Overview

Youropean Coffee Company (YCC) is a specialty coffee and technology company focused on single-serve pour over coffee products in the US, Canada, and Mexico. Key points:

• Leading producer of single-serve pour over and coffee brew bags (tea bag style) coffee in North America
• Acquired Dripkit in 2021 to add a third single-serve format - the DRIPKIT pour over
• Recently expanded into bagged coffee and a licensing deal with Stone Brewing for coffee
• Operations in the US, Korea, and a joint venture in Latin America
• Business model is largely a tolling arrangement - paid per package produced for customers

2022 Reverse Stock Split

• In December 2022, YCC completed a 1-for-35 reverse stock split to raise the per share price and comply with exchange listing standards

Geographic Concentration

• Operations primarily in North America and Asia
• For Q4 2023:
  • North America revenue: $965,932 (71% of total)
  • North America net property and equipment: $464,112 (79% of total)
• For Q4 2023:
  • Asia revenue: $388,054 (29% of total)
  • Asia net property and equipment: $120,007 (21% of total)

Results of Operations

	Three Months Ended December 31		Change
	2023	2022	Dollars
Revenue	$1,353,986	$1,136,348	$217,638

• Q4 2023 revenue increased 19% over Q4 2022, driven by higher sales volumes with major US customers
• Began shipping new bagged coffee products in addition to existing single-serve products for largest customer
• Q4 revenue not indicative of future quarters due to initial pipeline fill

	Three Months Ended December 31		Change
	2023	2022	Dollars
Cost of sales	$1,178,707	$1,060,816	$117,891
Gross profit	$175,279	$75,532	$99,747
Gross margin	13%	7%

• Gross margin increased due to lower production labor costs

	Three Months Ended December 31		Change
	2023	2022	Dollars
Operating expenses	$2,318,234	$2,277,200	$41,034

• Operating expenses increased 2% due to higher supply costs

	Three Months Ended December 31		Change
	2023	2022	Dollars
Net loss	$2,148,611	$2,183,206	$(34,595)

• Lower stock compensation expense drove reduced net loss

Liquidity and Capital Resources

• Accumulated deficit of $76 million as of December 31, 2023
• Cash balance of $0.4 million as of December 31, 2023
• Expects to need additional capital within next 12 months to fund planned operations
• Main uses of cash are funding operations and working capital
• May seek additional equity or debt financing
• Ability to continue as going concern in doubt without further financing

Contractual Obligations

• Total payments for leases and loans of $400,859 as of December 31, 2023
• $366,028 payable within next 12 months

Cash Flows

	Three Months Ended December 31
	2023	2022
Cash used in operating activities	$(2,336,166)	$(1,913,446)
Cash used in investing activities	$(307,044)	$(16,514)
Cash provided by financing activities	$1,659,855	$(8,857)

Critical Accounting Policies and Estimates

• No significant changes in critical accounting policies and estimates during Q4 2023