Reborn Coffee(REBN) - 2024 Q4 - Annual Report

Financial Performance - Total net revenues for the year ended December 31, 2024, were approximately $5.9 million, an increase of $0.4 million or 7.6% compared to $5.5 million in 2023, driven by new location openings and marketing efforts [260]. - The company reported a net loss of approximately $4.8 million for the year ended December 31, 2024, compared to a net loss of $4.7 million in 2023, reflecting a 1.7% increase in losses [260]. - Net cash used in operating activities was approximately $3.5 million for the year ended December 31, 2024, compared to $3.2 million in 2023, indicating ongoing cash flow challenges [268][269]. Revenue Composition - Retail store revenue accounted for approximately 98% of total revenue, while wholesale and online revenue made up between 4% to 6% of total revenue [253][254]. Cost and Expenses - Product, food, and drink costs for stores increased to approximately $2.1 million in 2024, up 15.7% from $1.8 million in 2023, influenced by new location openings and increased sales [261]. - General and administrative expenses rose to approximately $8.3 million in 2024, a 1.2% increase from $8.2 million in 2023, primarily due to higher occupancy and labor costs [262]. Cash Flow and Financing - The company utilized $1.0 million in investing activities in 2024, down from $2.4 million in 2023, primarily for property and equipment purchases related to location openings [270]. - Financing activities provided net cash of $4.4 million in 2024, an increase from $2.7 million in 2023, mainly from common stock issuances [271]. Going Concern and Risks - The company has a history of operating losses and negative cash flow, raising substantial doubt about its ability to continue as a going concern [264]. - As a "smaller reporting company," the company is not required to provide quantitative and qualitative disclosures about market risk [282]. Taxation - The company files income tax returns in the U.S. federal and California state jurisdictions, as well as in South Korea and Malaysia, where income taxes are not material [277]. - Upon closing of the offering, the company will be taxed at the prevailing U.S. corporate tax rates and will record a provision for anticipated tax consequences [278]. Accounting and Reporting - Management utilizes estimates and judgments in preparing financial statements, affecting reported amounts of assets, liabilities, revenues, and expenses [280]. - The company does not have any off-balance sheet arrangements that require disclosure, but enters into operating lease commitments and other contractual obligations recognized in financial statements [279]. - All other issued but not yet effective accounting pronouncements are determined to be inapplicable or insignificant to the company [281]. Stock and Corporate Actions - A reverse stock split of 1-for-8 was executed on January 12, 2024, with trading adjusted accordingly on January 22, 2024 [257].