Reborn Coffee, Inc. (REBN) just pulled off something interesting: it raised $6.5 million by selling equity at a significant premium to where its stock has been trading. That's the kind of deal that makes finance folks look twice.

Here's how it worked. The company sold nearly 1.2 million common shares at $5.45 each, which Reborn says is roughly three times its recent market value. Finding investors willing to pay that kind of premium when you're dealing with Nasdaq compliance issues? That takes some convincing.

The cash infusion matters because Reborn Coffee has been working to fix its balance sheet. Combined with year-end accounting moves, the company estimates its stockholders' equity now sits at about $3.4 million as of December 31. Management believes that figure puts them back in compliance with Nasdaq's equity requirements, though they're still waiting for the exchange to officially confirm it.

But the deal involved more than just fresh capital. Reborn also completed a warrant exchange with previous investors, wiping out outstanding warrants and removing approximately $1.3 million in derivative liabilities from the books. Those derivative liabilities are accounting headaches that can create volatility on financial statements, so eliminating them cleans things up considerably while also limiting future shareholder dilution.

Founder and CEO Jay Kim framed the transactions as providing financial stability heading into the new year. "The receipt of $6.5 million in premium-priced equity capital at approximately three times our current market price, combined with the elimination of warrant-related derivative liabilities, significantly strengthens our balance sheet," Kim said. "We believe these actions address the previously identified equity deficiency and provide a solid financial foundation as we enter 2026."

Kim also pointed to operational improvements, tighter cost controls, and an expanded mix of domestic and international opportunities as reasons the company expects to reach profitability in 2026. That's the real test, of course—whether the capital provides enough runway to actually turn profitable.

The company plans to update investors once Nasdaq issues its formal compliance determination.

For context on the stock's recent journey: REBN hit a 52-week high of approximately $8.30 and a 52-week low of nearly $1.20, which tells you everything about volatility. Shares dropped sharply from those earlier highs before bouncing back more than 50% off the bottom.

REBN Price Action: Reborn Coffee shares were up 6.67% at $1.92 during premarket trading on Tuesday, according to market data.