Reborn Coffee, Inc. Debt Disclosure
| 4. | LOANS PAYABLE TO FINANCIAL INSITUTIONS |
Loans payable to financial institutions consisted of the following:
| December 31, | 2024 | 2023 | ||||||
| Loan agreements with principal amount of $960,777 and repayment rate of 14.75% to 20.0% for a total of $845,484. The loans payable mature on various dates in 2025. | $ | 111,300 | 1,005,442 | |||||
| Loan agreement with principal amount of $140,954 with an interest rate of 30.0% per annum with a maturity date on May 31, 2024 | 121,058 | |||||||
| Total loan payable | 111,300 | 1,126,499 | ||||||
| Less: current portion | (111,300 | ) | (791,352 | ) | ||||
| Total loan payable, net of current | $ | $ | 335,147 | |||||
About Debt Disclosures
Debt disclosures detail a company's borrowing structure — the types of instruments, interest rates, maturity schedule, and covenant restrictions that define its financial obligations and flexibility. This section is essential for assessing refinancing risk, interest rate exposure, and the margin of safety against financial distress.
Key signals: the maturity schedule reveals concentration risk — large maturities within 1-2 years during tight credit markets can force dilutive refinancing or asset sales. Compare the fair value of debt against carrying amount to gauge whether the market views the company's credit risk differently than the balance sheet suggests. Watch covenant compliance disclosures for tightening cushions, especially leverage and interest coverage ratios. Variable-rate debt exposure quantifies sensitivity to interest rate changes. Secured versus unsecured mix affects recovery rates and future borrowing capacity. Compare net debt-to-EBITDA against industry peers and covenant limits to assess financial health.