Business Context and Reporting Period
Company: Coffee Holding Co., Inc. (JVA)
Filing Type: Form 8-K (Current Report)
Date of Report: October 15, 2020
Event: Entry into a Contribution and Equity Purchase Agreement to acquire a 49% ownership stake in The Jordre Well, LLC, a cannabidiol (CBD) beverage company.
Key Financial Metrics
This filing is a current report regarding a corporate transaction and does not contain periodic financial statements. Consequently, specific values for revenue, profit, cash flow, margins, debt, and liquidity are not provided in this document.
Material Changes and Transaction Details
- Strategic Partnership: The Company entered a joint venture with The Jordre Well to develop and commercialize CBD-infused line extensions for existing coffee brands and launch new non-coffee CBD beverages.
- Equity Issuance: The Company agreed to issue up to 278,500 shares of common stock to The Jordre Well.
- Issuance Schedule:
- 139,250 shares issued on the effective date (October 15, 2020).
- 139,250 shares to be issued upon the joint venture generating $500,000 in revenue.
- Regulatory Basis: The issuance relied on the exemption from registration under Section 4(a)(2) of the Securities Act.
Guidance, Outlook, and Risks
Outlook: Management intends to leverage this partnership to serve consumer demand for functional beverages and CBD-infused products.
Risks/Contingencies: The filing does not explicitly detail specific risks or contingencies beyond the standard nature of entering a new market segment (CBD) and the conditional nature of the second tranche of stock issuance.
Investor Verification Checklist
- Verify the exact number of shares issued on October 15, 2020, and the resulting dilution impact on existing shareholders.
- Monitor the joint venture's progress toward the $500,000 revenue milestone required for the issuance of the remaining 139,250 shares.
- Review the full text of the Contribution and Equity Purchase Agreement (if available in subsequent filings) for specific terms regarding governance and profit sharing.
- Assess regulatory risks associated with the CBD market and the Company's ability to commercialize these products across its distribution network.