##### Table of Contents

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U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



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FORM 10-QSB



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



For the quarterly period ended September 30, 2003



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. 33-960-70-LA



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THANKSGIVING COFFEE COMPANY, INC.

(Exact name of small business issuer as specified in its charter)



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|California                                                     |  | 94-2823626                          
|-------------------------------------------------------------- |  | ------------------------------------
|(State or other jurisdiction of incorporation or organization) |  | (IRS Employer Identification Number)



|19100 South Harbor Drive Fort Bragg, California |  | 95437     
|----------------------------------------------- |  | ----------
|(Address of principal executive offices)        |  | (Zip Code)



Issuers
telephone number, including area code: 707: 964-0118



(Former name, former address and former fiscal year, if changed since last report.)



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



As of November 12, 2003 there were 1,234,544 shares outstanding of common stock of the
issuer.



Transitional Small Business Disclosure Format (check
one):    Yes ̈No  x



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##### Table of Contents

THANKSGIVING COFFEE COMPANY, INC.



INDEX



|PART I. FINANCIAL INFORMATION                                                             
|------------------------------------------------------------------------------------------
|                                                                                          
|Item 1.                                                                                   
|                                                                                          
|Balance Sheets as of September 30, 2003 and 2002                                          
|                                                                                          
|Statements of Income for the Three Months and Nine Months EndedSeptember 30, 2003 and 2002
|                                                                                          
|Statements of Accumulated Deficit for the Nine Months EndedSeptember 30, 2003 and 2002    
|                                                                                          
|Statements of Cash Flows for the Nine Months EndedSeptember 30,2003 and 2002              
|                                                                                          
|Notes to Financial Statements                                                             
|                                                                                          
|Item 2.                                                                                   
|                                                                                          
|Item 3.                                                                                   
|                                                                                          
|PART II. OTHER INFORMATION                                                                
|                                                                                          
|Item 1.                                                                                   
|                                                                                          
|Item 2.                                                                                   
|                                                                                          
|Item 3.                                                                                   
|                                                                                          
|Item 4.                                                                                   
|                                                                                          
|Item 5.                                                                                   
|                                                                                          
|Item 6.                                                                                   



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Thanksgiving Coffee Company, Inc.



Unaudited Financial Statements



For the Nine Months Ended September 30, 2003 and 2002



|ITEM 1.    Financial Statements   |  |    
|--------------------------------- |  | ---
|Balance Sheets                    |  | 4-5
|Statements of Income              |  | 6  
|Statements of Accumulated Deficit |  | 7  
|Statements of Cash Flows          |  | 8  
|Notes to Financial Statements     |  | 9  



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Thanksgiving Coffee Company, Inc.



Balance Sheets

Unaudited



|                                       |  | September 30, |           
|-------------------------------------- |  | ------------- | ----------
|                                       |  | 2003          |           
|Assets                                 |  |               |           
|Current assets                         |  |               |           
|Cash                                   |  | $             | 73,120    
|Accounts receivable, net of allowance  |  |               | 272,311   
|Inventories                            |  |               | 440,408   
|Prepaid expenses                       |  |               | 59,129    
|                                       |  |               |           
|Total current assets                   |  |               | 844,968   
|                                       |  |              
|Property and equipment                 |  |               |           
|Property and equipment                 |  |               | 2,704,992 
|Accumulated depreciation               |  |               | (2,124,678
|                                       |  |               |           
|Total property and equipment           |  |               | 580,314   
|                                       |  |              
|Other assets                           |  |               |           
|Deposits and other assets              |  |               | 43,402    
|Goodwill                               |  |               | 171,773   
|Other intangibles, net of amortization |  |               | 39,747    
|Deferred tax asset                     |  |               | 46,333    
|                                       |  |               |           
|Total other assets                     |  |               | 301,255   
|                                       |  |               |           
|Total assets                           |  | $             | 1,726,537 
|                                       |  |               |           



See accompanying
notes



4



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Thanksgiving Coffee Company, Inc.



Balance Sheets

Unaudited



|                                                                                                                          |  | September 30, |          
|------------------------------------------------------------------------------------------------------------------------- |  | ------------- | ---------
|                                                                                                                          |  | 2003          |          
|Liabilities and shareholders equity                                                                                      |  |               |          
|Current liabilities                                                                                                       |  |               |          
|Accounts payable                                                                                                          |  | $             | 340,868  
|WCMA credit line                                                                                                          |  |               | 139,019  
|Notes payable-WCMA, current portion                                                                                       |  |               | 56,250   
|Notes payable-other, current portion                                                                                      |  |               | 8,394    
|Notes payable-shareholders, current portion                                                                               |  |               | 25,169   
|Capital lease obligations, current portion                                                                                |  |               | 33,897   
|Accrued liabilities                                                                                                       |  |               | 75,255   
|Deferred income taxes                                                                                                     |  |               |         
|                                                                                                                          |  |               |          
|Total current liabilities                                                                                                 |  |               | 678,852  
|                                                                                                                          |  |              
|Long term debt                                                                                                            |  |               |          
|Notes payable-WCMA                                                                                                        |  |               | 159,375  
|Notes payable-other                                                                                                       |  |               |         
|Notes payable-shareholders                                                                                                |  |               |         
|Capital lease obligations                                                                                                 |  |               | 58,770   
|                                                                                                                          |  |               |          
|Total long term debt                                                                                                      |  |               | 218,145  
|                                                                                                                          |  |               |          
|Total liabilities                                                                                                         |  |               | 896,997  
|                                                                                                                          |  |              
|Shareholders equity                                                                                                      |  |               |          
|Common stock, no par value, 1,960,000 shares authorized, 1,234,544 shares issued and outstanding (981,000 are
restricted) |  |               | 861,816  
|Additional paid in capital                                                                                                |  |               | 24,600   
|Accumulated deficit                                                                                                       |  |               | (56,876  
|                                                                                                                          |  |               |          
|Total shareholders equity                                                                                                |  |               | 829,540  
|                                                                                                                          |  |               |          
|Total liabilities and shareholders equity                                                                                |  | $             | 1,726,537
|                                                                                                                          |  |               |          



See accompanying
notes



5



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Thanksgiving Coffee Company, Inc.



Statements of Income

Unaudited



|                                             |  | Three Month Periods Ended |           |   | Nine Month Periods Ended |  
|-------------------------------------------- |  | ------------------------- | --------- | - | ------------------------ | -
|                                             |  | Sept. 30, 2003            |           |   | Sept. 30, 2002           |  
|Income                                       |  |                           |           |   |                          |  
|Net sales                                    |  | $                         | 1,161,074 |   |                          | $
|Cost of sales                                |  |                           | 594,716   |   |                          |  
|                                             |  |                           |           |   |                          |  
|Gross profit                                 |  |                           | 566,358   |   |                          |  
|                                             |  |                           |           |  
|Operating expenses                           |  |                           |           |   |                          |  
|Selling, general and administrative expenses |  |                           | 556,573   |   |                          |  
|Depreciation and amortization                |  |                           | 41,582    |   |                          |  
|                                             |  |                           |           |   |                          |  
|Total operating expenses                     |  |                           | 598,155   |   |                          |  
|                                             |  |                           |           |   |                          |  
|Operating income (loss)                      |  |                           | (31,797   | ) |                          |  
|                                             |  |                           |           |  
|Other income (expense)                       |  |                           |           |   |                          |  
|Interest income                              |  |                           |          |   |                          |  
|Miscellaneous income (expense)               |  |                           | 773       |   |                          |  
|Gain on sale of equpment                     |  |                           |          |   |                          |  
|Interest expense                             |  |                           | (9,272    | ) |                          |  
|                                             |  |                           |           |   |                          |  
|Total other income (expense)                 |  |                           | (8,499    | ) |                          |  
|                                             |  |                           |           |   |                          |  
|Income (loss) before income taxes            |  |                           | (40,296   | ) |                          |  
|Income tax expense                           |  |                           |          |   |                          |  
|                                             |  |                           |           |   |                          |  
|Net income (loss)                            |  | $                         | (40,296   | ) |                          | $
|                                             |  |                           |           |   |                          |  
|Earnings (loss) per share (basic)            |  | $                         | (0.033    | ) |                          | $
|                                             |  |                           |           |   |                          |  
|Earnings (loss) per share (dilutive)         |  | $                         | (0.033    | ) |                          | $
|                                             |  |                           |           |   |                          |  



See accompanying
notes



6



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Thanksgiving Coffee Company, Inc.



Statements of Accumulated Deficit

Unaudited



|                                                   |  | September 30, |        
|-------------------------------------------------- |  | ------------- | -------
|                                                   |  | 2003          |        
|Retained earnings (accumulated deficit), beginning |  | $             | 43,121 
|Net income (loss)                                  |  |               | (99,997
|                                                   |  |               |        
|Accumulated deficit, ending                        |  | $             | (56,876
|                                                   |  |               |        



See accompanying
notes



7



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Thanksgiving Coffee Company, Inc.



Statements of Cash Flows

Unaudited



|                                                    |  | Nine Month PeriodsEnded September 30, |         
|--------------------------------------------------- |  | ------------------------------------- | --------
|                                                    |  | 2003                                  |         
|Operating activities                                |  |                                       |         
|Net income (loss)                                   |  | $                                     | (99,997 
|Noncash items included in net income (loss)         |  |                                       |         
|Depreciation and amortization                       |  |                                       | 139,827 
|Gain on sale of assets                              |  |                                       |        
|Changes in operating assets and liabilities         |  |                                       |         
|Receivables                                         |  |                                       | 38,152  
|Employee receivables                                |  |                                       | 2,470   
|Inventories                                         |  |                                       | (61,530 
|Prepaid expenses                                    |  |                                       | (30,177 
|Deposits and other assets                           |  |                                       | (5,830  
|Deferred income taxes                               |  |                                       | 25,074  
|Accounts payable                                    |  |                                       | 37,964  
|Accrued liabilities                                 |  |                                       | 20,456  
|                                                    |  |                                       |         
|Net cash provided by operating activities           |  |                                       | 66,409  
|                                                    |  |                                      
|Investing activities                                |  |                                       |         
|Proceeds from disposal of equipment                 |  |                                       |        
|Purchases of property and equipment                 |  |                                       | (76,554 
|Loan fees - intangibles                             |  |                                       | (2,000  
|                                                    |  |                                       |         
|Net cash used in investing activities               |  |                                       | (78,554 
|                                                    |  |                                      
|Financing activities                                |  |                                       |         
|Proceeds from note payable                          |  |                                       | 380,662 
|Repayments of notes payable and capital leases      |  |                                       | (360,571
|                                                    |  |                                       |         
|Net cash provided by (used in) financing activities |  |                                       | 20,091  
|                                                    |  |                                      
|Net increase in cash                                |  |                                       | 7,946   
|Cash at January 1, 2003 and 2002                    |  |                                       | 65,174  
|                                                    |  |                                       |         
|Cash at September 30, 2003 and 2002                 |  | $                                     | 73,120  
|                                                    |  |                                       |         



Supplemental disclosure of cash
flow information:



Interest paid for the nine months periods ended
September 30, 2003 and 2002 was $28,142 and $43,338, respectively.



See accompanying notes



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Thanksgiving Coffee Company, Inc.



Notes to Financial Statements



September 30, 2003



1. Summary of Significant Accounting Policies



Nature of Operations



Thanksgiving Coffee Company, Inc. (the Company), was incorporated in California in 1985. The Company purchases and roasts high-quality whole
bean coffees and sells them to restaurants, grocery stores and other retail outlets. Additionally, the Company produces and sells a line of high-quality tea products under the trademark of Royal Gardens Tea Company. Products are sold through the
Companys distribution network in Northern California or nationally through common carriers selling direct, brokers or distributors. Distributors and retailers do not have the right to return products. The Company also sells coffee, tea and
related specialty products through mail order and Internet sales on a nationwide basis.



Basis of Presentation



The Company has
prepared the financial statements on the accrual basis of accounting in accordance with generally accepted accounting principles in the United States of America. In the opinion of management, all adjustments considered necessary for a fair
presentation have been included.



Concentration of Credit Risk



The Company grants credit to customers in the retail and food service
industries throughout the country. Consequently, the Companys ability to collect the amounts due from customers is affected by economic fluctuations in the retail and food service industries.



Inventories



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



Property and Equipment



Property and equipment are carried at cost less accumulated depreciation. Depreciation is provided using the straight-line and 150% declining balance methods over
estimated useful lives of the assets. The following useful lives are used:



|Equipment                             |  | 7 to 12 years
|------------------------------------- |  | -------------
|Furniture and fixtures                |  | 5 to 7 years 
|Leasehold improvements                |  | 7 to 39 years
|Transportation equipment              |  | 5 years      
|Marketing equipment                   |  | 5 to 7 years 
|Capitalized website development costs |  | 3 years      



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Thanksgiving Coffee Company, Inc.



Notes to Financial Statements (continued)



1. Summary of Significant Accounting Policies (continued)



Property and Equipment (continued)



Leasehold improvements are carried at cost and are amortized over the shorter of their estimated useful lives or the related lease term. Expenditures for major renewals
that extend the useful lives of property, fixtures and improvements are capitalized. Expenditures for maintenance and repairs are charged to expense as incurred. Depreciation and amortization expense related to production facilities is included in
cost of sales.



Website development costs incurred in the operation phase that
will result in future added functionality are capitalized. Expenditures for training, administration and maintenance of an existing website are expensed as incurred.



For income tax purposes, depreciation is computed using the accelerated cost recovery system and modified cost recovery system.



Stock Based Compensation



The Company accounts for stock-based employee compensation arrangements in accordance with
the provisions of Accounting Principles Board (APB) Opinion No. 25, Accounting for Stock Issued to Employees, and its related interpretations. As such, compensation expense is recorded on the date of the grant only if the current
market price of the underlying stock exceeds the exercise price. The Company adopted the disclosure-only provisions of Statement of Financial Accounting Standards (FASB) No. 123, Accounting for Stock-Based Compensation, which
establishes a fair value method of accounting for stock options and similar equity instruments.



Goodwill and Other Intangible Assets



The Company adopted the provisions of Statement of Financial Accounting Standards (FASB) No. 142, Goodwill and Other Intangible Assets, as of January 1, 2002. Financial condition and results of operations in accordance
with Statement No. 142 are reflected in the accompanying 2003 interim financial statements. Intangible assets that do not have indefinite lives are amortized over their useful economic lives. Goodwill is tested annually for impairment. Impairment
losses, if any, are recorded in the statement of income as part of operating income.



Intangible assets are amortized over the following estimated useful lives using primarily straight-line basis.



|                |  | Life in Years
|--------------- |  | -------------
|Leasehold value |  | 14           
|Trademark       |  | 17           
|Refinance Cost  |  | 5            



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Thanksgiving Coffee Company, Inc.



Notes to Financial Statements (continued)



1. Summary of Significant Accounting Policies (continued)



Income Taxes



The Company accounts for income taxes under the asset and liability method as prescribed by Statement of Financial Accounting Standards
(FASB) No. 109, Accounting for Income Taxes. As such, deferred income tax assets and liabilities are recognized for the future tax consequences of the differences between the financial statement carrying amount of existing assets
and liabilities and their respective tax bases. Deferred income tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or
settled.



Profit Sharing Plan



The Company has a profit sharing plan covering substantially all of its employees. Benefits
are based upon years of service and the employees compensation during the employment period. No contributions to the profit sharing plan were made for the nine month period ended September 30, 2003.



Compensated Absences



Employees of the Company are entitled to paid vacation, paid sick days and personal days off, depending on job classification, length of
service, and other factors. The Companys policy is that fully vested vacation is accrued at each quarter end. The accrued liability for vacation pay was $4,600 as of September 30, 2003, and such amount was included in accrued liabilities.
Carryover paid sick days are not available, nor ever considered vested.



Advertising



Advertising costs are expensed as incurred,
except for direct-response advertising, which is capitalized and amortized over its expected period of future benefits. Direct-response advertising consists primarily of mail order solicitation and catalog costs, typically mailed to customers who
have specifically responded to this type of advertising. For the nine month period ended September 30, 2003, the Company did not engage in any direct-response advertising that would require capitalization. Advertising costs charged to expense were
$32,654 for the nine month period ended September 30 2003.



Use of
Estimates



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



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Thanksgiving Coffee Company, Inc.



Notes to Financial Statements (continued)



1. Summary of Significant Accounting Policies (continued)



Revenue Recognition



Revenue is recognized when persuasive evidence of an arrangement exists, delivery occurs, the sales price is fixed or determinable and
collectibility is reasonably assured. Product is considered delivered and revenue is recognized when title and risk of loss have been transferred to the customer. Under the terms and conditions of the sale, the transfer of title may occur either at
the time of shipment or when product is delivered to the customer.



2.
Accounts Receivable



Accounts receivable at September 30, 2003 consist of
the following:



|Accounts receivable                   |  | $ | 277,177 |  
|------------------------------------- |  | - | ------- | -
|Due from employees                    |  |   | 1,803   |  
|                                      |  |   |         |  
|                                      |  |   | 278,980 |  
|Less: Allowance for doubtful accounts |  |   | (6,669  | )
|                                      |  |   |         |  
|                                      |  | $ | 272,311 |  
|                                      |  |   |         |  



The Company utilizes a percentage
method to establish the allowance for doubtful accounts. The estimated allowance ranges from 1% to 10% of outstanding receivables at September 30, 2003. Bad debt expense for the nine month period ended September 30, 2003 was $10,066.



3. Inventories



Inventories at September 30, 2003 consist of:



|Coffee                                                  |  |   |        
|------------------------------------------------------- |  | - | -------
|Unroasted                                               |  | $ | 149,889
|Roasted                                                 |  |   | 80,026 
|Tea                                                     |  |   | 18,782 
|Packaging, supplies and other merchandise held for sale |  |   | 191,711
|                                                        |  |   |        
|Total inventory                                         |  | $ | 440,408
|                                                        |  |   |        



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Thanksgiving Coffee Company, Inc.



Notes to Financial Statements (continued)



4. Property and Equipment



Property and equipment at September 30, 2003 consist of the following:



|Equipment                             |  | $ | 1,574,680  |  
|------------------------------------- |  | - | ---------- | -
|Furniture and fixtures                |  |   | 294,567    |  
|Leasehold improvements                |  |   | 439,533    |  
|Transportation equipment              |  |   | 123,936    |  
|Marketing equipment                   |  |   | 18,427     |  
|Capitalized website development costs |  |   | 148,506    |  
|Property held under capital leases    |  |   | 105,343    |  
|                                      |  |   |            |  
|Total property and equipment          |  |   | 2,704,992  |  
|Accumulated depreciation              |  |   | (2,124,678 | )
|                                      |  |   |            |  
|Property and equipment, net           |  | $ | 580,314    |  
|                                      |  |   |            |  



Depreciation expense for the nine
month period ended September 30, 2003 was $134,324.



5. Goodwill and Other
Intangible Assets



There was no change in the carrying value of goodwill
during the nine months ended September 30, 2003.



Intangible assets subject to
amortization at September 30, 2003 consist of the following:



|Leasehold value          |  | $ | 67,000  |  
|------------------------ |  | - | ------- | -
|Trademark                |  |   | 5,127   |  
|Refinance cost           |  |   | 4,500   |  
|                         |  |   |         |  
|Total intangible assets  |  |   | 76,627  |  
|Accumulated amortization |  |   | (36,880 | )
|                         |  |   |         |  
|Intangible assets, net   |  | $ | 39,747  |  
|                         |  |   |         |  



Amortization expense for the nine
month period ended September 30, 2003 was $5,503.



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Thanksgiving Coffee Company, Inc.



Notes to Financial Statements (continued)



6. Long Term Debt



Notes Payable and Capital Lease Obligationsas of September 30, 2003



|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | 
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|Note payable to Merrill Lynch, monthly installments of $4,687 plus interest at 3.3% over the one month LIBOR rate beginning August 1, 2003 (4.42% at September 30, 2003), final
payment is due on July 1, 2007. The note payable and the Companys credit line are collateralized by a security interest of first priority in all accounts receivable, inventory, equipment, instruments, general intangibles and contract rights
along with a personal guarantee of up to $150,000 by Paul and Joan Katzeff. | 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | 
|Working capital line of credit ($200,000 maximum), payable to Merrill Lynch, interest only installments, at 3.3% over the one month LIBOR rate (4.42% at September 30, 2003),
renewable annually. The credit line and the Companys note payable are collateralized by a security interest of first priority in all accounts receivable, inventory, equipment, instruments, general intangibles and contract rights along with a
personal guarantee of up to $150,000 by Paul and Joan Katzeff.               | 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | 
|Note payable to majority shareholders, Paul and Joan Katzeff, payable in monthly installments of interest only at 12%, with balance due on demand after June 30, 1996.                                                                                                                                                                                                                                                                                                                                        | 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | 
|Note payable to majority shareholders, Paul and Joan Katzeff, payable in monthly installments of $1,649 including interest at 11.50%, with final payment due on November 17, 2003,
unsecured.                                                                                                                                                                                                                                                                                                                 | 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | 
|Note payable to Laoma Yaski for the purchase of Mendocino Bakery, payable in monthly installments of $4,249, including interest at 10%, secured by property and equipment at the
bakery, final payment due on November 14, 2003.                                                                                                                                                                                                                                                                              | 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | 
|Note payable to Chase Manhattan Bank, payable in monthly installments of $324, including interest at 8.637%, secured by a vehicle, final payment due on October 26, 2004. The note is
personally guaranteed by the Companys majority shareholders.                                                                                                                                                                                                                                                           | 



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Thanksgiving Coffee Company, Inc.



Notes to Financial Statements (continued)



6. Long Term Debt (continued)



|Note payable to Chase Manhattan Bank, payable in monthly installments of $304, including interest at 9.90%, secured by a vehicle, final payment due on November 16, 2005. The note is
personally guaranteed by the Companys majority shareholders. |  |   | 7,100    |  
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | - | -------- | -
|                                                                                                                                                                                                                                                    | 
|Note payable to Chrysler Financing, payable in monthly installments of $335, including interest at 6.00%, secured by a vehicle, final payment due on October 30, 2007.                                                                              |  |   | 14,529   |  
|                                                                                                                                                                                                                                                    | 
|Note payable to Avaya Financial Services, payable in monthly installments of $372, including interest at 12.91%, secured by equipment, final payment due on June 12, 2007.                                                                          |  |   | 13,393   |  
|                                                                                                                                                                                                                                                    | 
|Note payable to Manifest Leasing, payable in monthly installments of $444, including interest at 12.909%, secured by equipment, final payment due in March 2007.                                                                                    |  |   | 15,130   |  
|                                                                                                                                                                                                                                                    | 
|Note payable to National Financial Services, payable in monthly installments of $1,414, including interest at 10.512%, secured by equipment, final payment due on May 10,
2006.                                                                     |  |   | 38,504   |  
|                                                                                                                                                                                                                                                    |  |   |          |  
|                                                                                                                                                                                                                                                    |  |   | 480,873  |  
|Less current portion                                                                                                                                                                                                                                |  |   | (262,728 | )
|                                                                                                                                                                                                                                                    |  |   |          |  
|Long term portion of notes payable                                                                                                                                                                                                                  |  | $ | 218,145  |  
|                                                                                                                                                                                                                                                    |  |   |          |  



As of September 30, 2003, the
maturities of notes payable and capital lease obligations were as follows:



|Twelve Month Periods Ending September 30, |  |   |        
|----------------------------------------- |  | - | -------
|2004                                      |  | $ | 277,570
|2005                                      |  |   | 100,876
|2006                                      |  |   | 90,288 
|2007                                      |  |   | 11,139 
|2008                                      |  |   | 1,000  
|Thereafter                                |  |   |       
|                                          |  |   |        
|                                          |  | $ | 480,873
|                                          |  |   |        



Based on current borrowing rates, the
fair value of the notes payable approximate their carrying amounts.



15



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Thanksgiving Coffee Company, Inc.



Notes to Financial Statements (continued)



7. Income Taxes



The provision for income taxes as of September 30, 2003 consists entirely of the State current tax expense of $800. Changes in deferred tax assets are immaterial for the
nine month period ended September 30, 2003.



A reconciliation of the
Companys income tax benefit based on the Companys most recent fiscal year ended December 31, 2002 at the federal statutory rate is as follows:



|Statutory tax rate                 |  | 20.8 | %
|---------------------------------- |  | ---- | -
|Property and equipment differences |  | 3.9  | %
|Nondeductible expense              |  | 5.3  | %
|Officers life insurance           |  | 4.0  | %
|Other                              |  | 1.4  | %
|                                   |  |      |  
|Effective income tax benefit rate  |  | 27.7 | %
|                                   |  |      |  



The primary components of temporary
differences which give rise to the Companys net deferred tax asset at September 30, 2003 are as follows:



|Net operating loss and tax credit carryforwards |  | $ | 42,229
|----------------------------------------------- |  | - | ------
|Depreciation and amortization                   |  |   | 4,104 
|                                                |  |   |       
|Net deferred tax asset                          |  | $ | 46,333
|                                                |  |   |       



The Company has a $2,400 federal
general business credit carryforward and a California manufacturers credit carryforward of $13,486 which may be used to offset federal and California income taxes, respectively, in the future.



The Company also has available unused contribution and net operating loss carryforwards that
may provide future tax benefits and that expire as follows:



Federal



|Years Ending December
31, |  | Contributions |        | Net OperatingLoss |   | Total  
|------------------------- |  | ------------- | ------ | ----------------- | - | -------
|2003                      |  | $             | 11,289 |                   | $ |       
|2005                      |  |               | 12,067 |                   |   |       
|2006                      |  |               | 758    |                   |   |       
|2017                      |  |               |       |                   |   | 290,210
|2018                      |  |               |       |                   |   | 128,576
|                          |  |               |        |                   |   |        
|                          |  | $             | 24,114 |                   | $ | 418,786
|                          |  |               |        |                   |   |        



16



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##### Table of Contents

Thanksgiving Coffee Company, Inc.



Notes to Financial Statements (continued)



7. Income Taxes (continued)



California



|Years Ending December
31, |  | Contributions |        | Net OperatingLoss |   | Total 
|------------------------- |  | ------------- | ------ | ----------------- | - | ------
|2004                      |  | $             | 4,695  |                   | $ | 28,950
|2005                      |  |               | 12,051 |                   |   | 64,092
|2006                      |  |               | 5,397  |                   |   |      
|                          |  |               |        |                   |   |       
|                          |  | $             | 22,143 |                   | $ | 93,042
|                          |  |               |        |                   |   |       



Income taxes paid for the nine month
period ended September 30, 2003 were $800.



8. Operating Leases



The Company leases its delivery fleet, other vehicles and some office
equipment under noncancelable operating leases with terms ranging from three to five years.



As of September 30, 2003, minimum annual lease payments due under these agreements are as follows:



|Twelve Month Periods Ending September 30, |  |  
|----------------------------------------- |  | -
|2004                                      |  | $
|2005                                      |  |  
|2006                                      |  |  
|2007                                      |  |  
|2008                                      |  |  
|Thereafter                                |  |  
|                                          |  |  
|                                          |  | $
|                                          |  |  



Total operating lease payments were
$51,952 for the nine month period ended September 30, 2003.



9. Stock Option
Purchase Plan



At the discretion of the Board of Directors, the Company
has periodically granted stock options to employees. Outstanding options of 16,000 shares at September 30, 2003 were granted to a single former employee under an agreement amended in 1996. These options will expire in 2003 and the Company has no
future plans to offer stock option compensation to its employees or others. All of the 16,000 options outstanding as of September 30, 2003 are exercisable at an exercise price of $5.00 per share and expire on December 31, 2003.



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##### Table of Contents

Thanksgiving Coffee Company, Inc.



Notes to Financial Statements (continued)



9. Stock Option Purchase Plan (continued)



No options were granted during the nine month period ended September 30, 2003 and, accordingly, pro-forma income statement presentation as
required under FASB Statement No. 123, Accounting for Stock-Based Compensation is not applicable.



10. Long Term Leases



The Company leases its corporate headquarters, warehouse and waterfront facilities from Paul and Joan Katzeff (the Companys majority shareholders). The lease provides for monthly rental payments of $8,600 and
the Company is responsible for all real estate taxes, insurance and maintenance costs related to the facilities. The lease provides for periodic cost of living increases during the term of the lease, including the option periods. The Company
exercised an option to renew for one five-year term on March 31, 1995. The lease has been extended for successive one year terms since March 31, 2000. The Company continues to hold options to renew the lease for three successive five year renewal
periods when the current one-year term expires on March 31, 2004. Rental expense under the lease was $77,400 for the nine month period ended September 30, 2003. The Company intends to exercise all options under the terms of this lease.



The Company leases a bakery establishment in Mendocino, California. The lease currently
provides for monthly rental payments of $3,307 as of September 30, 2003. The lease term expires on September 30, 2011.



The Company leases warehouse premises in Santa Rosa, California. The Company exercised an option to renew the lease for a two year renewal period on February 1, 2003.



As of September 30, 2003, minimum future rental payments under facilities
operating leases are as follows:



|Twelve Month Periods Ending September 30, |  |  
|----------------------------------------- |  | -
|2004                                      |  | $
|2005                                      |  |  
|2006                                      |  |  
|2007                                      |  |  
|2008                                      |  |  
|Thereafter                                |  |  
|                                          |  |  
|                                          |  | $
|                                          |  |  



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##### Table of Contents

Thanksgiving Coffee Company, Inc.



Notes to Financial Statements (continued)



11. Related Party Transactions



The Company has (i) one interest only note payable due on demand and (ii) a principal and interest note, in each case payable to Paul and
Joan Katzeff (the Companys majority shareholders). Additionally, Paul and Joan Katzeff have personally guaranteed a portion of the Companys long term debt (see Note 6).



The Company also leases properties from its majority shareholders. In the nine month period ended September 30, 2003, the Company replaced
and upgraded the exterior of the office and the manufacturing facility leased from the majority shareholders (see Note 10).



The summary of payments made to Paul and Joan Katzeff in connection with these related party transactions for the nine month period ended September 30, 2003 are as
follows:



|Principal on notes |  | $ | 16,191
|------------------ |  | - | ------
|Interest expense   |  | $ | 2,430 
|Rent expense       |  | $ | 77,400



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##### Table of Contents

THANKSGIVING COFFEE COMPANY, INC.



ITEM 2.  MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS

OF
OPERATIONS



FORWARD LOOKING STATEMENTS



In addition to historical information, this Quarterly Report on Form 10-QSB contains
forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 as amended and Section 21E of the Securities Exchange Act of 1934 as amended. Words such as believe, anticipate, expect,
intend, plan, will, may, and other similar expressions identify forward-looking statements. In addition, any statements that refer to expectations, projections or other characterizations of future
events or circumstances are forward-looking statements. These statements relate to, among other things, sources of liquidity and capital (see Liquidity and Capital Resources). Any such statements should be considered in light of various risks and
uncertainties that could cause results to differ materially from expectations, estimates or forecasts expressed. The various risks and uncertainties include, but are not limited to: changes in general economic conditions, changes in business
conditions in the coffee industry, fluctuations in consumer demand for coffee products and in the availability and costs of green beans, increased competition within the Companys businesses, variances from budgeted sales mix and growth rate,
inability to hire, train and retain qualified personnel, concentration of production and sales in Northern California, the loss of one or more major customers, inability to successfully implement its business plan, natural disasters, civil unrest in
countries which produce coffee and tea, weather and other risks identified herein. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date of this Quarterly Report on Form 10-QSB.



Three Months Ended September 30, 2003 Compared With Three
Months Ended September 30, 2002



|Consolidated         |  | Increase (Decrease) |          |    | Percent Change |      
|-------------------- |  | ------------------- | -------- | -- | -------------- | -----
|Net Sales            |  | $                   | (108,782 | )  |                | (8.6 
|Cost of Sales        |  | $                   | (26,086  | )  |                | (4.2 
|Gross Margin         |  |                     | (2.30    | )% |                | (4.5 
|Selling, G&A Expense |  | $                   | 36,379   |    |                | 7.0  
|Deprec. and Amort.   |  | $                   | 1,782    |    |                | 4.5  
|Interest Expense     |  | $                   | (3,626   | )  |                | (29.1
|Net Income           |  | $                   | (117,928 | )  |                |     



Consolidated net sales for the three
months ended September 30, 2003 were $1,161,074 down 8.6% or nearly $109,000 when compared with net sales of $1,269,856 for the same period in fiscal 2002.



Distribution revenues (e.g., revenues generated on our own truck distribution) declined by nearly $40,000 or 6.2% for the three month period ended September 30, 2003 when
compared to the same period in fiscal 2002. The decline was a result of a general slowdown in all the territories of the Company and a loss of a major foodservice account in July, 2003 in Sonoma County.



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##### Table of Contents

National revenues (e.g., revenues not derived by mail order and direct truck distribution) decreased by $71,000 or 20.9%
for the three month period ended September 30, 2003, when compared to the same period in fiscal 2002, because of slow sales at a distributor in the southeast, a loss of customers by a distributor in southern California and a national account who has
experienced slow sales in their avenue of distribution.



Mail order
revenues (e.g., revenues generated from product sold directly to the consumer either through print media or the Internet) increased nearly $3,000 or 2.5%, for the three months ended September 30, 2003 when compared to the same period in fiscal 2002.
The increase in revenue for mail order reflects the addition of the Companys Cornucopia program, an extension of the mail order business that is designed to provide an avenue for non-profit organizations to raise money by selling
the Companys coffee to their constituency. This program was established during the third quarter of 2002. The traditional mail order catalog business was up $3,000 while Internet sales were up $6,000 or 16% for the quarter when compared to the
same period last year. Some of the increase in the Internet sales reflects the migration of traditional mail order customers to the Companys website and Internet store.



Sales attributable to operations of the Companys bakery were up $6,000 for the three months ended September 30, 2003, or 2.8%, when
compared to the same period in fiscal 2002.



Consolidated cost of sales
for the three months ended September 30, 2003 were $594,716, down 4.2% or $26,000 when compared with the cost of sales of $620,802 for the same period in fiscal 2002. This decrease was a result of lower sales volume and a decrease in per pound green
bean costs of $.10 per pound over last year, offset somewhat by increases in workers compensation and medical insurance costs.



Consolidated gross margin (gross profit as a percentage of net sales) for the three months ended September 30, 2003 was 48.8%, down 4.5% when compared with gross margin
of 51.1% for the same period in fiscal 2002. Lower per pound green bean cost were offset by the higher insurance costs as indicated above. There are no assurances that the Company will be able to sustain lower raw material costs or that insurance
costs may not exceed their current rate of increase.



Consolidated selling,
general and administrative expenses were $556,573 for the three months ended September 30, 2003, a 7.0% increase when compared with the selling, general and administrative expenses of $520,194 for the same period in fiscal 2002. The increase was due
to $18,000 to retain a public relations firm, $10,000 in higher liability and workers compensation insurance and $10,000 for wages for the Cornucopia program that began in September of 2002.



Depreciation and amortization expenses for the three months ended September 30, 2003 were
$41,582, slightly higher than depreciation and amortization expenses of $39,800 for the same period in fiscal 2002.



Interest expense for the three months ended September 30, 2003 was $9,272, a 29.1% decline from interest of $12,898 for the same period in fiscal 2002. The decrease in
interest was a result of lower interest rates because the Company refinanced its debt in June 2003, lowering its interest rate from 7.25% to 4.42%. Total borrowings increased by over $40,000 from $436,248 at September 30, 2002 to $480,874 at
September 30, 2003. The Company acquired a line of credit in June 2003 and borrowed $139,019 on the line at the end of September 2003. (See Liquidity and Capital Resource Section for details).



As a result of the foregoing factors, the Company had a consolidated net loss of $40,296 for
the three months ended September 30, 2003, compared to a $77,632 consolidated net profit for the same period in 2002. Because of the decline in sales and an increase in selling, general and administrative expenses as well as other factors noted
herein, there are no assurances that the Company will be profitable in any future period.



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##### Table of Contents

Nine Months Ended Sept. 30, 2003 Compared With Nine Months Ended Sept. 30, 2002



|Consolidated         |  | Increase (Decrease) |          |   | Percent Change |      
|-------------------- |  | ------------------- | -------- | - | -------------- | -----
|Net Sales            |  | $                   | (247,096 | ) |                | (7.7 
|Cost of Sales        |  | $                   | (132,832 | ) |                | (7.1 
|Gross Margin         |  |                     | .3       | % |                |     
|Selling, G&A Expense |  | $                   | 78,583   |   |                | 5.0  
|Deprec. and Amort.   |  | $                   | 1,865    |   |                | 1.5  
|Interest Expense     |  | $                   | (15,196  | ) |                | (35.1
|Net Income           |  | $                   | (166,278 | ) |                |      



Consolidated net sales for the nine
months ended September 30, 2003 were $3,434,123 down 7.7% or nearly $247,000 when compared with net sales of $3,681,219 for the same period in fiscal 2002.



Distribution revenues (e.g., revenues generated on our own truck distribution) declined by $153,000 or 8.9%. The decline continues to be a result of a general slowdown in
all the territories of the Company and the loss of a major foodservice account in the Sonoma County market.



National revenues (e.g., revenues not derived by mail order and direct truck distribution) declined by $100,000 or 12%. The decline was a result of slower sales to a distributor in the southeast, a large national
chain that was experiencing slow store volume and a loss of foodservice customers by a large distributor in southern California.



Mail order revenues (e.g., revenues generated from product sold directly to the consumer either through print media or the Internet) increased nearly $17,000 or 6% for
the nine months ended September 30, 2003 when compared to the same period in fiscal 2002. The increase in revenue for mail order reflects the addition of the Companys Cornucopia program, an extension of the mail order business that
is designed to provide an avenue for non-profit organizations to raise money by selling the Companys coffee to their constituencies. This program was established during the third quarter of 2002. The traditional mail order catalog business was
up $3,000 while Internet sales were up $23,000 or 20.7% for the six months compared to the same period last year. Some of the increase in the Internet sales reflects the migration of traditional mail order customers to the Companys website and
Internet store.



Sales attributable to the Companys bakery were down
$11,000 for the nine months ended September 30, 2003 or 1.8% when compared to the same period in fiscal 2002. A lower customer count when compared to last year resulted in the lower volume. Slower visitor business, particularly during the second
quarter, appeared to affect most local Mendocino businesses during this year.



Consolidated cost of sales for the nine months ended September 30, 2003 were $1,739,121, down 7.1% or $132,832 when compared with the cost of sales of $1,871,953 for the same period in fiscal 2002. The decrease was a result of lower sales
and a drop in per pound bean costs of 4.8% over the same period last year, offset by a rise in workers compensation and medical insurance costs.



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##### Table of Contents

Consolidated gross margin (gross profit as a percentage of net sales) for the nine months ended September 30, 2003 was
49.4 % an increase of .3% when compared with gross margin of 49.1% for the same period in fiscal 2002. Lower per pound bean costs offset somewhat by higher insurance costs resulted in slightly higher gross margins. Because of the erosion of gross
margins in the third quarter, there can be no assurances that the gross margin will not continue to erode in future quarters.



Consolidated selling, general and administrative expenses were $1,643,776 for the nine months ended September 30, 2003, a 5% increase or $78,583 when compared with
selling, general and administrative expenses of $1,565,193 for the same period in fiscal 2002. The increase is a result of $18,000 to retain a public relations firm, a write off of bad debts of $10,000, higher salaries for the Cornucopia program of
$30,000, higher costs of leasing delivery vehicles of $8,000 and higher health and workers compensation insurance of $10,000.



Depreciation and amortization expenses for the nine months ended September 30,2003 were $123,919 an increase of 1.8% or $1,865 when compared with depreciation and
amortization expenses of $122,054 for the same period in fiscal 2002.



Interest
expense for the nine months ended September 30, 2003 was $28,142, a 35.1% drop or $15,196. This drop was a result of a lower interest rate on debt previously with Wells Fargo at a rate of 7.25% that was refinanced with Merrill Lynch at a rate of
4.42%. Borrowings increased over $44,000, from $436,248 at September 30, 2002 to $480,874 at September 30, 2003. The Company established a line of credit in June 2003 and borrowed $139,019 on the line at the end of September 2003. (See Liquidity and
Capital Resources section for details).



As a result of the foregoing factors,
the Company had a consolidated net loss of $99,997 for the nine months ended September 30, 2003 compared to a consolidated net profit of $66,281 for the same period in 2002. Because of the decline in sales and an increase in selling and general and
administrative expense, as well as other factors noted herein, there can be no assurances that the Company will be profitable in any future period.



LIQUIDITY AND CAPITAL RESOURCES



As of September 30, 2003, the Company has working capital of $166,116 versus working capital of $249,799 as of September 30, 2002. This decrease in working capital is due
to an increase in debt resulting from an addition of a working capital line of credit in June 2003 and a reduction in cash.



Net cash provided by operating activities was $69,409 for the nine months ended September 30, 2003, compared to $258,961 provided by operating activities for the nine
months ended September 30, 2002. The decline in net cash provided by operating activities in the first nine months of 2003 was the result of a decline in sales and a large loss this year of $99,997, compared to a profit in the same period in fiscal
2002 of $66,281, resulting in a difference of over $166,000. An increase in deferred taxes of $25,409 also contributed to the decline in net cash for the period.



Cash used by investing activities was $78,554 for the nine months ended September 30, 2003 compared to $74,057 for the same period in 2002.
Capital additions for the first nine months of 2003 include $13,000 for the Companys website and web store, $27,000 for brewers, grinders and fixtures, $15,000 for replacing and upgrading the exterior of the building and $21,000 for decals for
trucks and $5,000 for packaging printing plates.



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##### Table of Contents

Net cash earned in financing activities for the nine months ended September 30, 2003 was $20,091 compared to cash used of
$158,750 during the same period in 2002. The proceeds received in the nine month period ended September 30, 2003 was a result of refinancing the Wells Fargo note and the establishment of a line of credit in June 2003 and drawing on that line during
the last three months (See below and Note 6 of Notes to Financial Statements).



Because of proceeds received in financing activities offset by lower cash generated by operating activities and a lower cash balance at January 1, 2003, cash at September 30, 2003 was $73,120 compared to cash at September 30, 2002 of
$125,210.



In June 2003, the Company refinanced its debt with Well Fargo by
securing a term note with Merrill Lynch for $225,000. This note is payable over four years at 3.3% over LIBOR (London Interbank Offering Rate). At September 30, 2003 the rate was 4.42%. This note extended the period for repayment of the loan over
four years rather than two and reduced the interest rate from 7.25% (3% over prime rate) to 4.42%. The cost of the loan facility was $2,000. In addition to the term loan, the Company negotiated a line of credit for $200,000. This line is renewable
annually, with an interest rate of 3.3% above LIBOR at a cost of $2,000. At September 30, 2003, the credit line had a loan balance of $139,019. The Companys accounts receivable, inventory, equipment, fixtures and improvements secure the
borrowings. The Companys majority shareholders have guaranteed $150,000 of the debt and the two vehicle related Chase Manhattan notes (See Note 6 of Notes to the Financial Statements).



In December of 2000, the Companys majority shareholders loaned the Company $50,000, on
an unsecured basis, payable in monthly installments of $1,649, due in November 2003. As of September 30, 2003, the principal amount of $3,250 remained outstanding on such loan. The Company has a loan outstanding for $21,919 at September 30, 2003
payable to the majority shareholders on demand.



At September 30, 2003, the
Company had total borrowings of $480,873 including $354,644 owing to Merrill Lynch. This compares to total borrowings of $436,248 as of September 30, 2002, including $301,600 outstanding to Wells Fargo at that time.



For long term debt, see Note 6 and Note 12 of the Notes to Financial Statements. For
operating leases, see Note 8 of the Notes to Financial Statements. For real estate leases, see Note 11 and Note 12 of the Notes to Financial Statements.



|                        |  | Payments Due By Period
|----------------------- |  | ----------------------
|Contractual Obligations |  | Total                 
|Long Term Debt          |  | $                     
|Operating Leases        |  |                       
|Real Estate Leases      |  |                       
|                        |  |                       
|Total Cash Obligations  |  | $                     
|                        |  |                       



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##### Table of Contents

The Company believes that its existing capital resources and revenues that it anticipates will be generated from
operations will be sufficient to meet its cash requirements for the next 12 months at its current level of operations.



The Company is dependent on successfully executing its business plan to achieve profitable operations, obtaining additional sources of borrowings (including normal trade
credit) and securing favorable financing arrangements (including lease financing) to finance its working capital needs. There can be no assurance that the Company will be successful in this regard. If the Company is not able to meet its credit
obligations, the Companys business could be materially and adversely affected.



RELATED PARTY TRANSACTIONS



From time to time, the Company
enters into various transactions with its majority shareholders, Paul and Joan Katzeff. See note 12  Related Party Transactions in the Notes to the Financial Statements.



SEASONALITY AND OTHER FACTORS AFFECTING PERFORMANCE



The Companys business is seasonal in nature. The seasonal availability of green bean
coffee in the first two quarters of the year and increased sales in the last quarter historically creates a high use of cash and a build up in inventories in the first two quarters, with a corresponding decrease in inventory and increase in cash in
the last quarter. Because of the seasonality of the Companys business, results for any quarter are not necessarily indicative of the results that may be achieved for the full fiscal year. Furthermore, past seasonal patterns are not necessarily
indicative of future results.



Equity Compensation Plan



The only equity compensation plan maintained by the Company is an option granted to a past
officer of the Company in fiscal 1997. This option expires on December 31, 2003.



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##### Table of Contents

Equity Compensation Plan Information



|                                                           |  | Number of securities to beissued upon exercise ofoutstanding options, warrantsand rights |  | Exercise price of outstanding options, warrants andrights |   | Number of securities Remainingavailable for future issuanceunder equitycompensationPlans
|---------------------------------------------------------- |  | ---------------------------------------------------------------------------------------- |  | --------------------------------------------------------- | - | ----------------------------------------------------------------------------------------
|Equity compensation Plans approved by Security holders     |  | 0                                                                                        |  |                                                           | 0 |                                                                                         
|Equity compensation Plans not approved by Security holders |  | 16,000                                                                                   |  | $                                                         | 5 |                                                                                         
|                                                           |  |                                                                                          |  |                                                           |   |                                                                                         
|Total                                                      |  | 16,000                                                                                   |  | $                                                         | 5 |                                                                                         
|                                                           |  |                                                                                          |  |                                                           |   |                                                                                         



See Note 10 and Note 12 of the Notes
to Financial Statements.



INDEMNIFICATION MATTERS



The Companys Bylaws provide that the Company may indemnify its directors, officers,
employees and other agents to the fullest extent permitted by California law. The Company believes that indemnification under its Bylaws also permits the Company to secure insurance on behalf of any officer, director, employee or other agent for any
liability arising out of his or her actions in such capacity, regardless of whether California law would permit indemnification. The Company maintains such liability insurance for its directors and certain officers and employees.



At present, there is no pending litigation or proceeding involving any director, officer,
employee or agent of the Company where indemnification would be required or permitted. The Company is not aware of any pending or threatened litigation or proceeding that might result in a claim for such indemnification.



ITEM 3.    CONTROLS AND PROCEDURES



An evaluation was performed under the supervision and with the participation of the Companys management, including the Chief Executive Officer and the President and Chief Financial Officer, of the effectiveness of the design,
maintenance, and operation of the Companys disclosure controls and procedures within 90 days before the filing date of this quarterly report. Based on that evaluation, the Companys management, including the Chief Executive Officer and
the President and Chief Financial Officer, concluded that the Companys disclosure controls and procedures were effective. There have been no significant changes in the Companys internal controls or in other factors that could
significantly affect internal controls subsequent to their evaluation.



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##### Table of Contents

Part II  Other Information



ITEM 1. LEGAL PROCEEDINGS



-None-



ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS



- None 



ITEM 3. DEFAULTS UPON SENIOR SECURITIES



- None 



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



- None -



ITEM 5. OTHER INFORMATION



- None 



ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K



| | a. | Exhibits
| | -- | --------



31.1 Rule 13a-14(a)/15d-14(a) Certification (Chief Executive Officer)



31.2 Rule 13a-14(a)/15d-14(a) Certification (Chief Financial Officer)



32.1 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
(Chief Executive Officer).



32.2 Certification pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Chief Financial Officer).



| | b. | Form 8-K
| | -- | --------



No reports on Form 8-K were filed during the period through September 30, 2003



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SIGNATURES



In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



THANKSGIVING COFFEE COMPANY, INC.



|Name                         |  | Title                   |  | Date             
|---------------------------- |  | ----------------------- |  | -----------------
|                             |  |                        
|/s/ Paul KatzeffPaul Katzeff |  | Chief Executive Officer |  | November 12, 2003
|                             |  |                        
|/s/ Joan KatzeffJoan Katzeff |  | President               |  | November 12, 2003



28