Reborn Coffee's Losses Mount Amid Soaring Costs, Liquidity Concerns

TL;DR

**REBN is burning cash at an alarming rate, and without a massive capital injection, this coffee dream is brewing a nightmare for investors.**

AI Summary

Reborn Coffee, Inc. (REBN) reported a significant increase in net loss for the nine months ended September 30, 2025, reaching $10,980,889, a substantial rise from $3,026,904 in the prior year. This was primarily driven by a surge in operating costs, including $3,995,609 in stock compensation expense and $1,543,313 in professional fees for the nine months ended September 30, 2025. Total net revenues increased to $4,884,662 for the nine months ended September 30, 2025, up from $4,149,892, largely due to a 22% increase in store revenues to $4,615,853. However, wholesale and online revenues declined by 53.7% to $168,809. The company's cash and cash equivalents plummeted from $158,215 at December 31, 2024, to $44,045 at September 30, 2025, indicating severe liquidity challenges. Total liabilities more than doubled to $9,620,143 from $5,186,381, with a new convertible debt of $1,253,086 and a derivative liability of $3,768,692 contributing significantly. The accumulated deficit expanded to $32,543,761, and the company explicitly stated substantial doubt about its ability to continue as a going concern.

Why It Matters

This filing reveals a company in deep financial distress, which is critical for investors. The substantial doubt about Reborn Coffee's ability to continue as a going concern signals a high risk of bankruptcy or significant dilution for existing shareholders. Employees face job insecurity as the company struggles with mounting losses and dwindling cash. Customers might see store closures or reduced service quality if the financial situation deteriorates further. In the competitive coffee market, REBN's struggles highlight the challenges smaller players face against giants like Starbucks, making it a cautionary tale for the broader market about the difficulties of scaling a niche brand without robust capital.

Risk Assessment

Risk Level: high — The company explicitly states "substantial doubt about the ability of the Company to continue as a going concern" due to a net loss of $10,980,889 for the nine months ended September 30, 2025, and an accumulated deficit of $32,543,761. Cash and cash equivalents have fallen to a critically low $44,045, and total liabilities have surged to $9,620,143, indicating severe liquidity and solvency issues.

Analyst Insight

Investors should exercise extreme caution and consider divesting REBN shares due to the explicit going concern warning, rapidly deteriorating financial position, and significant accumulated deficit. New investors should avoid initiating a position until the company demonstrates a clear path to profitability and secures substantial, stable financing.

Financial Highlights

debt To Equity

N/A

revenue

$4,884,662

operating Margin

N/A

total Assets

$6,198,248

total Debt

$9,620,143

net Income

-$10,980,889

eps

-$0.68

gross Margin

N/A

cash Position

$44,045

revenue Growth

+17.7%

Revenue Breakdown

Key Numbers

• $10,980,889 — Net Loss (Increased significantly for the nine months ended September 30, 2025, from $3,026,904 in 2024.)
• $32,543,761 — Accumulated Deficit (As of September 30, 2025, indicating substantial historical losses.)
• $44,045 — Cash and Cash Equivalents (Critically low as of September 30, 2025, down from $158,215 at December 31, 2024.)
• $9,620,143 — Total Liabilities (More than doubled from $5,186,381 at December 31, 2024, driven by new debt and derivative liabilities.)
• $4,884,662 — Total Net Revenues (Increased for the nine months ended September 30, 2025, from $4,149,892 in 2024.)
• $3,995,609 — Stock Compensation Expense (Significant non-cash operating cost for the nine months ended September 30, 2025.)
• $1,253,086 — Convertible Debt (New liability as of September 30, 2025, net of debt discount.)
• $3,768,692 — Derivative Liability (New liability as of September 30, 2025, contributing to increased total liabilities.)
• $0.68 — Loss Per Share (Basic and Diluted) (For the three months ended September 30, 2025, up from $0.30 in 2024.)
• 5,976,322 — Common Stock Outstanding (As of November 19, 2025, indicating potential dilution from prior periods.)

Key Players & Entities

• Reborn Coffee, Inc. (company) — Registrant and primary entity in the filing
• Nasdaq Stock Market LLC (regulator) — Exchange where REBN common stock is registered
• Reborn Global Holdings, Inc. (company) — Wholly-owned subsidiary operating retail coffee stores
• Reborn Coffee Franchise, LLC (company) — Wholly-owned franchisor subsidiary
• Reborn Realty, LLC (company) — Wholly-owned subsidiary for real property acquisition
• Reborn Coffee Korea, Inc. (company) — Wholly-owned subsidiary operating a retail store in South Korea
• Reborn Malaysia, Inc. (company) — Majority-owned subsidiary operating a retail store in Malaysia
• SEC (regulator) — Securities and Exchange Commission
• Bloomberg (company) — Financial news organization

FAQ

Risk Factors

• Going Concern Uncertainty [high — financial]: The company explicitly stated substantial doubt about its ability to continue as a going concern due to a significant increase in net loss to $10,980,889 and a drastic reduction in cash and cash equivalents to $44,045 as of September 30, 2025.
• Surging Operating Costs [high — financial]: Operating costs increased substantially, driven by $3,995,609 in stock compensation expense and $1,543,313 in professional fees for the nine months ended September 30, 2025, significantly widening the net loss.
• Deteriorating Liquidity [high — financial]: Cash and cash equivalents decreased from $158,215 at December 31, 2024, to $44,045 at September 30, 2025, indicating severe liquidity challenges.
• Ballooning Liabilities [high — financial]: Total liabilities more than doubled to $9,620,143 from $5,186,381, with new convertible debt of $1,253,086 and a derivative liability of $3,768,692 being major contributors.
• Increased Competition [medium — market]: The company faces increased competition in its market and must effectively compete to maintain and expand its customer base.
• Growth and Expense Management [medium — operational]: The company's ability to effectively sustain and manage its growth and future expenses is a key risk factor.
• Evolving Market and Technology [medium — market]: The market for the company's products is new and evolving, requiring the ability to scale and update its platform in response to customer needs and rapid technological change.
• Macro-economic Conditions [medium — market]: Global macro-economic conditions, including inflation and rising interest rates, pose risks to the company's financial performance and outlook.

Industry Context

The coffee retail industry is highly competitive, with established global brands and numerous independent cafes. Trends include a growing demand for specialty coffee, sustainable sourcing, and convenient ordering options (online/app-based). Companies are also focusing on unique in-store experiences and plant-based milk alternatives. Reborn Coffee operates within this dynamic environment, facing pressure to innovate and differentiate.

Regulatory Implications

As a publicly traded company, Reborn Coffee is subject to SEC regulations, including timely and accurate financial reporting. The explicit disclosure of substantial doubt about its going concern status triggers heightened scrutiny from regulators and investors regarding its financial viability and future prospects.

What Investors Should Do

1. Monitor cash burn rate closely.
2. Evaluate the sustainability of store revenue growth.
3. Assess the impact of new debt and derivative liabilities.
4. Scrutinize stock compensation expense.
5. Consider the implications of the going concern warning.

Key Dates

• 2025-09-30: End of Nine Months Reporting Period — Reported a net loss of $10,980,889 and cash reserves of $44,045, highlighting severe financial distress and going concern issues.
• 2025-12-31: Prior Year End — Cash and cash equivalents were $158,215 and total liabilities were $5,186,381, indicating a significant deterioration in financial health over the subsequent nine months.

Glossary

Accumulated deficit

The total net losses a company has incurred since its inception, minus any net profits. It represents a cumulative loss that has not been offset by profits. (Indicates substantial historical losses for Reborn Coffee, Inc., reaching $32,543,761 as of September 30, 2025.)

Convertible debt

A type of debt that can be converted into equity (stock) of the issuing company under certain conditions. (A new liability for Reborn Coffee, Inc. as of September 30, 2025, amounting to $1,253,086 (net of discount), adding to its debt burden.)

Derivative liability

A financial obligation arising from a derivative contract, whose value is derived from an underlying asset, index, or rate. These can be complex and volatile. (A significant new liability of $3,768,692 for Reborn Coffee, Inc. as of September 30, 2025, contributing to the sharp increase in total liabilities.)

Going concern

The assumption that a company will continue to operate for the foreseeable future. If there is substantial doubt about this, it must be disclosed. (Reborn Coffee, Inc. explicitly stated substantial doubt about its ability to continue as a going concern, signaling severe financial distress.)

Stock compensation expense

The cost recognized for employee stock options, restricted stock units, and other equity-based awards granted to employees. It is typically a non-cash expense. (A major operating expense for Reborn Coffee, Inc., totaling $3,995,609 for the nine months ended September 30, 2025, significantly impacting net loss.)

Year-Over-Year Comparison

For the nine months ended September 30, 2025, Reborn Coffee, Inc. experienced a significant increase in its net loss to $10,980,889, a stark contrast to the $3,026,904 loss in the prior year. Total net revenues saw a modest increase to $4,884,662, driven by a 22% rise in store revenues, but this was overshadowed by a 53.7% decline in wholesale and online sales. The company's financial health has deteriorated considerably, with cash and cash equivalents plummeting to $44,045 from $158,215, and total liabilities more than doubling to $9,620,143, largely due to new debt instruments. The accumulated deficit has also widened substantially, and the company has explicitly raised concerns about its ability to continue as a going concern.

Key Financial Figures

• $0.0001 — ange on which registered Common Stock, $0.0001 par value per share REBN The Nasdaq Sto
• $0 — ine months ended September 30, 2025 and $0 for each of the prior comparable period

Filing Documents

• ea0266120-10q_reborn.htm (10-Q) — 968KB
• ea026612001ex31-1_reborn.htm (EX-31.1) — 10KB
• ea026612001ex32-1_reborn.htm (EX-32.1) — 4KB
• 0001213900-25-112680.txt ( ) — 5235KB
• rebn-20250930.xsd (EX-101.SCH) — 54KB
• rebn-20250930_cal.xml (EX-101.CAL) — 56KB
• rebn-20250930_def.xml (EX-101.DEF) — 235KB
• rebn-20250930_lab.xml (EX-101.LAB) — 427KB
• rebn-20250930_pre.xml (EX-101.PRE) — 255KB
• ea0266120-10q_reborn_htm.xml (XML) — 488KB

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 18 Item 3

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 24 Item 4

Controls and Procedures

Controls and Procedures 24 PART II OTHER INFORMATION 25 Item 1

Legal Proceedings

Legal Proceedings 25 Item 1A

Risk Factors

Risk Factors 25 Item 2 Unregistered Sales of Equity Securities and Use of Proceeds 25 Item 6 Exhibits 26 Signature 27 i NOTE REGARDING FORWARD-LOOKING STATEMENTS This Quarterly Report on Form 10-Q contains forward-looking 21E of the Securities Exchange Act of 1934, as amended, (the "Exchange Act") that are based on our management's beliefs and assumptions and on information currently available to management, and which statements involve substantial risk and uncertainties. All statements contained in this Quarterly Report on Form 10-Q other than statements of historical fact, including statements regarding our future operating results and financial position, our business strategy and plans, market growth and trends, and objectives for future operations are forward-looking statements. Forward-looking statements generally relate to future events or our future financial or operating performance. In some cases, you can identify forward-looking statements because they contain words such as "may," "will," "should," "expects," "plans," "anticipates," "could," "intends," "target," "projects," "contemplates," "believes," "estimates," "predicts," "potential," or "continue" or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans or intentions. These risks and uncertainties include, among other things, risks related to our expectations regarding the impact of the coronavirus pandemic (the "COVID-19 pandemic"), including the easing of related regulations and measures as the pandemic and its related effects begin to abate or have abated, on our business, results of operations, financial condition, and future profitability and growth; our expectations regarding the impact of the evolving COVID-19 pandemic on the businesses of our customers, partners and suppliers, and the economy, as

—FINANCIAL INFORMATION

PART I—FINANCIAL INFORMATION

Unaudited Consolidated Financial Statements

Item 1. Unaudited Consolidated Financial Statements. Reborn Coffee, Inc. and Subsidiaries Unaudited Condensed Consolidated Balance Sheets September 30, December 31, 2025 2024 ASSETS Current assets: Cash and cash equivalents $ 44,045 $ 158,215 Accounts receivable, net 147,459 67,309 Inventory, net 200,662 169,615 Prepaid expenses and other current assets 274,950 467,613 Total current assets 667,116 862,752 Property and equipment, net 3,443,352 4,080,004 Operating lease right-of-use asset 1,894,592 2,653,179 Other assets 193,188 193,188 Total assets $ 6,198,248 $ 7,789,123 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 895,738 $ 558,444 Accrued expenses and current liabilities 535,142 774,826 Deferred revenue 70,000 - Loans payable to financial institutions, current 132,164 111,300 Loans payable to others 449,027 427,073 Convertible debt, net of debt discount of $ 2,913,579 1,253,086 - Derivative liability 3,768,692 - Loan payable, emergency injury disaster loan, current 30,060 30,060 Loan payable, payroll protection program, current 26,307 37,494 Operating lease liabilities, current 794,492 844,177 Total current liabilities 7,954,708 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 1,169,777 1,906,760 Total liabilities 9,620,143 5,186,381 Commitments and Contingencies (Note 11) Stockholders' equity Common Stock, $ 0.0001 par value, 40,000,000 shares authorized; 5,927,830 and 4,274,508 shares issued and outstanding at September 30, 2025 and December 31, 2024, respectively 594 428 Common stock issuable, $ 0.0001 par value, 420,000 shares issuable 1,460,000 1,470,000 Preferred Stock, $ 0.0001 par value, 1,000,000 shares authorized; no shares issued and outstanding at

View Full Filing

View this 10-Q filing on SEC EDGAR