Reborn Coffee, Inc. 10-K

Item 9A. Controls and Procedures Evaluation of Disclosure Controls and Procedures Our management has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), as of December 31, 2025. 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. 47 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 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. These control deficiencies could result in a misstatement of account balances that would result in a reasonable possibility that a material misstatement to our financial statements may not be prevented or detected on a timely basis. In light of this material weakness, we performed additional analyses and procedures in order to conclude that our financial statements for the year ended December 31, 2025 included in this Report were fairly stated in accordance with GAAP. 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 Over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Securities Exchange Act of 1934 Rule 13a-15(f). Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Our internal control over financial reporting includes those policies and procedures 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; and ● 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. Because of the inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. 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 . Based 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 Reporting There were no changes in our internal controls over financial reporting that occurred during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Limitations on Effectiveness of Controls and Procedures In designing and evaluating the disclosure controls and procedures and internal control over financial reporting, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures and internal control over financial reporting must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs. Item 9B. Other Information Trading Plans During the three months ended December 31, 2025, no director or officer (as defined in Rule 16a-1(f) under the Exchange Act) of the company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K. Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections Not applicable. 48 Part III Item 10. Directors, Executive Officers and Corporate Governance Current Directors and Executive Officers The following table provides information regarding our executive officers and members of our board of directors as of the date of this Report: Name Age Position Executive Officers Jay Kim 64 Co-Chief Executive Officer and Director Jung Jae Lim 58 Co-Chief Executive Officer and Director Non-Employee Directors Farooq M. Arjomand 68 Chairman of the Board of Directors and Director Dennis R. Egidi 76 Director Charles C. Jeong 61 Director Mi Jeong Lee 54 Director Alex Yeon 58 Director Background of Executive Officers and Directors Jay Kim, age 64, Co-Chief Executive Officer and Director Mr. Kim has served as Co-Chief Executive Officer since March 2026. Mr. 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. Mr. 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. Kim was the owner of Coffee Roasters in Riverside, California from 2002 to 2007. Mr. Kim worked as the project manager for JES Inc., based in Brea, CA from 1997 to 2002 where he coordinated and managed environmental engineering projects. Mr. Kim worked as a Senior Process Engineer for Allied Signal Environment Catalyst in Tulsa, Oklahoma, from 1992 to 1997 where he coordinated and implemented projects related to plant productivity. He also acted as the leader in start-up plant to be based in Mexico for Allied Signal. From 1988 to 1992 Mr. Kim worked as the plant start-up engineer for Toyota Auto Body Inc. Mr. Kim has a B.S, in Chemical Engineering from California State University at Long Beach and followed a Chemical office basic at US Army Chemical School in 1988. He was commissioned 1st. LT. of the US Army in 1986 and retired from the US Army in 1988. Jung Jae Lim, age 58, Co-Chief Executive Officer Jung Jae Lim has served as Co-Chief Executive Officer since March 2026. Mr. 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 sectors. 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 present, Mr. 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. 49 Non-Employee Directors Farooq M. Arjomand, age 68, Chairman of the Board of Directors Farooq Arjomand has served as the Chairman of the Board of Directors of Reborn Global since January 2015, and took over as the Chairman of the Board of Reborn Coffee Inc. on May 7, 2018. In 1984, he started his career as a banker with HSBC and gained experience across all departments—namely, private banking, corporate finance, trade services, and investment banking. During his stint with HSBC, he also became the founding member of Amlak Finance& Emmar Properties in 1997. Mr. Arjomand founded the Arjomand Group of companies in 2000 and has served as chief executive officer since that company’s inception. Based in Dubai, the Arjomand Group conducts various activities including real estate, manufacturing, trades, financial activities and aviation across the GCC, Asia, Europe and the US. Mr. Arjomand has also served as the Chairman of DAMAC Properties, a leading developer in the Middle East and as a board member of Al Ahlia Insurance Company BSC, Bahrain. Mr. Arjomand also serves as Managing Partner of Barakat Group. Barakat Group has been involved in the manufacturing of juices and food stuffs for the past 30 years. Mr. Arjomand is a citizen of the United Arab Emirates. He graduated with a Business Management degree from Seattle Pacific University in Seattle, Washington. Dennis R. Egidi, age 76, Director Mr. Egidi is a licensed real estate broker in the State of Illinois. Additionally, Mr. Egidi was awarded the CPM® designation through the Institute of Real Estate Management. He holds a bachelor’s degree in civil engineering and attended graduate school in Civil Engineering at the University of Detroit. Mr. Egidi joined our Board as a Director and the Vice Chairman of the Board in June of 2020. Mr. Egidi formed DRE, Inc., an Illinois real estate development company in 1993, developing over 30 affordable housing projects in Illinois, Ohio, Indiana, Iowa, and California, totaling approximately 5,000 units. Today, he continues to serve as President of DRE, Inc., and acts as Managing General Partner of 15 limited partnerships, of which 5 have been redeveloped over the past 5 years. In addition, Mr. Egidi served as President and Chairman of the board of Promex Midwest, a real estate property management firm. He has been involved in all phases of management in the commercial, residential and industrial building fields in the Midwest. Mr. Egidi has extensive knowledge and experience in the construction industry, having served as Executive Vice President and Chief Estimator for Corbetta Construction Company of Illinois, and then for Contractors and Engineers, Inc. During his 25 years of experience in the construction industry, he was involved in all types of projects ranging from multifamily housing, historical rehabs, high-rise office buildings and shopping centers. Mr. Egidi and DRE also have experience in the food service industry having developed fast food pizza stores in central Illinois under the Rocky Rococo brand in the 1980s. He was also a principal partner in Cookie Associates of Houston, Texas. Cookie Associates owned and operated 34 “Great American Cookie” stores and kiosks in the Houston market. Most recently, Mr. Egidi, as a principal of TF Investors LLC, was a franchisor of eight Tutti Frutti Frozen Yogurt franchises located in France and England. Charles C. Jeong, age 61, Director Charles C. Jeong has served as a director since February 2026. Mr. 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. Mr. 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. 50 Mi Jeong Lee, age 54, Director Mi Jeong Lee has served as a director since February 2026. Ms. Lee has been retired since 2012. From 2000 to 2012. Ms. Lee served as an Accounting Manager at Tyson Foods, Inc. (USA), where she was responsible for financial reporting, compliance, and accounting operations within a global manufacturing environment. Prior to Tyson, Ms. 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. Ms. 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 March 2026. 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. and as an Investment Executive for UBS Financial Services. Mr. 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 There are no family relationships among any of our executive officers or directors. Board Composition Our business and affairs are managed under the direction of our board of directors, a majority of which are independent (i.e., Farooq M. Arjomand, Charles C. Jeong, Mi Jeong Lee, and Alex Yeon). 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 permit our board of directors to establish the authorized number of directors from time to time by resolution. Each director serves until the expiration of the term for which such director was elected or appointed, or until such director’s earlier death, resignation or removal. Involvement in Certain Legal Proceedings 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 Our board of directors has established a compensation committee and an audit committee. The composition and responsibilities of each of the committees of our board of directors are described below. Members serve on these committees until their resignation or until otherwise determined by our board of directors. Our board of directors may establish other committees as it deems necessary or appropriate from time to time. 51 Audit Committee As of the date of this filing, our audit committee consists of Farooq M. Arjomand, Mi Jeong Lee, and Alex Yeon. Each member of our audit committee can read and understand fundamental financial statements in accordance with applicable requirements. The chair of our audit committee is Farooq M. Arjomand, who our board of directors has determined is an “audit committee financial expert” within the meaning of SEC regulations. 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; and ● approving (or, as permitted, pre-approving) all audit and all permissible non-audit services to be performed by the independent registered public accounting firm. Our audit committee operates under a written charter that satisfies the applicable listing standards of the Nasdaq Capital Market. Compensation Committee Our compensation committee consists of Farooq M. Arjomand and Charles C. Jeong. The chair of our compensation committee is Charles C. Jeong. 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; 52 ● 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; and ● reviewing and establishing general policies relating to compensation and benefits of our employees and reviewing our overall compensation philosophy. Our compensation committee operates under a written charter that satisfies the applicable listing standards of the Nasdaq Capital Market. Compensation Committee Interlocks None of the members of the compensation committee are currently, or have been at any time, one of our executive officers or employees. None of our executive officers currently serve, or have served during the last year, as a member of the board of directors or compensation committee of any entity that has one or more executive officers serving as a member of our board of directors or compensation committee. Director Nominations We do not have a standing nominating committee. In accordance with the Nasdaq corporate governance standards, a majority of the independent directors may recommend a director nominee for selection by the board of directors. The board of directors believes that the independent directors can satisfactorily carry out the responsibility of properly selecting or approving director nominees without the formation of a standing nominating committee. As there is no standing nominating committee, we do not have a nominating committee charter in place. The board of directors will also consider director candidates recommended for nomination by our 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 the future to include additional independent directors. In adding additional members to our board of directors, we will consider each candidate’s independence, skills and expertise based on a variety of factors, including the person’s experience or background in management, finance, regulatory matters and corporate governance. Further, when identifying nominees to serve as a director, we expect that our board of directors will seek to create a board of directors that is strong in its collective knowledge and has a diversity of skills and experience with respect to accounting and finance, management and leadership, vision and strategy, business operations, business judgment, industry knowledge and corporate governance. Code of Business Conduct and Ethics In 2017, we adopted a Code of Business Conduct and Ethics that applies to all our employees, officers and directors. This includes our principal executive officer, principal financial officer and principal accounting officer or controller, or persons performing similar functions. The full text of our Code of Business Conduct and Ethics is posted on our website at www.reborncoffee.com. We intend to disclose on our website any future amendments of our Code of Business Conduct and Ethics or waivers that exempt any principal executive officer, principal financial officer, principal accounting officer or controller, persons performing similar functions or our directors from provisions in the Code of Business Conduct and Ethics. Information contained on, or that can be accessed through, our website is not incorporated by reference into this Report, and you should not consider information on our website to be part of this Report. Insider Trading Policy Our Code of Business Conduct and Ethics contains an insider trading policy that governs the purchase, sale, and other disposition of our securities by our directors, officers, employees and other individuals associated with us, as well as by the Company itself, that we believe is reasonably designed to promote compliance with insider trading laws, rules and regulations, and listing standards applicable to us. A copy of our Code of Business Conduct and Ethics is filed as Exhibit 19.1 to this Report . 53 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 Compliance 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 Mr. Lim, Mr. Jeong, Ms. Lee, and Mr. Yeon. Risk and Compensation Policies We have analyzed our compensation programs and policies to determine whether those programs and policies are reasonably likely to have a material adverse effect on us. Item 11. Executive Compensation Compensation Philosophy Our compensation philosophy includes: ● pay for performance; ● fair compensation that is competitive with market standards; ● compensation mix according to growth stage of our company as well as job level; and ● incentivizing employees to work for long-term sustainable and profitable growth of our company. Objective of Executive Compensation Program The objective of our compensation program is to provide a fair and competitive compensation package in the industry to each named executive officer (“NEO”) that will enable us to: ● attract and hire outstanding individuals to achieve our mid-term and long-term visions; ● motivate, develop and retain employees; and ● 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: ● Jay Kim, Co-Chief Executive Officer; and ● Stephane Kim, Former Chief Financial Officer 54 Administration Our Compensation Committee oversees our executive compensation program and is responsible for approving the nature and amount of the compensation paid to our NEOs. The committee also administers our equity compensation plan and awards. Elements of Compensation Our compensation program for NEOs consists of the following elements of compensation, each described in greater depth below: ● base salaries; ● performance-based bonuses; ● equity-based incentive compensation; and ● general benefits. Base Salary Base salaries are an annual fixed level of cash compensation to reflect each NEO’s performance, role and responsibilities, and retention considerations. Equity Compensation 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 Our NEOs are provided with other fringe benefits that we believe are commonly provided to similarly situated executives. Summary Compensation Table – Officers The following table sets forth information concerning the compensation of our NEOs for the years ended December 31, 2025 and December 31, 2025. Salary Bonus Stock Awards Option Awards Non-equity Incentive plan compensation Change in Pension Value and Nonqualified deferred compensation All other Compensation Total Name and principal position Year ($) ($) ($) ($) ($) ($) ($) ($) Jay Kim Co-Chief Executive Officer 2025 $ 162,000 -0- -0- -0- -0- -0- -0- $ 162,000 Stephan Kim Former Chief Financial Officer (1) 2025 $ 124,000 -0- -0- -0- -0- -0- -0- $ 124,000 Jay Kim Co-Chief Executive Officer 2024 $ 162,000 -0- -0- -0- -0- -0- -0- $ 162,000 Stephan Kim Former Chief Financial Officer 2024 $ 124,000 -0- -0- -0- -0- -0- -0- $ 124,000 (1) Mr. Stephan Kim resigned as our Chief Financial Officer effective October 31, 2025. 55 Employment Agreements We do not currently have employment agreements with any of our NEOs . Timing of Option Awards We provide the following discussion of the timing of option awards in relation to the disclosure of material nonpublic information, as required by Item 402(x) of Regulation S-K. We have no policy or practice regarding option grant timing because we do not grant, and have not granted, options to our NEOs. We have not timed the disclosure of material nonpublic information to affect the value of executive compensation. During 2025, we did not grant any stock options to the NEOs during any period beginning four business days before the filing of a periodic report on Form 10-Q or Form 10-K or the filing or furnishing of a current report on Form 8-K disclosing material non-public information (other than a current report on Form 8-K disclosing a material new stock option award under Item 5.02(e) of such Form 8-K), and ending one business day after the filing or furnishing of such report with the SEC. Outstanding Equity Awards at Fiscal Year-End As of December 31, 2025, there were no outstanding equity awards for each of the NEOs. Director Compensation No compensation was paid to our non-employee directors for services rendered during the years ended December 31, 2025 and 2024. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters The following table sets forth, as of March 31, 2026, information regarding beneficial ownership of our capital stock by: ● each person, or group of affiliated persons, known by us to beneficially own more than 5% of our common stock; ● each of our directors; ● each of our NEOs; and ● all of our current executive officers, directors and director nominees as a group. 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 persons named in the table have sole voting and investment power with respect to all ordinary shares beneficially owned by them. The following table does not reflect record or beneficial ownership of the private placement warrants or rights as these warrants and rights are not exercisable or convertible within 60 days of the date of this Report. Except as otherwise noted below, the address for each person or entity listed in the table is c/o Reborn Coffee Inc., 580 N. Berry St. Brea, CA 92821. 56 Number of Shares Percentage of Shares Name of Beneficial Owner Beneficially Owned Beneficially Owned 5% or Greater Shareholders Arena Investors, LP (1) 911,592 9.99 % Directors and Named Executive Officers Charles C. Jeong, Director 1,192,661 14.5 % Jay Kim, Co-Chief Executive Officer and Director 522,057 6.4 % Stephan Kim, Former Chief Financial Officer 87,190 1.1 % Farooq M. Arjomand, Chairman of the Board 633,165 7.7 % Dennis R. Egidi, Director 578,868 7.0 % 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): 2,926,751 35.6 % (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 shares. 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. The ASOFM2 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 Compensation Plans None. Changes in Control None. Item 13. Certain Relationships and Related Transactions, and Director Independence Policies and Procedures for Related Person Transactions Our board of directors has adopted a written-related person transaction policy, which sets forth the policies and procedures for the review and approval or ratification of related party transactions. This policy is administrated by our Audit Committee. These policies provide that, in determining whether or not to recommend the initial approval or ratification of a related party transaction, the relevant facts and circumstances available shall be considered, including, among other factors it deems appropriate, whether the interested transaction is on terms no less favorable than terms generally available to an unaffiliated third party under the same or similar circumstances and the extent of the related party’s interest in the transaction. Director Independence Nasdaq rules require that a majority of the board of directors of a company listed on Nasdaq be composed of “independent directors,” which is defined generally as a person other than an officer or employee of the company or its subsidiaries or any other individual having a relationship, which, in the opinion of the company’s board of directors, would interfere with the director’s exercise of independent judgment in carrying out the responsibilities of a director. In addition, the director must not be precluded from qualifying as independent under the per se bars set forth by the Nasdaq rules. Our Board has undertaken a review of its composition, the composition of its committees and the independence of our directors and considered whether any director has a material relationship with us that could compromise his or her ability to exercise independent judgment in carrying out his or her responsibilities. Based upon information requested from and provided by each director concerning his or her background, employment and affiliations, including family relationships, our Board of Directors has determined that each of the directors on our Board, other than Jay Kim, 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. 57 Indemnification Agreements We have entered into indemnification agreements with each of our directors and executive officers. These agreements, among other things, require us to indemnify each director and executive officer to the fullest extent permitted by Delaware law, including indemnification of expenses such as attorneys’ fees, judgments, penalties, fines and settlement amounts incurred by the director or executive officer in any action or proceeding, including any action or proceeding by or in right of us, arising out of the person’s services as a director or executive officer. Our certificate of incorporation contains provisions that limit the liability of our current and former directors for monetary damages to the fullest extent permitted by Delaware law. Additionally, a director is not personally liable for monetary damages for breach of fiduciary duty as a director (i) for any breach of his or her duty of loyalty to the Company or its 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 to indemnify our directors, officers, employees and other agents to the fullest extent permitted by Delaware law. Our bylaws provide that we are required to indemnify our directors and officers to the fullest extent permitted by Delaware law and may indemnify our other employees and agents. Our bylaws also provide that, on satisfaction of certain conditions, we will advance expenses incurred by a director or officer in advance of the final disposition of any action or proceeding, and permit us to secure insurance on behalf of any officer, director, employee or other agent for any liability arising out of his or her actions in that capacity regardless of whether we would otherwise be permitted to indemnify him or her under the provisions of Delaware law. We have entered and expect to continue to enter into agreements to indemnify our directors, executive officers and other employees as determined by our board of directors. With certain exceptions, these agreements provide for indemnification for related expenses including attorneys’ fees, judgments, fines and settlement amounts incurred by any of these individuals in any action or proceeding. We believe these provisions in our certificate of incorporation and bylaws and these indemnification agreements are necessary to attract and retain qualified persons as directors and officers. We also maintain customary directors’ and officers’ liability insurance. The limitation of liability and indemnification provisions in our certificate of incorporation and bylaws may discourage 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 under the Securities Act may be permitted for directors, executive officers or persons controlling us, we have been informed that, in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable. Item 14. Principal Accountant Fees and Services We have appointed BCRG Group (“BCRG”) to serve as our independent registered public accounting firm for the fiscal year ending December 31, 2025. BCRG has served as our 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, 2025 and 2024: Year ended December 31, 2025 Year ended December 31, 2024 Audit fees (1) $ 130,000 $ 125,000 Audit related fees (2) - - Tax fees (3) - - Total 130,000 $ 125,000 (1) Audit Fees — Audit fees consist of fees billed for the audit of our annual financial statements and the review of the interim consolidated financial statements. (2) Audit-Related Fees — These consisted principally of the aggregate fees related to audits that are not included Audit Fees. (3) Tax Fees — Tax fees consist of aggregate fees for tax compliance and tax advice, including the review and preparation of our various jurisdictions’ income tax returns. 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 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 Committee. The Audit Committee pre-approves all audit services and permitted non-audit services (including the fees and terms thereof) to be performed for us by our independent registered public accounting firm, subject to the de minimis exceptions for non-audit services described in Section 10A(i)(1)(B) of the Exchange Act and Rule 2-01(c)(7)(i)(C) of Regulation S-X, provided that all such excepted services are subsequently approved prior to the completion of the audit. We have complied with the procedures set forth above, and the Audit Committee has otherwise complied with the provisions of its charter. 58 PART IV Item 15. Exhibits, Financial Statement Schedule (a) The following documents are filed as part of this Report: (1) Financial Statements Page Report of Independent Registered Public Accounting Firm F-1 Balance Sheets F-3 Statements of Operations F-4 Statements of Changes in Shareholders’ Equity F-5 Statements of Cash Flows F-6 Notes to Financial Statements F-7 (2) Financial Statements Schedule All financial statement schedules are omitted because they are not applicable or the amounts are immaterial and not required, or the required information is presented in the financial statements and notes beginning on F-1 on this Report. (b) Exhibits EXHIBIT INDEX 3.1 Certificate of Incorporation (Delaware), dated July 27, 2022 (incorporated by reference to Exhibit 3.1 to Amendment No. 5 to our Registration Statement on Form S-1 filed on August 2, 2022) 3.2 Bylaws of Registrant (Delaware) (incorporated by reference to Exhibit 3.2 to Amendment No. 5 to our Registration Statement on Form S-1 filed on August 2, 2022) 3.3 Certificate of Amendment to Certificate of Incorporation filed with the Secretary of State of the State of Delaware on January 12, 2024 (incorporated by reference to Exhibit 3.1 to our Current Report on Form 8-K filed on January 16, 2024) 4.1 Description of Registrant’s Securities (incorporated by reference to Exhibit 4.3 to our Annual Report on Form 10-K filed on March 28, 2024) 4.2 Specimen Common Stock Certificate (Delaware) (incorporated by reference to Exhibit 4.1 to Amendment No. 5 to our Registration Statement on Form S-1 filed on August 2, 2022) 4.3 Form of Representative’s Warrant (incorporated by reference to Exhibit 4.5 to Amendment No. 2 to our Registration Statement on Form S-1 filed on April 18, 2022) 4.4 Warrant to Purchase Common Shares issued May 20, 2024, by Reborn Coffee Inc. to EFF HUTTON YA FUND, LP (incorporated by reference to Exhibit 4.1 to our Current Report on Form 8-K filed on May 23, 2024) 4.5 Form of Common Stock Purchase Warrant (incorporated by reference to Exhibit 4.1 to our Current Report on Form 8-K filed on February 12, 2025) 10.1 Share Exchange Agreement, dated May 7, 2018 by and among Capax, Reborn and each of the RB shareholders (incorporated by reference to Exhibit 10.1 to Amendment No. 2 to our Registration Statement on Form S-1 filed on April 18, 2022) 10.2 Form of Letter Agreement (Lockup) by and among Registrant, officers and directors of Registrant and EF Hutton (incorporated by reference to Exhibit 10.2 to Amendment No. 2 to our Registration Statement on Form S-1 filed on April 18, 2022) 10.3+ Form of Director and Officer Indemnity Agreement (incorporated by reference to Exhibit 10.3 to Amendment No. 2 to our Registration Statement on Form S-1 filed on April 18, 2022) 10.4 Shopping Center Lease by and between Reborn Global Holdings, Inc. and La Floresta Regency, LLC, effective July 25, 2016 (incorporated by reference to Exhibit 10.4 to Amendment No. 2 to our Registration Statement on Form S-1 filed on April 18, 2022) 10.5 Standard Industrial/ Commercial Multi-Tenant Lease, as amended, by and between Reborn Global Holdings, Inc. and Foothill Crescenta, LLC, effective December 6, 2016 (incorporated by reference to Exhibit 10.5 to Amendment No. 2 to our Registration Statement on Form S-1 filed on April 18, 2022) 10.6 Shopping Center Lease by and between Reborn Global Holdings, Inc. and Sibling Associates, LLC, effective July 12, 2017 (incorporated by reference to Exhibit 10.6 to Amendment No. 2 to our Registration Statement on Form S-1 filed on April 18, 2022) 10.7 Standard Lease by and between Reborn Global Holdings, Inc. and El Toro, LP, effective February 12, 2021 (incorporated by reference to Exhibit 10.7 to Amendment No. 2 to our Registration Statement on Form S-1 filed on April 18, 2022) 10.8 Long Term Kiosk License Agreement by and between Reborn Global Holdings, Inc. and Tyler Mall Limited Partnership, effective February 4, 2021 (incorporated by reference to Exhibit 10.8 to Amendment No. 2 to our Registration Statement on Form S-1 filed on April 18, 2022) 10.9 Long Term Kiosk License Agreement by and between Reborn Global Holdings, Inc. and Stonestown Shopping Center, LP, effective December 22, 2020 (incorporated by reference to Exhibit 10.9 to Amendment No. 2 to our Registration Statement on Form S-1 filed on April 18, 2022) 10.10 Long Term Kiosk License Agreement by and between Reborn Global Holdings, Inc. and Glendale I Mall Associates, LP, effective October 27, 2020 (incorporated by reference to Exhibit 10.10 to Amendment No. 2 to our Registration Statement on Form S-1 filed on April 18, 2022) 59 10.11 Form of Subscription Agreement (Regulation A+ Offering) (incorporated by reference to Exhibit 10.11 to Amendment No. 2 to our Registration Statement on Form S-1 filed on April 18, 2022) 10.12 Amendment to Share Exchange Agreement, dated January 25, 2022, by and among Reborn Coffee Inc., Andrew Weeraratne and each of the former shareholders of Reborn Global Holdings, Inc., a California corporation (incorporated by reference to Exhibit 10.10 to Amendment No. 5 to our Registration Statement on Form S-1 filed on August 2, 2022) 10.13+ Offer of Employment by and between the Company and Stephan Kim, dated July 27, 2022 (incorporated by reference to Exhibit 10.11 to Amendment No. 5 to our Registration Statement on Form S-1 filed on August 2, 2022) 10.14 Form of Securities Subscription Agreement entered into between Reborn Coffee, Inc. and three investors between May 28, 2024 and June 21, 2024 (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on August 29, 2024) 10.15 Convertible Promissory Note issued August 29, 2024, by Reborn Coffee, Inc. to Quen Inno Tech Co., Ltd. (incorporated by reference to Exhibit 10.2 to our Current Report on Form 8-K filed on August 29, 2024) 10.16 Securities Purchase Agreement by and between Reborn Coffee, Inc. and 1800 Diagonal Lending LLC dated January 6, 2025 (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on January 10, 2025) 10.17† Promissory Note dated January 6, 2025 issued by Reborn Coffee, Inc. to 1800 Diagonal Lending LLC (incorporated by reference to Exhibit 10.2 to our Current Report on Form 8-K filed on January 10, 2025) 10.18† Form of Securities Purchase Agreement by and between Reborn Coffee, Inc. 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) 10.19 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) 10.20† 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) 10.21 Form of Guarantee Agreement between the subsidiaries of Reborn Coffee, Inc. and the Debenture Investors dated February 10, 2025 (incorporated by reference to Exhibit 10.4 to our Current Report on Form 8-K filed on February 12, 2025) 10.27 Form of Registration Rights Agreement between Reborn Coffee, Inc. 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) 10.28 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) 10.29† 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) 10.30† 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) 10.31† 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) 10.32† 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) 10.33† 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) 19.1 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) 21.1* Subsidiaries of Registrant 31.1* 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. 31.2* 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. 32.1** Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 97.1 Reborn Coffee, Inc. Clawback Policy (incorporated by reference to Exhibit 97.1 to our Annual Report on Form 10-K filed on March 28, 2024) 101.INS Inline XBRL Instance Document. 101.SCH Inline XBRL Taxonomy Extension Schema Document. 101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document. 101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document. 101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document. 101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document. 104 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. Item 16. Form 10-K Summary Not applicable. 60 Report of Independent Registered Public Accounting Firm To the Board of Directors, 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, 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 financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our 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 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 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 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 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. F- 1 Issuance and Conversion of Senior Convertible Promissory Note (the “Notes”) 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. Auditing these matters involved extensive procedures and effort to evaluate management’s accounting conclusions and application of the relevant guidance. 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 (PCAOB ID 7158 ) We have served as the Company’s auditor since 2024. Irvine, CA April 22, 2026 F- 2 REBORN COFFEE, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS December 31, 2025 2024 ASSETS Current assets: Cash and cash equivalents $ 2,594,716 $ 158,215 Accounts receivable, net of allowance for doubtful accounts of $ 75,689 and $ 0 , respectively 946,996 67,309 Accounts receivable from related party 728,990 - Inventories, net 58,435 169,615 Prepaid expense and other current assets 550,000 467,613 Loan receivable from related party 2,000,000 - Total current assets 6,879,137 862,752 Property and equipment, net 2,894,893 4,080,004 Operating lease right-of-use asset 2,160,871 2,653,179 Long-term prepayment 1,000,000 - Other assets 246,189 193,188 Total assets $ 13,181,090 $ 7,789,123 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Accounts payable $ 561,457 $ 558,444 Accrued expenses and current liabilities 815,245 774,826 Loan payable to shareholder 70,000 - Loans payable to financial institutions, current 109,247 111,300 Loans payable to others 279,026 427,073 Loan payable to related party 153,605 - Convertible debt, net of debt discount of $ 900,198 3,266,467 - Derivative liability 503,384 - Loan payable, emergency injury disaster loan, current 22,452 30,060 Loan payable, payroll protection program, current 26,307 37,494 Operating lease liabilities, current 879,416 844,177 Total current liabilities 6,686,606 2,783,374 Loan payable, emergency injury disaster loan, net of current 469,940 469,940 Loan payable, payroll protection program, net of current 25,718 26,307 Operating lease liabilities, net of current 1,352,961 1,906,760 Total liabilities 8,535,225 5,186,381 Commitments and Contingencies (Note 13) Shareholders’ equity Common Stock, $ 0.0001 par value, 40,000,000 shares authorized; 7,850,601 and 4,274,508 shares issued and outstanding, respectively 785 428 Common stock issuable, $ 0.0001 par value, 170,000 and 294,000 shares issuable, respectively 850,000 1,470,000 Preferred Stock, $ 0.0001 par value, 1,000,000 shares authorized; no shares issued and outstanding - - Additional paid-in capital 34,365,043 22,674,095 Accumulated deficit ( 30,704,112 ) ( 21,562,872 ) Accumulated other comprehensive income - 21,091 Non-controlling interest in subsidiary 134,149 - Total shareholders’ equity 4,645,865 2,602,742 Total liabilities and shareholders’ equity $ 13,181,090 $ 7,789,123 See accompanying notes to consolidated financial statements. F- 3 REBORN COFFEE, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS Years Ended December 31, 2025 2024 Net revenues: Stores $ 5,952,061 $ 5,573,247 Wholesale and online 113,577 355,286 Service income – related party 928,990 - License income 1,100,000 - Total net revenues 8,094,628 5,928,533 Operating costs and expenses: Product, food and drink costs - stores, wholesale and online 2,376,017 2,204,574 Cost of service income – subcontractors, related party 650,293 - General and administrative 7,751,594 6,862,729 Professional fees 1,626,238 693,563 Stock compensation expense 1,484,333 787,213 Total operating costs and expenses 13,888,475 10,548,079 Loss from operations ( 5,793,847 ) ( 4,619,546 ) Other income (expenses): Other income 146,508 55,140 Interest expense ( 156,093 ) ( 215,140 ) Interest expense - debt discount ( 1,067,028 ) - Gain on sale of property 45,673 - Loss on debt extinguishment ( 722,972 ) - Derivative expense 297,176 - Asset impairment loss ( 1,647,229 ) ( 25,602 ) Total other expenses, net ( 3,103,965 ) ( 185,602 ) Loss before income taxes ( 8,897,812 ) ( 4,805,148 ) Provision for income taxes 109,279 800 Net loss ( 9,007,091 ) ( 4,805,948 ) Net income attributable to non-controlling interest 134,149 - 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 $ ( 1.73 ) $ ( 1.66 ) Number of weighted average shares - basic and diluted 5,294,587 2,896,960 See accompanying notes to consolidated financial statements. F- 4 REBORN COFFEE, INC. AND SUBSIDIARIES CONSOLIDATED SHAREHOLDERS’ EQUITY Accumulated Common Stock Common Stock Issuable Additional Paid-in Accumulated Non-controlling Other Comprehensive Total Shareholders’ Shares Amount Shares Amount Capital Deficit Interest Income Equity Balance as of December 31, 2023 1,866,174 $ 187 - $ - $ 17,603,143 $ ( 16,756,924 ) $ - $ - $ 846,406 Net loss - - - - - ( 4,805,948 ) - - ( 4,805,948 ) Stock compensation - issuance for services 57,512 6 - - 187,146 - - - 187,152 Stock compensation - issuances to employees 267,370 27 - - 600,034 - - - 600,061 Issuances of common stock 2,083,452 208 - - 4,283,772 - - - 4,283,980 Common stock issuable - - 294,000 1,470,000 - - - - 1,470,000 Foreign currency translation - - - - - - - 21,091 21,091 Balance as of December 31, 2024 4,274,508 $ 428 294,000 $ 1,470,000 $ 22,674,095 $ ( 21,562,872 ) $ - $ 21,091 2,602,742 Accumulated Common Stock Common Stock Issuable Additional Paid-in Accumulated Non-controlling Other Comprehensive Total Shareholders’ Shares Amount Shares Amount Capital Deficit Interest Income Equity Balance as of December 31, 2024 4,274,508 $ 428 294,000 $ 1,470,000 $ 22,674,095 $ ( 21,562,872 ) $ - $ 21,091 $ 2,602,742 Stock compensation expense 1,101,231 110 - - 1,484,223 - - - 1,484,333 Issuances of common shares from sale of common stock 1,835,994 184 - - 8,379,816 - - - 8,380,000 Common shares issued from shares issuable 124,000 12 ( 124,000 ) ( 620,000 ) 619,988 - - - - Common shares issued for settlement of debt 514,868 51 - - 1,206,921 - - - 1,206,972 Foreign currency translation - - - - - - - ( 21,091 ) ( 21,091 ) Net loss - - - - - ( 9,141,240 ) 134,149 - ( 9,007,091 ) Balance as of December 31, 2025 7,850,601 $ 785 170,000 $ 850,000 $ 34,365,043 $ ( 30,704,112 ) $ 134,149 $ - $ 4,645,865 See accompanying notes to consolidated financial statements. F- 5 REBORN COFFEE, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS Years Ended December 31, 2025 2024 Cash flows from operating activities: Net loss $ ( 9,141,240 ) $ ( 4,805,948 ) Non-controlling interest net income 134,149 - Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Stock compensation expense 1,484,333 787,213 Loss on settlement of debt 722,972 Interest expense - amortization of debt discount 1,067,028 - Operating lease ( 26,252 ) ( 64,180 ) Asset impairment loss 1,647,229 25,602 Loss on disposal of assets ( 45,673 ) - Depreciation 449,585 391,263 Derivative expense ( 297,176 ) - Changes in operating assets and liabilities: Decrease in accounts receivable ( 1,608,677 ) ( 10,371 ) Increase in inventories 111,180 15,446 Decrease in prepaid expense and other assets ( 135,388 ) 98,433 Decrease in accounts payable ( 907,915 ) ( 53,218 ) Increase in accrued expenses and liabilities 40,419 163,536 Net cash used in operating activities ( 6,505,426 ) ( 3,452,224 ) Cash flows from investing activities: Acquisition of property and equipment ( 51,195 ) ( 1,109,374 ) Proceeds from sale of assets 75,000 132,157 Long-term prepayment ( 1,000,000 ) - Loan receivables from related party ( 2,000,000 ) - Net cash used in investing activities ( 2,976,195 ) ( 977,217 ) Cash flows from financing activities: Net proceeds from loan payable to others ( 148,045 ) ( 181,954 ) Net borrowings from related party 637,605 - Proceeds from issuances of common stock 8,380,000 4,283,980 Proceeds from common stock issuable - 1,470,000 Proceeds from loan payable to shareholder 70,000 ( 100,000 ) Borrowings from convertible debt 2,999,999 - Repayments from loan payable to financial institutions ( 2,053 ) ( 1,015,199 ) Repayments on loan payable to PPP ( 19,384 ) ( 33,472 ) Net cash provided by financing activities 11,918,122 4,423,355 Net increase (decrease) in cash 2,436,501 ( 6,086 ) Cash at beginning of year 158,215 164,301 Cash at end of year $ 2,594,716 $ 158,215 Supplemental disclosure of cash flow information: Cash paid during the period for: Interest $ 75,215 $ 134,781 Income taxes $ 109,279 $ 1,600 See accompanying notes to consolidated financial statements. F- 6 REBORN COFFEE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. NATURE OF OPERATIONS Reborn Coffee, Inc. (“Reborn”) was incorporated in the State of Florida in January 2018. In July 2022, Reborn was migrated from Florida to Delaware, and filed a certificate of incorporation with the Secretary of State of the State of Delaware having the same capitalization structure as the Florida predecessor entity. Reborn has the following wholly owned subsidiaries: ● Reborn Global Holdings, Inc. (“Reborn Holdings”), a California Corporation incorporated in November 2014. Reborn Holdings is engaged in the operation of wholesale distribution and retail coffee stores in California to sell a variety of coffee, tea, Reborn brand name water and other beverages along with bakery and dessert products. ● Reborn Coffee Franchise, LLC (the “Reborn Coffee Franchise”), a California limited liability corporation formed in December 2020, is a franchisor providing premier roaster specialty coffee to franchisees or customers. Reborn Coffee Franchise continues to develop the Reborn Coffee system for the establishment and operation of Reborn Coffee stores using one or more Reborn Coffee marks. Reborn Coffee Franchise have one franchise as of December 31, 2025. ● Reborn 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. ● 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 Holdings. ● Reborn 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, Reborn Malaysia and Reborn Logistics will be collectively referred as the “Company”. 2. SUMMARY 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 $ 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 31, 2025. 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. 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 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. F- 7 Reporting 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 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 FASB ASC Topic 280, Segment Reporting, requires public companies to report financial and descriptive information about their reportable operating segments. 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 Total Revenue 7,165,638 928,990 8,094,628 Income (loss) from operations ( 6,071,740 ) 273,774 4,119 ( 5,793,847 ) Other income (expenses) ( 2,659,746 ) ( 444,219 ) ( 3,103,965 ) F- 8 The Company generates revenues from two geographic areas, consisting of North America and Asia. The following enterprise-wide disclosure is prepared on a basis consistent with the preparation of the consolidated financial statements. The following table contains certain financial information by geographic area: Years Ended December 31, 2025 2024 Net Revenues: North America $ 8,094,628 $ 5,928,533 Asia - 260,131 Total net revenue $ 8,094,628 $ 5,928,533 December 31, 2025 2024 Long-lived asset, net: North America $ 2,894,893 $ 3,352,911 Asia - 727,093 Total long-lived asset, net $ 2,894,893 $ 4,080,004 Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires the Company to make estimates and assumptions that affect the amounts reported in our consolidated financial statements and the accompanying notes. Such estimates include accounts receivables, accrued liabilities, income taxes, long-lived assets, and deferred tax valuation allowances. These estimates generally involve complex issues and require management to make judgments, involve analysis of historical and future trends that can require extended periods of time to resolve, and are subject to change from period to period. In all cases, actual results could differ materially from estimates. Foreign Currency Translations The Company has wholly owned subsidiaries in foreign countries, South Korea and Malaysia. Fluctuations in foreign currency impact the amount of total assets, liabilities, earnings and cash flows that the Company report for foreign subsidiaries upon the translation of these amounts into U.S. Dollars for, and as of the end of, each reporting period. In particular, the strengthening of the U.S. Dollar generally will reduce the reported amount of our foreign-denominated cash, cash equivalents, total revenues and total expense that we translate into U.S. Dollars and report in the Company’s consolidated financial statements for, and as of the end of, each reporting period. However, a majority of the Company’s consolidated revenue is denominated in U.S. Dollars, and therefore, the Company’s revenue is not directly subject to foreign currency risk. In accordance with FASB ASC 830, “Foreign Currency Matters”, when an operation has transactions denominated in a currency other than its functional currency, they are measured in the functional currency. Changes in the expected functional currency cash flows caused by changes in exchange rates are included in net income for the period. Revenue Recognition The Company recognizes revenue in accordance with Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers. The Company’s net revenue primarily consists of revenues from its retail stores and wholesale and online store. Accordingly, the Company recognizes revenue as follows: ● Retail Store Revenue Retail store revenues are recognized at the point of sale when payment is tendered. 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. ● Wholesale 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. F- 9 ● Service 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 destination. 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. ● License Income 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 supplies used in customer service. 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 services. Shipping and Handling Costs The Company incurred freight out costs, which are primarily included in the Company’s cost of sales – wholesale and online. Freight in costs, when attached to a specific purchase, are included as a component of the cost of the purchased goods and materials items and allocated to accounts in accordance with the nature of the goods. When the freight in costs are not allocable to an individual purchase or are more significant, they are recorded to a freight and shipping account within cost of sales. General and Administrative Expense General and administrative expense includes store-related expense as well as the Company’s corporate headquarters’ expenses. These include rent and utilities, payroll and benefits, and depreciation expenses. Advertising Expense Advertising costs are expensed as incurred. Advertising expenses amounted to $ 9,616 and $ 173,577 for the years ended December 31, 2025 and 2024, respectively, and is recorded under general and administrative expenses in the accompanying consolidated statements of operations. Accounts Receivable Accounts receivables are stated net of allowance for doubtful accounts. The allowance for doubtful accounts is determined primarily on the basis of past collection experience and general economic conditions. The Company determines terms and conditions for its customers based on volume transacted by the customer, customer creditworthiness and past transaction history. At December 31, 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. F- 10 Inventories Inventories consisted primarily of coffee beans, drink products, and supplies which are recorded at cost or at net realizable value. Property and Equipment Property and equipment are recorded at cost. Maintenance and repairs are charged to expense as incurred. Depreciation and amortization are provided using both the straight-line and declining balance methods over the following estimated useful lives: Furniture and fixtures 5 - 7 Years Store construction Lesser of the lease term or the estimated useful lives of the improvements, generally 6 years Leasehold improvement Lesser of the lease term or the estimated useful lives of the improvements, generally 6 years When assets are retired or disposed of, the cost and accumulated depreciation thereon are removed, and any resulting gains or losses are included in the consolidated statements of operations. Leasehold improvements are amortized using the straight-line method over the estimated life of the asset, not to exceed the length of the lease. Repair and maintenance costs are expensed as incurred. Operating Leases The Company adopted FASB Accounting Standards Codification, or ASC, Topic 842, Leases (“ASC 842”) which requires the recognition of the right-of-use assets and relating operating and finance lease liabilities on the balance sheet. Under ASC 842, all leases are required to be recorded on the balance sheet and are classified as either operating leases or finance leases. The lease classification affects the expense recognition in the income statement. Operating lease charges are recorded entirely in operating expenses. Finance lease charges are split, where amortization of the right-of-use asset is recorded in operating expenses and an implied interest component is recorded in interest expense. 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. This amount 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 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 shares for the years ended December 31, 2025 and 2024. Long-lived Assets In accordance with FASB ASC Topic 360, Property, Plant, and Equipment, the Company reviews for impairment of long-lived assets and certain identifiable intangibles whenever events or circumstances indicate that the carrying amount of assets may not be recoverable. 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. F- 11 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 The Company records its financial assets and liabilities at fair value, which is defined under the applicable accounting standards as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measure date. The Company uses valuation techniques to measure fair value, maximizing the use of observable outputs and minimizing the use of unobservable inputs. The standard describes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value which are the following: Level 1 – Quoted prices in active markets for identical assets or liabilities. Level 2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 – Inputs include management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. The inputs are unobservable in the market and significant to the instrument’s valuation. 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. As of 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 Financial instruments that potentially subject the Company to concentrations of credit risk are accounts receivable arising from its normal business activities. The Company performs ongoing credit evaluations to its customers and establishes allowances when appropriate. The Company purchases from various vendors for its operations. For the years ended December 31, 2025 and 2024, no purchases from any vendors accounted for a significant amount of the Company’s bean coffee purchases. Related Parties Related parties are any entities or individuals that, through employment, ownership, or other means, possess the ability to direct or cause the direction of management and policies of the Company. Recent Accounting Pronouncement 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. F- 12 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. The Company 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 No. 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 entities. 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 3. PROPERTY AND EQUIPMENT Property and equipment consisted of the following: December 31, 2025 2024 Furniture and equipment $ 964,157 $ 1,365,937 Leasehold improvement 1,020,515 632,516 Store construction 379,356 487,729 Store 2,322,027 2,991,571 Vehicle 103,645 103,645 Total property and equipment 4,789,700 5,581,398 Less accumulated depreciation ( 1,894,807 ) ( 1,501,394 ) Total property and equipment, net $ 2,894,893 $ 4,080,004 Depreciation expense related to property and equipment was $ 449,585 and $ 391,263 for the years ended December 31, 2025 and 2024, respectively. F- 13 4. LOANS PAYABLE TO FINANCIAL INSITUTIONS Loans payable to financial institutions consisted of the following: December 31, 2025 2024 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. $ 109,247 $ 111,300 Total loan payable 109,247 111,300 Less: current portion ( 109,247 ) ( 111,300 ) Total loan payable, net of current $ - $ - 5. LOAN PAYABLE TO OTHER Loans payable to others consisted of the following: December 31, 2025 2024 June 2023 – Loan agreements with principal amount of $ 500,000 and repayment rate of 12.0 % per annum. The loans payable mature on various dates in 2026 184,026 234,509 April 2024 - Loan amount of $ 275,000 with total payback of $ 365,750 with monthly payment of $ 9,144 until fully paid - 63,998 November 2024 - Loan amount of $ 140,000 with total payback of $ 175,932 with monthly payment of $ 6,767 until fully paid - 128,566 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 Less: current portion ( 279,026 ) ( 427,073 ) Total loan payable to others, net of current $ - $ - 6. LOAN PAYABLE TO SHAREHOLDER Loans payable to shareholders consisted of the following: December 31, 2025 2024 Borrowing from shareholder, bearing no interest and due upon demand $ 70,000 $ - Total loan payable 70,000 - Less: current portion ( 70,000 ) - Total loan payable, net of current $ - $ - 7. LOAN PAYABLE TO RELATED PARTY Loans payable to related party consisted of the following: December 31, 2025 2024 Borrowing from related party, bearing no interest and due upon demand $ 153,605 $ - Total loan payable 153,605 - Less: current portion ( 153,605 ) - Total loan payable, net of current $ - $ - F- 14 8. LOAN PAYABLE, EMERGENCY INJURY DISASTER LOAN (EIDL) Loans payable, Emergency Injury Disaster Loan (EIDL) consisted of the following: December 31, 2025 2024 May 16, 2020 - Loan agreement with principal amount of $150,00 with an interest rate of 3.75 % and maturity date on May 16, 2050 $ 150,000 $ 150,000 June 28, 2021 – Loan agreement with principal amount of $ 350,000 with an interest rate of 3.75 % and maturity date on May 18, 2050 350,000 350,000 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 ) Total loan payable, emergency injury disaster loan (EIDL), less current portion $ 469,940 $ 469,940 The following table provides future minimum payments: For the years ended December 31, Amount 2026 $ 30,060 2027 30,060 2028 30,060 2029 30,060 2030 30,060 Thereafter 349,700 Total $ 500,000 May 16, 2020 – $ 150,000 On May 16, 2020, the Company executed the standard loan documents required for securing a loan (the “EIDL Loan”) from the SBA under its Economic Injury Disaster Loan (“EIDL”) assistance program in light of the impact of the COVID-19 pandemic on the Company’s business. As of December 31, 2022, the loan payable, Emergency Injury Disaster Loan noted above is not in default. Pursuant to that certain Loan Authorization and Agreement (the “SBA Loan Agreement”), the Company borrowed an aggregate principal amount of the EIDL Loan of $ 150,000 , with proceeds to be used for working capital purposes. Interest accrues at the rate of 3.75 % per annum and will accrue only on funds actually advanced from the date of each advance. Installment payments, including principal and interest, are due monthly beginning May 16, 2021 (twelve months from the date of the SBA Loan) in the amount of $ 731 . The balance of principal and interest is payable thirty years from the date of the SBA Loan. In connection therewith, the Company also received a $ 10,000 grant, which does not have to be repaid. During the year ended December 31, 2020, $ 10,000 was recorded in Economy injury disaster loan (EIDL) grant income in the Statements of Operations. The schedule of payments on this loan was later deferred to commence 24 months from the date of loan, which was May 2022. In connection therewith, the Company executed (i) a loan for the benefit of the SBA (the “SBA Loan”), which contains customary events of default and (ii) a Security Agreement, granting the SBA a security interest in all tangible and intangible personal property of the Company, which also contains customary events of default (the “SBA Security Agreement”). F- 15 June 28, 2021 – $ 350,000 On June 28, 2021, the Company executed the standard loan documents required for securing a loan (the “EIDL Loan”) from the SBA under its Economic Injury Disaster Loan (“EIDL”) assistance program in light of the impact of the COVID-19 pandemic on the Company’s business. As of December 31, 2022, the loan payable, Emergency Injury Disaster Loan noted above is not in default. Pursuant to that certain Amended Loan Authorization and Agreement (the “SBA Loan Agreement”), the Company borrowed an aggregate principal amount of the EIDL Loan of $ 500,000 , with proceeds to be used for working capital purposes. Interest accrues at the rate of 3.75 % per annum and will accrue only on funds 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. 9. LOAN PAYABLE, PAYROLL PROTECTION LOAN PROGRAM (PPP) Loans payable, Payroll Protection Loan Program (PPP) consisted of the following: December 31, 2025 2024 Loan payable from Payroll protection program $ 52,025 $ 63,801 Less - current portion ( 26,307 ) ( 37,494 ) Total loan payable, payroll protection program, less current portion $ 25,718 $ 26,307 The Paycheck Protection Program Loan (the “PPP Loan”) is administered by the U.S. Small Business Administration (the “SBA”). The interest rate of the loan is 1.00 % per annum and accrues on the unpaid principal balance computed on the basis of the actual number of days elapsed in a year of 360 days. Commencing seven months after the effective date of the PPP Loan, the Company is required to pay the Lender equal monthly payments of principal and interest as required to fully amortize any unforgiven principal balance of the loan by the two-year anniversary of the effective date of the PPP Loan (the “Maturity Date”). The PPP Loan contains customary events of default relating to, among other things, payment defaults, making materially false or misleading representations to the SBA or the Lender, or breaching the terms of the PPP Loan. The occurrence of an event of default may result in the repayment of all amounts outstanding under the PPP Loan, collection of all amounts owing from the Company, or filing suit and obtaining judgment against the Company. 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. 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. F- 16 10. CONVERTIBLE NOTES PAYABLE NET OF DEBT DISCOUNT Convertible Notes Payable consisted of the following: December 31, 2025 Tranche 1: February 10, 2025 $ 555,555 Tranche 2: February 27, 2025 1,111,111 Tranche 3: March 28, 2025 1,666,666 Tranche 4: August 1, 2025 833,333 Total Convertible Debt 4,166,665 Less: Debt Discount ( 900,198 ) Total Convertible Notes Payable $ 3,266,467 December 31, 2025 Initial calculation Original Issuance Discount $ 416,665 Commitment Fees 750,000 Derivative 800,560 Total Debt Discount 1,967,225 Less: Amortization of Debt Discount ( 1,067,027 ) Total Debt Discount $ 900,198 On February 6, 2025, the Company entered into a Securities Purchase Agreement (“Securities Purchase Agreement”) with the purchasers named therein (the “Arena Investors”). 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. F- 17 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. Debt discount will be amortized over the term of the note. Debt discount is calculated as follows: 11. DERIVATIVE LIABILITY Derivative Liability consisted of the following: December 31, 2025 2024 Initial Recognition on Convertible Debt $ 596,195 - Add/Less: Change during the period ( 92,811 ) Total Derivative Liability $ 503,384 - 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 0.00 % Expected Term 1.5 years Expected Volatility 158.08 % Expected Dividends None Expected volatility was based primarily on historical volatility. Historical 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 volatility. 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. F- 18 12. INCOME TAX Total income tax provision expense consists of the following: For the Years Ended December 31, 2025 2024 Current provision: Federal $ 75,217 $ - State 34,063 800 Total current provision 109,279 800 Deferred provision: Federal - - State - - Total deferred provision - - Total tax provision $ 109,279 $ 800 A reconciliation of the Company’s effective tax rate to the statutory federal rate is as follows: December 31, 2025 2024 Statutory federal rate 21.00 % 21.00 % State income taxes net of federal income tax benefit and others 0.08 % 6.98 % Permanent differences for tax purposes and others ( 1.18 )% 0.00 % Change in valuation allowance ( 18.61 )% ( 27.98 )% Effective tax rate 1.29 % 0.00 % 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 0.10 % due to the change in the valuation allowance. December 31, 2025 2024 Deferred tax assets: Net operating loss $ 6,863,965 $ 9,461,884 Bad debt reserve 22,586 - Basis difference in fixed assets 332,510 - Operating lease liabilities 666,142 - State taxes 7,153 - Total Deferred tax assets 7,892,355 9,461,884 Deferred tax liabilities: Operating lease right-of-use asset ( 644,804 ) - Total Deferred tax liabilities ( 644,804 ) - Net deferred tax assets 7,247,551 9,461,884 Less – valuation allowance ( 7,247,551 ) ( 9,461,884 ) Total deferred tax assets, net of valuation allowance $ - $ - 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 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. The Company have pre-tax reform federal net operating loss carryforwards in the amount of approximately $ 2.0 million as of December 31, 2025. Net 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. F- 19 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 be realized. 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: 2025 2024 United states ( 8,460,973 ) ( 4,476,004 ) Foreign ( 436,839 ) ( 329,144 ) 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. 2025 2024 Federal 75,217 1,600 State 34,062 Foreign - - Total tax paid 109,279 1,600 F- 20 13. COMMITMENTS AND CONTINGENCIES Operating Leases 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 30, 2029 . 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 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. The lease started in April 2021 and expires in March 2028 . 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. F- 21 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 . 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 . 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”) assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Generally, the implicit rate of interest in arrangements is not readily determinable and the Company utilizes its incremental borrowing rate in determining the present value of lease payments. The Company’s incremental borrowing rate is a hypothetical rate based on its understanding of what its credit rating would be. The operating lease ROU asset includes any lease payments made and excludes lease incentives. Our variable lease payments primarily consist of maintenance and other operating expenses from our real estate leases. Variable lease payments are excluded from the ROU assets and lease liabilities and are recognized in the period in which the obligation for those payments is incurred. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. The Company has lease agreements with lease and non-lease components. The Company has elected to account for these lease and non-lease components as a single lease component. In accordance with ASC 842, the components of lease expense were as follows: Years ended December 31, 2025 2024 Operating lease expense $ 1,262,451 $ 1,156,809 Total lease expense $ 1,262,451 $ 1,156,809 In accordance with ASC 842, other information related to leases was as follows: Years ended December 31, 2025 2024 Operating cash flows from operating leases $ 1,277,443 $ 1,102,901 Cash paid for amounts included in the measurement of lease liabilities $ 1,277,443 $ 1,102,901 Weighted-average remaining lease term—operating leases Weighted-average discount rate—operating leases F- 22 In accordance with ASC 842, maturities of operating lease liabilities as of December 31, 2025 were as follows: Operating For the years ended December 31, Lease 2026 $ 1,056,452 2027 504,688 2028 307,542 2029 280,490 2030 175,590 Thereafter 448,952 Total undiscounted cash flows $ 2,773,714 Reconciliation of lease liabilities: Weighted-average remaining lease terms 4.3 years Weighted-average discount rate 9.9 % Present values $ 2,232,377 Lease liabilities—current 879,416 Lease liabilities—long-term 1,352,961 Lease liabilities—total $ 2,232,377 Difference between undiscounted and discounted cash flows $ 541,337 Contingencies 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. 14. SHAREHOLDERS’ EQUITY Common Stock 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 amount. ● 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 full amount. ● 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 full amount. ● 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 amount. ● 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 . These shares have not been registered and is recorded as common stock issuable as of December 31, 2024. F- 23 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 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 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 immediately: ● 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 . ● Issuances of Shares to Employees – The Company issued 267,370 shares of common stock to its employees for compensation during 2024. These shares were valued at fair value at the time of issuance, and the Company recorded stock compensation expense of $ 600,061 . Dividend policy Dividends are paid at the discretion of the Board of Directors. There were no dividends declared for the years ended December 31, 2025 and 2024, respectively. 15. 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 loss per common share: Years Ended December 31, 2025 2024 Net Loss attributable to Reborn Coffee shareholders $ ( 9,141,240 ) $ ( 4,805,948 ) Weighted Average Shares of Common Stock Outstanding Basic 5,294,587 2,896,960 Diluted 5,294,587 2,896,960 Loss Per Share - Basic Basic $ ( 1.73 ) $ ( 1.66 ) Diluted $ ( 1.73 ) $ ( 1.66 ) F- 24 16. RELATED PARTY TRANSACTIONS The Company had the following related party transactions: ● 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. 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. 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. ● 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. 17. SUBSEQUENT EVENTS 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 follows: 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; (iv) 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 Warrants”); 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; (iii) 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. On December 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. F- 25 Signatures 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. Signature Title Date /s/ Jay Kim Co-Chief Executive Officer April 22, 2026 Jay Kim ( 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. Signature Title Date /s/ Jay Kim Co-Chief Executive Officer and Director April 22, 2026 Jay Kim (Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer) /s/ Jung Jae Lim Co-Chief Executive Officer and Director April 22, 2026 Jung Jae Lim /s/ Farooq M. Arjomand Chairman of the Board of Directors April 22, 2026 Farooq M. Arjomand /s/ Dennis R. Egidi Director April 22, 2026 Dennis R. Egidi /s/ Charles C. Jeong Director April 22, 2026 Charles C. Jeong /s/ Mi Jeong Lee Director April 22, 2026 Mi Jeong Lee /s/ Alex Yeon Director April 22, 2026 Alex Yeon 61