Business Context and Reporting Period
Company: Coffee Holding Co., Inc. (JVA)
Filing Type: Form 8-K (Current Report)
Date of Report: February 26, 2025
Principal Event: Change in Registrant's Certifying Accountant.
Key Financial Metrics
This filing does not contain revenue, profit, cash flow, margin, debt, or liquidity figures. It is a disclosure regarding auditor changes and historical audit findings.
Material Changes and Auditor Transition
- Resignation: Marcum LLP resigned as the independent registered public accounting firm on February 26, 2025.
- Reason for Resignation: Marcum declined reelection due to the acquisition of its attest business by CBIZ CPAs P.C. on November 1, 2024.
- New Auditor: CBIZ CPAs P.C. was engaged as the independent registered public accounting firm for the fiscal year ending October 31, 2025, with Audit Committee approval.
- Historical Opinions: Marcum's reports for fiscal years ended October 31, 2024, and 2023, contained no adverse opinions or disclaimers. However, the 2023 report included an explanatory paragraph regarding the Company's ability to continue as a going concern.
Management Commentary, Risks, and Contingencies
Disagreements: The Company reported no disagreements with Marcum regarding accounting principles, financial statement disclosure, or auditing scope/procedures during the fiscal years ended October 31, 2024 and 2023, or through the date of resignation.
Reportable Events and Material Weaknesses: The filing discloses previously identified material weaknesses in internal controls, including:
- Inadequate controls to prevent/detect misstatements of inventory quantities at a subsidiary.
- Inappropriate system access controls over the financial reporting system (lack of segregation of duties).
- Inadequate controls for identifying and accounting for material contracts (e.g., failure to account for a material lease amendment).
- Inadequate controls over physical custody of hardware and records for the "Generations Coffee" and "Steep and Brew" operations following relocation.
- Inadequate controls regarding the preparation and review of journal entries and account reconciliations.
- Inaccurate accounting for intercompany eliminations in the fiscal year ended October 31, 2020.
- Inadequate controls for recording year-end accruals for vendor liabilities and calculating loan covenants.
Consultation: The Company did not consult with CBIZ CPAs P.C. regarding accounting principles or audit opinions prior to engagement.
Investor Verification Checklist
- Verify the status of the "going concern" qualification noted in the 2023 audit report.
- Review the specific remediation plans for the seven listed material weaknesses in internal controls.
- Confirm the transition timeline and scope of work for the new auditor, CBIZ CPAs P.C.
- Examine the impact of the inventory and contract control weaknesses on current financial statements.
- Check for any subsequent filings regarding the resolution of the lease amendment accounting error.