Under the terms of the proposed transaction, pursuant to an asset purchase agreement that would cover the proposed transaction (the "Asset Purchase Agreement"), Buyer will purchase the Assets for a purchase price consisting of: a) $450,000 in cash at closing, b) an additional $50,000 in cash if Buyer generates a pre-tax net profit of $300,000 or more within a certain period, which payment will be made at a to-be-determined date, c) 50,000 shares of Company common stock at closing, d) up to an additional 10,000 shares of Company common stock if Buyer generates a pre-tax net profit of $300,000 or more within certain periods, which payments will be made at to-be-determined dates, and e) at closing, a cash amount based on the cost of inventory transferred to Buyer.

In addition, as part of the proposed transaction, all of the employees of Seller would become employees of Buyer, which would operate from Seller's Vancouver, Washington location, and Buyer would change its name to Organic Products Trading Co., LLC. The Company would agree to guarantee performance of Buyer and to pay the obligations of Buyer under the Asset Purchase Agreement. The Asset Purchase Agreement will contain customary representations and warranties relating to the Assets and covenants relating to the proposed purchase of the Assets.

The proposed transaction remains subject to final approval by the Boards of Directors of the Company and the Seller and remains subject to the completion and execution of the Asset Purchase Agreement covering the proposed transaction.

Additional information regarding this transaction will be included in future Company filings with the Securities and Exchange Commission ("SEC") if and when the Parties enter into a material definitive agreement regarding this proposed transaction.

 

About Coffee Holding

Coffee Holding is a leading integrated wholesale coffee roaster and dealer in the United States and one of the few coffee companies that offers a broad array of coffee products across the entire spectrum of consumer tastes, preferences and price points. Coffee Holding has been a family-operated business for three generations and has remained profitable through varying cycles in the coffee industry and the economy. The Company's private label and branded coffee products are sold throughout the United States, Canada and abroad to supermarkets, wholesalers, and individually owned and multi-unit retail customers.

Any statements that are not historical facts contained in this release are "forward-looking statements" within the meaning 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 release and management's expectations and projections about certain future events. It is possible that the assumptions made by management for purposes of such statements may not materialize. Actual results may differ materially from those projected or implied in any forward-looking statements. Such statements may involve risks and uncertainties, including but not limited to those relating to product demand, pricing, market acceptance, the effect of economic conditions, intellectual property rights, the outcome of competitive products, risks in product development, the results of financing efforts, the ability to complete transactions, and other factors discussed from time to time in the Company's Securities and Exchange Commission filings. The Company undertakes no obligation to update or revise any forward-looking statement for events or circumstances after the date on which such statement is made.