Business Context and Reporting Period
This Form 8-K was filed by Reborn Coffee, Inc. (REBN) on April 28, 2023, with the report dated May 2, 2023. The filing addresses two material events: a notification from Nasdaq regarding non-compliance with minimum bid price requirements and the change of the company's independent registered public accounting firm.
Key Financial Metrics
The filing text does not provide specific values for revenue, profit, cash flow, margins, debt, or liquidity. However, it notes that the company's independent auditor previously issued a qualification regarding the company's ability to continue as a going concern in reports for the fiscal years ended December 31, 2022, and 2021.
Material Changes and Events
- Nasdaq Delisting Notification: On April 28, 2023, the company received notice that its common stock closing bid price had been below $1.00 for 32 consecutive business days, violating Nasdaq Listing Rule 5550(a)(2).
- Compliance Timeline: The company has until October 25, 2023, to regain compliance by maintaining a closing bid price of at least $1.00 for ten consecutive business days.
- Accountant Change: On May 1, 2023, the company terminated its engagement with Kreit & Chiu CPA LLP and engaged BF Borgers CPA, PC as its new independent auditor.
Outlook, Risks, and Management Commentary
Management is monitoring the stock bid price and may evaluate courses of action, including a reverse stock split, to achieve compliance. The filing explicitly states there is no assurance that the company will regain compliance or avoid delisting. If the company fails to comply within the initial 180-day period, it may be eligible for an additional 180 days if it meets other listing standards and notifies Nasdaq of its intent to cure the deficiency. The termination of the previous auditor was amicable, with no disagreements reported on accounting principles or audit scope.
Investor Verification Checklist
- Verify the current trading price of REBN to assess the likelihood of meeting the $1.00 bid price requirement by October 25, 2023.
- Monitor future filings for announcements regarding a potential reverse stock split.
- Review the upcoming financial statements audited by BF Borgers CPA, PC for any updates on the "going concern" qualification.
- Check for any subsequent correspondence from Nasdaq regarding the company's compliance status.