What changed in this filing

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Item 1. Business

2024-03-28 compared with 2023-04-11 · 60 added, 102 removed, 309 unchanged (34% of the section changed)

19 unchanged sentences

as of December 31, 2023.

Reborn Coffee, Inc., Reborn

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

● Reborn Realty, LLC (the “Reborn Realty”), a California limited liability

corporation formed in March 2023, is an entity which acquired a real property located at 596 Apollo Street, Brea, California.

Reborn Coffee, Inc., Reborn Global

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

In August 2022, the Company

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Other brew methods, such as an in-house pour over and drip coffee, are also available.

In 2015 Jay Kim, our Chief

Executive Officer, founded Reborn Coffee.

Kim and his team launched Reborn Coffee with the vision of using the finest pure ingredients

and pristine water.

We serve customers through our retail store locations in Southern California:

Brea, La Crescenta, Glendale, Corona

Del Mar, Arcadia, Laguna Woods, Riverside, Manhattan Village, Cabazon, San Francisco, and Irvine.

Additionally, we expect

to continue to develop additional retail locations.

We currently are developing 3 additional retail locations, Huntington Beach, Pasadena

and Irvine, and have identified additional 2 locations, Diamond Bar and Anaheim, for expansion.

In 2023, we expect to open up to 10 company-operated

retail locations.

As evidence of our success, we received 1st place traditional still in “America’s Best Cold Brew”

competition by Coffee Fest in 2017 in Portland and 2018 in Los Angeles.

As of December 31, 2022,

all of our 11 locations were company-operated.

In 2015 Jay Kim, our Chief Executive Officer, founded Reborn Coffee.

Kim and his team launched Reborn Coffee with the vision of using the finest pure ingredients and pristine water.

We serve customers through

our retail store locations in Southern California:

Brea, La Crescenta, Huntington Beach, Corona Del Mar, Arcadia, Laguna Woods, Riverside,

San Francisco, Cabazon, Manhattan Beach, two locations in Irvine, Diamond Bar and Anaheim with one location in development.

We expect to continue to develop

additional retail locations.

In 2023, we opened up 2 retail locations, Diamond Bar and Anaheim, California and currently are developing

a location in Pasadena, California.

As evidence of our success, we received 1st place traditional still in “America’s Best

Cold Brew” competition by Coffee Fest in 2017 in Portland and 2018 in Los Angeles.

As of December 31, 2023, all

of our 14 locations were company-operated.

Our retail locations, which opened through whole year of 2023, generated AUV of approximately

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In 2022, we generated approximately

$2.3 million of revenue, $3.4 million of net loss, a net loss margin of -150.9%, and approximately -$2.4 million of Adjusted EBITDA, a

non-GAAP financial measure, resulting in an Adjusted EBITDA margin, a non-GAAP financial measure, of -104.8%.

$3.2 million of revenue, $3.6 million of net loss, a net loss margin of –109.7%, and approximately -$3.3 million of Adjusted EBITDA,

a non-GAAP financial measure, resulting in an Adjusted EBITDA margin, a non-GAAP financial measure, of -102.8%.

A reconciliation of net income to EBITDA, Adjusted EBITDA, and Adjusted

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Depreciation and amortization

Loss on extinguishment of debt

PPP loan forgiveness

Other expense (income)

Gain on the sale of a building

Adjusted EBITDA

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Pour Over Packs allow our consumers to consume our specialty coffee outdoors and on-the-go.

Our success in innovating

within the “fourth wave” coffee movement is measured by our success in B2B sales with our introduction of Reborn Coffee Pour

Over Packs to hotels.

With the introduction of our Pour Over Packs to major hotels (including one hotel company with 7 locations), our

B2B sales increased as these companies recognized the convenience and functionality our Pour Over Packs serve to their customers.

Our success in innovating within

the “fourth wave” coffee movement is measured by our success in B2B sales with our introduction of Reborn Coffee Pour Over

Packs to hotels.

With the introduction of our Pour Over Packs to major hotels, our B2B sales increased as these companies recognized the

convenience and functionality our Pour Over Packs serve to their customers.

Reborn Coffee’s continuous

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Our Retail Locations

Reborn Coffee is built upon

superior customer service, convenience and a modern experience as well as safe, clean and well-maintained stores that reflect the personalities

of the communities in which they operate, thereby building a high degree of customer loyalty.

Our strategy for expanding our retail business

is to increase our category share in an aggressive manner, by opening additional stores in new and existing markets, as well as increasing

sales in existing stores.

Store growth in specific existing markets will vary due to many factors, including expected financial returns,

the maturity of the market, economic conditions, consumer behavior and local business practices.

Our highly efficient retail locations

and kiosks place a premium on customer convenience without sacrificing the personal experience.

Our new retail locations are typically

800 to 1,500 square feet and are located in shopping plazas in upscale areas.

We strategically position our new locations in areas where

large-chain coffee locations have moved out, creating an opportunity for us to remodel a purpose-built coffee retail store.

we are able to open quickly in high traffic areas with established local demand for coffee, ensuring a customer base we can convert into

Reborn Coffee customers by offering a specialty coffee experience that wasn’t previously available.

Our locations feature patios,

contemporary design, and inviting atmospheres for socialization, study, and work.

Our retail locations generated AUV of approximately

$376,000 in 2022.

As we expand our retail footprint and improve customer awareness, we expect our AUV to grow.

Reborn Coffee is built upon superior customer service, convenience and

a modern experience as well as safe, clean and well-maintained stores that reflect the personalities of the communities in which they

operate, thereby building a high degree of customer loyalty.

Our strategy for expanding our retail business is to increase our category

share in an aggressive manner, by opening additional stores in new and existing markets, as well as increasing sales in existing stores.

Store growth in specific existing markets will vary due to many factors, including expected financial returns, the maturity of the market,

economic conditions, consumer behavior and local business practices.

Our highly efficient retail locations and kiosks place a premium

on customer convenience without sacrificing the personal experience.

Our new retail locations are typically 800 to 1,500 square feet and

are located in shopping plazas in upscale areas.

We strategically position our new locations in areas where large-chain coffee locations

have moved out, creating an opportunity for us to remodel a purpose-built coffee retail store.

In this way, we are able to open quickly

in high traffic areas with established local demand for coffee, ensuring a customer base we can convert into Reborn Coffee customers by

offering a specialty coffee experience that wasn’t previously available.

Our locations feature patios, contemporary design, and

inviting atmospheres for socialization, study, and work.

Our retail locations generated AUV of approximately $458,000 in 2023.

our retail footprint and improve customer awareness, we expect our AUV to grow.

Franchise Operations

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and size does not diminish the quality and personal element that is instilled in the coffee industry.

Our brand experience has

enabled strong growth and financial performance.

Revenue grew from $2.3 million in the 12 months ended December 31, 2021, to $3.2 million

in the 12 months ended December 31, 2022.

We continue to accelerate the pace of new “corporate-owned” (i.e., directly owned

by Reborn) stores openings and intend to operate over 20 corporate-owned locations by year end 2023.

Our brand experience has enabled

strong growth and financial performance.

Revenue grew from $3.2 million in the 12 months ended December 31, 2022, to $6.0 million in the

12 months ended December 31, 2023.

We continue to accelerate the pace of new “corporate-owned” (i.e., directly owned by Reborn)

stores openings and intend to operate over 20 corporate-owned locations and 10 franchised locations by year end 2024.

Since our founding, we have

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Experienced Leadership

Our relentless commitment

to excellence is driven by our passionate management team under the leadership of Founder and Chief Executive Officer Jay Kim.

Our relentless commitment to

excellence is driven by our passionate management team under the leadership of Founder and Chief Executive Officer Jay Kim.

Reborn Coffee with the vision to provide the best coffee using the purest ingredients.

Jay is focused on the expansion of Reborn and

he has surrounded himself with leaders with direct experience in beverage and retail.

Stephan Kim, our Chief Financial Officer, has almost

20 years of experience in public accounting and consulting.

Other members of our executive leadership team bring high growth, franchise

and sector expertise.

Jay is focused on the expansion of Reborn and he

has surrounded himself with leaders with direct experience in beverage and retail.

Stephan Kim, our Chief Financial Officer, has 20 years

of experience in public accounting and consulting.

Other members of our executive leadership team bring high growth, franchise and sector

Our Commitment to Our

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10-K, and you should not consider information on our website to be part of this Annual Report on Form 10-K.

Implications of Being

an Emerging Growth Company

We are an “emerging

growth company” as defined in the JOBS Act.

For as long as we are an emerging growth company, unlike other public companies that

do not meet those qualifications, we are not required to:

● provide an auditor’s

attestation report on management’s assessment of the effectiveness of our system of

internal control over financial reporting pursuant to Section 404(b) of Sarbanes-Oxley Act

of 2002, as amended, or the Sarbanes-Oxley Act;

● provide more than

two years of audited financial statements and related management’s discussion and analysis

of financial condition and results of operations in a registration statement on Form S-1;

● comply with any new

requirements adopted by the Public Company Accounting Oversight Board, or the PCAOB, requiring

mandatory audit firm rotation or a supplement to the auditor’s report in which the

auditor would be required to provide additional information about the audit and the financial

statements of the issuer;

certain disclosure regarding executive compensation required of larger public companies or

hold shareholder advisory votes on executive compensation required by the Dodd-Frank Wall

Street Reform and Consumer Protection Act, or the Dodd-Frank Act;

shareholder approval of any golden parachute payments not previously approved.

We will cease to be an “emerging

growth company” upon the earliest of:

last day of the fiscal year in which we have $1.07 billion or more in annual gross revenues;

date on which we become a “large accelerated filer” (which means the year-end

at which the total market value of our common equity securities held by non-affiliates is

$700 million or more as of the last business day of our most recently completed second fiscal

date on which we have issued more than $1 billion of non-convertible debt securities over

a three-year period;

last day of the fiscal year following the fifth anniversary of our initial public offering.

In addition, Section 107

of the JOBS Act provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B)

of the Securities Act of 1933, as amended (the “Securities Act”), for complying with new or revised accounting standards,

but we have irrevocably opted out of the extended transition period and, as a result, we will adopt new or revised accounting standards

on the relevant dates in which adoption of such standards is required for other public companies.

For more information, please

see the section of this Annual Report on Form 10-K entitled “Item 1.A.

Risk Factors.”

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 1. Business