Reborn Coffee ends agreement with investment firm

BREA, CA - Reborn Coffee , Inc. (NASDAQ:REBN), a retail coffee chain with a market capitalization of $16 million, has terminated its Standby Equity Purchase Agreement (SEPA) with investment partner Yorkville, effective February 12, 2025. According to InvestingPro data, the company’s stock has shown remarkable performance with a 162% return year-to-date, despite high price volatility. The company announced the decision today, following a notice sent to Yorkville last week.

The original agreement, established on February 12, 2024, allowed Reborn Coffee to optionally sell up to $5 million of its common stock to Yorkville during a period ending March 1, 2027. The company has exercised its right to end the agreement early, which required a five trading days’ notice and carries no penalties or fees for termination. With impressive gross profit margins of 68%, but facing cash burn challenges according to InvestingPro analysis, this decision could impact the company’s financial flexibility.

During the lifespan of the SEPA, Reborn Coffee did not sell any shares to Yorkville, except for the 64,656 shares issued as part of the commitment fee when the agreement was signed. The termination of this financial instrument comes without any financial detriment to Reborn Coffee.

The company, headquartered at 580 N. Berry Street, Brea, CA, operates under the retail-eating places industry category. Currently trading at $4.15, the stock appears undervalued based on InvestingPro’s Fair Value analysis. Reborn Coffee, Inc. has been incorporated in Delaware and is identified by the IRS with the number 47-4752305. The fiscal year for the company concludes on December 31, with the next earnings report expected on March 28, 2025.

This strategic move by Reborn Coffee, Inc. was reported in a filing with the Securities and Exchange Commission (SEC) and is part of the company’s current financial maneuvering. The details of the termination were disclosed in the company’s latest 8-K filing, which serves as an official record of significant corporate events.

The coffee chain’s decision to terminate the SEPA with Yorkville is now a matter of public record, with no further equity to be offered under this specific agreement. The information provided is based on the statement released in the SEC filing by Reborn Coffee, Inc.

In other recent news, U.S. specialty coffee retailer, Reborn Coffee, Inc., has solidified a substantial distribution agreement with its South Korean subsidiary, Bbang Ssaem Bakery F&B. This deal is set to distribute Reborn’s signature preservative-free baked goods across approximately 8,000 stores of a prominent coffee chain in South Korea. To accommodate the increased demand, the company has boosted its production capacity by establishing a new facility at the site of the former Tom N Toms bakery.

Jay Kim, CEO of Reborn Coffee, emphasized that this partnership introduces a significant new revenue stream and marks a critical juncture for the company. The strategic expansion aims to enhance Reborn Coffee’s market presence and revenue potential in the Asian market, in line with the company’s ongoing commitment to quality, sustainability, and strategic international growth.

While the company’s management is positive about the new distribution agreement, it’s important to note that forward-looking statements are based on current expectations and are subject to risks and uncertainties. These recent developments provide an insightful look into Reborn Coffee’s current business trajectory.

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