Reborn Coffee, Inc.
For the period ended Mar 31, 2025. Filed May 20, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed May 20, 2025
REBN$1.21-4.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-11-19.
0001213900-24-100247
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-20.
0001213900-25-046026
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 73 previous paragraphs and 58 current paragraphs.
32 unchanged; 19 reworded; 7 added; 20 removed; 2 previous and 0 current paragraphs rearranged.
Tables are not compared: 7 previous and 6 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (7)
Current report
*Revenues.*Revenues were approximately $1.7 million for the three-month period ended March 31, 2025, compared to $1.5 million for the comparable period in 2024, representing an increase of approximately $0.2 million, or 14.1%. The increase in sales for the period was primarily driven by the opening of new locations, and to the continued focus on marketing efforts to grow brand recognition.
Current report
Gross margin. Gross margin was approximately $1.8 million for the three-month period ended March 31, 2025, compared to $0.9 million for the comparable period in 2024, representing an increase of approximately $0.9 million, or 46.7%. The increase in gross margin for the period was primarily driven by increase in sales.
Current report
This increase in general and administrative expenses for the three-month period ended March 31, 2025 compared to the comparable period in the prior year was primarily due to the hiring of additional administrative employees, increases in professional services and corporate-level costs to support growth plans, the opening of new restaurants, as well as costs associated with outside administrative, legal and professional fees and other general corporate expenses for a public company.
Current report
On February 6, 2025, we entered into a securities purchase agreement between us and the purchasers named therein (the “Investors”) pursuant to which we issued a 10% original issue discount secured convertible debentures (“Debentures”) in a principal amount of up to $10,000,000, divided into up to four separate tranches that are each subject to certain closing conditions. The conversion price per share of each Debenture, subject to adjustment as provided therein, is equal to 92.5% of the lowest daily VWAP (as defined in the Debentures) of our common stock during the five trading day period ending on the trading day immediately prior to delivery or deemed delivery of the applicable Conversion Notice (as defined in the Debentures). The Debentures accrue interest at a rate of 10% per annum paid in kind, unless there is an event of default in which case the Debentures will accrue interest at a default rate. Each Debenture shall mature at eighteen (18) months from the date of the first closing. Upon the consummation of the closing of each tranche, we will issued common stock purchase warrants (“Warrants”) to each Investor who participated in such closing. The Warrants will: (i) provide for the purchase by the applicable Investor of a number of shares of common stock equal to 20% of the total principal amount of the related Debenture purchased by the Investor on the applicable closing date divided by 92.5% of the lowest daily VWAP of common stock for the five consecutive trading day period ended on the last trading day immediately preceding such closing date and (ii) be exercisable at an exercise price equal to 92.5% of the average of the lowest daily VWAP of the common stock over the consecutive trading days immediately preceding the delivery of the applicable Notice of Exercise (as defined in the Warrants). As of March 31, 2025, we conducted three closings under the securities purchase agreement, pursuant to which we sold Debentures in the aggregate principal amount of $3,333,333 and 254,470 Warrants to the Investors.
Current report
Net cash provided by investing activities during the three months ended March 31, 2025 and used in investing activities during the three months ended March 31, 2024 was $1,994 and $986,982, respectively, These expenditures in each period are primarily related to purchases of property and equipment in connection with current and future location openings and maintaining our existing locations.
Current report
Cash Flows Provide by (Used in) Financing Activities
Current report
Net cash provided by financing activities during the three-month period ended March 31, 2025 was $152,302, mostly derived from the proceeds from loan payables of $3.5 million, which was offset by the debt amortization of $3.2 million repayment of loans payable by $154,268.
Removed paragraphs (20)
Previous report
Cost of Sales
Previous report
Cost of sales includes costs associated with generating revenue within our company-owned retail locations, and franchising operations (of which, as of September 30, 2024, we had none).
Previous report
Shipping and Handling Costs
Previous report
The Company incurred freight out cost and is included in the Company’s cost of sale.
Previous report
General and Administrative Expense
Previous report
General and administrative expense includes store-related expense as well as the Company’s corporate headquarters’ expenses.
Previous report
Advertising Expense
Previous report
Advertising costs are expensed as incurred. Advertising expenses amounted to $110,050 and $49,531 for thenine months ended September 30, 2024 and 2023, respectively, and are recorded under general and administrative expenses in the accompanying condensed consolidated statements of operations.
Previous report
Pre-opening Costs
Previous report
Pre-opening costs for new stores, which are not material, consist primarily of payroll and recruiting expense, training, marketing, rent, travel, and supplies, and are expensed as incurred depreciated over the shorter of the useful life of the improvement or the lease term, including renewal periods that are reasonably assured.
Previous report
Revenues
Previous report
Revenues were approximately $4.14 million for thenine months ended September 30, 2024, compared to $4.15 million for the comparable period in 2023, representing a decrease of approximately $5,611, or 0.1%. Revenues were approximately $1.3 million for the three months ended September 30, 2024, compared to $1.5 million for the comparable period in 2023, representing a decrease of approximately $255,000, or 16.9%.
Previous report
Product, food and drink costs
Previous report
General and administrative expenses
Previous report
Net cash used in investing activities during thenine months ended September 30, 2024 and 2023 was $641,059 and $746,416, respectively. Net cash used in investing activities for the third quarter of 2024 was primarily related to the purchase of equipment.
Previous report
Net cash provided by financing activities during thenine months ended September 30, 2024 and 2023 was $3.9 million and $1.1 million, respectively. Net cash flows provided by financing activities for the third quarter of 2024 was primarily proceeds from the issuance of common stock.
Previous report
Operating Leases
Previous report
Income Taxes
Previous report
Reborn files income tax returns in the U.S. federal and California state jurisdictions.
Previous report
We are taxed at the prevailing corporate tax rates for U.S. federal, state and local income taxes. Accordingly, a provision is recorded for the anticipated tax consequences of our reported results of operations for U.S. federal, state and foreign income taxes.
Reworded paragraphs (19)
Previous wording
You should read the following discussion and analysis of our financial condition and results of operations together with our condensed consolidated financial statements and the related notes and other financial information included elsewhere in this Quarterly Report on Form 10-Q and with our audited consolidated financial statements included in our Annual Report on Form 10-K/A for the year ending December 31, 2023. As discussed in the section titled “Note Regarding Forward-Looking Statements,” the following discussion and analysis contains forward-looking statements that involve risks and uncertainties, as well as assumptions that, if they never materialize or prove incorrect, could cause our results to differ materially from those expressed or implied by such forward-looking statements. Factors that could cause or contribute to these differences include, but are not limited to, those identified below and those discussed in the section titled “Risk Factors” in our Annual Report on Form 10-K/A for the year ending December 31, 2023.
Current wording
You should read the following discussion and analysis of our financial condition and results of operations together with our condensed consolidated financial statements and the related notes and other financial information included elsewhere in this Quarterly Report on Form 10-Q and with our audited consolidated financial statements included in our Annual Report on Form 10-K for the year ending December 31, 2024. As discussed in the section titled “Note Regarding Forward-Looking Statements,” the following discussion and analysis contains forward-looking statements that involve risks and uncertainties, as well as assumptions that, if they never materialize or prove incorrect, could cause our results to differ materially from those expressed or implied by such forward-looking statements. Factors that could cause or contribute to these differences include, but are not limited to, those identified below and those discussed in the section titled “Risk Factors” in our Annual Report on Form 10-K for the year ending December 31, 2024.
Previous wording
Reborn is focused on serving high quality, specialty-roasted coffee at retail locations, kiosks and cafes. We are an innovative company that strives for constant improvement in the coffee experience through exploration of new technology and premier service, guided by traditional brewing techniques. We believe Reborn differentiates itself from other coffee roasters through its innovative techniques, including sourcing, washing, roasting, and brewing our coffee beans with a balance of precision and craft.
Current wording
Reborn Coffee, Inc. (“Reborn”) is focused on serving high quality, specialty-roasted coffee at retail locations, kiosks and cafes. We are an innovative company that strives for constant improvement in the coffee experience through exploration of new technology and premier service, guided by traditional brewing techniques. We believe Reborn differentiates itself from other coffee roasters through its innovative techniques, including sourcing, washing, roasting, and brewing our coffee beans with a balance of precision and craft.
Previous wording
Founded in 2015 by Jay Kim, our Chief Executive Officer, Mr. Kim and his team launched Reborn with the vision of using the finest pure ingredients and pristine water. We currently serve customers through our retail store locations in California: Brea, La Crescenta, Corona Del Mar, Laguna Woods, Manhattan Beach, Huntington Beach, Riverside, San Francisco, Irvine, Diamond Bar and Anaheim.
Current wording
Founded in 2015 by Jay Kim, our Chief Executive Officer, Mr. Kim and his team launched Reborn with the vision of using the finest pure ingredients and pristine water. We currently serve customers through our retail store locations in California: Brea, La Crescenta, Corona Del Mar, Laguna Woods, Manhattan Beach, Huntington Beach, Riverside, San Francisco, Irvine, Diamond Bar, Anaheim and Pasadena. In addition to the locations in the United States, we have two international locations in South Korea and Malaysia.
Previous wording
Centered around its core values of service, trust, and well-being, Reborn Coffee delivers an appreciation of coffee as both a science and an art. Developing innovative processes such as washing green coffee beans with magnetized water, we challenge traditional preparation methods by focusing on the relationship between water chemistry, health, and flavor profile. Reborn Coffee proactively distinguishes exceptional quality from good quality by starting at the foundation and paying attention to the details. Our mission places an equal emphasis on humanizing the coffee experience, delivering a fresh take on “farm-to-table” by sourcing internationally. In this way, Reborn Coffee creates opportunities to develop transparency by paying homage to origin stories and sparking new conversations by building cross-cultural communities united by a passion for the finest coffee.
Current wording
Centered around our core values of service, trust, and well-being, we deliver an appreciation of coffee as both a science and an art. Developing innovative processes such as washing green coffee beans with magnetized water, we challenge traditional preparation methods by focusing on the relationship between water chemistry, health, and flavor profile. Leading research studies, testing brewing equipment, and refining roasting/brewing methods to a specific, we proactively distinguish exceptional quality from good quality by starting at the foundation and paying attention to the details. Our mission places an equal emphasis on humanizing the coffee experience, delivering a fresh take on “farm-to-table” by sourcing internationally. In this way, we create opportunities to develop transparency by paying homage to origin stories and spark new conversations by building cross-cultural communities united by a passion for the finest coffee.
Previous wording
Through a broad product offering, Reborn Coffee provides customers with a wide variety of beverages and coffee options. As a result, we believe we can capture share of any experience where customers seek to consume great beverages whether in our inviting store atmospheres which are designed for comfort, or on the go through our Pour Over Packs, or at home with our whole bean ground coffee bags. We believe that the retail coffee market in the US is large and growing. According to IBIS, in 2021, the retail market for coffee in the United States is expected to be $46.2 billion. This is expected to grow due to a shift in consumer preferences to premium coffee, including specialized blends, espresso-based beverages, and cold brew options. Reborn aims to capture a growing portion of the market as we expand and increase consumer awareness of our brand.
Current wording
Through a broad product offering, Reborn provides customers with a wide variety of beverages and coffee options. As a result, we believe we can capture share of any experience where customers seek to consume great beverages whether in our inviting store atmospheres which are designed for comfort, or on the go through our pour over packs, or at home with our whole bean ground coffee bags. We believe that the retail coffee market in the US is large and growing. According to IBIS, in 2025, the retail market for coffee in the United States is expected to be $74.3 billion. This is expected to grow due to a shift in consumer preferences to premium coffee, including specialized blends, espresso-based beverages, and cold brew options. Reborn aims to capture a growing portion of the market as we expand and increase consumer awareness of our brand.
Previous wording
Currently, we have the following twelve retail coffee locations:
Current wording
Currently, we have the following thirteen retail coffee locations:
Previous wording
Retail store revenues are recognized when payment is tendered at the point of sale. Retail store revenues are reported net of sales, use or other transaction taxes that are collected from customers and remitted to taxing authorities. Sales taxes that are payable are recorded as accrued as other current liabilities. Retail store revenue makes up approximately 92% of the Company’s total revenue.
Current wording
Retail store revenues are recognized when payment is tendered at the point of sale. Retail store revenues are reported net of sales, use or other transaction taxes that are collected from customers and remitted to taxing authorities. Sales taxes that are payable are recorded as accrued as other current liabilities. Retail store revenue makes up approximately 99% of the Company’s total revenue.
Previous wording
Wholesale and online revenues are recognized when the products are delivered, and title passes to the customers or to the wholesale distributors. When customers pick up products at the Company’s warehouse, or distributed to the wholesale distributors, the title passes, and revenue is recognized.
Current wording
Wholesale and online revenues are recognized when the products are delivered, and title passes to the customers or to the wholesale distributors. When customers pick up products at the Company’s warehouse, or distributed to the wholesale distributors, the title passes, and revenue is recognized. Wholesale revenues make up approximately 1% of the Company’s total revenue.
Previous wording
Franchise revenues consist of royalty fees and other franchise fees. Royalty fees are based on a percentage of a franchisee’s weekly gross sales revenue at 5%. The Company recognizes the fee as the underlying sales occur. The Company did not have any revenue from royalties or other fees for the nine months ended September 30, 2024 and 2023.
Current wording
Franchise revenues consist of royalty fees and other franchise fees. Royalty fees are based on a percentage of a franchisee’s weekly gross sales revenue at 5%. The Company recognizes the fee as the underlying sales occur. The Company did not have any revenue from royalties or other fees for the three months ended March 31, 2025 and 2024.
Previous wording
Three and nine months ended September 30, 2024 compared to three and nine months ended September 30, 2024
Current wording
Three months ended March 31, 2025 compared to three months ended March 31, 2024
Previous wording
The following table presents selected comparative results of operations from our unaudited financial statements for the three and nine months ended September 30, 2024 compared to three and nine months ended September 30, 2023. Our financial results for these periods are not necessarily indicative of the financial results that we will achieve in future periods. Certain totals for the table below may not sum to 100% due to rounding.
Current wording
The following table presents selected comparative results of operations from our unaudited financial statements for the three months ended March 31, 2025 compared to three months ended March 31, 2024. Our financial results for these periods are not necessarily indicative of the financial results that we will achieve in future periods. Certain totals for the table below may not sum to 100% due to rounding.
Previous wording
Product, food and drink costs were approximately $1.1 million for thenine months ended September 30, 2024 compared to $1.3 million for the comparable period in 2023, representing a decrease of approximately $253,000 or 19.1%, and were approximately $441,000 for the three months ended September 30, 2024 compared to $442,000 for the comparable period in the prior year.
Current wording
Product, food and drink costs. Product, food and drink costs were approximately $0.9 million for the three-month period ended March 31, 2025 compared to $0.4 million for the comparable period in the prior year.
Previous wording
General and administrative expenses were approximately $5.8 million for thenine months ended September 30, 2024 compared to $5.7 million for the comparable period in the prior year, representing an increase of approximately $157,000, or 2.8%, and were approximately $1.5 million for the three months ended September 30, 2024 compared to $1.8 million for the comparable period in 2023, representing a decrease of approximately $257,000, or 14.3%.
Current wording
General and administrative expenses. General and administrative expenses were approximately $2.5 million for the three-month period ended March 31, 2025 compared to $2.0 million for the comparable period in 2024, representing an increase of approximately $0.5 million, or 23.3%.
Previous wording
We have a history of operating losses and negative cash flow in operating activities. We have incurred recurring net losses, including net losses from operations before income taxes of $3.0 million and $3.0 million for thenine months ended September 30, 2024 and 2023, respectively. We used $3.3 million and $3.0 million of cash for operating activities for thenine months ended September 30, 2024 and 2023, respectively.
Current wording
We have a history of operating losses and negative cash flow in operating activities. We have incurred recurring net losses, including net losses from operations before income taxes of approximately $2.1 million and $1.0 million for the three months ended March 31, 2025 and 2024, respectively. We used approximately $0.4 million and $1.9 million of cash for operating activities for the three months ended March 31, 2025 and 2024, respectively.
Previous wording
To support our existing and planned business model, the Company needs to raise additional capital to fund our future operations. The Company has not experienced any difficulty in raising funds through loans, and has not experienced any liquidity problems in settling payables in the normal course of business and repaying loans when they fall due. Successful renewal of our loans, however, is subject to numerous risks and uncertainties. In addition, the increasingly competitive industry conditions under which we operate may negatively impact our results of operations and cash flows. Additional debt financing is anticipated to fund the Company’s operations in the near future. However, there are no current agreements or understandings with regard to the form, time or amount of such financing and there is no assurance that any of this financing can be obtained or that the Company can continue as a going concern.
Current wording
To support our existing and planned business model, we need to raise additional capital to fund our future operations. We have not experienced any difficulty in raising funds through loans, and have not experienced any liquidity problems in settling payables in the normal course of business and repaying loans when they fall due. Successful renewal of our loans, however, is subject to numerous risks and uncertainties. In addition, the increasingly competitive industry conditions under which we operate may negatively impact our results of operations and cash flows. Additional debt financing is anticipated to fund our operations in the near future. However, there are no current agreements or understandings with regard to the form, time or amount of such financing and there is no assurance that any of this financing can be obtained or that we can continue as a going concern.
Previous wording
Net cash used in operating activities during thenine months ended September 30, 2024 was approximately $3.3 million, which resulted from net loss of $3.0 million and from the changes in operating assets and liabilities.
Current wording
Net cash used in operating activities during the three-month period ended March 31, 2025 was approximately $0.5 million, which resulted from net loss of $2.19 million, non-cash charges of $800,840 for Stock compensation, $122,336 for Debt Discount Expense, $ 3,076,956 for Derivative Expense, $15,662 for operating lease and $61,000 for depreciation and net cash outflows of approximately $211,954 from changes in operating assets and liabilities.
Previous wording
Cash Flows used in Investing Activities
Current wording
Cash Flows Provided by (Used in) Investing Activities
Previous wording
As of September 30, 2024, the Company had total assets of approximately $10.6 million. Our cash balance as of September 30, 2024 was approximately $106,000.
Current wording
As of March 31, 2025, we had total assets of approximately $8.0 million. Our cash balance as of March 31, 2025 was approximately $777,000.
Previous wording
Pursuant to the SBA Loan Agreement, we borrowed an aggregate principal amount of the EIDL Loan of $500,000, with proceeds to be used for working capital purposes. Interest accrues at the rate of 3.75% per annum and will accrue only on funds actually advanced from the date of each advance. Installment payments, including principal and interest, are due monthly beginning May 16, 2021 (twelve months from the date of the SBA Loan Agreement) in the amount of $731. The balance of principal and interest is payable thirty years from the date of the SBA Loan Agreement. In connection therewith, we also received a $10,000 grant, which does not have to be repaid. During the year ended December 31, 2020, $10,000 was recorded in Economy injury disaster loan (EIDL) grant income in the Statements of Operations. The schedule of payments on this loan was later deferred to commence 24 months from the date of loan and we has paid all payments owed since May 2022.
Current wording
Pursuant to the SBA Loan Agreement, we borrowed an aggregate principal amount of the EIDL Loan of $500,000, with proceeds to be used for working capital purposes. Interest accrues at the rate of 3.75% per annum and will accrue only on funds actually advanced from the date of each advance. Installment payments, including principal and interest, are due monthly beginning May 16, 2021 (twelve months from the date of the SBA Loan Agreement) in the amount of $731. The balance of principal and interest is payable thirty years from the date of the SBA Loan. In connection therewith, we also received a $10,000 grant, which does not have to be repaid. During the year ended December 31, 2020, $10,000 was recorded in Economy injury disaster loan (EIDL) grant income in the Statements of Operations. The schedule of payments on this loan was later deferred to commence 24 months from the date of loan and we has paid all payments owed since May 2022.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
Wholesale revenues make up approximately 8% of the Company’s total revenue.
Previous report — wording carried elsewhere
Cash Flows provided by Financing Activities