AMERICAN REBEL HOLDINGS INC

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, 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.

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 and six months ended June 30, 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 quarter ended June 30, 2024 have been included in the three months ended September 30, 2024. Accordingly, the accompanying consolidated statement of operations and the consolidated statement of stockholders’ equity/(deficit) for the three and six months ended June 30, 2024 and the consolidated statement of cash flows for the six months ended June 30, 2024, and the accompanying notes for the three and six months ended June 30, 2024, including references thereon within Management’s Discussion and Analysis, should not be relied upon.

Previous 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.

Current wording

From inception through June 30, 2025, we have generated an accumulated deficit of $88,663,449. 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 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.

Current wording

For the three months ended June 30, 2025, we reported Revenues of $2,842,596 compared to Revenues of $3,255,393 for the three months ended June 30, 2024. The decrease in Revenues of $412,797 (or (13%) period over period) for the current period compared to the three months ended June 30, 2024 is attributable to slower sales for 2025 and current market conditions. For the three months ended June 30, 2025, we reported Cost of Goods Sold of $2,873,969 compared to Cost of Goods Sold of $3,224,738 for the three months ended June 30, 2024. The decrease in Cost of Goods Sold of $350,769 (or (11%) period over period) for the current period is primarily attributable to the decrease in revenue. For the three months ended June 30, 2025, we reported Gross Margin of $(31,373), compared to Gross Margin of $30,655 for the three months ended June 30, 2024. The decrease in Gross Margin of $62,028 (or (202%) period over period) for the three months ended June 30, 2025 compared to the three months ended June 30, 2024 is again due a decrease in sales and increased costs of goods sold. Gross Margin percentage for the three months ended June 30, 2025 was (1)% compared to 1% for the three months ended June 30, 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 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.

Current wording

Total operating expenses for the three months ended June 30, 2025 were $4,166,907 compared to $3,978,576 for the three months ended June 30, 2024 as further described below. Overall, we experienced a $188,331 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 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.

Current wording

For the three months ended June 30, 2025, we incurred consulting/payroll and other costs (along with officer compensation) of $1,137,816 compared to consulting/payroll and other costs (along with officer compensation) of $2,001,791 for the three months ended June 30, 2024. The decrease in consulting/payroll and other costs of $(863,975) 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 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.

Current wording

For the three months ended June 30, 2025, we incurred rental expense, warehousing, outlet expense of $48,253, compared to rental expense, warehousing, outlet expense of $80,515 for the three months ended June 30, 2024. The decrease in rental expense, warehousing, outlet expense of $32,262 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 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.

Current wording

For the three months ended June 30, 2025, we incurred product development expenses of $648,357 compared to product development expenses of $337,771 for the three months ended June 30, 2024. The increase in product development expenses of $310,586 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 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.

Current wording

For the three months ended June 30, 2025, we incurred marketing and brand development expenses of $970,806 compared to marketing and brand development expenses of $299,655 for the three months ended June 30, 2024. The increase in marketing and brand development expenses of $671,151 (or 224% 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 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.

Current wording

For the three months ended June 30, 2025, we incurred administrative and other expense of $1,324,575 compared to administrative and other expense of $1,228,163 for the three months ended June 30, 2024. The increase in administrative and other expense of $96,412 (or 8% period over period) relates directly to increased professional fees including accounting and legal fees.

Previous 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.

Current wording

For the three months ended June 30, 2025, we incurred depreciation and amortization expense of $37,100 compared to depreciation and amortization expense of $30,681 for the three months ended June 30, 2025. The increase primarily relates to amortization related to intangible assets.

Previous wording

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 wording

For the three months ended June 30, 2025, we incurred interest expense of $430,183 compared to interest expense of $1,055,282 for the three months ended June 30, 2024. The decrease in interest expense of $625,099 is due to a significant number of notes we have entered into and subsequently converted or modified.

Previous wording

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 wording

For the three months ended June 30, 2025, we incurred a loss on debt extinguishment of $11,817,991 and loss on settlement of liability of $1,692,144. This is due to the conversion of debt into equity, which was not present during the three months ended June 30, 2024.

Previous 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.

Current wording

Net loss for the three months ended June 30, 2025 amounted to $18,137,743, resulting in a loss per share of $(5.34), compared to a net loss of $5,253,004 for the three months ended June 30, 2024, resulting in a loss per share of $(201.01) (adjusted for various reverse stock splits). The increase in the net loss for the three months ended June 30, 2025 compared to the three months ended June 30, 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 as well as the significant loss on debt extinguishment as mentioned above.

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 $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.

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 $4,302,288 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 $(4,637,940) at June 30, 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

During the three months ended March 31, 2025, we reduced anticipated cash outflows of $1.8 million through the issuance of common stock.

Current wording

During the six months ended June 30, 2025, we reduced anticipated cash outflows of $25.3 million through the issuance of common stock in exchange for settlement of our outstanding debt and payables.

Previous 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.

Current wording

Over the past twelve months, we entered into various working capital notes with a total balance of $6,860,490 as of June 30, 2025. The promissory notes have various terms – refer to Note 8 of our consolidated financial statements for the specific terms of each promissory note.