Reborn Coffee Intends to Appeal Delisting Notice from Nasdaq
Reborn Coffee (Nasdaq: REBN), a specialty coffee retailer, announced receipt of a delisting notice from Nasdaq on June 21, 2024. The company failed to file its Form 10-Q for Q1 2024 due to delays caused by changing its independent public accounting firm from BF Borgers CPA PC to BCRG Group. Reborn Coffee has until June 28, 2024, to appeal this determination and request a stay of suspension. If the appeal is not made, trading of Reborn Coffee's stock will be suspended on July 2, 2024, and its securities will be delisted.
- None.
- Reborn Coffee received a delisting notice from Nasdaq due to non-compliance with filing requirements.
- The company has until June 28, 2024, to appeal or face suspension of stock trading on July 2, 2024.
- Failure to file the Form 10-Q for Q1 2024 on time due to delays in appointing a new accounting firm.
Insights
Reborn Coffee's recent delisting notice from Nasdaq raises significant concerns for investors. The primary issue here is the company's failure to file its Form 10-Q for the quarter ending March 31, 2024. This non-compliance with Nasdaq's Listing Rule 5250(c)(1) can lead to the company's removal from the Nasdaq exchange, which is a major red flag. Delisting often results in a decrease in stock liquidity and investor confidence. The company's previous compliance issues and the recent change in auditing firms add further uncertainty.
From a short-term perspective, investors should be cautious. The company's stock might experience heightened volatility and a potential drop in value until the situation is resolved. Long-term implications include challenges in attracting new investors, as well as potential difficulties in securing financing. Moreover, the costs associated with the appeal process and the risk of being delisted if the appeal fails are significant drawbacks.
It's essential to understand that delisting does not necessarily reflect the company's operational performance, but rather its governance and compliance capabilities. Investors should closely monitor updates from the Nasdaq Hearings Panel and any financial disclosures from Reborn Coffee to assess whether the company can rectify these compliance issues promptly.
The legal framework surrounding Nasdaq's delisting process is stringent, particularly under Listing Rule 5250(c)(1). Reborn Coffee's failure to file the required financial documents within the stipulated timeframe is a clear breach. The fact that the company was already on a Discretionary Panel Monitor exacerbates the situation, leaving little room for compliance leniency. The company must now pour resources into an appeal, which does not guarantee a positive outcome.
From a legal standpoint, the decision to appeal is critical. The company must convincingly argue for an extended stay of the suspension, detailing why the delay was unavoidable and how they plan to prevent future occurrences. This involves complex legal considerations, as the Panel requires substantial evidence and a solid plan for compliance. Furthermore, the costs and risks associated with legal proceedings, along with the potential for heightened scrutiny by regulatory bodies, make this a precarious situation for Reborn Coffee.
Investors should be aware that an unsuccessful appeal could lead to trading suspension and eventual delisting, legal ramifications that are severe for any public company. This underscores the importance of robust legal and compliance strategies in maintaining market trust and regulatory adherence.
BREA, Calif., June 26, 2024 (GLOBE NEWSWIRE) -- Reborn Coffee Inc. (Nasdaq: REBN), (“Reborn”, or the “Company”), a California-based retailer of specialty coffee, today announced that it has received a notice of delisting from Nasdaq.
On June 21, 2024, Reborn Coffee (the “Company”) received a staff determination letter (the “Letter”) from the Nasdaq Listing Qualifications Staff (the “Staff”) of The Nasdaq Stock Market LLC (“Nasdaq”) notifying the Company that because it has not yet filed its Form 10-Q for the fiscal year ended March 31, 2024 (the “Filing”), it has failed to comply with the filing requirement set forth in Listing Rule 5250(c.)(1).
As previously announced on May 15, 2024, the Company was required to dismiss BF Borgers CPA PC as the Company’s independent registered public accounting firm. The Company was required to engage a new independent registered public accounting firm in order to complete and file the Form 10-Q.
On May 14, 2024, the Audit Committee approved the engagement of BCRG Group (“BCRG”) as the Company’s new independent registered public accounting firm. Due to the timing of the appointment of BCRG, the Company was unable without unreasonable effort and expense to complete the review of the Company’s financial statements for the quarter ended March 31, 2024 before the required filing date for the Quarterly Report on Form 10-Q.
A Nasdaq Hearings Panel (the “Panel”) had previously placed the Company on a Discretionary Panel Monitor for a period of one year or until May 16, 2025 after the Company regained compliance with previous Nasdaq listing deficiencies, which would require the Staff to issue a Delist Determination Letter in the event that the Company failed to maintain compliance with any continued listing requirement (the “Panel Monitor”). The Letter explains that ordinarily Nasdaq listed companies may be provided up to 60 calendar days to submit a plan to regain compliance, and that if the plan is accepted, Staff may grant an exception of up to 180 calendar days from the Filing’s due date. However, pursuant to the Panel Monitor, the Company is not eligible for a compliance period. Therefore, the Company must, and shall, request an appeal of this determination to the Panel, and request a stay of the suspension pending a hearing (with an explanation as to why an extended stay is appropriate) by June 28, 2024, or else trading of the Company’s common stock will be suspended at the opening of business on July 2, 2024, and a Form 25-NSE will be filed with the Securities and Exchange Commission, which will remove the Company’s securities from listing and registration on the Nasdaq.
Under Nasdaq Listing Rule 5810(c)(2)(A)(v) and as stated in the Letter, the Company has until June 28, 2024 to request a hearing to appeal the Staff’s determination and the Company intends to request such a hearing.
Pursuant to Listing Rule 5810(b), the Staff requires that the Company issue as promptly as possible, but no later than four days from the receipt of the Letter, a public announcement disclosing the receipt of the Letter. In the event the Company does not make the required public announcement, trading in its securities will be halted. By issuing this press release, the Company believes it complies with Listing Rule 5810(b).
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-K for the fiscal year of 2023, 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 impact of COVID-19 on consumer traffic and costs, 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
Why did Reborn Coffee (REBN) receive a delisting notice from Nasdaq?
What is the deadline for Reborn Coffee (REBN) to appeal the delisting notice?
When will Reborn Coffee's (REBN) stock trading be suspended if no appeal is made?
What caused Reborn Coffee (REBN) to miss the Form 10-Q filing deadline?
What is Form 25-NSE in the context of Reborn Coffee (REBN)?
