Reborn Coffee (REBN) risk factors, FY2025 10-K

Risks Related to Our Business

1. 01Evolving consumer preferences and tastes may adversely affect our business
2. 02Our financial condition and annual results of operations are subject to, and may be adversely affected by, a number of factors, many of which are also largely outside our control and as such our results may fluctuate significantly and may not fully reflect the underlying performance of our business
3. 03Our marketing programs may not be successful, and our new menu items and advertising campaigns may not generate increased sales or profits
4. 04Our growth strategy depends in part on opening new locations in existing and new markets. We may be unsuccessful in opening new locations or establishing new markets, which could adversely affect our growth
5. 05New locations, once opened, may not be profitable or may close, and the increases in average per location revenue and comparable sales that we have experienced in the past may not be indicative of future results
6. 06If our new locations do not perform as planned or close, our business and future prospects could be harmed. In addition, an inability to achieve our expected average location revenue could harm our business
7. 07Our failure to manage our growth effectively could harm our business and operating results
8. 08Damage to our brand or reputation and negative publicity could negatively impact our business, financial condition and results of operations
9. 09Our inability to identify, recruit and retain qualified individuals for our locations could slow our growth and adversely impact our ability to operate
10. 10Our expansion into new domestic markets may present increased risks, which could affect our profitability
11. 11We are subject to the risks associated with leasing space subject to long-term non-cancelable lease and, in the event we chose to purchase real property in the future, owning real estate
12. 12Our locations are geographically concentrated in California, and we could be negatively affected by conditions specific to that state
13. 13Interruption of our supply chain of coffee or other ingredients, coffee machines and other restaurant equipment or packaging could affect our ability to produce or deliver our products and could negatively impact our business and profitability
14. 14The availability and prices of coffee beans and other commodities are subject to significant volatility. We purchase, roast and sell high-quality whole bean coffee beans and related coffee products
15. 15Changes in U.S. and international trade policies, including the export and import controls and laws, may adversely impact our business and operating results
16. 16If we fail to offer high-quality customer experience, our business and reputation will suffer
17. 17If we fail to maintain adequate operational and financial resources, particularly if we continue to grow rapidly, we may be unable to execute our business plan or maintain high levels of service and customer satisfaction
18. 18Pandemics or disease outbreaks such as the COVID-19 pandemic have had, and may continue to have, an effect on our business and results of operations35% rewritten

Risks Related to Our Brand

1. 19Our success depends substantially on the value of our brand and failure to preserve its value could have a negative impact on our financial results
2. 20We may not be able to adequately protect our intellectual property, including trademarks, trade names, and service marks, which, in turn, could harm the value of our brand and adversely affect our business
3. 21If we or our future franchise partners are unable to protect our customers’ credit and debit card data or confidential information in connection with process the same or confidential employee information, we could be exposed to data loss, litigation, liability and reputational damage

Risks Related to People and Culture

1. 22Changes in the availability of and the cost of labor could harm our business
2. 23We depend on our executive officers and other key employees, and the loss of one or more of these employees or an inability to attract and retain other highly skilled employees could harm our business30% rewritten
3. 24Our culture has contributed to our success, and if we cannot maintain this culture as we grow, we could lose the high employee engagement fostered by our culture, which could harm our business
4. 25Unionization activities may disrupt our operations and affect our profitability

Risks Related to Regulation and Litigation

1. 26Changes in statutory, regulatory, accounting, and other legal requirements, including changes in accounting principles generally accepted in the United States, could potentially impact our operating and financial results
2. 27Fluctuations in our tax obligations and effective tax rate and realization of our deferred tax assets may result in volatility of our operating results and adversely affect our financial condition
3. 28We are subject to many federal, state and local laws with which compliance is both costly and complex
4. 29We Process personal information, confidential information and other information necessary to provide our products and service and ensure that they are delivered effectively, to operate our business, for legal and marketing purposes, and for other business-related purposes
5. 30We are subject to extensive government regulations that could result in claims leading to increased costs and restrict our ability to operate future franchises30% rewritten
6. 31Beverage and restaurant companies have been the target of class action lawsuits and other proceedings that are costly, divert management attention and, if successful, could result in our payment of substantial damages or settlement costs
7. 32New information or attitudes regarding diet and health or adverse opinions about the health effects of consuming our menu offerings, could affect consumer preferences and negatively impact our business, financial condition and results of operations
8. 33The U.S. Congress, the Trump administration, or any new administration may make substantial changes to fiscal, tax, and other federal policies that may adversely affect our business

Risks Related to Our Organizational Structure and Ownership of Our Common Stock

1. 34If we are unable to satisfy the applicable continued listing requirements of Nasdaq, our common stock could be delisted57% rewritten
2. 35Reborn Coffee, Inc. is a holding company35% rewritten
3. 36The trading price of our securities may be volatile, and you could lose all or part of your investment
4. 37Our trading price and trading volume could decline if securities or industry analysts do not publish research about our business, or if they publish unfavorable research
5. 38We will incur costs and demands upon management as a result of complying with the laws and regulations affecting public companies in the United States, which may harm our business
6. 39Due to the implementation of the Reverse Stock Split, the liquidity of our common stock may be adversely effected
7. 40It is not possible to predict the actual number of shares we will sell under the ELOC Agreement to Arena, or the actual gross proceeds resulting from those sales
8. 41We may require additional financing to sustain our operations and without it we may not be able to continue operations26% rewritten
9. 42Future sales and issuances of our common stock or other securities might result in significant dilution and could cause the price of our common stock to decline

General Risks

1. 43Our quarterly and annual results may fluctuate significantly and may not meet our expectations or those of investors or securities analysts
2. 44Our outstanding indebtedness could materially adversely affect our financial condition and our ability to operate our business, pursue our growth strategy, and react to changes in the economy or industry22% rewritten
3. 45A failure to establish and maintain an effective system of disclosure controls and internal control over financial reporting, could adversely affect our ability to produce timely and accurate financial statements or comply with applicable regulations
4. 46We may engage in merger and acquisition activities, which would require significant management attention, disrupt our business, dilute shareholder value, and adversely affect our business, results of operations, and financial condition
5. 47We may need additional capital, and we cannot be sure that additional financing will be available
6. 48Additionally, our amended and restated certificate of incorporation provide that any person or entity holding, owning or otherwise acquiring any interest in any of our securities shall be deemed to have notice of and consented to these provisions
7. 49We do not intend to pay dividends for the foreseeable future
8. 50Catastrophic events may disrupt our business24% rewritten