The coffee culture in the U.S is unique and has constantly evolved over the years. As new consumption habits take root in the food industry, coffee companies are preparing themselves to leverage the new trends in the business. Recently, Reborn Coffee announced its decision to become a public entity to take growth to the next level.
Special Brew
Reborn Coffee was founded in 2015 by Jay Kim – who serves as the CEO now — and is currently headquartered in Brea, California. The coffee roaster operates multiple retail outlets in California, serving specialty-roasted coffee, and is all set to further expand the chain. The products include whole bean coffee, pour-over-packs, and cold brew packs.
In a revised filing with the Securities and Exchange Commission, the company recently said it would offer its common shares in a $17-million IPO. The original plan, as per a disclosure made in the final weeks of last year, was to offer units comprising one common share and one warrant.
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It has applied to list on the Nasdaq stock exchange under the symbol REBN, which will be managed by EF Hutton as the underwriter. Other details like the number of shares and offer price are yet to be announced.
Reborn Coffee bets on its innovative processes — ranging from sourcing to washing and roasting to brewing – to gain an edge over the legacy coffee companies. The management is looking to grow into new markets through franchising, starting this year. In the initial phase, new retail locations will be opened outside California and the network will be expanded across the country gradually.
The proceeds from the IPO will be mainly used for expanding the store network, and the target is to open 20 company-operated outlets within a year from the completion of the offering. The company expects to achieve the goal by ramping up the portfolio, sourcing directly from farms, and allowing customers to choose how the menu is served to them.
In Expansion Mode
The growth initiatives would require heavy investment, which will be funded using available cash and by raising additional capital through public and private offerings. However, Reborn’s prospects would depend a lot on how the pandemic situation evolves. In the last two years, operations were significantly impacted by COVID-related movement restrictions and muted consumer sentiment.
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In the fiscal year ended December 2021, Reborn generated $2.28 million in revenues, sharply higher than the $0.79 million it recorded in the previous year. However, the company incurred a higher loss of $3.44 million compared the $1.07 million in 2020. At the end of the year, it operated seven company-owned retail locations.