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What changed in AMERICAN REBEL HOLDINGS INC's 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of AMERICAN REBEL HOLDINGS INC's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+335 added−233 removedSource: 10-K (2024-04-12) vs 10-K (2023-04-14)

Top changes in AMERICAN REBEL HOLDINGS INC's 2023 10-K

335 paragraphs added · 233 removed · 155 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

46 edited+9 added−3 removed160 unchanged
Biggest changeIn addition to the payments to the Seller, the Company paid costs on behalf of and specifically associated with the acquisition of Champion and its integration into the Company’s operations of $350,000; $200,000 was paid to our investment banker in analyzing the acquisition and purchase of Champion prior to the purchase and subsequent financing in July as well as $150,000 paid to Champion’s independent PCAOB registered accounting firm to conduct their two years of audit and subsequent interim review reports. 10 Based in Provo, Utah and founded in 1999, Champion Safe is what we believe to be one of the premier designers, manufacturers and marketers of home and gun safes in North America.
Biggest changeIn addition to the direct payments to the Seller during the year ended December 31, 2022, the Company paid certain costs on behalf of and associated with the acquisition of Champion and its integration totaling $350,000; $200,000 was paid to our investment banker in analyzing the acquisition and purchase of Champion as well as $150,000 was paid to Champion’s independent PCAOB registered accounting firm to conduct their two years of audit and subsequent interim review reports to be filed with the SEC in our Annual Report and other forms with the SEC.
We believe that Mr. Ross had an immediate and positive impact on our brand, products, team members, and customers. Under Mr. Ross’s leadership, we believe that we have built a strong brand and strengthened the management team. We are refocusing on the profitability of our products, reinforcing the quality of safes to engage customers and drive sales.
Ross had an immediate and positive impact on our brand, products, team members, and customers. Under Mr. Ross’s leadership, we believe that we have built a strong brand and strengthened the management team. We are refocusing on the profitability of our products, reinforcing the quality of safes to engage customers and drive sales.
This is also an excellent opportunity to meet, greet and sell product to our final customers, the buying public. The Iowa Deer Classic and Illinois Deer Classic are carryovers from our Chief Executive Officer Charles A. Ross’ hosting duties on Maximum Archery World Tour , but we have found that many potential safe buyers attend these shows.
This is an excellent opportunity to meet, greet and sell product to our final customers, the buying public. The Iowa Deer Classic and Illinois Deer Classic are carryovers from our Chief Executive Officer Charles A. Ross’ hosting duties on Maximum Archery World Tour , but we have found that many potential safe buyers attend these shows.
Our management team also reflects a balanced approach to tenure that will allow the Board to benefit from a mix of newer members who bring fresh perspectives and seasoned directors who bring continuity and a deep understanding of our complex business. 8 Our Growth Strategy Our goal is to enhance our position as a designer, producer and marketer of premium safes and personal security products.
Our management team reflects a balanced approach to tenure that will allow the board of directors to benefit from a mix of newer members who bring fresh perspectives and seasoned directors who bring continuity and a deep understanding of our complex business. 8 Our Growth Strategy Our goal is to enhance our position as a designer, producer and marketer of premium safes and personal security products.
As we believe that safes are becoming a must-have household appliance, we strive to establish authenticity by selling our products to additional groups, and to expand our direct-to-consumer presence through our website and our showroom in Lenexa, Kansas. Further, we expect the cannabis dispensary industry to be a material growth segment for our business.
As we believe that safes are becoming a must-have household appliance, we strive to establish authenticity by selling our products to additional groups, and to expand our direct-to-consumer presence through our website and our showroom currently in Lenexa, Kansas. Further, we expect the cannabis dispensary industry to be a material growth segment for our business.
Small Plus CCW Backpack Our small one-strap concealed carry backpack is designed for use while running, jogging, biking or riding a motorcycle. Our concealment pocket contains a holster and attaches to the interior with hook and loop material. Soft fleece lined pockets for your tablet, glasses case and accessories are also included.
Small Plus CCW Backpack Our small one-strap concealed carry backpack is designed for use while running, jogging, biking or riding a motorcycle. Our concealment pocket contains a holster and attaches to the interior with hook and loop material. Soft fleece lined pockets for your tablet, glasses case and accessories are included.
Available in dark blue or in our signature patriotic “We The People” design. Small Freedom CCW Backpack This one strap pack also contains a holster and attaches to the interior with hook and loop material. There is also plenty of room for a small tablet, cell phone, chargers and other necessities.
Available in dark blue or in our signature patriotic “We The People” design. Small Freedom CCW Backpack This one strap pack contains a holster and attaches to the interior with hook and loop material. There is plenty of room for a small tablet, cell phone, chargers and other necessities.
We rely on a combination of patent, copyright and trade secret laws in the United States to protect our proprietary technology. We also rely on a number of United States registered, pending and common law trademarks to protect our brand “American Rebel”. On May 29, 2018, US Patent No. 9,984,552, Firearm Detecting Luggage, was issued to us.
We rely on a combination of patent, copyright and trade secret laws in the United States to protect our proprietary technology. We rely on a number of United States registered, pending and common law trademarks to protect our brand “American Rebel”. On May 29, 2018, US Patent No. 9,984,552, Firearm Detecting Luggage, was issued to us.
NBS provides an excellent base of customers for us to introduce our products to. Sports, Inc. is also a buying group show where retailers who are members of Sports, Inc. attend to make purchases from attending vendors. Paid Advertising We will occasionally purchase paid print advertising to support editorial and events.
NBS provides an excellent base of customers for us to introduce our products. Sports, Inc. is a buying group show where retailers who are members of Sports, Inc. attend to make purchases from attending vendors. Paid Advertising We will occasionally purchase paid print advertising to support editorial and events.
Safe storage is also top priority of our customer base who seeks to responsibly secure their firearms. Whenever a new firearm is purchased, gun owners look for our premium solution to responsibly secure them and protect their loved ones. Our large safes selection includes the following: AR-50 The AR-50 is our biggest safe.
Safe storage is a top priority of our customer base who seeks to responsibly secure their firearms. Whenever a new firearm is purchased, gun owners look for our premium solution to responsibly secure them and protect their loved ones. Our large safes selection includes the following: AR-50 The AR-50 is our biggest safe.
Whenever a new firearm is purchased, the owner should also look for a way to store and secure it. Storing the firearm in a gun safe will prevent it from being misused by young household members, and it will also prevent it from being stolen in a burglary or damaged in a fire or natural disaster.
Whenever a new firearm is purchased, the owner should look for a way to store and secure it. Storing the firearm in a gun safe will prevent it from being misused by young household members, and it will prevent it from being stolen in a burglary or damaged in a fire or natural disaster.
We believe that a large, highly visible safe also acts as a deterrent to any prospective thief. ii. Personal Safes – the safes in our compact safe collection are easy to operate and carry as they fit into briefcases, desks or under vehicle seats.
We believe that a large, highly visible safe acts as a deterrent to any prospective thief. ii. Personal Safes – the safes in our compact safe collection are easy to operate and carry as they fit into briefcases, desks or under vehicle seats.
We have included the Champion Entities assets and liabilities as of that date and the subsequent financial activity through the date of this Annual Report in our consolidated financial statements which consist of the consolidated balance sheets, consolidated statement of operations, consolidated statement of stockholders’ equity (deficit) and consolidated statement of cash flows (the “Consolidated Financial Statements”).
We included the Champion Entities assets and liabilities as of that date and the subsequent financial activity through the date of this Annual Report in our consolidated financial statements which consist of the consolidated balance sheets, consolidated statement of operations, consolidated statement of stockholders’ equity (deficit) and consolidated statement of cash flows (the “Consolidated Financial Statements”).
We also sell our products online to individuals desiring home, personal and office protection, as well as to recreational shooters and hunters. Our customers choose us for a number of reasons, including the breadth and availability of the products we offer, our extensive expertise, and the quality of our customer service.
We sell our products online to individuals desiring home, personal and office protection, as well as to recreational shooters and hunters. Our customers choose us for a number of reasons, including the breadth and availability of the products we offer, our extensive expertise, and the quality of our customer service.
The large safes are designed to be resistant to break-ins, natural disasters and fire damage, and to prevent unauthorized access and to protect your family and their valuables. A large, highly visible safe also is believed to act as a deterrent to any prospective thief.
The large safes are designed to be resistant to break-ins, natural disasters and fire damage, and to prevent unauthorized access and to protect your family and their valuables. A large, highly visible safe is believed to act as a deterrent to any prospective thief.
We believe we made significant progress in 2022 in the largest growing segment of the safe industry, sales to first-time buyers. We also intend to opportunistically pursue the strategies described below to continue our upward trajectory and enhance stockholder value.
We believe we made significant progress in 2022 in the largest growing segment of the safe industry, sales to first-time buyers. We intend to opportunistically pursue the strategies described below to continue our upward trajectory and enhance stockholder value.
This licensee would benefit from the strong American Rebel brand with their second line of American Rebel branded tools as they would continue to sell both of the lines of tools. Conversely, American Rebel could potentially also benefit as a licensee of products.
This licensee would benefit from the strong American Rebel brand with their second line of American Rebel branded tools as they would continue to sell both of the lines of tools. Conversely, American Rebel could potentially benefit as a licensee of products.
We also believe that our high level of service, combined with strong consumer demand for our products and our focused distribution strategy, produces substantial customer satisfaction and loyalty.
We believe that our high level of service, combined with strong consumer demand for our products and our focused distribution strategy, produces substantial customer satisfaction and loyalty.
Designed with medical marijuana or recreational cannabis dispensaries in mind and increasing governmental and insurance industry regulation to lock inventory after hours, we believe our HG-INV Inventory Safe delivers a high-level user experience. Upcoming Product Offerings To further complement our diverse product offerings, we intend to introduce additional products in 2023 and 2024.
Designed with medical marijuana or recreational cannabis dispensaries in mind and increasing governmental and insurance industry regulation to lock inventory after hours, we believe our HG-INV Inventory Safe delivers a high-level user experience. Upcoming Product Offerings To further complement our diverse product offerings, we intend to introduce additional products in 2024 and 2025.
Champion Safe Co. has three safe lines, which we believe feature some of the most secure and highest quality gun safes. Following the acquisition, we operate Champion Safe in the same manner as it operated pre-acquisition. Champion Safe, Superior Safe and Safe Guard Security Products are valuable and prominent identifiable brands in the safe industry.
Champion Safe Co. has three safe lines, which we believe feature some of the most secure and highest quality gun safes. We operate Champion Safe in the same manner as it was operated pre-acquisition. Champion Safe, Superior Safe and Safe Guard Security Products are valuable and prominent identifiable brands in the safe industry.
We also believe we have cultivated an emotional connection with the brand which symbolizes a lifestyle of freedom, rugged individualism, excitement and a sense of bad boy rebellion. ● Proven Management Team - our founder and Chief Executive Officer, Charles A. Ross, Jr., has led the expansion and focus on the select product line we offer today.
We believe we have cultivated an emotional connection with the brand which symbolizes a lifestyle of freedom, rugged individualism, excitement and a sense of bad boy rebellion. ● Proven Management Team - our founder and Chief Executive Officer, Charles A. Ross, Jr., has led the expansion and focus on the select product line we offer today. We believe that Mr.
The active boltworks and three external hinges are some of the features of the vault door. For safety and to use the door for a panic or safe room door, a quick release lever is installed inside the door. 14 Dispensaries Our inventory control safe, the HG-INV Inventory Safe, provides cannabis dispensaries a reliable and safe solution.
The active bolt works and three external hinges are some of the features of the vault door. For safety and to use the door for a panic or safe room door, a quick release lever is installed inside the door. 14 Dispensaries Our inventory control safe, the HG-INV Inventory Safe, provides cannabis dispensaries a reliable and safe solution.
Champion Safe On June 29, 2022, the Company entered into a stock and membership interest purchase agreement with Champion Safe Co., Inc., Superior Safe, LLC, Safe Guard Security Products, LLC, Champion Safe De Mexico, S.A. de C.V. (the “Champion Entities” or “Champion”) and Mr.
Champion Safe Combined Group On June 29, 2022, the Company entered into a stock and membership interest purchase agreement with Champion Safe Co., Inc., Superior Safe, LLC, Safe Guard Security Products, LLC, Champion Safe De Mexico, S.A. de C.V. (the “Champion Entities”, “Champion Safe Combined Group” or “Champion”) and Mr.
The Champion Entities have been integrated with our existing operations and are under the control of our management team. The closing of the acquisition occurred on July 29, 2022.
The Champion Entities have been fully integrated with our existing operations and are under the full control of our management team. The closing occurred on July 29, 2022.
Below is a summary of potential upcoming product offerings: i. Biometrics Safes – we intend to introduce a line of handgun boxes with biometrics, WiFi and Bluetooth technologies.
Below is a summary of potential upcoming product offerings: i. Biometrics Safes – we intend to introduce a line of handgun boxes with biometrics, Wi-Fi and Bluetooth technologies.
ITEM 1. BUSINESS Recent Events Acquisition of Champion Entities 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.
Acquisition of Champion Entities 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.
If American Rebel determines a third party has designed, engineered, and manufactured a product that would be a strong addition to the American Rebel catalog of products, American Rebel could license that product from the third-party and sell the licensed product under the American Rebel brand. Our website address is www.americanrebel.com.
If American Rebel determines a third party has designed, engineered, and manufactured a product that would be a strong addition to the American Rebel catalog of products, American Rebel could license that product from the third-party and sell the licensed product under the American Rebel brand. Our website addresses are www.americanrebel.com, www.championsafe.com, www.superiorsafe.com and www.americanrebelbeer.com.
Available in a variety of trim color options. 15 Apparel We offer a wide range of concealed carry jackets, vests and coats for men and women, including our Freedom Jacket 2.0 which incorporates a significant advance in the operation of the concealment pocket.
Available in a variety of trim color options. 15 Apparel We offer a wide range of concealed carry jackets, vests and coats for men and women, including our Freedom Jacket 2.0 which incorporates a significant advance in the operation of the concealment pocket. We proudly offer patriotic apparel for the whole family, with the imprint of the American Rebel brand.
We believe that when it comes to their homes, consumers place a premium on their security and privacy. Our products are designed to offer our customers convenient, efficient and secure home and personal safes from a provider that they can trust.
Additionally, the Company designs and produces branded accessories and apparel, including with concealment pockets. We believe that when it comes to their homes, consumers place a premium on their security and privacy. Our products are designed to offer our customers convenient, efficient and secure home and personal safes from a provider that they can trust.
We plan to expand our manufacturing throughput to fill our significant backlog of orders and aggressively open new dealer accounts. As a division of the combined company, Champion Safe Company will shift its emphasis to growing revenue and increasing profitability of the combined company. We believe the combined company will continue to benefit greatly from Champion founder Mr.
We have begun to expand our manufacturing throughput to fill the significant backlog of orders and aggressively open new dealer accounts. Champion Safe Company and its management will shift its emphasis to growing revenue and increasing profitability of the combined businesses. We believe that the combined company will benefit greatly from access to former Champion founder Mr. Crosby. Mr.
Ray Crosby (the “Seller”) (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 the Seller. The acquisition closed on July 29, 2022.
Ray Crosby (the “Seller”) (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 the Seller. The closing occurred on July 29, 2022 (see Recent Events described above). “Champion Safe Combined Group” consists of Champion Safe Co., Inc.
We compete primarily on the quality, safety, reliability, features, performance, brand awareness, and price of our products. Our primary competitors include companies such as Liberty Safe, Fort Knox Security Products, American Security, Sturdy Safe Company, Homeland Security Safes, SentrySafe and as well as certain other domestic manufacturers, as well as certain China-based manufactured safes.
Our primary competitors include companies such as Liberty Safe, Fort Knox Security Products, American Security, Sturdy Safe Company, Homeland Security Safes, SentrySafe and as well as certain other domestic manufacturers, as well as certain China-based manufactured safes.
Effective January 5, 2017, the Company amended its articles of incorporation and changed its name to American Rebel Holdings, Inc. The Company completed a business combination with its majority stockholder, American Rebel, Inc. on June 19, 2017. As a result, American Rebel, Inc. became a wholly owned subsidiary of the Company.
Effective January 5, 2017, the Company amended its articles of incorporation and changed its name to American Rebel Holdings, Inc. The Company completed a business combination with its majority shareholder, American Rebel, Inc. on June 19, 2017. On July 29, 2022, the Company closed on the acquisition of Champion.
Left-hand and right-hand concealment pocket access provides for secure and safe concealment of your firearm with easy access on either side. Freedom 2.0 Jackets and Vests for men and women Our lightweight jackets collection is designed with magnetic pocket closures for silent, secure and safe concealment.
Freedom 2.0 Jackets and Vests for men and women Our lightweight jackets collection is designed with magnetic pocket closures for silent, secure and safe concealment. Our lightweight jackets are crafted to facilitate easy firearm access for both right-handed and left-handed carriers.
In 1999, Mr. Crosby founded Champion Safe, later expanding to include Superior Safe and Safe Guard Security Products. Champion Safe employs over 60 employees in their Utah factory and over 150 employees in their Nogales, Mexico facility just south of the U.S. border. The majority of the midline and value priced safes industry-wide are manufactured in China, but Mr.
Champion Safe employs over 60 employees in their Utah factory and over 150 employees in their Nogales, Mexico facility just south of the U.S. border. The majority of the midline and value priced safes industry-wide are manufactured in China, but Mr. Crosby had the foresight to build his own facility in Mexico and utilize American-made steel exclusively.
Expanding Scope of Operations Activities by Offering Servicing Dispensaries and Brand Licensing We continually seek to target new consumer segments for our safes.
The collaboration between management teams will focus on increased manufacturing efficiencies and volume expansion. Expanding Scope of Operations Activities by Offering Servicing Dispensaries and Brand Licensing We continually seek to target new consumer segments for our safes.
The information on our website is not part of this Annual Report, Form 10-K. Description of Business Our Company American Rebel – America’s Patriotic Brand, operates primarily on designing and marketing branded safes and personal security and self-defense products. Additionally, the Company designs and produces branded accessories and apparel, including with concealment pockets.
Information available on our websites is not incorporated by reference in and is not deemed a part of this Annual Report, Form 10-K. Description of Business Our Company American Rebel – America’s Patriotic Brand, operates primarily on designing and marketing branded safes and personal security and self-defense products.
We also proudly offer patriotic apparel for the whole family, with the imprint of the American Rebel brand. Our apparel line serves as “point man” for the brand, often the first exposure that people have to all things American Rebel. Our branded apparel line is forever relevant, current and bold.
Our apparel line serves as “point man” for the brand, often the first exposure that people have to all things American Rebel. Our branded apparel line is forever relevant, current and bold. We place emphasis on styling that complements our enthusiast customers’ lifestyle, representing the values of our community and quintessential American character.
Our apparel collection consists of the following: Cartwright Coats and Vests Engineered for comfort, warmth, and versatility and mobility. Our Cartwright Concealed Carry Coats and Vests are designed with purpose and informed by the rugged demands of the everyday hard worker. Its quality construction and workmanship are designed to keep you warm and shielded from the elements.
Our Cartwright Concealed Carry Coats and Vests are designed with purpose and informed by the rugged demands of the everyday hard worker. Its quality construction and workmanship are designed to keep you warm and shielded from the elements. Left-hand and right-hand concealment pocket access provides for secure and safe concealment of your firearm with easy access on either side.
Furthermore, the current emphasis on safe storage and the capital infusion from American Rebel positions the Champion operation to grow its footprint. In addition to the access to capital for Champion to grow its business, American Rebel will benefit from Champion’s 350 dealers, nationwide distribution network and seniority with buying groups and trade shows.
In addition to the access to capital for Champion to grow its business, American Rebel will benefit from Champion’s 350 dealers, nationwide distribution network and seniority with buying groups and trade shows. American Rebel will benefit from the increased Champion manufacturing throughput as capacity restrictions have limited American Rebel’s inventory and potential growth.
Ray Crosby’s vast experience and expertise in the industry. Mr. Crosby is a foundational figure in the safe business with over 40 years of experience in the industry. Mr. Crosby and his brother Jay founded Fort Knox Safe in 1982 and Liberty Safe, in 1988, which recently sold to a middle market private investment firm for approximately $147.5 million.
Crosby’s vast experience and expertise in the industry will be instrumental in opening doors and insight into the industry’s growth. Mr. Crosby is a foundational figure in the safe business with over 40 years of experience in the industry. Mr. Crosby and his brother Jay Crosby founded Fort Knox Safe in 1982, and Liberty Safe in 1988.
Crosby was eager to expand his manufacturing operation and seize upon the growth opportunities in the safe business. Working closing with the American Rebel team, Mr. Crosby expanded his paint-line capacity and hinge assembly workstations. Mr. Crosby has experience in many prior economic cycles and has found the safe business to be sound in good and bad economic times.
Crosby expanded his paint-line capacity and hinge assembly workstations. Mr. Crosby has experience in many prior economic cycles and has found the safe business to be sound in good and bad economic times. Furthermore, the current emphasis on safe storage and the capital infusion from American Rebel positions the Champion operation to grow its footprint.
Our lightweight jackets are crafted to facilitate easy firearm access for both right-handed and left-handed carriers. American Rebel T-Shirts Collection American Rebel’s T-shirts collection is created to liberate the spirit of an endless summer inside everyone and to embrace their patriotism. 16 Competition The North American safe industry is dominated by a small number of companies.
American Rebel T-Shirts Collection American Rebel’s T-shirts collection was created to liberate the spirit of an endless summer inside everyone and to embrace their patriotism. 16 Competition The North American safe industry is dominated by a small number of companies. We compete primarily on the quality, safety, reliability, features, performance, brand awareness, and price of our products.
We place emphasis on styling that complements our enthusiast customers’ lifestyle, representing the values of our community and quintessential American character. The American Rebel clothing line style is not only a fashion statement; it is the sense of pride of belonging to our patriotic family, on your adventures and in life.
The American Rebel clothing line style is not only a fashion statement; it is the sense of pride of belonging to our patriotic family, on your adventures and in life. Our apparel collection consists of the following: Cartwright Coats and Vests Engineered for comfort, warmth, and versatility and mobility.
The prices of components for the made-in-China safes have dramatically increased as well as the transportation costs to import these Chinese-made safes. Mr. Crosby’s decision to build his own facility in Mexico as opposed to importing Chinese-made safes has proven to be insightful and beneficial for Champion Safe. Mr.
Crosby’s decision to build his own facility in Mexico as opposed to importing Chinese-made safes has proven to be insightful and beneficial for Champion Safe. Mr. Crosby was eager to expand his manufacturing operation and seize upon the growth opportunities in the safe business. Working closing with the American Rebel team, Mr.
Crosby had the foresight to build his own facility in Mexico and utilize American-made steel exclusively. Steep tariffs were imposed on China manufactured safes by the Trump administration and were continued under the first half of the Biden administration.
Steep tariffs were imposed on China manufactured safes by the Trump administration and were continued under the first half of the Biden administration. The prices of components for the made-in-China safes have dramatically increased as well as the transportation costs to import these Chinese-made safes. Mr.
Removed
Under the terms of the Champion Purchase Agreement, the Company paid the Seller (i) cash consideration of approximately $9,150,000, along with (ii) cash deposits in the amount of $350,000, and (iii) reimbursed the Seller for approximately $400,000 of agreed upon acquisitions and equipment purchases completed by the Seller and the Champion Entities since June 30, 2021.
Added
ITEM 1. BUSINESS Recent Development and Events Introduction of American Rebel Beer On August 9, 2023, the Company 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.
Removed
American Rebel will also benefit from the increased Champion manufacturing throughput as capacity restrictions have limited American Rebel’s inventory and potential growth. The collaboration between Champion and American Rebel management teams will focus on increased manufacturing efficiencies and volume expansion.
Added
American Rebel Light Beer will launch regionally in early 2024. The Company paid a setup fee and security deposit to Associated Brewing. In late 2023, we established American Rebel Beverages, LLC as a wholly-owned subsidiary specifically to hold our alcohol licenses and operate the beer business.
Removed
On July 29, 2022, the Company closed on its acquisition of the Champion Entities.
Added
During the year ended December 31, 2023 the Company received a claim for refund or right of repayment from the Seller of the Champion Entities with respect to the CARES Act tax credit income the Company received.
Added
The Company during the year settled the matter with the Seller and agreed to pay an additional $325,000 to the Seller as part of its purchase price. This increased the overall purchase price of the Champion Entities by an additional $325,000.
Added
(“Champion Safe”) a Utah corporation, Superior Safe, LLC (“Superior Safe”) a Utah limited liability company, Safe Guard Security Products, LLC (“Safe Guard”) a Utah limited liability company, Champion Safe De Mexico, S.A. de C.V. (“Champion Safe Mexico”) a corporation duly organized and existing under the laws of Mexico.
Added
Each of these entities is under common control and ownership by American Rebel Holdings, Inc. Champion Safe Combined Group develops and sells branded products in the safe storage product using a wholesale distribution network, utilizing personal appearances, musical venue performances, as well e-commerce and television. Champion Safe Combined Group’s products are marketed under the Champion, Superior and Safe Guard brands.
Added
Champion Safe Combined Group promotes and sells its safe and storage products through a growing network of dealers, in select regional retailers and local specialty safe, sporting goods, hunting and firearms retail outlets, as well as through online avenues, including website and e-commerce platforms.
Added
Champion Safe Combined Group sells its products under the Champion Safe Co., Superior Safe Company and Safe Guard Safe Co. brands. 10 Based in Provo, Utah and founded in 1999, Champion Safe is what we believe to be one of the premier designers, manufacturers and marketers of home and gun safes in North America.
Added
Liberty Safe which was recently resold to a middle market private investment firm for approximately $147.5 million a significant increase in overall enterprise value. In 1999, Mr. Crosby founded Champion Safe, later expanding to include Superior Safe and Safe Guard Security Products.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

65 edited+74 added−28 removed112 unchanged
Biggest changeWe have never paid cash dividends on our Common Stock. We do not expect to pay cash dividends on our Common Stock at any time in the foreseeable future. The future payment of dividends directly depends upon our future earnings, capital requirements, financial requirements and other factors that our board of directors will consider.
Biggest changeThe future payment of dividends directly depends upon our future earnings, capital requirements, financial requirements and other factors that our board of directors will consider. Since we do not anticipate paying cash dividends on our common stock, return on your investment, if any, will depend solely on an increase, if any, in the market value of our common stock.
Net operating loss carryforwards are available to reduce future taxable income. The federal net operating losses generated before 2018 will begin to expire in 2032. The federal net operating losses generated in and after 2018 may be carried forward indefinitely. The expiration of state NOL carryforwards vary by state and begin to expire in 2024.
Net operating loss carryforwards are available to reduce future taxable income. Federal net operating losses generated before 2018 will begin to expire in 2032. Federal net operating losses generated in and after 2018 may be carried forward indefinitely. The expiration of state NOL carryforwards vary by state and begin to expire in 2024.
Our competitors could also gain market share by acquiring or forming strategic alliances with other competitors. Finally, we may face additional sources of competition in the future because new distribution methods offered by the Internet and electronic commerce have removed many of the barriers to entry historically faced by start-up companies.
Our competitors could gain market share by acquiring or forming strategic alliances with other competitors. Finally, we may face additional sources of competition in the future because new distribution methods offered by the Internet and electronic commerce have removed many of the barriers to entry historically faced by start-up companies.
Retailers also demand that suppliers reduce their prices on products, which could lead to lower margins. Any of the foregoing effects could cause our sales to decline, which would harm our financial position and results of operations. Our ability to compete successfully depends on a number of factors, both within and outside our control.
Retailers also demand that suppliers reduce their prices on products, which could lead to lower margins. Any of the foregoing effects could cause our sales to decline, which would harm our financial position and results of operations. 23 Our ability to compete successfully depends on a number of factors, both within and outside our control.
In addition, our reputation may be adversely affected by such claims, whether or not successful, including potential negative publicity about our products. Despite the Company’s indebtedness levels, we are able to incur substantially more debt. This could further increase the risks associated with its leverage.
In addition, our reputation may be adversely affected by such claims, whether or not successful, including potential negative publicity about our products. Despite our indebtedness levels, we are able to incur substantially more debt. This could further increase the risks associated with its leverage.
Unforeseen expenses, difficulties, and delays frequently encountered in connection with expansion through acquisitions could inhibit our growth and negatively impact our operating results. 27 Our ability to complete acquisitions that we desire to make will depend upon various factors, including the following: ● the availability of suitable acquisition candidates at attractive purchase prices; ● the ability to compete effectively for available acquisition opportunities; ● the availability of cash resources, borrowing capacity, or stock at favorable price levels to provide required purchase prices in acquisitions; ● the ability of management to devote sufficient attention to acquisition efforts; and ● the ability to obtain any requisite governmental or other approvals.
Unforeseen expenses, difficulties, and delays frequently encountered in connection with expansion through acquisitions could inhibit our growth and negatively impact our operating results. 29 Our ability to complete acquisitions that we desire to make will depend upon various factors, including the following: ● the availability of suitable acquisition candidates at attractive purchase prices; ● the ability to compete effectively for available acquisition opportunities; ● the availability of cash resources, borrowing capacity, or stock at favorable price levels to provide required purchase prices in acquisitions; ● the ability of management to devote sufficient attention to acquisition efforts; and ● the ability to obtain any requisite governmental or other approvals.
Our competitors could introduce products with superior features at lower prices than our products and could also bundle existing or new products with other more established products to compete with us. Certain of our competitors may be willing to reduce prices and accept lower profit margins to compete with us.
Our competitors could introduce products with superior features at lower prices than our products and could bundle existing or new products with other more established products to compete with us. Certain of our competitors may be willing to reduce prices and accept lower profit margins to compete with us.
These acquisitions also could require us to make significant investments in systems, equipment, facilities, and personnel in anticipation of growth. These costs could be essential to implement our growth strategy in supporting our expanded activities and resulting corporate structure changes.
These acquisitions could require us to make significant investments in systems, equipment, facilities, and personnel in anticipation of growth. These costs could be essential to implement our growth strategy in supporting our expanded activities and resulting corporate structure changes.
As a result, our board of directors could authorize the issuance of a series of preferred stock that would grant to holders the preferred right to our assets upon liquidation, the right to receive dividend payments before dividends are distributed to the holders of Common Stock and the right to the redemption of the shares, together with a premium, prior to the redemption of our Common Stock. 31 Our Common Stock may be affected by limited trading volume and our share price may be volatile, which could adversely impact the value of our Common Stock.
As a result, our board of directors could authorize the issuance of a series of preferred stock that would grant to holders the preferred right to our assets upon liquidation, the right to receive dividend payments before dividends are distributed to the holders of common stock and the right to the redemption of the shares, together with a premium, prior to the redemption of our common stock. 33 Our common stock may be affected by limited trading volume and our share price may be volatile, which could adversely impact the value of our common stock.
If our revenues do not increase to a level to support our working capital needs, we will be forced to seek equity capital to fund our operations and repay our substantial debt balances, which may not be available to us on acceptable terms or at all. 25 Product defects could adversely affect the results of our operations.
If our revenues do not increase to a level to support our working capital needs, we will be forced to seek equity capital to fund our operations and repay our substantial debt balances, which may not be available to us on acceptable terms or at all. 27 Product defects could adversely affect the results of our operations.
Quality issues experienced by third party suppliers can also adversely affect the quality and effectiveness of our products and result in liability and reputational harm. We do not have long-term purchase commitments from our customers, and their ability to cancel, reduce, or delay orders could reduce our revenue and increase our costs.
Quality issues experienced by third party suppliers can adversely affect the quality and effectiveness of our products and result in liability and reputational harm. 22 We do not have long-term purchase commitments from our customers, and their ability to cancel, reduce, or delay orders could reduce our revenue and increase our costs.
Such events may cause customers to suspend their decisions on using the Company’s products and services, make it impossible to access some of our inventory, and give rise to sudden significant changes in regional and global economic conditions and cycles that could interfere with purchases of goods or services and commitments to develop new products and services.
Such events may cause customers to suspend their decisions on using our products and services, make it impossible to access some of our inventory, and give rise to sudden significant changes in regional and global economic conditions and cycles that could interfere with purchases of goods or services and commitments to develop new products and services.
Company owned trademarks are listed under the heading Intellectual Property on page 20. 29 We are subject to the periodic reporting requirements of Section 15(d) and 12(g) of the Exchange Act that require us to incur audit fees and legal fees in connection with the preparation of such reports.
Company owned trademarks are listed under the heading Intellectual Property on page 20. 31 We are subject to the periodic reporting requirements of Section 15(d) and 12(g) of the Exchange Act that require us to incur audit fees and legal fees in connection with the preparation of such reports.
As defined in Exchange Act Rule 13a-15(f), internal control over financial reporting is a process designed by, or under the supervision of, the principal executive and principal financial officer and effected by the board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that: ● pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company; ● provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and/or directors of the Company; and ● provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements. 30 Our internal controls may be inadequate or ineffective, which could cause financial reporting to be unreliable and lead to misinformation being disseminated to the public.
As defined in Exchange Act Rule 13a-15(f), internal control over financial reporting is a process designed by, or under the supervision of, the principal executive and principal financial officer and effected by the board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that: ● pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of ours; ● provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles and that receipts and expenditures of ours are being made only in accordance with authorizations of management and/or directors; and ● provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements. 32 Our internal controls may be inadequate or ineffective, which could cause financial reporting to be unreliable and lead to misinformation being disseminated to the public.
In future years, if and when a net deferred tax asset is recognized related to our NOLs, the changes in the carryforward/carryback periods as well as the new limitation on use of NOLs may significantly impact our valuation allowance assessments for NOLs generated after December 31, 2017.
In future years, if and when a net deferred tax asset is recognized related to our NOLs, the changes in the carryforward/carryback periods as well as new limitations on use of NOLs may significantly impact our valuation allowance assessments for NOLs generated after December 31, 2017.
Our inability to adequately respond to these risks and uncertainties or to successfully maintain and expand our direct-to-consumer business may have an adverse impact on our business and operating results. 24 We sell products that create exposure to potential product liability, warranty liability, or personal injury claims and litigation.
Our inability to adequately respond to these risks and uncertainties or to successfully maintain and expand our direct-to-consumer business may have an adverse impact on our business and operating results. 26 We sell products that create exposure to potential product liability, warranty liability, or personal injury claims and litigation.
Our executive officers and directors, and their affiliated entities, although they own an insignificant percentage of our stock, super voting preferred stock will allow them to be able to exert significant control over matters subject to stockholder approval. Our executive officers and directors beneficially own only approximately 4% of our Common Stock.
Our executive officers and directors, and their affiliated entities, although they own an insignificant percentage of our common stock, super voting preferred stock will allow them to be able to exert significant control over matters subject to stockholder approval. Our executive officers and directors beneficially own only approximately 1% of our common stock.
Under the Tax Cuts and Jobs Act of 2017, or the Tax Act, as amended by the CARES Act, NOLs arising in tax years beginning after December 31, 2017, are subject to an 80% of taxable income limitation (as calculated before taking the NOLs into account) for tax years beginning after December 31, 2020.
Under the Tax Cuts and Jobs Act of 2017, or the Tax Act, as amended by the CARES Act, NOLs arising in tax years beginning after December 31, 2017, are subject to an 80% of taxable income limitation (as calculated before taking the NOLs into account).
Our board of directors has the authority, without stockholder approval, to issue preferred stock with terms that may not be beneficial to Common Stockholders and with the ability to affect adversely stockholder voting power and perpetuate their control over us.
Our board of directors has the authority, without stockholder approval, to issue additional series of preferred stock with terms that may not be beneficial to Common Stockholders and with the ability to affect adversely stockholder voting power and perpetuate their control over us.
We may take advantage of these reporting exemptions until we are no longer a smaller reporting company. If we cannot provide reliable financial reports or prevent fraud, our business and operating results could be harmed, investors could lose confidence in our reported financial information, and the trading price of our Common Stock, if a market ever develops, could drop significantly.
We may take advantage of these reporting exemptions until we are no longer a smaller reporting company. If we cannot provide reliable financial reports or prevent fraud, our business and operating results could be harmed, investors could lose confidence in our reported financial information, and the trading price of our common stock, could drop significantly.
There can be no assurance that an active trading market in our Common Stock will be maintained.
There can be no assurance that an active trading market in our common stock can be maintained.
Failure to achieve and maintain an effective internal control environment could cause us to face regulatory action and also cause investors to lose confidence in our reported financial information, either of which could have a material adverse effect on the Company’s business, financial condition, results of operations and future prospects.
Failure to achieve and maintain an effective internal control environment could cause us to face regulatory action and cause investors to lose confidence in our reported financial information, either of which could have a material adverse effect on our business, financial condition, results of operations and future prospects.
We estimate these costs to be in excess of $100,000 per year and may be higher if our business volume or business activity increases significantly.
We estimate these costs to be in excess of $200,000 per year and may be higher if our business volume or business activity increases significantly.
The Company may not properly anticipate customer applications of our products and our products may fail to survive such unanticipated customer use. If the Company’s products fail to adequately perform to meet the customer’s expectations, the customer may demand refunds or replacements which will negatively affect the Company’s profitability.
We may not properly anticipate customer applications of our products and our products may fail to survive such unanticipated customer use. If our products fail to adequately perform to meet the customer’s expectations, the customer may demand refunds or replacements which will negatively affect our profitability.
It is possible that we will not generate taxable income in time to use NOLs before their expiration, or at all.
It is possible that we will not generate sufficient taxable income in time to use the NOLs before their expiration, or at all.
These fluctuations may also cause short sellers to periodically enter the market in the belief that we will have poor results in the future. We cannot predict the actions of market participants and, therefore, can offer no assurances that the market for our Common Stock will be stable or appreciate over time. Warrants are speculative in nature.
These fluctuations may also cause short sellers to periodically enter the market in the belief that we will have poor results in the future. We cannot predict the actions of market participants and, therefore, can offer no assurances that the market for our common stock will be stable or appreciate over time.
For example, California recently enacted legislation suspending the use of NOLs for taxable years 2020, 2021, and 2022 for many taxpayers.
For example, California recently enacted legislation suspending the use of NOLs for tax years 2020, 2021, and 2022 for many taxpayers.
We will not be profitable unless we can demonstrate that our products can be manufactured at low prices. To date, we have manufactured our products in limited volume. As the Company creates demand for its products, our projections require the benefit of volume discounts as we increase the size of our order.
We will not be profitable unless we can demonstrate that our products can be manufactured at low prices. To date, we have manufactured our products in limited volume. As we create demand for our products, our projections require the benefit of volume discounts as we increase the size of our order.
War, terrorism, other acts of violence or natural or manmade disasters such as a pandemic, epidemic, outbreak of an infectious disease or other public health crisis may affect the markets in which the Company operates, the Company’s customers, the Company’s delivery of products and customer service, and could have a material adverse impact on our business, results of operations, or financial condition.
War, terrorism, other acts of violence or natural or manmade disasters such as a pandemic, epidemic, outbreak of an infectious disease or other public health crisis may affect the markets in which we operate, our customers, our delivery of products and customer service, and could have a material adverse impact on our business, results of operations, or financial costs condition.
In addition, NOLs arising in tax years 2018, 2019, and 2020 are subject to a five-year carryback and indefinite carryforward, while NOLs arising in tax years beginning after December 31, 2020, also are subject to indefinite carryforward but cannot be carried back. Our NOLs may also be subject to limitations in other jurisdictions.
In addition, NOLs arising in tax years 2018, 2019, and 2020 were subject to a five-year carryback along with an indefinite carryforward, while NOLs arising in tax years beginning after December 31, 2020, are subject to indefinite carryforward but cannot be carried back. Our NOLs may be subject to limitations in other jurisdictions.
In general, an “ownership change” will occur if there is a cumulative change in our ownership by “5 percent stockholders” that exceeds 50 percentage points over a rolling three-year period. Similar rules may apply under state tax laws.
In general, an “ownership change” will occur if there is a cumulative change in our ownership by “5 percent (and greater than 5 percent) stockholders” that exceeds 50 percentage points or more in change over a rolling three-year period. Similar rules may apply under state tax laws.
These events also pose significant risks to the Company’s personnel and to physical facilities, transportation and operations, which could materially adversely affect the Company’s financial results. 26 Any significant disruption to communications and travel, including travel restrictions and other potential protective quarantine measures against COVID-19 or other public health crisis by governmental agencies, could make it difficult for the Company to deliver goods services to its customers.
These events pose significant risks to our personnel and to physical facilities, transportation and operations, which could materially adversely affect our financial results. 28 Any significant disruption to communications and travel, including travel restrictions and other potential protective quarantine measures against COVID-19 or other public health crisis by governmental agencies, could make it difficult for us to deliver goods services to its customers.
Additionally, series of preferred stock may carry the preferred right to our assets upon liquidation, the right to receive dividend payments before dividends are distributed to the holders of Common Stock, superior voting or conversion rights and the right to the redemption of the shares, together with a premium, prior to the redemption of our Common Stock.
Additionally, other series of preferred stock, besides our Series C Preferred Stock, currently being offered, may carry the preferred right to our assets upon liquidation, the right to receive dividend payments before dividends are distributed to the holders of common stock, superior voting or conversion rights and the right to the redemption of the shares, together with a premium, prior to the redemption of our common stock.
Furthermore, there can be no assurance that profitability, if achieved, can be sustained on an ongoing basis. As of December 31, 2022, we had an accumulated deficit of $34,112,810. We have limited financial resources. Our independent registered auditors’ report includes an explanatory paragraph stating that there is substantial doubt about our ability to continue as a going concern .
Furthermore, there can be no assurance that profitability, if achieved, can be sustained on an ongoing basis. As of December 31, 2023, we had an accumulated deficit of $45,213,594. We have limited financial resources. Our independent registered auditors’ report includes an explanatory paragraph stating that there is substantial doubt about our ability to continue as a going concern .
Our efforts to introduce new products into the market may not be successful, and new products that we introduce may not result in customer or market acceptance. We develop new products that we believe will match consumer preferences.
Our success depends upon our ability to introduce new products that track consumer preferences. Our efforts to introduce new products into the market may not be successful, and new products that we introduce may not result in customer or market acceptance. We develop new products that we believe will match consumer preferences.
Our Second Amended and Restated Articles of Incorporation authorizes our board of directors to issue up to 600,000,000 shares of common stock and up to 10,000,000 shares of preferred stock, of which we have designated 100,000 shares as Series A – Super Voting Convertible Preferred Stock (“Existing Series A Preferred Stock”) (which were issued to two members of management, Messrs.
Our Second Amended and Restated Articles of Incorporation authorizes our board of directors to issue up to 600,000,000 shares of common stock and up to 10,000,000 shares of preferred stock, of which we have designated 150,000 shares as Series A – Super Voting Convertible Preferred Stock (“Series A Preferred Stock”) (125,000 of which were issued to three members of management, Messrs.
Under such circumstances, if and when a trading market for our securities is established, the trading price of our securities could decline, and you may lose all or part of your investment. 19 OUR SECURITIES INVOLVE A HIGH DEGREE OF RISK AND, THEREFORE, SHOULD BE CONSIDERED EXTREMELY SPECULATIVE.
Under such circumstances, if and when a trading market for our various securities (besides our Common Stock and certain Common Stock Purchase Warrants) is established, the trading price of these securities could decline, and you may lose all or part of your investment. 19 OUR SECURITIES INVOLVE A HIGH DEGREE OF RISK AND, THEREFORE, SHOULD BE CONSIDERED EXTREMELY SPECULATIVE.
The common stock warrants (“Warrants”) included in our February 2022 public offering or our July 2022 private investment in public entity (“PIPE”) offering do not confer any rights of Common Stock ownership on their holders, such as voting rights or the right to receive dividends, but rather merely represent the right to acquire shares of our Common Stock at a fixed price for a limited period of time.
The common stock warrants (“Warrants”) included in our various public and private offerings do not confer any rights of common stock ownership on their holders, such as voting rights or the right to receive dividends, but rather merely represent the right to acquire shares of our common stock at a fixed price for a limited period of time.
If we underestimate demand for our products, our suppliers may not be able to react quickly enough to meet consumer demand, resulting in delays in the shipment of products and lost revenue, and damage to our reputation and customer and consumer relationships.
If we underestimate demand for our products, our suppliers may not be able to react quickly enough to meet consumer demand, resulting in delays in the shipment of products and lost revenue, and damage to our reputation and customer and consumer relationships. We may not be able to manage inventory levels successfully to meet future order and reorder requirements.
Sales of firearms are influenced by a variety of economic, social, and political factors, which may result in volatile sales. Our financial results may be affected by tariffs or border adjustment taxes or other import restrictions.
The sale of safe firearms storage and security components is influenced by the sale and usage of firearms. Sales of firearms are influenced by a variety of economic, social, and political factors, which may result in volatile sales. Our financial results may be affected by tariffs or border adjustment taxes or other import restrictions.
However, as referenced above, we issued 100,000 shares of the Existing Series A Preferred Stock to two members of our management, Messrs. Charles A. Ross, Jr. and Doug E. Grau, which have superior voting rights of 1,000 to 1 over shares of our common stock, resulting in nearly 85% of the current available stockholder votes.
However, as referenced above, we issued 125,000 shares of the Series A Preferred Stock to three members of our executive management team, Messrs. Charles A. Ross, Jr., Corey Lambrecht and Doug E. Grau, which have superior voting rights of 1,000 to 1 over shares of our common stock, resulting in nearly 96% of the current available stockholder votes.
In addition to the discussion of the provisions of our governing organizational documents, certain provisions of the Warrants offered in our February 2022 public offering and July 2022 PIPE offering could make it more difficult or expensive for a third party to acquire us.
In addition to the discussion of the provisions of our governing organizational documents, certain provisions of the Warrants offered in our various public and private offerings could make it more difficult or expensive for a third party to acquire us.
Provisions of the Warrants sold in our February and July 2022 offerings could discourage an acquisition of us by a third party .
Provisions of the Warrants sold in our public and private offerings could discourage an acquisition of us by a third party .
Further, travel restrictions and protective measures against COVID-19 could cause the Company to incur additional unexpected labor costs and expenses or could restrain the Company’s ability to retain the highly skilled personnel the Company needs for its operations.
Further, travel restrictions and protective measures against COVID-19 could cause us to incur additional unexpected labor costs and expenses or could restrain our ability to retain the highly skilled personnel we need for our operations.
This concentration of ownership could delay or prevent a change in control of the Company. 32 We do not anticipate that we will pay dividends on our Common Stock and, consequently, your ability to achieve a return on your investment will depend on appreciation in the price of our Common Stock.
We do not anticipate that we will pay dividends on our common stock and, consequently, your ability to achieve a return on your investment will depend on appreciation in the price of our common stock.
We may not be able to manage inventory levels successfully to meet future order and reorder requirements. 21 We face intense competition that could result in our losing or failing to gain market share and suffering reduced sales. We operate in intensely competitive markets that are characterized by price erosion and competition from major domestic and international companies.
We face intense competition that could result in our losing or failing to gain market share and suffering reduced sales. We operate in intensely competitive markets that are characterized by price erosion and competition from major domestic and international companies.
Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited. As of December 31, 2022, and December 31, 2021, we had net operating loss carryforwards, or NOLs, for federal and state income tax purposes of $34,112,810 and $26,969,657, respectively, which begins to expire in 2034.
Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited. As of December 31, 2023, and December 31, 2022, we continue to have net operating loss carryforwards, or “NOLs”, for federal and state income tax purposes of $45,213,594 and $34,112,810, respectively, which begins to expire in 2032.
Charles A. Ross, Jr. and Doug E. Grau), and have superior voting rights of 1,000 to 1 over shares of our common stock, resulting in nearly 85% of the available stockholder votes.
Charles A. Ross, Jr., Doug E. Grau and Corey Lambrecht), and have superior voting rights of 1,000 to 1 over shares of our common stock, resulting in nearly 96% of the available stockholder votes, and are convertible (subject to vesting requirements) at a ratio of 500 to 1 into shares of common stock.
As a result, they may not give priority to our business, leading to potential delays in or cancellation of our orders.
Our orders with certain of our suppliers may represent a very small portion of their total orders. As a result, they may not give priority to our business, leading to potential delays in or cancellation of our orders.
If reviews of our products are negative, or less positive as compared to those of our competitors, our brand may be adversely affected and our results of operations materially harmed.
If reviews of our products are negative, or less positive as compared to those of our competitors, our brand may be adversely affected and our results of operations materially harmed. 24 We have a limited operating history on which you can evaluate our company.
General economic conditions and consumer spending patterns can negatively impact our operating results. Economic uncertainty, unfavorable employment levels, declines in consumer confidence, increases in consumer debt levels, increased commodity prices, and other economic factors may affect consumer spending on discretionary items and adversely affect the demand for our products.
Economic uncertainty, unfavorable employment levels, declines in consumer confidence, increases in consumer debt levels, increased commodity prices, and other economic factors may affect consumer spending on discretionary items and adversely affect the demand for our products. In times of economic uncertainty, consumers tend to defer expenditures for discretionary items, which affects demand for our products.
The inability to obtain sufficient quantities of raw materials and components, including those necessary for the production of our products could result in reduced or delayed sales or lost orders. Any delay in or loss of sales or orders could adversely impact our operating results.
Shortages of components and materials, as well as supply chain disruptions, may delay or reduce our sales and increase our costs, thereby harming our results of operations. The inability to obtain sufficient quantities of raw materials and components, including those necessary for the production of our products could result in reduced or delayed sales or lost orders.
We may be required to rely on further debt financing, further loans from related parties, and private placements of our common and preferred stock for our additional cash needs. Such funding sources may not be available, or the terms of such funding sources may not be acceptable to the Company. 23 American Rebel has limited financial resources.
We may be required to rely on further debt financing, further loans from related parties, and private placements of our common and preferred stock for our additional cash needs.
Although our customer base is large and diverse, and our products serve our customers’ different needs, our products have been particularly popular among collectors, hunters, sportsmen, competitive shooters, and gun enthusiasts. The sale of safe firearms storage and security components is influenced by the sale and usage of firearms.
We market safes and other personal security products for sale to a wide variety of consumers. Although our customer base is large and diverse, and our products serve our customers’ different needs, our products have been particularly popular among collectors, hunters, sportsmen, competitive shooters, and gun enthusiasts.
As a result, economic conditions also can have an effect on the sale of our products to law enforcement, government, and military customers. Political and other factors also can affect our performance. Concerns about presidential, congressional, and state elections and legislature and policy shifts resulting from those elections can affect the demand for our products.
Political and other factors can affect our performance. Concerns about presidential, congressional, and state elections and legislature and policy shifts resulting from those elections can affect the demand for our products.
Because we believe technological and functional distinctions among competing products in our markets are perceived by many end-user consumers to be relatively modest, effectiveness in marketing and manufacturing are particularly important competitive factors in our business. 22 We have a limited operating history on which you can evaluate our company.
Because we believe technological and functional distinctions among competing products in our markets are perceived by many end-user consumers to be relatively modest, effectiveness in marketing and manufacturing are particularly important competitive factors in our business. RISKS RELATED TO OUR BUSINESS AND INDUSTRY Our success depends upon our ability to introduce new products that track customer preferences.
Many of the materials used in the production of our products are available only from a limited number of suppliers. We do not have long-term supply contracts with any suppliers. As a result, we could be subject to increased costs, supply interruptions, and difficulties in obtaining raw materials and components.
Any delay in or loss of sales or orders could adversely impact our operating results. Many of the materials used in the production of our products are available only from a limited number of suppliers. We do not have long-term supply contracts with any suppliers.
As a significant portion of our revenues is derived by demand for our safes and personal security products for firearms storage purposes, we depend on the availability and regulation of firearm/ammunition storage, as well as various economic, social and political factors. Our performance is influenced by a variety of economic, social, and political factors.
No assurance can be given that we will be able to establish or maintain a distribution network or secure additional distributors on terms favorable to us. 21 RISKS RELATED TO THE SAFE INDUSTRY As a significant portion of our revenues is derived by demand for our safes and personal security products for firearms storage purposes, we depend on the availability and regulation of firearm/ammunition storage, as well as various economic, social and political factors.
Our reliance on third-party suppliers for various raw materials and components for our products exposes us to volatility in the availability, quality, and price of these raw materials and components. Our orders with certain of our suppliers may represent a very small portion of their total orders.
As a result, we could be subject to increased costs, supply interruptions, and difficulties in obtaining raw materials and components. Our reliance on third-party suppliers for various raw materials and components for our products exposes us to volatility in the availability, quality, and price of these raw materials and components.
In times of economic uncertainty, consumers tend to defer expenditures for discretionary items, which affects demand for our products. Any substantial deterioration in general economic conditions that diminish consumer confidence or discretionary income could reduce our sales and adversely affect our operating results. Economic conditions also affect governmental political and budgetary policies.
Any substantial deterioration in general economic conditions that diminish consumer confidence or discretionary income could reduce our sales and adversely affect our operating results. Economic conditions affect governmental political and budgetary policies. As a result, economic conditions can have an effect on the sale of our products to law enforcement, government, and military customers.
While we just completed a capital raise utilizing a financial institution, we may attempt to raise additional capital by returning to the market to sell shares, possibly at a deep discount.
The Series A Preferred Stock was issued prior to these shareholder approval limitations. While we have completed several capital raises utilizing multiple financial institutions, we may attempt to raise additional capital by returning to the market to sell shares of common or preferred stock, possibly at a deep discount to the market price of our common stock.
The rapidly growing interest in new concealed carry products that this rapidly growing market may attract the attention of government regulators and legislators. The current trend in legislation is to roll back or minimize access to firearms restrictions, but there can be no assurance that this trend will continue.
The rapidly growing interest in new concealed carry products that this rapidly growing market may attract the attention of government regulators and legislators.
THEY SHOULD NOT BE PURCHASED BY PERSONS WHO CANNOT AFFORD THE POSSIBILITY OF THE LOSS OF THE ENTIRE INVESTMENT. RISKS RELATED TO OUR BUSINESS AND INDUSTRY Our success depends upon our ability to introduce new products that track customer preferences. Our success depends upon our ability to introduce new products that track consumer preferences.
THEY SHOULD NOT BE PURCHASED BY PERSONS WHO CANNOT AFFORD THE POSSIBILITY OF THE LOSS OF THE ENTIRE INVESTMENT. RISKS RELATED TO THE BEER INDUSTRY We face substantial competition within the beer industry.
If such restrictive changes to legislation develop, we could find it difficult, expensive, or even impossible to comply with them, impeding new product development and distribution of existing products. 20 Shortages of components and materials, as well as supply chain disruptions, may delay or reduce our sales and increase our costs, thereby harming our results of operations.
Existing laws may be affected by future judicial rulings and interpretations firearm products, ammunition, and safe gun storage. If such restrictive changes to legislation develop, we could find it difficult, expensive, or even impossible to comply with them, impeding new product development and distribution of existing products.
These risks may materially adversely affect our ability to pursue our acquisition strategy successfully and materially adversely affect our financial condition, business and results of operations. 28 RISKS RELATED TO OUR LEGAL AND REGULATORY ENVIRONMENT Failure to comply with applicable laws and changing legal and regulatory requirements could harm our business and financial results.
These risks may materially adversely affect our ability to pursue our acquisition strategy successfully and materially adversely affect our financial condition, business and results of operations. The industry in which we operate is competitive, price sensitive and subject to risks of governmental regulations or laws.
Removed
Existing laws may also be affected by future judicial rulings and interpretations firearm products, ammunition, and safe gun storage.
Added
The beer categories within the United States are highly competitive due to the participation of large domestic and international brewers in the categories and the increasing number of craft brewers and craft distilleries, who distribute similar beers we plan on selling and that have similar pricing and target drinkers.
Removed
We have a limited operating history on which you can evaluate our company. The corporate entity has existed since 2014 and started engaging in its current primary business operations in April 2019. As a result, our business has been subject to many of the problems, expenses, delays, and risks inherent in the establishment of a relatively new business enterprise.
Added
The two largest brewers in the United States, AB InBev and Molson Coors, participate actively in mass appeal beer offerings as well as the High End and Beyond Beer categories, through numerous launches of new hard seltzers, flavored malt beverages and spirit RTDs from existing brands or new brands, importing and distributing import brands, and with their own domestic specialty beers, either by developing new brands or by acquiring, in whole or part, existing brands.
Removed
There is substantial doubt about our ability to continue as a going concern if we are unable to raise additional funds . We expect to require additional funds to further develop our business plan, including the anticipated launch of new products, in addition to continuing to market our safes and concealed carry product line.
Added
Imported beers, such as Corona®, Heineken®, Modelo Especial® and Stella Artois®, continue to compete aggressively in the United States and have gained market share over the last ten years. All of these brands and companies have substantially greater financial resources, marketing strength and distribution networks than we do.
Removed
Since it is impossible to predict with certainty the timing and amount of funds required to establish profitability, we anticipate that we will need to raise additional funds through equity or debt offerings or otherwise in order to meet our expected future liquidity requirements. Any such financing that we undertake may be dilutive to existing stockholders.
Added
We anticipate competition to be strong as some existing beverage companies are building more capacity, expanding geographically and adding more SKUs and styles.
Removed
The sales of our safes are dependent in large part on the sales of firearms. We market safes and other personal security products for sale to a wide variety of consumers.
Added
The potential for growth in the sales of hard seltzers, flavored malt beverages, craft-brewed domestic beers, imported beers and spirits RTDs is expected to increase the competition in the market for beer occasions within the United States and, as a result, we anticipate we will face competitive pricing pressures and the demand for and market share of our products, when introduced, may fluctuate and possibly decline.
Removed
While the Certificate of Designation is named “Certificate of Designation of Series A Convertible Preferred Stock”, the Company’s Existing Series A Preferred Stock is not convertible into shares of common stock of the Company or redeemable by either the Company or any other person.
Added
Our products, when introduced, will compete generally with other alcoholic beverages.
Removed
Since we do not anticipate paying cash dividends on our Common Stock, return on your investment, if any, will depend solely on an increase, if any, in the market value of our Common Stock. RISKS RELATED TO THE INDUSTRY The industry in which we operate is competitive, price sensitive and subject to risks of governmental regulations or laws.
Added
We anticipate competing with other beer and beverage companies not only for drinker acceptance and loyalty, but also for traditional retail shelf, cold box and tap space, as well as e-commerce placement and for marketing focus by our distributors and their customers, when established, all of which are anticipated to distribute and sell other alcoholic beverage products.
Removed
RISKS RELATED TO THE CANNABIS INDUSTRY Federal regulation and enforcement may adversely affect the implementation of medical controlled substance laws and regulations may negatively impact our revenues and profits.

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Item 2. Properties

Properties — owned and leased real estate

7 edited+5 added−2 removed1 unchanged
Biggest changeIn the future, the Company may lease or license additional facilities for manufacturing, corporate offices and other functions. The Company believes that suitable additional facilities will be available on commercially reasonable terms to accommodate the foreseeable expansion of its operations.
Biggest changeThe Company believes these facilities are currently adequate for its needs, including providing the space and infrastructure to accommodate its development work based on its operating plans. For the foreseeable future, the Company may lease or license additional facilities for manufacturing, corporate offices and other functions.
January 1, 2024 2813 S Sierra Vista Way, Provo, Utah 84606* 8,000 Executive Offices and Factory Sales Outlet January 1, 2024 200 Rock Industrial Park Bridgeton, Missouri 63044** 5,000 Warehouse and Shipping May 1, 2024 500 Industrial Drive Lewisberry, Pennsylvania 17339** 2,100 Warehouse and Retail Sales August 1, 2024 5411 Trebor Lane Knoxville, Tennessee 37914** 2,500 Warehouse and Retail Sales September 1, 2024 792 N.
January 1, 2025 2813 S Sierra Vista Way, Provo, Utah 84606* 8,000 Executive Offices and Factory Sales Outlet December 31, 2024 2813 S Sierra Vista Way, Suite 2 Provo, Utah 84606 24,000 Warehouse December 31, 2024 200 Rock Industrial Park Bridgeton, Missouri 63044**## 5,000 Warehouse and Shipping January 15, 2024 500 Industrial Drive Lewisberry, Pennsylvania 17339** 2,100 Warehouse and Retail Sales August 1, 2024*** 5411 Trebor Lane Knoxville, Tennessee 37914**## 2,500 Warehouse and Retail Sales January 31, 2024 792 N.
Alvaro Obregon 6745, California, 84065 Nogales, Sonora, Mexico 73,659 Manufacturing Champion Safe De Mexico, S.A. DE C.V. September 1, 2024 ** Leased from Utah–Tennessee Holding Company, LLC, a company owned by the current Champion CEO, Ray Crosby. * Leased from Champion Holdings, LLC, a company owned by the current Champion CEO, Ray Crosby.
Alvaro Obregon 6745, California, 84065 Nogales, Sonora, Mexico 73,659 Manufacturing Champion Safe De Mexico, S.A. DE C.V. September 1, 2024 *** Subleased effective December 15, 2023. Original lease expiration date was August 1, 2024. ** Leased from Utah–Tennessee Holding Company, LLC, a company owned by former Champion founder, owner and Chief Executive Officer, Mr.
Gilbert Road, Suite 102 Gilbert, Arizona 85233 2,600 Retail Sales June 30, 2026 4027 North Oracle Road Tucson, Arizona 85705 1,400 Retail Sales March 7, 2027 17455 N.
Gilbert Road, Suite 102 Gilbert, Arizona 85233 2,600 Retail Sales June 30, 2026 4027 North Oracle Road Tucson, Arizona 85705 1,400 Retail Sales March 7, 2027 17455 N. Black Canyon Highway Phoenix, Arizona 85023 2,400 Retail Sales February 28, 2025 9802 N. 91 st Avenue, Suite 108 Peoria, Arizona 85345 3,907 Warehouse and Retail Sales April 30, 2025 Av.
Tracy Hall Parkway Provo, Utah 84606** 8,000 Manufacturing Champion Safe Company, Inc.
These entities lease the following locations: Location Square Feet Use Lessee Lease Expiration 2055 S. Tracy Hall Parkway Provo, Utah 84606** 8,000 Manufacturing Champion Safe Company, Inc.
As part of our transaction in acquiring the Champion Entities, several of the long-term leases are held with the Seller, Mr. Ray Crosby through a limited liability company. These long-term leases are considered market value as Mr. Crosby through this LLC provides rental space at market value, neither charging the Company and its subsidiaries too much or too little.
As part of the acquisition of the Champion Entities, several long-term leases were held with the Seller, Mr. Crosby through his ownership in two limited liability companies. These long-term leases were considered fair value as Mr. Crosby provided rental space at what was deemed market value or what could have been negotiated in an arm’s length transaction.
Please review the footnotes to our Consolidated Financial Statements for further disclosure on the leases that the Company is obligated to the Seller of the Champion Entities. The Company believes these facilities are adequate for its needs, including providing the space and infrastructure to accommodate its development work based on current operating plans.
Please review the footnotes to our Consolidated Financial Statements for further disclosure on the leases the Company is obligated to the Seller of the Champion Entities. Recently the Company and Mr. Crosby, through his limited liability companies, entered into several short-term extensions on the leased properties.
Removed
Month to month 8460 Nieman Road Lenexa, Kansas 66214 5,724 Retail Sales American Rebel, Inc. March 31, 2026 35 Champion Safe Facilities Headquarters for the Champion Entities (Champion, Superior and Safe Guard) are located in Provo, Utah. These entities lease the following locations: Location Square Feet Use Lessee Lease Expiration 2055 S.
Added
Month to month 8500 Marshall Drive Lenexa, Kansas 66214# 13,000 Retail Sales/Offices American Rebel, Inc. July 31, 2028 ** Subsequent to year end the above leased property (our corporate offices) we received an extension from the lessor providing for month-to-month to vacate the premises.
Removed
Black Canyon Highway Phoenix, Arizona 85023 2,400 Retail Sales February 28, 2025 9802 N. 91 st Avenue, Suite 108 Peoria, Arizona 85345 3,907 Warehouse and Retail Sales April 30, 2025 28344 Waterview Drive Boerne, Texas 78006 2,400 Retail Sales Sublease Month-to-month 1020 FM 1960 West, Suite 7 Houston, Texas 77090 2,500 Retail Sales Sublease Month-to-month Av.
Added
We currently believe that we will vacate these offices in their entirety on or before May 31, 2024. ## The above leased properties should be or shall be vacated by the date this Report is filed or shortly thereafter. # The Company and its wholly owned subsidiary moved from the 8460 Nieman Road facility to the 8500 Marshall Drive facility which adjoins the old 8460 Nieman Road property, increasing the retail sales space from approximately 6,000 square feet to 13,000 square feet. 37 Champion Safe Facilities Headquarters for the Champion Entities (Champion, Superior and Safe Guard) are located in Provo, Utah.
Added
Crosby. * Leased from Champion Holdings, LLC, a company owned by former Champion founder, owner and Chief Executive Officer, Mr. Crosby. ## The above leased properties should be or shall be vacated by Champion Safe Company, Inc. by the date this Report is filed or shortly thereafter.
Added
With the extensions of the leases the Company and the limited liability companies generally increased the base rent to be paid by an average of 10% due to inflation. The Company negotiated these extensions and other terms in an arm’s length manner.
Added
The Company believes that suitable facilities will be available on commercially reasonable terms to accommodate the foreseeable expansion of our operations and warehousing requirements. The Company intends to for the immediate future, twelve (12) to eighteen (18) months, not to extend the leases on the Lewisberry, Phoenix and Peoria facilities and consolidate its warehousing wholly within its Utah facilities.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+0 added−0 removed1 unchanged
Biggest changeWe are not currently a party in any legal proceeding or governmental regulatory proceeding nor are we currently aware of any pending or potential legal proceeding or governmental regulatory proceeding proposed to be initiated against us that would have a material adverse effect on us or our business.
Biggest changeWe are not currently a party in any legal proceeding or governmental regulatory proceeding nor are we currently aware of any pending or potential legal proceeding or governmental regulatory proceeding proposed to be initiated against us that would have a material adverse effect on us or our business. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 38 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

9 edited+12 added−35 removed5 unchanged
Biggest changeSecurities Authorized for Issuance under Equity Compensation Plans On January 1, 2021, our board of directors approved the establishment of the 2021 Long-Term Equity Incentive Plan (“LTIP”).
Biggest changeAny determination to pay dividends in the future will be at the discretion of our board of directors and will depend upon our results of operations, financial condition, tax laws and other factors as the board, in its discretion, deems relevant. 39 Securities Authorized for Issuance under Equity Compensation Plans On January 1, 2021, our Board approved the establishment of the 2021 Long-Term Equity Incentive Plan (“LTIP”).
All such securities issued pursuant to such exemptions are restricted securities as defined in Rule 144(a)(3) promulgated under the Securities Act, appropriate legends have been placed on the documents evidencing the securities, and may not be offered or sold absent registration or pursuant to an exemption there from.
All such securities issued pursuant to such exemptions are restricted securities as defined in Rule 144(a)(3) promulgated under the Securities Act, appropriate legends have been placed on the documents evidencing the securities, and may not be offered or sold absent registration or pursuant to an exemption there from. 40 ITEM 6. [RESERVED]
Repurchase of Equity Securities We have no plans, programs or other arrangements in regards to repurchases of our common stock. Further, we did not repurchase any of our equity securities during the year ended December 31, 2022. 40 ITEM 6. [RESERVED]
Repurchase of Equity Securities We have no plans, programs or other arrangements in regards to repurchases of our common stock. Further, we did not repurchase any of our equity securities during the year ended December 31, 2023.
For fiscal year 2022, up to 159,737 shares of common stock are available for participants under the LTIP.
For fiscal year 2022, up to 6,390 shares of common stock were available for participants under the LTIP. For fiscal year 2023, up to 67,723 shares of common stock were available for participants under the LTIP. For fiscal year 2024, up to 587,992 shares of common stock are available for participants under the LTIP.
These shares have not been issued as of the date of this Annual Report. Subsequent Issuances after Year-End None All of the above-described issuances were exempt from registration pursuant to Section 4(a)(2) and/or Regulation D of the Securities Act as transactions not involving a public offering.
Subsequent Issuances after Year-End None All of the above-described issuances were exempt from registration pursuant to Section 4(a)(2) and/or Regulation D of the Securities Act as transactions not involving a public offering. With respect to each transaction listed above, no general solicitation was made by either the Company or any person acting on its behalf.
On July 12, 2022, we entered into a PIPE transaction with an institutional investor for the purchase and sale of $12,887,976 of securities, consisting of (i) 509,311 shares of common stock at $1.11 per share, (ii) prefunded warrants (the “Prefunded Warrants”) that are exercisable into 11,202,401 shares of common stock (the “Prefunded Warrant Shares”) at $1.10 per Prefunded Warrant, and (iii) immediately exercisable warrants to purchase up to 23,423,424 shares of common stock at an initial exercise price of $0.86 per share and will expire five years from the date of issuance.
Recent Sales of Unregistered Securities On June 27, 2023, we entered into a PIPE transaction with Armistice Capital Master Fund Ltd. for the purchase and sale of $2,993,850.63 of securities, consisting of (i) 71,499 shares of common stock at $4.37 per share, (ii) prefunded warrants (the “2023 Prefunded Warrants”) that are exercisable into 615,000 shares of common stock (the “2023 Prefunded Warrant Shares”) at $4.37 per Prefunded Warrant, and (iii) immediately exercisable warrants to purchase up to 686,499 shares of common stock at an initial exercise price of $4.24 per share and will expire five years from the date of issuance.
In December of 2022, we authorized the grant and issuance of all 159,737 shares of common stock under the LTIP to our executive management team. Recent Sales of Unregistered Securities On December 27, 2022, we authorized the issuance of 103,829 shares of common stock to our CEO and 55,908 shares of common stock to our President under the 2021 LTIP.
In December of 2022, we authorized the grant and issuance of all 6,390 shares of common stock under the LTIP to our executive management team. Further, in December of 2023, we authorized the grant and issuance of all 67,723 shares of common stock under the LTIP to our executive management team.
Stockholders of Record As of March 30, 2023, an aggregate of 16,930,517 shares of our Common Stock were issued and outstanding and owned by 132 stockholders of record. We also had 159,737 shares of Common Stock that were authorized, but unissued as of March 30, 2023.
Stockholders of Record As of April 1, 2024, an aggregate of 5,947,643 shares of our common stock were issued and outstanding and owned by 132 stockholders of record. This amount includes 67,723 shares of common stock that were authorized, but unissued as of April 1, 2024.
ITEM 5. MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Reverse Stock Split and Potential Reverse Stock Split for NASDAQ Continued Listing Requirements On February 7, 2022, we effectuated a reverse split of our issued and outstanding shares of Common Stock at a ratio of 1-for-80.
ITEM 5. MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market for our Common Stock and certain Common Stock Purchase Warrants Our common stock and certain existing warrants are traded on the Nasdaq Capital Market under the symbols “AREB” and “AREBW,” respectively.
Removed
The share numbers and pricing information in this Annual Report are adjusted to reflect the reverse stock split. Our common stock is listed on the Nasdaq Capital Market, which has as one of its continued listing requirements a minimum bid price of at least $1.00 per share. During 2022, our common stock traded significantly below $1.00 per share.
Added
On April 11, 2024, the closing price of shares of common stock of the Company was $ 0.3689 . Our common stock has been quite volatile over the past two years, with significant fluctuations in volume and price.
Removed
On June 28, 2022, we received a letter from The Nasdaq Stock Market LLC indicating that we failed to comply with the minimum bid price requirement, and that we have been provided with a 180-day grace period (which expired on December 27, 2022) to regain compliance.
Added
Nasdaq Deficiency Notices On October 23, 2023, we were notified by Nasdaq that we were not in compliance with Nasdaq Listing Rule 5550(a)(2) because the price of our common stock had traded at less than $1.00 per share for the last thirty consecutive trading days.
Removed
On December 28, 2022, we received notice from Nasdaq indicating that, while we had not regained compliance with the bid price requirement, Nasdaq has determined that we were eligible for an additional 180-day period, or until June 26, 2023, to regain compliance.
Added
Nasdaq’s notice has no immediate effect on the listing of the common stock on Nasdaq and, at this time. Pursuant to Nasdaq Listing Rule 5810(c)(3)(A), we have been provided an initial compliance period of 180 calendar days, or until April 22, 2024, to regain compliance with the minimum bid price requirement.
Removed
According to the notification from Nasdaq, the staff’s determination was based on (i) us meeting the continued listing requirement for market value of publicly held shares and all other applicable Nasdaq initial listing standards, with the exception of the minimum bid price requirement, and (ii) our written notice to Nasdaq of the intention to cure the deficiency during the second compliance period by effecting a reverse stock split, if necessary.
Added
To regain compliance, the closing bid price of the common stock must meet or exceed $1.00 per share for a minimum of ten consecutive business days prior to April 22, 2024. In late March of 2024, we requested an additional 180-day extension to regain compliance with the minimum bid price requirement.
Removed
If at any time during this second 180-day compliance period, the closing bid price of the common stock is at least $1 per share for a minimum of 10 consecutive business days, Nasdaq will provide us with written confirmation of compliance.
Added
As of the date of this filing Nasdaq has not responded to our request. Management continues to believe that adherence to its current operating and business plan will enable us to regain compliance.
Removed
If compliance cannot be demonstrated by June 26, 2023, Nasdaq will provide written notification that the common stock will be delisted. At that time, we may appeal Nasdaq’s determination to a Hearings Panel.
Added
In addition, we have obtained majority stockholder consent to enact up to a 1-for-10 reverse stock split at any time in the following twelve months and would cure the deficiency during the second compliance period, by effecting the reverse stock split, if necessary.
Removed
We have received stockholder consent to implement up to a 1-for-25 reverse stock split of our outstanding shares of common stock at any time prior to January 5, 2024. Our board of directors will determine when, and if, the reverse stock split would be implemented and at what ratio.
Added
On February 28, 2024, we received a written notice from Nasdaq stating that because we have not yet held an annual meeting of shareholders within 12 months of the end of our 2022 fiscal year end, we no longer comply with Nasdaq Listing Rule 5620(a) for continued listing on Nasdaq.
Removed
Delisting from the Nasdaq Capital Market may adversely affect our ability to raise additional financing through the public or private sale of equity securities, may significantly affect the ability of investors to trade our securities and may negatively affect the value and liquidity of our common stock.
Added
We have until April 15, 2024, which is 45 days from the date of the notice, to submit a plan to regain compliance and, if Nasdaq accepts the plan, it may grant an exception of up to 180 calendar days from the fiscal year end, or until June 28, 2024, to regain compliance.
Removed
Delisting also could have other negative results, including the potential loss of employee confidence, the loss of institutional investors or interest in business development opportunities.
Added
We intend to submit a compliance plan within the specified period, which we expect will consist of holding an annual meeting of stockholders within sixty (60) days of filing of this Form 10-K. While the compliance plan is pending, our securities will continue to trade on Nasdaq.
Removed
If we are delisted from the Nasdaq Capital Market and we are not able to list our common stock on another exchange, our common stock could be quoted on the OTC Markets or in the “pink sheets.” As a result, we could face significant adverse consequences including, among others: ● a limited availability of market quotations for our securities; ● a determination that our common stock is a “penny stock” which will require brokers trading in our common stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities; ● a limited amount of news and little or no analyst coverage of our company; ● we would no longer qualify for exemptions from state securities registration requirements, which may require us to comply with applicable state securities laws; and ● a decreased ability to issue additional securities (including pursuant to short-form registration statements on Form S-3) or obtain additional financing in the future.
Added
In connection with the Company’s June 27, 2023 1-for-25 reverse split and the round lot rounding associated therewith, approximately 2.1 million new shares of common stock were issued. On July 1, 2023, we authorized the issuance of 24,129 shares of common stock to our independent board members for past services through June 30, 2023.
Removed
In addition, an increase in the per share trading value of our common stock would be beneficial because it would: ● improve the perception of our common stock as an investment security; ● reset our stock price to more normalized trading levels in the face of potentially extended market dislocations; ● assist with future potential capital raises; ● appeal to a broader range of investors to generate greater investor interest in us; and ● reduce stockholder transaction costs because investors would pay lower commissions to trade a fixed dollar amount of our stock if our stock price were higher than they would if our stock price were lower. 37 Public Offering(s) and Recent Up-listing to Nasdaq On February 9, 2022, we closed on an underwritten public offering of 2,530,121 units (the “Common Units”), at a price to the public of $4.15 per Common Unit, for aggregate gross proceeds of approximately $10.5 million, prior to deducting underwriting discounts, commissions, and other estimated offering expenses.
Added
On September 8, 2023, holders of certain existing warrants exercised such warrants by paying $3,287,555.70 for 2,988,687 shares of the Company’s common stock at a reduced exercise price of $1.10 per share in consideration for the Company’s agreement to issue two new common stock purchase warrants to purchase, in the aggregate, up to 5,977,374 shares of the Company’s common stock.
Removed
Each Common Unit consisted of one share of common stock and one warrant to purchase one share of common stock. The common stock and warrants were immediately separable from the Common Units and were issued and trade separately. The warrants are exercisable immediately, expire five years from the date of issuance and have an exercise price of $5.1875 per share.
Added
On December 30, 2023, we authorized the issuance of 40,634 shares of common stock to Mr. Ross, our Chief Executive Officer, and 27,089 shares of common stock to Mr. Grau, our President, under the 2021 LTIP. These shares have not been issued as of the date of this Annual Report.
Removed
As of December 31, 2022, there were no Prefunded Warrants issued and outstanding. The Prefunded Warrants were purchased by the holders of the warrants for $1.10 per warrant.
Removed
The Prefunded Warrants required the payment of an additional $0.01 per warrant and the written notice of exercise to the Company to convert the Prefunded Warrant into one share of common stock of the Company. During the period ended September 30, 2022, the Company received notice on all the Prefunded Warrants converting into 11,202,401 shares of common stock.
Removed
We used the net proceeds from these offerings to repay various outstanding indebtedness, purchase the Champion Safe entities and for general corporate purposes, including working capital, increased research and development expenditures and funding our growth strategies.
Removed
The shares of Common Stock and Warrants were approved to up-list on the Nasdaq Capital Market under the symbols “AREB” and “AREBW,” respectively, and began trading on February 7, 2022.
Removed
Market for our Common Stock Our Common Stock was quoted on the OTC:QB Market under the symbol “AREB” and continued with our uplisting to NASDAQ on February 7, 2022 through this date as “AREB”.
Removed
Our Common Stock traded infrequently on the OTC, which limited our ability to pinpoint high and low bid prices for each quarter during the year ending December 31, 2021. The following table lists the available quotations for the high and low closing prices for fiscal 2021 and 2022 obtained through various investing websites.
Removed
The quotations reflect inter-dealer prices without retail mark-up, markdown, or commissions and may not represent actual transactions. 2022 2021 High Low High Low 1st Quarter $ 6.48 $ 1.15 $ 9.12 $ 3.29 2nd Quarter $ 2.12 $ 0.65 $ 9.60 $ 4.00 3rd Quarter $ 1.24 $ 0.33 $ 9.44 $ 3.88 4th Quarter $ 0.50 $ 0.16 $ 7.42 $ 3.02 On March 30, 2023, the closing price of shares of Common Stock of the Company was $0.15.
Removed
Any determination to pay dividends in the future will be at the discretion of our board of directors and will depend upon our results of operations, financial condition, tax laws and other factors as the board, in its discretion, deems relevant. 38 Preferred Stock Our Board is authorized, subject to limitations prescribed by Nevada law, to issue preferred stock in one or more series, to establish from time-to-time the number of shares to be included in each series, and to fix the designation, powers, preferences and rights of the shares of each series and any of its qualifications, limitations or restrictions, in each case without further vote or action by our stockholders.
Removed
Our Board can also increase (but not above the total number of authorized shares of the class) or decrease (but not below the number of shares then outstanding) the number of shares of any series of preferred stock, without any further vote or action by our stockholders.
Removed
Our Board may authorize the issuance of preferred stock with voting or conversion rights that could adversely affect the voting power or other rights of the holders of our common stock or other series of preferred stock.
Removed
The issuance of preferred stock, while providing flexibility in connection with possible financings, acquisitions and other corporate purposes, could, among other things, have the effect of delaying, deferring or preventing a change in our control of our company and might adversely affect the market price of our common stock and the voting and other rights of the holders of our common stock.
Removed
Series A Preferred Stock No Maturity, Sinking Fund or Mandatory Redemption The Series A Preferred Stock (the “Existing Series A Preferred Stock”) has no stated maturity and will not be subject to any sinking fund or mandatory redemption. Shares of the Existing Series A Preferred Stock will remain outstanding indefinitely unless we decide to redeem or otherwise repurchase them.
Removed
Dividend Rights Holders of shares of the Existing Series A Preferred Stock are not entitled to receive any dividends. Voting Rights Holders of the Existing Series A Preferred Stock are entitled to vote together with the holders of our common stock on an as-converted basis.
Removed
Each Existing Series A Preferred Stock is entitled to cast one thousand (1,000) votes for each share held of the Existing Series A Preferred stock.
Removed
Conversion Rights While the Certificate of Designation is named “Certificate of Designation of Series A Convertible Preferred Stock”, the Company’s Existing Series A Preferred Stock is not convertible into shares of common stock of the Company or redeemable by either the Company or another person.
Removed
Series B Preferred Stock No Maturity, Sinking Fund or Pre-Determined Mandatory Redemption The Series B (the “Existing Series B Preferred Stock”) has no stated maturity and will not be subject to any sinking fund or pre-determined mandatory redemption.
Removed
Shares of the Existing Series B Preferred Stock will remain outstanding indefinitely unless we decide to redeem or otherwise repurchase them, or the holders decide to convert them. Dividend Rights Holders of shares of the Existing Series B Preferred Stock are not entitled to receive any dividends.
Removed
Voting Rights Holders of the Existing Series B Preferred Stock shall not have any voting rights, except in the case of voting on a change in the preferences of the Existing Series B Preferred Stock shares.
Removed
Conversion Rights Each holder of the Existing Series B Preferred Stock is entitled to convert any portion of the outstanding shares of Existing Series B Preferred Stock held by such holder into validly issued, fully paid and non-assessable shares of our common stock Each share of the Existing Series B Preferred Stock is convertible into our common stock at the conversion rate of 1 share of Existing Series B Preferred Stock to 1.25 shares of common stock, subject to adjustment in the event of certain stock dividends and distributions, stock splits, stock combinations, reclassifications or similar events affecting our common stock.
Removed
Should the Company issue a redemption notice the conversion shall occur on or prior to the fifth (5 th ) day prior to the redemption date, as may have been fixed in any redemption notice with respect to the Existing Series B Preferred Stock shares, at the office of the Company or any transfer agent for such stock. 39 Liquidation Preference The Existing Series B Preferred Stock has senior liquidation preference rights compared to the common stock.
Removed
Upon a liquidation, the Existing Series B Preferred Stock shares are entitled to receive cash based upon a stated value per share of $7.00. Fractional Shares No fractional shares of our common stock will be issued upon any conversion of the Existing Series B Preferred Stock.
Removed
If the conversion would result in the issuance of a fraction of a share of common stock, the number of shares of common stock issuable upon such conversion will be rounded up to the nearest whole share.
Removed
With respect to each transaction listed above, no general solicitation was made by either the Company or any person acting on its behalf.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

1 edited+0 added−0 removed0 unchanged
Biggest changeITEM 6. [Reserved] 41 ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operation 41 ITEM 7A. Quantitative and Qualitative Disclosures About Market Risk 44 ITEM 8. Financial Statements and Supplementary Data 45 ITEM 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 46 ITEM 9A. Controls and Procedures 46 ITEM 9B.
Biggest changeITEM 6. [Reserved] 41 ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operation 41 ITEM 7A. Quantitative and Qualitative Disclosures About Market Risk 46 ITEM 8. Financial Statements and Supplementary Data 47 ITEM 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 48 ITEM 9A. Controls and Procedures 48 ITEM 9B.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

26 edited+80 added−10 removed20 unchanged
Biggest changeThe increase in Cost of Sales was again primarily attributable to the acquisition of the Champion Entities. For the year ended December 31, 2022, we reported Gross Profit of $1,940,418, compared to Gross Profit of $174,696 for the year ended December 31, 2021. The increase in Gross Profit was primarily attributable to the acquisition of the Champion Entities.
Biggest changeFor the year ended December 31, 2023, we reported Gross Margin of $3,036,424, compared to Gross Margin of $1,940,418 for the year ended December 31, 2022.
While we may need to seek additional funding for such purposes, we may not be able to obtain financing on acceptable terms, or at all. In addition, the terms of our financings may be dilutive to, or otherwise adversely affect, holders of our common stock. We may also seek additional funds through arrangements with collaborators or other third parties.
While we may need to seek additional funding for such purposes, we may not be able to obtain financing on acceptable terms, or at all. In addition, the terms of our financings may be dilutive to, or otherwise adversely affect, holders of our common stock. We may seek additional funds through arrangements with collaborators or other third parties.
Andy has also released 3 CDs, done numerous radio and print interviews, and performed many concerts in front of thousands of people. Andy has the ability to present American Rebel to large numbers of potential customers through the appeal of his music and other supporting appearances.
Andy has released 3 CDs, done numerous radio and print interviews, and performed many concerts in front of thousands of people. Andy has the ability to present American Rebel to large numbers of potential customers through the appeal of his music and other supporting appearances.
Ray Crosby (“Seller”) (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 the Seller. This transaction was completed on July 29, 2022.
Crosby (“Seller”) (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 the Seller. This transaction was completed on July 29, 2022.
Description of Business Company Overview American Rebel is boldly positioning itself as America’s Patriotic Brand. The Company has identified the market opportunity to design, manufacture, and market innovative concealed carry products and safes.
Description of Our Business Company Overview American Rebel is boldly positioning itself as America’s Patriotic Brand. The Company has identified the market opportunity to design, manufacture, and market innovative concealed carry products and safes.
In addition, we expect to also need additional funds to respond to business opportunities and challenges, including our ongoing operating expenses, protecting our intellectual property, developing or acquiring new lines of business and enhancing our operating infrastructure.
In addition, we expect to need additional funds to respond to business opportunities and challenges, including our ongoing operating expenses, protecting our intellectual property, developing or acquiring new lines of business and enhancing our operating infrastructure.
Operations On June 9, 2016, a change in control occurred, a sixty percent (60%) ownership interest was obtained by American Rebel, Inc. from our former officer and director and founder. On June 17, 2017, the Company acquired the business of its control stockholder accounted for and presented financially as a reverse merger transaction.
Operations On June 9, 2016, a change in control occurred, a sixty percent (60%) ownership interest was obtained by American Rebel, Inc. from a former officer and director who was also our founder. On June 17, 2017, the Company acquired the business of its control stockholder accounted for and presented financially as a reverse merger transaction.
For example, his appearance on the History Channel hit show Counting Cars in February 2014 has been viewed by over 2 million people. Bringing innovative products that satisfy an existing demand to the market through exciting means is the American Rebel blueprint for success.
For example, his appearance on the History Channel hit show Counting Cars in February 2014 has been viewed by over 2 million times. Bringing innovative products that satisfy an existing demand to the market through exciting means is the American Rebel blueprint for success.
Management’s Discussion and Analysis should be read in conjunction with the financial statements included in this Annual Report on Form 10-K (the “Financial Statements”). The financial statements have been prepared in accordance with generally accepted accounting policies in the United States (“GAAP”).
Management’s Discussion and Analysis should be read in conjunction with the financial statements included in this Annual Report on Form 10-K (the “Financial Statements”). The financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”).
Our majority stockholder, American Rebel, Inc. became a wholly owned subsidiary of the Company and we distributed shares to the stockholders of American Rebel, Inc. As a result of this reverse merger, the reported operating history of the Company is now the operating history of American Rebel, Inc.
Our majority stockholder, American Rebel, Inc. became a wholly owned subsidiary of the Company and we distributed the shares to the stockholders of American Rebel, Inc. As a result of this reverse merger, the reporting operating history of the Company is now the operating history of American Rebel, Inc.
Since inception, the Company has been engaged in financing activities and executing its business plan of operations and incurring costs and expenses related to developing products and market identity, obtaining inventory and preparing for public product launch. As a result, the Company incurred net income (losses) for the years ended December 31, 2022 and 2021 of ($7,143,981) and ($6,098,944), respectively.
Since inception, the Company has been engaged in financing activities and executing its business plan of operations and incurring costs and expenses related to developing products and market identity, obtaining inventory and preparing for public product launch. As a result, the Company incurred net income (losses) for the years ended December 31, 2023 and 2022 of ($11,100,784) and ($7,143,981), respectively.
If the Company is unable to secure such additional funds from these sources, it may be forced to change or delay its business plan rollout.
If the Company is unable to secure such additional funds from these sources, it may be forced to change or delay its business plan rollout. We expect to require additional funds to further develop our business plan.
Management believes holders of its warrants will execute their outstanding warrants generating investment capital for the Company. Management is also in discussion with several investment banks and broker dealers regarding the initiation of a capital campaign.
Management believes the remaining holders of its warrants will execute their outstanding warrants generating investment capital. Management is in discussions with several investment banks and broker dealers regarding the initiation of further capital campaigns.
Note 1 to the financial statements, included elsewhere in this Annual Report, includes a summary of the significant accounting policies and methods used in the preparation of our financial statements. Recent Pronouncements The Company evaluated recent accounting pronouncements through December 31, 2022, and believes that none have a material effect on the Company’s financial statements.
Note 1 to the financial statements, included elsewhere in this Annual Report, includes a summary of the significant accounting policies and methods used in the preparation of our financial statements.
The Company’s accumulated deficit was ($34,112,810) as of December 31, 2022, and ($26,969,657) as of December 31, 2021. The Company’s working capital surplus was $6,678,562 as of December 31, 2022, and a deficit of ($4,171,277) as of December 31, 2021.
The Company’s accumulated deficit was ($45,213,594) as of December 31, 2023, and ($34,112,810) as of December 31, 2022. The Company’s working capital surplus was $ 4,551,927 as of December 31, 2023, compared to $6,678,562 as of December 31, 2022.
The increase in depreciation expense is due to the increased size of the Company and the assets acquired in the Champion Entities purchase. Other income and expenses For the year ended December 31, 2022, we incurred interest expense of $358,689, compared to interest expense of $2,061,782 for the year ended December 31, 2021.
Other income and expenses For the year ended December 31, 2023, we incurred interest expense of $406,252 , compared to interest expense of $358,689 for the year ended December 31, 2022.
Liquidity The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the recoverability of assets and the satisfaction of liabilities in the normal course of business. The Company is in the growth and acquisition stage and, accordingly, will have to raise capital to complete acquisitions and successfully integrate acquired companies.
The Company is in the growth and acquisition stage and, accordingly, will have to raise capital to complete acquisitions and successfully integrate acquired companies.
In addition, the Company’s development activities since inception have been sustained through equity and debt financing and the deferral of payments on accounts payable and other expenses. 43 The ability of the Company to continue as a going concern is dependent upon its ability to raise capital from the sale of its equity and, ultimately, the achievement of increased operating revenues.
Requiring the Company to seek replacement equity or debt financing, which may not be available, or may be on substantially worse terms than the current credit facility. The ability of the Company to continue as a going concern is dependent upon its ability to raise capital from the sale of its equity and, ultimately, the achievement of increased operating revenues.
Net Loss Net loss for the year ended December 31, 2022, amounted to $7,143,153, resulting in a loss per share of $0.96, compared to a net loss of $6,098,944 for the year ended December 31, 2021, resulting in a loss per share of $4.85.
The goodwill carrying amount of the Champion Entities reporting unit was $4.525 million prior to its impairment Net Loss Net loss for the year ended December 31, 2023, amounted to $ 11,100,784 , resulting in a loss per share of $3.81 , compared to a net loss of $7,143,153 for the year ended December 31, 2022, resulting in a loss per share of $23.90.
For the year ended December 31, 2022, we incurred rental expense, warehousing and outlet expense of $508,527, compared to rental expense, warehousing and outlet expense of $0 for the year ended December 31, 2021. Since the acquisition of the Champion Entities that closed on July 29, 2022, the Company now has a much larger physical footprint.
For the year ended December 31, 2023, we incurred rental expense, warehousing, outlet expense of $871,032, compared to rental expense, warehousing, outlet expense of $508,527 for the year ended December 31, 2022.
For the year ended December 31, 2022, we incurred consulting and business development expenses of $2,000,624, compared to consulting and business development expenses of $2,012,803 for the year ended December 31, 2021.
For the year ended December 31, 2023, we incurred consulting/payroll and other costs of $3,347,070 compared to consulting/payroll and other costs of $905,843 for the year ended December 31, 2022.
The increase is primarily attributable to the Company’s recent acquisition of the Champion Entities that closed on July 29, 2022. For the year ended December 31, 2022, we reported Cost of Sales of $6,509,382, compared to Cost of Sales of $812,130 for the year ended December 31, 2021.
For the year ended December 31, 2023, we reported Cost of Goods Sold of $13,191,886, compared to Cost of Goods Sold of $6,509,382 for the year ended December 31, 2022.
The increase in marketing and brand development expenses relates primarily to the expanded size of the Company and the return of trade shows post the COVID-19 pandemic. For the year ended December 31, 2022, we incurred general and administrative expenses of $3,190,092, compared to general and administrative expenses of $968,306 for the year ended December 31, 2021.
For the year ended December 31, 2023, we incurred administrative and other expense of $3,317,082, compared to administrative and other expense of $3,190,092 for the year ended December 31, 2022.
The increase in the amount of product development expenses was due to the increase in product development activity. For the year ended December 31, 2022, we incurred marketing and brand development expenses of $507,503, compared to marketing and brand development expenses of $171,030 for the year ended December 31, 2021.
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. For the year ended December 31, 2023, we incurred marketing and brand development expenses of $1,273,012, compared to marketing and brand development expenses of $507,503 for the year ended December 31, 2022.
Financial statements of both companies are now consolidated and all material intercompany transactions and balances are eliminated. On July 29, 2022, the Company closed on its acquisition of the Champion Entities. 41 Recent Developments Acquisition of Champion Entities On June 29, 2022, the Company entered into a stock and membership interest purchase agreement with Champion Safe Co., Inc.
We established American Rebel Beverages, LLC as a wholly-owned subsidiary specifically to hold our alcohol licenses and conduct operations for our beer business. Acquisition of Champion Entities On June 29, 2022, the Company entered into a stock and membership interest purchase agreement with Champion Safe Co., Inc.
The increase relates primarily to an increase in professional, consulting and operating fees due to the expanded size of the Company. For the year ended December 31, 2022, we incurred depreciation expense of $50,087, compared to depreciation expense of $3,643 for the year ended December 31, 2021.
The Company believes as it grows its sales base it will need to increase administrative and other expenses commensurate with an overall increased profit into the future. For the year ended December 31, 2023, we incurred depreciation and amortization expense of $104,229, compared to depreciation and amortization expense of $50,087 for the year ended December 31, 2022.
Removed
The closing of the acquisition occurred on July 29, 2022.
Added
Financial statements of both companies are now consolidated and all material intercompany transactions and balances are eliminated.
Removed
Under the terms of the Champion Purchase Agreement, the Company paid the Seller (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 the Seller and the Champion Entities since June 30, 2021.
Added
On July 29, 2022, the Company closed on its acquisition of the Champion Entities, a major acquisition with significant existing operations. 41 Recent Developments Establishment of American Rebel Beer On August 9, 2023, the Company entered into a Master Brewing Agreement with Associated Brewing.
Removed
Additionally, the issuance of restricted shares will dilute the percentage of ownership interest of our stockholders. Results of Operations for the fiscal year ended December 31, 2022 Revenue and cost of goods sold For the year ended December 31, 2022, we reported Sales of $8,449,800, compared to Sales of $986,826 for the year ended December 31, 2021.
Added
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 early 2024. The Company paid a setup fee and security deposit to Associated Brewing.
Removed
Please review our footnotes to the Consolidated Financial Statements for its presentation on the pro forma financial information as if the Company and the Champion Entities had been combined since January 1, 2021.
Added
Secured Loans On April 14, 2023, the Company entered into a $1,000,000 Business Loan and Security Agreement (the “Secured Loan”) with an accredited investor lending source (the “Lender”). Under the Secured Loan, the Company received $980,000 on April 20, 2023, which was net of fees to the Lender.
Removed
This represents a significant difference if we were able to include a full year of revenue and costs of sales for the Champion Entities for 2022. 42 Expenses Total operating expenses for the year ended December 31, 2022 were $7,003,704 compared to $3,486,135 for the year ended December 31, 2021 as further described below.
Added
The Secured Loan requires 64 weekly payments of $20,000, for a total repayment of $1,280,000 to the Lender. The principal balance bears interest at 22.8%.
Removed
The slight decrease in consulting and business development expenses is due to the decrease in outside corporate consultants offset by additional payroll expenses for the Company as a result of the acquisition of the Champion Entities.
Added
The Secured Loan is secured by all of the assets of the Company and its subsidiaries second only to a previously secured line of credit and contains other customary terms and conditions for agreements of its type. Further, the Company’s CEO, Charles A. Ross, Jr., provided a personal guaranty for the Secured Loan.
Removed
Our rental expense, warehousing, etc. was negligible in years prior to 2022 and was included in our general and administrative expense line item. For the year ended December 31, 2022, we incurred product development expenses of $746,871, compared to product development expenses of $330,353 for the year ended December 31, 2021.
Added
On December 28, 2023, the Company entered into a $500,000 Business Loan and Security Agreement (the “Second Secured Loan”) with Alt Banq Inc., an accredited investor lending source (“Alt Banq”). Under the Second Secured Loan, the Company received $490,000 on December 29, 2023, which was net of fees to Alt Banq.
Removed
The decrease in interest expense is due to the Company retiring or converting to common stock most of its outstanding debt in late 2021. Retirement or converting to common stock of debt in 2022 was smaller in comparison. Additionally, the Company incurred interest expense of $350,000 for the release of pre-emptive rights from a certain lender to the Company.
Added
The Second Secured Loan requires 52 weekly payments of $11,731, for a total repayment of $610,000 to Alt Banq. The principal balance bears interest at 22% per annum.
Removed
The increase in the net loss from the year ended December 31, 2021 to the year ended December 31, 2022 is primarily due to acquisition costs of the Champion Entities and our increased expenditures on financing and other activities for growth.
Added
The Second Secured Loan, is secured by all of the assets of the Company and its subsidiaries second only to a previously secured line of credit and contains other customary terms and conditions for agreements of its type. Further, the Company’s CEO, Charles A. Ross, Jr., provided a personal guaranty for the Second Secured Loan.
Removed
As we proceed with the launch of our American Rebel concealed carry product and safe lines we have devoted and expect to continue to devote significant resources in the areas of capital expenditures and marketing, sales, and operational expenditures. We expect to require additional funds to further develop our business plan.
Added
Unsecured Loan The Company refinanced a $600,000 note with an accredited investor that was due March 31, 2023 with a new note dated July 1, 2023. The total amount refinanced with an accredited investor is $450,000, with $150,000 due December 31, 2023, and $300,000 due June 30, 2024.
Added
Interest will be paid quarterly in the amount of 12% on the outstanding principal amounts.
Added
Armistice PIPE and Warrant Exercise On June 27, 2023, we entered into a PIPE transaction with Armistice Capital Master Fund Ltd. for the purchase and sale of $2,993,850.63 of securities, consisting of (i) 71,499 shares of Common Stock at $4.37 per share, (ii) prefunded warrants (the “2023 Prefunded Warrants”) that are exercisable into 615,000 shares of Common Stock (the “ 2023 Prefunded Warrant Shares”) at $4.37 per Prefunded Warrant, and (iii) immediately exercisable warrants to purchase up to 686,499 shares of Common Stock at an initial exercise price of $4.24 per share and will expire five years from the date of issuance.
Added
On September 8, 2023, Armistice exercised certain existing warrants by paying $3,287,555.70 for 2,988,687 shares of the Company’s common stock at a reduced exercise price of $1.10 per share in consideration for the Company’s agreement to issue two new common stock purchase warrants to purchase, in the aggregate, up to 5,977,374 shares of the Company’s common stock. 42 Revenue Interest Purchase Agreement On December 19, 2023, we entered into a Revenue Interest Purchase Agreement (the “ Revenue Interest Purchase Agreement ”) with Kingdom Building Inc.
Added
(“ KBI ”), pursuant to which KBI purchased a revenue interest from us for $500,000, less $5,000 in transaction expenses.
Added
As consideration for such payment, commencing on April 1, 2024 and continuing thereafter until all amounts are repurchased by us pursuant to the terms of the Revenue Interest Purchase Agreement, KBI has a right to receive $75,000 per month from us in perpetuity until we purchase the revenue interest from the holder (the “ Revenue Interest ”).
Added
There are no distinct limitations or requirements that we are to produce revenue, or sufficient revenue to cover these payments. Under the Revenue Interest Purchase Agreement, we have an option (the “ Call Option ”) to repurchase the Revenue Interest at any time upon two days advance written notice.
Added
Additionally, KBI has an option (the “ Put Option ”) to terminate the Revenue Interest Purchase Agreement and to require us to repurchase future Revenue Interest upon us consummating a public offering pursuant to Regulation A.
Added
The repurchase price to be paid by us will be, if the Call Option or the Put Option is exercised (i) $625,000 if repurchased on or before March 31, 2024; and (ii) $687,500 after April 1, 2024; in each case of (i) or (ii), minus all Revenue Interest or other payments made by us to KBI prior to such date.
Added
In addition, the Revenue Interest Purchase Agreement contains various representations and warranties, covenants and other obligations and other provisions that are customary for a transaction of this nature. Further, in March and April of 2024 we have entered into several additional revenue interest purchase agreements, which are described in Item 9B below.
Added
Additionally, the issuance of restricted shares will dilute the percentage of ownership interest of our stockholders. 43 Results of Operations for the fiscal year ended December 31, 2023 Twelve Months Ended December 31, 2023 Compared to the Twelve Months Ended December 31, 2022 For the year ended December 31, 2023 For the year ended December 31, 2022 Revenue $ 16,228,310 $ 8,449,800 Cost of goods sold 13,191,886 6,509,382 Gross margin 3,036,424 1,940,418 Expenses: Consulting/payroll and other costs 3,347,070 905,843 Compensation expense – officers – related party 528,107 1,094,781 Compensation expense – officers – deferred comp – related party 1,413,000 - Rental expense, warehousing, outlet expense 871,032 508,527 Product development costs 132,528 746,871 Marketing and brand development costs 1,273,012 507,503 Administrative and other 3,317,082 3,190,092 Depreciation and amortization expense 104,229 50,087 10,976,060 7,003,704 Operating income (loss) (7,939,636 ) (5,063,286 ) Other Income (Expense) Interest expense (406,252 ) (358,689 ) Interest expense – pre-emptive rights release - (350,000 ) Interest income 3,780 5,578 Employee retention credit funds, net of costs to collect 1,113,337 - Gain/(loss) on sale of equipment 1,900 - Tangible asset valuation adjustment (1,570,816 ) - Impairment adjustment – goodwill (2,525,000 ) - Gain/(loss) on extinguishment of debt 221,903 (1,376,756 ) Net income (loss) before income tax provision (11,100,784 ) (7,143,153 ) Provision for income tax - - Net income (loss) $ (11,100,784 ) $ (7,143,153 ) Basic and diluted income (loss) per share $ (3.81 ) $ (23.90 ) Weighted average common shares outstanding - basic and diluted 2,912,100 298,800 Revenue and cost of goods sold For the year ended December 31, 2023, we reported Revenues of $16,228,310 compared to Revenues of $8,449,800 for the year ended December 31, 2022.
Added
The increase in Revenues of $7,778,510 (or 92% period over period (PoP)) for the year ended December 31, 2023 compared to the year ended December 31, 2022, is primarily attributable to the closing of the Champion acquisition on July 29, 2022 and a general increase from Champion’s average quarterly sales of product.
Added
The increase in Cost of Goods Sold of $6,682,504 (or 103% period over period (PoP)) for the current period is due to a significantly greater number of sales of product during the period compared to the year ending December 31, 2022 and again attributable to the closing of the Champion acquisition on July 29, 2022.
Added
The increase in Gross Margin of $1,096,006 (or 56% period over period (PoP)) for the year ending December 31, 2023, compared to the year ending December 31, 2022 is again due to the closing of the Champion acquisition on July 29, 2022.
Added
Gross Margin percentages for the year ended December 31, 2023 was 18.7% compared to 22.9% for the year ended December 31, 2022.
Added
We expect our Gross Margin percentage to remain consistent in the 20% range until we achieve sufficient sales volume to increase our margins from better pricing power, to better buying power on our costs of goods, inventory and inventory management. 44 Expenses Total operating expenses for the year ended December 31, 2023 were $10,976,060 compared to $7,003,704 for the year ended December 31, 2022 as further described below.
Added
Overall, we saw a $3,972,356 increase in operating expenses or a 57% period over period (PoP) increase in operating expenses from the prior year comparable period. With the acquisition and integration of the Champion acquisition we expect this to be about the same going forward dropping as a percentage of Revenues as we increase our overall sales volume.
Added
The increase in consulting/payroll and other costs of $2,441,227 (or 269% period over period (PoP)) was primarily due to the overall increase in the number of employees and the size of the Company’s head count post-acquisition of the Champion Entities.
Added
This was affected as well by the increased payroll costs from a competitive jobs market and the Champion Entities employees receiving pay increases that they were promised for years. The Company expects to maintain its current consulting/payroll and other costs as we further expand our sales volume and increase margins.
Added
For the year ended December 31, 2023, we incurred compensation expense – officers and compensation expense – officers – deferred comp costs of $518,107 and $1,413,000 compared to compensation expense – officers and compensation expense – officers – deferred comp costs of $1,094,781 and $0 for the year ended December 31, 2022.
Added
The increase in compensation expense – officers – deferred comp costs of $1,413,000 (in excess of 100% period over period (PoP)) was due to Company issuing shares of preferred stock that are convertible into common stock of the Company as well as the modification of the conversion terms of the same preferred stock that were previously issued to two (2) officers that are now able to be converted into common stock of the Company.
Added
The Company is required to recognize the cost attributable to the ability to convert the preferred shares into common stock multiplied by the market value or fair value of the Company’s common stock on either the grant date, issuance date, or the end of each reporting period.
Added
The Company will re-evaluate the fair value of the common stock equivalents underlying the preferred stock that was issued, as well as take into account the vesting (and complete ownership) of the preferred stock and its common stock equivalency.
Added
The decrease in compensation expense – officers of $576,674 (or -53% period over period (PoP)) was due to the Company issuing significant bonuses to its officers in 2022 for the successful closing on the Champion Entities offset or decreased by reduced bonuses for 2023 as recommended by the board of directors and its compensation committee. Mr.
Added
Lambrecht’s compensation will be fully integrated into the year ended December 31, 2024 with approximately another $250,000 to $300,000 in direct compensation expense – officers attributable to Mr. Lambrecht.
Added
Compensation expense is the total value that we pay our officers during the period reported, which includes a base salary, bonus, any equity awards or fringe benefits that we provide our officers. The Company believes that it pays it officers or management a fair and competitive salary, as well as stock grants or awards that are made during the year.
Added
Deferred compensation is attributable to the fair value of the common stock equivalents that are underlying our Series A preferred stock that have been issued pursuant to employment agreements and vesting schedules.
Added
The increase in rental expense, warehousing, outlet expense of $362,505 (or 71% period over period (PoP)) was due to the significant number of leases and properties that the Company rents to conduct the Champion business. Prior to the Champion business acquisition, the Company included lease expense in the Administrative and other account.
Added
The significant number of leases and properties that the Company rents to conduct its Champion business provides a better presentation of expenses through a separate line item in its Statement of Operations. The Company expects to maintain this level of expense on a go-forward basis with its leases and rented properties.
Added
The Company may look to consolidate some of its space as it fine tunes the Champion business. For the year ended December 31, 2023, we incurred product development expenses of $132,528, compared to product development expenses of $746,871 for the year ended December 31, 2022.
Added
The decrease in product development expenses of $614,343 (or -82% period over period (PoP)) is due to some of the Company’s current product development expenses being included in consulting/payroll and other costs account which provides for a better presentation of those expenses than pure product development expense, offset by new efforts over these past few months where we’ve incurred some significant expenses that are attributable to our private label brewery efforts and should be separated and identified.
Added
The increase in marketing and brand development expenses of $765,509 (or 151% period over period (PoP)) relates primarily to an increase of activities including major trade shows and the availability of working capital for these types of expenses as well as increased costs attributable to our acquisition and integration of the Champion business.
Added
The increase in administrative and other expense of $126,990 (or 4% period over period (PoP)) relates primarily to significant legal and other professional fees that we incurred during 2022 in anticipation of our registered public offerings, offset by other additional expenses picked up from our acquisition of Champion and recent financing efforts.
Added
The increase in depreciation and amortization expense relates primarily to the acquisition of Champion and its significant and additional depreciable asset base that it provided to the Company’s financial position.
Added
The increase in interest expense ($47,563) is due to a significant number of notes being paid during 2022 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.

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