REBORN COFFEE, INC.

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• Reborn Logistics, a 51%-owned freight-forwarding subsidiary incorporated in September 2025, became the company's dominant revenue stream in Q1 2026, contributing $3.39M in service income (65% of total net revenues) against $2.59M in subcontractor costs; the company now reports two segments (Reborn Coffee and Reborn Logistics) and total revenue rose 208% year-over-year to $5.21M, driven almost entirely by this new logistics line.
• The company introduced a new license income stream of $275,000 (5.3% of revenue) from agreements permitting licensees to operate Reborn Coffee branded stores on three-year terms with ongoing training and marketing support; meanwhile, retail store revenue declined 12.4% to $1.47M across ten company-operated locations (nine in California, one in Kuala Lumpur, Malaysia) plus one franchisee, and wholesale/online sales grew to $80K from $14K.
• As a subsequent event, on April 15, 2026 the company and Arena Investors executed an Amended and Restated Forbearance Agreement restructuring convertible debenture repayment ($400,000 due by April 30, 2026; $400,000 monthly beginning May 30, 2026; full payoff by September 30, 2026; 70% of any future securities-sale proceeds applied to the debt), and on April 29, 2026 the company agreed to a $21M two-closing private placement at $2.00 per share, with proceeds earmarked for flagship store expansion in key metropolitan markets, brand development, working capital, and multi-channel distribution growth; neither closing had occurred as of the filing date.
• The company disclosed substantial doubt about its ability to continue as a going concern, citing an accumulated deficit of $32.5M and a Q1 2026 net loss attributable to shareholders of $1.83M; cash on hand fell to $266,000 from $2.59M at year-end 2025, and while the company entered a $50M equity line of credit with Arena, no drawdowns had been made by the filing date.
• Management concluded that disclosure controls and procedures were ineffective as of March 31, 2026, identifying material weaknesses stemming from inadequate accounting resources and lack of segregation of duties attributed to the small size of the outsourced accounting staff; an $80,000 asset impairment loss was also recorded during the quarter.

• Reborn Logistics, a 51%-owned logistics and freight-forwarding subsidiary incorporated in September 2025, began operations with a Buena Park, CA sublease effective October 1, 2025 (Q4). For fiscal 2025 (annual context; the subsidiary was active primarily in Q4), it generated $929,000 in service revenue and $274,000 in operating income, representing 11.5% of total company revenue.
• The company recorded a $444,216 impairment loss in fiscal 2025 (annual context) on its South Korea and Malaysia subsidiaries, citing continued operating losses, negative cash flows, and absence of revenue; Asia revenue fell to $0 in 2025 from $260,131 in 2024, and the carrying value of the related asset groups was reduced to $727,093.
• In Q4 2025 the company (a) closed a $6.5M equity financing via a Securities Subscription Agreement with director Charles Jeong (issued 1,192,661 shares at $2.50/share in December 2025), (b) terminated all 1,041,667 Arena Investor warrants in December 2025 in exchange for common stock, and (c) CFO Stephan Kim resigned effective October 31, 2025. Nasdaq issued a delisting determination on December 2, 2025 for failure to meet the minimum shareholders' equity requirement; the company submitted a compliance plan on December 9, 2025, and Nasdaq confirmed regained compliance on January 13, 2026 (subsequent event).
• Annual context (fiscal year 2025, not Q4-specific): total revenue was $8.1M (up 36.5% YoY), comprising store revenue of $5.95M (+6.8%), new license income of $1.1M (13.6%), service income of $929K (11.5%), and wholesale/online revenue of $114K (-68%). Net loss was $9.0M; the independent auditor included a going-concern explanatory paragraph. The company operated 10 company-owned locations (9 in California, 1 in Malaysia) as of December 31, 2025.
• Subsequent to year-end, the company entered a Forbearance Agreement with Arena Investors in March 2026, amended and restated in April 2026, establishing a structured cash repayment plan of $400,000/month beginning May 30, 2026 with full debenture payoff by September 30, 2026, and requiring 70% of any future equity-sale proceeds to be applied to the debt. Jung Jae Lim was appointed Co-Chief Executive Officer in March 2026 to lead logistics and supply-chain initiatives.

• Q3 2025 total revenue rose 7.8% to $1.36M, aided by a new $100K territory-license revenue line (recognized over a 10-year term; $70K held as deferred revenue) and modest store growth of 0.7% to $1.13M; wholesale and online sales declined 7.5% to $130K. The company operated 12 California locations plus one each in Daejeon, South Korea, and Kuala Lumpur, Malaysia.
• Between February and August 2025 the company completed four tranches of 10% original-issue-discount secured convertible debentures with Arena Investors for an aggregate $3.75M principal, convertible at 92.5% of the lowest five-day VWAP, carrying 10% PIK interest and an 18-month maturity; 1,041,667 warrants were issued alongside, and a $3.77M derivative liability was recorded on the balance sheet.
• Management disclosed substantial doubt about the company's ability to continue as a going concern: cash fell to $44,045 at quarter-end (from $158K at year-end 2024), stockholders' equity turned negative at $(3.4)M, and accumulated deficit reached $32.5M. Post-quarter, the company entered three subscription agreements for a combined $7M in common stock (3.6M shares at $1.818–$2.00 per share) with staged payment schedules extending into April 2026.
• Nine-month operating lease expense declined from $1.16M to $0.77M, and the company recorded a $434K asset impairment loss plus a $75K gain on sale of property; net property and equipment dropped from $4.08M to $3.44M, indicating disposition or write-down of store-related assets during the period.
• Q3 net loss widened to $3.45M (prior-year $0.72M), driven by $1.33M in stock-based compensation, $0.57M in interest and debt-discount amortization, and a 44.7% increase in product and food costs; management also reported that disclosure controls and procedures were ineffective due to material weaknesses in accounting staffing and segregation of duties.