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Item 9A. Controls and Procedures

2023-04-11 compared with 2017-11-30 · 1428 added, 507 removed, 28 unchanged (99% of the section changed)

Controls and Procedures

(a) Evaluation of Disclosure Controls and Procedures

The management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting.

The Companys internal control over financial reporting is a process designed under the supervision of the Companys Chief Executive Officer and Chief Financial Officer to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Companys financial statements for external purposes in accordance with the U.S.

generally accepted accounting principles.

In evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

Our management, with the participation of our Chief Executive Officer (Office of the CEO) also our Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this Annual Report on Form 10-K.

Based on that evaluation, our CEO as well as our Chief Financial Officer concluded that our disclosure controls and procedures are not effective, at the reasonable assurance level, containing material weaknesses in internal controls as of the end of the period covered by this report to ensure that information we are required to disclose in reports that we file or submit under the Securities Exchange Act of 1934 (1) is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and (2) is accumulated and communicated to management, including our Office of the CEO and our Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure due to the Companys limited internal resources and lack of ability to have multiple levels of review and Lack of internal control environment and lack of formal documentation of internal control policies Also due to limited resources available to have additional staff to our accounting office there is inadequate segregation of duties.

This lack of capital and consequential lack of staff has resulted in insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of both US GAAP and SEC guidelines.

(b) Management's report on internal control over financial reporting.

Our Chief Executive Officer as well as our Chief Financial Officer, I.

Andrew Weeraratne, is responsible for establishing and maintaining adequate internal control over financial reporting.

Weeraratne has assessed the effectiveness of the Company's internal control over financial reporting as of the end of the period covered by this report based on the criteria for effective internal control described Internal Control Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.

Based on this assessment Mr.

Weeraratne has concluded that, as of the end of the period covered by this report, the Company's internal control over financial reporting is not effective due to insufficient written policies and procedures and inadequate segregation of duties and lack of multiple levels of reviews and effective risk assessment, as to timely identify, correct and disclose information required to be included on our Securities and Exchange Commission reports due to the Companys limited internal resources and lack of ability to have multiple levels of transaction review and segregate duties Due to our limited activities where all cash disbursements can be easily accounted and due to the quarterly review process with our auditors, management believes that the financial statements and other information presented herewith are materially correct.

There have been no changes in our internal controls over financial reporting (as such term is defined in Rule 13a-15(f) and 15d-15(f) under the Securities Exchange Act) during the year ended September 30, 2017, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

of Disclosure Controls and Procedures

management has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under

the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), as of December 31, 2022.

Based on such evaluation,

our Chief Executive Officer and Chief Financial Officer have concluded that as of December 31, 2022, our disclosure controls and procedures

were ineffective to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit

under the Exchange Act (a) is recorded, processed, summarized and reported within the time periods specified by Securities and Exchange

Commission (“SEC”) rules and forms and (b) is accumulated and communicated to our management, including our Chief Executive

Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding any required disclosure.

has identified control deficiencies regarding inadequate accounting resources, the lack of segregation of duties and the need for a stronger

internal control environment.

Management of the Company believes that these material weaknesses are due to the small size of the Company’s

accounting staff.

The small size of the Company’s accounting outsourced staff may prevent adequate controls in the future due to

the cost/benefit of such remediation.

mitigate the current limited resources and limited employees, we rely heavily on direct management oversight of transactions, along with

the use of external legal and accounting professionals.

As we grow, we expect to increase our number of employees, which will enable

us to implement adequate segregation of duties within the internal control framework.

control deficiencies could result in a misstatement of account balances that would result in a reasonable possibility that a material

misstatement to our financial statements may not be prevented or detected on a timely basis.

In light of this material weakness, we performed

additional analyses and procedures in order to conclude that our financial statements for the year ended December 31, 2022 included in

this Annual Report on Form 10-K were fairly stated in accordance with GAAP.

Accordingly, management believes that despite our material

weaknesses, our financial statements for the quarter ended December 31, 2022 are fairly stated, in all material respects, in accordance

in Internal Control Over Financial Reporting

to a transition period established by SEC rules applicable to newly public companies, our management is not required to evaluate the

effectiveness of our internal control over financial reporting until after the filing of our Annual Report on Form 10-K for the year

ending December 31, 2022.

As a result, this Annual Report does not address whether there have been any changes in our internal control

over financial reporting.

on Effectiveness of Controls and Procedures

designing and evaluating the disclosure controls and procedures and internal control over financial reporting, management recognizes

that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired

control objectives.

In addition, the design of disclosure controls and procedures and internal control over financial reporting must

reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of

possible controls and procedures relative to their costs.

Other Information

DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS OF THE COMPANY

The following individuals serve as our executive officers and members of our board of directors:

Andrew Weeraratne

Chairman of the Board of Directors, Chief Executive Officer, Chief Financial Officer, Director

Eugene Nichols

Secretary, Treasurer, Director

Disclosure Regarding Foreign Jurisdictions that Prevent

Not applicable.

Directors, Executive Officers and Corporate Governance

The following individuals serve as our executive officers and members of our board of directors:

Andrew Weeraratne, age 67, Chief Executive Officer, Chairman of the Board of Directors and Chief Financial Officer

Weeraratne has served as our Chief Executive Officer, Chief Financial Officer and Chairman of the Board of Directors since inception.

Weeraratne had been an entrepreneur since he was 14-years old and has been involved in various start-up ventures in many parts of the world, including Asia, the Middle East, Europe and the U.S., in a variety of industries including communications, construction, and entertainment in addition to forming various global joint ventures.

From October 2013 to January 2017, Mr.

Weeraratne served as the Chief Executive Officer and Chief Financial Officer for NGFC Equities Inc.

(NGFC), a public company that was listed on the OTCQB under the ticker NGFF. In January 2017, NGFC reverse-merged with Quest Energy Inc.

and the name of NGFC was changed to American Resources Corporation and currently has the symbol AREC, on the OTCQB.

From February 2000 to the present time he serves as president of Passerelle Corp., a private investment company on a part time basis while managing a few private investment partnerships.

Weeraratne was chief financial officer of China Direct, Inc.

CDII) from February 2009 to May 2009.

From August 2004 to December 2008, Mr.

Weeraratne acted as a financial consultant working in a variety of industries including work with the Embassy of the United States of America in Iraq as a financial advisor to form an Iraqi Accounting Association to introduce International Accounting Standards to Iraq as part of a plan to privatize State owned enterprises after the Iraq war.

From December 1998 to February 2000, Mr.

Weeraratne was the chief financial officer of National Lampoon, Inc.

(formerly known as J2 Communications), a provider of branded comedic content.

From November 1996 to December 1998, Mr.

Weeraratne was the controller for Beachport Entertainment Corp., a provider of family entertainment and sporting events and television programming.

Current Directors and Executive Officers

The following table provides information regarding

our executive officers and members of our board of directors as of the date of this Annual Report on Form 10-K:

Executive Officers

Chief Executive Officer and Director

Chief Financial Officer

Non-Employee, Independent Directors

Chairman of the Board of Directors and Independent

Vice Chairman of the Board of Directors and Independent

Independent Director

Background of Executive Officers and Directors

Jay Kim, age 60, Chief

Executive Officer and Director

Kim has served as the

Chief Executive Officer of Reborn Coffee since the inception of the Company in 2014.

On July 1, 2007, Mr.

Kim previously founded

Wellspring Industry, Inc., which created the yogurt distribution company “Tutti Frutti” and the bakery-café franchise

“O’My Buns.” Tutti Frutti grew to approximately 700 agents worldwide that offered self-serve frozen yogurt.

sold the majority ownership of Wellspring to group of investors in 2017 to focus his efforts on Reborn Coffee.

Prior to beginning Wellspring

Kim was the owner of Coffee Roasters in Riverside, California from 2002 to 2007.

Kim worked as the project manager for JES Inc.,

based in Brea, CA from 1997 to 2002 where he coordinated and managed environmental engineering projects.

Kim worked as a Senior Process

Engineer for Allied Signal Environment Catalyst in Tulsa, Oklahoma, from 1992 to 1997 where he coordinated and implemented projects related

to plant productivity.

He also acted as the leader in start-up plant to be based in Mexico for Allied Signal.

From 1988 to 1992 Mr.

Weeraratne was the chief financial officer of Business Resource Exchange, a business consulting company that identified, acquired and resold undervalued companies.

worked as the plant start-up engineer for Toyota Auto Body Inc.

Kim has a B.S, in Chemical

Engineering from California State University at Long Beach and followed a Chemical office basic at US Army Chemical School in 1988.

was commissioned 1st.

of the US Army in 1986 and retired from the US Army in 1988.

Stephan Kim, age

46, Chief Financial Officer

Kim has served as the

full-time Chief Financial Officer of the Company since June 26, 2022.

Prior to joining Reborn Coffee, Mr.

Kim provided professional accounting

and tax consulting services for nearly 20 years to various clients in the consumer retail, healthcare, industrial manufacturing, and

technology industries, including public accounting and tax consulting services under his own practice since 2011.

Throughout his career

as a public accountant, controller and banker in the US and South Korea, Mr.

Kim has obtained broad and in-depth expertise on international

accounting, finance, taxes and Sarbanes-Oxley 404 compliance.

Kim graduated from Sogang University in South Korea with a B.A.

Sociology and Business in 2002 and earned a Master’s degree in Professional Accountancy from Indiana University in 2005.

began his career in 2002 as a banker with Shinhan Bank in South Korea.

From 2005 to 2010, Mr.

Weeraratne managed his own CPA firm in Washington D.C.

representing foreign clients with investments in the U.S.

and in International taxation matters.

Weeraratne has been a Florida licensed Certified Public Accountant since 1981.

He is also an author, and wrote a book entitled Uncommon Commonsense Steps to Super Wealth, where he illustrates how some people beginning with very little ended up in the list of richest people on earth by focusing only one out of four ways to make their wealth.

Weeraratne devotes approximately 80 % of his time to our business and affairs.

Eugene Nichols, age 71, member of the Board of Directors, Secretary, Treasurer

Nichols has served as a director, the secretary and the treasurer of our Company since May 2017.

Nichols has over 30 years of sales, management and marketing experience with a Fortune 100 company.

From October 2013 to January 2017, Mr.

Nichols served as the President and a member of the Board of Directors for NGFC

Equities Inc.

(NGFC) a public company that was listed on the OTCQB under the ticker NGFF. In January 2017, NGFC was reverse merged with American Resources Corporation and currently has the symbol AREC.

He began his professional career as a sales representative at Beecham Massengill in Bristol, Tennessee, where he was employed from 1972 to 1976.

From May 1976 until October 2002 he was employed with Abbott Diagnostic for 26 years holding various positions including sales executive, sales trainer, district manager and director advertising and communication.

Nichols was retired from October 2002 until March 2007.

Nichols professional experience also includes, the part time work he did, in the start-up and majority ownership of Communication Exchange Inc.

and Visa Exchange, Inc., in Washington D.C., from 1988 to 1991, co-owner of Foxfire Golf Course in Waupaca, Wisconsin (1995 until 2004) and managing partner of Power Management Electrical Consultants, an electrical consulting firm in Pasadena, Maryland from March 2007 until June 2011.

Goran Antic age 43, Member of the Board of Directors

Antic has served as a director of our Company since May 2017.

He began his career with Getinge Sterilization factory (division of Getinge Group), a public company based in Sweden which is one of the largest medical supply companies in the world in 1990 as an assembler and then moved to the testing department of Getinge Group in 1995.

He worked in that division till 1999 and then was promoted to be an international service engineer of Getinge Sweden which is another subsidiary of Getinge Group.

Antic was transferred to Getinge International branch in Miami, Florida as a service manager for Latin America and Caribbean islands.

Antic began ECI-LATAM Inc.

in April of 2014 with an agreement with Getinge International to serve the same client base through his own company, ECI-LATAM Inc.

Antic had his education as an electronic engineer at Kattegat Institution in Halmstad, Sweden.

Michael Laub age 51, Member of the Board of Directors

Laub has served as a director of our Company since May 2017.

He began his career in the Real Estate industry as a Licensed Loan Officer in 1988.

Soon after he earned his Brokers License for Real Estate Financing and established his first brokerage office in Southern California in 1990.

His practice grew to include both mortgage finance offices and real estate sales offices in South Orange County, California.

Both managed by Mr.

Laub till 2008.

After a successful 20-year career in the real estate industry, Mr.

Laub looked for new business challenges and directed his focus toward the clean energy sector in July, 2008.

Recognizing the substantial cost savings in operating Compressed Natural Gas (CNG) fueled vehicles vs Gasoline vehicles was his catalyst.

Michael began buying and selling CNG vehicles across the country.

By the June of 2009, that experience and the healthy demand he witnessed nationally for cleaner burning, more cost-effective vehicles, led him on the search for CNG conversion kits and components to start converting existing gasoline+diesel vehicles to run on CNG.

From early on the focus for Mr.

Laub was to provide quality CNG conversion systems, parts and accessories to small and large vehicle fleets across the country.

Soon thereafter Mr.

Laub realized the necessity to educate the automobile technicians on proper safety installation and maintenance practices.

Thus, he began a company entitled CNG United LLC, an Alternative Fuels, safety & education company.

Within the following year, in 2010 he created a CNG educational curriculum for automotive technicians providing them an opportunity to earn two (2) CNG certifications while following his comprehensive step by step policies & procedures to ensure a successful and safe vehicle conversion.

Laub currently manages CNG United, and utilizes this company to conduct vehicle conversions and safety training classes nationally.

CNG United also sells state-of-the-art conversion systems, CNG parts & accessories to their national network of CNG technician graduates, as well as corporate fleets and municipalities and are proud to be entering their Tenth Year Anniversary in the Alternative Fuel Industry in 2018.

You can learn more about CNG United, LLC at:

www.cngunited.com

Kazuko Kusunoki

Vice President Administration

From October 2013 to January 2017, Ms.

Kusunoki served as the vice President Administration for NGFC Equities Inc.

(NGFC) a public company that was listed on the OTCQB under the ticker NGFF. In January 2017, NGFC was reverse merged with American Resources Corporation and currently trading under the symbol AREC. Ms.

Kazuko Kusunoki began her career as a freelance writer for magazines in Japan.

From October 1991 to May 1994

she worked for Subaru International Co.

Ltd in Tokyo, Japan as a Translator, Editor and Coordinator.

From June 1994 to February 1996 she worked as a freelance translator working on software manuals, automobile magazines and other technical documents.

From March 1996 to October 2000 Kazuko worked for Fujitsu Learning Media Limited in Tokyo, Japan as Software Localization Project Manager and Coordinator.

She moved to the USA in 2001 and from 2001 to the present time she has been working as a freelance translator for various major translation companies, especially translating content on websites, for clients such as Eurail, Akamai, Citigroup and Mastercard etc.

Kazuko has a BA in Commerce from Waseda University, Tokyo, Japan in March 1989 and got a certificate in Local Area Network support from UCLA Extension in California in June 2002.

Kazukos responsibilities will include keeping a schedule of all the mandatory filings we have to with the SEC (once we are a public company) and tax authorities to assure they are done on time.

Also she will be instrumental in doing our SEC filing using in-house software to edgarize and XBRL the process.

She will also help us expand our operations in Japan by meeting with Japanese investors and business people.

Kazuko Kusunoki is the wife of I.

Andrew Weeraratne, the CEO and CFO of Capax Inc.

Kim was an Audit Manager at KPMG, Los Angeles

Non-Employee Directors

age 64, Chairman of the Board of Directors

Farooq Arjomand has served

as the Chairman of the Board of Directors of Reborn Global since January 2015, and took over as the Chairman of the Board of Reborn Coffee

on May 7, 2018.

In 1984, he started his career as a banker with HSBC and gained experience across all departments—namely,

private banking, corporate finance, trade services, and investment banking.

During his stint with HSBC, he also became the founding member

of Amlak Finance & Emmar Properties in 1997.

Arjomand founded the Arjomand Group of companies in 2000 and has served as

chief executive officer since that company’s inception.

Based in Dubai, the Arjomand Group conducts various activities including

real estate, manufacturing, trades, financial activities and aviation across the GCC, Asia, Europe and the US.

Arjomand has also served

as the Chairman of DAMAC Properties, a leading developer in the Middle East and as a board member of Al Ahlia Insurance Company BSC,

Arjomand also serves as Managing Partner of Barakat Group.

Barakat Group has been involved in the manufacturing of juices

and food stuffs for the past 30 years.

Arjomand is a citizen of the United Arab Emirates.

He graduated with a Business Management

degree from Seattle Pacific University in Seattle, Washington.

76, Vice Chairman of the Board of Directors

Egidi is a licensed

real estate broker in the State of Illinois.

Additionally, Mr.

Egidi was awarded the CPM® designation through the Institute of Real

Estate Management.

He holds a bachelor’s degree in civil engineering and attended graduate school in Civil Engineering at the University

Egidi joined Reborn

as a Director and the Vice Chairman of the Board of Directors in June of 2020.

Egidi formed DRE, Inc., an Illinois real

estate development company in 1993, developing over 30 affordable housing projects in Illinois, Ohio, Indiana, Iowa, and California,

totaling approximately 5,000 units.

Today, he continues to serve as President of DRE, Inc., and acts as Managing General Partner of 15

limited partnerships, of which 5 have been redeveloped over the past 5 years.

In addition, Mr.

as President and Chairman of the board of Promex Midwest, a real estate property management firm.

He has been involved in all phases

of management in the commercial, residential and industrial building fields in the Midwest.

Egidi has extensive knowledge and experience

in the construction industry, having served as Executive Vice President and Chief Estimator for Corbetta Construction Company of Illinois,

and then for Contractors and Engineers, Inc.

During his 25 years of experience in the construction industry, he was involved in all types

of projects ranging from multifamily housing, historical rehabs, high-rise office buildings and shopping centers.

Egidi and DRE also have

experience in the food service industry having developed fast food pizza stores in central Illinois under the Rocky Rococo brand in the

He was also a principal partner in Cookie Associates of Houston, Texas.

Cookie Associates owned and operated 34 “Great American

Cookie” stores and kiosks in the Houston market.

Most recently, Mr.

Egidi, as a principal of TF Investors LLC, was a franchisor

of eight Tutti Frutti Frozen Yogurt franchises located in France and England.

Sehan Kim, age 69,

Sehan Kim has been a Director

of Reborn Global since January 2015.

Sehan Kim joined Magitech Incorporation in 2013 as Vice President of Operations.

He oversees operations

and management in water, and beverage businesses at Magitech Corporation.

He led the major projects at Magitech to install the ERP system

and the cold brewed coffee extraction systems.

Prior to this position,

Sehan Kim from 2005 to 2011, was Senior Vice President at Korean Air Co., Ltd.

(“Korean Air”).

He was the Head of the Aerospace

Division at Korean Air.

Prior to that, Sehan Kim was vice president and general manager of the Commercial Aerostructure Businesses at

Korean Air from 2001 to 2005, which supplied various aircraft structural components to major commercial airplane manufacturers, including

Airbus, Boeing and Embraer.

From January 1994 to February

Kim worked as a Korean Air representative at Boeing in Seattle, Washington, and had on the job training in configuration management

at Northrop Aircraft company in Los Angeles, for the Korean Fighter Coproduction Program in 1981.

He joined Korean Air in August 1979

as an Aerospace structural engineer.

Sehan Kim studied Aerospace Engineering at Seoul National University in 1973 through 1977 and

holds a master’s Degree in business management from Busan National University.

Family Relationships

There are no family relationships among any of

our executive officers or directors.

Board Composition

Our business and affairs

are managed under the direction of our board of directors, a majority of which are independent (i.e., Farooq M.

Arjomand, Dennis R.

and Sehan Kim).

We have four directors with no vacancies.

Our current directors will continue to serve as directors until their resignation,

removal or successor is duly elected.

Our certificate of incorporation

and our bylaws permit our board of directors to establish the authorized number of directors from time to time by resolution.

Each director

serves until the expiration of the term for which such director was elected or appointed, or until such director’s earlier death,

resignation or removal.

Involvement in Certain Legal Proceedings

During the past ten years, none of our directors or executive officers has been:

the subject of any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;

convicted in a criminal proceeding or is subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);

subject to any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities;

found by a court of competent jurisdiction (in a civil action), the SEC or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, that has not been reversed, suspended, or vacated;

subject of, or a party to, any order, judgment, decree or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of a federal or state securities or commodities law or regulation, law or regulation respecting financial institutions or insurance companies, law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity;

subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization, any registered entity or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.

None of our directors, executive officers or affiliates, or any beneficial owner of 5% or more of our common stock, or any associate of such persons, is an adverse party in any material proceeding to, or has a material interest adverse to, us.

DIRECTOR INDEPENDENCE

Antic and Mr.

Laub are considered independent within NYSE MKTs director independence standards pursuant to the NYSE MKT Company Guide.

As of the filing of this

Annual Report on Form 10-K, there are no legal proceedings, and during the past ten years there have been no legal proceedings, that

are material to an evaluation of the ability or integrity of any of our directors, director nominees or executive officers.

Committees of Our Board of Directors

Our board of directors has

established a compensation committee and an audit committee.

The composition and responsibilities of each of the committees of our board

of directors are described below.

Members serve on these committees until their resignation or until otherwise determined by our board

of directors.

Our board of directors may establish other committees as it deems necessary or appropriate from time to time.

Audit Committee

We have not established any committees, including an Audit Committee, a Compensation Committee or a Nominating Committee, any committee performing a similar function.

The functions of those committees are being undertaken by board of directors as a whole.

Because we only have one independent director, we believe that the establishment of these committees would be more form over substance.

Further, because we have no operations, at the present time, we believe the services of financial experts are not warranted.

Weeraratne is considered an “ audit committee financial expert ” within the meaning of Item 401(e) of Regulation S-K.

In general, an “ audit committee financial expert ” is an individual member of the audit committee or board of directors who:

understands generally accepted accounting principles and financial statements;

is able to assess the general application of such principles in connection with accounting for estimates, accruals and reserves;

has experience preparing, auditing, analyzing or evaluating financial statements comparable to the breadth and complexity to our financial statements;

understands internal controls over financial reporting;

understands audit committee functions.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Exchange Act requires our directors and executive officers and persons who beneficially own more than ten percent of our Common Stock (collectively, the Reporting Persons) to report their ownership of, and transactions in our Common Stock to the SEC.

Such Directors, executive officers and 10% shareholders also are required to furnish us with copies of all Section 16(a) reports they file.

CODE OF BUSINESS CONDUCT AND ETHICS

We have adopted a Code of Business Conduct and Ethics that applies to our executive officers and any other persons performing similar functions.

This Code provides written standards that we believe are reasonably designed to deter wrongdoing and promote honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships, and full, fair, accurate, timely and understandable disclosure in reports we file with the SEC.

A copy of our Code of Business Conduct and Ethics has been filed with the SEC as an exhibit to the registration statement that we filed with the SEC.

EXECUTIVE COMPENSATION

As of the date of this filing,

our audit committee consists of Farooq M.

Arjomand, Dennis R.

Egidi and Sehan Kim.

Each member of our audit committee can read and understand

fundamental financial statements in accordance with applicable requirements.

The chair of our audit committee is Farooq M.

who our board of directors has determined is an “audit committee financial expert” within the meaning of SEC regulations.

In arriving at these determinations, our board of directors has examined each audit committee member’s scope of experience and

the nature of their employment in the corporate finance sector.

The principal duties and

responsibilities of our audit committee include, among other things:

and selecting a qualified firm to serve as the independent registered public accounting firm

to audit our financial statements;

to ensure the independence and performance of the independent registered public accounting

to maintain and foster an open avenue of communication between management and the independent

registered public accounting firm;

the scope and results of the audit with the independent registered public accounting firm,

and reviewing, with management and the independent registered public accounting firm, our

interim and year-end operating results;

procedures for employees to submit concerns anonymously about questionable accounting or

audit matters;

our policies on risk assessment and risk management;

related party transactions;

and reviewing a report by the independent registered public accounting firm at least annually,

that describes its internal quality-control procedures, any material issues with such procedures,

and any steps taken to deal with such issues when required by applicable law;

(or, as permitted, pre-approving) all audit and all permissible non-audit services to be

performed by the independent registered public accounting firm.

Our audit committee operates

under a written charter that satisfies the applicable listing standards of the Nasdaq Capital Market.

Compensation Committee

Our compensation committee

consists of Farooq M.

Arjomand, Dennis R.

Egidi and Sehan Kim.

The chair of our compensation committee is Dennis R.

The principal duties and

responsibilities of our compensation committee include, among other things:

the retention of compensation consultants and outside service providers and advisors;

and approving, or recommending that our board of directors approve, the compensation, individual

and corporate performance goals and objectives and other terms of employment of our executive

officers, including evaluating the performance of our chief executive officer and, with his

assistance, that of our other executive officers;

and recommending to our board of directors the compensation of our directors;

● administering

our equity and non-equity incentive plans;

our practices and policies of employee compensation as they relate to alignment of incentives;

and evaluating succession plans for the executive officers;

and approving, or recommending that our board of directors approve, incentive compensation

and equity plans;

and establishing general policies relating to compensation and benefits of our employees

and reviewing our overall compensation philosophy.

Our compensation committee

operates under a written charter that satisfies the applicable listing standards of the Nasdaq Capital Market.

Compensation Committee

None of the members of the

compensation committee are currently, or have been at any time, one of our executive officers or employees.

None of our executive officers

currently serve, or have served during the last year, as a member of the board of directors or compensation committee of any entity that

has one or more executive officers serving as a member of our board of directors or compensation committee.

Director Nominations

We do not have a standing

nominating committee.

In accordance with the Nasdaq Stock Exchange corporate governance standards, a majority of the independent directors

may recommend a director nominee for selection by the board of directors.

The board of directors believes that the independent directors

can satisfactorily carry out the responsibility of properly selecting or approving director nominees without the formation of a standing

nominating committee.

As there is no standing nominating committee, we do not have a nominating committee charter in place.

The board of directors will

also consider director candidates recommended for nomination by our stockholders during such times as they are seeking proposed nominees

to stand for election at the next annual meeting of stockholders (or, if applicable, a special meeting of stockholders).

Our stockholders

that wish to nominate a director for election to our board of directors should follow the procedures set forth in our bylaws.

We expect to expand our

board of directors in the future to include additional independent directors.

In adding additional members to our board of directors,

we will consider each candidate’s independence, skills and expertise based on a variety of factors, including the person’s

experience or background in management, finance, regulatory matters and corporate governance.

Further, when identifying nominees to serve

as a director, we expect that our board of directors will seek to create a board of directors that is strong in its collective knowledge

and has a diversity of skills and experience with respect to accounting and finance, management and leadership, vision and strategy,

business operations, business judgment, industry knowledge and corporate governance.

Code of Business Conduct

In filing our Registration

Statement on Form S-1 on July 3, 2017, we adopted a Code of Business Conduct and Ethics that applies to all our employees, officers and

This includes our principal executive officer, principal financial officer and principal accounting officer or controller,

or persons performing similar functions.

The full text of our Code of Business Conduct and Ethics will be posted on our website at www.reborncoffee.com.

We intend to disclose on our website any future amendments of our Code of Business Conduct and Ethics or waivers that exempt any principal

executive officer, principal financial officer, principal accounting officer or controller, persons performing similar functions or our

directors from provisions in the Code of Business Conduct and Ethics.

Information contained on, or that can be accessed through, our

website is not incorporated by reference into this Annual Report on Form 10-K, and you should not consider information on our website

to be part of this Annual Report on Form 10-K.

Risk and Compensation

We have analyzed our compensation

programs and policies to determine whether those programs and policies are reasonably likely to have a material adverse effect on us.

Compliance with Section

16(a) of the Exchange Act

Section 16(a) of the Exchange

Act requires our executive officers, directors and persons who beneficially own more than 10% of a registered class of our equity securities

to file with the SEC initial reports of ownership and reports of changes in ownership of our common stock and other equity securities.

These executive officers, directors, and greater than 10% beneficial owners are required by SEC regulation to furnish us with copies

of all Section 16(a) forms filed by such reporting persons.

Based solely on our review of such forms furnished to us and written representations

from certain reporting persons, we believe that during the year ended December 31, 2022, all reports applicable to our executive officers,

directors and greater than 10% beneficial owners were filed in a timely manner in accordance with Section 16(a) of the Exchange Act.

Executive Compensation

The following table sets forth information concerning the annual and long-term compensation of our Chief Executive Officer, and the executive officers who served at the end of the periods of September 30, 2017 and September 30, 2016, for services rendered in all capacities to us.

The listed individuals shall hereinafter be referred to as the Named Executive Officers. Currently, we have no employment agreements with any of our Directors or Officers.

For the fiscal year ended September 2017 and 2016 our directors except the CEO/director were not given any cash compensation.

On February 21, 2017 the Company issued the following shares of Class A common stock as founders shares to the following officers and directors Andrew Weeraratne, Eugene Nichols, Goran Antic and Michael Laub for a total of $540.

Weeraratne paid to the Company.

Consideration ($)

Andrew Weeraratne

Chief Executive Officer,

Chairman of the Board of Directors

Eugene Nichols

Compensation for the future will be determined when and if additional funding is obtained.

Summary Compensation Table Officers

The listed individuals shall hereinafter be referred to as the Named Executive Officers. Currently, we have no employment agreements with any of our Directors or Officers.

Compensation for the future will be determined when and if additional funding is obtained.

Compensation Philosophy

Our compensation philosophy includes:

● pay for performance;

● fair compensation that is competitive with market standards;

● compensation mix according to growth stage of our company as

well as job level;

● incentivizing employees to work for long-term sustainable and

profitable growth of our company.

Objective of Executive Compensation Program

The objective of our compensation program is to provide a fair and

competitive compensation package in the industry to each named executive officer (“NEO”) that will enable us to:

● attract and hire outstanding individuals to achieve our mid-term

and long-term visions;

● motivate, develop and retain employees;

● align the financial interests of each named executive officer

with the interests of our stakeholders including stockholders and encourage each named executive officer to contribute to enhance value

of the Company.

Our named executive officers for the year 2022, which consist of our

principal executive officers, were:

● Jay Kim, President and Chief Executive Officer;

● Stephan Kim, Chief Financial Officer.

Administration

Following the consummation of this offering, our Compensation Committee,

which includes two independent directors, will oversee our executive compensation program and will be responsible for approving the nature

and amount of the compensation paid to our NEOs.

The committee will also administer our equity compensation plan and awards.

Elements of Compensation

Our compensation program for NEOs consists of the following elements

of compensation, each described in greater depth below:

● base salaries;

● performance-based bonuses;

● equity-based incentive compensation;

● general benefits.

Base salaries are an annual fixed level of cash compensation to reflect

each NEO’s performance, role and responsibilities, and retention considerations.

Performance-Based Bonus

To incentivize management to drive strong operating performance and

reward achievement of our company’s business goals, our executive compensation program includes performance-based bonuses for NEOs.

Our Compensation Committee has established annual target performance-based bonuses for each NEO during the first quarter of the fiscal

Equity Compensation

We may pay equity-based compensation to our NEOs in order to link

our long-term results achieved for our stockholders and the rewards provided to NEOs, thereby ensuring that such NEOs have a continuing

stake in our long-term success.

General Benefits

Our NEOs are provided with other fringe benefits that we believe are

commonly provided to similarly situated executives.

Summary Compensation Table – Officers

Incentive plan compensation

Change in Pension Value and

Nonqualified deferred compensation earnings

All other Compen-sation

Name and principal position

Andrew Weeraratne,

There is no employment contract with Mr.

Andrew Weeraratne at this time.

Nor are there any agreements for compensation in the future.

A salary and stock options and/or warrants program may be developed in the future.

The amount of value for the services of Mr.

Weeraratne was determined by agreement for shares in which he received as a founders for (1) control, (2) willingness to serve on the Board of Directors and (3) participation in the foundational days of the corporation.

The amount received by Mr.

Weeraratne is not reflective of the true value of the contributed efforts by Mr.

Weeraratne and was arbitrarily determined by the company.

On June 1, 2017, at a Board of Directors meeting the board passed a resolution to pay $2,000 per month compensation plus any expense reimbursements to its Chief Executive Officer until the Company has a successful offering.

The amount of this compensation is based on the current cash flow situation and the cash flow needs currently and in the immediate future and not based on the fair market value of the services the CEO is providing the Company currently.

We have no employment agreement with any officers or directors of the Company and no other officers or directors were paid any compensation except expense reimbursements.

Director Compensation Table

Fees earned or paid in cash

Incentive plan compensation

Change in Pension Value and

Nonqualified deferred compensation earnings

All other Compen-sation

Name and principal position

I Andrew Weeraratne

Chairman of the Board of Directors

Eugene Nichols, Director

Goran Antic, Director

Michael Laub, Director

CHANGE OF CONTROL

As of September 30, 2017, we had no pension plans or compensatory plans or other arrangements which provide compensation in the event of a termination of employment or a change in our control.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The following table presents information concerning the beneficial ownership of the shares of our Common Stock as of November 30, 2017, by:

(i) each of our named executive officers and current directors, (ii) all of our current executive officers and directors as a group and (iii) each person we know to be the beneficial owner of 5% of more of our outstanding shares of common stock.

Unless otherwise specified, the address of each beneficial owner listed in the table is c/o Capax Inc., 7135 Collins Ave, No 624, Miami Beach, Florida 33141.

Number of Shares of Class A Common Stock Beneficially Owned (1)

Percent of Class A Common Stock Owned (2)

Number of Shares of Class B Common Stock Beneficially Owned (1)

Percent of Class B Common Stock Owned (3)(4)

Voting Control by Officers & Directors

Percent of Voting Control by Officers & Directors (5)

Officers and Directors

Andrew Weeraratne (3)

Chairman of the Board of Directors, CEO, CFO

Eugene Nichols, Director

Goran Antic, Director

Michael Laub, Director

All Directors and Officers as a Group (4 persons)

Tom and Jayne Avery

Par Holding Partnership

Christopher Higgins

Nabil Barakat

All Directors, Officers and 5% Holders as a Group (8 persons)

A person is deemed to be the beneficial owner of securities that can be acquired by such a person within 60 days from November 30, 2017, upon exercise of options, warrants or convertible securities.

Each beneficial owners percentage ownership is determined by assuming that options, warrants and convertible securities that are held by such a person (but not those held by any other person) and are exercisable within 60 days from that date have been exercised;

Based on 11,041,100 shares of common stock outstanding as of November 30, 2017.

These percentages have been rounded for convenience;

Weeraratne also owns 7,000,000 shares of Class B common stock, which has 10:1 voting rights and is convertible into shares of Common Stock on a 1:1 basis at the option of the holder;

The address of Tom and Jayne Avery is 815 Canal Street, Turnersville, NJ 08012;

The address of Christopher Higgins is 213 Bradley Ave, Bellmawr, NJ 08031-1302;

The address of Nabil Barakat is 3735 Atlanta Industrial Parkway NW, Atlanta, GA 30331

Andrew Weeraratne is the General Partner of Par Holding Partnership.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

I Andrew Weeraratne is a founder and an organizer of the company and as such need to disclose any relevant transactions that Mr.

Weeraratne will have with the company.

Weeraratne received no compensation as a founder except the approval to buy 7,000,000 Class B common stock at par value of .0001 cents for a total value of $700.00 and 4,000,000 of Class A common stock at par value of .0001 cents for a total value of $400.00 as founding shares that Mr.

Weeraratne purchased on May 12, 2017.

Eugene Nichols, is a founder and organizer of the Company and our Secretary and Treasurer and a Director.

Nichols, as a founder and organizer of the Company and thus needs to disclose any relevant transactions that he will have with the company.

Nichols has received no compensation as a founder except the approval to purchase 1,000,000 Class A common stock at par value of .0001 for a total value of $100.00 that Mr.

Weeraratne paid on his behalf to the Company on May 21, 2017.

Goran Antic, is a founder and organizer of the Company and a Director.

Antic, as a founder and organizer of the Company and thus needs to disclose any relevant transactions that he will have with the company.

Antic has received no compensation as a founder except the approval to purchase 200,000 Class A common stock at par value of .0001 for a total value of $20.00 that Mr.

Weeraratne paid on his behalf to the Company on May 21, 2017.

Michael Laub, is a founder and organizer of the Company and a Director.

Laub, as a founder and organizer of the Company and thus needs to disclose any relevant transactions that he will have with the company.

Laub has received no compensation as a founder except the approval to purchase 200,000 Class A common stock at par value of .0001 for a total value of $20.00 that Mr.

Weeraratne paid on his behalf to the Company on May 21, 2017

Also on May 21, 2017, as approved by the Board, Mr.

Weeraratne paid the Company the 186.70 as cost of 1,867,000 Class A common stock as founding shares at the par value of $0.001 issued on behalf of a list of shareholders since Mr.

Weeraratne believes that a network of loyal shareholders could help the Company accomplish its goals and it would make it much easier to set up an independent company, take it public and raise funds from the public with the help of a wider network of shareholders.

These shareholders need to disclose any relevant transactions that they will have with the company.

PRINCIPAL ACCOUNTANT FEES AND SERVICES

MaloneBailey, LLP is our independent registered public accounting firm.

During fiscal years ended September 30, 2017 and 2016:

- We incurred approximately $6,000 and $4,000 in fees respectively to our principal independent accountants for professional services rendered in connection with the audit of our financial statements for the fiscal years ending September 30, 2017 and 2016.

- We incurred approximately $1,000 in fees respectively to our principal independent accountants for professional services rendered in connection with consents on registration statements and the audit of our target for acquisitions.

EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

Description of Exhibit

Financial Statements

Filed herewith

Exhibits required by Item 601, Regulation S-K;

Articles of Incorporation of La Veles Inc.

(filed as Exhibit 3.1 to the Companys Registration Statement on Form S-1, filed with the SEC on July 3, 2017)

Amended Articles of Incorporation of Capax Inc.

(filed as Exhibit 3.2 to the Companys Registration Statement on Form S-1, filed with the SEC on July 3, 2017)

Bylaws of Capax Inc.

(filed as Exhibit 3.3 to the Companys Registration Statement on Form S-1, filed with the SEC on July 3, 2017)

Opinion of Clifford L Hunt LLC (filed as Exhibit 5.1 to the Companys Registration Statement on Form S-1, filed with the SEC on July 3, 2017).

Form of Subscription Agreement (filed as Exhibit 10.1 to the Companys Registration Statement on Form S-1, filed with the SEC on July 3, 2017)

Statement re:

computation of per share earnings Note 2 to Financial Stmts.

Code of Business Conduct and Ethics (filed as Exhibit 14.1 to the Companys Registration Statement on Form S-1, filed with the SEC on July 3, 2017)

Consent of Malone Bailey LLP

Filed herewith.

Certificate of Chief Executive Officer

Filed herewith

And Principal Financial and Accounting Officer

Pursuant to Section 302 of the

Sarbanes-Oxley Act of 2002

Certificate of Principal Financial and Accounting Officer

Filed herewith

Pursuant to Section 302 of the

Sarbanes-Oxley Act of 2002

Certification of Chief Executive Officer

Filed herewith

And Principal Financial and Accounting Officer

pursuant to 18 U.S.C.

as adopted pursuant to Section 906 of the

Sarbanes-Oxley Act of 2002

XBRL Instance Document

XBRL Taxonomy Extension Schema Document

XBRL Taxonomy Extension Calculation Linkbase Document

XBRL Taxonomy Extension Definition Linkbase Document

XBRL Taxonomy Extension Label Linkbase Document

XBRL Taxonomy Extension Presentation Linkbase Document

In accordance with Section 13 or 15(d) of the Exchange Act of 1934, the registrant has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Andrew Weeraratne

November 30, 2017

Andrew Weeraratne

The following table sets forth information concerning

the compensation of our named executive officers for the years ended December 31, 2022 and December 31, 2021.

and principal

Incentive plan

Chief Executive Officer

KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints I.

Andrew Weeraratne, his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments to this Annual Report on Form 10-K, and to file the same, with all exhibits thereto and other documents in connection therewith the SEC, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully and to all intents and purposes as he or she might or could do in person hereby ratifying and confirming all that said attorneys-in-fact and agents, or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the registrant and in the capacities and on the dates indicated below.

Andrew Weeraratne

Chief Executive Officer (PEO), Chairman of the Board of Directors

November 30, 2017

Andrew Weeraratne

Chief Financial Officer (Principal Accounting Officer)

November 30, 2017

Andrew Weeraratne

/s/ Eugene Nichols

Director, Secretary, Treasurer

November 30, 2017

Eugene Nichols

/s/ Goran Antic

November 30, 2017

/s/ Michael Laub

November 30, 2017

Chief Financial Officer (1)

Chief Executive Officer

Former Chief Financial Officer (2)

(1) Effective July 27, 2022, the Company executed an employment

agreement with Stephan Kim for Mr.

Kim to serve as full time Chief Financial Officer of the Company, effective immediately.

Kim shall receive a monthly payment of $12,000 ($144,000 annually) as compensation for his services, and the Company granted $56,000

worth of shares of RSU, which will be vested in 3 months after employment and can be sold after one year.

The terms of the RSUs will

be set out in a separate RSU agreement to be executed in the near future.

The employment agreement is an at-will agreement and is terminable

by either party at any time.

A copy of the agreement is filed herewith as Exhibit 10.11.

(2) We entered into a consulting agreement on September 15, 2021

with Kevin Hartley for his services as CFO of the Company pursuant to which Mr.

Hartley received $10,000 per year and additional compensation

in the form of shares common stock.

Effective July 27, 2022, Mr.

Hartley amicably resigned as CFO of the Company and Stephan Kim was

appointed as new full-time CFO of the Company.

Outstanding Equity Awards at Fiscal Year-End

As of December 31, 2022, there were no outstanding equity awards for

each of the NEOs.

Director Compensation

No compensation was paid to our non-employee

directors for services rendered during the years ended December 31, 2022 and 2021.

Security Ownership of Certain Beneficial

Owners and Management and Related Stockholder Matters

The following table sets forth, as of December

31, 2022, information regarding beneficial ownership of our capital stock by:

● each person, or group

of affiliated persons, known by us to beneficially own more than 5% of our common stock;

● each of our directors;

● each of our named executive

● all of our current

executive officers, directors and director nominees as a group.

In the table below, percentage

ownership is based on 13,163,126 shares of our Class A Common Stock issued and outstanding as of December 31, 2022.

Unless otherwise indicated,

we believe that all persons named in the table have sole voting and investment power with respect to all ordinary shares beneficially

owned by them.

The following table does not reflect record or beneficial ownership of the private placement warrants or rights as these

warrants and rights are not exercisable or convertible within 60 days of the date of this Report.

Except as otherwise noted below, the address for each person or entity

listed in the table is c/o Reborn Coffee Inc., 580 N.

Brea, CA 92821.

Number of Shares

Percentage of Shares

Name of Beneficial Owner

Beneficially Owned

5% or Greater Stockholders

Directors and Named Executive Officers

Jay Kim, Chief Executive Officer and Director

Stephan Kim, Chief Financial Officer

Arjomand, Chairman of the Board

Egidi, Vice Chairman of the Board

Sehan Kim, Director

Hannah Goh, Former Director

All directors, directors nominees and executive officers as a group (6 persons):

Securities Authorized for Issuance under Equity Compensation Plans

Changes in Control

Certain Relationships and Related

Transactions, and Director Independence

Policies and Procedures for Related Person Transactions

We do not currently have a formal, written policy or procedure for

the review and approval of related party transactions.

However, all related party transactions are currently reviewed and approved by

Our board of directors has adopted a written related person transaction

policy, effective upon the closing of the IPO, which sets forth the policies and procedures for the review and approval or ratification

of related party transactions.

This policy will be administrated by our Audit Committee.

These policies will provide that, in determining

whether or not to recommend the initial approval or ratification of a related party transaction, the relevant facts and circumstances

available shall be considered, including, among other factors it deems appropriate, whether the interested transaction is on terms no

less favorable than terms generally available to an unaffiliated third party under the same or similar circumstances and the extent of

the related party’s interest in the transaction.

Director Independence

Nasdaq rules require that

a majority of the board of directors of a company listed on Nasdaq be composed of “independent directors,” which is defined

generally as a person other than an officer or employee of the company or its subsidiaries or any other individual having a relationship,

which, in the opinion of the company’s board of directors, would interfere with the director’s exercise of independent judgment

in carrying out the responsibilities of a director.

In addition, the director must not be precluded from qualifying as independent under

the per se bars set forth by the Nasdaq rules.

Our Board has undertaken a review of its composition, the composition of its committees

and the independence of our directors and considered whether any director has a material relationship with us that could compromise his

or her ability to exercise independent judgment in carrying out his or her responsibilities.

Based upon information requested from and

provided by each director concerning his or her background, employment and affiliations, including family relationships, our Board of

Directors has determined that each of the directors on our Board, other than Jay Kim are independent directors under the Nasdaq listing

Our independent directors have regularly scheduled meetings at which only independent directors are present.

Indemnification Agreements

We have entered into indemnification

agreements with each of our directors and executive officers.

These agreements, among other things, require us to indemnify each director

and executive officer to the fullest extent permitted by Delaware law, including indemnification of expenses such as attorneys’

fees, judgments, penalties, fines and settlement amounts incurred by the director or executive officer in any action or proceeding, including

any action or proceeding by or in right of us, arising out of the person’s services as a director or executive officer.

Our certificate of incorporation

contains provisions that limit the liability of our current and former directors for monetary damages to the fullest extent permitted

by Delaware law.

Additionally, a director is not personally liable for monetary damages for breach of fiduciary duty as a director (i)

for any breach of his or her duty of loyalty to the Company or its stockholders, (ii) for acts or omissions not in good faith or which

involve intentional misconduct or a knowing violation of the law, (iii) under Section 174 of the General Corporation Law of the State

of Delaware, or (iv) for any transaction from which the director derives an improper personal benefit.

Our certificate of incorporation

authorizes us to indemnify our directors, officers, employees and other agents to the fullest extent permitted by Delaware law.

provide that we are required to indemnify our directors and officers to the fullest extent permitted by Delaware law and may indemnify

our other employees and agents.

Our bylaws also provide that, on satisfaction of certain conditions, we will advance expenses incurred

by a director or officer in advance of the final disposition of any action or proceeding, and permit us to secure insurance on behalf

of any officer, director, employee or other agent for any liability arising out of his or her actions in that capacity regardless of

whether we would otherwise be permitted to indemnify him or her under the provisions of Delaware law.

We have entered and expect to continue

to enter into agreements to indemnify our directors, executive officers and other employees as determined by our board of directors.

With certain exceptions, these agreements provide for indemnification for related expenses including attorneys’ fees, judgments,

fines and settlement amounts incurred by any of these individuals in any action or proceeding.

We believe these provisions in our certificate

of incorporation and bylaws and these indemnification agreements are necessary to attract and retain qualified persons as directors and

We also maintain customary directors’ and officers’ liability insurance.

The limitation of liability

and indemnification provisions in our certificate of incorporation and bylaws may discourage stockholders from bringing a lawsuit against

our directors for breach of their fiduciary duty.

They may also reduce the likelihood of derivative litigation against our directors

and officers, even though an action, if successful, might benefit us and other stockholders.

Further, a stockholder’s investment

may be adversely affected to the extent that we pay the costs of settlement and damage awards against directors and officers as required

by these indemnification provisions.

Insofar as indemnification

for liabilities arising under the Securities Act may be permitted for directors, executive officers or persons controlling us, we have

been informed that, in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is

therefore unenforceable.

Principal Accountant Fees and Services

Audit, Audit-Related, Tax and All Other Fees

The following is a summary

of fees paid or to be paid to Kreit & Chiu CPA LLP for services rendered.

Audit Committee Pre-Approval Policy and Procedures

As of the date of this filing,

our audit committee consists of Farooq M.

Arjomand, Dennis R.

Egidi and Sehan Kim.

Each member of our audit committee can read and understand

fundamental financial statements in accordance with applicable requirements.

The chair of our audit committee is Farooq M.

who our board of directors has determined is an “audit committee financial expert” within the meaning of SEC regulations.

In arriving at these determinations, our board of directors has examined each audit committee member’s scope of experience and

the nature of their employment in the corporate finance sector.

Exhibits, Financial Statement Schedule

(a) The following documents are filed as part of this Report:

(1) Financial Statements

September 30, 2017

Index to Financial Statements

Audited Financial Statements

Report of Independent Registered Public Accounting Firm

Balance Sheets as of September 30, 2017 and September 30, 2016

Statements of Operations for the years ended September 30, 2017 and 2016

Statements of Stockholders Equity for the years ended September 30, 2017 and 2016

Statements of Cash Flows for the years ended September 30, 2017 and 2016

Notes to the Financial Statements

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Stockholders

Miami Beach, Florida

We have audited the accompanying balance sheets of Capax Inc.

(The Company) as of September 30, 2017 and 2016, and the related statements of operations, stockholders equity, and cash flows for the years then ended.

These financial statements are the responsibility of the Company smanagement.

Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).

Those standards require that we plan and perform an audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Companys internal control over financial reporting.

Accordingly, we express no such opinion.

An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.

We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Capax Inc.

as of September 30, 2017 and 2016, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

/s/ MaloneBailey, LLP

www.malonebailey.com

Houston, Texas

November 30, 2017

Balance Sheets

September 30, 2017

September 30, 2016

Statements of Operations

Statements of Changes in Shareholders’ Deficit

Statements of Cash Flows

Notes to Financial Statements

(2) Financial Statements Schedule

All financial statement schedules are omitted

because they are not applicable or the amounts are immaterial and not required, or the required information is presented in the financial

statements and notes beginning on F-1 on this Report.

EXHIBIT INDEX

Certificate of Incorporation (Delaware), dated July 27,

2022 (incorporated by reference to Exhibit 3.1 to Amendment No.

5 to our Registration Statement on Form S-1 filed on August 2, 2022)

Bylaws of Registrant (Delaware) (incorporated by reference to Exhibit

3.2 to Amendment No.

5 to our Registration Statement on Form S-1 filed on August 2, 2022)

Specimen Common Stock Certificate (Delaware) (incorporated

by reference to Exhibit 4.1 to Amendment No.

5 to our Registration Statement on Form S-1 filed on August 2, 2022)

Form of Representative’s Warrant (incorporated

by reference to Exhibit 4.5 to Amendment No.

2 to our Registration Statement on Form S-1 filed on April 18, 2022)

Description of Registrant’s Securities

Share Exchange Agreement, dated May 7, 2018 by

and among Capax, Reborn and each of the RB shareholders (incorp orated by reference to Exhibit

10.1 to Amendment No.

2 to our Registration Statement on Form S-1 filed on April 18, 2022)

Form of Letter Agreement (Lockup) by and among

Registrant, officers and directors of Registrant and EF Hutton (incorporated by reference to Exhibit 10.2 to Amendment No.

Registration Statement on Form S-1 filed on April 18, 2022)

Form of Director and Officer Indemnity Agreement

(incorporated by reference to Exhibit 10.3 to Amendment No.

2 to our Registration Statement on Form S-1 filed on April 18, 2022)

Shopping Center Lease by and between Reborn Global

Holdings, Inc.

and La Floresta Regency, LLC, effective July 25, 2016 (incorporated by reference to Exhibit 10.4 to Amendment No.

2 to our Registration Statement on Form S-1 filed on April 18, 2022)

Standard Industrial/ Commercial Multi-Tenant Lease,

as amended, by and between Reborn Global Holdings, Inc.

and Foothill Crescenta, LLC, effective December 6, 2016 (incorporated by

reference to Exhibit 10.5 to Amendment No.

2 to our Registration Statement on Form S-1 filed on April 18, 2022)

Shopping Center Lease by and between Reborn Global

Holdings, Inc.

and Sibling Associates, LLC, effective July 12, 2017 (incorporated by reference to Exhibit 10.6 to Amendment No.

to our Registration Statement on Form S-1 filed on April 18, 2022)

Standard Lease by and between Reborn Global Holdings,

and El Toro, LP, effective February 12, 2021 (incorporated by reference to Exhibit 10.7 to Amendment No.

2 to our Registration

Statement on Form S-1 filed on April 18, 2022)

Long Term Kiosk License Agreement by and between

Reborn Global Holdings, Inc.

and Tyler Mall Limited Partnership, effective February 4, 2021 (incorporated by reference to Exhibit

10.8 to Amendment No.

2 to our Registration Statement on Form S-1 filed on April 18, 2022)

Long Term Kiosk License Agreement by and between

Reborn Global Holdings, Inc.

and Stonestown Shopping Center, LP, effective December 22, 2020 (incorporated by reference to Exhibit

10.9 to Amendment No.

2 to our Registration Statement on Form S-1 filed on April 18, 2022)

Long Term Kiosk License Agreement by and between

Reborn Global Holdings, Inc.

and Glendale I Mall Associates, LP, effective October 27, 2020 (incorporated by reference to Exhibit

10.10 to Amendment No.

2 to our Registration Statement on Form S-1 filed on April 18, 2022)

Form of Subscription Agreement (Regulation A+

Offering) (incorporated by reference to Exhibit 10.11 to Amendment No.

2 to our Registration Statement on Form S-1 filed on April

Consulting Agreement by and between the Company

and Kevin Hartley, effective September 15, 2021 (incorporated by reference to Exhibit 10.12 to Amendment No.

2 to our Registration

Statement on Form S-1 filed on April 18, 2022)

Amendment to Share Exchange Agreement, dated January

25, 2022, by and among Reborn Coffee Inc., Andrew Weeraratne and each of the former shareholders of Reborn Global Holdings, Inc.,

a California corporation (incorp orated by reference to Exhibit 10 .1 0

to Amendment No.

5 to our Registration Statement on Form S-1 filed on August 2, 2022)

Offer of Employment by and between the Company

and Stephan Kim, dated July 27, 2022 (incorporated by reference to Exhibit 10.11 to Amendment No.

5 to our Registration Statement

on Form S-1 filed on August 2, 2022)

Subsidiaries of Registrant

Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and

15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Certification

of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant

to Section 302 of the Sarbanes-Oxley Act of 2002.

Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and

15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Certification

of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant

to Section 302 of the Sarbanes-Oxley Act of 2002.

Certification of Principal Executive Officer and Principal Financial Officer

Pursuant to 18 U.S.C.

Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Certification of Principal

Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C.

Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley

Inline XBRL Instance Document.

Inline XBRL Taxonomy Extension Schema Document.

Inline XBRL Taxonomy Extension Calculation Linkbase Document.

Inline XBRL Taxonomy Extension Definition Linkbase Document.

Inline XBRL Taxonomy Extension Label Linkbase Document.

Inline XBRL Taxonomy Extension Presentation Linkbase Document.

Cover Page Interactive Data File (formatted as Inline XBRL and contained

in Exhibit 101).

Form 10-K Summary

Report of Independent

Registered Public Accounting Firm

To the Board of Directors

and Stockholders of Reborn Coffee, Inc.

and Subsidiaries

Opinion on the Consolidated Financial Statements`

We have audited the accompanying consolidated

balance sheets of Reborn Coffee, Inc.

and subsidiaries (the “Company”) as of December 31, 2022 and 2021, and the related statements

of operation, stockholders’ equity (deficit), and cash flows for each of the two years in the period ended December 31, 2022, and

the related notes and schedules (collectively referred to as the consolidated financial statements).

In our opinion, the consolidated

financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021,

and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2022, in conformity with

accounting principles generally accepted in the United States of America.

Explanatory Paragraph – Going

The accompanying

consolidated financial statements have been prepared assuming that the Company will continue as a going concern.

As more fully described

in Note 2 to the consolidated financial statements, the Company has incurred recurring losses and at December 31, 2022, had an accumulated

deficit of $12,031,801.

For the year ending December 31, 2022, the Company sustained a net loss of $3,554,897.

These conditions raise

substantial doubt about the Company’s ability to continue as a going concern.

Management’s plans in regard to these matters

are also described in Note 2.

The consolidated financial statements do not include any adjustments that might become necessary should

the Company be unable to continue as a going concern.

Basis for Opinion

These consolidated financial statements are the

responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s consolidated financial

statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United

States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and

the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the

standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated

financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were

we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits, we are required to obtain an

understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of

the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

Our audits included performing procedures to

assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures

that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the

consolidated financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made

by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audits provide

a reasonable basis for our opinion.

/s/ Kreit & Chiu CPA LLP

(Formerly known as Paris, Kreit & Chiu CPA

We have served as the Company’s auditor since 2020.

PCAOB ID 6651

April 11, 2023

Consolidated Balance Sheet

Current assets:

Cash and cash equivalent

Cash and cash equivalents

Accounts receivable, net of allowance for doubtful accounts of $ 0 and $ 0 , respectively

Inventories, net

Prepaid expense and other current assets

Total current assets

Property and equipment, net

Operating lease right-of-use asset

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Payable to related parties

Accounts payable

Accrued expenses and current liabilities

Loans payable to financial institutions

Current portion of loan payable, emergency injury disaster loan (EIDL)

Current portion of loan payable, payroll protection program (PPP)

Current portion of equipment loan payable

Current portion of operating lease liabilities

Total current liabilities

Loans payable to financial institutions, less current portion

Loan payable, emergency injury disaster loan (EIDL), less current portion

Loan payable, payroll protection program (PPP), less current portion

Operating lease liabilities, less current portion

Total liabilities

Commitments and Contingencies

Stockholders’ equity

Preferred stock:

$.0001 par value;

30,000,000 and 10,000,000 shares authorized, no shares issued and outstanding for Sept, 30, 2017 & Sept, 30, 2016 respectively

Class A Common stock:

$.0001 par value;

900,000,000 shares authorized and 10,967,000 issued & outstanding for Sept 30 2017 and 230,000,000 shares authorized, 3,250,000 shares issued and outstanding for Sept 30, 2016

Class B Common stock:

$.0001 par value;

70,000,000 & 60,000,000 shares authorized for Sept 30, 2017 & Sept 30, 2016 and, 7,000,000 & 5,000,000 shares issued and outstanding for same periods

Common Stock, $ 0.0001 par value, 40,000,000 shares authorized;

13,163,126 and 11,634,523 shares issued and outstanding at December 31, 2022 and 2021, respectively

Preferred Stock, $ 0.0001 par value, 1,000,000 shares authorized;

no shares issued and outstanding at December 31, 2022 and 2021

Additional paid-in capital

Retained deficit

Accumulated deficit

( 12,031,801 )

( 8,476,904 )

Total stockholders’ equity

Total liabilities and stockholders’ equity

The accompanying notes are an integral part of these financial statements.

Statements of Operations

Sept 30, 2017

Sept 30, 2016

Operating expenses

Professional fees

Administrative expenses

Total operating expenses

See accompanying notes

to consolidated financial statements.

Consolidated Statements of Operations

Years Ended December 31,

Net revenues:

Wholesale and online

Total net revenues

Operating costs and expenses:

Product, food and drink costs—stores

Cost of sales—wholesale and online

General and administrative

Total operating costs and expenses

Loss from operations

Basic and diluted net loss per common share

Basic and diluted weighted average number of common shares outstanding

The accompanying notes are an integral part of these financial statements.

Statements of Stockholders Equity

Statement of Stockholders' Equity

Common Stock Class A

Common Stock Class B

Stockholders'

Balance at September 30, 2015

Common stock bought back

Balance at September 30, 2016

Common stock bought back

Common stock issued for cash

Balance at September 30, 2017

The accompanying notes are an integral part of these financial statements.

Statements of Cash Flows

Sept 30, 2017

Sept 30, 2016

( 3,540,542 )

( 2,563,677 )

Other income (expense):

Paycheck protection program (PPP) loan forgiven income

Interest expense

Loss on extinguishment of debt

Total other income (expense), net

Loss before income taxes

( 3,553,297 )

( 3,439,601 )

Provision for income taxes

$ ( 3,554,897 )

$ ( 3,440,401 )

Loss per share:

Basic and diluted

Weighted average number of common shares outstanding:

Basic and diluted

See accompanying notes

to consolidated financial statements.

Consolidated Shareholders’ Equity

Subscription of

Shareholders’

Balance as of December 31, 2020

( 5,036,504 )

( 3,440,401 )

Conversion of debt into common stock

Stock issued for store acquisition

Stock compensation – issuance for services

Common stock issued

Payments received from prior year subscription

Stock subscription

Balance as of December 31, 2021

$ ( 8,476,904 )

( 3,554,897 )

Stock compensation – issuance for services

Common stock issued

Offering costs associated with issuance of common stock

in the Initial Public Offering

Balance as of December 31, 2022

$ ( 12,031,801 )

See accompanying notes

to consolidated financial statements.

Consolidated Statements of Cash Flows

Years Ended December 31,

Cash flows from operating activities:

Adjustments to reconcile net income from continuing

operations to cash used in operating activities:

Expense paid by related party treated as payable

$ ( 3,554,897 )

$ ( 3,440,401 )

Adjustments to reconcile net loss to net cash used in operating activities:

Stock compensation

Operating lease

Loss on extinguishment of debt

Forgiveness of Paycheck protection program (PPP) loan

Changes in operating assets and liabilities:

Accounts receivable

Prepaid expense and other current assets

Accounts payable

Accrued expenses and current liabilities

Net cash used in operating activities

Financing activities:

Payback related party loan

Buyback of common stock

Proceeds from sale of common stock

Net cash provided by (used in) financing activities

Net increase (decrease) in cash

( 3,297,058 )

( 1,949,820 )

Cash flows from investing activities:

Purchases of property and equipment

Reacquisition of store

Net cash used in investing activities

Cash flows from financing activities:

Proceeds from issuance of common stock

Payment for offering costs

Proceeds from Line of Credit

Repayment of Line of Credit

Proceeds from loans

Repayments of loans

Repayments of equipment loan payable

Net cash provided by financing activities

Net increase in cash

Cash at beginning of period

Cash at end of period

Supplemental disclosures:

Cash paid for:

The accompanying notes are an integral part of these financial statements.

Notes to Financial Statements

September 30, 2017 and September 30, 2016

NOTE 1 DESCRIPTION OF BUSINESS

We incorporated our Company on July 31, 2015 in the State of Florida under the name La Veles Inc. We changed our name to Capax Inc.

(Capax the Company) on February 8, 2017.

When we began, our primary planned business objective was to package, market and distribute an infection healing cream for dairy animals.

We terminated that business plan and changed the name of the Company to Capax Inc.

and currently focusing on setting up a chain of bakery-cafes that we hope to franchise in the future.

NOTE 2 SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying financial statements include the accounts of the Company for the years ending September 30,2017 and September 2016.

Management uses estimates and assumptions in preparing financial statements in accordance with accounting principles generally accepted in the United States of America.

Those estimates and assumptions affect the reported amounts of assets, liabilities, expenses and the disclosure of contingent assets and liabilities.

Actual results could vary from those estimates.

New Accounting Pronouncements

The FASB has issued the following accounting pronouncements and guidance which may be applicable to the Company.

Accounting Standards Update (ASU) No.

2014-09 Revenue Recognition (Topic 606):

In May 2014, the FASB issued a new standard related to revenue recognition.

Under the new standard, revenue is recognized when a customer obtains control of promised goods or services and is recognized in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services.

In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers.

The FASB has recently issued several amendments to the standard, including identifying performance obligations and other technical corrections and minor improvements affecting a variety of topics and required disclosures in the new standard.

This standard will be effective and the Company will adopt this standard on January 1, 2018.

Entities have the option to apply the new guidance under a full retrospective approach or a modified retrospective approach with the cumulative effect of initially applying the new guidance recognized at the date of initial application.

Accounting Standards Update (ASU) No.

2016-02 Leases (Topic 842).

This update will require assets and liabilities to be recognized on the balance sheet of a lessee for the rights and obligations created by leases of assets with terms of more than 12 months.

For income statement purposes, the update retained a dual model, requiring leases to be classified as either operating or finance based on largely similar criteria to those applied in current lease accounting, but without explicit bright lines.

ASU 2016-02 also requires extensive quantitative and qualitative disclosures, including significant judgments made by management, to provide greater insight into the extent of revenue and expense recognized and expected to be recognized from existing leases.

This standard will be effective for the Company on January 1, 2019.

Early adoption is permitted.

There are not expected to a have a material impact on the Company's financial position, results of operations or cash flows.

Cash and Cash Equivalents

Cash consists of cash balances on deposit.

The Company believes no significant concentration of credit risk exists with respect to these cash balances.

The Company considers all highly liquid instruments purchased with a maturity of three months or less and money market accounts to be cash equivalents.

The Company had no cash equivalents at September 30, 2017 or at September 30, 2016.

The Company accounts for income taxes in accordance with accounting guidance now codified as FASB ASC Topic 740, Income Taxes, which requires that the Company recognize deferred tax liabilities and assets based on the differences between the financial statement carrying amounts and the tax basis of assets and liabilities, using enacted tax rates in effect in the years the differences are expected to reverse.

Deferred income tax benefit (expense) results from the change in net deferred tax assets or deferred tax liabilities.

A valuation allowance is recorded when it is more likely than not that some or all deferred tax assets will not be realized.

We recognize interest and penalties related to unrecognized tax benefits in operating expenses.

As of September 30, 2017 and 2016, there were no unrecognized tax benefits nor interest or penalties accrued related to unrecognized tax benefits, nor were any interest and penalties recognized during the years ended September 30, 2017 or September 30, 2016.

Basic and Diluted Net Loss Per Share

The Company computes loss per share in accordance with ASC-260, Earnings per Share, which requires presentation of both basic and diluted earnings per share on the face of the statement of operations.

Basic loss per share is computed by dividing net loss available to common shareholders by the weighted average number of outstanding common shares during the period.

Diluted loss per share gives effect to all dilutive potential common shares outstanding during the period.

Dilutive loss per share excludes all potential common shares if their effect is anti-dilutive.

As of September 30, 2017 and 2016, the Company had no potential dilutive shares outstanding.

Stock Based Compensation

The Company accounts for employee stock-based compensation in accordance with the guidance of FASB ASC Topic 718, Compensation Stock Compensation which requires all share-based payments to employees, including grants of employee stock options, to be recognized in the financial statements based on their fair values.

The fair value of the equity instrument is charged directly to compensation expense and additional paid-in capital over the period during which services are rendered.

There has been no stock-based compensation issued to employees.

The Company follows ASC Topic 505-50, Accounting for Equity Instruments that are Issued to Other than Employees for Acquiring, or in Conjunction with Selling Goods and Services, for stock options and warrants issued to consultants and other non-employees.

In accordance with ASC Topic 505-50, these stock options and warrants issued as compensation for services provided to the Company are accounted for based upon the fair value of the services provided or the estimated fair market value of the option or warrant, whichever can be more clearly determined.

There were no stock-based compensation expense, related to all of the Companys stock-based awards, recognized for the years ended September 30, 2017 and 2016.

Related Party Transactions

We consider all who own more than 5% shares and equity method investments to be related parties and record any transactions between them and the Company to be related party transactions and disclose such transactions on notes to the Financial Statements.

Under ASC 850, examples of related party transactions also include those between:

- A parent entity and its subsidiaries

- Subsidiaries of a common parent, an entity and trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of the entity's management

- An entity and its principal owners, management, or members of their immediate families and affiliates

Transactions between related parties are considered to be related party transactions even though they may not be given accounting recognition.

For example, an entity may receive services from a related party without charge and not record receipt of the services.

While not providing accounting or measurement guidance for such transactions, this Topic requires their disclosure nonetheless.

Fair Value Measurement

The Company applies fair value accounting for all financial assets and liabilities and non-financial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis.

defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

When determining the fair value measurements for assets and liabilities, which are required to be recorded at fair value, the Company considers the principal or most advantageous market in which the Company would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as risks inherent in valuation techniques, transfer restrictions and credit risk.

NOTE 3 NOTE PAYABLE OFFICER

The CEO uses his personal credit card to pay certain expenses on behalf of the Company that are reimbursed by the Company as soon as the credit card invoice is received and an expense reimbursement statement is presented, without payment of any interest.

In the month of June and July 2017 the CEO had expenses of $1,764 incurred in his credit cards that was reimbursed in July 2017.

In the month of August the CEO had expenses of $972 incurred and it was reimbursed to him in September 2017.

In the months of September the CEO incurred expenses of $4,107 that had been accrued as of September 30, 2017 and was reimbursed in October 2017.

NOTE 4 EQUITY

We have 300,000,000 authorized shares of capital stock, which consists of (i) 230,000,000 shares of Class A common stock, par value $0.0001 per share;

(ii) 60,000,000 shares of Class B common stock, par value $0.0001 per share;

and (iii) 10,000,000 shares of blank-check preferred stock, par value of $0.0001 per share.

The holders of Class A common stock shall be entitled to one vote per share and shall be entitled to dividends as shall be declared by our Board of Directors from time to time.

Each share of Class B common stock shall entitle the holder thereof to 10 votes for each one vote per share of Class A common stock, and with respect to such vote, shall be entitled, notwithstanding any provision hereof, to notice of any stockholders meeting in accordance with the bylaws of this corporation, and shall be entitled to vote, together as a single class with holders of Class A common stock with respect to any question or matter upon which holders of Class A common stock have the right to vote.

Class B common stock shall also entitle the holders thereof to vote as a separate class as set forth herein and as required by law.

Holders of Class B common stock shall be entitled to dividends as shall be declared by our Board of Directors from time to time at the same rate per share as the Class A common stock.

The holders of the Class B common stock shall have the right to convert each one of their shares to one share of Class A common stock automatically by surrendering the shares of Class B common stock to us.

As of September 30, 2017 we have 7,000,000 Class B common stock outstanding and 10,967,000 Class A common stock outstanding.

As of September 30, 2016 we have 5,000,000 Class B common stock outstanding and 3,250,000 Class A common stock outstanding.

On August 13, 2015, the Company issued one of its founders, NGFC Equities Inc.

3,250,000 restricted Class A Common Stock priced at $0.0001 per share for a total value of $325 cash and 5,000,000 Class B Common Stock priced at $0.0001 per shares for a total value of $500 cash.

Also the Company issued another founder Goran Antic 2,000,000 Class A Common Stock valued at the par value of $0.0001 per share for a total value of $200 cash.

On January 6, 2016 the Company bought back 2,000,000 Class A Common Stock of the Company at par value for a total of $200 cash that one of the founders of the Company Goran Antic bought as a founding stockholder back to the Company at their purchase price of $.0001 per share.

In January 2017, NGFC Equities Inc.

(NGFC) one of the founder-shareholders of the Company merged with another company and as a part of that merger, NGFC gave the ownership it had of Capax back to the Company representing 3,250,000 Class A Common Stock and 5,000,000 of Class B Common stock for free.

On 8th of February 2017 we filed an amendment to our Articles of Incorporation to increase our authorized shares to 1,000,000,000 shares of capital stock, of which (i) 900,000,000 shares are Common Stock, $0.0001 par value per share;

(ii) 70,000,000 shares are Class B common stock, par value $0.0001 per share;

and (iii) 30,000,000 shares of blank-check preferred stock, $0.0001 par value per share.

February 12, 2017 the Board appointed I Andrew Weeraratne (AW) as the Chairman of the Board of directors, Chief Executive Officer and the Chief Financial Officer of the Company and approved him buying 4,000,000 Class A common stock and 7,000,000 Class B common stock at the par value of $0.0001 per share that he paid in cash of $400 and $700 respectively

Also on February 12, 2017 the Board approved a list of individuals, who we believe could help us with the operation of the company, buying 3,267,000 Class A common stock at par value of $0.0001 per share that were paid $326 in cash.

In May 2017 we sold 3,700,000 unregistered shares of our Class A Common Stock at $0.03 per share to eight investors and we deposited $111,000.

We closed this offering on June 30, 2017.

NOTE 5 OUR OFFICE

Our offices are located at 7135 Collins Ave No.

624, Miami Beach, FL 33141 at the residence of our CEO for no charge and on a month by month basis Our telephone number is 305-865-8193.

NOTE 6 INCOME TAXES

As of September 30, 2017, the Company had net operating loss carry forwards of $27,055 that may be available to reduce future years taxable income through 2034.

Future tax benefits which may arise as a result of these losses have not been recognized in these financial statements, as their realization is determined not likely to occur and accordingly, the Company has recorded a valuation allowance for the deferred tax asset relating to these tax loss carry-forwards.

Components of net deferred tax assets, including a valuation allowance, are as follows at September 30, 2017 and September 30, 2016

Net Operating loss carry-forward

Net adjustments to taxes

Adjusted NOL carry-forward

Supplemental disclosures of non-cash financing activities:

Issuance of common shares for repurchase of lease and leasehold improvements

Conversion of debt to common stock issuances

Forgiveness of paycheck protection program (PPP) loan

Issuance of common shares for service

Supplemental disclosure of cash flow information:

Cash paid during the years for:

Lease liabilities and assets

See accompanying notes

to consolidated financial statements.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NATURE OF OPERATIONS

Reborn Coffee, Inc.

was incorporated in the State of Florida in January 2018.

In July 2022, Reborn was migrated from Florida to Delaware, and filed a certificate

of incorporation with the Secretary of State of the State of Delaware having the same capitalization structure as the Florida predecessor

Reborn has the following wholly owned subsidiaries:

Reborn Global Holdings, Inc.

(“Reborn Holdings”), a California Corporation incorporated in November 2014.

Reborn Holdings is engaged in the operation of wholesale distribution and retail coffee stores in California to sell a variety of coffee, tea, Reborn brand name water and other beverages along with bakery and dessert products.

Reborn Coffee Franchise, LLC (the “Reborn Coffee Franchise”), a California limited liability corporation formed in December 2020, is a franchisor providing premier roaster specialty coffee to franchisees or customers.

Reborn Coffee Franchise continues to develop the Reborn Coffee system for the establishment and operation of Reborn Coffee stores using one or more Reborn Coffee marks.

Reborn Coffee Franchise does not have any franchisee as of December 31, 2022.

Reborn Coffee, Inc., Reborn Global Holdings,

Inc., and Reborn Coffee Franchise, LLC will be collectively referred as the “Company”.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The consolidated financial statements

include Reborn Coffee, Inc.

and its wholly owned subsidiaries as of and for the years ended December 31, 2022 and 2021.

Basis of Presentation and Consolidation

The accompanying consolidated financial

statements have been prepared in accordance with generally accepted accounting principles (“GAAP”) as promulgated in the

United States of America.

The consolidated financial statements include Reborn Coffee, Inc.

and its wholly owned subsidiaries.

All intercompany

accounts, transactions, and profits have been eliminated upon consolidation.

Going Concern

The accompanying consolidated

financial statements have been prepared assuming the Company will continue as a going concern, which contemplates, among other things,

the realization of assets and satisfaction of liabilities in the normal course of business.

The Company had an accumulated deficit of

$ 12,031,801 at December 31, 2022, and had a net loss of $ 3,554,897 for the year ended December 31, 2022 and net cash used in operating

activities of $ 3,297,058 for the year ended December 31, 2022.

These matters raise substantial doubt about the Company’s ability

to continue as a going concern.

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 impacted

our results of operations and cash flows.

Additional debt financing is anticipated to fund the Company’s operations in 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.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Use of Estimates

The preparation of consolidated financial

statements in conformity with accounting principles generally accepted in the United States (“U.S.

GAAP”) requires the Company

to make estimates and assumptions that affect the amounts reported in our consolidated financial statements and the accompanying notes.

Such estimates include accounts receivables, accrued liabilities, income taxes, long-lived assets, and deferred tax valuation allowances.

These estimates generally involve complex issues and require management to make judgments, involve analysis of historical and future

trends that can require extended periods of time to resolve, and are subject to change from period to period.

In all cases, actual results

could differ materially from estimates.

Revenue Recognition

The Company recognizes revenue in accordance

with Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers .

The Company’s net

revenue primarily consists of revenues from its retail stores and wholesale and online store.

Accordingly, the Company recognizes revenue

● Retail Store Revenue

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 98 % of the Company’s total revenue.

● Wholesale and Online Revenue

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 2 % of the Company’s total revenue.

● Royalties and Other Fees

Franchise revenues consists of royalty fee and other franchise fees.

Royalty fee is based on a percentage of franchisee’s weekly gross sales revenue at 5 %.

The Company recognizes the fee as the underlying

The Company recorded revenue from royalties of $ 0 for the years ended December 31, 2022 and 2021.

Other fees are earned as

incurred and the Company did not have any other fee revenue for the years ended December 31, 2022 and 2021.

● Customer Loyalty Program

The Company has a loyalty program whereby a customer receives a discounted

or free beverage after a number of prior purchases.

The costs of providing the reward are recognized when incurred and there is

no revenue allocated for original purchases to the provision of the reward since the program is not significant and the usage is uncertain.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Cost of Sales

Product, food and drink costs – stores and cost of sales –

wholesale and online primarily include the costs of ingredients of food and beverage sold and related supplies used in customer service.

The wholesale and online sales also include costs of packaging and shipping.

Shipping and Handling Costs

The Company incurred freight out costs, which are primarily included

in the Company’s cost of sales – wholesale and online.

Freight in costs, when attached to a specific purchase, are included

as a component of the cost of the purchased goods and materials items and allocated to accounts in accordance with the nature of the goods.

When the freight in costs are not allocable to an individual purchase or are more significant, they are recorded to a freight and shipping

account within cost of sales.

General and Administrative Expense

General and administrative expense

includes store-related expense as well as the Company’s corporate headquarters’ expenses.

These include rent and utilities,

payroll and benefits, and depreciation expenses.

Advertising Expense

Advertising costs are expensed as incurred.

Advertising expenses amounted to $ 52,688 and $ 82,351 for the years ended December 31, 2022 and 2021, respectively, and is recorded under

general and administrative expenses in the accompanying consolidated statements of operations.

Pre-opening Costs

Pre-opening costs for new stores consist

primarily of payroll and recruiting expense, training, marketing, rent, travel, and supplies, and are expensed as incurred.

Accounts Receivable

Accounts receivables are stated net

of allowance for doubtful accounts.

The allowance for doubtful accounts is determined primarily on the basis of past collection experience

and general economic conditions.

The Company determines terms and conditions for its customers based on volume transacted by the customer,

customer creditworthiness and past transaction history.

At December 31, 2022 and 2021, allowance for doubtful accounts was $ 0 and $ 0 ,

respectively.

The Company does not have any off-balance sheet exposure related to its customers.

Inventories consisted primarily of

coffee beans, drink products, and supplies which are recorded at cost or at net realizable value.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Property and Equipment

Property and equipment are recorded

Maintenance and repairs are charged to expense as incurred.

Depreciation and amortization are provided using both the straight-line

and declining balance methods over the following estimated useful lives:

Furniture and fixtures

Store construction

Lesser of the lease term or the estimated useful lives of the improvements, generally 6 years

Leasehold improvement

Lesser of the lease term or the estimated useful lives of the improvements, generally 6 years

When assets are retired or disposed

of, the cost and accumulated depreciation thereon are removed, and any resulting gains or losses are included in the consolidated statements

of operations.

Leasehold improvements are amortized using the straight-line method over the estimated life of the asset, not to exceed

the length of the lease.

Repair and maintenance costs are expensed as incurred.

Operating Leases

The Company adopted FASB Accounting

Standards Codification, or ASC, Topic 842, Leases (“ASC 842”) which requires the recognition of the right-of-use assets and

relating operating and finance lease liabilities on the balance sheet.

Under ASC 842, all leases are required to be recorded on the balance

sheet and are classified as either operating leases or finance leases.

The lease classification affects the expense recognition in the

income statement.

Operating lease charges are recorded entirely in operating expenses.

Finance lease charges are split, where amortization

of the right-of-use asset is recorded in operating expenses and an implied interest component is recorded in interest expense (Note 11).

Earnings Per Share

Financial Accounting Standard Board

(“FASB”) Accounting Standards Codification (“ASC”) Topic 260, Earnings Per Share, requires a reconciliation of

the numerator and denominator of the basic and diluted earnings (loss) per share (EPS) computations.

Basic earnings (loss) per share are

computed by dividing net earnings available to common shareholders by the weighted-average number of common shares outstanding during

Diluted earnings (loss) per share is computed similar to basic earnings per share except that the denominator is increased

to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and

if the additional common shares were dilutive.

In periods where losses are reported, the weighted-average number of common stock outstanding

excludes common stock equivalents, because their inclusion would be anti-dilutive.

The Company did not have any dilutive shares for the years

ended December 31, 2022 and 2021.

Segment Reporting

FASB ASC Topic 280, Segment Reporting,

requires public companies to report financial and descriptive information about their reportable operating segments.

The Company’s

management identifies operating segments based on how the Company’s management internally evaluate separate financial information,

business activities and management responsibility.

At the current time, the Company has only one reportable segment, consisting of both

the wholesale and retail sales of coffee, water, and other beverages.

The Company’s franchisor subsidiary was not material as of

and for the years ended December 31, 2022 and 2021.

Long-lived Assets

In accordance with FASB ASC Topic 360,

Property, Plant, and Equipment, the Company reviews for impairment of long-lived assets and certain identifiable intangibles whenever

events or circumstances indicate that the carrying amount of assets may not be recoverable.

The Company considers the carrying value

of assets may not be recoverable based upon our review of the following events or changes in circumstances:

the asset’s ability

to continue to generate income from operations and positive cash flow in future periods;

loss of legal ownership or title to the assets;

significant changes in our strategic business objectives and utilization of the asset;

or significant negative industry or economic trends.

An impairment loss would be recognized when estimated future cash flows expected to result from the use of the asset are less than its

carrying amount.

As of December 31, 2022 and 2021, the Company was not aware of any events or changes in circumstances that would indicate

that the long-lived assets are impaired.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Fair Value of Financial Instruments

The Company records its financial assets

and liabilities at fair value, which is defined under the applicable accounting standards as the exchange price that would be received

for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability

in an orderly transaction between market participants on the measure date.

The Company uses valuation techniques to measure fair value,

maximizing the use of observable outputs and minimizing the use of unobservable inputs.

The standard describes a fair value hierarchy

based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure

fair value which are the following:

Level 1 – Quoted prices in active markets for identical

assets or liabilities.

Level 2 – Inputs other than Level

1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities;

quoted prices in markets

that are not active;

or other inputs that are observable or can be corroborated by observable market data for substantially the full

term of the assets or liabilities.

Level 3 – Inputs include management’s

best estimate of what market participants would use in pricing the asset or liability at the measurement date.

The inputs are unobservable

in the market and significant to the instrument’s valuation.

As of December 31, 2022 and 2021, the

Company believes that the carrying value of accounts receivable, accounts payable, accrued expenses, and other current assets and liabilities

approximate fair value due to the short maturity of theses financial instruments.

The financial statements do not include any financial

instruments at fair value on a recurring or non-recurring basis.

Concentration of Credit Risk

Financial instruments that potentially

subject the Company to concentrations of credit risk are accounts receivable arising from its normal business activities.

performs ongoing credit evaluations to its customers and establishes allowances when appropriate.

The Company purchases from various

vendors for its operations.

For the years ended December 31, 2022 and 2021, no purchases from any vendors accounted for a significant

amount of the Company’s bean coffee purchases.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Related Parties

Related parties are any entities or

individuals that, through employment, ownership, or other means, possess the ability to direct or cause the direction of management and

policies of the Company.

Significant Recent Developments Regarding COVID-19

The novel coronavirus (“COVID-19”)

pandemic has significantly impacted health and economic conditions throughout the United States and globally, as public concern about

becoming ill with the virus has led to the issuance of recommendations and/or mandates from federal, state and local authorities to practice

social distancing or self-quarantine.

The Company is continually monitoring the outbreak of COVID-19 and the related business and travel

restrictions and changes to behavior intended to reduce its spread, and its impact on operations, financial position, cash flows, inventory,

supply chains, purchasing trends, customer payments, and the industry in general, in addition to the impact on its employees.

experienced significant disruptions to our business due to the COVID-19 pandemic and related suggested and mandated social distancing

and shelter-in-place orders.

Recent Accounting Pronouncement

In June 2016, the FASB issued Accounting

Standards Update No.

2016-13, “Financial Instruments - Credit Losses (Topic 326)” (“ASU 2016-13”).

revises the methodology for measuring credit losses on financial instruments and the timing of when such losses are recorded.

ASU 2016-13 was effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2019, with

early adoption permitted.

In November 2019, FASB issued ASU 2019-10, “Financial Instruments – Credit Losses (Topic 326), Derivatives

and Hedging (Topic 815), and Leases (Topic 842).” This ASU defers the effective date of ASU 2016-13 for public companies that are

considered smaller reporting companies as defined by the SEC to fiscal years beginning after December 15, 2022, including interim periods

within those fiscal years.

The Company is planning to adopt this standard in the first quarter of fiscal 2023.

The Company evaluated and

concluded that no material effects of adopting the provisions of ASU No.

2016-13 on its consolidated financial statements.

Other recently issued accounting updates are not expected

to have a material impact on the Company’s consolidated financial statements.

PROPERTY AND EQUIPMENT

Property and equipment consisted of the following:

Furniture and equipment

Leasehold improvement

Store construction

Total property and equipment

Less accumulated depreciation

Total property and equipment, net

Depreciation expense on property and

equipment amounted to approximately $ 210,616 and $ 174,696 for the years ended December 31, 2022 and 2021, respectively.

LOANS PAYABLE TO FINANCIAL INSTITUTIONS

Loans payable to financial institutions consist

of the following:

July 2021 - Loan agreement with principal amount of $ 90,000 and repayment rate of 19 % for a total of $ 101,700 .

The loan payable matures on January 31, 2023 and was fully paid off in 2022.

August 2021 - Loan agreement with principal amount of $72,500 and a repayment rate of 18.5 % for a total of $ 81,925 .

The loan payable matures on February 10, 2023 and was fully paid off in 2022.

August 2021 - Loan agreement with principal amount of $ 67,500 and repayment rate of 18.5 % for a total of $ 76,275 .

The loan payable matures on February 11, 2023 and was fully paid off in 2022.

August 2022 - Loan agreement with principal amount of $ 100,000 and repayment rate of 20.5 % for a total of $ 124,430 .

The loan payable matures on February 2, 2024 .

current portion

Total loan payable, net of current

LOANS PAYABLE TO FINANCIAL INSTITUTIONS (continued)

July 2021 - $ 101,700 loan payable

In July 2021, the Company entered into

a loan agreement with Square Capital in the principal amount of $ 90,000 with loan cost $ 11,700 .

The loan payable has a maturity date

on January 31, 2023 .

As of December 31, 2022 and December 31, 2021, there was a balance outstanding of $ 0 and $ 52,819 , respectively.

August 2021 - $ 81,925 loan payable

In August 2021, the Company entered

into a loan agreement with Square Capital in the principal amount of $ 72,500 with loan cost $ 9,425 .

The loan payable has a maturity date

on February 10, 2023 .

As of December 31, 2022 and December 31, 2021, there was a balance outstanding of $ 0 and $ 36,502 , respectively.

August 2021 - $ 76,275 loan payable

In August 2021, the Company entered

into a loan agreement with Square Capital in the principal amount of $ 67,500 with loan cost $ 8,775 .

The loan payable has a maturity date

on February 11, 2023 .

As of December 31, 2022 and December 31, 2021, there was a balance outstanding of $ 0 and $ 32,382 , respectively.

August 2022 - $ 112,215 loan

In August 2022, the Company entered

into a loan agreement with Square Capital in the principal amount of $ 100,000 with loan cost $ 12,215 .

The loan payable has a maturity

date on February 2, 2024 .

As of December 31, 2022, there was a balance outstanding of $ 50,898 .

LOAN PAYABLE, EMERGENCY INJURY DISASTER LOAN (EIDL)

May 16, 2020 ($ 150,000 ) - Loan agreement with principal amount of $150,00 with an interest rate of 3.75 % and maturity date on May 16, 2050

June 28, 2021 ($ 350,000 ) – Loan agreement with principal amount of $350,000 with an interest rate of 3.75 % and maturity date on May 18, 2050

Total long-term loan payable, emergency injury disaster loan (EIDL)

Less - current portion

Total loan payable, emergency injury disaster loan (EIDL), less

current portion

The following table provides future minimum payments:

For the years ended December 31,

May 16, 2020 – $ 150,000

On May 16, 2020, the Company executed

the standard loan documents required for securing a loan (the “EIDL Loan”) from the SBA under its Economic Injury Disaster

Loan (“EIDL”) assistance program in light of the impact of the COVID-19 pandemic on the Company’s business.

As of December

31, 2022, the loan payable, Emergency Injury Disaster Loan noted above is not in default.

Pursuant to that certain Loan Authorization

and Agreement (the “SBA Loan Agreement”), the Company borrowed an aggregate principal amount of the EIDL Loan of $ 150,000 ,

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) 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, the Company 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

The schedule of payments on this loan was later deferred to commence 24 months from the date of loan, which was May 2022.

In connection therewith, the Company

executed (i) a loan for the benefit of the SBA (the “SBA Loan”), which contains customary events of default and (ii) a Security

Agreement, granting the SBA a security interest in all tangible and intangible personal property of the Company, which also contains

customary events of default (the “SBA Security Agreement”).

June 28, 2021 – $ 350,000

On June 28, 2021, the Company executed

the standard loan documents required for securing a loan (the “EIDL Loan”) from the SBA under its Economic Injury Disaster

Loan (“EIDL”) assistance program in light of the impact of the COVID-19 pandemic on the Company’s business.

As of December

31, 2022, the loan payable, Emergency Injury Disaster Loan noted above is not in default.

Pursuant to that certain Amended Loan

Authorization and Agreement (the “SBA Loan Agreement”), the Company 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

April 16, 2022 (twenty four months from the original date of the SBA Loan) in the amount of $ 2,505 .

The balance of principal and interest

is payable thirty years from the original date of the SBA Loan.

LOAN PAYABLE, PAYROLL PROTECTION LOAN PROGRAM (PPP)

Loan payable from Payroll protection program

Less - current portion

Total loan payable, payroll protection program (PPP), less current

The Paycheck Protection Program Loan

(the “PPP Loan”) is administered by the U.S.

Small Business Administration (the “SBA”).

The interest rate of

the loan is 1.00 % per annum and accrues on the unpaid principal balance computed on the basis of the actual number of days elapsed in

a year of 360 days.

Commencing seven months after the effective date of the PPP Loan, the Company is required to pay the Lender equal

monthly payments of principal and interest as required to fully amortize any unforgiven principal balance of the loan by the two-year

anniversary of the effective date of the PPP Loan (the “Maturity Date”).

The PPP Loan contains customary events of default

relating to, among other things, payment defaults, making materially false or misleading representations to the SBA or the Lender, or

breaching the terms of the PPP Loan.

The occurrence of an event of default may result in the repayment of all amounts outstanding under

the PPP Loan, collection of all amounts owing from the Company, or filing suit and obtaining judgment against the Company.

terms of the CARES Act, PPP loan recipients can apply for and be granted forgiveness for all or a portion of the loan granted under the

Such forgiveness will be determined, subject to limitations, based on the use of loan proceeds for payment of payroll costs and

any payments of mortgage interest, rent, and utilities.

Recent modifications to the PPP by the U.S.

Treasury and Congress have extended

the time period for loan forgiveness beyond the original eight-week period, making it possible for the Company to apply for forgiveness

of its PPP loan.

Total income tax (benefit) expense consists of the following:

For the Years Ended December 31,

Current provision (benefit):

Total current provision (benefit)

Deferred provision (benefit):

Total deferred provision (benefit)

Total tax provision (benefit)

INCOME TAX (continued)

A reconciliation of the Company’s effective tax rate to the

statutory federal rate is as follows:

Statutory federal rate

State income taxes net of federal income tax benefit and others

Permanent differences for tax purposes and others

Change in valuation allowance

Effective tax rate

The income tax benefit differs from the amount

computed by applying the U.S.

federal statutory tax rate of 21 % and California state income taxes of 6.98 % due to the change in the valuation

Deferred tax assets

Deferred tax assets:

Net operating loss

Other temporary differences

Total deferred tax assets

Less valuation allowances

Net deferred tax asset

In assessing the recovery of the deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized.

The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income in the periods in which those temporary differences become deductible.

Management considers the scheduled reversals of future deferred tax assets, projected future taxable income, and tax planning strategies in making this assessment.

As a result, management determined it was more likely than not the deferred tax assets would not be realized as of September 30, 2017.

We have filed the September 30, 2015 and 2016 tax returns with the IRS and will be soon filing the September 30, 2017 tax return.

They all are eligible for examinations by the IRS since the IRS has the right to audit any corporate tax returns within three years of the date they have been filed.

NOTE 7 SUBSEQUENT EVENTS

In July 2017 we filed a Form S-1, a registration statement with the Security and Exchange Commission to sell 15,000,000 Class A common stock, and on August 15, 2017 we got effective from the SEC to sell those 15,000,000 registered shares.

As of September 30, 2017 we have not sold any of such registered shares since we were waiting a few States approvals from the States we plan to sell them.

We are currently selling those shares.

As of the filing date of this report, we have sold 74,100 registered common stock and have deposited $ 11,115 in our bank.

Less – valuation allowance

( 2,515,031 )

( 1,768,839 )

Total deferred tax assets, net of valuation allowance

Deferred income taxes reflect the temporary

differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax

The components of deferred tax assets and liabilities are as follows:

As of December 31, 2021, the Company had available net operating loss

carryovers of approximately $ 1,769,000 .

Per the Tax Cuts and Jobs Act (TCJA) implemented in 2018, the two-year carryback provision was

removed and now allows for an indefinite carryforward period.

The carryforwards are limited to 80 % of each subsequent year’s net

As a result, net operating loss may be applied against future taxable income and expires at various dates subject to certain limitations.

The Company has a deferred tax asset arising substantially from the benefits of such net operating loss deduction and has recorded a valuation

allowance for the full amount of this deferred tax asset since it is more likely than not that some or all of the deferred tax asset may

not be realized.

The Company files income tax returns

federal jurisdiction and California and is subject to income tax examinations by federal tax authorities for tax year ended

2018 and later and subject to California authorities for tax year ended 2017 and later.

The Company currently is not under examination

by any tax authority.

The Company’s policy is to record interest and penalties on uncertain tax positions as income tax expense.

As of December 31, 2022 and December 31, 2021, the Company has no accrued interest or penalties related to uncertain tax positions.

As of December 31, 2022, the Company had cumulative net operating loss

carryforwards for federal tax purposes of approximately $ 2,515,000 .

In addition, the Company had state tax net operating loss carryforwards

of approximately $ 2,515,000 .

The carryforwards may be applied against future taxable income and expires at various dates subject to certain

COMMITMENTS AND CONTINGENCIES

Operating Leases

The Company entered into the following operating facility

Brea - On September 1, 2018, the Company entered into an operating facility lease for its corporate office located in Brea, California with a term of 72 months and an option to extend.

The lease started on September 2018 and expires in August 2024.

La Floresta - On July 25, 2016, the Company entered into an operating facility lease for its store located at La Floresta Shopping Village in Brea, California with a term of 60 months and an option to extend.

The lease started in July 2016 and expiration date was extended to November 2024.

La Crescenta - On May 2017, the Company entered into an operating facility lease for its store located in La Crescenta, California with 120 months term with option to extend.

The lease started on May 2017 and expires in May 2027.

The Company entered into non-cancellable lease agreement for a coffee shop approximately 1,607 square feet located in La Crescenta, California commencing in May 2017 and expiring in April 2027.

The monthly lease payment under the lease agreement approximately $ 6,026 .

Corona Del Mar - On January 18, 2023, the Company renewed its retail store in Corona Del Mar, California.

As part of that lease renewal, the Company renewed the original operating lease with 60 months term with an option to extend.

The lease expires in January 2028.

The monthly lease payment under the renewed lease agreement is approximately $ 5,001 .

Laguna Woods - On February 12, 2021, the Company entered into an operating facility lease for its store located at Home Depot Center in Laguna Woods, California with a term of 60 months and an option to extend.

The lease starts in June 2021 and expires in May 2026.

Manhattan Village - On March 1, 2022, the Company entered into an operating facility lease for its store located at Manhattan Beach, California with 60 months term with option to extend.

The lease starts in March 2022 and expires in February 2027.

Cabazon - On May 2017, the

Company entered into an operating facility lease for its store located in Cabazon, California with 120 months term with option to extend.

The lease started in November 2022 and expires in October 2032.

The Company entered into non-cancellable lease agreement for a coffee

shop approximately 1,734 square feet located in Cabazon, California commencing in November 2022 and expiring in November 2032.

lease payment under the lease agreement is approximately $ 6,521 .

Glendale – On October 27,

2020, The Company entered a 7 -year operating facility lease for its store located at the Glendale Galleria in Glendale, California.

lease started in November 2020 and expires in October 2027.

Santa Anita - On December 22, 2020, the Company entered into an operating facility lease for its store located at Arcadia, California with 36 months term with option to extend.

The lease starts in February 2021 and expires in January 2024.

Riverside - On February 4, 2021, the Company entered into an operating facility lease for its store located at Galleria at Tyler in Riverside, California with a term of 84 months and an option to extend.

The lease started in April 2021 and expires in March 2028.

San Francisco - On December 22, 2020, the Company entered into an operating facility lease for its store located at Stonestown Galleria in San Francisco, California with a term of 84 months with an option to extend.

The lease starts in June 2021 and expires in April 2028.

Irvine - On October 1, 2022 the Company entered into a percentage base lease agreement for the store located in Irvine, California with 9 months term with option to extend.

The lease started in October 2022 and expires on June 30, 2023.

The rate to be used is 10 % and it’s based on monthly gross sales.

COMMITMENTS AND CONTINGENCIES (continued)

Operating lease right-of-use (“ROU”)

assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term.

represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments

arising from the lease.

Generally, the implicit rate of interest in arrangements is not readily determinable and the Company utilizes

its incremental borrowing rate in determining the present value of lease payments.

The Company’s incremental borrowing rate is a

hypothetical rate based on its understanding of what its credit rating would be.

The operating lease ROU asset includes any lease payments

made and excludes lease incentives.

Our variable lease payments primarily consist of maintenance and other operating expenses from our

real estate leases.

Variable lease payments are excluded from the ROU assets and lease liabilities and are recognized in the period in

which the obligation for those payments is incurred.

Our lease terms may include options to extend or terminate the lease when it is reasonably

certain that we will exercise that option.

Lease expense for minimum lease payments is recognized on a straight-line basis over the lease

The Company has lease agreements with

lease and non-lease components.

The Company has elected to account for these lease and non-lease components as a single lease component.

In accordance with ASC 842, the components

of lease expense were as follows:

Year ended December 31,

Operating lease expense

Total lease expense

In accordance with ASC 842, other information related to

leases was as follows:

Year ended December 31,

Operating cash flows from operating leases

Cash paid for amounts included in the measurement of lease liabilities

Weighted-average remaining lease term—operating leases

Weighted-average discount rate—operating leases

In accordance with ASC 842, maturities of operating lease

liabilities as of December 31, 2022 were as follows:

For the years ended December 31,

Total undiscounted cash flows

Reconciliation of lease liabilities:

Weighted-average remaining lease terms

Weighted-average discount rate

Present values

Lease liabilities—current

Lease liabilities—long-term

Lease liabilities—total

Difference between undiscounted and discounted cash flows

Contingencies

The Company is subject to various legal

proceedings from time to time as part of its business.

As of December 31, 2022, the Company was not currently party to any legal proceedings

or threatened legal proceedings, the adverse outcome of which, individually or in the aggregate, it believes would have a material adverse

effect on its business, financial condition and results of operations.

SHAREHOLDERS’ EQUITY

The Company has authorization to issue

and have outstanding at any one time 40,000,000 share of common stock with a par value of $ 0.0001 per share.

The shareholders of common

stock shall be entitled to one vote per share and dividends declared by the Company’s Board of Directors.

Preferred Stock

The Company has authorization to issue

and have outstanding at any one time 1,000,000 share of preferred stock with a par value of $ 0.0001 per share, in one or more classes

or series within a class as may be determined by our board of directors, who establish, from time to time, the number of shares to be

included in each class or series, fix the designation, powers, preferences and rights of the shares of each such class or series and

any qualifications, limitations or restrictions thereof.

Any preferred stock so issued is senior to other existing classes of common

stock with respect to the payment of dividends or amounts upon liquidation or dissolution.

As of December 31, 2022 and 2021, no shares

of our preferred stock had been designated any rights and we had no shares of preferred stock issued and outstanding.

Issuance of Common Stock in Settlement of Antidilution

In May 2018, the Company had entered

into a share exchange agreement wherein Capax, Inc., the predecessor entity of Reborn Coffee, Inc.

(“Capax”) effectively

merged with Reborn Global Holdings, Inc.

to form the Company.

In this share exchange agreement, the preexisting shareholder of Capax

were provided covenants that for a period of one year following the date upon which the Company is approved for quotation or trading

on a public exchange (“IPO”), the percentage of ownership of the prior shareholders of Capax would not be less than the 5%

of the total number of shares of voting common stock outstanding of the Company that they owned following the share exchange.

event the ownership of the pre-merger shareholders of Capax fell below 5%, the Company was obligated to issue that number of shares of

common stock to those shareholders which would increase the ownership of all of the Pre-Merger Shareholders to five percent (5%) of the

total outstanding voting common shares of the Company.

During the year ended December 31, 2021, the Company issued 325,495 shares

of common stock under these provisions.

On January 25, 2022, the Company modified

this agreement with the preexisting shareholders to effectively end the antidilution protection at the time of a successful IPO, eliminating

the one-year period following an IPO as provided under the original agreement.

The shareholders would be entitled to additional protection

through the IPO date should the Company issue any additional shares between December 31, 2021 and the IPO date.

The Company has not issued

any additional shares subsequent to December 31, 2021.

Initial Public Offering

In August 2022, the Company consummated

its initial public offering (the “IPO”) of 1,440,000 shares of its common stock at a public offering price of $ 5.00

per share, generating gross proceeds of $ 7,200,000 .

Net proceeds from the IPO were approximately $ 6.2 million after deducting underwriting

discounts and commissions and other offering expenses of approximately $ 998,000 .

The Company had granted the underwriters

a 45-day option to purchase up to 216,000 additional shares (equal to 15 % of the shares of common stock sold in the offering)

to cover over-allotments.

In addition, the Company had agreed to issue to the representative of the several underwriters warrants to purchase

the number of shares of common stock in the aggregate equal to five percent ( 5 %) of the shares of common stock to be issued and sold in

The warrants are exercisable for a price per share equal to 125 % of the public offering price.

No over-allotment option

or representative’s warrants have been exercised.

SHAREHOLDERS’ EQUITY (continued)

Stock Compensation

The Company issued a total of 88,200

shares of common stock to employees and consultants for compensation.

These shares were valued at $ 5.00 per share for total stock-based

compensation expense of $ 441,000 .

These shares were fully vested at issuance and as such the related stock-based compensation was recognized

Dividend policy

Dividends are paid at the discretion

of the Board of Directors.

There were no dividends declared for the years ended December 31, 2022 and 2021, respectively.

EARNINGS PER SHARE

The Company calculates earnings per

share in accordance with FASB ASC 260, Earnings Per Share, which requires a dual presentation of basic and diluted earnings per share.

Basic earnings per share are computed using the weighted average number of shares outstanding during the fiscal year.

Potentially dilutive

common shares consist of stock options outstanding (using the treasury method).

The following table sets forth the computation of basic

and diluted net income per common share:

Years Ending December 31,

$ ( 3,554,897 )

$ ( 3,440,401 )

Weighted Average Shares of Common Stock Outstanding

Years Ending December 31,

Earnings Per Share - Basic

Net Loss Per Share

Earnings Per Share - Diluted

Net Loss Per Share

SUBSEQUENT EVENTS

The Company evaluated all events or

transactions that occurred after December 31, 2022 up through the date the consolidated financial statements were available to be issued.

Based upon the evaluation, except as disclosed below or within the footnotes, the Company did not identify any recognized or non-recognized

subsequent events that would have required adjustment or disclosure in the consolidated financial statements as of and for the year ended

December 31, 2022.

In January 2023, the Company closed a store located in Glendale, California.

In January 2023, the Company completed

an acquisition of a café located in Irvine, California, under an asset purchase agreement entered on October 5, 2022.

price of $ 250,000 was paid in 2022 and included in prepaid expenses and other current assets in the December 31, 2022 consolidated balance

In February 2023, the Company opened a store

located in Huntington Beach, California and the store is under a 10 -year operating lease which expires in February 2032.

In February 2023, the Company formed a subsidiary

in Korea, “Reborn Coffee Korea, Inc.”, under the Company’s international expansion plan.

Initial investment capital

of $ 138,000 was made to Reborn Coffee Korea, Inc.

by the Company.

Pursuant to the requirements

of Section 13 or 15(d) of the Securities Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned,

thereunto duly authorized.

Chief Executive Officer

April 11, 2023

( Principal Executive Officer )

/s/ Stephan Kim

Chief Financial Officer

April 11, 2023

( Principal Financial and Accounting Officer )

Pursuant to the requirements of the Securities

Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the registrant and in the capacities and

on the dates indicated.

Chief Executive Officer

April 11, 2023

(Principal Executive Officer)

/s/ Stephan Kim

Chief Financial Officer

April 11, 2023

(Principal Financial and Accounting Officer)

/s/ Farooq M.

Chairman of the Board of Directors

April 11, 2023

/s/ Dennis R.

Vice Chairman of the Board of Directors

April 11, 2023

/s/ Sehan Kim

April 11, 2023

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures