COFFEE HOLDING CO INC Leases Disclosure

NOTE 10 - LEASES:

 

The following summarizes the Company’s operating leases:

 SCHEDULE OF OPERATING LEASES

		2025				2024
Right-of-use operating lease assets			2,084,175				1,166,537
Current lease liability			811,975				307,364
Non-current lease liability			1,530,096				865,668
Total lease liability			2,342,071				1,173,032

 

 

The amortization of the right-of-use asset for the years ended October 31, 2025 and 2024 was $785,957 and $315,414, respectively.

 

 

Maturities of lease liabilities by year for our operating leases are as follows:

 SCHEDULE OF MATURITY LEASE LIABILITY

2026			955,052
2027			818,259
2028			766,322
2029			66,619
Thereafter			-
Total lease payments			2,606,252
Less: imputed interest			(264,181	)
Present value of operating lease liabilities			2,342,071

 

The aggregate cash payments under these leasing agreements were $1,431,164 and $288,202 for the years ended October 31, 2025, and 2024, respectively.

 

Variable lease payments were $448,765 and $131,490 during the years ended October 31, 2025, and 2024, respectively. Operating lease costs were $982,398 and $426,200 for the years ended October 31, 2025, and 2024, respectively.

 

In May 2024, the Company modified its existing lease agreement pertaining to a portion of its office facility. The Company wrote off $1,848,032 in right-of-use assets and $2,058,599 lease liability associated with this agreement, resulting in a gain on extinguishment of lease of $210,567. On May 1, 2024, the Company entered into an amended lease agreement for the remaining portion of its office facility in Staten Island, NY, which changed the lease modification date to April 30, 2029. The amended lease commenced on May 1, 2024. The Company recognized a right-of-use asset and lease liability associated with this modified agreement of $547,975. As a result of the modification, the Company decreased its right-of-use asset by $1,300,057 and lease liability by $1,510,624 as of July 31, 2024.

 

In November 2024, the Company entered into a new lease in connection with the Second Empire Acquisition. As a result, the Company recognized a right-of-use asset and lease liability of $2,113,581 in connection with such new lease.

 

In October 2025, the Company ceased operations of its Comfort Foods manufacturing subsidiary and exited the leased facility located in North Andover, Massachusetts. The lease for this facility was scheduled to expire on May 31, 2028. Upon the closure of Comfort Foods, the Company determined that the right-of-use asset associated with the lease was fully impaired, as the facility would no longer be utilized in the Company’s operations. As a result, the Company recorded an impairment charge of $400,000 to write off the remaining ROU asset. Based on ongoing legal discussions with the landlord and management’s estimate of the expected settlement amount, the Company reduced the lease liability by approximately $200,000, which partially offset the impairment charge. After this adjustment, the remaining estimated lease liability is approximately $200,000, representing management’s best estimate of the Company’s remaining obligation under the lease. The related impairment charge is included in selling and administrative expenses in the consolidated statement of operations.