Reborn Coffee, Inc. Annual Report: A Simple Breakdown

I’ve put together this guide to help you understand how Reborn Coffee, Inc. performed this year. We will skip the dense legal jargon and focus on how the business is actually doing, how they are handling their money, and what you should watch as an investor.

1. What does this company do?

Reborn Coffee is a specialty coffee retailer based in Brea, California. They call themselves "Fourth Wave" pioneers, using a unique "magnetized water" process to clean beans and improve flavor. They operate ten retail locations—nine in California and one in Malaysia. Beyond their storefronts, they are growing their business-to-business sales by supplying coffee and equipment to hotels and offices, and they sell products online through Amazon and their own website. Their model relies on a mix of company-owned stores, wholesale distribution, and a planned move into franchising.

2. Financial performance

The company is currently in a "growth at all costs" phase, which has proven expensive:

• Widening losses: They lost $8.9 million in 2025, nearly double their $4.8 million loss in 2024.
• Accumulated debt: They have an accumulated deficit of $30.7 million, reflecting that their spending on rent, labor, and marketing currently outpaces their revenue from coffee sales.

3. Major wins and strategic shifts

• New leadership: They hired a new Co-CEO, Jung Jae Lim, in March 2026. His background in logistics suggests a strategic focus on improving operational efficiency and lowering costs.
• Diversification: They introduced a "Tea and Bakery" menu to increase the average amount each customer spends per visit. They are also pursuing partnerships with corporate clients like Google to create revenue streams that don't rely solely on store foot traffic.
• Franchise status: While they have a franchise subsidiary, they have zero active franchisees. They aim to launch this program in 2026 to shift the capital-intensive cost of opening new stores to third-party operators.

4. Financial health

The company’s filing includes a "going concern" warning, which means auditors are monitoring whether the company has enough cash to sustain operations. To manage this, they rely on:

• Debt restructuring: They negotiated with lenders to delay repayments until late 2026, providing temporary breathing room.
• Selling stock: They use an "Equity Line of Credit" to sell more shares when they need cash. While this keeps the business running, it issues more shares, which reduces your ownership percentage and the value of your current holdings.

5. Key risks

• Survival risk: The company is burning through cash quickly. Their ability to continue operations depends on their success in raising more capital or reaching profitability.
• Heavy competition: They compete against massive coffee chains that possess significantly higher brand recognition and larger marketing budgets.
• Geographic concentration: With most stores located in California, the company is highly vulnerable to local economic shifts, changes in labor laws, and regional supply chain disruptions.

6. Future outlook

Management is betting on scale to turn the business around. Their 2026 roadmap includes launching a barista training school to generate extra income and ensure quality for future franchises. They are also focused on expanding into grocery stores and new states, with the goal of using their new leadership’s expertise to streamline logistics and lower costs.

Investor Takeaway: Reborn Coffee is in a high-risk, high-growth phase. When deciding whether to invest, consider whether you believe their new leadership can successfully pivot to a franchise-based model and achieve profitability before their current cash reserves and financing options are exhausted.