Reborn Coffee Announces Financing Commitments of up to $60.0 Million
Reborn Coffee Inc. (REBN) has secured financing commitments totaling up to $60 million through agreements with Arena Investors, LP and Arena Business Solutions Global SPC II, The financing consists of two main components: a $10 million Debenture and Warrant Offering with 10% original issue discount secured convertible debentures, and a $50 million Equity Line of Credit (ELOC).
The Debenture Offering will be closed in four tranches, with warrants issued to purchase common stock equal to 20% of the principal amount. The ELOC allows Reborn Coffee to sell up to $50 million in common stock shares at its discretion. The company plans to use the proceeds for working capital, general corporate purposes, flagship store openings, and national expansion initiatives.
Reborn Coffee Inc. (REBN) ha ottenuto impegni di finanziamento per un totale di fino a 60 milioni di dollari attraverso accordi con Arena Investors, LP e Arena Business Solutions Global SPC II. Il finanziamento è composto da due principali componenti: un Offerta di Debenture e Warrant da 10 milioni di dollari con debenture convertibili garantiti a sconto del 10% sul valore nominale, e una Linea di Credito Equity da 50 milioni di dollari (ELOC).
L'Offerta di Debenture verrà chiusa in quattro tranche, con warrant emessi per acquistare azioni ordinarie pari al 20% dell'importo principale. L'ELOC consente a Reborn Coffee di vendere fino a 50 milioni di dollari in azioni ordinarie a sua discrezione. L'azienda prevede di utilizzare i proventi per il capitale circolante, scopi aziendali generali, aperture di negozi di punta e iniziative di espansione nazionale.
Reborn Coffee Inc. (REBN) ha asegurado compromisos de financiamiento que totalizan hasta 60 millones de dólares a través de acuerdos con Arena Investors, LP y Arena Business Solutions Global SPC II. El financiamiento consta de dos componentes principales: una Oferta de Debentures y Warrants de 10 millones de dólares con obligaciones convertibles garantizadas con un descuento del 10% sobre el monto nominal, y una Línea de Crédito de Capital (ELOC) de 50 millones de dólares.
La Oferta de Debentures se cerrará en cuatro tramos, con warrants emitidos para comprar acciones comunes equivalentes al 20% del monto principal. La ELOC permite a Reborn Coffee vender hasta 50 millones de dólares en acciones comunes a su discreción. La empresa planea utilizar los ingresos para capital de trabajo, fines corporativos generales, apertura de tiendas insignia e iniciativas de expansión nacional.
리본 커피 주식회사 (REBN)는 아레나 인베스터스 LP와 아레나 비즈니스 솔루션 글로벌 SPC II와의 계약을 통해 총 6천만 달러의 자금 지원 약정을 확보했습니다. 이 자금 조달은 두 가지 주요 구성 요소로 이루어져 있습니다: 1천만 달러 규모의 채권 및 워런트 제공과 10%의 원금 할인으로 확보된 전환 가능한 채권, 그리고 5천만 달러 규모의 자본 신용 한도 (ELOC)입니다.
채권 제공은 네 번의 분할 방식으로 종료되며, 원금의 20%에 해당하는 보통주를 구매할 수 있는 워런트가 발행됩니다. ELOC는 리본 커피가 최대 5천만 달러의 보통주를 자의적으로 판매할 수 있도록 합니다. 회사는 자금을 운영 자본, 일반 기업 목적, 플래그십 매장 오픈 및 국가 확장 계획에 사용할 계획입니다.
Reborn Coffee Inc. (REBN) a obtenu des engagements de financement totalisant jusqu'à 60 millions de dollars par le biais d'accords avec Arena Investors, LP et Arena Business Solutions Global SPC II. Le financement se compose de deux principaux composants : une offre de débenture et de bons de souscription de 10 millions de dollars avec des débentures convertibles garanties à escompte de 10 % sur le montant nominal, et une ligne de crédit en actions (ELOC) de 50 millions de dollars.
L'offre de débenture sera clôturée en quatre tranches, avec des bons de souscription émis pour l'achat d'actions ordinaires correspondant à 20 % du montant principal. L'ELOC permet à Reborn Coffee de vendre jusqu'à 50 millions de dollars d'actions ordinaires à sa discrétion. L'entreprise prévoit d'utiliser les produits pour le fonds de roulement, les fins corporatives générales, l'ouverture de magasins phares et les initiatives d'expansion nationale.
Reborn Coffee Inc. (REBN) hat Finanzierungszusagen von bis zu 60 Millionen Dollar durch Vereinbarungen mit Arena Investors LP und Arena Business Solutions Global SPC II gesichert. Die Finanzierung besteht aus zwei Hauptkomponenten: einem 10 Millionen Dollar Debenture- und Warrant-Angebot mit 10% Originalausgabe-Rabatt gesicherten wandelbaren Schuldverschreibungen und einer 50 Millionen Dollar Eigenkapitallinie (ELOC).
Das Debenture-Angebot wird in vier Tranchen abgeschlossen, wobei Warrants ausgegeben werden, um Aktien im Wert von 20% des Nominalbetrags zu erwerben. Die ELOC ermöglicht es Reborn Coffee, bis zu 50 Millionen Dollar an Stammaktien nach eigenem Ermessen zu verkaufen. Das Unternehmen plant, die Einnahmen für Betriebskapital, allgemeine Unternehmenszwecke, Eröffnungen von Flagship-Stores und nationale Expansionsinitiativen zu verwenden.
- Secured significant financing commitment of up to $60 million
- Flexible funding structure with both immediate liquidity ($10M debenture) and long-term capital access ($50M ELOC)
- Funding enables national expansion and flagship store openings
- 10% discount on convertible debentures indicates high cost of capital
- Potential significant shareholder dilution through convertible debentures and ELOC
- Warrant issuance of 20% creates additional dilution risk
Insights
This $60M financing package represents a significant development for Reborn Coffee, though it warrants careful analysis given its size relative to the company's $16.8M market capitalization. The structure reveals several key considerations:
The $10M convertible debenture offering with Arena Investors includes notable terms that impact shareholders:
- A 10% original issue discount means the company receives $9M while owing $10M, representing an immediate 11.11% cost
- The 20% warrant coverage tied to the lowest 5-day VWAP at a 7.5% discount suggests significant potential dilution
- The four-tranche structure provides some protection but also indicates careful risk management by the lender
The $50M equity line of credit offers strategic flexibility but comes with important caveats:
- While substantial in size, actual utilization will depend on trading volume and stock price performance
- The facility's size exceeds 3x current market cap, indicating potential significant dilution if fully utilized
- The structure suggests a focus on maintaining operational flexibility while managing near-term cash needs
From a strategic perspective, this financing positions Reborn for aggressive expansion but at a considerable cost. The immediate focus on flagship stores and product innovation indicates a push for rapid scale, though investors should monitor execution carefully given the size of the commitment relative to the company's current operations.
This financing package arrives at a critical juncture in the specialty coffee market, where several key factors warrant attention:
- The specialty coffee segment continues to show resilience despite economic pressures, with premium offerings maintaining consumer appeal
- Strategic focus on flagship locations suggests a high-end positioning strategy, targeting urban markets with higher disposable income
- The timing aligns with post-pandemic retail recovery, potentially allowing access to prime locations at favorable terms
The expansion strategy carries both opportunities and execution risks:
- Rapid expansion in the current market requires precise location selection and efficient operations to achieve profitability
- Success will depend on maintaining product quality and brand consistency across a larger footprint
- The focus on innovation suggests potential development of proprietary products or processes to differentiate from competitors
The scale of financing relative to current operations indicates an ambitious growth trajectory that will require careful market selection and operational execution to achieve sustainable returns.
Financing Provides Operating Liquidity and Positions Reborn Coffee for Expansive Growth, Flagship Openings, and Industry Innovation
BREA, Calif., Feb. 07, 2025 (GLOBE NEWSWIRE) -- Reborn Coffee Inc. (Nasdaq: REBN), a leader in the specialty coffee market, today announced has entered into a securities purchase agreement and a common stock purchase agreement for up to a total of
Dawson James Securities, Inc. served as placement agent to Reborn Coffee.
The finalized financing structure includes:
- Up to
$10 Million Debenture and Warrant Offering (the “Debenture Offering”) – Reborn Coffee has entered into a securities purchase agreement with Arena for the sale and issuance of up to$10 million in aggregate principal of10% original issue discount secured convertible debentures for a purchase price of up to$9 million . Reborn Coffee anticipates closing on the transaction in four separate tranches. In connection with the debentures, Reborn Coffee will also issue warrants to purchase common stock equal to20% of the total principal amount of the related debentures divided by92.5% of the lowest daily VWAP of the common stock for the five trading days prior to the related closing. $50 Million Equity Line of Credit (“ELOC”) – Reborn Coffee also announced that it has entered into a purchase agreement establishing an equity line of credit with ABS, under which the Company will have the right, but not the obligation, to issue and sell ABS up to$50.0 million in shares of the Company’s common stock from time to time, subject to certain conditions set forth therein.
Reborn Coffee intends to use the net proceeds from the Debenture Offering and the ELOC for working capital and general corporate purposes to support its future growth.
"Finalizing this definitive agreement marks a major milestone for Reborn Coffee. Arena’s confidence in our vision and execution strengthens our ability to scale rapidly, open flagship locations, and drive continued innovation. We believe this funding provides the financial foundation we need to elevate our brand and expand strategically across key markets," said Jay Kim, CEO of Reborn Coffee.
With this potential financing now in place, Reborn Coffee plans to accelerate its national expansion, focusing on flagship store openings, strengthening its retail presence, and introducing new product offerings tailored to meet evolving consumer demands. The Debenture Offering will provide immediate liquidity to undertake growth initiatives, while the ELOC provides long-term financial strength to support large-scale expansion efforts.
Additional details on the Debenture and the ELOC will be disclosed in a Current Report on Form 8-K that Reborn Coffee intends to file with the SEC.
This press release does not constitute an offer to sell, or the solicitation of an offer to buy, the shares of common stock, nor will there be any sale of the shares of common stock in any state or other jurisdiction in which such offer, solicitation or sale is not permitted.
About Reborn Coffee
Reborn Coffee, Inc. (NASDAQ: REBN) is focused on serving high quality, specialty-roasted coffee at retail locations, kiosks, and cafes. Reborn is an innovative company that strives for constant improvement in the coffee experience through exploration of new technology and premier service, guided by traditional brewing techniques. Reborn believes they differentiate themselves from other coffee roasters through innovative techniques, including sourcing, washing, roasting, and brewing their coffee beans with a balance of precision and craft. For more information, please visit www.reborncoffee.com.
Forward-Looking Statements
All statements in this release that are not based on historical fact are “forward-looking statements.” While management has based any forward-looking statements included in this release on its current expectations, the information on which such expectations were based may change. Forward-looking statements involve inherent risks and uncertainties which could cause actual results to differ materially from those in the forward-looking statements, as a result of various factors including those risks and uncertainties described in the Risk Factors and Management’s Discussion and Analysis of Financial Condition and Results of Operations sections of our recent filings with the Securities and Exchange Commission (“SEC”) including our Form 10-Q for the third quarter of 2024, which can be found on the SEC’s website at www.sec.gov. Such risks, uncertainties, and other factors include, but are not limited to, the Company’s ability to continue as a going concern as indicated in an explanatory paragraph in the Company’s independent registered public accounting firm’s audit report as a result of recurring net losses, among other things, the Company’s ability to successfully open the additional locations described herein as planned or at all, the Company’s ability to expand its business both within and outside of California (including as it relates to increasing sales and growing Average Unit Volumes at our existing stores), the degree of customer loyalty to our stores and products, the fluctuation of economic conditions, competition and inflation. We urge you to consider those risks and uncertainties in evaluating our forward-looking statements. We caution readers not to place undue reliance upon any such forward-looking statements, which speak only as of the date made. The Company undertakes no obligation to update these statements for revisions or changes after the date of this release, except as required by law.
Contacts
Investor Relations Contact:
Chris Tyson
Executive Vice President
MZ North America
REBN@mzgroup.us
949-491-8235
Company Contact:
Reborn Coffee, Inc.
ir@reborncoffee.com
FAQ
How much financing did Reborn Coffee (REBN) secure in February 2024?
What are the terms of REBN's $10 million Debenture Offering?
How will Reborn Coffee use the $60 million financing?
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