Business Context and Reporting Period
This Form 8-K is a current report filed by Reborn Coffee, Inc. (REBN) on October 26, 2023, regarding a material event affecting its listing status. The Company is a Delaware corporation with principal executive offices in Brea, California, and its common stock trades on the Nasdaq Capital Market.
Key Financial Metrics and Listing Compliance
The filing does not provide specific revenue, profit, cash flow, or debt figures. However, it discloses critical financial thresholds related to Nasdaq listing requirements:
- Minimum Bid Price: The Company failed to maintain the required minimum bid price of $1.00 per share for 30 consecutive days.
- Stockholders' Equity: The Company's stockholders' equity has fallen below the required minimum of $2,500,000.
Material Changes and Delisting Notification
On October 26, 2023, the Company received a notification letter from Nasdaq scheduling its securities for delisting from The Nasdaq Capital Market. Key details include:
- Effective Date: Trading suspension is scheduled for the opening of business on November 6, 2023.
- Reasons for Delisting:
- Failure to comply with Listing Rule 5550(a)(2) regarding the minimum bid price.
- Failure to comply with Listing Rule 5550(b)(1) regarding the minimum stockholders' equity.
- Compliance History: The Company was previously granted 180 days to regain compliance with the bid price requirement but failed to do so by the October 25, 2023 deadline. It is not eligible for a second 180-day period.
Outlook, Management Commentary, and Contingencies
Management intends to appeal Nasdaq's determination to a Hearings Panel. The filing outlines the following contingencies:
- Appeal Process: Filing a hearing request will stay the suspension and the filing of Form 25-NSE pending the Panel's decision.
- Costs: The Company must pay a non-refundable $20,000 fee to present its compliance plan to the Panel.
- Uncertainty: There is no assurance that Nasdaq will grant approval of the compliance plan or reverse the delisting determination.
- Previous Disclosures: The Company has previously disclosed similar notification letters on May 2, 2023, and September 11, 2023.
Investor Verification Checklist
- Verify the status of the Company's appeal to the Nasdaq Hearings Panel and the outcome of any scheduled hearing.
- Confirm the current trading status of REBN stock following the November 6, 2023 suspension date.
- Review the Company's most recent audited financial statements to assess the actual stockholders' equity balance and liquidity position.
- Monitor for any Form 25-NSE filings which would officially remove the stock from Nasdaq registration.