shares  of our  common  stock  to the  firm  for  services  performed  and to be
performed.  The shares were issued  pursuant to an exemption  from  registration
under Section 4(2) of the Securities  Act of 1933,  based upon the fact that the
shares  were  issued  in a  private  transaction  without  the  use  of  general
solicitation or  advertising,  to only one investor who we had reason to believe
capable of evaluating the merits and risks of an investment in our common stock.

Item 3. Defaults upon Senior Securities

      None

Item 4. Submission of Matters to a Vote of Security Holders

      None

Item 5. Other Information

      None


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<PAGE>

Item 6. Exhibits

      (a)   Exhibits

      11.1  Earnings Per Share Calculation

      31.1  Rule 13a - 14(a)/15d - 14a Certification.

      32.1  Section 1350 Certification.


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<PAGE>

                                   SIGNATURES

      Pursuant to the  requirements of the Securities  Exchange Act of 1934, the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.

                                       Coffee Holding Co., Inc.
                                       (Registrant)

                                       By: /s/ Andrew Gordon
                                           -------------------------------------
                                           Andrew Gordon
                                           President, Chief Executive Officer
                                           and Chief Financial Officer

September 14, 2005


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