JVA 10-K & 10-Q changes, risk factors and insider trading

Risks affectingRelated to our Company

Adverse global conditions, including tariffs and economic uncertainty, may negatively impact our financial results.

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 reformreform. tariffs, or changes to existing trade agreements or tax conventions, or inflation, could adversely impact 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.

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. Such challenges have caused, and may continue to cause, uncertainty and instability in local economies and in global financial markets.

We had one customer that accounted for greater than 10% of our net sales during oureach of the 2025 and 2024 fiscal year.years, and such customer was the same in both periods. 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. 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.

If there was a significant interruption in the operation of our Colorado or MassachusettsNew York 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.

We are dependent on the continued operations of our Colorado and MassachusettsNew York coffee roasting and distribution facilities. Our operations depend depend on our ability to maintain our computer and telecommunications equipment in effective working order and to protect against damage from from fire, natural disaster, power loss, telecommunications failure or similar events. In addition, growth of our customer base may strain or exceed the capacity of our systems and lead to degradations in performance or systems failure. Although we continually review and consider upgrades to our order fulfillment infrastructure and provide for system redundancies to limit the likelihood of systems overload or failure, substantial damage to our systems or a systems failure that causes interruptions for a number of days could adversely affect our business. Additionally, if we are unsuccessful in updating and expanding our order fulfillment infrastructure, our ability to grow may be constrained. As a result, our revenues and earnings could be materially adversely affected.

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. Accordingly, such supply shortages and delivery limitations could have anda material adverse effect on our our business, financial condition, results of operations, and cash flows.

In addition to the increase in coffee costs discussed in the risk factor above,costs, we are exposed to cost fluctuation in other commodities, including, in particular, steel, natural gas and gasoline. In addition, an increase in the cost of fuel could indirectly lead to higher electricity costs, transportation costs and other commodity costs. Much like coffee costs, the costs of these commodities depend on various factors beyond our control, including economic and political conditions, foreign currency fluctuations, and global weather patterns. To the extent we are unable to pass along such costs to our customers through price increases, our margins and profitability will decrease.

Some of the matters discussed under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operation,” “Business,” “Risk Factors” and elsewhere in this annualAnnual reportReport include forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. We have based these forward-looking statements upon information available to management as of the date of this FormAnnual 10-KReport and management’s expectations and projections about future future events, including, among other things:

Cost of Sales. Cost of sales for the fiscal year ended October 31, 20242025 was $62,520,529,80,868,881, or 80%84% of net sales, as compared to $57,214,382,$62,520,529, or 84%80% of net sales, for the fiscal year ended October 31, 2023.2024. Cost of sales consists primarily of the cost of green coffee and packaging materials and realized and unrealized gains or losses on hedging activity. For the fiscal year ended October 31, 2025, the net result of our hedging activities resulted in a gain of approximately $1.8 million, and 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.million. The increase in the cost of sales was due to higher sales volume, volume,increased salariessalaries, higher packaging material costs, and packagingthe materialsimpact of tariffs, partially offset by the hedging activities discussed above.

Gross Profit. Gross profit for the fiscal year ended October 31, 20242025 was $16,041,769$15,414,666, ana increasedecrease of $5,082,747$627,103 from $10,959,022$16,041,769 for for the fiscal year ended October 31, 2023.2024. Gross profit as a percentage of net sales increaseddecreased to 20%16% for the fiscal year ended October October 31, 2024,2025, from 16%20% for the fiscal year ended October 31, 2023.2024. The increasedecrease in gross profit percentage was attributable to highertariff sales volumecosts duringin the current year.

Income Before Provision For Income Taxes. We had an income of $3,135,145$1,921,128 before income taxes for the fiscal year ended October 31, 20242025 compared to a lossincome of $1,103,796$3,067,899 for the fiscal year ended October 31, 2023,2024, resulting in a net change of $4,238,941$1,146,771 for the year ended October 31, 2025. The decrease was primarily attributable to increased costs associated with tariffs on imported goods, which negatively impacted margins during the fiscal year ended October 31, 2025, as well as operating losses incurred by Second Empire following its acquisition in November 2024.

Income Taxes. Our expense for income taxes for the fiscal year ended October 31, 20242025 totaled $849,885,$517,689, compared to aan benefitexpense of $268,220$849,885 for the fiscal year ended October 31, 2023.2024. The change was attributable to the difference in the income for the fiscal year ended October 31, 20242025 versus the fiscal year ended October 31, 2023.2024.

Net Income (Loss).Income. We had net income of $2.2 million,$1,403,439, or $0.39$0.25 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, 2023.2025 compared to net income of $2,218,014, or $0.39 per share basic and diluted, for the fiscal year ended October 31, 2024. The change decrease in net lossincome was due to our results of operations as described above.

As of October 31, 2024,2025, we had working capital of $21,526,983,$22,633,292, which represented a $2,926,721$1,106,309 increase from our working capital of $18,600,262$21,526,983 as of October 31, 2023.2024. Our working capital increase was primarily due to the outstandingincrease balancein oninventories ourand lineaccounts of credit of $0 as of October 31, 2024, compared to $9,620,000 as of October 31, 2023.receivable.

For the fiscal year ended October 31, 2024,2025, our investingoperating activities providedused net cash of $2,843,069$5,018,989 as compared to the fiscal year ended October October 31, 20232024 when operating activities provided net cash usedof by investing activities was $857,760.$5,431,211. The increasedecrease inprimarily our uses of cash in investing activities was duerelates to ourincreases proceedsto frominventory theand sale of our investment during the fiscal year ended October 31, 2024.accounts receivable.

For the fiscal year ended October 31, 20242025 our financing activities had net cash used of $9,627,234$6,050,000 compared to net cash providedused byin financing activities of $423,781$9,627,234 for the fiscal year ended October 31, 2023.2024. The year-over-year change in cash flowflows from financing activities for the fiscal year ended October 31, 2024 was primarily dueattributable to ouractivity payon downthe of ourCompany’s line of credit.

Our net sales are driven primarily by the success of our sales and marketing efforts and our ability to retain existing customers and attract new customers. For this reason, we have made, and will continue to evaluate, strategic decisions to invest in measures that are expected to increase net sales. These transactions include our acquisition of Premier Roasters, LLC, including equipment and a roasting facility in La Junta, Colorado, the addition of a west coast sales manager to increase sales of our private label and branded coffees to new customers and the transaction with OPTCO. On June 29, 2016, we purchased substantially all the assets, including equipment, inventory, customer lists and relationships of Coffee Kinetics, LLC., a Washington limited liability company. On February 24, 2017, we acquired 100% of the capital stock of CommonComfort Foods, Inc. (“CFI”) , a Massachusetts based medium sized coffee roaster, manufacturing both branded branded and private label coffee for retail and foodservice customers. On November 11,6, 2024, we acquired substantially all of the assets of Empire Coffee Company, a New York-based long-running private-label roaster.roaster .

The supply and price of coffee beans are subject to volatility and are influenced by numerous factors which are beyond our control. 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 26 of the Notes to theour condensed consolidated financial statements in this quarterly report. In addition, we acquired, and expect to continue to acquire, future contracts with longer terms, generally three to four months, primarily for the purpose of guaranteeing an adequate supply of green coffee. Realized and unrealized gains or losses on options and futures contracts are reflected in our cost of sales. Gains on options and futures contracts reduce our cost of sales and losses on options and futures contracts increase our cost of sales. The use of these derivative financial instruments has generally enabled us to mitigate the effect of changing prices. We believe that, in normal economic times, our hedging policies remain a vital element to our business model not only in controlling our cost of sales, but also giving us the flexibility to obtain the inventory necessary to continue to grow our sales while trying to minimize margin compression during a time of historically high coffee prices. However, no strategy can entirely eliminate pricing risks and we generally remain exposed to losses on futures contracts when prices decline significantly in a short period of time, and we would generally remain exposed to supply risk in the event of non-performance by the counterparties to any of our futures contracts. Although we have had net gains on options and futures contracts in the past, we have incurred significant losses on options and futures contracts during some recent reporting periods. In these cases, our cost of sales has increased, resulting in a decrease in our profitability or increase our losses. Such losses have and could in the future, materially increase our cost of sales and materially decrease our profitability and adversely affect our stock price. See our Annual Report on Form 10-K “Part II.I. Item 1A – Risk Factors - 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.” Failure to properly design and implement an effective hedging strategy may materially adversely affect our business and operating results. If the hedges that we enter do not adequately offset the risks of coffee bean price volatility or our hedges result in losses, our cost of sales may increase, resulting in a decrease in profitability or increased losses. As previously announced, as a result of the volatile nature of the commodities markets, we have and are continuing to scale back our use of hedging and short-term trading of coffee futures and options contracts, and intend to continue to use these practices in a limited capacity going forward.

There have been no changes to our critical accounting policies during the three and sixnine months ended AprilJuly 30,31, 2026. Critical accounting policies and the significant estimates in accordance with such policies are regularly discussed with our Audit Committee. Those policies are discussed under under “Critical Accounting Policies and Estimates” in “Part II. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” as well as in our consolidated financial statements and notes thereto, each in our 2025 Form 10-K.

Three Months Ended AprilJuly 30,31, 2026 Compared to the Three Months Ended AprilJuly 30,31, 2025

Net Sales. Net sales totaled $22,126,156$21,686,262 for the three months ended AprilJuly 30,31, 2026, a decrease of 1,193,905,$2,224,252, or 5.1%,9.3%, from $23,910,514 $23,320,061 for the three months ended AprilJuly 30,31, 2025. The decrease in net sales was primarily attributable to the rapidsustained decline in green coffee prices that began in late January and continued throughout most of the quarter. In response to these market conditions, the Company reduced prices and increasedcontinued promotional activity for its wholesale roasted coffee customers. In addition, the Company charged lower prices to its wholesale green coffee customers due to the decline in prevailing coffee market prices during the quarter.

Cost of Sales. Cost of sales for the three months ended AprilJuly 30,31, 2026, was $18,639,088,$16,262,131, or 84.2%75.0% of net sales, as compared to $21,655,486, $19,589,889, or 84.0%90.6% of net sales, for the three ended AprilJuly 30,31, 2025. Cost of sales consists primarily of the cost of green coffee and packaging materials and realized and unrealized gains or losses on hedging activity. While cost of sales decreased due to lower sales volume, cost of sales as a percentage of net sales increasedalso slightly, decreased, primarily due to highera productfavorable inventory position acquired during the first half of the fiscal year when coffee prices decline significantly, tariff refunds recognized during the current period, and packaginga costsnet gain on trading activity during the current quarter.period compared to a net loss on trading activity in the comparative period.

Gross Profit. Gross profit for the sixthree months ended AprilJuly 30,31, 2026, was $9,612,005,$5,424,131, an increase of $995,764$3,169,103 from $8,616,241$2,255,028 for the three six months ended AprilJuly 30,31, 2025. Gross profit as a percentage of net sales was 20.2%25.0% for the sixthree months ended AprilJuly 30,31, 2026, compared to 19.3% 9.4% for the sixthree months ended AprilJuly 30,31, 2025. The changeincrease in gross profit was dueprimarily attributable to oura resultsfavorable inventory ofposition, tariff refunds, and a net salesgain andon costtrading ofactivity salesduring the current period, as described discussed above.

Operating Expenses. Total operating expenses increaseddecreased by $756,172$250,378 to $6,892,767$3,099,801 for the sixthree months ended AprilJuly 30,31, 2026, from $6,136,595$3,350,179 for the sixthree months ended AprilJuly 30,31, 2025. Selling and administrative expenses increaseddecreased from $5,682,024$3,166,764 for the sixthree months ended AprilJuly 30,31, 2025, to $6,483,162$2,899,193 for the sixthree months ended AprilJuly 30,31, 2026. Operating expenses increaseddecreased modestlyslightly compared to the prior-year period,period but whileremained continuinggenerally toconsistent benefitwith fromhistorical improved operating efficiencies and lower administrative costs.levels.

Other Income (Expense).Expense. Other expense for the sixthree months ended AprilJuly 30,31, 2026 was $105,350,$37,809, ana increasedecrease of $56,181$54,869 from other incomeexpense of $92,678 $49,170 for the sixthree months ended AprilJuly 30,31, 2025. The increasedecrease in expense was primarily attributable to higherlower interest expense related to increased decreased borrowings outstanding under the Company’s line of credit during the current periods.

Income Before Provision Forfor Income Taxes. We had income of $2,613,887$2,286,521 before income taxes for the sixthree months ended AprilJuly 30,31, 2026, compared to incomeloss of $2,430,476$1,187,829 for the sixthree months ended AprilJuly 30,31, 2025, resulting in a net change of $183,411$3,474,350 for the sixthree months ended AprilJuly 30,31, 2026. The changeincrease was dueprimarily attributable to the market conditions described above.

Income Taxes. Our expense for income taxes for the sixthree months ended AprilJuly 30,31, 2026 totaled $703,078,$293,083, compared to an expense of $633,165$17,584 for the sixthree months ended AprilJuly 30,31, 2025. The change was attributable to the difference in the income for the sixthree months ended AprilJuly 31, 30, 2026 versus the sixthree months ended AprilJuly 30,31, 2025.

Net Income.Income (Loss). We had net income of $1,910,809$1,993,438 or $0.33$0.35 per share basic and diluted, for the sixthree months ended AprilJuly 30,31, 2026, compared to to net incomeloss of $1,797,311,$1,205,413, or $0.31$0.21 per share basic and diluted, for the sixthree months ended AprilJuly 30,31, 2025. The change in net income was due to our results of operations as described above.

As of AprilJuly 30,31, 2026, we had working capital of $23,193,100,$25,536,749, which represented a $559,808$2,903,457 increase from our working capital of $22,633,292 at October 31, 2025. Our working capital remainedincreased relativelyprimarily consistentdue to paydown of our outstanding line of credit during the periods.period.

Each of the A&R Loan Facility and A&R Loan Agreement contains covenants, subject to certain exceptions, that place annual restrictions on the Borrowers’ operations, including covenants relating to debt restrictions, capital expenditures, indebtedness, minimum deposit restrictions, tangible net worth, net profit, leverage, employee loan restrictions, dividend and repurchase restrictions (common stock and preferred stock), and restrictions on intercompany transactions. The outstanding balance on the Company’s line of credit was $2,650,000$2,150,000 and $6,050,000 as of AprilJuly 30,31, 2026, and October 31, 2025, respectively.

For the sixnine months ended AprilJuly 30,31, 2026, our operating activities provided net cash of $6,648,313,$7,795,367, as compared to the sixnine months ended AprilJuly 30,31, 2025, when operating activities used net cash of $1,555,954,$5,396,716, respectively. The increase in cash provided by operating activities was primarily relatesattributable to decreases to inventory andin accounts receivable and inventory, partially offset by a decrease in accounts payable and accrued expenses.

For the sixnine months ended AprilJuly 30,31, 2026, our investing activities used net cash of $1,159,598,$1,213,538, as compared to the sixnine months ended AprilJuly 30,31, 2025, when net cash used in investing activities was $992,907.$1,254,535. TheInvesting changeactivities isduring the current period primarily attributable to capital expenditures relatedconsisted to leasehold improvements at the Second Empire location, as well asof the purchase of an investment and capital expenditures, while investing activities during the currentprior-year six-monthperiod period.primarily consisted of acquisition-related payments and capital expenditures.

For the sixnine months ended AprilJuly 30,31, 2026, our financing activities had net cash used of $3,867,813,$4,367,813, compared to net cash provided by financing activities of $3,000,000,$6,250,000, for the sixnine months ended AprilJuly 30,31, 2025. The year-over-year change in cash flows from financing activities was primarily attributable to activity repayments on the Company’s line of credit.credit and dividend payments, during the current period, compared to net borrowings under the line of credit during the prior-year period.