Investment Thesis
Reborn Coffee is technically insolvent with negative stockholders' equity of -$3.4M and liabilities exceeding assets. The company is in a critical liquidity crisis with only $44K cash and a 0.08x current ratio while burning $4.8M annually in operating cash flow against just $4.9M in revenue, creating an unsustainable cash burn trajectory. Absent immediate capital infusion or dramatic operational transformation, the company faces imminent financial distress.
Strengths
- Modest revenue growth of 7.6% YoY demonstrates some market demand
- Long-term debt of only $500K is relatively manageable in isolation
- Operates in retail food sector with established consumer habits
Risks
- Negative stockholders' equity of -$3.4M indicates technical insolvency
- Critical liquidity crisis: $44K cash with 0.08x current ratio; runway <10 days at current burn rate
- Catastrophic profitability: -187% operating margin, -225% net margin, -$4.8M operating cash flow on $4.9M revenue
- Interest coverage of -70.7x demonstrates inability to service debt obligations
- Operating cash outflows nearly match entire revenue generation
- Zero insider Form 4 filings in past 90 days suggests no confidence from management
Key Metrics to Watch
- Cash position and liquidity runway (critical)
- Operating cash flow trend (currently destroying value)
- Revenue sustainability and gross margin recovery (required for viability)
- Capital raise announcements (company likely requires emergency financing)
Financial Metrics
Revenue
4.9M
Net Income
-11.0M
EPS (Diluted)
$-2.16
Free Cash Flow
-4.9M
Total Assets
6.2M
Cash
44.0K
Profitability Ratios
Gross Margin
N/A
Operating Margin
-187.4%
Net Margin
-224.8%
ROE
N/A
ROA
-177.2%
FCF Margin
-99.9%
Balance Sheet & Liquidity
Current Ratio
0.08x
Quick Ratio
0.06x
Debt/Equity
N/A
Debt/Assets
155.2%
Interest Coverage
-70.69x
Long-term Debt
500.0K
Disclaimer: This analysis is generated by AI based on publicly available SEC EDGAR filings.
It does not include stock price data and should not be considered financial advice.
All fundamental data is sourced from SEC public domain filings.
Always conduct your own research before making investment decisions.
Data Source: SEC EDGAR |
Analysis Date: 2026-04-08T16:20:19.451317 |
Data as of: 2025-09-30 |
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