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

                                    FORM 10-Q

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

      For the quarterly period ended April 30, 1998 OR

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

      For the transition period from ____________ to _______________.

                           Commission file No. _______

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

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

4401 First Avenue, Brooklyn, New York                             11232
(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 No X .

As of September 30, 2000, the Registrant had 3,999,650 shares of common stock,
par value $.001 per share, outstanding.


<PAGE>

                                     PART I

                            COFFEE HOLDING CO., INC.

ITEM 1. FINANCIAL STATEMENTS


<PAGE>

                            COFFEE HOLDING CO., INC.

                     INDEX TO UNAUDITED FINANCIAL STATEMENTS

                                                                     PAGE
                                                                    ------

BALANCE SHEETS
     APRIL 30, 1998 AND OCTOBER 31, 1997                             F-2

STATEMENTS OF OPERATIONS
     SIX AND THREE MONTHS ENDED APRIL 30, 1998 AND 1997              F-3

STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
     SIX MONTHS ENDED APRIL 30, 1998                                 F-4

STATEMENTS OF CASH FLOWS
     SIX MONTHS ENDED APRIL 30, 1998 AND 1997                        F-5

NOTES TO FINANCIAL STATEMENTS                                     F-6/17

                                      * * *


                                      F-1
<PAGE>

                            COFFEE HOLDING CO., INC.

                                 BALANCE SHEETS
                       APRIL 30, 1998 AND OCTOBER 31, 1997

<TABLE>
<CAPTION>
                                                                         April      October
                                 ASSETS                                30, 1998    31, 1997
                                 ------                              -----------  ------------
                                                                     (Unaudited)  (See Note 1)
<S>                                                                  <C>          <C>
Current assets:
     Cash                                                            $   70,314   $  198,679
     Due from broker                                                    199,588      423,899
     Accounts receivable, net of allowance for doubtful
        accounts of $215,000 and $254,317                             2,335,113    2,858,201
     Inventories                                                      1,831,898    1,379,383
     Cash and cash equivalents restricted under mortgage note           370,237       66,070
     Prepaid expenses and other current assets                           27,756       27,066
                                                                     ----------   ----------
           Total current assets                                       4,834,906    4,953,298
Property and equipment, at cost, net of accumulated
     depreciation of $1,521,164 and $1,422,651                        2,166,427    1,722,194
Deferred mortgage costs, net of accumulated amortization
     of $46,029 and $43,449                                              59,366       61,946
Deposits and other assets                                               133,826       57,191
                                                                     ----------   ----------

           Totals                                                    $7,194,525   $6,794,629
                                                                     ==========   ==========

                LIABILITIES AND STOCKHOLDERS' EQUITY
                ------------------------------------

Current liabilities:
     Due factor                                                                   $2,503,228
     Mortgage note payable                                           $  625,000      650,000
     Current portion of term loan                                        87,312
     Current portion of obligations under capital leases                235,479      127,524
     Accounts payable and accrued expenses                            1,971,520    2,209,420
                                                                     ----------   ----------
           Total current liabilities                                  2,919,311    5,490,172
Term loan, net of current portion                                       273,498
Line of credit borrowings                                             2,587,095
Obligations under capital leases, net of current portion                367,872      233,810
Loans from related parties                                               75,492      475,215
                                                                     ----------   ----------
           Total liabilities                                          6,223,268    6,199,197
                                                                     ----------   ----------

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
     Common stock, no par value; 200 shares authorized;
        100 shares issued and outstanding                                            460,000
     Additional paid-in capital                                         480,997
     Retained earnings                                                  486,260      135,432
                                                                     ----------   ----------
           Total stockholders' equity                                   971,257      595,432
                                                                     ----------   ----------
           Totals                                                    $7,194,525   $6,794,629
                                                                     ==========   ==========
</TABLE>

See Notes to Financial Statements.


                                      F-2
<PAGE>

                            COFFEE HOLDINGS CO., INC.

                            STATEMENTS OF OPERATIONS
               SIX AND THREE MONTHS ENDED APRIL 30, 1998 AND 1997
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                  Six Months                 Three Months
                                                Ended April 30,             Ended April 30,
                                          -------------------------   --------------------------
                                             1998          1997           1998           1997
                                          -----------   -----------   -----------    -----------
<S>                                       <C>           <C>           <C>            <C>
Net sales                                 $13,181,142   $11,537,024   $ 6,324,247    $ 6,531,390
Cost of sales                              11,329,593     9,166,989     6,181,727      4,826,402
                                          -----------   -----------   -----------    -----------

Gross profit                                1,851,549     2,370,035       142,520      1,704,988
                                          -----------   -----------   -----------    -----------

Operating expenses:
     Selling and administrative               900,919       877,064       407,752        561,844
     Officers' salaries                       163,175       117,802        72,500         56,545
                                          -----------   -----------   -----------    -----------
               Totals                       1,064,094       994,866       480,252        618,389
                                          -----------   -----------   -----------    -----------

Income (loss) from operations                 787,455     1,375,169      (337,732)     1,086,599
                                          -----------   -----------   -----------    -----------

Other expenses:
     Interest expense                         186,403       165,424        89,501         79,890
     Expenses in connection with
        reverse acquisition                   180,000                     180,000
                                          -----------   -----------   -----------    -----------
               Totals                         366,403       165,424       269,501         79,890
                                          -----------   -----------   -----------    -----------

Income (loss) before income taxes             421,052     1,209,745      (607,233)     1,006,709

Provision (credit) for state and local
     income taxes                              46,000       142,534       (67,000)       116,648
                                          -----------   -----------   -----------    -----------

Net income (loss)                         $   375,052   $ 1,067,211   $  (540,233)   $   890,061
                                          ===========   ===========   ===========    ===========

Unaudited:
     Historical income (loss) before
        income taxes                      $   421,052   $ 1,209,745   $  (607,233)   $ 1,006,709
     Pro forma:
        Provision (credit) for income
           taxes                              191,000       544,000      (273,000)       453,000
                                          -----------   -----------   -----------    -----------

        Net income (loss)                 $   230,052   $   665,745   $  (334,233)   $   553,709
                                          ===========   ===========   ===========    ===========

        Basic earnings (loss) per share   $       .06   $       .17   $      (.08)   $       .14
                                          ===========   ===========   ===========    ===========

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

See Notes to Financial Statements.


                                      F-3
<PAGE>

                            COFFEE HOLDING CO., INC.

                  STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
                         SIX MONTHS ENDED APRIL 30, 1998
                                   (Unaudited)

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

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

Net income                                                                                     375,052     375,052
                                    ------    ---------    ----------   --------   --------   --------    --------

Balance, April 30, 1998               --      $    --       3,999,650   $  4,000   $480,997   $486,260    $971,257
                                    ======    =========    ==========   ========   ========   ========    ========
</TABLE>

See Notes to Financial Statements.


                                      F-4
<PAGE>

                            COFFEE HOLDING CO., INC.

                            STATEMENTS OF CASH FLOWS
                    SIX MONTHS ENDED APRIL 30, 1998 AND 1997
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                 1998          1997
                                                              ---------    ----------
<S>                                                           <C>          <C>
Operating activities:
     Net income                                               $ 375,052    $1,067,211
     Adjustments to reconcile net income to net cash
        provided by operating activities:
        Depreciation and amortization                           101,472       106,501
        Changes in operating assets and liabilities:
           Due from broker                                      224,311       (50,533)
           Accounts receivable                                  523,088      (405,397)
           Inventories                                         (452,515)     (405,347)
           Prepaid expenses and other current assets               (690)          691
           Deposits and other assets                            (76,635)
           Accounts payable and accrued expenses               (237,127)      251,762
                                                              ---------    ----------
               Net cash provided by operating activities        456,956       564,888
                                                              ---------    ----------

Investing activities - purchases of property and equipment     (254,625)     (138,855)
                                                              ---------    ----------

Financing activities:
     Net repayments of amounts due factor                                     (99,913)
     Principal payments on mortgage note payable                (25,000)      (25,000)
     Increase in cash and cash equivalents restricted under
        mortgage note                                          (304,167)
     Principal payments on term loan                            (43,656)
     Net advances under bank line of credit                     488,333
     Principal payments of obligations under capital leases     (46,483)
     Repayments of loans from related parties                  (399,723)     (151,612)
                                                              ---------    ----------
               Net cash used in financing activities           (330,696)     (276,525)
                                                              ---------    ----------

Net increase (decrease) in cash                                (128,365)      149,508

Cash, beginning of period                                       198,679        11,090
                                                              ---------    ----------

Cash, end of period                                           $  70,314    $  160,598
                                                              =========    ==========

Supplemental disclosure of cash flow data:
     Interest paid                                            $ 186,403    $  165,424
                                                              =========    ==========

     Income taxes paid                                        $ 104,664
                                                              =========
</TABLE>

Supplemental schedule of noncash investing and financing activities:

      During  the six  months  ended  April  30,  1998,  the  Company  purchased
      equipment at a cost of $288,500 by incurring capital lease obligations.

      During the six months  ended April 30,  1998,  the Company  increased  its
      obligations  under the credit  facility  that provides it with the line of
      credit  and term loan and  decreased  the  balance  payable  to its factor
      through a direct transfer of $2,503,288 from the bank to the factor.

See Notes to Financial Statements.


                                      F-5
<PAGE>

                            COFFEE HOLDING CO., INC.

                     NOTES TO UNAUDITED FINANCIAL STATEMENTS

Note 1 - Business activities and reverse acquisition:

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

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

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

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

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

      Consulting  and  professional  fees and other costs incurred in connection
      with the reverse  acquisition  totaling  $180,000  were charged to expense
      during the six months ended April 30, 1998.

      Information  as to the  unaudited  pro forma  results of operations of the
      Company assuming the Merger had been consummated as of, and the results of
      operations of  Transpacific  had been included from,  November 1, 1996 has
      not been  presented  because  such pro  forma  results  would  not  differ
      materially  from the  historical  results of operations for the six months
      ended April 30, 1998 and 1997  reflected  in the  accompanying  historical
      statements of operations.


                                      F-6
<PAGE>

                            COFFEE HOLDING CO., INC.

                     NOTES TO UNAUDITED FINANCIAL STATEMENTS

Note 2 - Summary of significant accounting policies:
      Basis of presentation:
            In the opinion of management,  the accompanying  unaudited financial
            statements  reflect all adjustments,  consisting of normal recurring
            accruals,  necessary to present fairly the financial position of the
            Company as of April 30, 1998,  its results of operations for the six
            and three  months  ended  April 30,  1998 and 1997,  its  changes in
            stockholders' equity for the six months ended April 30, 1998 and its
            cash  flows  for the six  months  ended  April  30,  1998 and  1997.
            Information included in the balance sheet as of October 31, 1997 has
            been  derived  from  the  Company's  audited  financial  statements.
            Pursuant to generally accepted  accounting  principles and the rules
            and  regulations  of the  Securities  and  Exchange  Commission  for
            interim financial  statements,  certain  information and disclosures
            normally  included in financial  statements  prepared in  accordance
            with generally accepted accounting principles have been condensed or
            omitted from these financial  statements.  Operating results for the
            six and three  month  periods  ended April 30, 1998 and 1997 are not
            necessarily  indicative  of the results that may be expected for the
            years ending October 31, 1998 and 1997.

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

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

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

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

      Hedging:
            The Company uses futures and options  contracts to hedge the effects
            of  fluctuations   in  the  price  of  green  coffee  beans.   These
            transactions meet the requirements for hedge  accounting,  including
            designation and correlation. To obtain a proper matching of revenues
            and expenses,  gains or losses  arising from open and closed hedging
            transactions  are included in  inventory as a cost of the  commodity
            and  reflected in the  statement of  operations  when the product is
            sold. Risks arise from the possible  inability of  counterparties to
            meet the terms of their contracts and from movements in the price of
            green  coffee.  Management  believes  that the  overall  exposure to
            credit risk is minimal.

            At April 30, 1998, the Company held options covering an aggregate of
            2,927,000  pounds of green  coffee  beans which are  exercisable  in
            fiscal  1998 at prices  ranging  from $1.35 to $1.45 per pound.  The
            fair market value of these options,  which was obtained from a major
            financial institution, was approximately $322,000 at April 30, 1998.
            Due from broker includes the effects of unrealized hedging losses of
            $296,789  and  $299,934  at April 30,  1998 and  October  31,  1997,
            respectively.


                                      F-7
<PAGE>

                            COFFEE HOLDING CO., INC.

                     NOTES TO UNAUDITED FINANCIAL STATEMENTS

Note 2 - Summary of significant accounting policies (continued):
      Deferred mortgage costs:
            Costs incurred in connection with obtaining  mortgage financing have
            been  capitalized  and are  being  amortized  over  the  term of the
            mortgage  using a method  that  approximates  the  interest  method.
            Amortization of deferred mortgage costs was not material for the six
            and three months ended April 30, 1998 and 1997.

      Advertising:
            The Company  expenses  the cost of  advertising  and  promotions  as
            incurred.  Advertising  costs charged to operations  totaled $89,006
            and  $50,116  for the six  months  ended  April  30,  1998 and 1997,
            respectively,  and $61,943 and  $25,320 for the three  months  ended
            April 30, 1998 and 1997, respectively.

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

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

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


                                      F-8
<PAGE>

                            COFFEE HOLDING CO., INC.

                     NOTES TO UNAUDITED FINANCIAL STATEMENTS

Note 2 - Summary of significant accounting policies (continued):
      Stock options:
            In accordance  with the  provisions of Accounting  Principles  Board
            Opinion No. 25,  "Accounting  for Stock  Issued to  Employees,"  the
            Company  will  recognize  compensation  costs  as a  result  of  the
            issuance of stock options to employees based on the excess,  if any,
            of the fair  value of the  underlying  stock at the date of grant or
            award (or at an appropriate  subsequent  measurement  date) over the
            amount the employees must pay to acquire the stock.  Therefore,  the
            Company will not be required to recognize  compensation expense as a
            result of any grants of stock  options to  employees  at an exercise
            price that is equivalent to or greater than fair value.  The Company
            will also make pro forma  disclosures,  as required by  Statement of
            Financial  Accounting Standards No. 123, "Accounting for Stock-Based
            Compensation" ("SFAS 123"), of net income or loss as if a fair value
            based method of accounting  for stock  options had been applied,  if
            such amounts differ materially from the historical amounts.

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

            Since the Company had elected to be taxed as an "S" Corporation,  it
            was not required to provide for Federal income taxes and it was only
            required to provide for state  income  taxes at a reduced rate prior
            to the date of the Exchange.  SEC rules and regulations prohibit the
            presentation  of  earnings  (loss)  per  common  share  amounts on a
            historical  basis for the periods  during which the "S"  Corporation
            elections were in effect;  instead, they require the presentation of
            basic and,  if  applicable,  diluted  unaudited  pro forma  earnings
            (loss) per common share amounts in the  statements of operations for
            such periods  assuming  that the Company had been subject to Federal
            and  state  income  taxes at  statutory  rates  applicable  to those
            companies that had not made "S" Corporation elections.

            Since the Company had elected to be taxed as an "S"  Corporation for
            part of the six and three months ended April 30, 1998 and all of six
            and three  months  ended  April 30,  1997 and it had no  potentially
            dilutive  securities  outstanding  during the six months ended April
            30, 1998 and 1997,  unaudited pro forma earnings (loss) per share is
            presented in the  accompanying  statements of operations for the six
            and three months ended April 30, 1998 and 1997.


                                      F-9
<PAGE>

                            COFFEE HOLDING CO., INC.

                     NOTES TO UNAUDITED FINANCIAL STATEMENTS

Note 2 - Summary of significant accounting policies (concluded):
      Earnings (loss) per share (concluded):
            The  weighted   average  common  shares   outstanding  used  in  the
            computation of unaudited pro forma basic  earnings  (loss) per share
            for the six and  three  months  ended  April  30,  1998 and 1997 was
            3,999,650,  which reflects the retroactive  adjustment of the number
            of common shares of  Transpacific  actually  outstanding  to include
            only the 999,650  shares  effectively  outstanding as of the date of
            the Exchange and the 3,000,000  shares of common stock issued to the
            stockholders of Coffee in connection with the Exchange (see Note 1).

      Recent accounting pronouncements:
            The  Financial   Accounting   Standards  Board  and  the  Accounting
            Standards Executive Committee of the American Institute of Certified
            Public    Accountants   had   issued   certain   other    accounting
            pronouncements  as of April 30, 1998 that will become  effective  in
            subsequent  periods;  however,  management  of the Company  does not
            believe that any of those  pronouncements  would have  significantly
            affected  the  Company's   financial   accounting   measurements  or
            disclosures  had they been in effect  during  the six  months  ended
            April 30, 1998 and 1997.

Note 3 - Inventories:
            Inventories  at April 30, 1998 and October 31, 1997 consisted of the
            following:

                                                    April             October
                                                  30, 1998            31, 1997
                                                 ----------         -----------

                  Packed coffee                  $  660,115         $  389,796
                  Green coffee                      950,287            805,780
                  Packaging supplies                221,496            183,807
                                                 ----------         ----------
                         Totals                  $1,831,898         $1,379,383
                                                 ==========         ==========

Note 4 - Property and equipment:
            Property  and  equipment  at April 30,  1998 and  October  31,  1997
            consisted of the following:

<TABLE>
<CAPTION>
                                                      Estimated        April       October
                                                     Useful Life     30, 1998     31, 1997
                                                     -----------    ----------    ----------
<S>                                                   <C>           <C>           <C>
                  Building and improvements           30 years      $1,128,182    $1,109,696
                  Machinery and equipment              7 years       1,621,798     1,399,084
                  Machinery and equipment under
                     capital leases                    7 years         694,609       406,109
                  Furniture and fixtures               7 years         102,002        88,956
                                                                    ----------    ----------
                                                                     3,546,591     3,003,845
                  Less accumulated depreciation                      1,521,164     1,422,651
                                                                    ----------    ----------
                                                                     2,025,427     1,581,194
                  Land                                                 141,000       141,000
                                                                    ------------  ----------
                         Totals                                     $2,166,427    $1,722,194
                                                                    ==========    ==========
</TABLE>


                                      F-10
<PAGE>

                            COFFEE HOLDING CO., INC.

                     NOTES TO UNAUDITED FINANCIAL STATEMENTS

Note 4 - Property and equipment (concluded):
            Depreciation  totaled  $98,892 and $103,920 for the six months ended
            April 30, 1998 and 1997,  respectively,  and $50,946 and $51,960 for
            the three months ended April 30, 1998 and 1997, respectively.

Note 5 - Cash and cash equivalents restricted under mortgage note:
            Restricted  cash and cash  equivalents at April 30, 1998 and October
            31, 1997 consisted of investments in the following  interest-bearing
            accounts:


                                                April              October
                                               30, 1998            31, 1997
                                               --------            --------
                  Cash in escrow               $ 20,237            $66,070
                  Certificate of deposit        350,000
                                               --------            -------
                     Totals                    $370,237            $66,070
                                               ========            =======

            Cash in escrow  represents  amounts held in accounts for the payment
            of principal,  interest and various fees in connection  with the New
            York City Industrial  Development  Agency  ("NYCIDA")  mortgage note
            payable (see Note 6).

            The Company did not comply with certain covenants, as defined, under
            the NYCIDA  agreement at April 30, 1998 and October 31,  1997.  As a
            result of its  noncompliance at October 31, 1997, it was required to
            obtain an irrevocable  letter of credit from ABN Amro Bank to secure
            the mortgage note and to pledge a $350,000 certificate of deposit to
            secure the letter of credit  during the six months  ended  April 30,
            1998.

Note 6 - Mortgage note payable:
            On June 1, 1989,  the  Company  financed  the  purchase  of land and
            building  through  the  issuance of a mortgage  note  payable in the
            principal  amount of  $1,050,000 to the NYCIDA.  The mortgage  note,
            which had an  outstanding  balance of $625,000 and $650,000 at April
            30,  1998 and  October  31,  1997,  respectively,  requires  monthly
            payments of $4,167 plus interest based on a variable rate set weekly
            by Bear Stearns & Co. The final payment is due November 1, 2009. The
            payment of the note is secured by a first  mortgage on the Company's
            land and building.

            The NYCIDA agreement contains certain financial covenants.  At April
            30,  1998 and October 31,  1997,  the Company was not in  compliance
            with the covenants.  Accordingly,  the mortgage note payable was due
            on demand and classified as a current liability,  and the restricted
            investments  securing the mortgage note (see Note 5) were classified
            as current assets,  in the  accompanying  April 30, 1998 and October
            31, 1997 balance sheets.


                                      F-11
<PAGE>

                            COFFEE HOLDING CO., INC.

                     NOTES TO UNAUDITED FINANCIAL STATEMENTS

Note 7 - Credit facility borrowings:
            The Company was obligated for borrowings under a factoring agreement
            until  November  21,  1997 when it obtained a credit  facility  from
            Nationscredit  Commercial  Corp.  consisting of a revolving  line of
            credit and a term loan.

            The factoring  agreement provided for borrowings of up to (i) 80% of
            the Company's eligible trade accounts receivable and (ii) 50% of its
            eligible  inventories up to a maximum of $400,000.  The  outstanding
            balance of $2,503,228 at October 31, 1997  approximated  the maximum
            amount that the Company  could borrow  based on its  eligible  trade
            accounts  receivable and  inventories as of that date.  Interest was
            payable  monthly  at the  prime  rate plus 2% and  borrowings  up to
            $200,000,  plus  interest  and other costs and  expenses as defined,
            were guaranteed by a stockholder.

            The Company incurred costs of  approximately  $113,000 in connection
            with the  cancellation of the factoring  agreement that were charged
            to interest expense during the six months ended April 30, 1998.

            The  line of  credit  provides  for  borrowings  of up to 85% of the
            Company's eligible trade accounts receivable and 60% of its eligible
            inventories up to a maximum of $5,000,000  through November 20, 2000
            when the line of credit expires and any outstanding  balance must be
            repaid.  The  outstanding  balance of  $2,587,095  at April 30, 1998
            approximated  the maximum amount that the Company could borrow based
            on its eligible trade accounts receivable and inventories as of that
            date.  Interest  is  payable  monthly  at the prime rate plus 1% (an
            effective rate of 9.5% at April 30, 1998).

            The  term  loan,  which  had  an  outstanding  balance  of  $360,810
            (including a current portion of $87,312) at April 30, 1998, provides
            for  borrowings  of up to the greater of 80% of the cost of eligible
            equipment or $500,000.  Principal is payable in monthly installments
            of $7,276  plus  interest  which is also at the  prime  rate plus 1%
            until November 20, 2000 at which time the  outstanding  balance must
            also be repaid.

            Two of the Company's  stockholders have each guaranteed  outstanding
            borrowings  under  the  credit  facility  of  up to  $100,000,  plus
            interest and other costs and expenses as defined.

Note 8 - Loans from related parties:
            The Company  had loans  payable to its  stockholders  of $75,492 and
            $475,215 at April 30, 1998 and October 31, 1997,  respectively.  The
            loans are due on demand,  bear interest at 10% and are  subordinated
            to the balance outstanding under the mortgage note payable. Interest
            expense was not  material  for the six and three  months ended April
            30, 1998 and 1997.


                                      F-12
<PAGE>

                            COFFEE HOLDING CO., INC.

                     NOTES TO UNAUDITED FINANCIAL STATEMENTS

Note 9 - Income taxes:
            As shown in the accompanying  statements of operations,  the Company
            had  historical  provisions and credits for income taxes for the six
            and  three   months   ended  April  30,  1998  and  1997  that  were
            attributable to state and local income taxes as set forth below:

                                          Six Months             Three Months
                                       Ended April 30,          Ended April 30,
                                    --------------------    --------------------
                                      1998        1997         1998       1997
                                    -------     --------    ---------   --------

             State                  $ 8,000     $ 33,534    $(15,000)   $ 26,048
             Local                   38,000      109,000     (52,000)     90,600
                                    -------     --------    --------   ---------
                 Total historical   $46,000     $142,534    $(67,000)   $116,648
                                    =======     ========    ========    ========

            As explained in Note 2, prior to February 10, 1998,  the date of the
            Exchange,  the Company had elected to be taxed as an "S" Corporation
            and, accordingly, it was not required to record a provision (credit)
            for Federal  income taxes on its  historical  income  before  income
            taxes of approximately $1,028,000, $1,210,000 and $1,007,000 for the
            period from  November  1, 1997 to February  10, 1998 and the six and
            three  months ended April 30, 1997,  respectively;  however,  it was
            required to provide for state income taxes at a reduced rate and New
            York City income taxes at the same rates as  companies  that had not
            made such an election  during  those  periods.  Although the Company
            became  subject to  Federal,  state and local  income  taxes at full
            statutory rates for periods  subsequent to the date of the Exchange,
            it had a  historical  loss  before  income  taxes  of  approximately
            $607,000  for the period from  February  11, 1998 to April 30, 1998,
            and it was not required to record any historical provision or credit
            for Federal  income  taxes  during that period as further  explained
            below.

            As a result of the loss for the period  from  February  11,  1998 to
            April  30,  1998  and  certain  other   elections   related  to  the
            termination  of its "S"  Corporation  election,  the Company had net
            operating loss  carryforwards  as of April 30, 1998 of approximately
            $227,000 available to reduce future Federal, state and local taxable
            income which, if not used, will expire in 2012.  There were no other
            material  temporary  differences  as of April 30,  1998.  Due to the
            uncertainties  related to the  extent  and  timing of the  Company's
            future taxable income, the Company offset the deferred tax assets of
            approximately  $102,000  attributable to the potential benefits from
            the net  operating  loss  carryforwards  as of April 30,  1998 by an
            equivalent  valuation  allowance  and,   accordingly,   it  did  not
            recognize  a credit for  Federal  income  taxes for the period  from
            February  11, 1998 to April 30, 1998.  As a result of recording  the
            valuation  allowance for the period after February 10, 1998, and the
            "S" Corporation  election for the period through  February 10, 1998,
            the Company did not  recognize  any  provision or credit for Federal
            income taxes for the six and three months ended April 30, 1998.

            The  differences  between the tax provision or credit computed based
            on  the  Company's   historical  pre-tax  income  or  loss  and  the
            applicable  statutory  income tax rate and the Company's  historical
            provisions and credits for Federal, state and local income taxes for
            the six and three months ended April 30, 1998 and 1997 are set forth
            below:


                                      F-13
<PAGE>

                            COFFEE HOLDING CO., INC.

                          NOTES TO FINANCIAL STATEMENTS

Note 9 - Income taxes (concluded):

<TABLE>
<CAPTION>
                                                                         Six Months               Three Months
                                                                       Ended April 30,           Ended April 30,
                                                                   ---------------------     ---------------------
                                                                      1998        1997          1998        1997
                                                                   ---------   ---------     ---------   ---------
<S>                                                                <C>         <C>           <C>          <C>
                Tax provision (credit) at statutory rate of 34%    $ 143,000   $ 411,000     $(206,000)   $342,000
                Adjustments for effects of:
                   State income taxes, net of Federal benefit         46,000     142,534       (67,000)    116,648
                   "S" Corporation election and termination
                       of "S" Corporation election                  (245,000)   (411,000)      104,000    (342,000)
                   Change in valuation allowance                     102,000                   102,000
                                                                  ----------   ---------     ---------    --------
                         Historical provision                      $  46,000   $ 142,534     $ (67,000)   $116,648
                                                                  ==========   =========     =========    ========
</TABLE>

            The Company's "S" Corporation election was in effect for part or all
            of the six and three months ended April 30, 1998 and 1997. Unaudited
            pro  forma  historical  provisions  and  credits  for  income  taxes
            assuming  the  Exchange  had  occurred  on  November 1, 1996 and the
            Company was subject to Federal, state and local income taxes at full
            statutory  rates for all of the six and three months ended April 30,
            1998 and 1997 are set forth below:

<TABLE>
<CAPTION>
                                                              Six Months               Three Months
                                                            Ended April 30,           Ended April 30,
                                                         --------------------     ---------------------
                                                           1998         1997         1998        1997
                                                         --------    --------     ---------    --------
<S>                                                      <C>         <C>          <C>          <C>
                  Federal                                $119,000    $336,000     $(168,000)   $280,000
                  State                                    34,000      99,000       (50,000)     82,000
                  Local                                    38,000     109,000       (55,000)     91,000
                                                         --------   ---------     ---------    --------
                           Total pro forma (unaudited)   $191,000    $544,000     $(273,000)   $453,000
                                                         ========    ========     =========    ========
</TABLE>

            The  unaudited  pro forma  provisions  and credits for income  taxes
            reflect  an  effective  rate of  approximately  45% for each  period
            comprised  of an 11% rate for state and local income  taxes,  net of
            the  related  Federal  income tax effect,  and a  statutory  Federal
            income tax rate of 34%.


                                      F-14
<PAGE>

                            COFFEE HOLDING CO., INC.

                     NOTES TO UNAUDITED FINANCIAL STATEMENTS

Note 10- Lease commitments:
      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 $23,400  and  $11,700 for the six and three
            months  ended  April 30,  1998,  respectively.  The  Company  had no
            obligations  under  noncancelable  operating  leases  during the six
            months ended April 30, 1997.  Future minimum  rental  payments under
            the  noncancelable  operating lease in years subsequent to April 30,
            1998 were as follows:

                       Year Ending
                         April 30,                                   Amount
                       -----------                                 ---------

                           1999                                    $ 46,800
                           2000                                      46,800
                           2001                                      46,800
                           2002                                      46,800
                           2003                                      15,600
                                                                   --------
                               Total                               $202,800
                                                                   ========
            Capital leases:
                  As of April 30, 1998, the Company was obligated  under various
                  capital  leases for  machinery  and  equipment  that expire at
                  various  dates  through  February  2001.  Assets under capital
                  leases are  amortized  over their  estimated  useful  lives of
                  seven years.  Amortization  of $28,388 and $14,194 was charged
                  to  operations  in the six and three  months  ended  April 30,
                  1998,   respectively.   The  Company  had  no  capital   lease
                  obligations  during the six months ended April 30,  1997.  The
                  future minimum lease payments under capital leases and the net
                  present value of the future  minimum  lease  payments at April
                  30, 1998 were as follows:

                     Total minimum lease payments                     $706,363
                     Less amount representing interest                 103,012
                                                                      --------

                     Present value of net minimum lease payments       603,351
                     Less current portion                              235,479
                                                                      --------
                     Long-term portion                                $367,872
                                                                      ========


                                      F-15
<PAGE>

                            COFFEE HOLDING CO., INC.

                     NOTES TO UNAUDITED FINANCIAL STATEMENTS

Note 11- 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 April 30, 1998, the Company had cash
            balances that exceeded Federal insurance limits by $250,000. 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  19% of the  Company's  sales  were  derived  from one
            customer  during the six months ended April 30, 1998.  That customer
            also accounted for approximately  $282,000 of the Company's accounts
            receivable balance at April 30, 1998.  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
            April 30, 1998 and October 31, 1997.

Note 12- 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 April 30, 1998, no options had been granted under the Plan.

Note 13- Major vendors:
            During the six months ended April 30, 1998, substantially all of the
            Company's  purchases  were from nine vendors that also accounted for
            substantially  all of the  Company's  accounts  payable at April 30,
            1998.  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
<PAGE>

                            COFFEE HOLDING CO., INC.

                     NOTES TO UNAUDITED FINANCIAL STATEMENTS

Note 14- Prior period adjustments:
            The Company's  retained  earnings balance as of November 1, 1997 has
            been  retroactively  adjusted to reflect prior period adjustments to
            annual  financial  statements  it had  previously  issued  that were
            attributable to the net effects of the unrecorded  losses and income
            described below:

<TABLE>

<S>           <C>                                                           <C>
              Retained earnings, November 1, 1997, as previously reported   $1,044,786
                                                                            ----------

              Increase (decrease) from prior period adjustments:

                 Write-off of uncollectible accounts receivable               (268,182)
                 Unrecorded unrealized losses on coffee futures               (664,069)
                 Unrecorded interest income on restricted cash                  22,897
                                                                            ----------
                     Total adjustments                                        (909,354)
                                                                            ----------
              Retained earnings, November 1, 1997, as adjusted              $  135,432
                                                                            ==========
</TABLE>

            The accompanying  financial  statements also reflect  adjustments to
            previously  reported  amounts  of net  income  for the six and three
            months ended April 30, 1997. The components of the  adjustments  and
            their effect on net income follow:

<TABLE>
<CAPTION>
                                                                   Six Months     Three Months
                                                                   Ended April    Ended April
                                                                    30, 1997        30, 1997
                                                                  -----------    ------------
              <S>                                                 <C>              <C>
              Unrecorded  unrealized losses on coffee futures     $ (150,809)      $(61,349)
              Net income, as previously reported                   1,218,020        951,410
                                                                  ----------       --------

              Net income, as adjusted                             $1,067,211       $890,061
                                                                  ==========       ========
</TABLE>

                                      * * *


                                      F-17

<PAGE>

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

Forward-Looking Statements

      The Private Securities Litigation Reform Act of 1995 (the "Act") provides
a safe harbor for forward-looking statements made by or on behalf of Coffee
Holding Co., Inc. (the "Company" or "Coffee"). Coffee 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 Securities
and Exchange Commission "SEC." These statements use words such as "believes",
"expects", "intends", "plans", "may", "will", "should", "anticipates" and other
similar expressions. All statements which address operating performance, events
or developments that the Company expects or anticipates will occur in the
future, including statements relating to volume growth, share of sales or
statements expressing general optimism about future operating results, are
forward-looking statements within the meaning of the Act. The forward-looking
statements are and will be based on management's then current views and
assumptions regarding future events and operating performance. We cannot assure
that anticipated results will be achieved since actual results may differ
materially because of risks and uncertainties. We do not undertake to revise
these statements to reflect subsequent developments.

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

o     the impact of rapid or persistent fluctuations in the price of coffee
      beans;
o     fluctuations in the supply of coffee beans;
o     general economic conditions and conditions which affect the market for
      coffee;
o     the effects of any loss of major customers;
o     the effects of competition from other coffee manufacturers and other
      beverage alternatives;
o     changes in consumption of coffee; and
o     other risks which we identify in future filings with the SEC.

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

Six Months Ended April 30, 1998 Compared to Six Months Ended April 30, 1997

      Net sales totaled $13,181,142 in the six months ended April 30, 1998, an
increase of $1,644,118 or 14% from $11,537,024 in the six months ended April 30,
1997. Net sales were higher in the six months ended April 30, 1998 due to higher
coffee selling prices in early fiscal 1998.

      Cost of sales in the six months ended April 30, 1998 was $11,329,593, or
86% of net sales, as compared to $9,166,989, or 79% of net sales in the six
months ended April 30, 1997. Cost of sales was higher in the six months ended
April 30, 1998 due to higher green coffee purchase prices.

      The Company's gross profit in the six months ended April 30, 1998 was
$1,851,549, a decrease of $518,486 or 22% from $2,370,035 in the six months
ended April 30, 1997. Gross profit as a percentage of net sales decreased by 7%
to 14% in the six months ended April 30, 1998 from 21% in the six months ended
April 30, 1997. The Company's gross profits were lower for the six months ended
April 30, 1998 due to declining retail prices and higher cost green coffee
inventories as well as due to a management decision to reduce prices further on
certain products to attract larger customers. Retail selling prices, which were
generally higher in the beginning of fiscal 1998, declined in the three months
ended April 30, 1998.

      Selling and administrative expenses were $900,919 in the six months ended
April 30, 1998, an increase of $23,855 or 3% from $877,064 in the six months
ended April 30, 1997.

      The Company's interest expense increased $20,979 or approximately 13% from
$165,424 in the six months ended April 30, 1997 to $186,403 in the six months
ended April 30, 1998. Interest costs increased due to increased borrowings
needed to purchase higher cost green coffee.

      Other expenses in the six months ended April 30, 1998 also included
$180,000 of consulting and professional fees and other costs incurred in
connection with the reverse acquisition (the "Reverse Acquisition") by
Transpacific International Group Corp. that was effectively completed on
February 10, 1998.


                                       1
<PAGE>

      Primarily as a result of the decrease in gross profit, the increase in
operating expenses and the charge for costs incurred in connection with the
Reverse Acquisition, the Company had income of $421,052 before income taxes in
the six months ended April 30, 1998 compared to $1,209,745 in the six months
ended April 30, 1997.

      As further explained in Notes 2 and 9 of the notes to the financial
statements elsewhere herein, the Company was not required to record a provision
for Federal income taxes in the six months ended April 30, 1998 and 1997 because
it had elected to be taxed as an "S" Corporation during the period from November
1, 1997 to February 10, 1998 (the date of the Reverse Acquisition) and the six
months ended April 30, 1997 and it had a pre-tax loss during the period from
February 11, 1998 to April 30, 1998. Although the Company had potential benefits
of approximately $102,000 from net operating loss carryforwards as of April 30,
1998, it did not record a credit for income taxes in the six months ended April
30, 1998 due to the uncertainties related to the extent and timing of its future
taxable income. The Company had a historical provision for state and local
income taxes of $46,000 in the six months ended April 30, 1998 compared to
$142,534 in the six months ended April 30, 1997 primarily as a result of the
decrease in pre-tax income. Accordingly, the Company had historical net income
of $375,052 in the six months ended April 30, 1998 compared to $1,067,211 in the
six months ended April 30, 1997.

      The statement of operations included in the financial statements elsewhere
herein presents unaudited pro forma provisions for income taxes, net income and
related earnings per share information assuming the Company had not elected to
be taxed as an "S" Corporation during any portion of the six months ended April
30, 1998 and 1997. The Company would have had a provision for income taxes of
approximately $191,000 in the six months ended April 30, 1998 compared to
$544,000 in the six months ended April 30, 1997 assuming the "S" Corporation
elections had not been made primarily as a result of the decrease in pro forma
pre-tax income. The unaudited pro forma provisions for income taxes reflect an
effective rate of approximately 45% for each period comprised of an 11% rate for
state and local income taxes, net of the related Federal income tax effect, and
a statutory Federal income tax rate of 34%. On an unaudited pro forma basis, the
Company would have had net income of $230,052, or $.06 per share, in the six
months ended April 30, 1998 compared to $665,745, or $.17 per share, in the six
months ended April 30, 1997.

Three Months Ended April 30, 1998 Compared to Three Months Ended April 30, 1997

      Net sales totaled $6,324,247 in the three months ended April 30, 1998, a
decrease of $207,143 or 3% from $6,531,390 in the three months ended April 30,
1997. Net sales were down in the three months ended April 30, 1998 because some
of the Company's customers were slow in liquidating excess inventory and
therefore bought less product from the Company.

      Cost of sales in the three months ended April 30, 1998 was $6,181,727, or
98% of net sales, as compared to $4,826,402, or 74% of net sales in the three
months ended April 30, 1997. Cost of sales was increased due to the liquidation
of higher cost green coffee inventory.

      The Company's gross profit in the three months ended April 30, 1998 was
$142,520, a decrease of $1,562,468 or 92% from $1,704,988 in the three months
ended April 30, 1997. Gross profit as a percentage of net sales decreased by
approximately 24% to 2% in the three months ended April 30, 1998 from 26% in the
three months ended April 30, 1997 due to relatively high purchase prices for
green coffee as compared to lower retail and wholesale selling prices.

      Selling and administrative expenses were $407,752 in the three months
ended April 30, 1998, a decrease of $154,092 or 27% from $561,844 in the three
months ended April 30, 1997. As a percentage of net sales, this change
represented a 3% decrease from 9% in the three months ended April 30, 1997 to 6%
in the three months ended April 30, 1998.

      Interest expense increased $9,611 or 12% from $79,890 in the three months
ended April 30, 1997 to $89,501 in the three months ended April 30, 1998. The
increase was due to higher average balances which were partially offset by lower
interest rates on the Company's line of credit.

      Other expenses in the three months ended April 30, 1998 also included
$180,000 of expenses consisting of consulting and professional fees and other
costs incurred in connection with the Reverse Acquisition.

      Primarily as a result of the decrease in gross profit, the decrease in
operating expenses and the charge for costs incurred in connection with the
Reverse Acquisition, the Company had a loss of $607,233 before income taxes in
the three months ended April 30, 1998 compared to income of $1,006,709 before
income taxes in the three months ended April 30, 1997.


                                       2
<PAGE>

      The Company was not required to record a provision for Federal income
taxes in the three months ended April 30, 1998 and 1997 primarily because it had
a pre-tax loss during the three months ended April 30, 1998 and it had elected
to be taxed as an "S" Corporation during the three months ended April 30, 1997.
Although the Company had potential benefits of approximately $102,000 from net
operating loss carryforwards as of April 30, 1998, it did not record a credit
for income taxes in the three months ended April 30, 1998 due to the
uncertainties related to the extent and timing of its future taxable income. The
Company had a historical credit for state and local income taxes of $67,000 in
the three months ended April 30, 1998 compared to a historical provision of
$116,648 in the three months ended April 30, 1997 primarily as a result of the
decrease in pre-tax income. Accordingly, the Company had a historical net loss
of $540,233 in the three months ended April 30, 1998 compared to historical net
income of $890,061 in the three months ended April 30, 1997.

      Assuming the "S" Corporation election had not been made and an effective
income tax rate of approximately 45% for each period, as explained above, the
Company would have had a credit for income taxes of approximately $273,000 in
the three months ended April 30, 1998 compared to a provision for income taxes
of $453,000 in the three months ended April 30, 1997. On an unaudited pro forma
basis, the Company would have had a net loss of $334,233 or $.08 per share, in
the three months ended April 30, 1998 compared to net income of $553,709, or
$.14 per share, in the three months ended April 30, 1997.

Liquidity and Capital Resources

      As of April 30, 1998, the Company had working capital of approximately
$1,916,000, an increase of $2,453,000 from its working capital deficiency of
approximately $537,000 as of October 31, 1997. The Company's cash balance
decreased by approximately $129,000 to $70,000 as of April 30, 1998 from
$199,000 as of October 31, 1997. The working capital balance increased primarily
as a result of the replacement of borrowings obtained under a factoring
agreement that were payable on a short-term basis with borrowings obtained under
a credit facility from Nationscredit Commercial Corp. that 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 for equipment purchases of up to
$500,000. The line of credit provides for borrowings of up to 85% of the
Company's eligible trade accounts receivable and 60% of its eligible
inventories. The outstanding balance of approximately $2,587,000 as of April 30,
1998 approximated the maximum amount that the Company could borrow based on its
eligible trade accounts receivable and inventories as of that date. Interest is
payable monthly at the prime rate plus 1% (an effective rate of 9.5% at April
30, 1998). Assuming the Company has sufficient collateral, substantially all of
the balances outstanding under the credit facility will not have to be repaid
until November 20, 2000.

      The Company's current liabilities as of April 30, 1998 included a mortgage
note payable with a balance of $625,000 that was due on demand as a result of a
violation of certain covenants. The note was collateralized by restricted cash
investments with an approximate balance of $370,000. The Company repaid the
mortgage note in full on March 3, 1999, and generated a portion of the funds
required for the payment by liquidating the restricted investments.

      During the six months ended April 30, 1998, net cash provided by operating
activities totaled approximately $457,000 primarily as a result of the net
income generated during that period, adjusted to eliminate the effects of
charges for depreciation and amortization, and decreases in amounts receivable
from the Company's broker and customers that were partially offset by an
increase in inventories and a decrease in accounts payable. In addition to
repaying the outstanding balance under the factoring agreement through
borrowings under the line of credit, the Company also borrowed approximately
$488,000 under the line of credit for working capital purposes.

      During the six months ended April 30, 1998, the Company used approximately
$255,000 of its cash resources to purchase property and equipment and added
property and equipment totaling $288,500 by entering into capital leases. The
capital expenditures were made primarily to refurbish equipment, upgrade
capacity and purchase and install new manufacturing and other equipment
associated with production. Management expects that the Company's capital
expenditures will be made at a reduced rate over at least the next twelve
months. The Company also placed approximately $304,000 in restricted cash
investments to secure the mortgage note, as explained above, and made payments
aggregating approximately $115,000 to reduce its mortgage note, term loan and
capital lease obligations.

      Management believes, but cannot assure, that the Company will be able to
finance its operations, including increases in accounts receivable and
inventories, capital expenditures and debt repayments, over the next twelve
months through its existing cash resources, cash provided by operating
activities and/or borrowings under its credit facility.


                                       3
<PAGE>

Year 2000

      The Year 2000 problem concerns the inability of information systems and
systems with embedded chip technology to properly recognize and process
data-sensitive information beyond December 31, 1999. In the fall of 1997, the
Company and its information technology consultant assessed the Company's
personal computer hardware and its accounting software (which included accounts
receivable and payroll and inventory management) for Year 2000 readiness. The
Company concluded that its then accounting software and computer hardware and
system were not Year 2000 compliant.

      The Company installed software modifications and upgrades to its
accounting software in November 1997 at an approximate cost of $4,300.

      In April and August 1999, the Company replaced its computer hardware and
operating systems including its server and three workstations. The Company also
added an additional workstation. The total cost of the equipment, installation
and follow-up support was approximately $18,800. The Company also paid its
consultant $1,400 to oversee installation of the operating system.

      As of June 30, 2000, with regard to Year 2000, the Company had not
experienced any disruptions in its internal information systems or its business
activities with its suppliers and customers.


                                       4
<PAGE>

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS

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

      Interest Rate Risks

      The Company is subject to market risk from exposure to fluctuations in
interest rates. At April 30, 1998, the Company's long-term debt, other than
capitalized leases, consisted of approximately $75,000 of fixed rate debt and
approximately $3,600,000 of variable rate debt under its revolving line of
credit, term loan and mortgage note payable. Interest on the variable rate debt
was payable primarily at 1% above a specified prime rate. The Company does not
expect changes in interest rates to have a material effect on income or cash
flows in fiscal 1998, although there can be no assurance that interest rates
will not significantly change.

      Commodity Price Risks

      See Note 2 to the financial statements, Summary of Significant Accounting
Policies - "Hedging" for additional information regarding the Company's hedging
program.

      The supply and price of coffee beans are subject to volatility and are
influenced by numerous factors which are beyond the Company's control. The
Company uses coffee futures and options contracts for hedging purposes to
minimize the effect of changing green coffee prices and, if needed, to
supplement its supply. At April 30, 1998, the Company held options covering an
aggregate of 2,927,000 pounds of green coffee beans, which are exercisable in
fiscal 1998 at prices ranging from $1.35 to $1.45 per pound. The price per pound
of green coffee on the close of business on April 30, 1998 was $1.34. The
Company generally has been able to pass green coffee price increases through to
its customers, thereby maintaining its gross profits. However, the Company
cannot predict whether it will be able to pass inventory price increases through
to its customers in the future.


                                       5
<PAGE>

                                     PART II

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

      On February 10, 1998, Coffee Holding Co., Inc., a New York corporation,
merged with Transpacific International Group Corp. See Note 1 to Unaudited
Financial Statements.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits

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

3.1           Articles of Incorporation of Coffee Holding Co., Inc.

3.2           Certificate of Amendment of Articles of Incorporation of Coffee
              Holding Co., Inc.

3.3           By-Laws of Coffee Holding Co., Inc.

10.1          Lease with T&O Management Corp. dated August 15, 1997.

10.2          1998 Stock Option Plan

27            Financial Data Schedule

(b) There were no reports on Form 8-K filed during the period covered by this
report.


                                       6
<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.

    Signature                  Title                        Date
    ---------                  -----                        ----

/s/ Andrew Gordon   Chief Executive Officer, President      October 25, 2000
-----------------   and Treasurer
Andrew Gordon       (principal executive officer
                    and principal financial officer)


                                       7
<PAGE>

                                INDEX TO EXHIBITS

3.1        Articles of Incorporation of Coffee Holding Co., Inc.

3.2        Certificate of Amendment of Articles of Incorporation of Coffee
           Holding Co., Inc.

3.3        By-Laws of Coffee Holding Co., Inc.

10.1       Lease with T&O Management Corp. dated August 15, 1997.

10.2       1998 Stock Option Plan

27         Financial Data Schedule