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What changed in COFFEE HOLDING CO INC's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of COFFEE HOLDING CO INC's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+83 added−118 removedSource: 10-K (2025-01-31) vs 10-K (2024-02-09)

Top changes in COFFEE HOLDING CO INC's 2024 10-K

83 paragraphs added · 118 removed · 73 edited across 5 sections

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

38 edited+3 added−30 removed85 unchanged
Biggest changeIn addition, the global macroeconomic environment could be negatively affected by, among other things, the COVID-19 pandemic or other epidemics, instability in global economic markets, increased U.S. trade tariffs and trade disputes with other countries, instability in the global credit markets, supply chain weaknesses, instability in the geopolitical environment as a result of the withdrawal of the United Kingdom from the European Union, the Russian invasion of Ukraine and the resulting prolonged conflict and other political tensions, and foreign governmental debt concerns.
Biggest changeGlobal conditions, dislocations in the financial markets, any negative financial impacts affecting United States corporations operating on a global basis as a result of tax reform or changes to existing trade agreements or tax conventions, or inflation, could adversely impact our business in a number of ways, including longer sales cycles, lower prices for our products, reduced licensing renewals, customer disruption or foreign currency fluctuations. 8 In addition, the global macroeconomic environment could be negatively affected by, among other things, the COVID-19 pandemic or other epidemics, instability in global economic markets, increased U.S. trade tariffs and trade disputes with other countries, instability in the global credit markets, supply chain weaknesses, instability in the geopolitical environment as a result of the withdrawal of the United Kingdom from the European Union, the Russian invasion of Ukraine and the resulting prolonged conflict and other political tensions, and foreign governmental debt concerns.
In addition, competitors may be able to develop roasting methods that are more advanced than our roasting methods, which may also harm our competitive position. 16 The success of our brand also depends in part on our intellectual property. We rely on a combination of trademarks, copyrights, service marks, trade secrets and similar rights to protect our intellectual property.
In addition, competitors may be able to develop roasting methods that are more advanced than our roasting methods, which may also harm our competitive position. The success of our brand also depends in part on our intellectual property. We rely on a combination of trademarks, copyrights, service marks, trade secrets and similar rights to protect our intellectual property.
Any one of these results could negatively affect our business, financial condition, and operating results and impair our ability to grow or sustain our business. 18 Risks related to the coffee industry Increases in the cost of high quality Arabica or Robusta coffee beans could reduce our gross margin and profit. Green coffee is our largest single cost of sales.
Any one of these results could negatively affect our business, financial condition, and operating results and impair our ability to grow or sustain our business. Risks related to the Coffee Industry Increases in the cost of high quality Arabica or Robusta coffee beans could reduce our gross margin and profit. Green coffee is our largest single cost of sales.
We are dependent on the continued operations of our Colorado and Massachusetts coffee roasting and distribution facilities. Our ability to maintain our computer and telecommunications equipment in effective working order and to protect against damage from fire, natural disaster, power loss, telecommunications failure or similar events.
We are dependent on the continued operations of our Colorado and Massachusetts coffee roasting and distribution facilities. Our operations depend on our ability to maintain our computer and telecommunications equipment in effective working order and to protect against damage from fire, natural disaster, power loss, telecommunications failure or similar events.
As a result, the effects of climate change could have a long-term adverse impact on our business and results of operations. The coffee industry is highly competitive and if we cannot compete successfully, we may lose our customers or experience reduced sales and profitability.
As a result, the effects of climate change could have a long-term adverse impact on our business and results of operations. 15 The coffee industry is highly competitive and if we cannot compete successfully, we may lose our customers or experience reduced sales and profitability.
ITEM 1A. RISK FACTORS An investment in our common stock is subject to risks inherent in our business. Before making an investment decision, you should carefully consider the risks and uncertainties described below together with all of the other information included in this report.
ITEM 1A. RISK FACTORS An investment in our common stock is subject to risks inherent in our business. Before making an investment decision, you should carefully consider the risks and uncertainties described below together with all of the other information included in this Annual Report.
Undetected material weaknesses in our internal control over financial reporting could lead to financial statement restatements and require us to incur the expense of remediation. 17 Moreover, we do not expect that disclosure controls or internal control over financial reporting will prevent all error and all fraud.
Undetected material weaknesses in our internal control over financial reporting could lead to financial statement restatements and require us to incur the expense of remediation. Moreover, we do not expect that disclosure controls or internal control over financial reporting will prevent all error and all fraud.
In addition, we may in certain circumstances be liable for the actions of our third-party joint venture partners. 14 Acquisitions including strategic investments or alliances entail numerous risks, which may include: ● difficulties in integrating acquired operations or products, including the loss of key employees from, or customers of, acquired businesses; ● diversion of management’s attention from our existing businesses; ● adverse effects on existing business relationships with suppliers and customers; ● adverse impacts of margin and product cost structures different from those of our current mix of business; and ● risks of entering distribution channels, categories or markets in which we have limited or no prior experience.
In addition, we may, in certain circumstances, be liable for the actions of our third-party joint venture partners. 10 Acquisitions including strategic investments or alliances entail numerous risks, which may include: ● difficulties in integrating acquired operations or products, including the loss of key employees from, or customers of, acquired businesses; ● diversion of management’s attention from our existing businesses; ● adverse effects on existing business relationships with suppliers and customers; ● adverse impacts of margin and product cost structures different from those of our current mix of business; and ● risks of entering distribution channels, categories or markets in which we have limited or no prior experience.
Joint venture partners may have business interests, strategies or goals that are inconsistent with our business interests, strategies or goals and may be, in cases where we have a minority interest, in a position to take actions contrary to our policies, strategies or objectives.
Joint venture partners may also have business interests, strategies or goals that are inconsistent with our business interests, strategies or goals and may be, in cases where we have a minority interest, in a position to take actions contrary to our policies, strategies or objectives.
The loss of, or reduction in sales to any of our other customers to which we sell a significant amount of our products or any material adverse change in the financial condition of such customers would negatively affect our revenues and decrease our earnings.
The loss of, or reduction in sales to any of our customers to which we sell a significant amount of our products or any material adverse change in the financial condition of such customers would negatively affect our revenues and decrease our earnings.
Our business strategy emphasizes, among other things, geographic expansion of our branded and private label products as opportunities arise. We may not be able to implement successfully this portion of our business strategy.
Our business strategy emphasizes, among other things, the geographic expansion of our branded and private label products as opportunities arise. We may not be able to implement successfully this portion of our business strategy.
Such losses have and could in the future materially increase our cost of sales and materially decrease our profitability or increase losses and adversely affect our stock price. 13 Any inability to successfully implement our strategy of growth through selective acquisitions, licensing arrangements and other strategic alliances, including joint ventures, could materially affect our revenues and profitability.
Such losses have and could in the future materially increase our cost of sales and materially decrease our profitability or increase losses and adversely affect our stock price. 9 Any inability to successfully implement our strategy of growth through selective acquisitions, licensing arrangements and other strategic alliances, including joint ventures, could materially affect our revenues and profitability.
No one customer accounted for greater than 10% of our net sales during our 2023 fiscal year. We generally do not enter long-term contracts with most of our customers. Accordingly, some of our customers can stop purchasing our products at any time without penalty and are free to purchase products from our competitors.
We had one customer that accounted for greater than 10% of our net sales during our 2024 fiscal year. We generally do not enter long-term contracts with most of our customers. Accordingly, some of our customers can stop purchasing our products at any time without penalty and are free to purchase products from our competitors.
We cannot predict the price at which our common stock will trade in the future and it may decline.
We cannot predict the price at which our common stock will trade in the future, and the price of our common stock may decline.
These provisions: ● provide that directors may only be removed upon a vote of at least eighty percent of the shares outstanding; ● establish advance notice requirements for nominating directors and proposing matters to be voted on by shareholders at shareholder meetings; ● limit the right of our stockholders to call a special meeting of stockholders; ● authorize our board of directors to issue preferred stock and to determine the rights and preferences of those shares, which would be senior to our common stock, without prior stockholder approval; ● require amendments to our articles of incorporation to be approved by the holders of at least eighty percent of our outstanding shares of common stock; ● a classified board of directors with three-year staggered terms, which may delay the ability of stockholders to change the membership of a majority of our board of directors; and ● provide a prohibition on stockholder action by written consent, thereby only permitting stockholder action to be taken at an annual or special meeting of our stockholders.
These provisions: ● provide that directors may only be removed upon a vote of at least eighty percent of the shares outstanding; ● establish advance notice requirements for nominating directors and proposing matters to be voted on by stockholders at stockholder meetings; ● limit the right of our stockholders to call a special meeting of stockholders; ● authorize our board of directors to issue preferred stock and to determine the rights and preferences of those shares, which would be senior to our common stock, without prior stockholder approval; ● require amendments to our articles of incorporation to be approved by the holders of at least eighty percent of our outstanding shares of common stock; ● a classified board of directors with three-year staggered terms, which may delay the ability of stockholders to change the membership of a majority of our board of directors; and ● provide a prohibition on stockholder action by written consent, thereby only permitting stockholder action to be taken at an annual or special meeting of our stockholders. 17 We are also subject to certain anti-takeover provisions under Nevada law.
As a result of the foregoing, period-to-period comparisons of our operating results may not necessarily be meaningful and those comparisons should not be relied upon as indicators of future performance. Accordingly, our operating results in future quarters may be below market expectations. In this event, the price of our common stock may decline.
As a result of the foregoing, period-to-period comparisons of our operating results may not necessarily be meaningful and those comparisons should not be relied upon as indicators of future performance. Accordingly, our operating results in future quarters may be below market expectations.
The market price and trading volume of our common stock has been volatile over the past year and it may continue to be volatile. Over the past fiscal year, our common stock has traded as low as $0.67 and as high as $2.78 per share.
The market price and trading volume of our common stock has been volatile over the past year, and it may continue to be volatile. Over the past fiscal year, our common stock has traded as low as $0.68 and as high as $3.88 per share.
Outstanding debt could have important negative consequences to the holders of our securities, including the following: ● general domestic and global economic conditions; ● a portion of our cash flow from operations will be needed to pay debt service and will not be available to fund future operations; ● we have increased vulnerability to adverse general economic and coffee industry conditions; ● we may be vulnerable to higher interest rates because interest expense on borrowings under our revolving line of credit is based on variable rates; and ● we may be subject to covenants that could restrict our operations.
Outstanding debt could have significant negative consequences to the holders of our securities, including the following: ● a portion of our cash flow from operations will be needed to pay debt service and will not be available to fund future operations; ● having increased vulnerability to adverse general economic and coffee industry conditions; ● we may be vulnerable to higher interest rates because interest expense on borrowings under our revolving line of credit is based on variable rates; and ● we may be subject to covenants that could restrict our operations. 11 Our ability to make payments on our indebtedness and to fund our operations depends on our ability to generate cash in the future.
We have been able to make alternative delivery arrangements for limited quantities of goods, at increased cost. 19 While we have not yet experienced material shortages in supply as a result of these disruptions and our alternative delivery arrangements, if they were to be prolonged or expanded in scope, there could be resulting supply shortages that could impact our ability to deliver our products to our customers.
While we have not yet experienced material shortages in supply as a result of these disruptions and our alternative delivery arrangements, if they were to be prolonged or expanded in scope, there could be resulting supply shortages that could impact our ability to deliver our products to our customers.
In addition, the failure of our suppliers and customers to adhere to the quality standards that we set for our products could lead to government investigations, litigation, write-offs and recalls, which could damage our reputation and our brand, increase our costs, and otherwise adversely affect our business.
In addition, the failure of our suppliers and customers to adhere to the quality standards that we set for our products could lead to government investigations, litigation, write-offs and recalls, which could damage our reputation and our brand, increase our costs, and otherwise adversely affect our business. 13 We rely on our reputation for offering great value, superior service and a broad assortment of high-quality, safe products.
The price at which our common stock trades may fluctuate significantly and may be influenced by many factors, including our financial results, developments generally affecting the coffee industry, general economic, industry and market conditions, the depth and liquidity of the market for our common stock, fluctuations in coffee prices, investor perceptions of our business, reports by industry analysts, negative announcements by our customers, competitors or suppliers regarding their own performances, and the impact of other “Risk Factors” discussed in this Annual Report. 21 Provisions in our articles of incorporation, bylaws and of Nevada law have anti-takeover effects that could prevent a change in control that could be beneficial to our stockholders, which could depress the market price of shares of our common stock.
The price at which our common stock trades may fluctuate significantly and may be influenced by many factors, including our financial results, developments generally affecting the coffee industry, general economic, industry and market conditions, the depth and liquidity of the market for our common stock, fluctuations in coffee prices, investor perceptions of our business, reports by industry analysts, negative announcements by our customers, competitors or suppliers regarding their own performances, and the impact of other “Risk Factors” discussed in this Annual Report.
The Gordon family has the ability to influence action requiring stockholder approval. Members of the Gordon family, including Andrew Gordon, our President, Chief Executive Officer, Chief Financial Officer and Treasurer, and David Gordon, our Executive Vice President and Secretary, own, in the aggregate, approximately 21.2% of our outstanding shares of common stock.
Members of the Gordon family, including Andrew Gordon, our President, Chief Executive Officer, Chief Financial Officer and Treasurer, and David Gordon, our Executive Vice President and Secretary, own, in the aggregate, approximately 23.1% of our outstanding shares of common stock.
If Arabica coffee beans from a region become unavailable or prohibitively expensive, we could be forced to discontinue particular coffee types and blends or substitute coffee beans from other regions in our blends. Frequent substitutions and changes in our coffee product lines could lead to cost increases, customer alienation and fluctuations in our gross margins.
If Arabica coffee beans from a region become unavailable or prohibitively expensive, we could be forced to discontinue particular coffee types and blends or substitute coffee beans from other regions in our blends.
Because we rely on a single commodity, any decrease in demand for coffee would harm our business more than if we had more diversified product offerings and could materially adversely affect our revenues and operating results. 11 Unfavorable global economic conditions and adverse developments with respect to financial institutions and associated liquidity risk could adversely affect our business, financial condition and stock price.
Because we rely on a single commodity, any decrease in demand for coffee would harm our business more than if we had more diversified product offerings and could materially adversely affect our revenues and operating results. Adverse global conditions, including economic uncertainty, may negatively impact our financial results.
Our sales and profitability may be adversely affected if we fail to successfully expand the geographic distribution of our branded and private label products.
Our sales and profitability may be adversely affected if we fail to successfully expand the geographic distribution of our branded and private label products. In addition, our expenses could increase and our profits could decrease as we implement our growth strategy.
The supply and price of coffee beans are subject to volatility and are influenced by numerous factors which are beyond our control. We have used and expect to continue to use to a lesser extent short-term coffee futures and options contracts for the purpose of hedging the effects of changing green coffee prices.
We have used and expect to continue to use to a lesser extent short-term coffee futures and options contracts for the purpose of hedging the effects of changing green coffee prices.
If there was a significant interruption in the operation of our Colorado or Massachusetts facilities, we may not have the capacity to service all of our customers and we may not be able to service our customers in a timely manner, thereby reducing our revenues and earnings.
Any significant increase in shipping costs could lower our profit margins or force us to raise prices, which could cause our revenue and profits to suffer. 12 If there was a significant interruption in the operation of our Colorado or Massachusetts facilities, we may not have the capacity to service all of our customers and we may not be able to service our customers in a timely manner, thereby reducing our revenues and earnings.
In addition, a delay in shipping could require us to contract with alternative, and possibly more expensive, common carriers and could cause orders to be cancelled or receipt of goods to be refused. Any significant increase in shipping costs could lower our profit margins or force us to raise prices, which could cause our revenue and profits to suffer.
In addition, a delay in shipping could require us to contract with alternative, and possibly more expensive, common carriers and could cause orders to be cancelled or receipt of goods to be refused.
If we are unable to continue as a going concern, our shareholders would likely lose some or all of their investment in our securities. There can be no assurance that we will be able to extend our line of credit or complete any financing transaction in a timely manner or on acceptable terms or otherwise.
There can be no assurance that we will be able to extend our line of credit or complete any financing transaction in a timely manner or on acceptable terms or otherwise.
We may experience supply delays and shortages due to a variety of macroeconomic factors, including disruptions on the global supply chain..
We may experience supply delays and shortages due to a variety of macroeconomic factors, including disruptions on the global supply chain. We have been able to make alternative delivery arrangements for limited quantities of goods, at increased cost.
If any of our relationships with coffee brokers, exporters or growers deteriorate, we may be unable to procure a sufficient quantity of high quality coffee beans at prices acceptable to us or at all. In such case, we may not be able to fulfill the demand of our existing customers, supply new retail stores or expand other channels of distribution.
We depend on our relationships with coffee brokers, exporters and growers for the supply of our primary raw material, high quality Arabica coffee beans. If any of our relationships with coffee brokers, exporters or growers deteriorate, we may be unable to procure a sufficient quantity of high quality coffee beans at prices acceptable to us or at all.
In addition, we could become subject to litigation relating to the existence of such compounds in our coffee; litigation that could be costly and could divert management attention. 20 Risks related to our common stock Our operating results may fluctuate significantly, which makes our results of operations difficult to predict and could cause our results of operations to fall short of expectations.
In addition, we could become subject to litigation relating to the existence of such compounds in our coffee; litigation that could be costly and could divert management attention.
We rely on our reputation for offering great value, superior service and a broad assortment of high-quality, safe products. If we become subject to unfavorable allegations, government investigations or legal actions involving our products or us, such circumstances could harm our reputation and our brand and adversely affect our business, financial condition and operating results.
If we become subject to unfavorable allegations, government investigations or legal actions involving our products or us, such circumstances could harm our reputation and our brand and adversely affect our business, financial condition and operating results. If this negative impact is significant, our ability to grow or sustain our business could be jeopardized.
A raw material shortage could result in a deterioration of our relationship with our customers, decreased revenues or could impair our ability to expand our business.
In such case, we may not be able to fulfill the demand of our existing customers, supply new retail stores or expand other channels of distribution. A raw material shortage could result in a deterioration of our relationship with our customers, decreased revenues or could impair our ability to expand our business.
From time to time, we utilize borrowings under our credit facility in connection with operations. The line is coming due at June 30, 2024. There is no assurance that it will be renewed.
Our indebtedness may adversely affect our ability to obtain additional funds and may increase our vulnerability to economic or business downturns. From time to time, we utilize borrowings under our credit facility in connection with operations. All amounts under this line of credit will become due on June 30, 2025. There is no assurance that it will be renewed.
In addition, our expenses could increase and our profits could decrease as we implement our growth strategy. 12 If our hedging policy is not effective, we may not be able to control our coffee costs, we may be forced to pay greater than market value for green coffee and our profitability may be reduced.
If our hedging policy is not effective, we may not be able to control our coffee costs, we may be forced to pay greater than market value for green coffee and our profitability may be reduced. The supply and price of coffee beans are subject to volatility and are influenced by numerous factors which are beyond our control.
Some of the Arabica coffee beans of the quality we purchase do not trade directly on the commodity markets. Rather, we purchase the high-end Arabica coffee beans that we use on a negotiated basis. We depend on our relationships with coffee brokers, exporters and growers for the supply of our primary raw material, high quality Arabica coffee beans.
Frequent substitutions and changes in our coffee product lines could lead to cost increases, customer alienation and fluctuations in our gross margins. 14 Some of the Arabica coffee beans of the quality we purchase do not trade directly on the commodity markets. Rather, we purchase the high-end Arabica coffee beans that we use on a negotiated basis.
If we are unable to make payments on our debt, we may have to reduce or delay capital expenditures, sell assets, seek additional capital or restructure or refinance our debt. Our credit facility contains covenants that place annual restrictions on our operations, including covenants relating to fixed charge coverage ratio, debt to tangible net worth and net worth.
Our future operating performance is subject to market conditions and business factors that are beyond our control. If we are unable to make payments on our debt, we may have to reduce or delay capital expenditures, sell assets, seek additional capital or restructure or refinance our debt.
Removed
The global credit and financial markets are currently, and have from time to time experienced extreme volatility and disruptions, including severely diminished liquidity and credit availability, rising interest and inflation rates, declines in consumer confidence, declines in economic growth, increases in unemployment rates and uncertainty about economic stability.
Added
Risks Related to our Common Stock Our operating results may fluctuate significantly, which makes our results of operations difficult to predict and could cause our results of operations to fall short of expectations.
Removed
The financial markets and the global economy may also be adversely affected by the current or anticipated impact of military conflict, including the ongoing conflict between Russia and Ukraine, terrorism or other geopolitical events.
Added
In this event, the price of our common stock may decline. 16 The Gordon family has the ability to influence action requiring stockholder approval.
Removed
Sanctions imposed by the United States and other countries in response to such conflicts, including the one in Ukraine, may also adversely impact the financial markets and the global economy, and any economic countermeasures by the affected countries or others could exacerbate market and economic instability.
Added
Provisions in our articles of incorporation, bylaws and of Nevada law have anti-takeover effects that could prevent a change in control that could be beneficial to our stockholders, which could depress the market price of shares of our common stock.
Removed
There can be no assurance that future credit and financial market instability and a deterioration in confidence in economic conditions will not occur. Our general business strategy may be adversely affected by any such economic downturn, liquidity shortages, volatile business environment or continued unpredictable and unstable market conditions.
Removed
If the equity and credit markets deteriorate, or if adverse developments are experienced by financial institutions, it may cause short-term liquidity risk and also make any necessary debt or equity financing more difficult, more costly, more onerous with respect to financial and operating covenants and more dilutive.
Removed
Failure to secure any necessary financing in a timely manner and on favorable terms could have a material adverse effect on our growth strategy, financial performance and stock price and could require us to delay or abandon clinical development plans.
Removed
In addition, there is a risk that one or more of our current service providers, financial institutions, manufacturers and other partners may be adversely affected by the foregoing risks, which could directly affect our ability to attain our operating goals on schedule and on budget. Adverse global conditions, including economic uncertainty, may negatively impact our financial results.
Removed
Global conditions, dislocations in the financial markets, any negative financial impacts affecting United States corporations operating on a global basis as a result of tax reform or changes to existing trade agreements or tax conventions, or inflation, could adversely impact our business in a number of ways, including longer sales cycles, lower prices for our products, reduced licensing renewals, customer disruption or foreign currency fluctuations.
Removed
If our indefinitely lived intangible assets or amortizable intangible assets become impaired, then we could be required to record a significant charge to earnings. GAAP requires us to test indefinite lived intangible asset impairment at least annually.
Removed
In addition, we review our indefinitely lived intangible assets and amortizable intangible assets for impairment when events or changes in circumstances indicate the carrying value may not be recoverable.
Removed
Factors that may be considered a change in circumstances indicating that the carrying value of our indefinite lived intangible assets or amortizable intangible assets may not be recoverable include declines in stock price, market capitalization or cash flows, and slower growth rates in our industry.
Removed
Depending on the results of our review, we could be required to record a significant charge to earnings in our consolidated financial statements during the period in which any impairment of our indefinite lived intangible assets or amortizable intangible assets were determined, negatively impacting our results of operations. 15 Our indebtedness may adversely affect our ability to obtain additional funds and may increase our vulnerability to economic or business downturns.
Removed
Our ability to make payments on our indebtedness and to fund our operations depends on our ability to generate cash in the future. Our future operating performance is subject to market conditions and business factors that are beyond our control.
Removed
The Company as of October 31, 2023 has failed to comply with one of these covenants and resulted in an event of default under the loan agreement. The lender has various defenses that it can apply against the Company, which includes up to and calling the line of credit.
Removed
There is no guarantee that the lender will not issue a waiver or not call the line of credit. There is substantial doubt about our ability to continue as a going concern. The Company’s line of credit is maturing on June 30, 2024 and in addition there are certain financial covenants that the Company are in violation with the lender.
Removed
The Company has not received a waiver from the lender. The lender has reserved its right to exercise its rights and remedies at any time at its sole discretion.
Removed
The uncertainties surrounding the ability to receive a waiver and extending its line of credit when it becomes due raise substantial doubt as to whether existing cash and cash equivalents will be sufficient to meet its obligations as they become due within twelve months from the date the consolidated financial statements were issued.
Removed
Our audited consolidated financial statements do not include any adjustments for the recovery and classification of assets or the amounts and classification of liabilities that might be necessary should we be unable to continue as a going concern.
Removed
Our remediation efforts may not enable us to avoid a material weakness in our internal control over financial reporting in the future. Any of the foregoing occurrences, should they come to pass, could negatively impact the public perception of our company, which could have a negative impact on our stock price.
Removed
During the years ended October 31, 2020, 2021 and 2022, we identified material weaknesses in our financial reporting, as set forth in Item 9A. Controls and Procedures. As of the date of this Annual Report, these material weaknesses have not been remediated.
Removed
If this negative impact is significant, our ability to grow or sustain our business could be jeopardized.
Removed
As disclosed further herein, we have been named as a defendant in one class action lawsuit, and we have agreed to indemnify a client named in another class action lawsuit, alleging that our products were mislabeled and thus violate consumer protection and false advertising statutes, among others.
Removed
These lawsuits, which generally allege that our coffee products do not make the number of servings as stated on the label, are affecting the entire coffee industry and numerous similar lawsuits have been filed against numerous private label coffee manufacturers and retailers.
Removed
We are also subject to certain anti-takeover provisions under Nevada law.
Removed
Risks Related to the Merger Completion of the Merger is subject to a number of conditions and if these conditions are not satisfied or waived, such transactions will not be completed.
Removed
Our obligation and the obligation of Delta to complete the Merger are subject to satisfaction or waiver of a number of conditions, including, among others: ● approval of the Merger by our stockholders; ● absence of injunctions or certain legal impediments; ● approval for the listing on NASDAQ of Pubco’s ordinary shares to be issued in the Merger; and ● accuracy of the representations and warranties of each of the parties, subject to certain materiality thresholds.
Removed
There can be no assurance that the conditions to closing set forth in the Merger Agreement will be satisfied or waived or that the Merger itself will be completed. Failure to complete the Merger could negatively impact our stock price, future business or operations.
Removed
If the Merger is not completed, JVA and Delta may be subject to a number of material risks, including the following: ● we may be required under certain circumstances to pay Delta a termination fee; ● the price of our common stock may decline to the extent that the relevant current market price reflects a market assumption that the Merger will be completed; ● costs related to the Merger, such as legal, accounting, certain financial advisory and financial printing fees, must be paid even if the Merger is not completed.
Removed
Further, if the Merger is terminated and either company’s board of directors determines to seek another merger or business combination, there can be no assurance that it will be able to find a partner on terms as attractive as those provided for in the Merger Agreement.
Removed
In addition, while the Merger Agreement is in effect and subject to very narrowly defined exceptions, we are prohibited from soliciting, initiating or encouraging or entering into certain extraordinary transactions, such as a merger, sale of assets or other business combination, other than with Delta.

Item 2. Properties

Properties — owned and leased real estate

3 edited+2 added−0 removed0 unchanged
Biggest changeWe pay annual rent of $168,288 under the terms of a lease, which expires in May 2028. We own a 50,000 square foot facility located at 27700 Frontage Road in La Junta, Colorado. We also use a variety of independent, bonded commercial warehouses to store our green coffee beans.
Biggest changeWe pay an annual rent of approximately $600,000 under the terms of the lease which expires November 2028. We also use a variety of independent, bonded commercial warehouses to store our green coffee beans. The Company pays for these warehouses based on the specific square footage used and can adjust depending on storage needs.
Our management believes that our facilities are adequate for our current operations and for our contemplated operations in the foreseeable future. 22
Our management believes that our facilities are adequate for our current operations and for our contemplated operations in the foreseeable future. 18
ITEM 2. PROPERTIES We are headquartered at 3475 Victory Boulevard, Staten Island, New York, where we lease office and warehouse space. We pay annual rent ranging from $182,749 to $297,864 under the terms of the lease, which expires on September 30, 2036. We lease production, warehouse and office space in North Arlington, MA.
ITEM 2. PROPERTIES We are headquartered at 3475 Victory Boulevard, Staten Island, New York, where we lease office and warehouse space. We pay annual rent ranging from $118,381 to $133,237 under the terms of the lease, which expires on April 30, 2029. We lease production, warehouse and office space in North Andover, MA.
Added
We pay an annual rent of $168,288 under the terms of a lease, which expires in May 2028. We lease production, warehouse and office space in Burlington, Washington. We pay an annual rent of $45,000 under the terms of a lease, which expires in December 2026.
Added
We own a 50,000 square foot facility located at 27700 Frontage Road in La Junta, Colorado used for office and warehouse space. In connection with the acquisition of Empire Coffee on November 6, 2024, we entered into a lease located at 21 Grace Church Street, Port Chester, New York.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeITEM 4. MINE SAFETY DISCLOSURES 23 PART II 23 ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES 23 ITEM 6. RESERVED 23 ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 24 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 29 ITEM 8.
Biggest changeITEM 4. MINE SAFETY DISCLOSURES 19 PART II 19 ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES 19 ITEM 6. RESERVED 19 ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 19 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 24 ITEM 8.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 29 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE 29 ITEM 9A. CONTROLS AND PROCEDURES 30 ITEM 9B. OTHER INFORMATION 30
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 24 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE 24 ITEM 9A. CONTROLS AND PROCEDURES 24 ITEM 9B. OTHER INFORMATION 26

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Removed
As of January, 15 2024, we had 170 holders of record.
Added
As of January 22, 2025 , we had 170 holders of record. Unregistered Sales of Equity Securities There were no sales of unregistered equity securities in the fiscal year ended October 31, 2024. Securities Authorized for Issuance under Equity Compensation Plans See “Item 11.
Added
Executive Compensation” for information regarding shares of our common stock authorized for issuance under our stock compensation plans, which information is incorporated herein by reference.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeAs a result of the Merger, each issued and outstanding share of our common stock will be cancelled and converted for the right of the holder thereof to receive one Pubco Ordinary Share. 25 Critical Accounting Policies and Estimates We prepare our consolidated financial statements in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”).
Biggest changeRecent Events See description of recent events of the Company in Item 1 – “Recent Developments”. Critical Accounting Policies and Estimates We prepare our consolidated financial statements in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”). Our significant accounting policies are described in Note 2 – Summary of Significant Accounting Policies to our consolidated financial statements attached hereto.
We have based these forward-looking statements upon information available to management as of the date of this Form 10-K and management’s expectations and projections about future events, including, among other things: ● our dependency on a single commodity could affect our revenues and profitability; ● our success in expanding our market presence in new geographic regions; ● the effectiveness of our hedging policy may impact our profitability; ● the success of our joint ventures; ● our success in implementing our business strategy or introducing new products; ● our ability to attract and retain customers; ● our ability to obtain additional financing; ● our ability to comply with the restrictive covenants we are subject to under our current financing; ● the effects of competition from other coffee manufacturers and other beverage alternatives; ● the impact to the operations of our Colorado facility; ● general economic conditions and conditions which affect the market for coffee; ● the macro global economic environment; ● our ability to maintain and develop our brand recognition; ● the impact of rapid or persistent fluctuations in the price of coffee beans; ● fluctuations in the supply of coffee beans; ● the volatility of our common stock; and ● other risks which we identify in future filings with the Securities and Exchange Commission (the “SEC”).
We have based these forward-looking statements upon information available to management as of the date of this Form 10-K and management’s expectations and projections about future events, including, among other things: ● our dependency on a single commodity could affect our revenues and profitability; ● our success in expanding our market presence in new geographic regions; ● the effectiveness of our hedging policy may impact our profitability; ● the success of our joint ventures; ● our success in implementing our business strategy or introducing new products; ● our ability to attract and retain customers; ● our ability to obtain additional financing; ● our ability to comply with the restrictive covenants we are subject to under our current financing; 19 ● the effects of competition from other coffee manufacturers and other beverage alternatives; ● the impact to the operations of our Colorado facility; ● general economic conditions and conditions which affect the market for coffee; ● the macro global economic environment; ● our ability to maintain and develop our brand recognition; ● the impact of rapid or persistent fluctuations in the price of coffee beans; ● fluctuations in the supply of coffee beans; ● the volatility of our common stock; and ● other risks which we identify in future filings with the Securities and Exchange Commission (the “SEC”).
Historically, we have used, and intend to continue to use in a limited capacity, short-term coffee futures and options contracts primarily for the purpose of partially hedging the effects of changing green coffee prices, as further explained in Note 2 of the Notes to the Consolidated Financial Statements in this Report.
Historically, we have used, and intend to continue to use in a limited capacity, short-term coffee futures and options contracts primarily for the purpose of partially hedging the effects of changing green coffee prices, as further explained in Note 2 of the Notes to the Consolidated Financial Statements in this Annual Report.
At October 31, 2023 our balance sheet reflected intangible assets as set forth below: October 31, 2023 Customer list and relationships, net $ 184,750 Trademarks and tradenames 327,000 $ 511,750 The trademarks which are deemed to have indefinite lives are subject to annual impairment tests.
At October 31, 2024 our balance sheet reflected intangible assets as set forth below: October 31, 2024 Customer list and relationships, net $ 154,250 Trademarks and tradenames 327,000 $ 481,250 The trademarks which are deemed to have indefinite lives are subject to annual impairment tests.
The dealers supply us with coffee beans from many countries, including Colombia, Mexico, Kenya, Indonesia, Brazil and Uganda. The supply and price of coffee beans are subject to volatility and are influenced by numerous factors which are beyond our control.
We purchase our green coffee from dealers located primarily within the United States. The dealers supply us with coffee beans from many countries, including Colombia, Mexico, Kenya, Indonesia, Brazil and Uganda. The supply and price of coffee beans are subject to volatility and are influenced by numerous factors which are beyond our control.
Our benefit for income taxes for the fiscal year ended October 31, 2023 totaled $268,220 compared to a benefit of $995,793 for the fiscal year ended October 31, 2022. The change was attributable to the difference in the income for the year ended October 31, 2023 versus fiscal year ended October 31, 2022. Net Loss .
Our expense for income taxes for the fiscal year ended October 31, 2024 totaled $849,885, compared to a benefit of $268,220 for the fiscal year ended October 31, 2023. The change was attributable to the difference in the income for the fiscal year ended October 31, 2024 versus the fiscal year ended October 31, 2023. Net Income (Loss) .
For the fiscal year ended October 31, 2023, the net result of our hedging activities resulted in a gain of approximately $189,000, and for the fiscal year ended October 31, 2022, the net result of our hedging activities resulted in a loss of approximately $100,000.
For the fiscal year ended October 31, 2024, the net result of our hedging activities resulted in a gain of approximately $1.6 million, and for the fiscal year ended October 31, 2023, the net result of our hedging activities resulted in a loss of approximately $189,000.
The change in cash flow from financing activities for the fiscal year ended October 31, 2023 was due to our decreased advances from our line of credit.
The change in cash flow from financing activities for the fiscal year ended October 31, 2024 was primarily due to our pay down of our line of credit.
To determine revenue recognition for the arrangements that we determine are within the scope of ASC 606, we perform the following five steps: (1) identify the contract(s) with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract and (5) recognize revenue when (or as) the entity satisfies a performance obligation.
To determine revenue recognition for the arrangements that we determine are within the scope of ASC 606, we perform the following five steps: (1) identify the contract(s) with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract and (5) recognize revenue when (or as) the entity satisfies a performance obligation. 21 We have intangible assets consisting of our customer lists and relationships and trademarks acquired from Comfort Foods, OPTCO and SONO.
Our significant accounting policies are described in Note 2 – Summary of Significant Accounting Policies to our consolidated financial statements attached hereto. We believe the following critical accounting policies involve the most significant judgements and estimates used in the preparation of our consolidated financial statements.
We believe the following critical accounting policies involve the most significant judgements and estimates used in the preparation of our consolidated financial statements.
The increased cash flow from operations for the fiscal year ended October 31, 2023 was primarily due to our lower net loss. For the fiscal year ended October 31, 2023, our investing activities used net cash of $857,760 as compared to the fiscal year ended October 31, 2022 when net cash used by investing activities was $1,059,205.
The increased cash flow from operations for the fiscal year ended October 31, 2024 was primarily due to our increased net income. 23 For the fiscal year ended October 31, 2024, our investing activities provided net cash of $2,843,069 as compared to the fiscal year ended October 31, 2023 when net cash used by investing activities was $857,760.
Gross profit as a percentage of net sales decreased to 16% for the fiscal year ended October 31, 2023 from 17% for the fiscal year ended October 31, 2022. The decrease in gross profit percentage was attributable to higher raw material costs. Operating Expenses.
Gross profit as a percentage of net sales increased to 20% for the fiscal year ended October 31, 2024, from 16% for the fiscal year ended October 31, 2023. The increase in gross profit percentage was attributable to higher sales volume during the current year. Operating Expenses.
We expect to fund our operations, including paying our liabilities, funding capital expenditures and making required payments on our indebtedness, through October 31, 2024 with cash provided by operating activities and the use of our credit facility. In addition, an increase in eligible accounts receivable and inventory would permit us to make additional borrowings under our line of credit.
We expect to fund our operations, including paying our liabilities, funding capital expenditures and making required payments on our indebtedness, through October 31, 2025 with cash provided by operating activities and the use of our credit facility.
For the fiscal year ended October 31, 2023 our financing activities provided net cash of $423,781 compared to net cash provided in financing activities of $5,316,311 for the fiscal year ended October 31, 2022.
For the fiscal year ended October 31, 2024 our financing activities had net cash used of $9,627,234 compared to net cash provided by financing activities of $423,781 for the fiscal year ended October 31, 2023.
In addition, we undertake no responsibility to update any forward-looking statement to reflect events or circumstances, that occur after the date of this annual report. 24 Overview We are an integrated wholesale coffee roaster and dealer in the United States and one of the few coffee companies that offers a broad array of coffee products across the entire spectrum of consumer tastes, preferences and price points.
Overview We are an integrated wholesale coffee roaster and dealer in the United States and one of the few coffee companies that offers a broad array of coffee products across the entire spectrum of consumer tastes, preferences and price points.
We had a loss of $1,103,796 before income taxes and non-controlling interest in subsidiary for the fiscal year ended October 31, 2023 compared to a loss of $5,597,650 for the fiscal year ended October 31, 2022, resulting in a net change of $4,493,854 for the year ended October 31, 2023. Income Taxes .
Income Before Provision For Income Taxes. We had an income of $3,135,145 before income taxes for the fiscal year ended October 31, 2024 compared to a loss of $1,103,796 for the fiscal year ended October 31, 2023, resulting in a net change of $4,238,941 for the year ended October 31, 2024. Income Taxes .
The increase in other income was attributable to an increase in other income of $634,181 due to an insurance claim and a $650,000 gain from the sale of an investment, an increase in interest income of $4,853, partially offset by an increase in interest expense of $338,308 and an increase in our loss from equity investments of $464,077.
The decrease in other income of $123,558 was attributable to other income in the prior year of $634,181 due to an insurance claim and a $650,000 gain from the sale of an investment offset by a decrease of $322,961 of interest expense, decrease from a loss from equity method investments of $511,878, and an increase from the gain from an extinguishment of a lease of $210,567 in the current year.
We had a net loss of $835,576 or $0.15 per share basic and diluted, for the fiscal year ended October 31, 2023 compared to a net loss of $3,744,785, or $0.66 per share basic and diluted for the fiscal year ended October 31, 2022.
We had net income of $2.2 million, or $0.39 of per share basic and diluted, for the fiscal year ended October 31, 2024 compared to a net loss of ($835,576), or ($0.15) per share basic and diluted, for the fiscal year ended October 31, 2023. The decrease in net loss was due to our results of operations as described above.
They can be affected by inaccurate assumptions we might make or by known or unknown risks and uncertainties. Consequently, no forward-looking statement can be guaranteed.
They can be affected by inaccurate assumptions we might make or by known or unknown risks and uncertainties. Consequently, no forward-looking statement can be guaranteed. In addition, we undertake no responsibility to update any forward-looking statement to reflect events or circumstances, that occur after the date of this annual report.
The decrease in our uses of cash in investing activities was due to our decreased outlays for purchases of machinery and equipment during the fiscal year ended October 31, 2023.
The increase in our uses of cash in investing activities was due to our proceeds from the sale of our investment during the fiscal year ended October 31, 2024.
Net sales totaled $68,173,404 for the fiscal year ended October 31, 2023, an increase of $2,466,525, or 4%, from $65,706,879 for the fiscal year ended October 31, 2022. The increase in net sales was due to an increase of sales to our legacy customers along with incremental sales to several significant new customers during the second half of the year.
The increase in net sales was due to an increase of sales to our legacy customers along with incremental sales to several significant new customers during the second half of the year. Cost of Sales.
Total operating expenses decreased by $4,862,129 to $12,290,717 for the fiscal year ended October 31, 2023 from $16,352,846 for the fiscal year ended October 31, 2022. Selling and administrative expenses decreased $2,108,250, to $11,680,782 for the fiscal year ended October 31, 2023 from $12,989,032 for the fiscal year ended October 31, 2022.
Total operating expenses increased by $787,494 to $13,078,211 for the fiscal year ended October 31, 2024, from $12,290,717 for the fiscal year ended October 31, 2023. Selling and administrative expenses increased from $11,680,782 for the year ended October 31, 2023, to $12,457,268 for the fiscal year ended October 31, 2024.
Other income for the fiscal year ended October 31, 2023 was $227,899, an increase of $485,649 from other expense of $258,750 for the fiscal year ended October 31, 2022.
Other income for the fiscal year ended October 31, 2024 was $104,341, a decrease of $123,558 from other income of $227,899 for the fiscal year ended October 31, 2023.
Cost of sales consists primarily of the cost of green coffee and packaging materials and realized and unrealized gains or losses on hedging activity.
Cost of sales for the fiscal year ended October 31, 2024 was $62,520,529, or 80% of net sales, as compared to $57,214,382, or 84% of net sales, for the fiscal year ended October 31, 2023. Cost of sales consists primarily of the cost of green coffee and packaging materials and realized and unrealized gains or losses on hedging activity.
Upon completion of each annual review, there can be no assurance that a material charge will not be recorded.
Upon completion of each annual review, there can be no assurance that a material charge will not be recorded. Impairment testing is required more often than annually if an event or circumstance indicates that an impairment or decline in value may have occurred.
The increase in cost of sales was due to increased prices of green coffee, freight, salaries and packaging materials. Gross Profit. Gross profit for the fiscal year ended October 31, 2023 was $10,959,022, a decrease of $54,924 from $11,013,946 for the fiscal year ended October 31, 2022.
The increase in the cost of sales was due to higher sales volume, salaries and packaging materials offset by the hedging activities discussed above. Gross Profit. Gross profit for the fiscal year ended October 31, 2024 was $16,041,769 an increase of $5,082,747 from $10,959,022 for the fiscal year ended October 31, 2023.
If we are unable to continue as a going concern, our shareholders would likely lose some or all their investment in our securities. 28 For the fiscal year ended October 31, 2023, our operating activities provided net cash of $652,083 as compared to the fiscal year ended October 31, 2022 when operating activities used net cash of $5,437,508.
For the fiscal year ended October 31, 2024, our operating activities provided net cash of $5,431,211 as compared to the fiscal year ended October 31, 2023 when operating activities used net cash of $652,083.
The decrease in net loss was due to our results as described above. 27 Liquidity and Capital Resources As of October 31, 2023, we had working capital of $18,600,262, which represented a $6,661,962 decrease from our working capital of $25,262,224 as of October 31, 2022.
Liquidity and Capital Resources As of October 31, 2024, we had working capital of $21,526,983, which represented a $2,926,721 increase from our working capital of $18,600,262 as of October 31, 2023.
(“CFI”), a Massachusetts based medium sized coffee roaster, manufacturing both branded and private label coffee for retail and foodservice customers. In April 2018, Generations Coffee Company, the entity formed as a result of our joint venture with Caruso’s Coffee, Inc., purchased substantially all the assets of Steep & Brew, Inc.
(“CFI”), a Massachusetts based medium sized coffee roaster, manufacturing both branded and private label coffee for retail and foodservice customers. On November 11, 2024, we acquired substantially all of the assets of Empire Coffee, a NY based long-running private-label roaster. 20 Our net sales are affected by the price of green coffee.
Operating expenses decreased primarily due to the termination of our Generations joint venture and no operating expenses for this joint venture for the year ended October 31, 2023 compared to the year ended October 31, 2022, partially offset by increase in various other categories. Other Income (Expense).
Officers’ salaries increased from $609,935 for the fiscal year ended October 31, 2023 to $620,943 for the fiscal year ended October 31, 2024. Operating expenses increased primarily due to an increase in freight charges relating to our increase in sales. 22 Other Income (Expense).
Removed
As of the fiscal period ending January 31, 2022, we agreed with Generations to no longer move forward with this joint venture. Our net sales are affected by the price of green coffee. We purchase our green coffee from dealers located primarily within the United States.
Added
RESULTS OF OPERATIONS Year Ended October 31, 2024 (Fiscal Year 2024) Compared to the Year Ended October 31, 2023 (Fiscal Year 2023) Net Sales. Net sales totaled $78,562,298 for the fiscal year ended October 31, 2024, an increase of $10,388,894, or 15%, from $68,173,404 for the fiscal year ended October 31, 2023.
Removed
Recent Events On September 29, 2022, we entered into the Merger Agreement, Upon the terms and subject to the conditions set forth in the Merger Agreement, Merger Sub will merge with and into JVA, with JVA surviving as a direct, wholly-owned subsidiary of Pubco.
Added
Our working capital increase was primarily due to the outstanding balance on our line of credit of $0 as of October 31, 2024, compared to $9,620,000 as of October 31, 2023.
Removed
We have intangible assets consisting of our customer lists and relationships and trademarks acquired from Comfort Foods, OPTCO and SONO.
Added
On June 27, 2024, we reached an agreement for a new loan modification agreement with Webster which (i) provided for a new loan maturity date of June 29, 2025, (ii) provided that the applicable margin requirement for any revolving loan outstanding under the A&R Loan Agreement to 2.25%, (iii) provided that the maximum facility amount shall be $10,000,000 and (iv) to adjusted certain definitions and terms related to the borrowing base and leverage ratios applicable to the A&R Loan Agreement.
Removed
Impairment testing is required more often than annually if an event or circumstance indicates that an impairment or decline in value may have occurred. 26 RESULTS OF OPERATIONS Year Ended October 31, 2023 (Fiscal Year 2023) Compared to the Year Ended October 31, 2022 (Fiscal Year 2022) Net Sales.
Removed
Cost of Sales. Cost of sales for the fiscal year ended October 31, 2023 was $57,214,382, or 84% of net sales, as compared to $54,692,933, or 83% of net sales, for the fiscal year ended October 31, 2022.
Removed
Goodwill and other intangible impairment during fiscal year ended October 31, 2023 amounted to $0. A decrease of $2,769,552 as compared to fiscal year ended October 31, 2022.
Removed
Loss Before Provision For Income Taxes And Non-Controlling Interest In Subsidiary.
Removed
Our working capital decrease was primarily due to decreases of $265,675 in inventory, $500,279 in prepaid and refundable taxes, $473,132 in due from broker, $18,374 in prepaid expenses and other current assets, increases of $1,391,578 in accounts payable and accrued expenses, $34,891 in lease liability – current portion and the inclusion of our line of credit of $9,620,000, partially offset by increases of $218,104 in cash, $3,316,559 in accounts receivable and decreases of $876,148 in cash overdraft and $1,231,156 in due to broker As of October 31, 2023, the outstanding balance on our line of credit was $9,620,000 compared to $8,314,000 as of October 31, 2022.
Removed
We are subject to certain covenants with respect to our credit agreement and we were not in compliance with the net profit and non-borrower affiliate covenants as of October 31, 2022. We requested a waiver from the lender and the waiver was granted and received on March 15, 2023.
Removed
The lender also extended the due date of the October 31, 2022 financial statements until April 15, 2023.
Removed
On March 15, 2023, the A&R Loan Agreement was also modified to, among other things: (i) provide for a requirement for subordination agreements if necessary, (ii) change the terms of transactions with affiliates from a dollar limitation to allowable in the ordinary course of business, and (iii) establish a new covenant for a fixed charge coverage ratio.
Removed
As of October 31, 2023, we were not in compliance with the terms of the credit agreement. The Company has not received a waiver from the lender. The lender has reserved its right to exercise its rights and remedies at any time at its sole discretion.
Removed
These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Our audited consolidated financial statements do not include any adjustments for the recovery and classification of assets or the amounts and classification of liabilities that might be necessary should we be unable to continue as a going concern.
Removed
We are in the process of renewing our credit facility. We believe that if the Merger with Delta closes, the A&R Loan Agreement and A&R Loan Facility with Webster Bank will continue in the ordinary course.

Other JVA 10-K year-over-year comparisons