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 third
quarter ended September 30, 2023.
Key Financial and Operational
Highlights
- Revenue increased 81% to $1.5
million in Q3'23 compared to $0.8 million in Q3'22.
- Ended Q3'23 with 14 open locations,
with one location in development.
- Company-operated
store sales increased $0.7 million, or 80% in the quarter ended
September 30, 2023, compared to the same period in 2022.
- Company-operated
store gross profit was $1.0 million for the quarter ended September
30, 2023, compared to $0.6 million for the same period in
2022.
Q3 2023 and Subsequent
Events
- Strategic
partnership with Sheikh Hamed, the respected owner of Abu Dhabi's
Millennium Hotel, paving the way for Reborn’s dynamic entry into
the vibrant UAE market, establishing its first retail location in
Abu Dhabi, UAE.
- Announced a
strategic partnership with Hour Loop (NASDAQ: HOUR), a leading
online retailer engaged in e-commerce, to offer the Company's
high-quality coffee products on Amazon through the Amazon
Marketplace program.
- Expanded
partnership with Hour Loop to offer new Reborn branded Organic
Volcanic Tea through the Amazon Marketplace program.
- Appointed
Jennifer Tan, a global entrepreneur with 30 years' experience as a
global entrepreneur in diversified businesses in the U.S., Europe
and Asia, to the Board of Directors.
- Launched "Sip
for a Cause" wildfire relief program to assist with efforts
following the devastating wildfires in Maui by pledging to donate
50% of its Kona Coffee sales proceeds to the Maui Food Bank.
- 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.
Management Commentary
“The third quarter of 2023 was focused on new
partnerships to diversify our reach beyond our California-based
retail locations both globally and through e-commerce,” said Jay
Kim, Chief Executive Officer of Reborn. “Our company-operated store
sales were driven by operational execution across our retail
locations. Leveraging our ongoing revenue growth, our expansion
strategy into new online and geographic channels continues to be
supported by new products and strategic marketing initiatives that
are increasing customer engagement.
“During the quarter we partnered with leading
online retailer Hour Loop to offer our high-quality coffee products
on Amazon through the Amazon Marketplace program. Hour Loop
operates as a third-party seller on multiple leading e-commerce
platforms and is one of the top 5 Amazon resellers. Under the
partnership, Hour Loop will purchase, carry and handle Reborn
coffee products as well as manage listings, logistics, marketing,
inventory management, price monitoring and platform integration on
Amazon Marketplace. The collaboration will rapidly enable coffee
enthusiasts across the US to conveniently purchase Reborn Coffee's
exceptional products on Amazon via a trusted provider.
“Recently we expanded our partnership with Hour
Loop to include our new Reborn branded Organic Volcanic Tea. Our
Organic Volcanic Tea is sourced from the Big Island of Hawaii where
tea plants are grown on volcanic slopes within a rainforest 3,500
feet above sea level. With both coffee and tea products readying to
launch on Amazon, combined with Hour Loop’s sales experience and
expansive reach, we believe we can rapidly scale sales to our
retail chain in 2024.
“We also made progress in our global expansion
plans, partnering with Sheikh Hamed, the respected owner of Abu
Dhabi's Millennium Hotel, to establish our first retail location in
Abu Dhabi, UAE. Under the licensing agreement, we will work to
establish Reborn Coffee outlets, roasting, and warehouse facilities
in the UAE, with a goal to establish a minimum of ten locations
within a specified five-year timeframe. With Sheikh Hamed’s wealth
of local knowledge and expertise, we look forward to elevating the
coffee experience in the UAE.
“Our marketing and customer engagement programs
delivered two unique initiatives during the quarter, including
plans to launch a specialty ‘Reborn Cafe N Pet Social’ in
pet-friendly Pasadena, California and a "Sip for a Cause" wildfire
relief program to assist with efforts following the devastating
wildfires in Maui. Reborn Cafe N Pet Social expands on our popular
Reborn Cafe concept with a location anticipated to open in late
2023 that 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. The "Sip for a Cause" program is
assisting with wildfire relief efforts by pledging to donate 50% of
Kona Coffee sales proceeds to the Maui Food Bank.
“Operationally, we were privileged to welcome
Jennifer Tan to our Board of Directors. Jennifer has over 30 years'
experience as a global entrepreneur in diversified businesses in
the U.S., Europe and Asia. She is currently Chief Executive Officer
of Hawaii Volcano Tea LP, a tea farm with multiple locations in the
Volcano area of Hawaii. Jennifer's expertise in global business,
especially her tenure in the premium tea sector, makes her an
invaluable addition to our Board.
“Looking ahead, we continue to execute on our
expansion strategy, 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 with our partners. In addition to geographic
expansion, we are also expanding into e-commerce in partnership
with a leading online retailer. 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,”
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 State 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.
Third Quarter 2023 Financial
Results
Revenues were $1.5 million for the third quarter
of 2023, compared to $0.8 million for the comparable period in
2022, representing an increase of 81%. For the nine months ended
September 30, 2023, revenues were $4.2 million, compared to $2.4
million in the prior year period, an increase of 75%. 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 September 30, 2023, compared to
$0.6 million for the comparable period in 2022. Q3’23
company-operated store gross margins were 70% compared to 71% for
the same period in 2022.
Total operating costs and expenses for the
three-months ended September 30, 2023, were $2.2 million compared
to $1.7 million for the comparable period in 2022, representing an
increase of 30%.
Net loss for the third quarter of 2023 was $0.7
million, compared to a net loss of $0.9 million for the third
quarter of 2022.
Net cash used in operating activities for the
nine months ended September 30, 2023, was $3.0 million, compared to
$2.0 million for the nine months ended September 30, 2022.
Cash and cash equivalents totaled $0.4 million
as of September 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 filings with the Securities and Exchange
Commission ("SEC") including our Form 10-K for the year ended
December 31, 2022 and subsequent reports we file with the SEC from
time to time, 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 |
|
September 30, 2023 |
|
|
December 31,2022 |
|
|
|
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
363,951 |
|
|
$ |
3,019,035 |
|
Accounts receivable, net of allowance for doubtful accounts of $0
and $0, respectively |
|
|
13,813 |
|
|
|
780 |
|
Inventories, net |
|
|
166,281 |
|
|
|
132,343 |
|
Prepaid expense and other current assets |
|
|
1,272,155 |
|
|
|
477,850 |
|
Total current assets |
|
|
1,816,200 |
|
|
|
3,630,008 |
|
Property and equipment, net |
|
|
2,129,577 |
|
|
|
1,581,805 |
|
Operating lease right-of-use asset |
|
|
4,449,188 |
|
|
|
3,010,564 |
|
Other assets |
|
|
45,977 |
|
|
|
235,164 |
|
|
|
|
|
|
|
|
|
|
Total assets |
|
$ |
8,440,942 |
|
|
$ |
8,457,541 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
298,279 |
|
|
$ |
87,809 |
|
Accrued expenses and current liabilities |
|
|
176,202 |
|
|
|
233,053 |
|
Line of credit |
|
|
1,009,027 |
|
|
|
- |
|
Loans payable to financial institutions, current portion |
|
|
140,220 |
|
|
|
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 |
|
|
871,226 |
|
|
|
624,892 |
|
Total current liabilities |
|
|
2,565,461 |
|
|
|
1,066,156 |
|
Loans payable to financial institutions, net of current
portion |
|
|
19,112 |
|
|
|
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 |
|
|
68,601 |
|
|
|
98,697 |
|
Operating lease liabilities, net of current portion |
|
|
3,753,007 |
|
|
|
2,529,985 |
|
Total liabilities |
|
|
6,876,121 |
|
|
|
4,171,012 |
|
|
|
|
|
|
|
|
|
|
Commitments and Contingencies |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders’ equity |
|
|
|
|
|
|
|
|
Common Stock, $0.0001 par value, 40,000,000 shares authorized;
13,262,723 and 13,162,723 shares issued and outstanding at
September 30, 2023 and December 31, 2022 |
|
|
1,326 |
|
|
|
1,316 |
|
Preferred Stock, $0.0001 par value, 1,000,000 shares authorized; no
shares issued and outstanding at September 30, 2023 and December
31, 2022 |
|
|
- |
|
|
|
- |
|
Additional paid-in capital |
|
|
16,602,004 |
|
|
|
16,317,014 |
|
Accumulated deficit |
|
|
(15,038,509) |
|
|
|
(12,031,801) |
|
Total stockholders’ equity |
|
|
1,564,821 |
|
|
|
4,286,529 |
|
|
|
|
|
|
|
|
|
|
Total liabilities and stockholders’ equity |
|
$ |
8,440,942 |
|
|
$ |
8,457,541 |
|
Unaudited Condensed Consolidated
Statements of Operations
|
|
Nine Months Ended September
30, |
|
|
Three Months Ended September
30, |
|
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
Stores |
|
$ |
4,091,512 |
|
|
$ |
2,339,284 |
|
|
$ |
1,487,858 |
|
|
$ |
827,332 |
|
Wholesale and online |
|
|
63,991 |
|
|
|
40,587 |
|
|
|
26,401 |
|
|
|
10,913 |
|
Total net revenues |
|
|
4,155,503 |
|
|
|
2,379,871 |
|
|
|
1,514,259 |
|
|
|
838,245 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Product, food and drink costs—stores |
|
|
1,324,465 |
|
|
|
806,453 |
|
|
|
442,163 |
|
|
|
242,547 |
|
Cost of sales—wholesale and online |
|
|
28,028 |
|
|
|
17,777 |
|
|
|
11,564 |
|
|
|
4,780 |
|
General and administrative |
|
|
5,687,095 |
|
|
|
3,954,997 |
|
|
|
1,793,246 |
|
|
|
1,486,550 |
|
Total operating costs and expenses |
|
|
7,039,588 |
|
|
|
4,779,227 |
|
|
|
2,246,973 |
|
|
|
1,733,877 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from operations |
|
|
(2,884,085) |
|
|
|
(2,399,356) |
|
|
|
(732,714) |
|
|
|
(895,632) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income |
|
|
- |
|
|
|
16,440 |
|
|
|
- |
|
|
|
- |
|
Interest expense |
|
|
(124,967) |
|
|
|
(39,404) |
|
|
|
(18,532) |
|
|
|
(24,428) |
|
Gain (loss) on asset disposition, net |
|
|
10,172 |
|
|
|
- |
|
|
|
10,172 |
|
|
|
- |
|
Total other income (expense), net |
|
|
(114,795) |
|
|
|
(22,964) |
|
|
|
(8,360) |
|
|
|
(24,428) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss before income taxes |
|
|
(2,998,880) |
|
|
|
(2,422,320) |
|
|
|
(741,074) |
|
|
|
(920,060) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income taxes |
|
|
7,828 |
|
|
|
- |
|
|
|
7,828 |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(3,006,708) |
|
|
$ |
(2,422,320) |
|
|
$ |
(748,902) |
|
|
$ |
(920,060) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted |
|
$ |
(0.23) |
|
|
|
(0.20) |
|
|
|
(0.06) |
|
|
|
(0.08) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted |
|
|
13,225,858 |
|
|
|
11,844,900 |
|
|
|
13,241,171 |
|
|
|
11,679,523 |
|
Unaudited Consolidated Statements of Cash
Flows
For the Nine Months Ended September 30, |
|
2023 |
|
|
2022 |
|
|
|
|
|
|
|
|
Cash flows from
operating activities: |
|
|
|
|
|
|
Net loss |
|
$ |
(3,006,708) |
|
|
$ |
(2,422,320) |
|
Adjustments to reconcile net loss to net cash used in operating
activities: |
|
|
|
|
|
|
|
|
Stock compensation |
|
|
285,000 |
|
|
|
225,000 |
|
Operating lease |
|
|
30,732 |
|
|
|
27,643 |
|
Depreciation |
|
|
198,654 |
|
|
|
146,505 |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
(13,033) |
|
|
|
(350) |
|
Inventories |
|
|
(33,938) |
|
|
|
(14,104) |
|
Prepaid expense and other current assets |
|
|
(605,118) |
|
|
|
(64,354) |
|
Accounts payable |
|
|
210,470 |
|
|
|
(24,771) |
|
Accrued expenses and current liabilities |
|
|
(56,851) |
|
|
|
130,051 |
|
Net cash used in operating activities |
|
|
(2,990,792) |
|
|
|
(1,996,700) |
|
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities: |
|
|
|
|
|
|
|
|
Purchases of property and equipment |
|
|
(746,426) |
|
|
|
(333,189) |
|
Net cash used in investing activities |
|
|
(746,426) |
|
|
|
(333,189) |
|
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities: |
|
|
|
|
|
|
|
|
Proceeds from issuance of
common stock |
|
|
- |
|
|
|
7,200,000 |
|
Payment of IPO stock
issuance |
|
|
- |
|
|
|
(997,870) |
|
Proceeds from line of credit |
|
|
1,009,027 |
|
|
|
685,961 |
|
Repayment of line of credit |
|
|
- |
|
|
|
(685,961) |
|
Repayment of loan payable, PPP |
|
|
(35,327) |
|
|
|
- |
|
Proceeds from loan payable, mortgage |
|
|
2,850,000 |
|
|
|
- |
|
Repayment of loan payable, mortgage |
|
|
(2,850,000) |
|
|
|
|
|
Proceeds from loan payable to financial institutions |
|
|
286,032 |
|
|
|
238,982 |
|
Repayment loan payable to financial institutions |
|
|
(177,598) |
|
|
|
(271,703) |
|
Repayment of equipment loan payable |
|
|
- |
|
|
|
(14,474) |
|
Net cash provided by financing activities |
|
|
1,082,134 |
|
|
|
6,154,935 |
|
|
|
|
|
|
|
|
|
|
Net (decrease) increase in
cash |
|
|
(2,655,084) |
|
|
|
3,825,046 |
|
|
|
|
|
|
|
|
|
|
Cash at beginning of
period |
|
|
3,019,035 |
|
|
|
905,051 |
|
|
|
|
|
|
|
|
|
|
Cash at end of period |
|
$ |
363,951 |
|
|
$ |
4,730,097 |
|
|
|
|
|
|
|
|
|
|
Supplemental
disclosures of non-cash financing activities: |
|
|
|
|
|
|
|
|
Issuance of common shares for compensation |
|
$ |
285,000 |
|
|
$ |
- |
|
|
|
|
|
|
|
|
|
|
Supplemental
disclosure of cash flow information: |
|
|
|
|
|
|
|
|
Cash paid during the years for: |
|
|
|
|
|
|
|
|
Lease liabilities |
|
$ |
900,978 |
|
|
$ |
669,265 |
|
Interest |
|
$ |
124,967 |
|
|
$ |
8,578 |
|
Reborn Coffee (NASDAQ:REBN)
過去 株価チャート
から 8 2024 まで 9 2024
Reborn Coffee (NASDAQ:REBN)
過去 株価チャート
から 9 2023 まで 9 2024