BREA, Calif., USA – Reborn Coffee, Inc., a California-based retailer of specialty coffee, has reported its financial and operational results for the second quarter ended June 30, 2022. On August 16, 2022, the Company successfully completed its upsized initial public offering (the “IPO”), selling 1,440,000 shares at $5.00 per share. Net proceeds raised in Reborn’s IPO were $6.2 million, after deducting underwriting discounts and commissions.
The Company’s common stock commenced trading on the Nasdaq Capital Market under the ticker symbol “REBN”.
Four new company-owned retail locations are in development in Southern California.
Revenue increased 63% to $0.8 million in Q2’22 compared to $0.5 million in Q2’21.
“The second and third quarters of 2022 were significant milestones for our company with our transition to a public company and the addition of new capital to accelerate our growth strategy,” said Jay Kim, Chief Executive Officer of Reborn.
“We believe our Nasdaq listing will help elevate the Company’s public profile, expand our stockholder base, improve liquidity and enhance stockholder value. The net proceeds to Reborn from the IPO amounted to $6.2 million, which will provide us with the financial capability to achieve our goals.”
“During the second quarter we delivered strong revenue performance from strong customer demand for our high quality, specialty-roasted coffee in shopping plazas and upscale areas at our nine retail locations. As pioneers of the emerging ‘Fourth Wave’ movement, we are redefining specialty coffee as an experience that demands much more than premium quality. We are committed to constantly developing our bean processing methods, researching design concepts, reinventing new ways of drinking coffee at our locations, and growing wholesale and online operations.”
“Looking ahead, with support from the IPO capital, we will continue to execute on our rapid growth as we strategically expand our footprint in existing and new markets. We are focused on expanding our customer base at new retail stores with inviting atmospheres designed for comfort and convenience, as well as through sales of pour over packs and whole bean ground coffee bags.
We have four additional company-owned retail locations in Southern California in development (which, once opened, will bring our total count to thirteen) and are developing our franchise opportunity. We expect to provide additional announcements on our new location pipeline timeline in the coming weeks.”
Stephan Kim, Chief Financial Officer of Reborn Coffee, added, “Combined with our successful IPO, we expect that current cash and cash equivalents will be sufficient to support current operations into 2023. We believe we now have sufficient cash to meet our current pipeline of new locations without the need to raise additional funds.”
“As a fully reporting public company, and from a best practices perspective, we will commence a cadence of quarterly and year-end financial results conference calls for analysts and investors. We look forward to this additional communication as we work to bring long-term value to our stockholders,” concluded Kim.
Anticipated Milestones
- Open up to 40 company-owned retail locations.
- Open 4 flagship locations in the U.S., targeting cities such as San Francisco, San Diego, Houston, and Kansas City.
- Open 4 overseas locations outside the U.S., targeting countries such as South Korea, Austria, and Dubai.
- Joint R&D projects with coffee farms in locations such as Hawaii and Columbia.
- Expand B2B marketing to wholesale clubs and other major outlets and expand ecommerce marketing.
- Launch new Reborn-branded products such as cascara tea packs, red tea bag packs and cold brew cans.
Reborn Coffee: Second Quarter 2022 Financial Results
Revenues were approximately $0.8 million for the three-month period ended June 30, 2022, compared to $0.5 million for the comparable period in 2021, representing an increase of 63%. The increase in sales was primarily driven by the opening of the Corona Del Mar, Laguna Woods and Santa Anita locations during 2021, and to the continued focus on marketing efforts to grow brand recognition.
Total operating costs and expenses for the three-month period ended June 30, 2022, were $1.7 million compared to $0.8 million for the comparable period in 2021, representing an increase of approximately 115%, primarily due to increases in product, food and drink costs, and general and administrative expenses. These increases were driven by opening of new locations, general inflationary pressures and the seasonal fluctuations in cost of ingredients, and expenses associated with preparing to become a public company.
Net loss for the second quarter of 2022 was $0.9 million, compared to a net loss of $0.3 million for the second quarter of 2021.
Net cash used in operating activities for the six months ended June 30, 2022 was approximately $1.2 million, compared to approximately $0.5 million for the six months ended June 30, 2021.
Cash and cash equivalents totaled $0.15 million as of June 30, 2022, which does not include net proceeds from the Company’s IPO, which was completed in August 2022.
