What changed in this filing

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Item 9A. Controls and Procedures

2024-03-28 compared with 2023-04-11 · 381 added, 345 removed, 1111 unchanged (40% of the section changed)

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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.

Our 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, 2023.

Based on such evaluation, our Chief Executive Officer

and Chief Financial Officer have concluded that as of December 31, 2023, 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

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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

These 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, 2023 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, 2023 are fairly stated, in all material respects, in accordance with GAAP.

Management’s Report

on Internal Control Over Financial Reporting

management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Securities

Exchange Act of 1934 Rule 13a-15(f).

Our internal control over financial reporting is designed to provide reasonable assurance

regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with

generally accepted accounting principles.

Our internal control over financial reporting includes those policies and procedures

pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;

provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors;

provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.

of the inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Also, projections

of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in

conditions, or that the degree of compliance with the policies or procedures may deteriorate.

management assessed the effectiveness of our internal control over financial reporting as of December 31, 2023.

this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the 2013 Treadway Commission

(“COSO”) in Internal Control-Integrated Framework .

Based upon this assessment, our Chief Executive Officer

and Chief Financial Officer concluded that as of December 31, 2023 our internal controls over financial reporting were ineffective.

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.

were no changes in our internal controls over financial reporting that occurred during our most recent fiscal quarter that have materially

affected, or are reasonably likely to materially affect, our internal control over financial reporting.

on Effectiveness of Controls and Procedures

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Other Information

Trading Plans

the three months ended December 31, 2023, no director or officer (as defined in Rule 16a-1(f) under the Exchange Act) of the company adopted

or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined

in Item 408(a) of Regulation S-K.

Disclosure Regarding Foreign Jurisdictions that Prevent

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Chief Financial Officer

Non-Employee, Independent Directors

Chairman of the Board of Directors and Independent

Vice Chairman of the Board of Directors and Independent

Non-Employee Directors

Chairman of the Board of Directors and Independent Director

Independent Director

Background of Executive Officers and Directors

Jay Kim, age 60, Chief

Executive Officer and Director

Jay Kim, age 62, Chief Executive Officer

Kim has served as the

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

Stephan Kim, age

46, Chief Financial Officer

Stephan Kim, age 48, Chief Financial Officer

Kim has served as the

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Non-Employee Directors

age 64, Chairman of the Board of Directors

Arjomand, age 66, Chairman of

the Board of Directors

Farooq Arjomand has served

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degree from Seattle Pacific University in Seattle, Washington.

76, Vice Chairman of the Board of Directors

Egidi, age 74, Director

Egidi is a licensed

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

Sehan Kim, age 69,

Sehan Kim, age 69, Director

Sehan Kim has been a Director

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

Andy Nasim, age 43, Director

Nasim graduated with a Bachelor of Science in Business with Information

Technology from Staffordshire University, United Kingdom.

He commenced his career in 2002 as a business development manager with Kenanga

Capital Sdn Bhd, the stockbroking lending division of Kenanga Investment Bank Berhad where he drove the credit business of corporate banking,

equity financing and development of financing solutions through various structured financing products and Islamic trade financing.

then became Head of Kenanga Private Equity division in 2010 where he was involved in strategic offshore merger and acquisition for the

He obtained extensive experience in the capital markets and financial services operations.

From January 2017 to present, Mr.

has served as CEO / Executive Director of the Wellspring Group;

a company which owns the global trademark of world-renowned dessert brand.

He oversees strategic planning and international brand expansion for the Group.

Jennifer Tan, age 56, Director

Jennifer Tan has over 30 years’

experience as a global entrepreneur in diversified businesses in the U.S., Europe and Asia.

Since 2020, she has served as Chief Executive

Officer of Hawaii Volcano Tea LP, a tea farm with multiple locations in the Volcano area of Hawaii Island.

From 2009 to 2019, Ms.

served as Managing Director of Tutti Frutti (China) Limited, developing and executing marketing plans for Tutti Frutti Frozen Yogurt stores

on both corporate-owned and franchise retail stores in China, Hong Kong and Macau.

From 1997 to 2001, she served as the Managing

Director of International Golf & Yacht Club (Hong Kong) Limited and Mass Star Development Limited.

Family Relationships

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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).

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, Sehan Kim, Andy

Nasim, and Jennifer Tan).

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 current directors will continue to serve as directors until their

resignation, removal or successor is duly elected.

Our certificate of incorporation

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our audit committee consists of Farooq M.

Arjomand, Dennis R.

Egidi and Sehan Kim.

Arjomand, Sehan Kim, and Andy Nasim.

Each member of our audit committee can read and understand

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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.

Arjomand, who

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

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

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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.

Our compensation committee consists

Arjomand, Sehan Kim, and Andy Nasim.

The chair of our compensation committee is Andy Nasim.

The principal duties and

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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.

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 directors.

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 is 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

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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.

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

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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.

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

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of the Company.

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

principal executive officers, were:

Our named executive officers for the

year 2023, which consist of our principal executive officers, were:

● Jay Kim, President and Chief Executive Officer;

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Summary Compensation Table – Officers

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

The following table sets

forth information concerning the compensation of our named executive officers for the years ended December 31, 2023 and December 31, 2022.

Incentive plan

Name and principal position

Chief Executive Officer

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Chief Executive Officer

Former Chief Financial Officer (2)

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

Chief Financial Officer

Employment Agreements

Effective July 27, 2022, we 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.

Kim to serve as our full time Chief Financial Officer, effective immediately.

Kim shall receive

a monthly payment of $12,000 ($144,000 annually) as compensation for his services, and we granted $56,000 worth of restricted stock units

(RSUs), which vested 3 months after employment and can be sold after one year.

The employment agreement is an at-will agreement and is

terminable by either party at any time.

Except as set forth above we do not currently have

employment agreements with any of our NEOs .

Outstanding Equity Awards at Fiscal Year-End

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

each of the NEOs.

As of December 31, 2023, 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.

No compensation was paid

to our non-employee directors for services rendered during the years ended December 31, 2023 and 2022.

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:

The following table sets

forth, as of December 31, 2023, information regarding beneficial ownership of our capital stock by:

● each person, or group

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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.

ownership is based on 14,929,390 shares of our Common Stock issued and outstanding as of December 31, 2023.

Unless otherwise indicated,

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Arjomand, Chairman of the Board

Egidi, Vice Chairman of the Board

Egidi, Director

Sehan Kim, Director

Hannah Goh, Former Director

Andy Nasim, Director

Jennifer Tan, Director

All directors, directors nominees and executive officers as a group (7 persons):

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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.

Our board of directors has adopted a written related

person transaction policy, 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.

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.

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

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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

Directors has determined that each of the directors on our Board, other than Jay Kim and Dennis R.

Egidi are independent directors under

the Nasdaq listing rules.

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

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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.

Prior Audit Firm

Kreit & Chiu CPA

LLP (“K&C”) (formerly known as Paris, Kreit & Chiu CPA LLP) served as our independent registered public accounting

firm from 2020 to May 1, 2023.

At such time, we amicably terminated the engagement of K&C, and such termination was approved

by our Board of Directors and Audit Committee.

The reports of K&C on our financial statements as of and for the fiscal years

ended December 31, 2022 and 2021 did not contain any adverse opinion or disclaimer of opinion and were not qualified or modified

as to uncertainty, audit scope or accounting principles, with the exception of providing a qualification as to our ability to continue

as a going concern.

During our two most recent fiscal years and the subsequent interim period through May 1, 2023, there were

no disagreements with K&C on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or

procedure, which disagreement(s), if not resolved to the satisfaction of K&C, would have caused it to make reference to the subject

matter of the disagreement(s) in connection with its report.

During our two most recent fiscal years and the subsequent interim

period through May 1, 2023, there were no reportable events of the type described in Item 304(a)(1)(v) of Regulation S-K.

Current Audit Firm

We have appointed BF Borgers

CPA PC (“BFB”) to serve as our independent registered public accounting firm for the fiscal year ending December 31,

BFB has served as our independent registered public accounting firm since May 1, 2023.

Fees Billed to the Company in fiscal year

2023 and 2022

The following table sets

forth the fees billed to us by our former principal auditor, K&C, for professional services rendered during the fiscal years

ended December 31, 2022 and our current principal auditor, BFB, for professional services rendered during the fiscal years

ended December 31, 2023:

Audit fees (1)

Audit related fees (2)

All other fees

(1) Audit Fees — Audit fees consist of fees billed

for the audit of our annual financial statements and the review of the interim consolidated financial statements.

(2) Audit-Related Fees — These consisted principally

of the aggregate fees related to audits that are not included Audit Fees.

(3) Tax Fees — Tax fees consist of aggregate

fees for tax compliance and tax advice, including the review and preparation of our various jurisdictions’ income tax returns.

Policies and Procedures

The Audit Committee has

the authority to appoint or replace our independent registered public accounting firm (subject, if applicable, to stockholder ratification).

The Audit Committee is also responsible for the compensation and oversight of the work of the independent registered public accounting

firm (including resolution of disagreements between management and the independent registered public accounting firm regarding financial

reporting) for the purpose of preparing or issuing an audit report or related work.

The independent registered public accounting firm

was engaged by, and reports directly to, the Audit Committee.

The Audit Committee pre-approves all audit services and permitted non-audit

services (including the fees and terms thereof) to be performed for us by our independent registered public accounting firm, subject

to the de minimis exceptions for non-audit services described in Section 10A(i)(1)(B) of the Exchange Act and Rule 2-01(c)(7)(i)(C) of

Regulation S-X, provided that all such excepted services are subsequently approved prior to the completion of the audit.

complied with the procedures set forth above, and the Audit Committee has otherwise complied with the provisions of its charter.

Exhibits, Financial Statement Schedule

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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

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

Line of Credit Note issued by Reborn Global Holdings, Inc.

on June 1, 2023 in the name of DRE, Inc.

(incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on July 24, 2023)

Exchange Agreement by and between Reborn Coffee, Inc.

and DRE, Inc.

dated November 28, 2023 (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on November 29, 2023)

Letter from Kreit and Chiu CPA LLP dated May 1, 2023 (incorporated by reference to Exhibit 16.1 to our Current Report on Form 8-K filed on May 2, 2023)

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.

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 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

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.

Reborn Coffee, Inc.

Clawback Policy

Inline XBRL Instance Document.

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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

We have audited

the accompanying consolidated balance sheet of Reborn Coffee, Inc.

(the “Company”) as of December 31, 2023, the related statement

of operations, stockholders’ equity (deficit), and cash flows for the year then ended, and the related notes (collectively referred to

as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial

position of the Company as of December 31, 2023, and the results of its operations and its cash flows for the year then ended, in conformity

with accounting principles generally accepted in the United States.

The financial statements of the Company as of December 31, 2022 and

for the year then ended were audited by other auditors whose report dated April 11, 2023 expressed an unqualified opinion on those statements.

Doubt about the Company’s Ability to Continue as a Going Concern

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.

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

As discussed in Note 2 to the financial

statements, the Company’s significant operating losses raise substantial doubt about its ability to continue as a going concern.

The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

These financial

statements are the responsibility of the Company’s management.

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

statements based on our audit.

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.

federal securities

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

our audit 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 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

Our audit included

performing procedures to assess the risks of material misstatement of the 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 financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management,

as well as evaluating the overall presentation of the financial statements.

We believe that our audit provides a reasonable basis for

/s/ BF Borgers CPA PC

BF Borgers CPA PC (PCAOB ID 5041 )

We have served as the Company’s auditor since 2023.

PCAOB ID 6651

April 11, 2023

Lakewood , CO

March 28, 2024

Consolidated Balance Sheet

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Loans payable to financial institutions

Loan payable to other

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

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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

and 14,929,390 and 13,162,723 shares issued and outstanding at December 31, 2023 and 2022, respectively

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

2 unchanged sentences

Accumulated deficit

( 12,031,801 )

( 8,476,904 )

Total stockholders’ equity

13 unchanged sentences

Loss from operations

( 3,540,542 )

( 2,563,677 )

Other income (expense):

Paycheck protection program (PPP) loan forgiven income

Other income (expense)

Interest expense

Loss on extinguishment of debt

Gain on the sale of building

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:

6 unchanged sentences

Subscription of

Preferred Stock

Shareholders’

Balance as of December 31, 2021

( 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

Offering costs associated with issuance of common stock in the Initial Public Offering

Balance as of December 31, 2022

$ ( 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

Common stock issued – conversion from the credit line

Balance as of December 31, 2023

$ ( 12,031,801 )

See accompanying notes

8 unchanged sentences

Operating lease

Loss on extinguishment of debt

Forgiveness of Paycheck protection program (PPP) loan

Changes in operating assets and liabilities:

1 unchanged sentence

Prepaid expense and other current assets

( 1,069,354 )

Accounts payable

5 unchanged sentences

Purchases of property and equipment

Reacquisition of store

( 1,019,353 )

Net cash used in investing activities

( 1,019,353 )

Cash flows from financing activities:

7 unchanged sentences

Net cash provided by financing activities

Net increase in cash

Net (decrease) increase in cash

( 2,342,587 )

Cash at beginning of period

1 unchanged sentence

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

Conversion of credit line to common stock issuances

Issuance of common shares for service

11 unchanged sentences

Reborn has the following wholly owned subsidiaries:

Reborn Global Holdings, Inc.

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 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.

1 unchanged sentence

Reborn Coffee Franchise does not have any franchisee 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”.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

11 unchanged sentences

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.

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 $ 16,029,487 at December

31, 2023, and had a net loss of $ 3,997,686 for the year ended December 31, 2023 and net cash used in operating activities of $ 2,790,956

for the year ended December 31, 2023.

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

To support our existing and planned

79 unchanged sentences

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.

At December 31, 2023 and 2022, allowance for doubtful accounts was zero .

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

Inventories consisted primarily of

55 unchanged sentences

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;

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;

37 unchanged sentences

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.

The Company purchases from various vendors

for its operations.

For the years ended December 31, 2023 and 2022, no purchases from any vendors accounted for a significant amount of

the Company’s bean coffee purchases.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

37 unchanged sentences

Less accumulated depreciation

( 1,133,157 )

Total property and equipment, net

1 unchanged sentence

equipment amounted to approximately $ 262,000 and $ 211,000 for the years ended December 31, 2023 and 2022, respectively.

LOANS PAYABLE TO FINANCIAL INSTITUTIONS

LOANS PAYABLE TO FINANCIAL INSITUTIONS

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 .

of the followings:

Loan agreement with principal amount of $ 140,954 and repayment rate of 20.5 % for a total of $ 124,430 .

The loan payable matures in February 2024

Loan agreements with principal amount of $ 960,777 and repayment rate of 14.75 % to 20.0 % for a total of $ 845,484 .

The loans payable mature on various dates in 2025.

Loan agreement with principal amount of $ 140,954 with an interest rate of 30.0 % per annum with a maturity date on May 31, 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 TO OTHER

On December 27, 2023, the Company entered into

a short-term borrowing agreement with a private party for a principal amount of $ 300,000 with a monthly interest of $ 9,000 .

payable matures on March 31, 2024 .

LOAN PAYABLE, EMERGENCY INJURY DISASTER LOAN (EIDL)

3 unchanged sentences

Less - current portion

Total 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:

38 unchanged sentences

LOAN PAYABLE, PAYROLL PROTECTION LOAN PROGRAM (PPP)

Loan payable from Payroll protection program

Loan payable from Payroll protection program (PPP)

Less - current portion

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

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

The Paycheck Protection Program Loan

68 unchanged sentences

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

of the same amount.

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

COMMITMENTS AND CONTINGENCIES

9 unchanged sentences

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.

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.

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 started 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 started in March 2022 and expires in February 2027.

Cabazon - On May 2017, the

4 unchanged sentences

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.

Huntington Beach - On October

7, 2022, the Company entered into an operating facility lease for its store located at Huntington Beach, California with a 124 months

term with option to extend.

The lease started in November 2021 and expires in February 2032.

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 started 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.

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 started in June 2021 and expires in April 2028.

Intersect in 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.

lease started in October 2022 and expires on December 31, 2023 with an execution of extension.

The rate to be used is 10 % and it’s

based on monthly gross sales.

Diamond Bar – On March

20, 2023, the Company entered into an operating facility lease for its store located at Diamond Bar, California which matures on March

The monthly lease payment under the lease agreement is approximately $ 5,900 .

Anaheim - On March 3, 2023, the Company entered

into an operating facility lease for its store located at Anaheim, California with 120 months term with option to extend.

The lease started

in March 2023 and expires in February 2033.

COMMITMENTS AND CONTINGENCIES (continued)

44 unchanged sentences

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.

The Company is subject to various legal proceedings from time to time

as part of its business.

As of December 31, 2023, 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

4 unchanged sentences

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.

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, 2023 and 2022, 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

36 unchanged sentences

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

The Company issued a total of 100,000 shares of common stock to employees

and consultants for compensation.

These shares were valued at $ 2.85 per share for total stock-based compensation expense of $ 285,000 .

These shares were fully vested at issuance and as such the related stock-based compensation was recognized immediately.

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.

Dividends are paid at the discretion of the Board of Directors.

were no dividends declared for the years ended December 31, 2023 and 2022, respectively.

EARNINGS PER SHARE

16 unchanged sentences

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.

The Company evaluated all events or transactions that occurred after

December 31, 2023 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, 2023.

On January 22, 2024, the Company effectuated a reverse stock

split of its issued common stock, par value $ 0.0001 , in the ratio of 1-for-8.

In March 2024, the Company closed stores located in Irvine, Cabazon

and San Francisco, California.

Pursuant to the requirements

2 unchanged sentences

Chief Executive Officer

April 11, 2023

March 28, 2024

( Principal Executive Officer )

1 unchanged sentence

Chief Financial Officer

April 11, 2023

March 28, 2024

( Principal Financial and Accounting Officer )

3 unchanged sentences

Chief Executive Officer

April 11, 2023

March 28, 2024

(Principal Executive Officer)

1 unchanged sentence

Chief Financial Officer

April 11, 2023

March 28, 2024

(Principal Financial and Accounting Officer)

1 unchanged sentence

Chairman of the Board of Directors

April 11, 2023

March 28, 2024

/s/ Dennis R.

Vice Chairman of the Board of Directors

April 11, 2023

March 28, 2024

/s/ Sehan Kim

April 11, 2023

March 28, 2024

/s/ Andy Nasim

March 28, 2024

/s/ Jennifer Tan

March 28, 2024

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