Reborn Coffee(REBN) - 2023 Q4 - Annual Report

Revenue and Sales Performance - Reborn Coffee's total net revenues increased by 45.6% to $5.95 million in 2023 compared to$3.24 million in 2022, driven by new store openings and marketing efforts[255] - Retail store revenue accounted for 98% of total revenue, while wholesale and online revenue made up 2% in 2023[244][245] - The company introduced Pour Over Packs to hotels, increasing B2B sales[239] Costs and Expenses - Product, food and drink costs increased by 37.9% to $1.76 million in 2023, partially due to new store openings[256] - General and administrative expenses rose by 28.9$7.97 million in 2023, mainly due to increased occupancy and labor costs from new locations[257][258] Financial Performance and Losses - Net loss increased to $3.99 million in 2023 from$3.55 million in 2022[255] - Net cash used in operating activities was $2.79 million in 2023, primarily due to a net loss of$3.7 million[264] Expansion Plans - Reborn Coffee plans to open up to 20 company-owned retail locations by the end of 2023[236] Cash and Loan Balances - Reborn Coffee's cash balance was $676,000 as of December 31, 2023[267] - The company had an outstanding loan balance of$1.13 million with Square Capital as of December 31, 2023[268] - The company borrowed $500,000 under the EIDL Loan with an interest rate of 3.75$731 began in May 2022[270] - The company received a $10,000 grant under the EIDL program, which was recorded as income in 2020[270] - The company secured two PPP loans totaling$282,000 ($115,000 in May 2020 and$167,000 in February 2021) with an interest rate of 1.00% per annum[272] - The initial PPP loan of $115,000 was fully forgiven by December 31, 2021[272] Leasing and Tax Information - The company leases all retail locations, with rent expenses recorded on a straight-line basis over the lease term[274] - The company files income tax returns in the U.S. federal and California state jurisdictions and will be taxed at prevailing U.S. corporate rates[275] Accounting and Financial Reporting - The company has no off-balance sheet arrangements requiring disclosure under current regulations[276] - Financial statement preparation involves critical accounting estimates based on historical experience and management assumptions[277] - The company has determined that recent accounting pronouncements will not have a material impact on its financial position[278] - As a smaller reporting company, the company is not required to provide quantitative and qualitative disclosures about market risk[280]