Filing Analysis
Reborn Coffee, Inc. entered into a two-year Agricultural Import and Supply Agreement with The Mighty Oak, Inc., establishing a framework for importing and supplying agricultural products to U.S. retailers.
🚩 Red Flags
- The $20,000,000 annual minimum guarantee represents a significant volume commitment that may pose operational or liquidity risks if demand fluctuates.
📋 Key Facts
- Agreement signed on August 10, 2026, with The Mighty Oak, Inc.
- Guaranteed annual supply and import volume of at least $20,000,000.
- The agreement is for a two-year term, automatically renewing for successive one-year terms unless 60 days' notice is given.
- Includes a non-compete/exclusivity clause preventing Mighty Oak from purchasing covered products directly from the Company’s suppliers for one year following termination.
Reborn Coffee filed an amended 8-K to clarify that Jay Kim resigned from all positions, including Co-CEO, CFO, and Director, effective June 4, 2026. Jung Jae Lim has assumed the role of sole CEO and was appointed interim CFO and Principal Accounting Officer on June 15, 2026.
🚩 Red Flags
- Sudden departure of a key executive holding multiple critical roles (CEO, CFO, and Director) simultaneously.
- Administrative error in the original 8-K filing (omitting the CFO and Director resignations), suggesting potential internal control or reporting weaknesses.
- The CEO is now serving as interim CFO, creating a concentration of power and a lack of segregation of duties in financial oversight.
📋 Key Facts
- Jay Kim resigned as Co-CEO, CFO, and Director effective June 4, 2026.
- The company filed this 8-K/A because the original filing inadvertently omitted Kim's resignation as CFO and Director.
- Jung Jae Lim, previously Co-CEO since March 2026, is now the sole CEO.
- Jung Jae Lim was appointed interim CFO and Principal Accounting Officer on June 15, 2026.
- Mr. Lim has 20+ years of experience in logistics and supply chain management.
Reborn Coffee, Inc. announced the immediate resignation of Co-CEO Jay Kim on June 4, 2026. Jung Jae Lim, previously Co-CEO since March 2026, has assumed the role of sole Chief Executive Officer.
🚩 Red Flags
- Sudden resignation of a top executive (Co-CEO) in a micro-cap company can indicate internal instability or strategic disagreement.
📋 Key Facts
- Jay Kim resigned as Co-Chief Executive Officer effective June 4, 2026.
- Jung Jae Lim assumed full responsibilities as CEO effective immediately.
- Jung Jae Lim has over 20 years of experience in logistics and supply chain management.
- The company issued a press release regarding the resignation on June 8, 2026.
Reborn Coffee, Inc. entered into a Securities Purchase Agreement for a $21 million private placement of common stock at $2.00 per share. The offering is structured in two closings, with the larger $18.2 million tranche contingent upon obtaining stockholder approval and Nasdaq compliance.
🚩 Red Flags
- Significant potential dilution from the issuance of up to 10.5 million shares.
- The majority of the funding ($18.2 million) is contingent upon stockholder approval.
- Reliance on Regulation S (offshore) investors which can sometimes involve less transparency regarding the investor base.
📋 Key Facts
- Total aggregate gross proceeds of $21 million from private placement.
- Shares priced at $2.00 per share.
- First closing involves 1,400,000 shares for $2.8 million, pending Nasdaq 'no objection' notice.
- Second closing involves up to 9,100,000 shares for $18.2 million, pending stockholder approval.
- Investors are non-U.S. persons under Regulation S exemption.
- Proceeds intended for flagship store expansion, brand development, and working capital.
Reborn Coffee entered into an Amended and Restated Forbearance Agreement with Arena Investors to restructure the repayment of defaulted secured convertible debentures. The agreement imposes a strict monthly repayment schedule and requires the company to divert 70% of proceeds from any future securities offerings to the lender.
🚩 Red Flags
- The company is in a state of default or near-default, requiring multiple forbearance agreements.
- The 70% cash sweep on future capital raises severely limits the company's ability to use new funding for operations or growth.
- High monthly debt service obligations ($400,000) for a micro-cap company.
- The debt is secured, meaning the lender likely has a lien on company assets.
📋 Key Facts
- The agreement was signed on April 15, 2026, following a previous forbearance agreement on March 31, 2026.
- Company must pay $400,000 plus $25,000 in legal fees by April 30, 2026.
- Monthly payments of $400,000 are required starting May 30, 2026, until full repayment by September 30, 2026.
- A mandatory prepayment clause requires 70% of cash proceeds from any future sale of securities to be paid to Arena Investors.
- The debt consists of 10% Original Issue Discount (OID) Secured Convertible Debentures issued throughout 2025.
Reborn Coffee, Inc. entered into a Forbearance Agreement with Arena Investors following a default on debt redemption obligations. The company failed to pay the required 30% of proceeds from a $6.5 million equity raise to lenders, necessitating a structured repayment plan and the issuance of warrants to avoid legal remedies.
🚩 Red Flags
- Admission of a 'Specified Delay' (default) in making required debt payments.
- Significant immediate liquidity drain of approximately $1.46 million in April 2026.
- Substantial ongoing monthly debt service of $500,000 which may strain operations.
- Dilutive warrant issuance triggered by financial non-compliance.
📋 Key Facts
- Entered into a Forbearance Agreement on March 31, 2026, with Arena Investors.
- The company defaulted on a clause in its 10% Original Issue Discount Secured Convertible Debentures requiring 30% of equity proceeds to be used for debt redemption.
- The default stems from a $6,500,000 equity subscription agreement with Charles Joeng in October 2025.
- Immediate cash payment of $1,059,522 is due by April 6, 2026.
- A second cash payment of $400,000 is due by April 20, 2026.
- Ongoing monthly payments of $500,000 are required starting May 6, 2026.
- Issued 250,000 warrants to Arena Investors with an exercise price of $2.00 per share as consideration for the forbearance.
Reborn Coffee expanded its Board of Directors to seven members and appointed Alex Yeon as an independent director. Concurrently, the company appointed current director Jung Jae Lim as Co-CEO to lead logistics and supply chain initiatives alongside existing CEO Jay Kim.
🚩 Red Flags
- The new Co-CEO and new Director are serving without compensation, which is atypical for public companies and may suggest cash conservation or existing significant ownership stakes.
📋 Key Facts
- The Board of Directors increased its size from six to seven members on March 2, 2026.
- Alex Yeon was appointed as an independent director and will serve on the Audit Committee.
- Jung Jae Lim, an existing board member, was appointed Co-CEO on March 3, 2026.
- Jung Jae Lim resigned from the Audit Committee as he is no longer considered independent due to his executive appointment.
- Neither Alex Yeon nor Jung Jae Lim will receive additional compensation for their new roles.
- Jung Jae Lim brings over 20 years of logistics experience, including roles as CEO of KCC Mexico Overseas Logistics and TJ America.
Reborn Coffee, Inc. (REBN) received a Nasdaq deficiency notice on February 19, 2026 for non-compliance with Listing Rule 5605, specifically failing to meet independent director, audit committee, and compensation committee requirements. The Company simultaneously remedied the deficiencies by appointing two new independent directors — Charles C. Jeong and Mi Jeong Lee — on February 20, 2026, effectively curing the compliance issues before the cure period deadline. The filing also reports the resignation of three board members (Andy Nasim, Alex Go, and Mi Young Jeong) and a board size reduction from seven to six members.
🚩 Red Flags
- Nasdaq non-compliance notice received for failure to meet independent director, audit committee, and compensation committee requirements under Rule 5605 — a governance breakdown
- Three board members resigned simultaneously (Andy Nasim, Alex Go, Mi Young Jeong), triggering the compliance deficiency — unusual mass departure
- Multiple 8-K items filed together (3.01 + 5.02), indicating layered corporate governance disruption
- Newly appointed director Charles C. Jeong has a prior related-party transaction: purchased $6.5M of REBN shares at $5.45/share in October 2025 — raises independence scrutiny despite Nasdaq determination
- No assurance provided that Nasdaq will accept the remediation or grant future relief if additional issues arise
- Micro-cap company (REBN) experiencing repeated governance instability is a risk factor for continued listing challenges
📋 Key Facts
- Nasdaq deficiency letter received February 19, 2026 for non-compliance with Listing Rule 5605 (independent director, audit committee, and compensation committee requirements)
- Cure period deadline: earlier of next annual stockholders' meeting or February 13, 2027; if annual meeting held before August 12, 2026, compliance required by August 12, 2026
- Company claims deficiencies were remedied by appointing Charles C. Jeong and Mi Jeong Lee as independent directors on February 20, 2026
- Three directors resigned: Andy Nasim, Alex Go, and Mi Young Jeong
- Board size reduced from seven to six members effective February 20, 2026
- Charles C. Jeong appointed Chair of Compensation Committee; Mi Jeong Lee appointed to Audit Committee
- Neither new director will receive compensation for board service
- Charles C. Jeong previously purchased 1,192,661 shares of common stock on October 20, 2025 for $6,500,000 at $5.45/share via a Securities Subscription Agreement — a disclosed related-party transaction
- No family relationships or undisclosed arrangements exist between new directors and existing officers/directors
- Filing covers dual 8-K items: 3.01 (delisting notice) and 5.02 (director changes)
Reborn Coffee, Inc. announced the immediate resignation of three key Board members: Andy Nasim (Chair of Compensation Committee and Audit Committee member), Alex Guo (Vice Chairman), and Mi Young Jeong (Compensation Committee member). The resignations were effective between February 11 and February 13, 2026.
🚩 Red Flags
- Mass resignation of three key board members within a 48-hour window.
- Loss of Audit Committee membership (Andy Nasim), which is critical for financial oversight in micro-cap companies.
- Loss of Vice Chairman and Compensation Committee representation simultaneously.
📋 Key Facts
- Andy Nasim resigned from the Board and all committees effective Feb 11, 2026; served as Chair of Compensation Committee and Audit Committee member.
- Alex Guo resigned from the Board effective Feb 13, 2026; served as Vice Chairman.
- Mi Young Jeong resigned from the Board effective Feb 13, 2026; served on the Compensation Committee.
- The company stated resignations were not due to disagreements regarding operations, policies, practices, accounting, or financial reporting.
Reborn Coffee, Inc. has successfully regained compliance with Nasdaq's Stockholders’ Equity Requirement through a series of capital infusions and a warrant exchange agreement. The company is currently awaiting formal confirmation from Nasdaq regarding its compliance status.
🚩 Red Flags
- Delisting risk: The company was facing suspension/delisting due to Nasdaq Listing Rule 5550(b)(1) (Stockholders’ Equity Requirement).
- Heavy reliance on equity financing and warrant exchanges to maintain compliance.
- Historical net loss of $985,562 for the three months ended December 31, 2025.
- Ongoing monitoring by Nasdaq; failure to meet requirements in future periodic reports could trigger delisting.
📋 Key Facts
- On December 31, 2025, the Company entered into a Warrant Exchange and Termination Agreement with Arena Investors to issue 185,771 shares in exchange for cancelling existing warrants.
- The warrant exchange is estimated to eliminate $1,308,194 of derivative liability.
- As of December 31, 2025, the Company has received $6,500,000 in gross proceeds from an October 2025 subscription agreement with Charles Joeng.
- The company reports estimated shareholders' equity of $3,400,737 as of December 31, 2025, which it believes meets the Nasdaq Stockholders’ Equity Requirement.
- For FY 2026, the Company projects net revenue of ~$10.3 million and a net income of ~$13 thousand.
Reborn Coffee, Inc. has received a notification from Nasdaq scheduling its securities for delisting from the Nasdaq Capital Market effective December 11, 2025. This follows a failure to regain compliance with the stockholders' equity requirement by the November 25, 2025 deadline.
🚩 Red Flags
- Imminent delisting from Nasdaq Capital Market scheduled for Dec 11, 2025.
- Failure to meet minimum stockholders' equity requirement ($2.5M).
- Expiration of the 180-day compliance period provided in May 2025.
📋 Key Facts
- Nasdaq scheduled delisting/suspension for December 11, 2025.
- The company failed to meet Nasdaq Listing Rule 5550(b)(1) requiring at least $2.5 million in stockholders' equity.
- A compliance period was previously granted until November 25, 2025, which has now expired.
- The company intends to request a hearing with a Nasdaq Hearings Panel to stay the delisting.
- Requesting a hearing requires a non-refundable $20,000 fee.
Reborn Coffee, Inc. entered into two separate securities subscription agreements to issue common stock to accredited investors for working capital purposes. The company expects to raise a total of $5,000,000 through these private placements at a price of $5.45 per share.
🚩 Red Flags
- Multiple securities offerings in a short timeframe (October and November agreements).
- Heavy reliance on private placements for working capital, suggesting potential liquidity constraints.
- The use of 'working capital' as the primary purpose often indicates immediate cash needs to sustain operations.
📋 Key Facts
- October 20 Agreement: Charles Jeong committed to purchase 825,688 shares at $5.45/share for a total of $4,500,000.
- Payment schedule for October Agreement: $1M on Oct 20, $1M on Oct 30, $1M on Nov 14, and $1.5M on Dec 24, 2025.
- November 14 Agreement: Zonglin Guo committed to purchase 366,972 shares at $5.45/share for a total of $2,000,000.
- Payment schedule for November Agreement: $500k on Nov 20 and $1.5M on Dec 15, 2025.
- Total potential proceeds from both agreements: $6,500,000 (Note: The text implies total commitment based on share counts/price).
- Securities are being issued under Section 4(a)(2) and Rule 506(b) of Regulation D.
Reborn Coffee, Inc. held its annual meeting of stockholders on November 20, 2025. The company successfully elected seven members to its Board of Directors and ratified the appointment of BCRG Group as its independent auditor for the fiscal year ending December 31, 2025.
📋 Key Facts
- Annual Meeting held on November 20, 2025.
- Quorum was established with 4,125,412 shares (69.13% of outstanding common stock) present in person or by proxy.
- Seven directors were elected: Farooq M. Arjomand, Jay Kim, Dennis R. Egidi, Jung Jae Lim, Andy Nasim, Mi Young Jeong, and Alex Guo.
- BCRG Group was ratified as the independent registered public accounting firm for FY2025.
- Proposal to adjourn the meeting to solicit additional proxies was withdrawn as a quorum and sufficient votes were achieved.
Reborn Coffee, Inc. announced the resignation of its Chief Financial Officer, Stephan Kim, effective October 31, 2025. CEO Jay Kim will assume the CFO responsibilities in an interim capacity until a permanent replacement is appointed.
🚩 Red Flags
- Sudden departure of a key executive (CFO) in a micro-cap environment can create operational instability.
- Concentration of power: The CEO is assuming dual roles as CEO and interim CFO, increasing management workload and reducing oversight separation.
📋 Key Facts
- Stephan Kim resigned as CFO on October 29, 2025, effective October 31, 2025.
- The resignation is stated not to be due to any disagreement regarding operations, policies, practices, accounting, or financial reporting.
- CEO Jay Kim will serve as the interim Chief Financial Officer, Principal Financial Officer, and Principal Accounting Officer.
- The company is currently seeking a permanent replacement for the CFO role.
Reborn Coffee, Inc. announced the immediate resignation of two Board members, Sehan Kim and Jennifer Tan, effective October 1, 2025. To fill vacancies and expand governance, the company increased its Board size from six to seven members and appointed three new directors: Jung Jae Lim, Mi Young Jeong, and Alex Gau.
🚩 Red Flags
- Sudden departure of a director who sat on both the Audit and Compensation committees (Sehan Kim) can sometimes signal internal friction, though the company explicitly denies any disagreement.
- Rapid turnover in Board composition within a single filing.
📋 Key Facts
- Sehan Kim resigned from the Board and all committees (Compensation and Audit) effective Oct 1, 2025.
- Jennifer Tan resigned from the Board effective Oct 1, 2025.
- The Board size was increased from six to seven members, effective Oct 3, 2025.
- Three new directors appointed: Jung Jae Lim, Mi Young Jeong, and Alex Gau.
- New directors will serve without compensation.
- Company states resignations were not due to disagreements regarding operations, policies, or practices.
Reborn Coffee, Inc. has completed the 'Fourth Closing' of a previously announced $10 million convertible debenture program with Arena Investors. This tranche involved the issuance of $833,333 in principal amount debentures at a 10% original issue discount.
🚩 Red Flags
- Highly dilutive financing structure: Conversion price is at a significant discount (92.5% of VWAP) to market.
- Warrant overhang: Issuance of additional warrants as part of the side letter increases potential future dilution.
- Death Spiral characteristics: The conversion price and warrant exercise prices are tied directly to the floating VWAP, which can lead to rapid share dilution if the stock price declines.
📋 Key Facts
- Consummated the Fourth Closing of a Securities Purchase Agreement on July 31, 2025.
- Issued Debentures with an aggregate principal amount of $833,333 for a purchase price of $750,000 (10% OID).
- Issued 136,483 Warrants to Arena Investors in connection with the Fourth Closing.
- The conversion price is set at 92.5% of the lowest daily VWAP over a five-day period preceding the conversion notice.
- Includes an agreement to issue 'Incentive Shares' equal to $175,000 divided by the VWAP in the five days preceding the closing date.
Reborn Coffee, Inc. entered into a $1.7 million licensing agreement with Arjomand Group LLC, an entity owned and controlled by the Company's Chairman, Farooq Arjomand. The deal involves granting non-exclusive rights to use trademarks and coffee-brewing business aspects for expansion in the Middle East and Europe.
🚩 Red Flags
- Related-party transaction involving the Chairman of the Board
- Potential conflict of interest regarding licensing company IP to an insider's entity
- The non-refundable 10% upfront payment is relatively low compared to total contract value, potentially favoring the licensee
📋 Key Facts
- Agreement date: July 16, 2025
- Total license fee: $1,700,000
- Upfront non-refundable payment: 10% of total fee ($170,000)
- Remaining 90% payable in three equal installments (30% each) over the first three years from Effective Date
- Licensee is Arjomand Group LLC, controlled by Chairman Farooq Arjomand
- Agreement includes construction of a flagship store in the UAE to be open within 180 days of Effective Date
- Term: 10 years with renewal rights subject to specific conditions and a $2,500 fee
Reborn Coffee, Inc. received a notification from Nasdaq stating it is in violation of the Equity Rule because its stockholders' equity fell below the $2,500,000 minimum requirement. As of March 31, 2025, the company reported stockholders' equity of only $415,582.
🚩 Red Flags
- Significant deficiency in stockholders' equity (approx. $2.08M shortfall).
- Failure to meet alternative Nasdaq listing criteria (market value and net income).
- Risk of delisting from the Nasdaq Capital Market if compliance is not achieved.
📋 Key Facts
- Nasdaq notification received on May 29, 2025.
- Stockholders' equity was $415,582 as of March 31, 2025 (vs. $2,500,000 required).
- Company does not meet the alternative market value or net income requirements for compliance.
- Deadline to submit a compliance plan is July 13, 2025.
- Potential extension up to November 25, 2025, if a plan is accepted.
Reborn Coffee, Inc. has amended its existing debt agreements with Arena Investors and completed the third tranche of a $10 million convertible debenture offering. The amendment includes a mandatory redemption clause requiring 30% of gross proceeds from future financing to pay down outstanding principal plus a premium.
🚩 Red Flags
- Death Spiral Provisions: The conversion price is linked to a discount (92.5%) of the lowest VWAP, which can lead to significant dilution for existing shareholders.
- Mandatory Redemption Clause: The requirement to use 30% of future financing proceeds to redeem debt at a 120% premium creates a 'cash drain' mechanism that could hinder operational growth.
- High Cost of Capital: Use of 10% Original Issue Discount (OID) and 10% PIK interest indicates expensive, non-traditional financing typical of distressed micro-caps.
📋 Key Facts
- Completed 'Third Closing' of a debt offering on March 28, 2025, issuing $1,666,667 in principal amount for a purchase price of $1,500,000 (10% OID).
- Issued 91,076 warrants as part of the third closing.
- Entered into a 'Global Amendment' requiring the company to use 30% of gross cash proceeds from any future equity or debt financing to redeem existing debentures at 120% of principal plus accrued interest.
- Conversion price for debentures is set at 92.5% of the lowest daily VWAP over a five-day period preceding conversion notice.
- Warrants are exercisable at 92.5% of the average lowest daily VWAP over the consecutive trading days preceding exercise notice.
Reborn Coffee, Inc. has entered into a rescission agreement to void a share purchase agreement with Bbang Ssaem Co. Ltd. (Bakery Café Korea) that was originally dated November 6, 2024.
🚩 Red Flags
- Termination of a material agreement that was recently entered into (November 2024) suggests failed strategic expansion or due diligence issues regarding the Korean market/entity.
📋 Key Facts
- The Company and Bbang Ssaem Co. Ltd. reached an agreement on March 14, 2025, to rescind the share purchase agreement.
- The original agreement was dated November 6, 2024, and was previously disclosed in an 8-K filed on January 2, 2025.
- The rescission renders the previous Agreement void from its inception.
Reborn Coffee, Inc. completed the second tranche of a $10 million secured convertible debenture offering to Arena Investors. This tranche involved the issuance of $1,111,111 in principal amount debentures for a $1,000,000 purchase price, including warrants.
🚩 Red Flags
- Death Spiral Provisions: The conversion and warrant exercise prices are tied to a percentage (92.5%) of the lowest daily VWAP, which can lead to significant dilution for existing shareholders as the stock price drops.
- High Cost of Capital: 10% interest rate paid in kind (PIK) plus a 10% original issue discount (OID).
- Secured Debt: The debentures are described as 'secured,' increasing the priority of these creditors over common equity.
📋 Key Facts
- Second Closing occurred on February 26, 2025.
- Issued $1,111,111 in aggregate principal amount of 10% original issue discount (OID) secured convertible debentures.
- Purchase price for the Second Closing was $1,000,000.
- Issued 52,283 warrants to Arena Investors in connection with the Second Closing.
- Conversion price is set at 92.5% of the lowest daily VWAP over a five-day period prior to conversion notice.
- Warrants exercise price is 92.5% of the average lowest daily VWAP over consecutive trading days preceding exercise notice.
Reborn Coffee, Inc. entered into a $10 million secured convertible debenture offering with Arena Investors and simultaneously established a $50 million Equity Line of Credit (ELOC) with Arena Business Solutions Global SPC II, Ltd. The filing includes significant dilutive terms, including warrants and commitment shares for the ELOC provider.
🚩 Red Flags
- Highly dilutive financing: Both the convertible debentures and the ELOC involve significant discounts to VWAP (92.5% for debentures, 96% for ELOC).
- Death Spiral potential: The conversion price of the debentures is tied to a percentage of the lowest VWAP, which can lead to rapid dilution if the stock price falls.
- Significant encumbrance: All company and subsidiary assets are pledged as security for the Arena Investors' debt via a Security Agreement and Guarantee Agreements.
- Large commitment fee shares: 1.5 million shares are being issued as a 'commitment fee' for the ELOC, representing significant dilution regardless of actual capital drawn.
📋 Key Facts
- Entered into a Securities Purchase Agreement for up to $10,000,000 in 10% original issue discount (OID) secured convertible debentures with Arena Investors.
- First tranche of $555,555 in Debentures closed on February 11, 2025, for a purchase price of $500,000 (10% OID).
- Debenture conversion price is set at 92.5% of the lowest daily VWAP over five trading days prior to conversion.
- Warrants issued in connection with the first tranche: 111,111 warrants with an exercise price at 92.5% of the average VWAP.
- Entered into a $50 million Equity Line of Credit (ELOC) agreement with Arena Business Solutions Global SPC II, Ltd.
- ELOC shares are priced at 96% of the VWAP on the date of Advance Notice.
- The ELOC includes 'Commitment Fee Shares' totaling 1.5 million shares to be issued to the investor as compensation.
Reborn Coffee, Inc. has terminated its $5 million Standby Equity Purchase Agreement (SEPA) with YA II PN, Ltd. (Yorkville). The termination is effective as of February 12, 2025, and the company reported no penalties or fees associated with the exit.
🚩 Red Flags
- Termination of a financing vehicle (SEPA) can sometimes indicate a shift in capital strategy or difficulty securing alternative funding, though not explicitly stated here.
📋 Key Facts
- Termination of SEPA with YA II PN, Ltd. (Yorkville) effective February 12, 2025.
- The original agreement was entered into on February 12, 2024, for up to $5,000,000 in Common Stock.
- No shares were sold under the SEPA except for 64,656 shares issued as consideration for the commitment.
- The company incurred no penalties or fees due to the termination.
Reborn Coffee, Inc. entered into a securities purchase agreement on January 6, 2025, to issue a $121,900 promissory note to an accredited investor. The deal includes high interest rates and a significant conversion feature at a steep discount.
🚩 Red Flags
- Death Spiral Provision: The conversion feature allows the investor to convert debt into equity at a 25% discount to the market price, which is highly dilutive for existing shareholders.
- High Default Interest: A 22% per annum default rate increases the company's debt burden significantly if liquidity issues arise.
- Immediate Liquidity Pressure: While payments start in July 2025, the terms suggest a high-cost bridge financing typical of companies facing cash constraints.
📋 Key Facts
- Entered into a Purchase Agreement with 1800 Diagonal Lending LLC on January 6, 2025.
- Issued a promissory note with an original principal amount of $121,900 for a purchase price of $106,000.
- Note carries a one-time 14% interest charge at issuance and a default interest rate of 22% per annum.
- Repayment schedule begins July 15, 2025, with an initial payment of $69,483 followed by monthly installments of $17,370.75.
- Investor has the right to convert outstanding principal and interest into common stock at a price equal to 75% of the lowest Nasdaq trading price over the preceding ten trading days in the event of default.
Reborn Coffee, Inc. has entered into a definitive agreement to acquire a 58% controlling interest in Bbang Ssaem Co. Ltd., a South Korean bakery chain with 31 locations.
🚩 Red Flags
- Issuance of $800,000 in unregistered common stock (Section 4(a)(2) exemption), which may lead to future dilution for existing shareholders.
- The use of a VWAP-based share issuance mechanism can be dilutive depending on market volatility.
📋 Key Facts
- Acquisition of 166,000 shares of Bbang Ssaem Co. Ltd. (d/b/a Bbang Ssaem Bakery Café Korea).
- Post-acquisition ownership stake: approximately 58% of the Seller's total outstanding shares.
- Total consideration: $1,000,000 USD.
- Payment structure: $200,000 in cash by Dec 31, 2024; $800,000 in REBN common stock to be issued on Jan 31, 2025.
- The Consideration Shares will be issued based on the lowest daily VWAP over the five trading days prior to Jan 31, 2025.
- Seller operates a bakery chain with 31 locations across South Korea.
Reborn Coffee, Inc. reported the results of its annual meeting of stockholders held on October 24, 2024. The meeting included elections for the Board of Directors, ratification of the independent auditor, and approval of a share issuance related to a convertible promissory note.
🚩 Red Flags
- Approval of share issuance in excess of an exchange cap suggests potential dilution for existing shareholders.
📋 Key Facts
- Annual Meeting held on October 24, 2024.
- Quorum was established with 1,798,335 shares present (67.01% of outstanding common stock).
- Six nominees were elected to the Board of Directors: Farooq M. Arjomand, Jay Kim, Dennis R. Egidi, Sehan Kim, Andy Nasim, and Jennifer Tan.
- Stockholders ratified BCRG Group as the independent registered public accounting firm for fiscal year 2024.
- Stockholders approved the issuance of common stock to YA II PN, LTD. in excess of the Exchange Cap per Nasdaq Listing Rule 5635(d).
Reborn Coffee, Inc. has announced the date for its 2024 Annual Meeting of Stockholders and established a record date for voting eligibility.
📋 Key Facts
- The 2024 Annual Meeting of Stockholders is scheduled for October 24, 2024.
- The record date for determining stockholders eligible to vote at the meeting is September 23, 2024.
- The meeting date represents a change of more than 30 calendar days from the anniversary of the previous year's meeting.
- Stockholder proposals must be submitted by the close of business on September 20, 2024.
Reborn Coffee, Inc. announced two significant financing events: a $1.1 million private placement of common stock completed in June 2024 and the issuance of a $500,000 convertible promissory note to Quen Inno Tech Co., Ltd. on August 29, 2024.
🚩 Red Flags
- Issuance of convertible debt (promissory note) is often used by micro-cap companies facing liquidity constraints.
- The 10% interest rate penalty upon default indicates significant credit risk for the issuer.
- The company's reliance on multiple small, private placements suggests a continuous need for external capital to fund working capital.
📋 Key Facts
- Completed private placement of 381,819 shares between May 28 and June 21, 2024, at prices of $2.75 and $3.00 per share.
- Total gross proceeds from the equity private placement were approximately $1.1 million.
- Issued a $500,000 convertible promissory note to Quen Inno Tech Co., Ltd. on August 29, 2024.
- The promissory note carries 0% interest initially, but increases to 10% per annum upon an event of default.
- Repayment installments for the note begin on August 21, 2025.
- Holder has the right to convert the note into common stock at a price of $3.36 per share.
Reborn Coffee, Inc. received a staff determination letter from Nasdaq notifying the company of failure to comply with listing rules due to unfiled Form 10-Q for the period ended March 31, 2024. The company is under a 'Panel Monitor' status, which precludes them from receiving standard compliance extensions.
🚩 Red Flags
- Delisting notice/Non-compliance with Nasdaq Listing Rule 5250(c)(1)
- Ineligibility for standard compliance extensions due to existing 'Panel Monitor' status
- Imminent trading suspension deadline of July 2, 2024
- Auditor change (dismissal of BF Borgers CPA PC) cited as the cause for filing delays
- Risk of de-listing and removal from Nasdaq via Form 25-NSE
📋 Key Facts
- Nasdaq issued a determination letter on June 21, 2024, due to failure to file Form 10-Q for the fiscal year ended March 31, 2024.
- The company was required to dismiss its previous auditor, BF Borgers CPA PC, and has engaged BCRG Group as the new independent accounting firm.
- Due to the 'Panel Monitor' status, the company is ineligible for standard compliance periods (60 days to submit a plan or 180-day extensions).
- The company must request an appeal and stay of suspension by June 28, 2024, to avoid trading suspension on July 2, 2024.
- Failure to comply may result in the filing of Form 25-NSE to remove securities from Nasdaq listing.
Reborn Coffee, Inc. issued a $800,000 convertible promissory note and warrants to EF Hutton Ya Fund, LP (managed by Yorkville Advisors) for a purchase price of $720,000. The agreement includes an 18% default interest rate and significant restrictive covenants regarding future financing.
🚩 Red Flags
- High default interest rate (18%) creates significant liquidity pressure if payments are missed.
- Right of first refusal granted to the lender on all future financing, which can deter other potential investors/creditors.
- The presence of a 'Variable Rate Transaction' restriction is a common feature in predatory or highly restrictive micro-cap financing.
- Requirement for the company to file an S-1 or S-3 registration statement upon holder request after July 15, 2024, which could lead to immediate dilution.
📋 Key Facts
- Issued a convertible promissory note with original principal amount of $800,000 to EF Hutton Ya Fund, LP.
- The Holder paid a purchase price of $720,000 (less a $36,000 advisory fee).
- Interest rate is 0% initially but jumps to 18% per annum upon an event of default.
- Installment payments on the note begin August 15, 2024.
- Conversion price for both the note and warrants is set at $2.29 per share.
- The Holder has a right of first refusal on any future financing transactions involving the issuance of securities.
- Company is prohibited from engaging in 'Variable Rate Transactions' while the note is outstanding.
Reborn Coffee, Inc. has dismissed its previous auditor, BF Borgers CPA PC, following an SEC order permanently barring the firm and its sole partner from practicing before the SEC. The company has appointed BCRG Group as its new independent registered public accounting firm.
🚩 Red Flags
- Auditor dismissal due to SEC enforcement action (permanent bar of the auditor/partner).
- Multiple 8-K items reported in a single filing (4.01 and 5.07) indicating significant corporate activity.
- Approval of share issuances exceeding exchange caps, which can lead to significant dilution for existing shareholders.
📋 Key Facts
- On May 3, 2024, the SEC issued an order barring BF Borgers CPA PC and Benjamin F. Borgers from appearing or practicing before the SEC.
- The Audit Committee dismissed BF Borgers on May 7, 2024.
- BCRG Group was engaged as the new independent registered public accounting firm on May 14, 2024.
- Stockholders approved two proposals on May 10, 2024, regarding share issuances to EF Hutton YA Fund, LP and YA II PN, LTD. in excess of exchange caps.
Reborn Coffee, Inc. has dismissed its independent registered public accounting firm, BF Borgers CPA PC, effective May 7, 2024. The dismissal is notable as the SEC recently issued a cease-and-desist order against the auditor.
🚩 Red Flags
- Auditor change combined with existing going concern language in previous audit reports.
- The dismissed auditor (BF Borgers) is under SEC cease-and-desist proceedings/sanctions as of May 3, 2024.
- Existing 'going concern' qualification in the most recent fiscal year audit report.
📋 Key Facts
- Dismissed BF Borgers CPA PC as independent registered public accounting firm on May 7, 2024.
- The decision was made with the recommendation and approval of the Audit Committee.
- BF Borgers' audit reports for FY ended Dec 31, 2023, included an explanatory paragraph regarding the Company's ability to continue as a going concern.
- The SEC issued an Order Instituting Public Administrative and Cease-and-Desist Proceedings against BF Borgers on May 3, 2024.
- The Company is currently seeking a new independent registered public accounting firm.
Reborn Coffee, Inc. reported the results of its 2024 annual meeting of stockholders, including the election of six directors and ratification of BF Borgers CPA PC as independent auditors. Notably, the company announced it has raised sufficient capital to meet Nasdaq's $2.5 million minimum stockholders' equity requirement.
🚩 Red Flags
- The company relies heavily on insider investments and prepaid advances to maintain compliance with Nasdaq listing rules.
- Significant estimated net loss of $650,000 for the quarter ended March 31, 2024.
📋 Key Facts
- Annual Meeting held on April 22, 2024; quorum reached at 65.99% of outstanding shares.
- Six directors elected: Farooq M. Arjomand, Jay Kim, Dennis R. Egidi, Sehan Kim, Andy Nasim, and Jennifer Tan.
- BF Borgers CPA PC ratified as independent registered public accounting firm for FY2023.
- Shareholders approved 'Say-on-Pay' on a non-binding basis.
- Board determined Say-on-Pay frequency will be every three years (next vote in 2026).
- Company estimates stockholders' equity at March 31, 2024, to be $3,923,843, exceeding the Nasdaq $2.5M minimum requirement.
Reborn Coffee, Inc. filed an 8-K to furnish its press release regarding the financial results for the fiscal year ended December 31, 2023.
📋 Key Facts
- The filing is a standard disclosure of annual results (Item 2.02).
- Reporting period: Year ended December 31, 2023.
- Filing date: March 28, 2024.
- The information provided in the press release (Exhibit 99.1) is furnished but not 'filed' for purposes of Section 18 liability.
Reborn Coffee, Inc. closed a private placement of 444,445 shares of common stock to an accredited investor at $2.25 per share. The transaction raised approximately $1 million in gross proceeds intended for working capital and general corporate purposes.
🚩 Red Flags
- Unregistered sale of equity securities (reliance on Section 4(a)(2) exemption)
📋 Key Facts
- Date of closing: February 29, 2024
- Total shares issued: 444,445 shares of common stock
- Price per share: $2.25
- Aggregate gross proceeds: Approximately $1 million
- Investor: Mr. Scott Lee (Accredited Investor)
- Use of proceeds: Working capital and general corporate purposes
Reborn Coffee, Inc. entered into two significant financing agreements on February 12, 2024: a $1.1 million Pre-Paid Advance Agreement (PPA) with EF Hutton YA Fund, LP and a $5 million Standby Equity Purchase Agreement (SEPA) with Yorkville Advisors. Both agreements involve the issuance of common stock at significant discounts to market price, indicating urgent liquidity needs.
🚩 Red Flags
- Highly dilutive financing structures (PPA and SEPA) typical of distressed micro-caps.
- Significant discounts to market price for share issuances (87% floor/95% market price).
- Potential cash repayment obligation ($500k + 10% premium) triggered by stock price decline (Amortization Event).
- Existence of a 'Floor Price' in the PPA suggests high volatility risk and potential for rapid dilution.
- Multiple material agreements filed simultaneously, indicating urgent capital requirements.
📋 Key Facts
- Entered into a Pre-Paid Advance Agreement (PPA) with EF Hutton YA Fund, LP for $1,100,000 on Feb 12, 2024.
- PPA terms allow investor to purchase shares at the lower of VWAP or 87% of the 5-day lowest VWAP (subject to a $0.46 floor).
- Entered into a Standby Equity Purchase Agreement (SEPA) with YA II PN, Ltd. (Yorkville) for up to $5,000,000.
- SEPA pricing is set at either 95% or 96% of the Market Price depending on the chosen option.
- PPA includes an 'Amortization Event' trigger requiring a $500,000 cash repayment plus a 10% premium if stock price stays below $0.46 for five of seven days.
- Company must pay Yorkville a $150,000 commitment fee in shares.
Reborn Coffee, Inc. received notice from Nasdaq that a hearing panel has granted a temporary extension to continue listing until March 29, 2024. This extension is conditional upon the company fulfilling its compliance plan regarding bid price, minimum stockholders' equity, and annual meeting requirements.
🚩 Red Flags
- Delisting notice/compliance issues across three distinct Nasdaq rules (Bid Price, Equity, and Meeting Rule).
- Requirement to complete 'one or more equity financings' indicates a critical need for immediate capital infusion.
- The extension period is extremely short (until March 29, 2024), leaving little room for error in fundraising or meeting logistics.
📋 Key Facts
- Nasdaq Panel granted an extension for continued listing until March 29, 2024.
- The company completed a 1-for-8 reverse stock split effective January 22, 2024, to address the Bid Price Rule (Rule 5550(a)(2)).
- Compliance with the Equity Rule (Rule 5550(b)) is contingent upon completing one or more equity financings.
- Compliance with the Meeting Rule (Rule 5620(a)) requires holding an annual meeting of stockholders in Q1 2024.
- The company has already achieved a closing bid price >$1.00 for ten consecutive trading days following the reverse split.
Reborn Coffee, Inc. announced a 1-for-8 reverse stock split and the closing of a $1 million private placement with its Board Chairman.
🚩 Red Flags
- Reverse stock split (typically used to boost share price for Nasdaq compliance).
- Related-party transaction: The investor in the private placement is the Chairman of the Board.
- Multiple 8-K items (reverse split and related-party investment) in a single filing.
📋 Key Facts
- Company is implementing a 1-for-8 reverse stock split of issued common stock.
- Closed a private placement with Farooq M. Arjomand (Chairman of the Board).
- The private placement involved 1,666,667 shares at $0.60 per share.
- Aggregate gross proceeds from the private placement are approximately $1 million.
Reborn Coffee, Inc. announced a 1-for-8 reverse stock split effective January 22, 2024, and simultaneously secured a $1 million private placement of common stock from its Board Chairman.
🚩 Red Flags
- Reverse stock split (1-for-8) often indicates efforts to maintain Nasdaq listing compliance regarding minimum bid price requirements.
- Related-party transaction: The primary capital infusion came from the Chairman of the Board rather than external institutional investors.
- Downsizing of previously announced strategic investment (from $5M MOU to a potential $2M negotiation).
📋 Key Facts
- The company is implementing a 1-for-8 reverse stock split to be effective on Monday, January 22, 2024.
- Farooq M. Arjomand (Chairman of the Board) subscribed to 1,666,667 shares at $0.60 per share.
- The private placement raised approximately $1 million in gross proceeds for working capital and general corporate purposes.
- Negotiations are ongoing with KIB Plug Energy Korea for a potential $2 million investment (reduced from an initial $5 million MOU).
Reborn Coffee, Inc. received a notification from Nasdaq regarding its failure to hold an annual meeting of shareholders for the fiscal year ended December 31, 2023. This follows existing non-compliance issues regarding minimum bid price and stockholders' equity requirements.
🚩 Red Flags
- Delisting risk due to failure to hold annual meeting of shareholders.
- Persistent non-compliance with minimum bid price ($1.00 rule).
- Persistent non-compliance with minimum stockholders' equity ($2.5M rule).
- History of multiple compliance failures (May 2023, Sept 2023, and now Jan 2024).
📋 Key Facts
- Received notification from Nasdaq on January 4, 2024, regarding failure to hold the 2023 annual meeting of shareholders.
- The company is currently in violation of Nasdaq Listing Rule 5550(a)(2) ($1.00 minimum bid price).
- The company is currently in violation of Nasdaq Listing Rule 5550(b)(1) ($2,500,000 minimum stockholders' equity).
- The company has submitted a written plan of compliance to Nasdaq for consideration.
- Nasdaq has previously issued notification letters for these same issues (May 2, 2023, and September 5, 2023).