Reborn Coffee Inc

On February 12, 2024, the Company entered into the SEPA with Yorkville. Pursuant to the SEPA, the Company shall have the right, but not the obligation, to sell to Yorkville up to $5,000,000 of the Company’s Common Stock, at the Company’s request any time during the commitment period commencing on February 12, 2024 (the “Effective Date”) and terminating on the first day of the month following the 36-month anniversary of the Effective Date. Each issuance and sale by the Company to Yorkville under the SEPA (a “SEPA Advance”) is subject to a maximum limit equal to the greater of: (i) an amount equal to 100% of the average of the daily volume traded of the Company’s Common Stock on Nasdaq during the five trading days immediately preceding the SEPA Advance notice, or (ii) 500,000 shares of the Company’s Common Stock.

The shares will be issued and sold to Yorkville at a per share price equal to, at the election of the Company as specified in the relevant SEPA Advance notice: (i) 95% of the Market Price (as defined below) for any period commencing (1) if submitted to Yorkville prior to 9:00 a.m. Eastern Time on a trading day, the open of trading on such day or (2) if submitted to Yorkville after 9:00 a.m. Eastern Time on a trading day, upon receipt by the Company of written confirmation of acceptance of such SEPA Advance notice by Yorkville (or the open of regular trading hours, if later) (the “Option 1 Pricing Period”), and (ii) 96% of the Market Price for any three consecutive trading days commencing on the SEPA Advance notice date (the “Option 2 Pricing Period,” and each of the Option 1 Pricing Period and the Option 2 Pricing Period, a “Pricing Period”). “Market Price” is defined as, for any Option 1 Pricing Period, the VWAP of the Common Stock on Nasdaq, and for any Option 2 Pricing Period, the lowest VWAP of the common stock on the Nasdaq during the Option 2 Pricing Period. The SEPA Advances are subject to certain limitations, including that Yorkville cannot purchase any shares that would result in it beneficially owning more than 4.99% of the Company’s outstanding common stock at the time of a SEPA Advance or acquiring since the Effective Date under the SEPA more than the Exchange Cap (representing 19.99% of the aggregate amount of Common Shares issued and outstanding as of the date of this Agreement), calculated in accordance with the rules of Nasdaq, which number is to be reduced, on a share-for-share basis, by the number shares of Common Stock issued or issuable pursuant to any transaction or series of transactions that may be aggregated with the transactions contemplated by the SEPA under the applicable rules of Nasdaq (which the shares issuable to EF Hutton pursuant to the PPA are aggregated by Nasdaq for the purposes of Listing Rule 5635(d)), unless the Company obtains stockholder approval to do so. Additionally, if the total number of shares of Common Stock traded on Nasdaq during the applicable Pricing Period is less than the Volume Threshold (as defined below), then the number of shares of Common Stock issued and sold pursuant to such SEPA Advance notice will be reduced to the greater of (a) 30% of the trading volume of the Common Stock on Nasdaq during the relevant Pricing Period as reported by Bloomberg L.P., or (b) the number of shares of Common Stock sold by Yorkville during such Pricing Period. “Volume Threshold” is defined as a number of shares of Common Stock equal to the quotient of (a) the number of shares in the SEPA Advance notice requested by the Company divided by (b) 0.30.

Pursuant to the SEPA, the Company is required to register all shares which Yorkville may acquire. The Company agreed to file with the SEC a registration statement Form S-1 or Form S-3 or on such other form promulgated by the SEC for which the Company then qualifies and which counsel for the Company shall deem appropriate, registering for resale all of the Common Stock that are to be offered and sold to Yorkville pursuant to the SEPA. The Company is required to have a registration statement covering the resale of shares issued pursuant to the SEPA declared effective by the SEC before it can sell any shares to Yorkville pursuant to the SEPA.

The Company has also agreed to pay Yorkville a commitment fee equal to $150,000 (the “Commitment Fee”) by the issuance to Yorkville, within three trading days of the Effective Date, of such number of shares of Common Stock that is equal to the Commitment Fee divided by the closing price of the Common Stock on the trading day immediately prior to the Effective Date (collectively, the “Commitment Shares”). The Company is also required to include the resale of the Commitment Shares on the registration statement described in the immediately preceding paragraph.

The Company may terminate the SEPA at any time upon five trading days’ notice to Yorkville; provided that (i) there are no outstanding SEPA Advance notices, the shares of Common Stock under which have yet to be issued, and (ii) the Company has paid all amounts owed to Yorkville pursuant to the SEPA, including the Commitment Fee.