AMERICAN REBEL HOLDINGS INC
For the period ended Mar 31, 2025. Filed May 15, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed May 15, 2025
AREB$0.31-9.0%Stored close · as of Jul 8, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2025-02-07.
0001493152-25-005403
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-15.
0001641172-25-011062
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 108 previous paragraphs and 66 current paragraphs.
47 unchanged; 16 reworded; 3 added; 40 removed; 5 previous and 0 current paragraphs rearranged.
Tables are not compared: 4 previous and 4 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (3)
Current report
For the three months ended March 31, 2025, we incurred interest expense of $723,942 compared to interest expense of $423,859 for the three months ended March 31, 2024. The increase in interest expense of $300,083 is due to a significant number of notes we have entered into and subsequently converted or modified.
Current report
For the three months ended March 31, 2025, we incurred a loss on debt extinguishment of $499,794 and loss on settlement of liability of $887,365. This is due to the conversion of debt into equity, which was not present during the three months ended March 31, 2024.
Current report
During the three months ended March 31, 2025, we reduced anticipated cash outflows of $1.8 million through the issuance of common stock.
Removed paragraphs (40)
Previous report
For the three months ended September 30, 2024, we incurred interest expense of $649,216, compared to interest expense of $95,330 for the three months ended September 30, 2023. The increase in interest expense of $553,886 is due to a significant number of notes being paid during 2023 that were able to be paid in full from the various financings, offset by the increased borrowing costs that we have on our working capital notes payable and line of credit. We are currently paying an interest rate of approximately 7% on our line of credit, in excess of 18% on our existing working capital notes payable, and more than 40% per annum on our new working capital notes payable. We believe we will manage and maintain our interest expense exposure despite the increase in interest rates for this year over last year, as well keeping our debt obligations to a reasonable amount as we grow the business and its sales volume.
Previous report
Nine Months Ended September 30, 2024 Compared to Nine Months Ended September 30, 2023
Previous report
Operating Expenses
Previous report
Total operating expenses for the nine months ended September 30, 2024 were $7,639,863 compared to $7,248,686 for the nine months ended September 30, 2023 as further described below. Overall, we experienced a $391,177 increase in operating expenses or a 5% period over period increase in operating expenses from the prior year comparable period due to a myriad of professional service expenses incurred
Previous report
For the nine months ended September 30, 2024, we incurred rental expense, warehousing, outlet expense of $335,743 compared to rental expense, warehousing, outlet expense of $732,360 for the nine months ended September 30, 2023. The decrease in rental expense, warehousing, outlet expense of $396,617 is due to cost cutting on leases and properties that we rent to conduct the Champion business acquisition as well as other cost cutting measures or efficiencies put in place. Prior to the Champion business acquisition, we included lease expense in the Administrative and other account. With the significant number of leases and properties that we rent to conduct the Champion business, we believe this is a better presentation of the expenses. We expect to maintain this level of expense on a go-forward basis with our leases and rented properties for the near term. We may look to consolidate some of our space as needed as we fine tune the Champion business.
Previous report
For the nine months ended September 30, 2024, we incurred product development expenses of $713,883, compared to product development expenses of $36,821 for the nine months ended September 30, 2023. The increase in product development expenses of $677,062 (or 1,839% period over period) is due to some of the Company’s current product development expenses being reclassed from consulting/payroll and other costs account, which we believe provides for a better presentation of our historical business expenses than pure product development expense. For the nine months ended September 30, 2024, we have incurred expenses that are attributable to our private label brewery efforts and should be separated and identified. The Company expects to maintain some level of expense on a go-forward basis with new products and efforts being expended for future sales growth and product needs.
Previous report
For the nine months ended September 30, 2024, we incurred administrative and other expense of $3,323,566 compared to administrative and other expense of $2,542,181 for the nine months ended September 30, 2023. The increase in administrative and other expense of $781,385 (or 31% period over period) relates directly to increased legal and other professional fees that we incurred in our registered public offerings and capital raising efforts, along with additional expenses picked up from our acquisition of Champion. We believe as we grow our sales base, we will also increase our administrative and other expense commensurate with the increased profits for the future.
Previous report
Other income and expenses
Previous report
For the nine months ended September 30, 2024, we incurred interest expense of $2,128,357 compared to interest expense of $250,877 for the nine months ended September 30, 2023. The increase in interest expense of $1,877,480 is due to a significant number of notes being paid during 2023 that were able to be paid in full from the various financings, offset by the increased borrowing costs that we have on our working capital notes payable and line of credit. We are currently paying an interest rate of approximately 7% on our line of credit, in excess of 18% on our existing working capital notes payable, and more than 40% per annum on our new working capital notes. We believe that we will manage and maintain our interest expense exposure despite the increase in interest rates for this year over last year, as well as keeping our debt obligations to a reasonable amount as we grow the business and its sales volume.
Previous report
Net Loss
Previous report
Net loss for the nine months ended September 30, 2024 amounted to $9,702,239, resulting in a loss per share of $(1.48), compared to a net loss of $3,610,929 for the nine months ended September 30, 2023, resulting in a loss per share of $(2.50). The increase in the net loss from the nine months ended September 30, 2023 to the nine months ended September 30, 2024 is from a myriad of expenses that the Company incurred in the quarter, such as professional and legal fees, increased costs in marketing, and the softening of gross margin on sales. The Company’s management believes with increasing sales volume from the launch of new products, strict adherence to cost cutting measures in its legacy business, and best practices that net positive income can be achieved for the business.
Previous report
During the nine months ended September 30, 2024, we raised net cash of approximately $0 through the issuance of equity, as compared to approximately $5,304,000 for the nine months ended September 30, 2023 (which included the inducement to accelerate the conversion of certain warrants into equity). During the nine months ended September 30, 2024, we raised net cash of approximately $3,500,000 through the issuance of notes payable and maintaining a line of credit with a national financial institution secured by inventory and other assets, as compared to approximately $2,386,000 for the nine months ended September 30, 2023.
Previous report
On April 14, 2023, the Company entered into a $1,000,000 Business Loan and Security Agreement (the “Secured Loan #1”) with an accredited investor lending source. Under the Secured Loan #1, the Company received the loan net of fees of $20,000. The Secured Loan #1 requires 64 weekly payments of $20,000 each, for a total repayment of $1,280,000. The Secured Loan #1 bears interest at 41.4%. The Secured Loan #1 is secured by all of the assets of the Company and its subsidiaries second to a first priority lien secured the holder of the Line of Credit. Furthermore, the Company’s Chief Executive Officer, provided a personal guaranty for the Secured Loan #1. The Secured Loan #1 provides for a default fee of $15,000 for any late payments on the weekly payments. No prepayment of the loan is allowed as well as any default by the Company allows the lender to take necessary actions to secure its collateral and recovery of funds. The Company was required to pay a fee associated with the lender and its introduction to the Company of $80,000 to be made in equity of the Company at the time the loan was entered into. The Company issued 3,721 post-reverse stock split shares, which on the date of issuance had a value of approximately $2,900. Since the number of shares had been established upon consummation of the loan but not valued or recorded on the books at the time, because of the leeway on grant date; total cost to the Company for the issuance of the 3,721 shares of common stock on the grant date was $2,900, which was recorded to interest expense and attributable to the loan.
Previous report
On July 1, 2023, the Company received a release from the lender of the working capital loans that were in default since June 30, 2023, and the accredited lender of the new working capital loans paid the holder of the old working capital loans $450,000 which required no additional working capital outlay from the Company. The terms of the new loan are 12% per annum and interest only payments that are due by last day of the quarter based on a calendar year. This reduces the Company’s interest payments on the working capital loans (old) of $600,000 from $18,000 per quarter to $13,500 per quarter (for quarter ended December 31, 2023) and $9,000 per quarter thereafter (for three and nine months ended September 30, 2024).
Previous report
On December 19, 2023, the Company entered into a $500,000 Revenue Interest Purchase Agreement (the “Revenue Interest Loan #1”) with an accredited lender. Under the Revenue Interest Loan #1, the Company received the purchase price/loan net of fees of $5,000. The Revenue Interest Loan #1 required monthly payments of $75,000, until the Revenue Interest Loan #1 is repurchased by the Company. Upon entering into the agreement, the Revenue Interest Loan #1 bore an effective interest of more than 100%. The Revenue Interest Loan #1 is secured by all of the product revenues of the Company and its subsidiaries second to a first priority lien secured the holder of the line of credit. Furthermore, the Company’s is obligated to provide for 50% of the Reg. 1-A offering proceeds to the holder of the Revenue Interest Loan #1 as payment towards the amounts due. The Revenue Interest Loan #1 may be repurchased by the Company at any time. The repurchase price for the Revenue Interest Loan #1 prior to April 1, 2024 is 125% or $625,000, the repurchase price for the Revenue Interest Loan #1 after April 1, 2024 and prior to May 5, 2024 is 137.5% or $687,500, thereafter the repurchase price of the Revenue Interest Loan #1 is $687,500 plus monthly payments of $75,000 due and payable on the fifth calendar day until repurchased by the Company in its entirety.
Previous report
On May 13, 2024 the Company and the holder of the Revenue Interest Loan #1 entered into a settlement and conversion agreement (“Securities Exchange Agreement”) whereby the Company issued 133,334 shares Series D convertible preferred stock as full satisfaction for the revenue participation interest agreement or loan. The Series D convertible preferred stock was purchased at $7.50 per share. Total loan balance on the date of settlement and conversion was $750,005. The Company paid approximately $250,005 in interest on a loan balance of $500,000 that it entered into on December 19, 2023. The Company also paid a premium payment of $250,000 to induce the holder to settle and convert their debt instrument. The Series D convertible preferred stock is convertible at the option of the holder into common stock of the Company at a fixed price per share of $1.50 per share.
Previous report
On July 10, 2024, the Company entered into a Conversion Agreement (the “Conversion Agreement”) with Series D convertible preferred stock holder, pursuant to which the holder agreed to convert the 133,334 shares of Series D convertible preferred stock it held into 2,232,143 shares of common stock, par value $0.001 per share, of the Company. The shares of common stock were priced at $0.448 per share (which price represents the closing price for the Company’s common stock on NASDAQ for the day immediately preceding the date of the Conversion Agreement).
Previous report
On December 29, 2023, the Company entered into a $500,000 Business Loan and Security Agreement (the “Secured Loan #2”) with an accredited investor lending source. Under the Secured Loan #2, the Company received loan proceeds net of fees of $10,000. The Secured Loan #2 requires 52 weekly payments of $11,731 each, for a total repayment of $610,000. The Secured Loan #2 bears interest at 40.5%. The Secured Loan #2 is secured by all of the assets of the Company and its subsidiaries second to a first priority lien secured the holder of the Line of Credit. Furthermore, the Company’s Chief Executive Officer, provided a personal guaranty for the Secured Loan #2. The Secured Loan #2 provides for a default fee of $15,000 for any late payments on the weekly payments. No prepayment of the loan is allowed as well as any default by the Company allows the lender to take necessary actions to secure its collateral and recovery of funds. The Company is required to pay a fee associated with the lender and its introduction to the Company of $40,000 to be made in equity of the Company at the time the loan was entered into.
Previous report
On March 21, 2024, the Company entered into a securities purchase agreement with an accredited investor lending source, pursuant to which the lender made a loan to the Company, evidenced by a promissory note in the principal amount of $235,750 (“Promissory Note #1). A one-time interest charge or points amounting to 15.0% (or $35,362) and fees of $5,000 were applied at the issuance date, resulting in net proceeds to the Company of $200,000. Accrued, unpaid interest and outstanding principal, subject to adjustment, is required to be paid in seven payments; the first payment shall be in the amount of $162,667.20 and is due on June 30, 2024 with six (6) subsequent payments each in the amount of $18,074.14 due on the 30 th of each month thereafter (total repayment of $271,112 on or by December 31, 2024). the Company has the right to prepay the note within one hundred eighty days at a discount of 5%.
Previous report
On March 22, 2024, the Company entered into another Revenue Interest Purchase Agreement (the “Revenue Interest Loan #2”) with an individual accredited investor lending source, in the amount of $100,000. As consideration for such payment, commencing on June 1, 2024 and continuing thereafter until all amounts are repurchased by the Company, pursuant to the terms of the Revenue Interest Loan #2, the holder has a right to receive $10,000 per month from the Company generated from its operating subsidiaries. Furthermore, the Company is obligated to provide for 5.15% of the Reg. 1-A offering proceeds to the holder of the Revenue Interest Loan #2 as payment towards the amounts due. The Revenue Interest Loan #2 may be repurchased by the Company at any time. The repurchase price for the Revenue Interest Loan #2 prior to May 31, 2024 is 140% or $140,000, the repurchase price for the Revenue Interest Loan #2 after May 31, 2024 and prior to July 5, 2024 is 154 % or $154,000, thereafter the repurchase price of the Revenue Interest Loan #2 is $154,000 plus monthly payments of $10,000 due and payable on the fifth calendar day until repurchased by the Company in its entirety.
Previous report
On March 27, 2024, the Company entered into a $1,300,000 Business Loan and Security Agreement (the “Secured Loan #3”) with an accredited investor lending source. Under the Secured Loan #3, the Company received the loan net of fees of $26,000. The Company repaid two outstanding secured notes payable (Secured Loan #1 and Secured Loan #2) to affiliates of the lender totalling $769,228, resulting in net proceeds to the Company of $504,772. The Secured Loan #3 requires 64 weekly payments of $26,000 each, for a total repayment of $1,664,000. The Secured Loan #3 is secured by all of the assets of the Company and its subsidiaries second to a first priority lien secured the holder of the Line of Credit. Furthermore, the Company’s Chief Executive Officer, provided a personal guaranty for the Secured Loan #3. The Secured Loan #3 provides for a default fee of $15,000 for any late payments on the weekly payments. As long as the Secured Loan #3 is not in default, the Company may prepay the Secured Loan #3 pursuant to certain prepayment amounts set forth in the Secured Loan #3. Further, any default by the Company allows the lender to take necessary actions to secure its collateral and recovery of funds.
Previous report
On April 1, 2024, the Company entered into a Revenue Interest Purchase Agreement with an accredited investor lending source, pursuant to which the holder purchased a revenue interest from the Company for $100,000 (“Revenue Interest Loan #3). As consideration for such payment, commencing on June 1, 2024 and continuing thereafter until all amounts are repurchased by the Company pursuant to the terms of the Revenue Interest Loan #3, the holder has a right to receive $10,000 per month from the Company generated from its operating subsidiaries. Under the Revenue Interest Loan #3, the Company has an option to repurchase the Revenue Interest Loan #3 at any time upon two days advance written notice. Additionally, the holder has an option to terminate the Revenue Interest Loan #3 and to require the Company to repurchase the Revenue Interest Loan #3 upon the Company consummating a public offering. The repurchase price to be paid by the Company will be, if the Call Option or the Put Option is exercised (i) $140,000 if repurchased on or before May 31, 2024; and (ii) $154,000 after June 1, 2024; in each case of (i) or (ii), minus all other payments made by the Company to the holder prior to such date.
Previous report
On April 9, 2024, the Company entered into a Revenue Interest Purchase Agreement with an accredited investor lending source, pursuant to which the holder purchased a revenue interest from the Company for $100,000 (“Revenue Interest Loan #4). As consideration for such payment, commencing on June 1, 2024 and continuing thereafter until all amounts are repurchased by the Company pursuant to the terms of the Revenue Interest Loan #4 the holder has a right to receive $10,000 per month from the Company generated from its operating subsidiaries. Under the Revenue Interest Loan #4, the Company has an option to repurchase the Revenue Interest Loan #4 at any time upon two days advance written notice. Additionally, the holders has an option to terminate the Revenue Interest Loan #4 and to require the Company to repurchase the Revenue Interest Loan #4 upon the Company consummating a public offering. The repurchase price to be paid by the Company will be, if the Call Option or the Put Option is exercised (i) $140,000 if repurchased on or before May 31, 2024; and (ii) $154,000 after June 1, 2024; in each case of (i) or (ii), minus all other payments made by the Company to the holder prior to such date.
Previous report
On April 9, 2024, the Company entered into a Revenue Interest Purchase Agreement with an accredited investor lending source, pursuant to which the holder purchased a revenue interest from the Company for $300,000 (“Revenue Interest Loan #5). As consideration for such payment, commencing on June 1, 2024 and continuing thereafter until all amounts are repurchased by the Company pursuant to the terms of the Revenue Interest Loan #5, the holder has a right to receive $30,000 per month from the Company generated from its operating subsidiaries. Under the Revenue Interest Loan #5, the Company has an option to repurchase the Revenue Interest Loan #5 at any time upon two days advance written notice. Additionally, the holder has an option to terminate the Revenue Interest Loan #5 and to require the Company to repurchase Revenue Interest Loan #5 upon the Company consummating a public offering. The repurchase price to be paid by the Company will be, if the Call Option or the Put Option is exercised (i) $420,000 if repurchased on or before May 31, 2024; and (ii) $462,000 after June 1, 2024; in each case of (i) or (ii), minus all other payments made by the Company to the holder prior to such date.
Previous report
On April 9, 2024, the Company entered into a Revenue Interest Purchase Agreement with an individual accredited investor lending source, pursuant to which the holder purchased a revenue interest from the Company for $75,000 (Revenue Interest Loan #6). As consideration for such payment, commencing on June 1, 2024 and continuing thereafter until all amounts are repurchased by the Company pursuant to the terms of the Revenue Interest Loan #6, the holder has a right to receive $7,500 per month from the Company generated from its operating subsidiaries. Under the Revenue Interest Loan #6, the Company has an option to repurchase the Revenue Interest Loan #6 at any time upon two days advance written notice. Additionally, the holder has an option to terminate the Revenue Interest Loan #6 and to require the Company to repurchase the Revenue Interest Loan #6 upon the Company consummating a public offering. The repurchase price to be paid by the Company will be, if the Call Option or the Put Option is exercised (i) $105,000 if repurchased on or before May 31, 2024; and (ii) $115,500 after June 1, 2024; in each case of (i) or (ii), minus all other payments made by the Company to the holder prior to such date.
Previous report
On April 19, 2024, the Company entered into a Revenue Interest Purchase Agreement with an accredited investor lending source, pursuant to which the holder purchased a revenue interest from the Company for $500,000 (“Revenue Interest Loan #7”). As consideration for such payment, commencing on June 1, 2024 and continuing thereafter until all amounts are repurchased by the Company pursuant to the terms of the Revenue Interest Loan #7, the holder has a right to receive $50,000 per month from the Company generated from its operating subsidiaries (the “Revenue Interest”). Under the Revenue Interest Loan #7, the Company has an option (the “Call Option”) to repurchase the Revenue Interest at any time upon two days advance written notice. Additionally, the Purchasers have an option (the “Put Option”) to terminate the Revenue Interest Loan #7 and to require the Company to repurchase the Revenue Interest Loan #7 upon the Company consummating a public offering. The repurchase price to be paid by the Company will be, if the Call Option or the Put Option is exercised (i) $700,000 if repurchased on or before May 31, 2024; and (ii) $770,000 after June 1, 2024; in each case of (i) or (ii), minus all other payments made by the Company to the holder prior to such date.
Previous report
The Company entered into seven (7) Revenue Interest Purchase Agreements with seven (7) accredited investor lending sources. As part of the loan agreements the Company was not aware that in the aggregate the loan agreements required the holders have the right to receive certain payments per month from the Company generated from its operating subsidiaries that far exceeds its free-cash flow from these operating subsidiaries, subjecting the subsidiaries to borrow additional funding to supplement these required cash payments. Furthermore, the Company’s is obligated to provide in excess of 100.0% of the Reg. 1-A offering proceeds to the collective group of holders of the Revenue Interest Loan’s as payment towards the amounts due to the holders.
Previous report
On May 28, 2024, the Company entered into a securities purchase agreement with an accredited investor lending source, pursuant to which the holder made a loan to the Company, evidenced by a promissory note in the principal amount of $111,550 (“Promissory Note #2). An original issue discount of $14,550 and fees of $7,000 were applied on the issuance date, resulting in net loan proceeds to the Company of $90,000. Accrued, unpaid interest and outstanding principal, subject to adjustment, is required to be paid in nine payments in the amount of $13,881.78, with the first payment due on June 30, 2024, and remaining eight payments due on the last day of each month thereafter (a total payback to the holder of $124,936.00). The securities purchase agreement allows for the holder to purchase shares of the Company’s common stock at a discount to market which as of the date of this Report has been determined to be $0.448 per share. These shares and the conversion of the loan payable is triggered if the Company is in default or technical default with respect to the Promissory Note #2. The Company has reserved for 3X the number of shares that would be considered common stock equivalents under the terms of the Promissory Note #2.
Previous report
On June 14, 2024, the Company entered into a securities purchase agreement with an accredited investor lending source, pursuant to which the holder made a loan to the Company, evidenced by a promissory note in the principal amount of $111,550 (“Promissory Note #3). An original issue discount of $14,550 and fees of $7,000 were applied on the issuance date, resulting in net loan proceeds to the Company of $90,000. Accrued, unpaid interest and outstanding principal, subject to adjustment, is required to be paid in nine payments in the amount of $13,881.78, with the first payment due on June 30, 2024, and remaining eight payments due on the last day of each month thereafter (a total payback to holder of $124,936.00). The securities purchase agreement allows for the holder purchase shares of the Company’s common stock at a discount to market which as of the date of this Report has been determined to be $0.448 per share. These shares and the conversion of the loan payable is triggered if the Company is in default or technical default with respect to Promissory Note #3. The Company has reserved for 3X the number of shares that would be considered common stock equivalents under the terms of Promissory Note #3.
Previous report
On July 2, 2024, the Company, entered into a Standard Merchant Cash Advance Agreement (the “Factoring Agreement”), with an accredited investor lending source (“Financier”). Under the Factoring Agreement, the Company sold to Financier a specified percentage of its future receipts (as defined by the Factoring Agreement, which include any and future revenues equal to $357,500 for $250,000, less origination and other fees of $12,500. The Company agreed to repay this purchased receivable amount in equal weekly installments of $17,875. Financier has specified customary collection procedures for the collection and remittance of the weekly payable amount including direct payments from specified authorized bank accounts. The Factoring Agreement expressly provides that the sale of the future receipts shall be construed and treated for all purposes as a true and complete sale and includes customary provisions granting a security interest under the Uniform Commercial Code in accounts and the proceeds, subject to existing liens. The Factoring Agreement also provides customary provisions including representations, warranties and covenants, indemnification, arbitration and the exercise of remedies upon a breach or default. The obligations the Company under the Factoring Agreement are irrevocably, absolutely, and unconditionally guaranteed by the Company’s Chief Executive Officer. The Personal Guaranty of Performance by Mr. Ross to Financier provides customary provisions, including representations, warranties and covenants.
Previous report
On July 8, 2024, the Company entered into a subordinated business loan and security agreement (“Loan”) with an accredited investor lending source and a subsidiary to that accredited investor lending source as collateral agent, which provides for a term loan in the amount of $1,312,500 which principal and interest (of $577,500) is due on January 20, 2025. Commencing July 15, 2024, the Company is required to make weekly payments of $67,500 until the due date. The loan may be prepaid subject to a prepayment fee. An administrative agent fee of $62,500 was initially paid on the loan. A default interest rate of 5% becomes effective upon the occurrence of an event of default. In connection with the loan, the holder was issued a subordinated secured promissory note, dated July 8, 2024, in the principal amount of $1,312,500 which note is secured by all of the borrower’s assets, including receivables, subject to certain outstanding liens and agreements.
Previous report
On July 10, 2024, the Company entered into a Conversion Agreement (the “Conversion Agreement”) with Series D convertible preferred stock holder, pursuant to which the holder agreed to convert the 133,334 shares of Series D convertible preferred stock it held into 2,232,143 shares of common stock, par value $0.001 per share, of the Company. The shares of common stock underlying the Series D convertible preferred stock were reduced and repriced from $1.50 per share to $0.448 per share (which this price represents the closing price for the Company’s common stock on NASDAQ for the day immediately preceding the date of the Conversion Agreement).
Previous report
On July 22, 2024, the Company and an accredited investor lending source entered into an agreement whereby $300,000 of the Assumption Loan was acquired by the accredited investor lending source from the original holder. The agreement entered into was structured as an installment purchase between the two accredited investor lending sources. The Company entered into an amended note payable, which by its terms became a $300,000 no interest convertible note, due and payable on July 22, 2025 (“Amended Convertible Note Payable”). The conversion price is fixed at $0.448 per share, with the normal share reserve and conversion mechanics. The Company issued 223, 214 shares of common stock to the holder of the amended note payable and retiring $100,000 of this $300,000 debt. The shares were issued to the holder without restrictive legend and a new amended convertible note payable of $200,000, due and payable on July 22, 2025.
Previous report
Line of Credit
Previous report
During February 2023, the Company entered into a $2 million line of credit facility (the “Line of Credit”). The Line of Credit accrues interest at a rate determined by BSBY Daily Floating Rate plus 2.05 percentage points (which was 7.25% as of September 30, 2024), and is secured by all of the assets of the Champion Entities. The maturity date on the line of credit was initially extended by Bank of America to April 30, 2024. The balance at the maturity date was approximately $1.9 million and access to the line of credit with Bank of America was terminated. Subsequent to quarter end, Bank of America put the Company on notice that the Line of Credit is in default; however, Champion and Bank of America have continued dialogue and the Company is currently negotiating a forbearance or other cure to the default and a plan for repayment of the Line of Credit within sixty (60) to ninety (90) days with its assigned relationship manager at the bank.
Previous report
Acquisition, Integration of Champion Entities and PIPE Transaction Used to Fund Acquisition
Previous report
On July 12, 2022, we sold $12,887,976 of securities to Armistice Capital, an institutional purchaser. Such securities consisted of (i) 20,372 shares of common stock at $27.75 per share, (ii) prefunded warrants that are exercisable into 448,096 shares of common stock at $27.50 per prefunded warrant, and (iii) immediately exercisable warrants to purchase up to 936,937 shares of common stock at an initial exercise price of $21.50 per share, subject to adjustments as set forth therein, and will expire five years from the date of issuance. EF Hutton, a division of Benchmark Investments, LLC, acted as exclusive placement agent for the offering and was paid: (i) a commission of 10% of the gross proceeds ($1,288,798); (ii) non-accountable expenses of 1% of the gross proceeds ($128,880); and (iii) placement agent expenses of $125,000.
Previous report
On June 29, 2022, the Company entered into a stock and membership interest purchase agreement with Champion Safe Co., Inc. (“Champion Safe”), Superior Safe, LLC (“Superior Safe”), Safe Guard Security Products, LLC (“Safe Guard”), Champion Safe De Mexico, S.A. de C.V. (“Champion Safe Mexico” and, together with Champion Safe, Superior Safe, and Safe Guard, collectively, the “Champion Entities”) and Mr. Ray Crosby (“Crosby”) (the “Champion Purchase Agreement”), pursuant to which the Company agreed to acquire all of the issued and outstanding capital stock and membership interests of the Champion Entities from Crosby.
Previous report
The closing of the acquisition occurred on July 29, 2022. Under the terms of the Champion Purchase Agreement, the Company paid Crosby (i) cash consideration in the amount of $9,150,000, along with (ii) cash deposits in the amount of $350,000, and (iii) reimbursed Seller for $397,420 of agreed upon acquisitions and equipment purchases completed by Crosby and the Champion Entities since June 30, 2021.
Previous report
During 2023 the Company received a claim for refund or right of repayment from Crosby. The Company settled with Crosby and agreed to pay an additional $325,000 to Crosby in the following manner. $275,000 upon signing of the agreement and another $50,000 to be paid over the next twelve months. The Company increased its purchase price of the Champion Entities by the $325,000 during 2023. The funds for this pricing adjustment came from general working capital.
Reworded paragraphs (16)
Previous wording
Management’s Discussion and Analysis should be read along with the financial statements included in this Quarterly Report on Form 10-Q (the “Financial Statements”). As described in Note 1 to the Financial Statements, the Company has included the comparative three and nine months ended September 30, 2023 in this filing; however, these figures have not been restated due to the undue burden it would place on the Company. Additionally, the Company has not restated its Form 10-Qs for the periods ended March 31, 2024 and June 30, 2024 due to the undue burden this would also have on the Company. The impact of any adjustments to the quarters ended March 31, 2024 and June 30, 2024 have been included in the three months ended September 30, 2024. Accordingly, the accompanying consolidated statements of operations for the three months ended September 30, 2024 and 2023 and the nine months ended September 30, 2023, the consolidated statements of stockholders’ equity/(deficit) for the three months ended September 30, 2024 and 2023 and the nine months ended September 30, 2023, the consolidated statement of cash flows for the nine months ended September 30, 2023, and the accompanying notes for the three months ended September 30, 2024 and 2023 and nine months ended September 30, 2023, including references thereon within Management’s Discussion and Analysis, should not be relied upon.
Current wording
Management’s Discussion and Analysis should be read along with the financial statements included in this Quarterly Report on Form 10-Q (the “Financial Statements”). As described in Note 1 to the Financial Statements, we have included the comparative three months ended March 31, 2024 in this filing; however, these figures have not been restated due to the undue burden it would place on us. Additionally, we have not restated our Form 10-Q for the period ended June 30, 2024 due to the undue burden this would also have on us. The impact of any adjustments to the quarters ended March 31, 2024 and June 30, 2024 have been included in the three months ended September 30, 2024. Accordingly, the accompanying consolidated statement of operations, the consolidated statement of stockholders’ equity/(deficit) and the consolidated statement of cash flows for the three months ended March 31, 2024, and the accompanying notes for the three months ended March 31, 2024, including references thereon within Management’s Discussion and Analysis, should not be relied upon.
Previous wording
To further complement our diverse product offerings, we intend to introduce additional products in 2025.
Current wording
To further complement our diverse product offerings, we intend to introduce additional products throughout 2025.
Previous wording
On August 9, 2023, we entered into a Master Brewing Agreement with Associated Brewing. Under the terms of the Brewing Agreement, Associated Brewing has been appointed as the exclusive producer and seller of American Rebel branded spirits, with the initial product being American Rebel Light Beer. American Rebel Light Beer will launch regionally in 2024. We paid a setup fee and security deposit to Associated Brewing. We established American Rebel Beverages, LLC as a wholly-owned subsidiary specifically to hold our alcohol licenses and conduct operations for our beer business.
Current wording
On August 9, 2023, we entered into a Master Brewing Agreement with Associated Brewing. Under the terms of the Brewing Agreement, Associated Brewing has been appointed as the exclusive producer and seller of American Rebel branded spirits, with the initial product being American Rebel Light Beer. American Rebel Light Beer launched regionally in 2024. We paid a setup fee and security deposit to Associated Brewing. We established American Rebel Beverages, LLC as a wholly-owned subsidiary specifically to hold our alcohol licenses and conduct operations for our beer business.
Previous wording
Further, we expect the cannabis dispensary industry to be a material growth segment for our business. Several cannabis dispensary operators have expressed interest in the opportunity to help them with their inventory locking needs. Cannabis dispensaries have various insurance requirements and local ordinances requiring them to secure their inventory when the dispensary is closed. Dispensary operators have been purchasing gun safes and independently taking out the inside themselves to allow them to store cannabis inventory. Recognizing what seems to be a growing need for cannabis dispensary operators, we have designed a safe tailor-made for the cannabis industry. With the legal cannabis hyper-growth market expected to exceed $43 billion by 2025, and an increasing number of states where the growth and cultivation of cannabis is legal (California, Colorado, Hawaii, Maine, Maryland, Michigan, Montana, New Mexico, Oregon, Rhode Island, Vermont and Washington), we believe we are well positioned to address the need of dispensaries. American Rebel has a long list of dispensary operators, growers, and processors interested in the Company’s inventory control solutions. We believe that dispensary operators, growers, and processors are another fertile new growth market for our Vault Doors products, as many in the cannabis space have chosen to install entire vault rooms instead of individual inventory control safes—the American Rebel Vault Door has been the choice for that purpose.
Current wording
Further, we expect the cannabis dispensary industry to be a material growth segment for our business. Several cannabis dispensary operators have expressed interest in the opportunity to help them with their inventory locking needs. Cannabis dispensaries have various insurance requirements and local ordinances requiring them to secure their inventory when the dispensary is closed. Dispensary operators have been purchasing gun safes and independently taking out the inside themselves to allow them to store cannabis inventory. Recognizing what seems to be a growing need for cannabis dispensary operators, we have designed a safe tailor-made for the cannabis industry. American Rebel has a long list of dispensary operators, growers, and processors interested in the Company’s inventory control solutions. We believe that dispensary operators, growers, and processors are another fertile new growth market for our Vault Doors products, as many in the cannabis space have chosen to install entire vault rooms instead of individual inventory control safes—the American Rebel Vault Door has been the choice for that purpose.
Previous wording
From inception through September 30, 2024, we have generated an accumulated deficit of $53,991,446. We expect to incur additional losses during fiscal year ending December 31, 2024, and beyond, principally as a result of our increased investment in inventory, manufacturing capacity, marketing and sales expenses, and other growth initiatives.
Current wording
From inception through March 31, 2025, we have generated an accumulated deficit of $70,145,456. We expect to incur additional losses during fiscal year ending December 31, 2025, and beyond, principally as a result of our increased investment in inventory, manufacturing capacity, marketing and sales expenses, and other growth initiatives.
Previous wording
For the three months ended September 30, 2024, we reported Revenues of $2,337,786 compared to Revenues of $3,345,552 for the three months ended September 30, 2023. The decrease in Revenues of $1,007,766 (or -30% period over period) for the current period compared to the three months ended September 30, 2023, is attributable to slower sales for 2024 and current market conditions. For the three months ended September 30, 2024, we reported Cost of Goods Sold of $2,835,763, compared to Cost of Goods Sold of $3,095,418 for the three months ended September 30, 2023. The decrease in Cost of Goods Sold of $259,655 (or -8% period over period) for the current period is primarily attributable to of the decrease in revenue. For the three months ended September 30, 2024, we reported Gross Margin of $(497,977), compared to Gross Margin of $250,134 for the three months ended September 30, 2023. The decrease in Gross Margin of $748,111 (or -299% period over period) for the three months ended September 30, 2024, compared to the three months ended September 30, 2023 is again due a decrease in sales and increased costs of goods sold. Gross Margin percentages for the three months ended September 30, 2024 was -18% compared to 8% for the three months ended September 30, 2023. We expect our Gross Margin percentages for this time of year to be consistently in the 20% range. If not within this range we will try to increase our sales volume to in order to increase our margins, with better pricing power, better buying power on costs of goods, inventory and of course inventory management. In general, second amendment businesses have experienced a slowdown in sales volume during the past twelve months and this is in line with what we have experienced in our business.
Current wording
For the three months ended March 31, 2025, we reported Revenues of $2,511,324 compared to Revenues of $4,043,837 for the three months ended March 31, 2025. The decrease in Revenues of $1,532,513 (or (38%) period over period) for the current period compared to the three months ended March 31, 2024 is attributable to slower sales for 2025 and current market conditions. For the three months ended March 31, 2025, we reported Cost of Goods Sold of $2,222,270 compared to Cost of Goods Sold of $3,202,514 for the three months ended March 31, 2024. The decrease in Cost of Goods Sold of $980,242 (or (31%) period over period) for the current period is primarily attributable to the decrease in revenue. For the three months ended March 31, 2025, we reported Gross Margin of $289,054, compared to Gross Margin of $841,323 for the three months ended March 31, 2024. The decrease in Gross Margin of $552,269 (or (66%) period over period) for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 is again due a decrease in sales and increased costs of goods sold. Gross Margin percentage for the three months ended March 31, 2025 was 12% compared to 21% for the three months ended March 31, 2024. In general, second amendment businesses have experienced a slowdown in sales volume during the past twelve months and this is in line with what we have experienced in our business.
Previous wording
Total operating expenses for the three months ended September 30, 2024 were $542,695 compared to $3,179,246 for the three months ended September 30, 2023 as further described below. Overall, we experienced a $2,636,551 decrease in operating expenses or a -83% period over period decrease in operating expenses from the prior year comparable period. This decrease is primarily due to an adjustment in the deferred compensation expense.
Current wording
Total operating expenses for the three months ended March 31, 2025 were $3,255,473 compared to $3,118,592 for the three months ended March 31, 2024 as further described below. Overall, we experienced a $136,881 increase in operating expenses period over period. This increase is primarily due to an increase in administrative and other expenses due to increased accounting and legal fees and increased marketing and brand development costs.
Previous wording
For the three months ended September 30, 2024, we incurred consulting/payroll and other costs (along with officer compensation) of $(1,932,565) compared to consulting/payroll and other costs (along with officer compensation) of $1,039,273 for the three months ended September 30, 2023. The decrease in consulting/payroll and other costs of $(2,971,838) was due to the adjustment in the deferred compensation expense due to common stock equivalents on our Series A preferred stock. The Company expects to try and maintain its consulting/payroll and other costs as we endeavour to further expand our sales volume.
Current wording
For the three months ended March 31, 2025, we incurred consulting/payroll and other costs (along with officer compensation) of $903,040 compared to consulting/payroll and other costs (along with officer compensation) of $1,898,413 for the three months ended March 31, 2024. The decrease in consulting/payroll and other costs of $(995,373) was due to the adjustment in the deferred compensation expense due to common stock equivalents on our Series A preferred stock as identified and corrected during the period ended September 30, 2024 upon finalization of the 2023 re-audit. The Company expects to try and maintain its consulting/payroll and other costs as we endeavor to further expand our sales volume.
Previous wording
For the three months ended September 30, 2024, we incurred rental expense, warehousing, outlet expense of $103,562, compared to rental expense, warehousing, outlet expense of $230,226 for the three months ended September 30, 2023. The decrease in rental expense, warehousing, outlet expense of $126,664 is due to cost cutting on leases and properties that the Company rents to conduct the Champion business acquisition as well as other cost cutting measures or efficiencies put in place. The Company expects to maintain this level of expense on a go-forward basis with its leases and rented properties for the near term. The Company may look to consolidate some of its space as needed as it fine tunes the Champion business.
Current wording
For the three months ended March 31, 2025, we incurred rental expense, warehousing, outlet expense of $57,114, compared to rental expense, warehousing, outlet expense of $151,666 for the three months ended March 31, 2024. The decrease in rental expense, warehousing, outlet expense of $94,552 is due to cost cutting on leases and properties that the Company rents to conduct the Champion business acquisition as well as other cost cutting measures or efficiencies put in place.
Previous wording
For the three months ended September 30, 2024, we incurred product development expenses of $277,483, compared to product development expenses of $20,326 for the three months ended September 30, 2023. The increase in product development expenses of $257,157 is due to some of the Company’s current product development expenses in the three months ended September 30, 2023 period being included in consulting/payroll and other costs accounts which we believe provides for a better presentation of our historical business expenses than pure product development expense. For the three months ended September 30, 2024, we have incurred expenses that are attributable to our private label brewery efforts and should be separated and identified. The Company expects to maintain some level of expense on a go-forward basis with new products and efforts being expended for future sales growth and product needs.
Current wording
For the three months ended March 31, 2025, we incurred product development expenses of $93,467 compared to product development expenses of $98,629 for the three months ended March 31, 2024. The decrease in product development expenses of $5,162 is due to the timing of development expenses in connection with the private label beer. We expect to maintain some level of expense on a go-forward basis with new products and efforts being expended for future sales growth and product needs.
Previous wording
For the three months ended September 30, 2024, we incurred marketing and brand development expenses of $624,509, compared to marketing and brand development expenses of $517,345 for the three months ended September 30, 2023. The increase in marketing and brand development expenses of $107,164 (or 21% period over period) relates primarily to initial market awareness efforts for American Rebel Beer as well as expenses associated with our Tony Stewart activities and general push forward on sales efforts.
Current wording
For the three months ended March 31, 2025, we incurred marketing and brand development expenses of $695,491 compared to marketing and brand development expenses of $265,055 for the three months ended March 31, 2024. The increase in marketing and brand development expenses of $430,436 (or 162% period over period) relates primarily to market awareness efforts for American Rebel Beer as well as expenses associated with our Tony Stewart activities and general push forward on sales efforts.
Previous wording
For the three months ended September 30, 2024, we incurred administrative and other expense of $1,414,889, compared to administrative and other expense of $1,347,181 for the three months ended September 30, 2023. The decrease in administrative and other expense of $67,708 (or 5% period over period) relates directly to decreased professional fees that we incurred in our registered public offerings and capital raising efforts, along with additional expenses picked up from our acquisition of Champion. The Company believes as it grows its sales base it will also increase its administrative and other expense commensurate with the increased profits for the future.
Current wording
For the three months ended March 31, 2025, we incurred administrative and other expense of $1,470,587 compared to administrative and other expense of $680,514 for the three months ended March 31, 2025. The increase in administrative and other expense of $790,073 (or 116% period over period) relates directly to increased professional fees including accounting and legal fees.
Previous wording
For the three months ended September 30, 2024, we incurred depreciation and amortization expense of $54,817, compared to depreciation and amortization expense of $24,895 for the three months ended September 30, 2023. The increase primarily relates to amortization related to goodwill.
Current wording
For the three months ended March 31, 2025, we incurred depreciation and amortization expense of $35,774 compared to depreciation and amortization expense of $24,315 for the three months ended March 31, 2025. The increase primarily relates to amortization related to intangible assets.
Previous wording
Net loss for the three months ended September 30, 2024 amounted to $1,747,957, resulting in a loss per share of $(0.67), compared to a net loss of $2,793,670 for the three months ended September 30, 2023, resulting in a loss per share of $(0.95). The decrease in the net loss from the three months ended September 30, 2023 to the three months ended September 30, 2024 is primarily due to adjustments made to deferred compensation expense in connection with the Series A Preferred shares partially offset by a myriad of expenses that the Company incurred in the quarter, such as professional and legal fees, increased costs in marketing, and the softening of gross margin on sales.
Current wording
Net loss for the three months ended March 31, 2025 amounted to $5,059,256, resulting in a loss per share of $(23.45), compared to a net loss of $2,701,278 for the three months ended March 31, 2024, resulting in a loss per share of $(27.47) (adjusted for various reverse stock splits). The increase in the net loss for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 is primarily due to a myriad of expenses that we incurred in the quarter, such as professional and legal fees, increased costs in marketing, and the softening of gross margin on sales.
Previous wording
We are a company still in the growth and acquisition stage and our revenue from operations does not cover our operating expenses. Working capital decreased by $7,322,713 period over period where we had a working capital balance of $2,545,744 at December 31, 2023 compared to a working capital deficit balance of $(4,776,970) at September 30, 2024. This working capital decrease was due to increased expenses launching new products and slowing sales in its legacy business. We have funded our operations primarily through the issuance of capital stock, convertible debt, and other securities and will continue so into the near future and beyond.
Current wording
We are a company still in the growth and acquisition stage and our revenue from operations does not cover our operating expenses. Working capital decreased by $507,743 period over period where we had a working capital deficit of $(8,940,228) at December 31, 2024 compared to a working capital deficit balance of $(9,447,971) at March 31, 2025. This working capital decrease was due to increased expenses launching new products and slowing sales in its legacy business. We have funded our operations primarily through the issuance of capital stock, convertible debt, and other securities and will continue so into the near future and beyond.
Previous wording
Over the past twelve months we entered into the following:
Current wording
Over the past twelve months, we entered into various working capital notes with a total balance of $4,603,859 as of March 31, 2025. The promissory notes have various terms – refer to Note 8 of our consolidated financial statements for the specific terms of each promissory note.
Rearranged previous paragraphs (5)
Previous report — wording carried elsewhere
Revenue (‘Sales’) and cost of goods sold (‘Cost of Sales’)
Previous report — wording carried elsewhere
For the nine months ended September 30, 2024, we reported Revenues of $9,637,016 compared to Revenues of $11,418,222 for the nine months ended September 30, 2023. The decrease in Revenues of $1,781,206 (or -16% period over period) for the current period compared to the nine months ended September 30, 2023 is attributable to slower sales for 2024 and current market conditions. For the nine months ended September 30, 2024, we reported Cost of Goods Sold of $9,263,015, compared to Cost of Goods Sold of $8,869,432 for the nine months ended September 30, 2023. The increase in Cost of Goods Sold of $393,583 (or 4% period over period) for the current period is primarily attributable to a marginal decrease in sales along with higher costs of goods sold for the period. For the nine months ended September 30, 2024, we reported Gross Margin of $374,001 compared to Gross Margin of $2,548,790 for the nine months ended September 30, 2023. The decrease in Gross Margin of $2,174,789 (or -85% period over period) for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023 is again due a decrease in sales and increased costs of goods sold. Gross Margin percentages for the nine months ended September 30, 2024 was 4% compared to 29% for the nine months ended September 30, 2023. We expect our Gross Margin percentages for this time of year to be consistently in the 20% range. If not within this range we will try to increase our sales volume to in order to increase our margins, with better pricing power, better buying power on costs of goods, inventory and of course inventory management. In general, second amendment businesses have experienced a slowdown in sales volume during the past twelve months and this is in line with what we have experienced in our business.
Previous report — wording carried elsewhere
For the nine months ended September 30, 2024, we incurred consulting/payroll and other costs (along with officer compensation) of $1,967,639 compared to consulting/payroll and other costs (along with officer compensation) of $2,915,377 for the nine months ended September 30, 2023. The decrease in consulting/payroll and other costs of $947,738 was due to cost controls put in place on the post-acquisition of the Champion Entities and an adjustment to compensation costs due to common stock equivalents on our Series A preferred stock. We expect to try and maintain our consulting/payroll and other costs as we endeavour to further expand our sales volume.
Previous report — wording carried elsewhere
For the nine months ended September 30, 2024, we incurred marketing and brand development expenses of $1,189,219 compared to marketing and brand development expenses of $942,687 for the nine months ended September 30, 2023. The increase in marketing and brand development expenses of $246,532 (or 26% period over period) relates primarily to an increase of activities related to the launch of American Rebel Beer as well as expenses associated with our Tony Stewart activities and general push forward on sales efforts.
Previous report — wording carried elsewhere
For the nine months ended September 30, 2024, we incurred depreciation and amortization expense of $109,813 compared to depreciation and amortization expense of $79,260 for the nine months ended September 30, 2023. The increase in depreciation and amortization expense primarily relates to the amortization expense of goodwill.