BREA, Calif., USA – Reborn Coffee Inc. (Nasdaq: REBN), a leader in the specialty coffee industry, yesterday announced the conversion of $1.0 million of outstanding debt held by the Company’s Vice Chairman of the Board of Directors, Dennis Egidi, into common equity.
On June 26, 2023, the Company secured a $1.0 million credit facility with DRE, Inc. (“DRE”), owned and controlled by Dennis Egidi, to fund working capital requirements and operating expenses.
Per the terms of the exchange agreement, DRE agreed to exchange, in consideration of surrender and termination of the Loan Note, with an outstanding balance (including interest accrued thereon) of $1,000,000, for 1,666,667 shares of common stock, par value $0.0001 per share, of the Company at a price per share equal to $0.60 per share.
Pursuant to the Exchange Agreement, Reborn Coffee also granted DRE piggyback registration rights with regard to the Exchange Shares.
“This exchange of debt for equity by our longstanding Director reflects a significant vote of confidence for what our team has been building at Reborn, and reduces our debt by $1.0 million,” said Jay Kim, Chief Executive Officer of Reborn.
“With Dennis’s deep commitment and belief in our company’s potential and strategic direction, he believes this conversion will not only strengthen the company’s financial structure but also signal to investors and stakeholders the promising future that lies ahead for Reborn.
The conversion rate of $0.60 per share also reflects a positive outlook for Reborn’s stock and operations. This rate is indicative of the company’s current valuation and its potential for growth in the coffee market.”
