Reborn Coffee, Inc. (NASDAQ: REBN) (“Reborn”, or the “Company”), a
California-based retailer of specialty coffee
, has
reported its financial and operational results for the second
quarter ended June 30, 2023.
Key Financial and Operational
Highlights
- Revenue increased 93% to $1.5
million in Q2'23 compared to $0.8 million in Q2'22.
- Ended Q2'23 with 14 open locations,
with four other locations in development.
- Company-operated
store sales increased $0.7 million, or 93% in the quarter ended
June 30, 2023, compared to the same period in 2022.
- Company-operated
store gross profit was $1.0 million for the quarter ended June 30,
2023, compared to $0.5 million for the same period in 2022.
Year-over-year company-operated store gross margins improved to 65%
from 64%.
Q2 2023 and Subsequent
Events
- Launched a
unique initiative to appeal to pet owners including a series of
pet-focused events at selected Reborn locations and the launch of a
flagship "Reborn Cafe N Pet Social" at the soon to be expanded
Pasadena Playhouse location in the dog-friendly city of Pasadena,
California.
- Secured a new
$1.0 million credit facility with DRE, Inc. ("DRE") to fund working
capital requirements and operating expenses.
- Appointed Bill
Koschak to its newly created Advisory Board, an experienced
financial executive bringing over 30 years of corporate, finance,
and accounting leadership to Reborn, having spent the last 14 years
as an operating or corporate CFO.
- Hosted a unique
coffee tasting and marketing event in the Miami Design District
during the Formula 1 Miami Grand Prix that took place May 5-7,
2023.
- Presented at
investor conferences including EF Hutton Inaugural Global
Conference and LD Micro Main Event Invitational XIII
Conference.
Management Commentary
“The second quarter of 2023 was marked by
ongoing revenue growth, execution of our expansion strategy, and
strategic marketing initiatives to build customer engagement,” said
Jay Kim, Chief Executive Officer of Reborn. “Increased company
operated store sales were driven by new locations and marketing,
underscored by new product innovations and effective operational
execution across our retail locations. The second quarter was also
focused on the exploration and launch of new U.S. and overseas
locations, and ongoing joint R&D projects, B2B marketing
expansion and new product launches.
“During the quarter we expanded on our popular
Reborn Cafe concept, which is generating approximately $18 per
customer on average, with plans to launch a specialty ‘Reborn Cafe
N Pet Social’ in pet-friendly Pasadena, California. Anticipated to
open in late 2023, the location will feature indoor seating and an
outdoor patio for pet owners and their furry friends, providing a
cozy and welcoming environment for everyone to enjoy. Snacks and
water bowls will be provided for pets, along with a curated special
pet supplies section. In tandem we are launching a new series of
engaging events at Reborn retail locations in partnership with pet
rescue and adoption organizations, and we are now allowing pets in
outdoor and patio spaces at all our locations.
“We intend to advance our retail location
expansion, preparing for new company-owned retail locations in
Southern California and new flagships in states such as Texas, as
well as global locations including South Korea, Austria, and Dubai.
We are actively conducting due diligence and seeking differentiated
and prime locations that will serve as strategic footprints in
these new markets, preparing us for additional expansion. To this
end, during the quarter we hosted a unique and successful coffee
tasting and marketing event in the Miami Design District during the
Formula 1 Miami Grand Prix. This was the first time we staged a
marketing event on the East Coast, an initiative fueled by plans to
expand into this market through Miami, a gateway to an
international community.
“Looking ahead, we believe our expansion
strategy, driven by sustained customer demand, new product
innovation and effective operational execution across our retail
locations, will support continued revenue growth for Reborn in the
years to come. Fueled by a recent $1 million strategic credit
facility, we plan to accelerate company initiatives including
expansion in new key markets in the U.S. and globally and
developing our franchise opportunities. Our diligent focus on
sustained operational execution is yielding ongoing year-over-year
revenue growth from company operated store sales. We look forward
to additional announcements in the months to come as we build
revenue, growth, and shareholder value,” concluded Kim.
Anticipated Milestones
- Open 4 flagship
Reborn Café locations in the U.S., targeting cities such as San
Francisco, San Diego, Houston, and Kansas City.
- Open up to 20
company-owned retail locations.
- Open up to 20
Franchised locations nationwide.
- Open 10+
overseas locations outside the U.S., targeting countries such as
South Korea, Malaysia, Dubai, Indonesia, Kazakhstan, India,
Thailand, and the UK
- Flagship Store
in Daejeon, South Korea: Showcasing the Cutting-Edge 4th Wave
Coffee Concept. Home to a Stage of the Art Roasting R&D
Facility for innovation
- Open First Pet
Friendly Indoor Café “Reborn N Pet Social in city of Pasadena
California.
- Joint R&D
projects with coffee farms in locations such as Hawaii, Colombia,
Ethiopia and Indonesia.
- Expand B2B
marketing to wholesale clubs and other major outlets and expand
ecommerce marketing.
- Launch new
Reborn-branded products such red tea bag packs and cold brew
cans.
Second Quarter 2023 Financial
Results
Revenues were $1.5 million for the second
quarter of 2023, compared to $0.8 million for the comparable period
in 2022, representing an increase of 93%. For the six months ended
June 30, 2023, revenues were $2.6 million, compared to $1.5 million
in the prior year period. The increase in sales was primarily
driven by the opening of new locations and the continued focus on
marketing efforts to grow brand recognition.
Company-operated store gross profit was $1.0
million for the three-months ended June 30, 2023, compared to $0.5
million for the comparable period in 2022. Q2’23 company-operated
store gross margins improved to 65% compared to 64% for the same
period in 2022.
Total operating costs and expenses for the
three-months ended June 30, 2023, were $2.7 million compared to
$1.7 million for the comparable period in 2022, representing an
increase of 58%.
Net loss for the second quarter of 2023 was $1.3
million, compared to a net loss of $0.9 million for the second
quarter of 2022.
Net cash used in operating activities for the
six months ended June 30, 2023, was $2.3 million, compared to $1.2
million for the six months ended June 30, 2022.
Cash and cash equivalents totaled $0.3 million
as of June 30, 2023, compared to $3.0 million as of December 31,
2022.
About Reborn Coffee
Reborn Coffee, Inc. (NASDAQ: REBN) is focused on
serving high quality, specialty-roasted coffee at retail locations,
kiosks, and cafes. Reborn is an innovative company that strives for
constant improvement in the coffee experience through exploration
of new technology and premier service, guided by traditional
brewing techniques. Reborn believes they differentiate themselves
from other coffee roasters through innovative techniques, including
sourcing, washing, roasting, and brewing their coffee beans with a
balance of precision and craft. For more information, please visit
www.reborncoffee.com.
Forward-Looking Statements
All statements in this release that are not
based on historical fact, including, without limitation, statements
regarding our execution and the expected benefits from our future
operating results and financial position, our business strategy and
plans, market growth and our objects for future operations are
"forward-looking statements." While management has based any
forward-looking statements included in this release on its current
expectations, the information on which such expectations were based
may change. Forward-looking statements contained in this press
release may be identified by the use of words such as “anticipate,”
“believe,” “contemplate,” “could,” “estimate,” “expect,” “intend,”
“seek,” “may,” “might,” “plan,” “potential,” “predict,” “project,”
“target,” “aim,” “should,” "will” “would,” or the negative of these
words or other similar expressions. Forward-looking statements
involve inherent risks and uncertainties which could cause actual
results to differ materially from those in the forward-looking
statements, as a result of various factors including those risks
and uncertainties described in the Risk Factors and Management's
Discussion and Analysis of Financial Condition and Results of
Operations sections of our recent filings with the Securities and
Exchange Commission ("SEC") including our Form 10-Q for the first
quarter of 2023, which can be found on the SEC's website at
www.sec.gov. Such risks, uncertainties, and other factors include,
but are not limited to, the Company's ability to continue as a
going concern as indicated in an explanatory paragraph in the
Company's independent registered public accounting firm's audit
report as a result of recurring net losses, among other things, the
Company's ability to successfully open the additional locations
described herein as planned or at all, the Company's ability to
expand its business both within and outside of California
(including as it relates to increasing sales and growing Average
Unit Volumes at our existing stores), the degree of customer
loyalty to our stores and products, the impact of COVID-19 on
consumer traffic and costs, the fluctuation of economic conditions,
competition and inflation. We urge you to consider those risks and
uncertainties in evaluating our forward-looking statements. We
caution readers not to place undue reliance upon any such
forward-looking statements, which speak only as of the date made.
The Company undertakes no obligation to update these statements for
revisions or changes after the date of this release, except as
required by law.
Contacts
Investor Relations Contact:Chris TysonExecutive
Vice PresidentMZ North AmericaREBN@mzgroup.us 949-491-8235
Company Contact:Reborn Coffee,
Inc.ir@reborncoffee.com
Unaudited Condensed Consolidated Balance
Sheets
As of |
|
June 30, 2023 |
|
|
December 31,2022 |
|
|
|
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
337,492 |
|
|
$ |
3,019,035 |
|
Accounts receivable, net of allowance for doubtful accounts of $0
and $0, respectively |
|
|
2,285 |
|
|
|
780 |
|
Inventories, net |
|
|
124,842 |
|
|
|
132,343 |
|
Prepaid expense and other current assets |
|
|
1,284,323 |
|
|
|
477,850 |
|
Total current assets |
|
|
1,748,942 |
|
|
|
3,630,008 |
|
Property and equipment, net |
|
|
5,864,189 |
|
|
|
1,581,805 |
|
Operating lease right-of-use asset |
|
|
4,209,267 |
|
|
|
3,010,564 |
|
Other assets |
|
|
235,164 |
|
|
|
235,164 |
|
|
|
|
|
|
|
|
|
|
Total assets |
|
$ |
12,057,562 |
|
|
$ |
8,457,541 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
293,911 |
|
|
$ |
87,809 |
|
Accrued expenses and current liabilities |
|
|
389,513 |
|
|
|
233,053 |
|
Line of credit |
|
|
974,027 |
|
|
|
- |
|
Loans payable to financial institutions, current portion |
|
|
194,844 |
|
|
|
44,664 |
|
Loan payable, emergency injury disaster loan (EIDL), current
portion |
|
|
30,060 |
|
|
|
30,060 |
|
Loan payable, payroll protection program (PPP), current
portion |
|
|
40,447 |
|
|
|
45,678 |
|
Operating lease liabilities, current portion |
|
|
840,590 |
|
|
|
624,892 |
|
Total current liabilities |
|
|
2,763,392 |
|
|
|
1,066,156 |
|
Loan payable, mortgage, net of current portion |
|
|
2,850,000 |
|
|
|
- |
|
Loans payable to financial institutions, net of current
portion |
|
|
74,918 |
|
|
|
6,234 |
|
Loan payable, emergency injury disaster loan (EIDL), net of current
portion |
|
|
469,940 |
|
|
|
469,940 |
|
Loan payable, payroll protection program (PPP), net of current
portion |
|
|
80,377 |
|
|
|
98,697 |
|
Operating lease liabilities, net of current portion |
|
|
3,540,212 |
|
|
|
2,529,985 |
|
Total liabilities |
|
|
9,778,839 |
|
|
|
4,171,012 |
|
|
|
|
|
|
|
|
|
|
Commitments and Contingencies |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders’ equity |
|
|
|
|
|
|
|
|
Common Stock, $0.0001 par value, 40,000,000 shares authorized;
13,212,723 and 13,162,723 shares issued and outstanding at June 30,
2023 and December 31, 2022 |
|
|
1,321 |
|
|
|
1,316 |
|
Preferred Stock, $0.0001 par value, 1,000,000 shares authorized; no
shares issued and outstanding at June 30, 2023 and December 31,
2022 |
|
|
|
|
|
|
- |
|
Additional paid-in capital |
|
|
16,567,009 |
|
|
|
16,317,014 |
|
Accumulated deficit |
|
|
(14,289,607 |
) |
|
|
(12,031,801 |
) |
Total stockholders’ equity |
|
|
2,278,723 |
|
|
|
4,286,529 |
|
|
|
|
|
|
|
|
|
|
Total liabilities and stockholders’ equity |
|
$ |
12,057,562 |
|
|
$ |
8,457,541 |
|
Unaudited Condensed Consolidated
Statements of Operations
|
|
Six Months Ended June 30, |
|
|
Three Months Ended June 30, |
|
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
Stores |
|
$ |
2,603,654 |
|
|
$ |
1,511,952 |
|
|
$ |
1,494,603 |
|
|
$ |
775,956 |
|
Wholesale and online |
|
|
37,590 |
|
|
|
29,674 |
|
|
|
24,320 |
|
|
|
12,520 |
|
Total net revenues |
|
|
2,641,244 |
|
|
|
1,541,626 |
|
|
|
1,518,923 |
|
|
|
788,476 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Product, food and drink costs—stores |
|
|
882,302 |
|
|
|
563,906 |
|
|
|
518,483 |
|
|
|
278,952 |
|
Cost of sales—wholesale and online |
|
|
16,464 |
|
|
|
12,997 |
|
|
|
10,652 |
|
|
|
5,484 |
|
General and administrative |
|
|
3,893,849 |
|
|
|
2,468,447 |
|
|
|
2,189,198 |
|
|
|
1,432,432 |
|
Total operating costs and expenses |
|
|
4,792,615 |
|
|
|
3,045,350 |
|
|
|
2,718,333 |
|
|
|
1,716,868 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from operations |
|
|
(2,151,371 |
) |
|
|
(1,503,724 |
) |
|
|
(1,199,410 |
) |
|
|
(928,392 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income |
|
|
- |
|
|
|
16,440 |
|
|
|
- |
|
|
|
1,440 |
|
Interest expense |
|
|
(106,435 |
) |
|
|
(14,976 |
) |
|
|
(94,232 |
) |
|
|
(10,196 |
) |
Total other income (expense), net |
|
|
(106,435 |
) |
|
|
1,464 |
|
|
|
(94,232 |
) |
|
|
(8,756 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss before income taxes |
|
|
(2,257,806 |
) |
|
|
(1,502,260 |
) |
|
|
(1,293,642 |
) |
|
|
(937,148 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income taxes |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(2,257,806 |
) |
|
$ |
(1,502,260 |
) |
|
$ |
(1,293,642 |
) |
|
$ |
(937,148 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted |
|
$ |
(0.17 |
) |
|
|
(0.13 |
) |
|
|
(0.10 |
) |
|
|
(0.08 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted |
|
|
13,216,270 |
|
|
|
11,642,550 |
|
|
|
13,237,580 |
|
|
|
11,667,545 |
|
Unaudited Consolidated Statements of Cash
Flows
For the Six Months Ended June 30, |
|
2023 |
|
|
2022 |
|
|
|
|
|
|
|
|
Cash flows from operating activities: |
|
|
|
|
|
|
Net loss |
|
$ |
(2,257,806 |
) |
|
$ |
(1,502,260 |
) |
Adjustments to reconcile net loss to net cash used in operating
activities: |
|
|
|
|
|
|
|
|
Stock compensation |
|
|
250,000 |
|
|
|
225,000 |
|
Operating lease |
|
|
27,222 |
|
|
|
22,086 |
|
Depreciation |
|
|
135,398 |
|
|
|
97,922 |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
(1,505 |
) |
|
|
(1,293 |
) |
Inventories |
|
|
7,501 |
|
|
|
(14,104 |
) |
Prepaid expense and other current assets |
|
|
(806,473 |
) |
|
|
(28,275 |
) |
Accounts payable |
|
|
206,102 |
|
|
|
(45,590 |
) |
Accrued expenses and current liabilities |
|
|
156,460 |
|
|
|
46,535 |
|
Net cash used in operating activities |
|
|
(2,283,101 |
) |
|
|
(1,199,979 |
) |
|
|
|
|
|
|
|
|
|
Cash flows from investing activities: |
|
|
|
|
|
|
|
|
Purchases of property and equipment |
|
|
(4,417,782 |
) |
|
|
(168,397 |
) |
Net cash used in investing activities |
|
|
(4,417,782 |
) |
|
|
(168,397 |
) |
|
|
|
|
|
|
|
|
|
Cash flows from financing activities: |
|
|
|
|
|
|
|
|
Proceeds from line of credit |
|
|
974,027 |
|
|
|
594,529 |
|
Proceeds from loan payable to shareholders |
|
|
- |
|
|
|
150,000 |
|
Proceeds from loan payable to financial institutions |
|
|
218,864 |
|
|
|
- |
|
Proceeds from loan payable, mortgage |
|
|
2,850,000 |
|
|
|
- |
|
Repayment of loans |
|
|
(23,551 |
) |
|
|
(121,703 |
) |
Repayment of equipment loan payable |
|
|
- |
|
|
|
(9,677 |
) |
Net cash provided by financing activities |
|
|
4,019,340 |
|
|
|
613,149 |
|
|
|
|
|
|
|
|
|
|
Net (decrease) increase in cash |
|
|
(2,681,543 |
) |
|
|
(755,227 |
) |
|
|
|
|
|
|
|
|
|
Cash at beginning of period |
|
|
3,019,035 |
|
|
|
905,051 |
|
|
|
|
|
|
|
|
|
|
Cash at end of period |
|
$ |
337,492 |
|
|
$ |
149,824 |
|
|
|
|
|
|
|
|
|
|
Supplemental disclosures of non-cash financing
activities: |
|
|
|
|
|
|
|
|
Issuance of common shares for compensation |
|
$ |
250,000 |
|
|
$ |
225,000 |
|
|
|
|
|
|
|
|
|
|
Supplemental disclosure of cash flow
information: |
|
|
|
|
|
|
|
|
Cash paid during the years for: |
|
|
|
|
|
|
|
|
Lease liabilities |
|
$ |
546,389 |
|
|
$ |
435,635 |
|
Interest |
|
$ |
106,435 |
|
|
$ |
367 |
|
Reborn Coffee (NASDAQ:REBN)
過去 株価チャート
から 4 2024 まで 5 2024
Reborn Coffee (NASDAQ:REBN)
過去 株価チャート
から 5 2023 まで 5 2024