1007019--1/29/2007--COFFEE_HOLDING_CO

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Risk Factors Affecting Our Company Because our business is highly dependent upon a single commodity, coffee, any decrease in demand for coffee could materially adversely affect our revenues and profitability. If we are unable to geographically expand our branded and private label products, our growth will be impeded which could result in reduced sales and profitability. 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. Our revenues and profitability could be adversely affected if our joint ventures are not successful. Any inability to successfully implement our strategy of growth through selective acquisitions, licensing arrangements and other strategic alliances could materially affect our revenues and profitability. The loss of any of our key customers could negatively affect our revenues and decrease our earnings. If we lose our key personnel, including Andrew Gordon and David Gordon, our revenues and profitability could suffer. If our planned increase in marketing expenditures fails to promote and enhance our brands, the value of our brands could decrease and our revenues and profitability could be adversely affected. Our roasting methods are not proprietary, so competitors may be able to duplicate them, which could harm our competitive position. If our competitive position is weakened, our revenues and profitability could be materially adversely affected. 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. Since we rely heavily on common carriers to ship our coffee on a daily basis, any disruption in their services or increase in shipping costs could adversely affect our relationship with our customers, which could result in reduced revenues, increased operating expenses, a loss of customers or reduced profitability. If there was a significant interruption in the operation of either one of our 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. Risk Factors Related to the Coffee Industry Increases in the cost of high quality Arabica or Robusta coffee beans could reduce our gross margin and profit. Disruptions in the supply of green coffee could result in a deterioration of our relationship with our customers, decreased revenues or could impair our ability to grow our business. The coffee industry is highly competitive and if we cannot compete successfully, we may lose our customers or experience reduced sales and profitability.

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1007019--1/29/2007--COFFEE_HOLDING_CO_INC