What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2026-04-22 compared with 2025-03-31 · 1104 added, 796 removed, 857 unchanged (69% of the section changed)

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(the “Exchange Act”)), as of December 31, 2025.

Based on such evaluation, our Chief Executive Officer and Chief Financial

Officer have concluded that as of December 31, 2024, 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.

Management has identified control deficiencies

regarding inadequate accounting resources, the lack of segregation of duties and the need for a stronger internal control environment.

Our management believes that these material weaknesses are due to the small size of our accounting staff.

The small size of our accounting

outsourced staff may prevent adequate controls in the future due to the cost/benefit of such remediation.

Based on such evaluation, our both of our Co-Chief Executive Officers and

our Chief Financial Officer have concluded that as of December 31, 2025, 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 SEC rules and forms and (b) is accumulated and communicated

to our management, including our Co-Chief Executive Officers, as appropriate, to allow timely decisions regarding any required disclosure.

Management has identified control deficiencies regarding inadequate

accounting resources, the lack of segregation of duties and the need for a stronger internal control environment.

Our management believes

that these material weaknesses are due to the small size of our accounting staff.

The small size of our outsourced accounting staff may

prevent adequate controls in the future due to the cost/benefit of such remediation.

To mitigate the current limited resources and

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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, 2024 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, 2024 are fairly stated, in all material respects, in accordance with GAAP.

to conclude that our financial statements for the year ended December 31, 2025 included in this Report were fairly stated in accordance

Accordingly, management believes that despite our material weaknesses, our financial statements for the quarter ended December

31, 2025 are fairly stated, in all material respects, in accordance with GAAP.

Management’s Report on Internal Control

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internal control over financial reporting includes those policies and procedures that:

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.

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

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;

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.

Because of the inherent limitations, internal

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with the policies or procedures may deteriorate.

Our management assessed the effectiveness of our

internal control over financial reporting as of December 31, 2024.

In making 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, 2024 our internal controls over financial reporting were ineffective.

Our management assessed the effectiveness of our internal control over

financial reporting as of December 31, 2025.

In making 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 .

upon this assessment, our Chief Executive Officer concluded that as of December 31, 2025 our internal controls over financial reporting

were ineffective.

Management has identified such deficiencies regarding inadequate resources,

the lack of segregation of duties and the need for a stronger internal control environment.

Our management believes that these material

weaknesses are due to the small size of our staff.

The small size of our outsourced staff may prevent adequate controls in the future

due to the cost/benefit of such remediation.

To 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.

Changes in Internal Control Over Financial

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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:

our executive officers and members of our board of directors as of the date of this Report:

Executive Officers

Chief Executive Officer and Director

Chief Financial Officer

Co-Chief Executive Officer and Director

Non-Employee Directors

Chairman of the Board of Directors and Independent Director

Independent Director

Chairman of the Board of Directors and Director

Background of Executive Officers and Directors

Jay Kim, age 63, Chief Executive Officer

Kim has served as our Chief Executive Officer

since inception in 2014.

Jay Kim, age 64, Co-Chief Executive Officer

Kim has served as Co-Chief Executive Officer

since March 2026.

Kim served as our Chief Executive Officer from inception 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.

Kim sold the majority ownership of Wellspring to group of investors in

2017 to focus his efforts on Reborn Coffee.

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.

Kim sold the majority

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

Prior to beginning Wellspring Mr.

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

Stephan Kim, age 49, Chief Financial Officer

Kim has served as our full-time Chief Financial

Officer 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.

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

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

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

From 2005 to 2010, Mr.

Kim was an Audit Manager at

KPMG, Los Angeles office.

Jung Jae Lim, age 58, Co-Chief Executive

Jung Jae Lim has served as Co-Chief Executive Officer

since March 2026.

Lim brings more than 20 years of leadership experience in logistics and supply chain management to the Company,

with a background overseeing large-scale operations, multi-node distribution networks, and end-to-end supply chain execution across multiple

From 2001 to present, Mr.

Lim has served as CEO of KCC Mexico Overseas Logistics, leading the company’s international logistics

operations and developing extensive expertise in cross-border transportation and global supply chain systems.

In addition, from 2004 to

Lim has served as CEO of TJ America and TJ Korea Inc., further strengthening his experience in multinational logistics management

and operational leadership.

Jung Jae Lim received his Bachelor of Language and Literature from Dankook University.

Non-Employee Directors

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Frutti Frozen Yogurt franchises located in France and England.

Sehan Kim, age 70, Director

Sehan Kim has been a Director of Reborn Global

since January 2015 and became a member of the Board of Reborn Coffee in 2018.

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

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

From January 1994 to February 1997 Mr.

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

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.

Andy Nasim, age 44, Director

Andy Nasim has served as a Director on our Board

since July 2023.

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.

He then became Head of Kenanga Private

Equity division in 2010 where he was involved in strategic offshore merger and acquisition for the group.

He obtained extensive experience

in the capital markets and financial services operations.

From January 2017 to present, Mr.

Nasim 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 57, Director

Jennifer Tan has served as a Director on our Board

since October 2023.

Tan has over 30 years’ experience as a global entrepreneur in diversified businesses in the U.S., Europe

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.

Tan 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

From 1997 to 2001, she served as the Managing Director of International Golf & Yacht Club (Hong Kong) Limited and

Mass Star Development Limited.

Jeong, age 61, Director

Jeong has served as a director since February 2026.

Jeong is the founder and owner of Charles C.

Jeong & Co., an accounting and consulting firm providing financial audit, tax consulting,

and tax compliance services.

He has more than 25 years of experience as a Certified Public Accountant, serving clients across a wide range

of industries.

Prior to founding his firm, Mr.

Jeong worked at Integral Business Consulting Group, where he provided accounting, tax,

and advisory services.

Throughout his career, Mr.

Jeong has developed extensive expertise in financial reporting, regulatory compliance,

tax strategy, and audit oversight.

Jeong earned his master’s degree in accounting from Hanyang University.

His background as

a CPA and accounting firm principal provides valuable expertise in financial oversight, audit processes, and regulatory compliance.

Mi Jeong Lee, age 54, Director

Mi Jeong Lee has served as a director since February

Lee has been retired since 2012.

From 2000 to 2012.

Lee served as an Accounting Manager at Tyson Foods, Inc.

she was responsible for financial reporting, compliance, and accounting operations within a global manufacturing environment.

Lee served as an account assistance manager at Pigeon Japan where she oversaw financial management, internal controls, and

regulatory compliance for regional operations.

She began her career in large-scale manufacturing and consumer goods industries, where

she developed deep expertise in financial reporting, internal controls, and multinational financial operations.

Lee earned her degree

from Asian College.

Her professional experience and international accounting expertise provide valuable insight into financial oversight,

regulatory compliance, and multinational business operations.

Alex Yeon, age 58, Director

Alex Yeon has served as a director since

Since January 2026, Mr.

Yeon has been a Partner at LJRC Partners Inc., where he has provided M&A advisory and

complex financing structuring services for growth-oriented companies.

From 2017 through 2025, Mr.

Yeon served as a Tax Preparer and

Consultant at Charles C.

Jeong & Co., an accounting and consulting firm, where he provided tax advisory and preparation services

for corporations.

Prior to 2017, Mr.

Yeon served as CEO of a prominent Korean investment firm, MUHAN Investment, Inc.

Investment Executive for UBS Financial Services.

Yeon earned Bachelor of Science degree in 1995 from California State

University, Long Beach and pursued a Master of Science at the University of Southern California.

His background provides valuable

expertise in financial oversight, audit processes, and regulatory compliance.

Family Relationships

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

Arjomand, Sehan Kim, Andy Nasim, and Jennifer

We have six directors with no vacancies.

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

or successor is duly elected.

Arjomand, Charles C.

Jeong, Mi Jeong Lee, and

We have seven 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

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Involvement in Certain Legal Proceedings

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.

As of the filing of this Report on, 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

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consists of Farooq M.

Arjomand, Sehan Kim, and Andy Nasim.

Arjomand, Mi Jeong Lee, and Alex Yeon.

Each member of our audit committee can read and understand fundamental financial

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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.

Our board of directors has

determined that Alex Yeon 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:

hiring and selecting a qualified firm to serve as the independent registered public accounting firm to audit our financial statements;

helping to ensure the independence and performance of the independent registered public accounting firm;

helping to maintain and foster an open avenue of communication between management and the independent registered public accounting firm;

discussing 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;

developing procedures for employees to submit concerns anonymously about questionable accounting or audit matters;

reviewing our policies on risk assessment and risk management;

reviewing related party transactions;

obtaining 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;

approving (or, as permitted, pre-approving) all audit and all permissible non-audit services to be performed by the independent registered public accounting firm.

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 firm;

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

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Our compensation committee consists of Farooq

Arjomand, Sehan Kim, and Andy Nasim.

The chair of our compensation committee is Andy Nasim.

Arjomand and Charles C.

The chair of our compensation committee is Charles C.

The principal duties and responsibilities of our

compensation committee include, among other things:

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

reviewing 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;

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

administering our equity and non-equity incentive plans;

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

reviewing and evaluating succession plans for the executive officers;

reviewing and approving, or recommending that our board of directors approve, incentive compensation and equity plans;

reviewing and establishing general policies relating to compensation and benefits of our employees and reviewing our overall compensation philosophy.

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

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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.

The board of directors will also consider director candidates recommended

for nomination by our shareholders during such times as they are seeking proposed nominees to stand for election at the next annual meeting

of shareholders (or, if applicable, a special meeting of shareholders).

Our shareholders 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

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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.

Information contained on, or that can be accessed through, our website is not incorporated by reference into this Report, and you should

not consider information on our website to be part of this Report.

Insider Trading Policy

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A copy of our Code of Business Conduct and Ethics

is filed as Exhibit 19.1 to this Annual Report on Form 10-K.

is filed as Exhibit 19.1 to this Report .

Clawback Policy

Our board of directors has adopted a clawback

policy, which provides that in the event we are required to prepare an accounting restatement due to noncompliance with any financial

reporting requirements under the securities laws or otherwise erroneous data or we determine there has been a significant misconduct that

causes financial or reputational harm, we shall recover a portion or all of any incentive compensation.

The policy is filed as Exhibit

97.1 to this Report.

Section 16(a) Beneficial Ownership Reporting

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 Securities and Exchange Commission initial reports of ownership and reports of changes in ownership of our shares of 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 all filing requirements applicable to our executive

officers, directors and greater than 10% beneficial owners were filed in a timely manner, except for a late Form 3 filing for each of

Risk and Compensation Policies

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develop and retain employees;

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.

align the financial interests of each named executive officer with the interests of our stakeholders including shareholders and encourage each named executive officer to contribute to enhance value of the Company.

Our named executive officers for the year 2025,

which consist of our principal executive officer and our two highest compensated executive officers, were:

Kim, President and Chief Executive Officer;

Kim, Chief Financial Officer.

Kim, Co-Chief Executive Officer;

● Stephane Kim, Former Chief Financial Officer

Administration

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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.

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

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

in our long-term success.

General Benefits

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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, 2024 and December 31, 2023.

The following table sets forth information concerning the compensation

of our NEOs for the years ended December 31, 2025 and December 31, 2025.

Incentive plan

Name and principal position

Chief Executive Officer

Chief Financial Officer

Chief Executive Officer

Chief Financial Officer

Co-Chief Executive Officer

Former Chief Financial Officer (1)

Co-Chief Executive Officer

Former Chief Financial Officer

Stephan Kim resigned as our Chief Financial Officer effective

October 31, 2025.

Employment Agreements

Effective July 27, 2022, we executed an employment

agreement with Stephan Kim for Mr.

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 .

We do not currently have employment agreements

with any of our NEOs .

Timing of Option Awards

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Security Ownership of Certain Beneficial

Owners and Management and Related Stockholder Matters

Owners and Management and Related Shareholder Matters

The following table sets forth, as of March 31,

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of our current executive officers, directors and director nominees as a group.

In the table below, percentage ownership is based

on 4,568,508 shares of our Common Stock issued and outstanding as of March 31, 2025.

In the table below, percentage ownership is based on 8,213,455 shares

of our Common Stock issued and outstanding as of March 31, 2026.

Unless otherwise indicated, we believe that all

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Beneficially Owned

5% or Greater Stockholders

5% or Greater Shareholders

Arena Investors, LP (1)

Directors and Named Executive Officers

Jay Kim, Chief Executive Officer and Director

Stephan Kim, Chief Financial Officer

Jeong, Director

Jay Kim, Co-Chief Executive Officer and Director

Stephan Kim, Former Chief Financial Officer

Arjomand, Chairman of the Board

Egidi, Director

Sehan Kim, Director

Andy Nasim, Director

Jennifer Tan, Director

Jung Jae Lim, Co-Chief Executive Officer and Director

Mi Jeong Lee, Director

Alex Yeon, Director

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

(1) Arena Investors, LP (“Arena”) filed a Schedule

13G/A on August 14, 2025, disclosing the beneficial ownership of shares of our common stock underlying derivative securities that can

be exercised/converted within 60 days of the date of this Report.

The derivative securities may not convert or be exercised, and we may

not issue or sell any our shares of common stock to Arena, when aggregated with all other our common stock then beneficially owned by

Arena, would cause Arena’s beneficial ownership of our shares of common stock to exceed 9.99% (the “Beneficial Ownership

Limitation”).

Due to the Beneficial Ownership Limitation, notwithstanding the maximum number of shares and percentage reflected

above, Arena’s beneficial ownership of our shares of common stock at any time will not exceed 9.99% of our outstanding shares of

common stock, or 911,592 shares based on our shares of common stock outstanding as of March 31, 2026, plus the issuance of such 911,592

The Schedule 13G/A filed on August 14, 2025 was filed by:

(i) Arena, who serves as subadvisor to Arena Global (as defined below)

and as investment manager to ASOFM2 and ASOPIII (each as defined below);

(ii) Arena Investors GP, LLC, who serves as the general partner

of the Arena (the “IM General Partner”);

(iii) Arena Business Solutions Global SPC II, LTD (“Arena Global”);

(iv) Arena Special Opportunities (Offshore) Master II, LP (“ASOFM2”);

(v) Arena Special Opportunities Partners (Offshore)

GP II, LLC, who serves as the general partner of ASOFM2 (the “ASOFM2 General Partner”);

(vi) Arena Special Opportunities

Partners III, LP (“ASOPIII”;

and collectively with Arena Global and ASOFM2, the “Arena Funds”);

and (vii) Arena

Special Opportunities Partners III GP, LLC, who serves as the general partner of ASOPIII (the “ASOPIII General Partner”).

The Arena Funds are private investment vehicles and directly beneficially own the common stock reported in this Schedule 13G/A Arena

and the IM General Partner may be deemed to beneficially own the common stock directly beneficially owned by the Arena Funds.

General Partner may be deemed to beneficially own the common stock directly beneficially owned by ASOFM2.

The ASOPIII General Partner

may be deemed to beneficially own the common stock directly beneficially owned by ASOPIII.

Each reporting person disclaims beneficial

ownership with respect to any common stock other than the common stock directly beneficially owned by such reporting person.

Securities Authorized for Issuance under Equity

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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 and Dennis R.

Egidi are independent directors under the Nasdaq listing rules.

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

each of the directors on our Board, other than Jay Kim, Dennis R.

Egidi, and Charles C.

Jeong, are independent directors under the Nasdaq

listing rules.

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

Indemnification Agreements

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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 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 shareholders, (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

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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

The limitation of liability and indemnification provisions in our certificate

of incorporation and bylaws may discourage shareholders 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 shareholders.

Further, a shareholder’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

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BCRG has served as our

independent registered public accounting firm since 2024.

Fees Billed to the Company in fiscal year

independent registered public accounting firm since May 2024.

Fees Billed to the Company in fiscal years

2025 and 2024

The following table sets forth the fees billed

to us by our auditor, BCRG, for professional services rendered during the fiscal years ended December 31, 2024:

December 31, 2024

to us by our auditor, BCRG, for professional services rendered during the fiscal years ended December 31, 2025 and 2024:

Audit fees (1)

Audit related fees (2)

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.

Audit-Related Fees — These consisted principally of the aggregate fees related to audits that are not included Audit Fees.

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.

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.

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.

Pre-Approval 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 has the authority to appoint or replace our independent

registered public accounting firm (subject, if applicable, to shareholder 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

The Audit Committee pre-approves all audit services

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(1) Financial

Report of Independent Registered Public Accounting Firm

Report of Independent Registered Public Accounting

Balance Sheets

Statements of Operations

Statements of Changes in Shareholders’ Deficit

Statements of Changes in Shareholders’ Equity

Statements of Cash Flows

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5 to our Registration Statement 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)

Securities Subscription Agreement by and between Reborn Coffee, Inc.

and Farooq M.

Arjomand, dated January 10, 2024 (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on January 16, 2024)

Securities Subscription Agreement by and between Reborn Coffee, Inc.

and Scott Lee, dated February 29, 2024 (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on February 29, 2024)

Form of Securities Subscription Agreement entered into between Reborn Coffee, Inc.

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and the Debenture Investors dated February 6, 2025 (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on February 12, 2025)

Form of 10% Original Issue Discount Secured Convertible Debenture (incorporated by reference to Exhibit 10.2 to our Current Report on Form 8-K filed on February 12, 2025)

Form of 10% Original Issue Discount Secured Convertible Debenture (incorporated by reference to Exhibit 10.2 to our Current Report on Form 8-K filed on March 31, 2025)

Form of Security Agreement between Reborn Coffee, Inc., its subsidiaries and the Debenture Investors dated February 10, 2025 (incorporated by reference to Exhibit 10.3 to our Current Report on Form 8-K filed on February 12, 2025)

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and the Debenture Investors dated February 10, 2025 (incorporated by reference to Exhibit 10.5 to our Current Report on Form 8-K filed on February 12, 2025)

Global Amendment to 10% Original Issue Discount Secured Convertible Debentures by and between Reborn Coffee, Inc.

and the Arena Investors, dated March 28, 2025 (incorporated by reference to Exhibit 10.3 to our Current Report on Form 8-K filed on March 31, 2025)

Amendment to Securities Purchase Agreement by and between Reborn Coffee, Inc.

and the Arena Investors dated March 28, 2025 (incorporated by reference to Exhibit 10.4 to our Current Report on Form 8-K filed on March 31, 2025)

Side Letter by and between Reborn Coffee, Inc.

and the Arena Investors dated July 31, 2025 (incorporated by reference to Exhibit 10.3 to our Current Report on Form 8-K filed on August 1, 2025)

Securities Subscription Agreement by and between Charles Jeong and the Company, dated October 20, 2025 (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on November 25, 2025)

Warrant Exchange and Termination Agreement by and among Reborn Coffee, Inc.

and the Arena Investors dated December 31, 2025 (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on January 5, 2026)

Purchase Agreement between Reborn Coffee, Inc.

and Arena Business Solutions Global SPC II, Ltd, dated as of February 10, 2025 (incorporated by reference to Exhibit 10.6 to our Current Report on Form 8-K filed on February 12, 2025)

Code of Business Conduct and Ethics (Insider Trading Policy)

Subsidiaries of Registrant (incorporated by reference to Exhibit 21.1 to our Annual Report on Form 10-K filed on March 28, 2024)

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 Pursuant to 18 U.S.C.

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

Certification of Principal Financial Officer Pursuant to 18 U.S.C.

Code of Business Conduct and Ethics (Insider Trading Policy) (incorporated by reference to Exhibit 19.1 to our Annual Report on Form 10-K filed on March 31, 2025)

Subsidiaries of Registrant

Certification 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 Pursuant to 18 U.S.C.

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

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Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

Filed herewith

Exhibits 32.1 and 32.2 are being furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, nor shall such exhibits be deemed to be incorporated by reference in any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as otherwise specifically stated in such filing.

Denotes a management contract or compensatory plan or arrangement.

Schedules and exhibits to this Exhibit omitted pursuant to Regulation S-K Item 601(b)(2).

The Company agrees to furnish supplementally a copy of any omitted schedule or exhibit to the SEC upon request.

32.1 and 32.2 are being furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act, or

otherwise subject to the liability of that section, nor shall such exhibits be deemed to be incorporated by reference in any registration

statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as otherwise specifically

stated in such filing.

a management contract or compensatory plan or arrangement.

and exhibits to this Exhibit omitted pursuant to Regulation S-K Item 601(b)(2).

The Company agrees to furnish supplementally a copy of

any omitted schedule or exhibit to the SEC upon request.

Form 10-K Summary

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To the Board of Directors,

and Stockholders of Reborn Coffee, Inc.

and Shareholders 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, 2024 and 2023, the related statement

of operations, stockholders’ equity (deficit), and cash flows for the years then ended, and the related notes (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, 2024 and 2023, 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.

Substantial 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 discussed in Note 2 to the consolidated financial statements,

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

The consolidated

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

We have audited the accompanying consolidated balance sheets of Reborn

and Subsidiaries (the “Company”) as of December 31, 2025 and 2024, the related statement of operations, shareholders’

equity, and cash flows for the years 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, 2025 and 2024, 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.

Substantial Doubt about the Company’s Ability to Continue

as a Going Concern

The accompanying financial statements have been prepared assuming that

the Company will continue as a going concern.

As described in Notes to the consolidated financial statements, the Company’s

significant operating losses raise substantial doubt about its ability to continue as a going concern.

Management’s plans with regard

to these matters are also described in Note to the consolidated financial statements.

The financial statements do not include any adjustments

that may be 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.

These financial statements are the responsibility of the Company’s

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

Our audits 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 audits 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 audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matter communicated below is

a matter arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated

to the audit committee and that:

(1) relate to accounts or disclosures that are material to the consolidated financial statements and

(2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter

in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit

matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates.

Concern – As discussed in Note 2 to the consolidated financial statements, the Company has a going concern due to negative

working capital and losses from operations which raises substantial doubt about its ability to continue as a going concern.

management’s evaluation of a going concern can be a significant judgment given the fact that the Company uses management estimates

on future revenues and expenses, which are difficult to substantiate.

To evaluate the appropriateness of the going concern, we examined

and evaluated the financial information along with management’s plans to mitigate the going concern and management’s disclosure

on going concern.

The critical audit matters communicated below are matters arising from

the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee

(1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially

challenging, subjective, or complex judgments.

The communication of the critical audit matters does not alter in any way our opinion on

the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing

separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Issuance and Conversion of Senior Convertible Promissory Note (the

In February 2025, the Company issued 10% Original Issue Discount Secured

Convertible Debentures to Arena Investors in an aggregate principal amount of $3,750,000, sold for a purchase price of $4,166,665, along

with 1,041,667 warrants In December 2025, all warrants were terminated and exchanged for an aggregate of 185,771 shares of Common Stock

to be issued pursuant to a Warrant Exchange and Termination Agreement.

We identified the issuance and subsequent conversion of these notes

as a critical audit matter due to the complexity of the financial instruments and the significant auditor judgment required.

these matters involved extensive procedures and effort to evaluate management’s accounting conclusions and application of the relevant

The primary procedures we performed to address this critical audit

matter included:

● Reviewed and evaluated the terms of the Securities Purchase Agreement, individual

Debenture agreements, and Warrant Termination Agreement

● Assessed management’s accounting conclusions regarding embedded derivative

bifurcation under ASC 815

● Involved valuation specialists to independently evaluate the Monte Carlo

model, including a review of key assumptions (volatility, VWAP inputs, expected term)

● Tested the completeness and accuracy of journal entries related to OID amortization

(effective interest method), PIK interest accrual, and warrant liability remeasurement

● Evaluated the accounting for the December 2025 warrant exchange, including

derecognition of the liability, fair value of shares issued, and gain/loss recognition

● Reviewed financial statement disclosures for completeness and compliance

with ASC 470, ASC 815, and ASC 820

/s/ BCRG Group

BCRG Group (PCAOB ID 7158 )

(PCAOB ID 7158 )

We have served as the Company’s auditor since 2024.

March 31, 2025

April 22, 2026

REBORN COFFEE, INC.

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Accounts receivable, net of allowance for doubtful accounts of $ 75,689 and $ 0 , respectively

Accounts receivable from related party

Inventories, net

Prepaid expense and other current assets

Loan receivable from related party

Total current assets

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Operating lease right-of-use asset

LIABILITIES AND STOCKHOLDERS’ EQUITY

Long-term prepayment

LIABILITIES AND SHAREHOLDERS’ EQUITY

Current liabilities:

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Accrued expenses and current liabilities

Loan payable to shareholder

Loans payable to financial institutions, current

Loans payable to others

Loans payable to shareholders

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

Loan payable, payroll protection program (PPP), current

Loan payable to related party

Convertible debt, net of debt discount of $ 900,198

Derivative liability

Loan payable, emergency injury disaster loan, current

Loan payable, payroll protection program, current

Operating lease liabilities, current

Total current liabilities

Loans payable to financial institutions, net of current

Loan payable, emergency injury disaster loan (EIDL), net of current

Loan payable, payroll protection program (PPP), net of current

Loan payable, emergency injury disaster loan, net of current

Loan payable, payroll protection program, net of current

Operating lease liabilities, net of current

Total liabilities

Commitments and Contingencies

Stockholders’ equity

Commitments and Contingencies (Note 13)

Shareholders’ equity

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

4,274,508 and 1,866,174 shares issued and outstanding at December 31, 2024 and 2023, respectively

Common stock issuable, $ 0.0001 par value, 294,000 shares issuable at $ 5.00 per share

7,850,601 and 4,274,508 shares issued and outstanding, respectively

Common stock issuable, $ 0.0001 par value, 170,000 and 294,000 shares issuable, respectively

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

no shares issued and outstanding at December 31, 2024 and 2023, respectively

no shares issued and outstanding

Additional paid-in capital

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( 21,562,872 )

Accumulated other comprehensive income (loss)

Total stockholders’ equity

Total liabilities and stockholders’ equity

Accumulated other comprehensive income

Non-controlling interest in subsidiary

Total shareholders’ equity

Total liabilities and shareholders’ equity

See accompanying notes to consolidated financial

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CONSOLIDATED STATEMENTS OF OPERATIONS

Years Ended December 31,

Net revenues:

Wholesale and online

Service income – related party

License income

Total net revenues

Operating costs and expenses:

Product, food and drink costs - stores

Cost of sales—wholesale and online

Product, food and drink costs - stores, wholesale and online

Cost of service income – subcontractors, related party

General and administrative

Professional fees

Stock compensation expense

Total operating costs and expenses

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( 4,619,546 )

Other income (expense):

Other income (expense)

Asset impairment loss

Loss on the sale of building

Other income (expenses):

Interest expense

Total other expense, net

Interest expense - debt discount

( 1,067,028 )

Gain on sale of property

Loss on debt extinguishment

Derivative expense

Asset impairment loss

( 1,647,229 )

Total other expenses, net

( 3,103,965 )

Loss before income taxes

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( 4,805,948 )

Loss per share:

Basic and diluted

Weighted average number of common shares outstanding:

Basic and diluted

Net income attributable to non-controlling interest

Net loss attributable to Reborn Coffee shareholders

$ ( 9,141,240 )

$ ( 4,805,948 )

Per common share basic and diluted:

Net loss per common share attributable to Reborn Coffee shareholders, basic and diluted

Number of weighted average shares - basic and diluted

See accompanying notes to consolidated financial

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CONSOLIDATED SHAREHOLDERS’ EQUITY

Stock Issuable

Common Stock Issuable

Non-controlling

Comprehensive

Shareholders’

Equity (Deficit)

Balance as of December 31, 2023

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Stock compensation - issuance for services

Common stock issued – conversion from the

Balance as of December 31, 2023

$ ( 16,756,924 )

( 4,805,948 )

Stock compensation - issuance for services

Stock compensation - issuances to employees

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$ ( 21,562,872 )

Common Stock Issuable

Non-controlling

Comprehensive

Shareholders’

Balance as of December 31, 2024

$ ( 21,562,872 )

Stock compensation expense

Issuances of common shares from sale of common stock

Common shares issued from shares issuable

Common shares issued for settlement of debt

Foreign currency translation

( 9,141,240 )

( 9,007,091 )

Balance as of December 31, 2025

$ ( 30,704,112 )

See accompanying notes to consolidated financial

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$ ( 4,805,948 )

Non-controlling interest net income

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

Stock compensation

Stock issued for services

Stock compensation expense

Loss on settlement of debt

Interest expense - amortization of debt discount

Operating lease

Asset impairment loss

Loss on disposal of assets

Derivative expense

Changes in operating assets and liabilities:

Decrease (increase) in accounts receivable

Decrease (increase) in inventories

Decrease (increase) in other assets, net

Increase (decrease) in accounts payable

Increase (decrease) in accrued liabilities, net

Decrease in accounts receivable

( 1,608,677 )

Increase in inventories

Decrease in prepaid expense and other assets

Decrease in accounts payable

Increase in accrued expenses and liabilities

Net cash used in operating activities

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( 1,109,374 )

Proceeds from sale of assets

Long-term prepayment

( 1,000,000 )

Proceeds from disposal of assets

Loan receivables from related party

( 2,000,000 )

Net cash used in investing activities

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Cash flows from financing activities:

Proceeds from issuance of common stock

Net proceeds from loan payable to others

Net borrowings from related party

Proceeds from issuances of common stock

Proceeds from common stock issuable

Repayent of borrowings from shareholder

Proceeds frm loan payable to others

Proceeds frm line of credit

Repayent of loan payable, PPP

Proceeds from loan payable to financial institutions

Repayments of loan payable to financial institutions

Proceeds from loan payable to shareholder

Borrowings from convertible debt

Repayments from loan payable to financial institutions

( 1,015,199 )

Repayments on loan payable to PPP

Net cash provided by financing activities

Net increase (decrease) in cash

( 2,854,734 )

Cash at beginning of year

Cash at end of year

Supplemental disclosures of non-cash investing and financing activities:

Conversion of credit line to common stock issuances

Supplemental disclosure of cash flow information:

Cash paid during the years for:

Cash paid during the period for:

See accompanying notes to consolidated financial

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NATURE OF OPERATIONS

OF OPERATIONS

Reborn Coffee, Inc.

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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 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, 2024.

● 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 Korea, Inc.

(the “Reborn Korea”) – a Korea corporation located in Daejeon, South Korea formed in October 2023, is a wholly owned subsidiary of Reborn with one retail coffee store under the brand name of Reborn Coffee.

● Reborn Malaysia, Inc.

(the “Reborn Malaysia”) – a Malaysian corporation located in Kuala Lumpur, Malaysia formed in October 2023, is majority owned subsidiary, with 60 % ownership, of Reborn with one retail coffee store under the brand name of Reborn Coffee.

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.

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 have one franchise as of December 31, 2025.

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

corporation formed in March 2023, is an entity which acquired a real property located in

Brea, California.

Coffee Korea, Inc.

(the “Reborn Korea”) – a

Korea corporation located in Daejeon, South Korea formed in October 2023, is a wholly owned

subsidiary of Reborn Holdings.

Malaysia, Inc.

(the “Reborn Malaysia”) – a Malaysian

corporation located in Kuala Lumpur, Malaysia formed in October 2023, is majority owned subsidiary

of Reborn Holdings with one retail coffee store under the brand name of Reborn Coffee.

● Reborn Logistics, Inc.

(the “Reborn Logistics”) – a California corporation incorporated in September 2025.

Reborn Logistics provides comprehensive freight forwarding, transportation and logistics services.

Reborn holds a 51 % interest in Reborn Logistics.

Reborn Coffee, Inc., Reborn Global

Holdings, Inc., Reborn Coffee Franchise, LLC, Reborn Realty, LLC, Reborn Korea and Reborn Malaysia will be collectively referred as the

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Holdings, Inc., Reborn Coffee Franchise, LLC, Reborn Realty, LLC, Reborn Korea, Reborn Malaysia and Reborn Logistics will be collectively

referred as the “Company”.

OF SIGNIFICANT ACCOUNTING POLICIES

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 $ 21.6 million at

December 31, 2024, and had a net loss of $ 4.8 million for the year ended December 31, 2024 and net cash used in operating activities of

$ 3.5 million for the year ended December 31, 2024.

These matters raise substantial doubt about the Company’s ability to continue

as a going concern.

To support its 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.

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 $ 30.7 million at December 31, 2025, and

had a net loss before income taxes of $ 8.9 million and net cash used in operating activities of $ 6.5 million for the year ended December

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

To support its 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

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 financing is anticipated to fund the Company’s operations in near future.

However, other than the ELOC

Agreement and the Arena Debenture Transaction (as defined in Note 15 – Subsequent Events), 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.

The consolidated financial statements

include Reborn Coffee, Inc.

and its wholly owned subsidiaries as of and for the years ended December 31, 2024 and 2023.

In addition, the increasingly competitive

industry conditions under which we operate may negatively impact on our results of operations and cash flows.

Additional financing is

anticipated to fund the Company’s operations in near future.

There is no assurance that any of this financing can be obtained or

that the Company can continue as a going concern.

The consolidated financial statements include Reborn Coffee, Inc.,

its wholly owned subsidiaries and majority owned subsidiary as of and for the years ended December 31, 2025 and 2024.

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.

Minority Interest

Reborn owns 60 % of Reborn Malaysia

located in Kuala Lumpur with one retail coffee store under the brand name of Reborn Coffee.

For the year ended December 31, 2024, the

minority interest was not material as the store in Malaysia opened in November 2023.

Reverse Stock Split

On January 12, 2024, the Company filed

a Certificate of Amendment (the “Certificate of Amendment”) to the Company’s Certificate of Incorporation to effect

a reverse stock split of its issued Common Stock in the ratio of 1-for-8 (the “Reverse Stock Split”).

The Common Stock began

trading on the Nasdaq Capital Market on a Reverse Stock Split-adjusted basis at the market open on Monday, January 22, 2024.

As a result of the Reverse Stock Split,

the total number of shares of common stock held by each shareholder was converted automatically into the number of whole shares of common

stock equal to (i) the number of shares of common stock held by such shareholder immediately prior to the Reverse Split, divided by (ii)

8, and then rounded up to the nearest whole number.

No fractional shares were issued, and no cash or other consideration was paid to any

Instead, the Company issued one whole share of the post-Reverse Stock Split common stock to any shareholder who otherwise

would have received a fractional share as a result of the Reverse Stock Split.

Except for the Company’s historical

financial statements and unless otherwise stated, all option, share, and per share information gives effect to the Reverse Stock Split.

statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).

The consolidated financial statements include the accounts of Reborn Coffee, Inc.

and its wholly owned subsidiaries, as well as a variable

interest entity, Reborn Logistics, Inc., in which the Company holds a 51 % ownership interest.

All significant intercompany balances, transactions,

and profits have been eliminated upon consolidation.

Non-controlling interest presented

in the consolidated balance sheets represents the equity interest in Reborn Logistics not attributable to the Company.

The net income

(loss) of consolidated subsidiaries or variable interest entities that are not wholly owned is allocated between the Company and the non-controlling

interest holders based on their respective ownership interests.

Segment Reporting

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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, 2024 and 2023.

Operating segments

are identified based on the manner in which the Company’s chief operating decision maker (“CODM”) evaluates financial

information, business activities, and performance results.

Management has identified two reportable

operating segments:

(i) Reborn Coffee, which includes both wholesale and retail sales of coffee, water, and other beverages, and (ii)

Reborn Logistics, which provides freight forwarding services.

The Company’s franchisor subsidiary was not material for the years

ended December 31, 2025 and 2024.

The Company’s CODM is its Chief

Executive Officer .

The CODM evaluates segment performance primarily based on revenues, income from operations, and other income (expense).

Assets by segment are not reviewed by the CODM in assessing segment performance and, accordingly, are not disclosed.

The following table presents a summary

of operating performance by reportable segment for the periods indicated:

Reborn Coffee

Reborn Logistics

Others / Elimination

Income (loss) from operations

( 6,071,740 )

( 5,793,847 )

Other income (expenses)

( 2,659,746 )

( 3,103,965 )

The Company generates revenues from

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Years Ended December 31,

Net Revenues:

North America

Total net sales

Total net revenue

Long-lived asset, net:

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Accordingly, the Company recognizes revenue as follows:

● 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 96 % 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 4 % 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 sales occur.

Revenues from royalties and other fees were not material for the years ended December 31, 2024 and 2023.

Cost of Sales

Store Revenue

Retail store revenues are recognized at the point of sale when payment

Retail store revenues are reported net of sales, use, or other transaction taxes collected from customers and remitted to

taxing authorities.

Sales taxes payable are recorded as accrued liabilities within other current liabilities.

Retail store revenue represents

approximately 73.5 % of the Company’s total revenue.

and Online Revenue

Wholesale and online revenues are recognized when products are delivered

and title passes to the customer or to wholesale distributors.

When customers pick up products at the Company’s warehouse or when

products are delivered to wholesale distributors, title transfers and revenue is recognized at that time.

Wholesale and online revenues

represent approximately 1.4 % of the Company’s total revenue.

Income – Reborn Logistics

Service income is primarily

derived from Reborn Logistics’ freight forwarding and logistics services.

The Company recognizes service revenue when shipment

transactions are delivered.

Each shipment transaction or service order generally represents a separate contract with a customer.

A performance

obligation is established once a customer agreement with an agreed-upon transaction price exists.

The transaction price is typically

fixed and is not contingent upon the occurrence or non-occurrence of future events, and payment is generally due within 45 to 60 days

from the invoice date.

The Company’s transportation arrangements involve organizing the movement of freight to a customer’s

Transportation services, including certain ancillary services such as loading and unloading, freight insurance, and customs

clearance, represent a single performance obligation, as these services are not distinct in the context of the contract.

This performance

obligation is satisfied and revenue is recognized as control of the services transfers to the customer during the transit period, as

the customer’s goods move from origin to destination.

The Company evaluates whether it controls the transportation services

provided to determine whether it is acting as a principal or an agent.

The Company has determined that it acts as the principal in its

transportation service arrangements, as it controls pricing, manages all aspects of the shipment process, and assumes the risks associated

with delivery and collection.

Accordingly, service income is presented on a gross basis in the consolidated statements of operations.

Service income represents approximately 11.5 % of the Company’s total revenue.

The Company has entered into license agreements that allow licensees

to operate and market Reborn Coffee branded stores and products under the Reborn Coffee trademarks.

Under these agreements, the Company

provides ongoing services, including training, marketing support, system updates, and other operational assistance.

As the Company is

required to provide these ongoing services, license revenue is recognized over the term of the license agreement.

License agreements typically

have initial terms of three years and may be renewed for additional periods.

License income represents approximately 13.6 % of the Company’s

total revenue.

Product, Food and Drink Costs

– Stores, Wholesales and Online

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

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

Cost of service income –

subcontractors (Reborn Logistics)

Cost of service income – subcontractors

mainly represent the cost of independence contractors and third-party carriers in the performance of its freight forward and transportation

Shipping and Handling Costs

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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.

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

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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

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customer creditworthiness and past transaction history.

At December 31, 2024 and 2023, allowance for doubtful accounts was zero .

At December 31, 2025 and 2024, allowance for doubtful accounts was $ 75,689

and zero , respectively.

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

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

Earnings Per Share

Long-term prepayment

As of December 31, 2025, the Company

recorded $ 1.0 million of long-term prepayment, included within other non-current assets on the consolidated balance sheets.

represents the advance payments made in connection with a planned acquisition of certain real property.

Net Loss 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 numerator and denominator of the basic and diluted loss per share computations.

Basic loss per share are computed by dividing net losses available

to common shareholders by the weighted-average number of common shares outstanding during the period.

Diluted loss per share is computed

similar to basic loss 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

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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, 2024 and 2023, the Company was not aware of any events or changes in circumstances that would indicate

that the long-lived assets are impaired.

During the year ended December 31,

2025, the Company identified triggering events related to its subsidiaries in Korea and Malaysia.

These triggering events included continued

operating losses, negative cash flows, and the absence of revenue generation, which indicated that the carrying value of the related asset

groups may not be recoverable.

Upon identification of these indicators,

the Company performed a recoverability test by comparing the carrying amount of the asset groups to the estimated undiscounted future

cash flow expected to be generated from the use and eventual disposition of the asset groups.

Based on this assessment, the Company determined

that the carrying amounts of the asset groups were not recoverable.

The Company measured the impairment

loss as the excess of the carrying amount of the asset groups over their estimated fair value.

Given the lack of revenue generation, continued

operating losses, and limited future cash flow expectations, the estimated fair value of the asset groups was determined to be negligible.

Accordingly, the Company recognized

an impairment loss of $ 444,216 during the year ended December 31, 2025, representing substantially all of the net carrying value of the

assets associated with its Korea and Malaysia subsidiaries.

The impairment loss is included in asset impairment loss in the consolidated

statements of operations.

The asset groups primarily consisted

of leasehold improvements, furniture and fixtures, and right-of-use assets.

Following the impairment, the carrying value of these assets

was reduced to $ 727,093 as of December 31, 2025.

Fair Value of Financial Instruments

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

As of December 31, 2024 and 2023, 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.

The financial statements do not include

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

The carrying value of financial assets and liabilities

recorded at fair value is measured on a recurring or nonrecurring basis.

Financial assets and liabilities measured on a non-recurring

basis are those that are adjusted to fair value when a significant event occurs.

There were no financial assets or liabilities carried

and measured on a nonrecurring basis during the reporting periods.

Financial assets and liabilities measured on a recurring basis are

those that are adjusted to fair value each time a financial statement is prepared.

There have been no transfers between levels.

December 31, 2025 and 2024, 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 these financial instruments.

Concentration of Credit Risk

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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.

Segment Reporting (Topic 280) - Improvements

to Reportable Segment Disclosures

In November 2023, the Financial Accounting

Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No.

2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures .

This ASU requires public entities to disclose significant segment expenses and other

segment items on both an annual and interim basis and to provide, in interim periods, all disclosures about a reportable segment’s

profit or loss and assets that are currently required on an annual basis.

In addition, the ASU requires public entities to disclose the

title and position of the chief operating decision maker (“CODM”).

The ASU does not change the manner in which operating segments

are identified, aggregated, or evaluated under the quantitative thresholds for determining reportable segments.

The ASU is effective for fiscal years

beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024.

Early adoption is permitted,

and the amendments are required to be applied retrospectively to all prior periods presented in the financial statements.

adopted ASU 2023-07 beginning with its Form 10-K for the year ended December 31, 2025.

The adoption of this guidance did not have a material

impact on the Company’s consolidated financial statement disclosures.

Income Statement - Expense Disaggregation

Disclosures (Subtopic 220-40)

In November 2024, the FASB issued ASU

2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation

of Income Statement Expenses .

This ASU is intended to enhance the transparency of expense disclosures for public business entities

by requiring more detailed information about the types of costs included within commonly presented expense captions.

The enhanced disclosures

are intended to improve investors’ understanding of an entity’s performance, future cash flows, and comparability with other

The amendments require public business

entities to disclose, in the notes to the financial statements for each annual and interim reporting period, specific information about

certain cost components included in expense captions presented on the face of the income statement, including purchases of inventory,

employee compensation, depreciation, intangible asset amortization, and the total amount of selling expenses.

The guidance is effective for annual

reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027, and may be applied

either prospectively or retrospectively.

Early adoption is permitted.

The Company is currently evaluating the impact that the adoption

of this ASU will have on its consolidated financial statements.

Other recent accounting pronouncements

issued by the FASB (including its Emerging Issues Task Force) and the SEC did not or are not believed by management to have a material

impact on the Company’s present or future consolidated financial statements

PROPERTY AND EQUIPMENT

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Total property and equipment, net

Depreciation expense on property and

equipment amounted to approximately $ 391,263 and $ 262,000 for the years ended December 31, 2024 and 2023, respectively.

Depreciation expense related to property and equipment was $ 449,585

and $ 391,263 for the years ended December 31, 2025 and 2024, respectively.

LOANS PAYABLE TO FINANCIAL INSITUTIONS

Loans payable to financial institutions consisted of the

December 31, 2024 2023

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

Loan agreements with principal amount of $ 960,777 and repayment rate of 14.75 % to 20.0 %.

The loans payable mature on various dates in 2026.

$ 111,300 1,005,442

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 -

Total loan payable

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December 31, 2025 2024

December 2023 - Loan agreement with principal amount of $ 300,000 and repayment rate of 5.5 % per annum.

The loan payable matures in February 2024 $ -

June 2023 – Loan agreements with principal amount of $ 500,000 and repayment rate of 12.0 % per annum.

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November 2024 - Loan amount of $ 140,000 with total payback of $ 175,932 with monthly payment of $ 6,767 until fully paid -

April 2025 - Loan amount of $ 220,000 with no interest.

The loans payable mature in 2026 95,000 128,566

Total loan payable to others 279,026 427,073

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Total loan payable to others, net of current $ -

December 2023 - $ 300,000

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 interest rate at 5.5 % per annum.

The loan payable matures on February 2024 .

LOAN PAYABLE TO SHAREHOLDER

Loans payable to shareholders consisted of the following:

Borrowings from shareholder and chairman of the Company, Farooq Arjomand, bearing no interest and due upon demand.

Borrowing from shareholder, bearing no interest and due upon demand

Total loan payable

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Total loan payable, net of current

In October 2023, the Company borrowed

$ 100,000 from a shareholder and Chairman of the Company, Farooq M.

The amount is due upon demand and bears no interest.

LOAN PAYABLE TO RELATED PARTY

Loans payable to related party consisted of the following:

Borrowing from related party, bearing no interest and due upon demand

Total loan payable

current portion

Total loan payable, net of current

LOAN PAYABLE, EMERGENCY INJURY DISASTER LOAN (EIDL)

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Total long-term loan payable, emergency injury disaster loan (EIDL) 500,000 500,000

Interest payment ( 7,608 ) -

Less - current portion ( 22,452 ) ( 30,060 )

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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)

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 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.

PAYABLE, PAYROLL PROTECTION LOAN PROGRAM (PPP)

Loans payable, Payroll Protection Loan Program (PPP) consisted

of the following:

Loan payable from Payroll protection program (PPP)

Loan payable from Payroll protection program

Less - current portion

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

Total loan payable, payroll protection program, less

current portion

The Paycheck Protection Program Loan

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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.

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

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

Under the 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 PPP.

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.

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:

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.

CONVERTIBLE NOTES PAYABLE NET OF DEBT DISCOUNT

Convertible Notes Payable consisted of the following:

February 10, 2025

February 27, 2025

March 28, 2025

August 1, 2025

Total Convertible Debt

Debt Discount

Total Convertible Notes Payable

Initial calculation

Original Issuance Discount

Commitment Fees

Total Debt Discount

Amortization of Debt Discount

( 1,067,027 )

Total Debt Discount

On February 6, 2025, the Company entered

into a Securities Purchase Agreement (“Securities Purchase Agreement”) with the purchasers named therein (the “Arena

Under the Securities Purchase Agreement, the Company will issue 10 % original issue discount secured convertible debentures

(“Debentures”) in a principal amount of up to $ 10,000,000 , divided into up to four separate tranches that are each subject

to certain closing conditions (the “Offering”).

The conversion price per share of each Debenture, subject to adjustment as

provided therein, is equal to 92.5 % of the lowest daily VWAP (as defined in the Debentures) of the Company’s shares of common stock

during the five trading day period ending on the trading day immediately prior to delivery or deemed delivery of the applicable Conversion

Notice (as defined in the Debentures).

The Debentures accrue interest at a rate of 10 % per annum paid in kind, unless there is an event

of default in which case the Debentures will accrue interest at a default rate.

Upon the consummation of the closing

of each tranche, the Company issued common stock purchase warrants (“Warrants”) to each Arena Investor who participated in

such closing.

The Warrants will:

(i) provide for the purchase by the applicable Arena Investor of a number of shares of common stock

equal to 20 % of the total principal amount of the related Debenture purchased by the Arena Investor on the applicable closing date divided

by 92.5 % of the lowest daily VWAP of common stock for the five consecutive trading day period ended on the last trading day immediately

preceding such closing date and (ii) be exercisable at an exercise price equal to 92.5 % of the average of the lowest daily VWAP of the

common stock over the consecutive trading days immediately preceding the delivery of the applicable Notice of Exercise (as defined in

the Warrants).

The Company executed four closings in February 2025, March 2025, and

August 2025 and issued the Arena Investors Debentures in an aggregate principal amount of $ 3,750,000 .

The Debentures were sold to the

Arena Investors for a purchase price of $ 4,166,665 , representing an original issue discount of ten percent ( 10 %) and professional fees.

The Company also issued to the Arena Investors 1,041,667 Warrants in connection with the Debentures.

The fair value of the warrant liability

was determined using Monte Carlo valuation techniques and is remeasured at each reporting date, with changes in fair value recognized

in the statement of operations.

In December 2025, the Company entered into a Warrant Exchange and Termination Agreement (“Warrant

Termination Agreement”) with Areana Investors.

Under the Warrant Termination Agreement, the Company terminated and cancelled all

previously issued 1,041,667 Warrants and issued 134,139 common stock shares.

During the initial recognition company calculated fair value of derivative

liability on convertible debt and Warrants and recorded the difference as debt discount subject to maximum of notes payable amount.

discount will be amortized over the term of the note.

Debt discount is calculated as follows:

DERIVATIVE LIABILITY

Derivative Liability consisted of the following:

Initial Recognition on Convertible Debt

Change during the period

Total Derivative Liability

The Company analyzed the conversion

feature of the Debentures for derivative accounting consideration under ASC 815 Derivatives and Hedging and determined that the embedded

conversion feature should be classified as a liability due to their being no explicit limit to the number of shares to be delivered upon

settlement of the above conversion features.

ASC 815 requires that the conversion features are bifurcated and separately accounted for

as an embedded derivative contained in the Company’s convertible debt.

The embedded derivative is carried on the balance sheet

at fair value.

Any unrealized change in fair value, as determined at each measurement period, is recorded as a component of the income

statement and the associated carrying amount on the balance sheet is adjusted by the change.

As of December 31, 2025, the Company’s conversion features of

the Debentures were treated as derivative liability and changes in the fair value were recognized in earnings.

The Company estimated the

fair value of conversion features of the Debentures using Monte Carlo model and the following assumptions:

Schedule of Derivative liability

Risk Free Interest Rate

Expected Term

Expected Volatility

Expected Dividends

Expected volatility was based primarily on historical volatility.

volatility was computed using daily pricing observations for recent periods.

The Company believes this method produced an estimate that

was representative of the Company’s expectations of future volatility over the expected term of the Debentures.

The Company had

no reason to believe that future volatility over the expected remaining life of these warrants was likely to differ materially from historical

The risk-free rate is set to 0 %, as both the end price and the minimum price grow and are discounted back at the same risk-free

rate in a Geometric Brownian Motion model.

The derivative liability of $ 596,195 was recognized by the Company

on issuance as note payable.

The derivative liability was further revalued as of December 31, 2025 and the Company recorded $ 503,384 as

the changes in fair value of derivative liability for the year ended December 31, 2025.

Total income tax provision 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)

Current provision:

Total current provision

Deferred provision:

Total deferred provision

Total tax provision

A reconciliation of the Company’s

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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 allowance.

The income tax benefit differs from the amount computed by applying

federal statutory tax rate of 21 % and California state income taxes of 0.10 % due to the change in the valuation allowance.

Deferred tax assets:

Net operating loss

Other temporary differences

Bad debt reserve

Basis difference in fixed assets

Operating lease liabilities

Total Deferred tax assets

Deferred tax liabilities:

Operating lease right-of-use asset

Total Deferred tax liabilities

Net deferred tax assets

Less – valuation allowance

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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, 2024, the Company

had available net operating loss carryovers of approximately $ 9.5 million.

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 income.

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, 2024 and December 31, 2023, the Company has no accrued interest or penalties related to uncertain tax positions.

The Company uses the liability method

of accounting for income taxes as set forth in ASC 740.

Under the liability method, deferred taxes are determined based on differences

between the financial statement and tax bases of assets and liabilities using enacted tax rates.

As of December 31, 2025, the Company

had cumulative net operating loss carryforwards for federal tax purposes of approximately $ 9.5 million.

In addition, the Company had state

tax net operating loss carryforwards 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

had federal and State net operating loss carryforwards of approximately $ 25.2 million and $ 17.8 million, respectively.

Under the new tax

law, the Federal net operating loss arising in tax years ending after December 31, 2017, will be carried forward indefinitely.

have pre-tax reform federal net operating loss carryforwards in the amount of approximately $ 2.0 million as of December 31, 2025.

operating loss carryforwards arising tax years ending after December 31, 2017, is approximately $ 23.2 million.

The state net operating

loss carryforwards will begin to expire in 2042.

As of December 31, 2025 and 2024, the

Company maintained full valuation allowance for net operating loss carryforward deferred tax asset.

In assessing the realizability of

deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will

The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods

in which those temporary differences become deductible.

Management considers the scheduled reversals of deferred tax liabilities, projected

future taxable income and tax planning strategies in making this assessment.

The amount of the deferred tax asset considered realizable,

however, could be reduced if estimates of future taxable income are reduced.

The Company files a federal income

tax return and files tax returns in state and local jurisdictions.

The statutes of limitations for its federal income tax returns are

open for years 2022 and after, and state and local income tax returns are open for years 2021 and after.

The components of income (loss) before

income taxes by jurisdiction are as follows:

United states

( 8,460,973 )

( 4,476,004 )

Total loss before income taxes

( 8,897,812 )

( 4,805,148 )

Loss before income taxes is derived from operations conducted in the

United States and two foreign jurisdictions.

Domestic results primarily reflect the Company’s U.S.

operations, while foreign income

primarily relates to the Company’s international subsidiaries.

The Company paid income taxes to the

following jurisdictions that individually represent greater than 5 percent of total income taxes paid during the year ended December 31,

2025 and 2024, respectively.

Total tax paid

AND CONTINGENCIES

Operating Leases

The Company entered into the following

operating facility leases:

(Corporate office) – On June 28, 2023, the Company entered into an operating facility lease for its corporate office

located in Brea, California with term of 36 months at $ 21,500 per month.

The lease started on July 2023 and expires in June

Floresta – On July 25, 2016, the Company entered into an operating lease agreement 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 commenced in July 2016

and was initially set to expire in November 2024 .

The lease has since been extended through November 30, 2029.

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 Company has the following operating

facility leases:

Brea (Corporate office) –

On August 12, 2024, the Company entered into an operating facility lease for its corporate office located in Brea, California with term

of 36 months at $ 10,589 per month.

The lease started on September 1, 2024 and expires in August 2026.

Brea – On August

16, 2024, the Company entered into an operating lease agreement 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 commenced in December 1, 2014 and was initially set to expire on November

The monthly lease payment under the lease agreement is approximately $ 7,965 .

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 .

Del Mar - On January 18, 2023, the Company renewed its retail store in Corona Del Mar, 1California.

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 .

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 .

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

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

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

Corona Del Mar - On

January 18, 2023, the Company renewed its retail store in Corona Del Mar, 1California.

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 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 .

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 .

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.

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 .

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.

The 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.

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 31, 2027 .

Reborn Logistics –

On October 1, 2025, Reborn Logistics entered into a sublease agreement

for its location at Buena Park, California with a term of 36 months at a $ 1,500 per month.

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 31, 2027 .

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

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.

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 .

– On December 1, 2024, the Company entered into an operating lease agreement for its store located in Pasadena, California.

The lease has a term of 120 months ( 10 years), with an option to extend.

The lease commenced on December 1, 2024 and is set to

expire in December 2034 .

Pasadena – On

December 1, 2024, the Company entered into an operating lease agreement for its store located in Pasadena, California.

The lease has

a term of 120 months ( 10 years), with an option to extend.

The lease commenced on December 1, 2024 and is set to expire in December 2034 .

Operating lease right-of-use (“ROU”)

4 unchanged sentences

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 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

4 unchanged sentences

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

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 term.

The Company has lease agreements with

6 unchanged sentences

Total lease expense

In accordance with ASC 842, other information

related to leases was as follows:

In accordance with ASC 842, other

information related to leases was as follows:

Years ended December 31,

18 unchanged sentences

Contingencies

The Company is subject to various legal

proceedings from time to time as part of its business.

As of December 31, 2024, 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.

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

as part of its business.

As of December 31, 2025, the Company was not currently party to any legal proceedings or threatened legal proceedings,

the adverse outcome of which, individually or in aggregate, it believes would have a material adverse effect on its business, financial

condition and results of operations.

SHAREHOLDERS’

The Company has authorization to issue and 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.

During 2025, the Company issued the

following Common Stock shares:

● In March 2025, the Company issued 155,350 shares of common stock to

its Board of Director in connection with the conversion of $ 320,000 of debt owed to the Board of Director.

Of these shares, 64,000 had

been previously classified as common stock issuable.

These shares were issued at a price of $ 3.15 per share, resulting in an aggregate

fair value of $ 489,353 .

As a result of the debt conversion, the Company recorded a loss on debt conversion of $ 169,353 , which recorded

in other income in the consolidated statements of operations.

● In June 2025, the Company issued 423,518 shares of common stock to its Board of Director for the repayment of unpaid rent for the property of $ 484,000 .

These shares were issued at a price of $ 2.45 per share, resulting in an aggregate fair value of $ 1,037,619 .

As a result of the debt conversion, the Company recorded a loss on debt conversion of $ 553,619 , which recorded in other income in the consolidated statements of operations.

● In June 2025, the Company issued 50,000 shares of common stock to its

former Board of Director at a price of $ 2.00 per share, resulting in an aggregate fair value of $ 100,000 .

The Company received the full

● In December 2025, the Company issued 200,000 shares of common

stock to its non-accredited investors at a price of $ 2.5 per share for aggregate gross proceeds of $ 500,000 .

The Company received the

● In December 2025, the Company issued 1,192,661 shares of

common stock to its Board of Director at a price of $ 2.5 per share for aggregate gross proceeds of $ 6,500,000 .

The Company received the

● In December 2025, the Company issued 393,333 common shares

of stock to its Board of Director at a price of $ 1.5 per share for aggregate gross proceeds of $ 530,000 .

The Company received the full

In December 2025, the Company issued 60,000 common shares of stock to its non-accredited investors at a price of $1.5 per share for aggregate gross proceeds of $300,000.

These shares were previously classified as common stock issuable at fair value of $300,000.

During 2024, the Company issued the

following Common Stock shares:

● In December 2024, the Company issued 294,000 shares

of common stock to three non-accredited investors at a price of $ 5.00 per share for aggregate gross proceeds of $ 1,470,000 .

have not been registered and is recorded as common stock issuable as of December 31, 2024.

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, 2024 and 2023, 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 Provisions

In May 2018, the Company 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.

In the 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.

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 to 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, 2025 and 2024, no shares of our preferred

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

Stock Compensation

The Company issued a total of 100,000 shares

of common stock to employees and consultants for compensation during 2023.

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.

The Company issued 57,512 shares of

common stock to consultants for services during 2024.

These shares were valued at trading value at the time of services completed and

at the time of issuance and recorded as stock-based compensation of $ 187,152 for the year ended December 31, 2024.

These shares were fully

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

The Company issued 267,370 shares of

common stock to employees for compensation during 2024.

These shares were valued at trading value at the time of issuance and recorded

as stock-based compensation of $ 600,061 for the year ended December 31, 2024.

These shares were fully vested at issuance and as such the

related stock-based compensation was recognized immediately.

Common Stock Issuable

The Company received $ 1,470,000 from

three non-accredited investors who subscribed to 294,000 of common shares at the end of 2024 under the subscription agreement.

have not been registered and is recorded as common stock issuable as of December 31, 2024.

During 2025, the Company issued the

following Common Stock shares for stock compensation.

The fair value of stock options granted was estimated using market value of the

stock as on the date of issuance.

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

● Issuance of shares to Board of Director – In March 2025, the Company issued 100,000 shares of common stock to its former Board of Director at a price of $ 4.32 per share, resulting in total stock-based compensation expense of $ 432,000 .

● Issuances of Shares to Arena Investors in connection with Securities Purchase Agreement – The Company issued 668,057 shares of common stock to its investors as commitment fee shares in connection with the Securities Purchase Agreement (SPA).

The shares were restricted to $ 750,000 commitment fees.

The Company recorded stock compensation expense of $ 157,582 .

● Issuances of Shares for Services in connection with SPA – The Company issued 37,500 shares of common stock for services provided to the Company in connection with the SPA.

These shares were valued at $ 1.84 per share, and the Company recorded stock compensation expense of $ 69,000 .

● Issuances of Shares to Employees – The Company issued 191,875 shares of common stock to its employees.

These shares were valued at fair value at the time of issuance, and the Company recorded stock compensation expense of $ 527,573 .

● Issuances of Shares to Investors – The Company issued 103,799 shares of common stock to non-accredited investors.

These shares were valued at fair value at the time of issuance, and the Company recorded stock compensation expense of $ 298,178 .

During 2024, the Company issued the

following Common Stock shares for stock compensation.

These shares were fully vested at issuance and as such the related stock-based

compensation was recognized immediately:

● Issuances of Shares for Services – The

Company issued 57,512 shares of common stock to the consultants for services provided to the Company.

These shares were valued

at their fair value at the time of issuance, and the Company recorded stock compensation expense of $ 187,152 .

of Shares to Employees – The Company issued 267,370 shares of common stock to its employees for compensation

These shares were valued at fair value at the time of issuance, and the Company recorded stock compensation expense of $ 600,061 .

Dividend policy

2 unchanged sentences

There were no dividends declared for the years ended December 31, 2025 and 2024, 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).

LOSS PER SHARE

The Company calculates loss per share in accordance with FASB ASC 260,

Earnings Per Share, which requires a dual presentation of basic and diluted earnings per share.

Basic loss per share is 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:

computation of basic and diluted net loss per common share:

Years Ended December 31,

Net Loss attributable to Reborn Coffee shareholders

$ ( 9,141,240 )

1 unchanged sentence

Weighted Average Shares of Common Stock Outstanding

Earnings Per Share - Basic

RELATED PARTY TRANSACTIONS

Loss Per Share - Basic

PARTY TRANSACTIONS

The Company had the following related party transactions:

● In October 2023, the Company borrowed $ 100,000 from a shareholder and Chairman of the Company, Farooq M.

The amount is due upon demand and bears no interest.

● In June 2023, the Company entered into a facility lease agreement for corporate office located in Brea, California with DRE, Inc., a company owned by the Board of Director of the Company.

June 2023, the Company entered into a facility lease agreement for corporate office located in Brea, California with DRE, Inc., a company

owned by the Board of Director of the Company.

The lease has 60 months term and expires in June 2029 .

● On January 10, 2024, the Company entered into a securities subscription agreement with Farooq M.

Arjomand, the Chairman of the Company’s Board of Directors.

January 10, 2024, the Company entered into a securities subscription agreement with Farooq M.

Arjomand, the Chairman of the Company’s

Board of Directors.

Pursuant to the securities subscription agreement, the Company offered and sold to Mr.

Arjomand a total of 1,666,667 shares of the Company’s common stock at a purchase price of $ 0.60 per share, for aggregate gross proceeds of approximately $ 1 million.

SUBSEQUENT EVENTS

The Company evaluated all events or

transactions that occurred after December 31, 2024 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, 2024 except as follows:

January 6, 2025, the Company entered into a securities purchase agreement (the “Purchase Agreement”) with an accredited investor

(the “Investor”), pursuant to which the Company issued and sold to the Investor a promissory note (the “Note”)

in the original principal amount of $ 121,900 .

The Investor paid a purchase price of $ 106,000 to the Company for the Note.

The Note incurred

a one-time interest charge of 14 %, applied on the date of issuance to the principal amount;

provided, however, that the Note will also

bear interest at a rate of 22 % per annum if any amount thereunder is not paid when due.

Beginning on July 15, 2025, the Company is required

to make a payment of $ 69,483 on the Note, and continuing on the same day of each successive calendar month thereafter, the Company is

required to make installment payments on the Note of $ 17,370.75 until it is fully repaid or the Investor has converted the outstanding

balance into shares of the Company’s common stock.

At any time after the occurrence of an event of default, subject to certain

ownership limitations, the Investor may convert any portion of the outstanding and unpaid principal, interest, or other amounts outstanding

under the Note into common stock at a price equal to 75 % of the lowest trading price of the common stock on Nasdaq during the ten trading

days prior to the conversion.

● On February 6, 2025, Reborn Coffee, Inc.

(the “Company”)

entered into a Securities Purchase Agreement (“Securities Purchase Agreement”) with the purchasers named therein (the “Arena

Under the Securities Purchase Agreement, the Company will issue 10 % original issue discount secured convertible debentures

(“Debentures”) in a principal amount of up to $ 10,000,000 , divided into up to four separate tranches that are each subject

to certain closing conditions (the “Offering”).

The conversion price per share of each Debenture, subject to adjustment as

provided therein, is equal to 92.5 % of the lowest daily VWAP (as defined in the Debentures) of the Company’s shares of common stock,

par value $ 0.0001 per share (“Common Stock”) during the five trading day period ending on the trading day immediately prior

to delivery or deemed delivery of the applicable Conversion Notice (as defined in the Debentures).

The Debentures accrue interest at

a rate of 10 % per annum paid in kind, unless there is an event of default in which case the Debentures will accrue interest at a default

Upon the consummation of the closing of each tranche, the Company will also issue common stock purchase warrants (“Warrants”)

to each Arena Investor who participates in such closing.

The Warrants will:

(i) provide for the purchase by the applicable Arena Investor

of a number of shares of Common Stock equal to 20 % of the total principal amount of the related Debenture purchased by the Arena Investor

on the applicable closing date divided by 92.5 % of the lowest daily VWAP of Common Stock for the five consecutive trading day period

ended on the last trading day immediately preceding such closing date and (ii) be exercisable at an exercise price equal to 92.5 % of

the average of the lowest daily VWAP of the Common Stock over the consecutive trading days immediately preceding the delivery of the

applicable Notice of Exercise (as defined in the Warrants).

The closing of the first tranche was consummated on February 11, 2025 (the

“First Closing”) and the Company issued to the Arena Investors Debentures in an aggregate principal amount of $ 555,555 (the

“First Closing Debentures”).

The First Closing Debentures were sold to the Arena Investors for a purchase price of $ 500,000 ,

representing an original issue discount of ten percent ( 10 %).

The Company also issued to the Arena Investors 111,111 Warrants in connection

with the First Closing (the “First Closing Warrants’).

The closing of the second tranche was consummated on February 26, 2025 (the “Second Closing”) and the Company issued to the

Arena Investors Debentures in an aggregate principal amount of $ 1,111,111 (the “Second Closing Debentures”).

The Second Closing

Debentures were sold to the Arena Investors for a purchase price of $ 1,000,000 , representing an original issue discount of ten percent

The Company also issued to the Arena Investors 52,283 Warrants in connection with the Second Closing (the “Second Closing

The closing of the third tranche was consummated on March 28, 2025 (the “Third Closing”) and the Company issued to the Arena

Investors Debentures in an aggregate principal amount of $ 1,666,667 (the “Third Closing Debentures”).

The Third Closing Debentures

were sold to the Arena Investors for a purchase price of $ 1,500,000 , representing an original issue discount of ten percent ( 10 %).

Company also issued to the Arena Investors 91,076 Warrants in connection with the Third Closing (the “Third Closing Warrants’).

● On March 14, 2025, Reborn Coffee, Inc., (the “Company”)

and Bbang Ssaem Co.

(d/b/a Bbang Ssaem Bakery Café Korea) (“Bakery”) reached an agreement to rescind (the “Recission”)

that certain share purchase (the “Agreement”) dated November 6, 2024.

The material terms of such Agreement were disclosed

in the current report on Form 8-K filed by the Company with the Securities and Exchange Commission on January 2, 2025.

As a result of

such Recission, the Agreement is deemed void from the beginning.

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

March 31, 2025

( Principal Executive Officer )

/s/ Stephan Kim

Chief Financial Officer

March 31, 2025

( 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

March 31, 2025

(Principal Executive Officer)

/s/ Stephan Kim

Chief Financial Officer

March 31, 2025

(Principal Financial and Accounting Officer)

/s/ Farooq M.

Chairman of the Board of Directors

March 31, 2025

/s/ Dennis R.

March 31, 2025

/s/ Sehan Kim

March 31, 2025

/s/ Andy Nasim

March 31, 2025

/s/ Jennifer Tan

March 31, 2025

Arjomand a total of 1,666,667

shares of the Company’s common stock at a purchase price of $ 0.60 per share, for aggregate gross proceeds of approximately $ 1 million.

● In December 2025, the Company entered into a loan agreement with a related party in the principal amount of $ 153,605 .

The loan is non-interest-bearing and due upon demand.

● In December 2025, the Company entered into a loan agreement with a

member of its Board of Directors in the principal amount of $ 70,000 .

The loan is non-interest-bearing and due upon demand.

● In December 2025, Reborn Logistics entered a non-interest-bearing promissory

note with its related party in the principal amount of $ 2 million.

The Company evaluated all events or transactions that occurred after

December 31, 2025 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, 2025, except

As previously reported, on October 20, 2025, the Company entered into

a Securities Subscription Agreement (the “October Agreement”) with Charles Joeng (“Jeong”), pursuant to which

the Company issued 1,192,661 shares of common stock to Jeong for an aggregate purchase price of $ 6,500,000 funded in multiple tranches.

Section 6(a) of the Debentures with the Arena Investors provides that, at any time prior to the full repayment or full conversion of all

amounts owed under the Debentures, the Company receives cash proceeds from the issuance of equity, the Company shall inform the Arena

Investors, whereupon the Arena Investors shall have the right to require that the Company immediately apply up to thirty percent ( 30 %)

of the gross cash proceeds received from the applicable financing transaction to redeem a portion of the outstanding principal amount

of the Debentures.

On February 19, 2026, the Arena Investors sent a letter to the Company requesting that the Company pay to the Arena

Investors thirty percent ( 30 %) of the gross cash proceeds received from the October Agreement, which the Arena Investors and the Company

were in mutual discussion regarding the timing and manner of such payment to the Arena Investors which caused a delay in payment to the

Arena Investors (the “Specified Delay”).

On March 31, 2026, the Company and the Arena Investors entered into a Forbearance

Agreement (the “Forbearance Agreement”) whereby the Arena Investors would waive and forbear from any exercise of their rights

and remedies under the Securities Purchase Agreement, the Debentures and applicable law in connection with the Specified Delay and waive

any defaults or events of default which may exist and may be ongoing under the Debentures as of March 31, 2026.

In consideration of such

forbearance and waiver, the Company agreed to:

(i) make payment of $ 1,059,522 in cash to the Arena Investors on or before April 6, 2026;

(ii) make payment of $ 400,000 in cash to the Arena Investors on or before April 20, 2026;

(iii) make payment of $ 500,000 in cash to the

Arena Investors on the sixth day of each month, beginning in May 2026, until the Debentures have been fully paid off or converted;

issue warrants to the Arena Investors to purchase 250,000 shares of Common Stock at an exercise price of $ 2.00 per share (the “Forbearance

and (v) file a registration statement no later than five business days following the filing of the Company’s Annual

Report on Form 10-K for the year ended December 31, 2025, covering the shares underlying the Forbearance Warrants and other common stock

purchase warrants issued to the Arena Investors on December 31, 2025.

On April 15, 2026, the Company and the Arena Investors entered

into an Amended and Restated Forbearance Agreement (the “A&R Forbearance Agreement”), which amended and restated the Forbearance

Agreement in certain respects.

Pursuant to the A&R Forbearance Agreement, the Company and the Arena Investors agreed to amend and

restate the plan for repayment of the Debentures in its entirety, as follows:

(i) the Company agreed to, on or before April 30, 2026,

make payment of $ 400,000 to the Arena Investors and $ 25,000 to counsel for the Arena Investors for the Arena Investors’ expenses

incurred in connection with the A&R Forbearance Agreement;

(ii) the Company agreed to, beginning on May 30, 2026, make payments of

$ 400,000 to the Arena Investors on the 30th day of each calendar month toward the outstanding amounts due under the Debentures;

the Company agreed to pay to the Arena Investors all remaining amounts then outstanding under the Debentures on or before September 30,

2026 (subject to prior repayment or conversion);

and (iv) the Company agreed to, within three business days following receipt of funds

from any sale of the Company’s securities, pay to the Arena Investors towards the amounts then outstanding under the Debentures

the lesser of (x) 70 % of the cash proceeds from such sale and (y) the amount outstanding under the Debentures.

In addition, pursuant to the A&R Forbearance Agreement,

the Company agreed to use commercially reasonable efforts to file a registration statement no later than 20 business days following the

filing of the Company’s Annual Report on Form 10-K covering the shares underlying the common stock purchase warrants issued to the

Arena Investors in connection with the Forbearance Agreement and other common stock purchase warrants issued to the Arena Investors on

December 31, 2025.

On December 2, 2025, the Company received a determination letter from

the staff of the Nasdaq Stock Market LLC (“Nasdaq”) indicating that the Company did not meet the minimum shareholders’

equity requirement under Nasdaq Listing Rule 5550(b) and that Nasdaq intended to delist the Company’s common stock.

9, 2025, the Company timely submitted the Company’s plan of compliance to Nasdaq and requested a hearing before the Nasdaq Hearings

Panel, which stayed the delisting action pending a final written decision by the panel.

On January 13, 2026, Nasdaq notified the Company

that it had regained compliance with Nasdaq Listing Rule 5550(b) and that the Company was in compliance with all applicable continued

listing standards.

As a result, the previously scheduled hearing was canceled, and the Company’s common stock continues to be listed

and traded on The Nasdaq Stock Market.

Management has evaluated these events

and determined that no adjustments to the accompanying consolidated financial statements were required.

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.

Co-Chief Executive Officer

April 22, 2026

( Principal Executive Officer, Principal Financial

Officer and Principal 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.

Executive Officer and Director

Executive Officer, Principal Financial Officer and Principal Accounting Officer)

Executive Officer and Director

of the Board of Directors

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