UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
(Mark One)
For
the Quarterly Period Ended
OR
for the transition period from ___ to ___
Commission
file number
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) | |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s
telephone number, including area code:
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| The
| ||||
| The
|
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule
405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ | |
| ☒ | Smaller reporting company | |||
| Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate
by check mark whether the registrant is a shell company (as defined in rule 12b-2 of the Exchange Act). Yes ☐ No
The number of shares of the registrant’s common stock outstanding as of November 7, 2025 was .
AMERICAN REBEL HOLDINGS, INC.
INDEX TO QUARTERLY REPORT ON FORM 10-Q
| 2 |
Part I. Financial Information
Item 1.- Interim Condensed Consolidated Financial Statements (Unaudited)
AMERICAN REBEL HOLDINGS, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
| September
30, 2025 | December
31, 2024 | |||||||
| (Unaudited) | (Audited) | |||||||
| ASSETS | ||||||||
| CURRENT ASSETS: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Restricted cash | ||||||||
| Accounts receivable, net | ||||||||
| Prepaid expense | ||||||||
| Deferred offering costs | ||||||||
| Inventory | ||||||||
| Total Current Assets | ||||||||
| Property and Equipment, net | ||||||||
| OTHER ASSETS: | ||||||||
| Lease deposits and other | ||||||||
| Investments | ||||||||
| Right-of-use lease assets | ||||||||
| Intangible assets, net | ||||||||
| Total Other Assets | ||||||||
| TOTAL ASSETS | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | ||||||||
| CURRENT LIABILITIES: | ||||||||
| Accounts payable and other payables | $ | $ | ||||||
| Accrued expense and other | ||||||||
| Accrued interest | ||||||||
| Deferred revenue | ||||||||
| Loan – Officers – related party | ||||||||
| Loans – Working capital, net | ||||||||
| Loan – Director – related party | ||||||||
| Line of credit | ||||||||
| Right-of-use lease liability, current | ||||||||
| Total Current Liabilities | ||||||||
| Right-of-use lease liability, long-term | ||||||||
| TOTAL LIABILITIES | ||||||||
| STOCKHOLDERS’ EQUITY (DEFICIT): | ||||||||
| Preferred stock, $ par value; shares authorized; and issued and outstanding, at September 30, 2025 and December 31, 2024, respectively, comprised of Preferred Shares A, B, and D | ||||||||
| Preferred - Series A | ||||||||
| Preferred - Series B | ||||||||
| Preferred - Series D | ||||||||
| Preferred - Series E | ||||||||
| Common Stock, $ par value; shares authorized; and issued and outstanding at September 30, 2025 and December 31, 2024, respectively | ||||||||
| Additional paid in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| TOTAL STOCKHOLDERS’ EQUITY (DEFICIT) | ( | ) | ||||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| (1) | The Company’s common stock outstanding as of December 31, 2024 has been retroactively restated for the various reverse stock splits as described in the footnotes. |
| 3 |
AMERICAN REBEL HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
| For the Three Months Ended | For the Nine Months Ended | |||||||||||||||
| September
30, 2025 | September
30, 2024 | September
30, 2025 | September
30, 2024 | |||||||||||||
| Revenue | $ | $ | $ | $ | ||||||||||||
| Cost of goods sold | ||||||||||||||||
| Gross margin | ( | ) | ( | ) | ||||||||||||
| Expenses: | ||||||||||||||||
| Consulting/payroll and other costs | ||||||||||||||||
| Compensation expense – officers – related party | ( | ) | ||||||||||||||
| Compensation expense – officers – deferred comp – related party | ( | ) | ||||||||||||||
| Rental expense, warehousing, outlet expense | ||||||||||||||||
| Product development costs | ||||||||||||||||
| Marketing and brand development costs | ||||||||||||||||
| Administrative and other | ||||||||||||||||
| Depreciation and amortization expense | ||||||||||||||||
| Total operating expenses | ||||||||||||||||
| Operating income (loss) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other Income (Expense) | ||||||||||||||||
| Interest expense | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Interest income | ||||||||||||||||
| Gain/(loss) on sale of equipment | ||||||||||||||||
| Other income | ||||||||||||||||
| Loss on debt extinguishment | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Loss on settlement of liability | ( | ) | ( | ) | ||||||||||||
| Net income (loss) before income tax provision | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Provision for income tax | ||||||||||||||||
| Net income (loss) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Basic and diluted income (loss) per share | $ | ) | $ | ) | $ | ) | $ | ) | ||||||||
| Weighted average common shares outstanding - basic and diluted | ||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. See Note 1 regarding non-reliance on financial information.
| (1) | The Company’s common stock outstanding for the three and nine months ended September 30, 2024 has been retroactively restated for the various reverse stock splits as described in the footnotes. |
| 4 |
AMERICAN REBEL HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY/(DEFICIT)
FOR THE THREE AND NINE MONTHS ENDED
SEPTEMBER 30, 2025 AND 2024 (UNAUDITED)
| Common Stock | Common Stock Amount | Preferred Stock | Preferred Stock Amount | Additional Paid-in Capital | Accumulated Deficit | Total | ||||||||||||||||||||||
| For the Three Months Ended September 30, 2025 | ||||||||||||||||||||||||||||
| Balance - June 30, 2025 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
| Series A compensation expense | - | - | ||||||||||||||||||||||||||
| Conversion of Series A preferred stock to common stock | ( | ) | ( | ) | ||||||||||||||||||||||||
| Exercise of warrants | - | |||||||||||||||||||||||||||
| Issuance of Series D preferred stock and common stock for liabilities settlement | ||||||||||||||||||||||||||||
| Issuance of common stock and Series D preferred stock for consulting services | ||||||||||||||||||||||||||||
| Conversion of notes payable to common stock | - | |||||||||||||||||||||||||||
| Conversion of Series D preferred stock to common stock | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||
| Common stock and warrants issued for minority interest investment | - | |||||||||||||||||||||||||||
| Series E preferred stock issued in connection with Damon Note | - | |||||||||||||||||||||||||||
| Series D preferred stock issued in exchange for investment | - | |||||||||||||||||||||||||||
| Issuance of Series D preferred stock | - | |||||||||||||||||||||||||||
| Offering costs | - | - | ( | ) | ( | ) | ||||||||||||||||||||||
| Effect of reverse stock split round lot shares | ||||||||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||
| Balance - September 30, 2025 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||
| For the Nine Months Ended September 30, 2025 | ||||||||||||||||||||||||||||
| Balance - December 31, 2024 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
| Series A compensation expense | - | - | ||||||||||||||||||||||||||
| Conversion of Series A preferred stock to common stock | ( | ) | ( | ) | ||||||||||||||||||||||||
| Exercise of warrants | - | |||||||||||||||||||||||||||
| Issuance of Series D preferred stock and common Stock for liabilities settlement | ||||||||||||||||||||||||||||
| Issuance of common stock and Series D preferred stock for consulting services | ||||||||||||||||||||||||||||
| Issuance of Common stock in private placement | ||||||||||||||||||||||||||||
| Issuance of Common stock in connection with consulting and financing arrangement | ||||||||||||||||||||||||||||
| Conversion of Series D Preferred Stock to Common Stock | ( | ) | ( | ) | ||||||||||||||||||||||||
| Conversion of notes payable into Common Stock | ||||||||||||||||||||||||||||
| Common stock and warrants issued for minority interest investment | - | |||||||||||||||||||||||||||
| Series E preferred stock issued in connection with Damon Note | - | |||||||||||||||||||||||||||
| Series D preferred stock issued for asset acquisition | - | |||||||||||||||||||||||||||
| Issuance of Series D preferred stock | - | |||||||||||||||||||||||||||
| Offering costs | - | - | ( | ) | ( | ) | ||||||||||||||||||||||
| Effect of reverse stock split round lot shares | ||||||||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||
| Balance - September 30, 2025 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||
| For the Three Months Ended September 30, 2024 | ||||||||||||||||||||||||||||
| Balance - June 30, 2024 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
| Conversion of Series D preferred stock to common stock | ( | ) | ( | ) | ||||||||||||||||||||||||
| Issuance of common stock | - | |||||||||||||||||||||||||||
| Series A compensation expense | - | - | ( | ) | ( | ) | ||||||||||||||||||||||
| Issuance of Common stock in connection with Amended Convertible Note Payable | - | |||||||||||||||||||||||||||
| Issuance of Common stock in connection with Amended VGR working capital loan - August 2024 | - | |||||||||||||||||||||||||||
| Issuance of Common stock in connection with Amended VGR working capital loan - September 2024 | - | |||||||||||||||||||||||||||
| Series D Convertible Preferred Stock issued in connection with two amended Revenue Interest Agreements | - | |||||||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||
| Balance - September 30, 2024 | ( | ) | ( | ) | ||||||||||||||||||||||||
| For the Nine Months Ended September 30, 2024 | ||||||||||||||||||||||||||||
| Balance - December 31, 2023 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||
| Conversion of Series D Preferred Stock to Common stock | ( | ) | ( | ) | ||||||||||||||||||||||||
| Issuance of Common stock | - | |||||||||||||||||||||||||||
| Series A compensation expense | - | - | ||||||||||||||||||||||||||
| Issuance of Series D preferred stock through settlement and conversion of Revenue Interest Purchase note payable | - | ( | ) | ( | ) | |||||||||||||||||||||||
| Issuance of Common stock in connection with Amended Convertible Note Payable | - | |||||||||||||||||||||||||||
| Issuance of Common stock in connection with Amended VGR working capital loan - August 2024 | - | |||||||||||||||||||||||||||
| Issuance of Common stock in connection with Amended VGR working capital loan - September 2024 | - | |||||||||||||||||||||||||||
| Issuance of Series D preferred stock issued in connection with amended Revenue Interest Agreement | - | |||||||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||
| Balance - September 30, 2024 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. See Note 1 regarding non-reliance on financial information.
| (1) | The Company’s changes in stockholders’ equity for the three and nine months ended September 30, 2024 has been retroactively restated for the various reverse stock splits as described in the footnotes. |
| 5 |
AMERICAN REBEL HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
| For the Nine Months Ended | ||||||||
| September
30, 2025 | September
30, 2024 | |||||||
| CASH FLOW FROM OPERATING ACTIVITIES: | ||||||||
| Net loss | ( | ) | ( | ) | ||||
| Depreciation and amortization | ||||||||
| Non-cash, in-kind interest net of settlement | ||||||||
| (Gain) loss on disposition of property | ( | ) | ||||||
| Deferred compensation in connection with Series A preferred shares | ||||||||
| Loss on debt extinguishment | ||||||||
| Loss on settlement of liability | ||||||||
| Adjustments to reconcile net loss to cash (used in) operating activities: | ||||||||
| Accounts receivable | ||||||||
| Prepaid expense and other | ( | ) | ( | ) | ||||
| Deferred offering costs | ( | ) | ||||||
| Inventory | ||||||||
| Inventory deposits | ||||||||
| Lease deposits and other | ( | ) | ( | ) | ||||
| Accounts payable | ||||||||
| Accrued expenses | ( | ) | ||||||
| Deferred revenue | ||||||||
| Right-of-use lease liabilities | ( | ) | ||||||
| Net Cash (Used in) Operating Activities | ( | ) | ( | ) | ||||
| CASH FLOW FROM INVESTING ACTIVITIES: | ||||||||
| Purchase of investments | ||||||||
| (Purchase) disposition of property and equipment | ( | ) | ||||||
| Net Cash (Used in) Provided by Investing Activities | ( | ) | ||||||
| CASH FLOW FROM FINANCING ACTIVITIES: | ||||||||
| Offering costs paid | ( | ) | ||||||
| Proceeds from line of credit | ||||||||
| Proceeds from loans - officer - related party | ||||||||
| Proceeds from loans - director - related party | ||||||||
| Proceeds from working capital loans, net | ||||||||
| Repayments of working capital loans, net | ( | ) | ||||||
| Origination fees | ( | ) | ||||||
| Payments on line of credit | ( | ) | ||||||
| Proceeds from issuance of Series D preferred stock | ||||||||
| Proceeds from issuance of Common stock | ||||||||
| Net Cash Provided by Financing Activities | ||||||||
| CHANGE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH | ( | ) | ||||||
| CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT BEGINNING OF PERIOD | ||||||||
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT END OF PERIOD | ||||||||
| CASH AND CASH EQUIVALENTS AT END OF PERIOD | ||||||||
| RESTRICTED CASH AT END OF PERIOD | ||||||||
| TOTAL CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT END OF PERIOD | ||||||||
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | ||||||||
| Cash paid for: | ||||||||
| Interest | ||||||||
| Income taxes | ||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. See Note 1 regarding non-reliance on financial information.
| 6 |
AMERICAN REBEL HOLDINGS, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2025
(Unaudited)
NOTE 1 – PREVIOUSLY ISSUED FINANCIAL STATEMENTS
On May 3, 2024, the SEC entered an order instituting settled administrative and cease-and-desist proceedings against BF Borgers CPA PC (“Borgers”) and its sole audit partner, Benjamin F. Borgers CPA, permanently barring Mr. Borgers and Borgers (collectively, “BF Borgers”) from appearing or practicing before the SEC as an accountant (the “Order”). As a result of the Order, BF Borgers may no longer serve as the Company’s independent registered public accounting firm, nor can BF Borgers issue any audit reports included in Commission filings or provide consents with respect to audit reports.
As reported in the Current Report on Form 8-K filed with the Commission on May 6, 2024, in light of the Order, the Audit Committee (the “Committee”) of the Board of Directors of the Company on May 6, 2024, unanimously approved to dismiss, and dismissed BF Borgers as the Company’s independent registered public accounting firm.
On May 14, 2024, the Committee approved the engagement of GBQ Partners LLC (“GBQ”) as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2024 and the reaudits of the years ended December 31, 2023 and 2022.
The Company filed its Form 10-K/A with the reaudits of the years ended December 31, 2023 and 2022 with the SEC on January 29, 2025.
The Company has included the comparative three and nine months ended September 30, 2024 in this filing, and the impact of any adjustments to the quarters ended March 31, 2024 and June 30, 2024 have been included in the three months ended September 30, 2024 Form 10-Q. The individual prior periods impacted by these adjustments have not been restated due to the undue burden it would place on the Company. Accordingly, the accompanying consolidated statement of operations, the consolidated statement of stockholders’ equity/(deficit) for the three and nine months ended September 30, 2024, the consolidated statement of cash flows for the nine months ended September 30, 2024, and the accompanying notes for the three and nine months ended September 30, 2024 include the impact of any adjustments to the quarters ended March 31, 2024 and June 30, 2024 and should not be relied upon.
NOTE 2 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization
The
Company was incorporated on
Nature of Operations
The Company develops and sells branded products in the self-defense, safe storage and other patriotic product areas using a wholesale distribution network, utilizing personal appearances, musical venue performances, as well e-commerce and television. The Company’s products are marketed under the American Rebel Brand and are proudly imprinted with such branding. Through its “Champion Entities” (which consists of Champion Safe Co., Inc., Superior Safe, LLC, Safe Guard Security Products, LLC, and Champion Safe De Mexico, S.A. de C.V.), the Company 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. The Company sells its products under the Champion Safe Co., Superior Safe Company and Safe Guard Safe Co. brands as well as the American Rebel Brand. On August 9, 2023, the Company entered into a Master Brewing Agreement (the “Brewing Agreement”) with Associated Brewing Company, a Minnesota limited liability company (“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 the American Rebel Light Beer (“American Rebel Beer”). The Company established American Rebel Beverages, LLC as a wholly-owned subsidiary to hold the licenses with respect to the beer business. American Rebel Beer launched in 2024.
To varying degrees, the development of geopolitical conflicts, supply chain disruptions, government actions to slow rapid inflation in recent years and predictable sales cycles have produced varying effects on the business. The economic effects from these events over the long term cannot be reasonably estimated at this time. Accordingly, estimates used in the preparation of the financial statements, including those associated with the evaluation of certain long-lived assets, goodwill and other intangible assets for impairment, expected credit losses on amounts owed to the Company (through accounts receivable) and the estimations of certain losses assumed under warranty and other liability contracts, may be subject to significant adjustments in future periods.
Interim Financial Statements and Basis of Presentation
The accompanying unaudited interim financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information, and with the rules and regulations of the SEC set forth in Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by the U.S. GAAP for complete financial statements. The unaudited interim financial statements furnished reflect all adjustments (consisting of normal recurring accruals) which are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented. Unaudited interim results are not necessarily indicative of the results for the full fiscal year. These financial statements should be read along with the Annual Report filed on Form 10-K of the Company for the period ended December 31, 2024, and notes thereto contained, filed on April 9, 2025.
Principles of Consolidation
The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, American Rebel, Inc., American Rebel Beverages, LLC, the Champion Entities, and ARH Sub, LLC, a Utah limited liability company (“ARH Sub”) formed in June 2025 to facilitate the Streeterville Capital Note (see Note 11). All significant intercompany accounts and transactions have been eliminated.
| 7 |
Year-end
The Company’s year-end is December 31.
Cash and Cash Equivalents
For the purpose of the statements of cash flows, all highly liquid investments with an original maturity of three months or less are considered to be cash equivalents. The carrying value of these investments approximates fair value.
Restricted Cash
Restricted cash consists of amounts held in separate accounts that are legally or contractually restricted as to use. These restrictions may relate to collateral requirements, escrow arrangements, or other specific purposes and are not available for general operating activities. Restricted cash is included in the reconciliation of cash, cash equivalents, and restricted cash in the statement of cash flows, in accordance with ASC 230.
Inventory and Inventory Deposits
Finished goods inventory primarily consists of backpacks, jackets, and related accessories, safes, and packaged beer available for sale. Raw materials primarily consists of component parts used in the assembly of safes and packaging materials. Apart from safes, the Company’s finished goods are manufactured or otherwise produced by outside parties to the Company’s specifications. Inventory is carried at the lower of cost (First-in, First-out Method) or net realizable value. The Company determines an estimate for the reserve of slow moving or obsolete inventories by regularly evaluating individual inventory levels, projected sales and current economic conditions. From time-to-time, the Company makes deposit payments on certain inventory purchases that are presented separately in the accompanying consolidated financial statements as inventory deposits until the goods are received into inventory.
Property and Equipment
Property and equipment are stated at cost, net of accumulated depreciation. Additions and improvements are capitalized while ordinary maintenance and repair expenditures are charged to expense as incurred. Depreciation is recorded using the straight-line method over the estimated useful life of the asset, which ranges from five to fifteen years for equipment. Depreciation for the building acquired during the three months ended September 30, 2025 was not material.
Revenue Recognition and Accounts Receivable
In accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers, revenues are recognized when control of the promised goods or services is transferred to our clients, in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods and services. To achieve this core principle, we apply the following five steps: (1) Identify the contract with a client; (2) Identify the performance obligations in the contract; (3) Determine the transaction price; (4) Allocate the transaction price to performance obligations in the contract; and (5) Recognize revenues when or as the company satisfies a performance obligation.
These steps are met when an order is received, a price is agreed to, and the product is shipped or delivered to that customer. Additionally, the Company offers extended warranties for the locking mechanism of its safes, which are separately purchased by customers. Warranty income is recognized over time based on the estimated useful life of the locks, which approximates 10 years. Unrecognized warranty income is presented as deferred revenue in the accompanying consolidated financial statements. Warranty income recognized was not significant for the three and nine months ended September 30, 2025 and 2024.
| 8 |
The
carrying amount of accounts receivable is reduced by an allowance for bad debts and expected credit losses, as necessary, that reflects
management’s best estimate of the amount that will not be collected. This estimation takes into consideration historical experience,
current conditions and, as applicable, reasonable supportable forecasts. Actual results could vary from the estimate. Accounts are charged
against the allowance when management deems them to be uncollectible. The allowance for doubtful accounts was approximately $
The following table sets forth the approximate percentage of revenue by primary category:
| For
the Three Months Ended September 30, | For
the Nine Months Ended September 30, | |||||||||||||||
| Percentage of revenue | 2025 | 2024 | 2025 | 2024 | ||||||||||||
| Safes | % | % | % | % | ||||||||||||
| Soft goods | % | % | % | % | ||||||||||||
| Beverages | % | % | % | % | ||||||||||||
| Other | % | % | % | % | ||||||||||||
| Total | % | % | % | % | ||||||||||||
Fair Value of Financial Instruments
Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of September 30, 2025 and December 31, 2024, respectively. The respective carrying value of certain financial instruments approximated their fair values. These financial instruments include cash and accounts payable. Fair values were assumed to approximate carrying values for cash and payables because they are short term in nature and their carrying amounts approximate fair values or they are payable on demand.
The three levels of inputs used to measure fair value are as follows:
Level 1: The preferred inputs to valuation efforts are “quoted prices in active markets for identical assets or liabilities,” with the caveat that the reporting entity must have access to that market. Information at this level is based on direct observations of transactions involving the same assets and liabilities, not assumptions, and thus offers superior reliability. However, relatively few items, especially physical assets, actually trade in active markets.
Level 2: FASB acknowledged that active markets for identical assets and liabilities are relatively uncommon and, even when they do exist, they may be too thin to provide reliable information. To deal with this shortage of direct data, the board provided a second level of inputs that can be applied in three situations.
Level 3: If inputs from levels 1 and 2 are not available, FASB acknowledges that fair value measures of many assets and liabilities are less precise. The board describes Level 3 inputs as “unobservable,” and limits their use by saying they “shall be used to measure fair value to the extent that observable inputs are not available.” This category allows “for situations in which there is little, if any, market activity for the asset or liability at the measurement date”. Earlier in the standard, FASB explains that “observable inputs” are gathered from sources other than the reporting company and that they are expected to reflect assumptions made by market participants.
The Company records stock-based compensation in accordance with the guidance in ASC Topic 718, which requires the Company to recognize expense related to the grant date fair value of its employee stock awards. The Company recognizes the cost of employee share-based awards over the requisite service period, which represents the vesting period of the award. Stock-based compensation primarily relates to the Company’s Series A Preferred Stock awards.
The Company accounts for equity instruments issued in exchange for the receipt of goods or services from non-employees in accordance with ASC 718-10 and the conclusions reached ASC 505-50. Costs are measured at the estimated fair market value of the consideration received or the estimated fair value of the equity instruments issued, whichever is more reliably measurable. The value of equity instruments issued for consideration other than employee services is determined on the earliest of a performance commitment or completion of performance by the provider of goods or services as defined by ASC 505-50.
| 9 |
Net loss per common share is computed by dividing net loss by the weighted average common shares outstanding during the period as defined by ASC 260 - Earnings per Share. Basic earnings per common share (“EPS”) calculations are determined by dividing net income by the weighted average number of shares of common stock outstanding during the year and the effect of pre-funded warrants issued. Diluted earnings per common share calculations are determined by dividing net income by the weighted average number of common shares and dilutive common share equivalents outstanding. Because the Company incurred net losses for each of the years presented, the effect of dilutive securities, excluding pre-funded warrants, have been excluded as the effect on EPS is antidilutive.
Fully diluted shares outstanding is the total number of shares that the Company would theoretically have if all dilutive securities were exercised and converted into shares. Dilutive securities include options, warrants, convertible debt, preferred stock and anything else that can be converted into shares. Potential dilutive shares consist of the incremental common shares issuable upon the exercise of dilutive securities, calculated using the treasury stock method. The calculation of dilutive shares outstanding excludes out-of-the-money options (i.e., such options’ exercise prices were greater than the average market price of our common shares for the period) because their inclusion would have been antidilutive.
| Three
Months Ended September 30, 2025 | Three
Months Ended September 30, 2024 | |||||||
| Shares used in computation of basic earnings per share for the year ended | ||||||||
| Pre-funded warrants | ||||||||
| Total denominator | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Fully diluted loss per share | $ | ( | ) | $ | ( | ) | ||
| Nine
Months Ended September 30, 2025 | Nine
Months Ended September 30, 2024 | |||||||
| Shares used in computation of basic earnings per share for the year ended | ||||||||
| Pre-funded warrants | ||||||||
| Total denominator | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Fully diluted loss per share | $ | ( | ) | $ | ( | ) | ||
In periods of losses, diluted loss per share is computed on the same basis as basic loss per share as the inclusion of any other potential shares outstanding would be antidilutive.
| 10 |
Income Taxes
The Company follows ASC Topic 740 for recording provision for income taxes. Deferred tax assets and liabilities are computed based upon the difference between the financial statement and income tax basis of assets and liabilities using the enacted marginal tax rate applicable when the related asset or liability is expected to be realized or settled. Deferred income tax expense or benefit is based on the changes in the asset or liability for each period. If available evidence suggests that it is more likely than not that some portion or the entire deferred tax asset will not be realized, a valuation allowance is required to reduce the deferred tax asset to the amount that is more likely than not to be realized. Future changes in such valuation allowance are included in the provision for deferred income tax in the period of change. For the three and nine months ended September 30, 2025 and 2024, respectively, income tax expense has been recorded given significant losses incurred and resulting valuation allowance on such losses.
Deferred income tax may arise from temporary differences resulting from income and expense items reported for financial accounting and tax purposes in different periods. Deferred taxes are classified as current or non-current, depending on the classification of assets and liabilities to which they relate. Deferred taxes arising from temporary differences that are not related to an asset or liability are classified as current or non-current depending on the periods in which the temporary differences are expected to reverse.
The
Company applies a more-likely-than-not recognition threshold for all tax uncertainties. ASC Topic 740 only allows the recognition of
tax benefits that have a greater than fifty percent likelihood of being sustained upon examination by taxing authorities. As of September
30, 2025 and December 31, 2024, the Company reviewed its tax positions and determined there were no outstanding, or retroactive tax positions
with
Leases
ASC 842 requires lessees to recognize substantially all leases on the balance sheet as a Right-of-use (“ROU”) asset and a lease liability and requires leases to be classified as either an operating or a finance type lease. The standard excludes leases of intangible assets or inventory. The Company elected the practical expedient related to treating lease and non-lease components as a single lease component for all equipment leases as well as electing a policy exclusion permitting leases with an original lease term of less than one year to be excluded from the ROU assets and lease liabilities.
Under ASC 842, the Company determines if an arrangement is a lease at inception. ROU assets and liabilities are recognized at commencement date based on the present value of remaining lease payments over the lease term. For this purpose, the Company considers only payments that are fixed and determinable at the time of commencement. As most of the Company’s leases do not provide an implicit rate, the Company estimated the incremental borrowing rate in determining the present value of lease payments. The ROU asset also includes any lease payments made prior to commencement and is recorded net of any lease incentives received. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise such options.
Operating
leases are included in operating lease Right-of-use assets and operating lease liabilities, current and non-current, on the Company’s
condensed consolidated balance sheets. The Company had
Rental income is recognized on a straight-line basis over the lease term.
Rental income totaled $
Recent Accounting Pronouncements
In October 2023, the FASB issued ASU No. 2023-06, Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative. This update modifies the disclosure or presentation requirements of a variety of topics in the Accounting Standards Codification to conform with certain SEC amendments in Release No. 33-10532, Disclosure Update and Simplification. The amendments in this update should be applied prospectively, and the effective date for each amendment will be the date on which the SEC’s removal of that related disclosure from Regulation S-X or S-K becomes effective. However, if the SEC has not removed the related disclosure from its regulations by June 30, 2027, the amendments will be removed from the Codification and not become effective. Early adoption is prohibited. We are currently evaluating the potential impact of this guidance on our consolidated financial statements.
| 11 |
Management does not believe that any other recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the Company’s financial statements.
Concentration Risk
The Company did not have any vendor or customer concentrations as of September 30, 2025 or December 31, 2024.
NOTE 3 – GOING CONCERN
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. As noted above, the Company is in the
growth and acquisition stage and, accordingly, has not yet reached profitability from its operations. Since inception, the Company has
been engaged in financing activities and executing its plan of operations and incurring costs and expenses related to product development,
branding, inventory buildup and product launch. As a result, the Company has continued to incur significant net losses for the three
and nine months ended September 30, 2025 of ($5,230,027) and ($
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 significant operating revenues and profitability.
Management believes that sufficient funding can be secured through the obtaining of loans, as well as future offerings of its preferred and common stock. However, no assurance can be given that the Company will obtain this additional working capital, or if obtained, that such funding will not cause substantial dilution to its existing stockholders. As indicated in the footnotes to the consolidated financial statements, most of the current debt instruments are charging high interest rates. These interest payments and/or premium repayments and prepayments may make it difficult for the Company to enter into new debt agreements. If the Company is unable to secure such additional funds from these sources, it may be forced to change or delay some of its business objectives and efforts. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern.
These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
NOTE 4 – PREPAID EXPENSE
Prepaid expenses include the following:
| September 30, 2025 | December 31, 2024 | |||||||
| (Unaudited) | (Audited) | |||||||
| Tony Stewart racing prepaid | $ | $ | ||||||
| Barham Enterprises prepaid | ||||||||
| Charlotte Motors Speedway prepaid | ||||||||
| MZ Digital prepaid | ||||||||
| FMW Media Works prepaid | ||||||||
| Other prepaids | ||||||||
| Total prepaid expense | $ | $ | ||||||
Prepaid expenses represent payments or stock issuances made by the Company for which the related benefits will be recognized in future periods. These amounts are expensed over the periods in which the benefits are expected to be realized. Prepaid expenses are classified as current assets on the condensed consolidated balance sheets.
| 12 |
NOTE 5 – INVENTORY
Inventory and deposits include the following:
| September
30, 2025 | December
31, 2024 | |||||||
| (Unaudited) | (Audited) | |||||||
| Inventory – raw materials | $ | $ | ||||||
| Inventory – finished goods | ||||||||
| Less reserve for excess and obsolete inventory | ( | ) | ( | ) | ||||
| Total Inventory | $ | $ | ||||||
The Company accounts for excess and obsolete inventory with a reserve that is established based on management’s estimates of the net realizable value of the related products. These reserves are product specific and are based upon analyses of product lines that are slow moving or expected to become obsolete due to significant product enhancements.
When
inventory is physically disposed of, the Company accounts for the write-offs by making a debit to the reserve and a credit to inventory
for the standard cost of the inventory item. The valuation reserve is applied as an estimate to specific product lines. Since the inventory
item retains its standard cost until it is either sold or written off, the reserve estimates will differ from the actual write-off. There
were
Included
in finished goods is approximately $
NOTE 6 – PROPERTY AND EQUIPMENT
Property and equipment include the following:
| September
30, 2025 | December
31, 2024 | |||||||
| (Unaudited) | (Audited) | |||||||
| Property and equipment | $ | $ | ||||||
Building | ||||||||
| Vehicles | ||||||||
| Less: Accumulated depreciation | ( | ) | ( | ) | ||||
| Net property and equipment | $ | $ | ||||||
For
the three and nine months ended September 30, 2025 and 2024, the Company recognized $
NOTE 7 – INVESTMENTS
218 LLC
On
September 15, 2025, the Company entered into an agreement for the acquisition of
| 13 |
Pursuant
to the Membership Interest Purchase Agreement, the Company issued shares of Series D Convertible Preferred Stock, valued at $
per share ($
The
Company also agreed to issue an additional shares of Series D Convertible Preferred Stock, valued at $
Minority Investment in RAEK Data, LLC
On
September 30, 2025, the Company entered into a Membership Interest Purchase Agreement with RAEK Data, LLC (“RAEK”) to
acquire a
Minority Investment in Schmitty’s Herbal Snuff and Pouches
On
September 2, 2025, the Company entered into a Membership Interest Purchase Agreement with Sydona Enterprises, LLC, doing business as
Schmitty’s Herbal Snuff and Pouches (“Schmitty’s”), to acquire a
Damon Note Purchase Agreement
On
August 22, 2025, the Company entered into a note purchase agreement (the “NPA”) with Streeterville Capital, LLC, a Utah limited
liability company (“Streeterville”), for the purchase by the Company of a portion of a certain $
Upon
the terms and conditions set forth in the NPA, Streeterville sold, transferred and assigned to the Company, and the Company agreed to
purchase from Streeterville, $
The Damon Note is secured by certain collateral of Damon as set forth in the transaction documents between Streeterville and Damon. The Company and Streeterville agreed that the security interest held in the collateral by Streeterville will be held pari passu for benefit of both parties. Any and all rights, benefits and proceeds of the collateral will be shared pro rata by the Company and Streeterville (based on the then-outstanding balances of the Damon Note and the portion of the Damon Note purchased by the Company). Any decision regarding when, how and whether to pursue collections or other actions against Damon will be determined by Streeterville in consultation with the Company. The Company covenanted and agreed that it will not pursue any collections or other action against Damon without Streeterville’s consent.
| 14 |
NOTE 8 – ACCRUED EXPENSE AND OTHER
Accrued expense and other includes the following:
| September
30, 2025 | December
31, 2024 | |||||||
| (Unaudited) | (Audited) | |||||||
| Accrued officer bonus | $ | $ | ||||||
| Accrued liabilities - Champion | ||||||||
| Accrued liabilities - Beer | ||||||||
| Accrued officer compensation | ||||||||
| Tony Stewart Racing | ||||||||
| Other accrued expenses | ||||||||
| Total accrued expense and other | $ | $ | ||||||
Accrued expenses represent obligations for goods and services received that have not yet been invoiced or paid as of the reporting date. These liabilities are recorded when incurred in accordance with the accrual basis of accounting and are classified as current liabilities on the condensed consolidated balance sheets.
NOTE 9 – RELATED PARTY NOTES PAYABLE AND RELATED PARTY TRANSACTIONS
Employment Agreements
Charles
A. Ross, Jr. serves as the Company’s Chief Executive Officer. Compensation for Mr. Ross was $
Doug
E. Grau served as the Company’s President and Interim Principal Accounting Officer through June 30, 2025. Compensation for Mr.
Grau was $
Effective
July 1, 2025, Darin Fielding began serving as the Company’s Interim Principal Accounting Officer. Compensation for Mr.
Fielding was $
Corey
Lambrecht serves as the Company’s President and Chief Operating Officer. Compensation for Mr. Lambrecht was $
There
were no new stock awards granted and issued to Messrs. Ross, Grau, Fielding and Lambrecht during 2025 and 2024. Additionally, the aforementioned
officers advanced the Company approximately $
| 15 |
Series A Convertible Preferred Stock
Per Mr. Lambrecht’s employment agreement entered into on November 20, 2023, the share-award grant is to vest 1/4th upon the signing of Mr. Lambrecht’s employment, another 1/4th on January 1, 2024, another 1/4th on January 1, 2025 and the remaining 1/4th on January 1, 2026. Mr. Lambrecht’s employment agreement has a term running from November 20, 2023 through December 31, 2026, a term of 37 and ½ months. For the three months ended September 30, 2025 and 2024, the Company recognized $ and $ in compensation expense attributable to the share award grant and respective earn-out. For the nine months ended September 30, 2025 and 2024, the Company recognized $ and $ in compensation expense attributable to the share award grant and respective earn-out. On January 1, 2025 another shares of Series A preferred stock vested for Mr. Lambrecht, providing for a total of shares of common stock that Mr. Lambrecht may convert his Series A preferred shares into.
Mr. Ross’s amended employment agreement had an effective date of November 20, 2023. The share-award grant will vest 1/5th on January 1, 2024, another 1/5th on January 1, 2025, 1/5th on January 1, 2026, 1/5th on January 1, 2027 and the remaining 1/5th on January 1, 2028. Mr. Ross’s amended employment agreement has an effective term running from November 20, 2023 through December 31, 2026, a term of 37 and ½ months. For the three months ended September 30, 2025 and 2024, the Company recognized $ and $ in compensation expense attributable to the share award grant and respective earn-out. For the nine months ended September 30, 2025 and 2024, the Company recognized $ and $ in compensation expense attributable to the share award grant and respective earn-out. On January 1, 2025 an additional shares of Series A preferred stock vested for Mr. Ross, providing for a total of shares of common stock that Mr. Ross may convert his Series A preferred shares into at any time.
Mr. Grau’s amended employment agreement had an effective date of November 20, 2023, with a termination date of July 1, 2025. The share-award grant will vest 1/5th on January 1, 2024, another 1/5th on January 1, 2025, 1/5th on January 1, 2026, 1/5th on January 1, 2027 and the remaining 1/5th on January 1, 2028. Mr. Grau’s amended employment agreement has an effective term running from November 20, 2023 through June 30, 2025. For the three months ended September 30, 2025 and 2024, the Company recognized $ and $ in compensation expense attributable to the share award grant and respective earn-out. For the nine months ended September 30, 2025 and 2024, the Company recognized $ and $ in compensation expense attributable to the share award grant and respective earn-out. On January 1, 2025 an additional shares of Series A preferred stock vested for Mr. Grau, providing for a total of shares of common stock that Mr. Grau may convert his Series A preferred shares into at any time. The Company is currently in the process of finalizing compensation arrangements for Mr. Grau.
On August 1, 2025, Corey Lambrecht converted shares of Series A preferred stock into shares of common stock. Additionally, on August 1, 2025, Charles A. Ross, Jr. converted shares of Series A preferred stock into shares of common stock. Further, on September 25, 2025, Corey Lambrecht converted an additional shares of Series A preferred stock into shares of common stock. In addition, on September 25, 2025, Charles A. Ross, Jr. converted an additional shares of Series A preferred stock into shares of common stock.
Stock-Based Compensation
The Company, in connection with various employment and independent directors’ agreements, is required to issue shares of its common stock as payment for services performed or to be performed. The value of the shares issued is determined by the fair value of the Company’s common stock that trades on the Nasdaq Capital Market. This value on the date of grant is afforded to the Company for the recording of stock compensation to employees and other related parties or control persons and the recognition of this expense over the period in which the services were incurred or performed. Most of the Company’s agreement for stock compensation provide for services performed to have been satisfied by the initial grant, thereby incurring the cost immediately from the grant.
Stock-based compensation is presented in accordance with the guidance of ASC Topic 718, “Compensation – Stock Compensation” (“ASC 718”). Under the provisions of ASC 718, the Company is required to estimate the fair value of share-based payment awards on the date of grant using an option-pricing model. The value of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service periods in our statements of operations. Where the stock-based compensation is not an award, option, warrant or other common stock equivalent, the Company values the shares based on fair value with respect to its grant date and the price that investors may have been paying for the Company’s common stock on that date in its various exempt private placement offerings. Stock-based compensation expense totaled $ and $() for the three months ended September 30, 2025 and 2024, respectively, and primarily relates to the aforementioned Series A preferred stock awards. Stock-based compensation expense totaled $ and $ for the nine months ended September 30, 2025 and 2024, respectively, and primarily relates to the aforementioned Series A preferred stock awards.
| 16 |
Taxable value of the stock-based compensation is recorded in accordance with the Internal Revenue Service’s regulations as it pertains to employees, control persons and others whereby they receive share-based payments. This may not always align with what the Company records these issuances in accordance with GAAP. There are no provisional tax agreements or gross-up provisions with respect to any of our share-based payments to these entities. The payment or withholding of taxes is strictly left to the recipient of the share-based payments, or the modification of share-based payments.
Director’s Note
On
June 28, 2024, the Company entered into a short-term loan with a director, Lawrence Sinks (“Mr. Sinks”), evidenced by a promissory
note in the principal amount of $
NOTE 10 – LINE OF CREDIT – FINANCIAL INSTITUTION
During
February 2023, the Company entered into a $
| September
30, 2025 | December
31, 2024 | |||||||
| (Unaudited) | (Audited) | |||||||
| Line of credit from a financial institution. | $ | $ | ||||||
| Total recorded as a current liability | $ | $ | ||||||
The
balance at the maturity was approximately $
| 17 |
On
May 30, 2025, the Company entered into a Forbearance Agreement (the “Forbearance Agreement”). Subject to the terms of the
Forbearance Agreement, Bank of America has agreed to forbear, during the Forbearance Period (as defined below), from exercising certain
of their available remedies under the Credit Agreement with respect to or arising out of the Company’s failure to make payment
on the outstanding principal amount on the Line of Credit. As a result of the uncured default, Bank of America filed a complaint against
the Company on March 21, 2025 in the Fourth Judicial District Court, in and for Utah County, Utah (Case No. 250401345) seeking no less
than $
| ● | On the sooner to occur of (i) June 30, 2025 or (ii) the termination of the Forbearance Period in accordance with the Termination of Forbearance Period Section of the Forbearance Agreement, all remaining unpaid principal, accrued interest, fees, attorneys’ fees, and expenses and other amounts owing under the Credit Agreement shall be due and payable in full; | |
| ● | The
Company made a principal payment in the amount of $ | |
| ● | Should
the Company fail to pay Bank of America all remaining unpaid principal, accrued interest, fees, attorneys’ fees, and expenses
and other amounts owing under the Credit Agreement and the Forbearance Agreement by close of business on June 30, 2025, the Company
may, upon an additional payment of $ |
On
June 26, 2025, the Company entered into a note purchase agreement with Streeterville Capital, LLC (“Streeterville”)
pursuant to which the Company issued and sold to Streeterville a secured promissory note in the original principal amount of $
| 18 |
NOTE 11 – NOTES PAYABLE – WORKING CAPITAL
The Company has several working capital loan agreements in place, which are described in detail below.
| September 30, 2025 | December 31, 2024 | |||||||
| (Unaudited) | (Audited) | |||||||
| Working capital loan agreement
with a limited liability company domiciled in the state of Virginia. The working capital loan requires an initial payment of $ | ||||||||
| The Company has entered a number of working
capital loan agreements structured as Revenue Interest Purchase Agreements (“revenue participation interest”, “RIP”).
These working capital loans provided for a purchase of an ownership interest in the revenues of the Champion subsidiary. The revenue
participation interest requires payments ranging from $ | ||||||||
| On November 11, 2024, the Company entered
into a Purchase and Exchange Agreement among an investor (the “Purchaser”) and Altbanq Lending LLC (the “Seller”),
pursuant to which the Purchaser agreed to purchase from the Seller a portion ($ | ||||||||
| Standard Merchant Cash Advance Agreement
(the “Factoring Agreement”), with an accredited investor lending source (“Financier”). Under the Factoring
Agreement, our wholly-owned subsidiary sold to Financier a specified percentage of its future receipts (as defined by the Factoring
Agreement, which include any and future revenues of Champion Safe Company, Inc. (“Champion”), another wholly-owned subsidiary
of the Company, and the Company) equal to $ | ||||||||
| 19 |
| Working Capital loan agreement
with an accredited investor lending source and a subsidiary to that accredited investor lending source as collateral agent, which
provides for a term loan in the amount of $ | ||||||||
| On September 4, 2024, the
Company entered into a Securities Purchase Agreement with Coventry Enterprises, LLC, an accredited investor
(“Coventry”), pursuant to which Coventry made a loan to the Company, evidenced by a promissory note in the principal
amount of $ | ||||||||
| On August 8, 2024, the Company entered into
a Securities Purchase Agreement with 1800 Diagonal Lending, LLC, an accredited investor (“1800 Diagonal”), pursuant to which
1800 Diagonal made a loan to the Company, evidenced by a promissory note in the principal amount of $ |
| 20 |
| On August 27, 2024 through
September 16, 2024, the Company entered into four loan advances with an investor. The principal of the advances ranged from $ | ||||||||
| On October 4, 2024, the Company entered
into a Securities Purchase Agreement with 1800 Diagonal Lending, LLC, an accredited investor (“1800 Diagonal”), pursuant
to which 1800 Diagonal made a loan to the Company, evidenced by a promissory note in the principal amount of $ | ||||||||
| On October 30, 2024, the Company entered
into a Securities Purchase Agreement with Alumni Capital LP, a Delaware limited partnership (“Alumni”), pursuant
to which Alumni made a loan to the Company, evidenced by a promissory note in the principal amount of $ |
| 21 |
| On November 6, 2024, the
Company entered into a Securities Purchase Agreement with 1800 Diagonal, pursuant to which 1800 Diagonal made a loan to the Company,
evidenced by a promissory note in the principal amount of $ | ||||||||
| On November 11, 2024, the Company entered
into a twelve-month promissory note with an accredited investor (the “Lender”) in the principal amount of $ |
| 22 |
| On December 13, 2024, the Company
entered into a three-month promissory note with an accredited investor (the “Lender”) in the principal amount of $ | ||||||||
| On January 10, 2025, the Company entered
into two six-month promissory notes with accredited investors (the “Lenders”) in the principal amounts of $ |
| 23 |
| On February 10, 2025, the Company entered
into a Securities Purchase Agreement with 1800 Diagonal, pursuant
to which 1800 Diagonal made a loan to the Company, evidenced by a promissory note in the principal amount of $ | ||||||||
| On March 3, 2025, the Company entered into
a Securities Purchase Agreement with 1800 Diagonal, pursuant to which
1800 Diagonal made a loan to the Company, evidenced by a promissory note in the principal amount of $ | ||||||||
| On April 7, 2025, the Company
entered into a Securities Purchase Agreement with 1800 Diagonal, pursuant to which 1800 Diagonal made a loan to the Company,
evidenced by a promissory note in the principal amount of $ | ||||||||
| On April 10, 2025, the Company entered into
a Securities Purchase Agreement with 1800 Diagonal, pursuant to which 1800 Diagonal made a loan to the Company, evidenced
by a promissory note in the principal amount of $ |
| 24 |
| On May 27, 2025, the Company
entered into five two year promissory notes with five accredited investors in the gross principal amount of $ | ||||||||
|
On June 26, 2025, the Company entered into a
note purchase agreement (the “Purchase Agreement”) with Streeterville Capital, LLC (“Streeterville”),
pursuant to which the Company issued and sold to Streeterville a secured promissory note (the “Note”) in the original
principal amount of $ |
| 25 |
| On
July 7, 2025, the Company entered into a Securities Purchase Agreement with 1800 Diagonal, pursuant to which 1800 Diagonal made a
loan to the Company, evidenced by a promissory note in the principal amount of $ | ||||||||
| On July 7, 2025, the Company entered into
a Securities Purchase Agreement with Boot Capital LLC, an accredited investor (“Boot”), pursuant to which Boot made a
loan to the Company, evidenced by a promissory note in the principal amount of $ |
| 26 |
| On July 31, 2025, the Company
entered into a Securities Purchase Agreement with Horberg, pursuant to which Horberg purchased a Promissory Note with a principal
amount of $ | ||||||||
| On August 25, 2025, the Company entered
into a note agreement with 1800 Diagonal for a principal amount of $ | ||||||||
| The Company entered
into a Membership Interest Purchase Agreement (“MIPA”) on September 15, 2025, to acquire all of the outstanding membership
interests in 218 LLC, whose sole asset is a 20,829 square foot commercial retail building located at 218 3rd Avenue North, Nashville,
Tennessee, for a total purchase price of $ | ||||||||
| Less: note discount and fees | ( | ) | ( | ) | ||||
| Total recorded as a current liability | $ | $ |
Accrued
interest was approximately $
For
the three and nine months ended September 30, 2025, the Company recognized a net loss on debt extinguishment totaling $
| Description | Fair Value | (Level 1) | (Level 2) | (Level 3) | ||||||||||||
| Common stock | $ | $ | $ | $ | ||||||||||||
Level 2 fair value measurements in the table above were primarily measured through the Company’s publicly traded common stock price, which is an observable input in determining fair value.
NOTE 12 – INTANGIBLE ASSETS
As
of September 30, 2025 and December 31, 2024, the Company had intangible assets, representing a trade name subject to amortization over
a
| 27 |
The
Company will review its trade name intangible asset for impairment periodically (based on indicators of impairment) and determine whether
impairment is to be recognized within its consolidated statement of operations.
NOTE 13 – SHARE CAPITAL
The Company is authorized to issue shares of its $ par value common stock and shares of its $ par value preferred stock. The shares of $ par value preferred stock were comprised of shares authorized and shares issued and outstanding of its Series A convertible preferred stock at September 30, 2025 and December 31, 2024, shares authorized and shares issued and outstanding of its Series B convertible preferred stock at September 30, 2025 and December 31, 2024, shares authorized and shares issued and outstanding of its Series C convertible preferred stock at September 30, 2025 and December 31, 2024, shares authorized and and shares issued and outstanding of its Series D convertible preferred stock at September 30, 2025 and December 31, 2024, respectively and shares authorized and and issued and outstanding of its Series E preferred stock at September 30, 2025 and December 31, 2024, respectively. As of September 30, 2025 and December 31, 2024, there were and shares of common stock issued and outstanding, respectively.
The share numbers and pricing information in this report have been adjusted to reflect the effects of the following reverse stock splits, which occurred during 2024 and 2025:
| ● | On
October 2, 2024, the Company effectuated a reverse split of its issued and outstanding shares of common stock at a ratio of | |
| ● | On
March 31, 2025, the Company effectuated a reverse split of its issued and outstanding shares of common stock at a ratio of | |
| ● | On
October 3, 2025, the Company effectuated a reverse split of its issued and outstanding shares of common stock at a ratio of |
Silverback Conversions
During
the nine months ended September 30, 2025, the Company issued shares of common stock to Silverback Capital Corporation (“SCC”),
representing total accounts payable settlements of $
In
April 2025, the Company completed a series of stock conversions with SCC pursuant to the terms of existing convertible instruments. During
this period, Silverback converted a significant portion of its holdings into shares of the Company’s common stock. In August 2025,
the Company and SCC mutually agreed to terminate the settlement agreement, which left outstanding approximately $
Debt to Equity Conversions
The
conversions occurred over multiple tranches throughout April 2025, during which the Company’s stock price experienced substantial
volatility. The trading price of the Company’s common stock ranged from a low of approximately $ to a high of $ during
the month. The Company recognized a significant loss on extinguishment of debt of $
Shares Issuances
On
January 10, 2025, the Company entered into two six-month promissory notes with accredited investors in the principal amounts of $
On January 10, 2025, the Company authorized the issuance of shares of common stock to a consultant pursuant to the terms of an amendment to a current consulting agreement.
| 28 |
On January 14, 2025, the Company authorized the issuance of shares of Series D Convertible Preferred Stock to seven service providers to the Company and its subsidiaries.
On February 10, 2025, the Company authorized the issuance of shares of common stock to an accredited investor upon the conversion of shares of Series D Convertible Preferred Stock.
On
February 10, 2025, the Company authorized the issuance of shares of common stock, valued at $
On
February 27, 2025, the Purchaser, pursuant to the Purchase and Exchange Agreement dated November 11, 2024, as amended on February 19,
2025, sent the Company a second closing notice for the exchange of $
On
March 4, 2025, the Purchaser, pursuant to the Purchase and Exchange Agreement dated November 11, 2024, as amended on February 19, 2025,
sent the Company a third closing notice for the exchange of $
On
March 5, 2025, the Company authorized the issuance of shares of common stock to an accredited investor upon the conversion of $
On
March 10, 2025, the Purchaser, pursuant to the Purchase and Exchange Agreement dated November 11, 2024, as amended on February 19, 2025,
sent the Company a fifth closing notice for the exchange of $
On
March 12, 2025, the Purchaser, pursuant to the Purchase and Exchange Agreement dated November 11, 2024, as amended on February 19, 2025,
sent the Company a sixth closing notice for the exchange of $
On
March 12, 2025, the Purchaser, pursuant to the Purchase and Exchange Agreement dated November 11, 2024, as amended on February 19, 2025,
sent the Company a seventh closing notice for the exchange of $
On
March 12, 2025, the Purchaser, pursuant to the Purchase and Exchange Agreement dated November 11, 2024, as amended on February 19, 2025,
sent the Company an eighth closing notice for the exchange of $
On
March 12, 2025, the Purchaser, pursuant to the Purchase and Exchange Agreement dated November 11, 2024, as amended on February 19, 2025,
sent the Company a nineth closing notice for the exchange of $
On
March 13, 2025, the Purchaser, pursuant to the Purchase and Exchange Agreement dated November 11, 2024, as amended on February 19, 2025,
sent the Company a tenth closing notice for the exchange of $
On
March 17, 2025, the Purchaser, pursuant to the Purchase and Exchange Agreement dated November 11, 2024, as amended on February 19, 2025,
sent the Company an eleventh closing notice for the exchange of $
On
March 18, 2025, the Purchaser, pursuant to the Purchase and Exchange Agreement dated November 11, 2024, as amended on February 19, 2025,
sent the Company a twelfth closing notice for the exchange of $
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On
March 19, 2025, the Purchaser, pursuant to the Purchase and Exchange Agreement dated November 11, 2024, as amended on February 19, 2025,
sent the Company a thirteenth closing notice for the exchange of $
On
March 24, 2025, the Purchaser, pursuant to the Purchase and Exchange Agreement dated November 11, 2024, as amended on February 19, 2025,
sent the Company a fifteenth closing notice for the exchange of $
On
March 26, 2025, the Purchaser, pursuant to the Purchase and Exchange Agreement dated November 11, 2024, as amended on February 19, 2025,
sent the Company a seventeenth closing notice for the exchange of $
On
March 28, 2025, the Purchaser, pursuant to the Purchase and Exchange Agreement dated November 11, 2024, as amended on February 19, 2025,
sent the Company a twentieth closing notice for the exchange of $
On
March 31, 2025, the Purchaser, pursuant to the Purchase and Exchange Agreement dated November 11, 2024, as amended on February 19, 2025,
sent the Company a twenty-first closing notice for the exchange of $
On
April 2, 2025, SCC requested the issuance of shares of Common Stock to SCC, representing a payment of approximately $
On
April 2, 2025, SCC requested the issuance of shares of Common Stock to SCC, representing a payment of approximately $
On
April 2, 2025, the Company entered into a second Settlement Agreement and Stipulation (the “ Second Settlement Agreement”)
with Silverback Capital Corporation (“SCC”) to settle outstanding claims owed to SCC. Pursuant to the Settlement Agreement,
SCC has agreed to purchase certain outstanding payables between the Company and designated vendors of the Company totaling $
On
April 3, 2025, SCC requested the issuance of shares of Common Stock to SCC, representing a payment of approximately $
On
April 4, 2025, SCC requested the issuance of shares of Common Stock to SCC, representing a payment of approximately $
On
April 4, 2025, the Purchaser, pursuant to the Purchase and Exchange Agreement dated November 11, 2024, as amended on February 19, 2025,
sent the Company a twenty-third closing notice for the exchange of $
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On
April 4, 2025, the Company entered into a conversion agreement with a current noteholder, whereby the noteholder agreed to convert all
$
On
April 4, 2025, the Company entered into definitive agreements for the purchase and sale of an aggregate of shares of common stock
(or pre-funded warrant in lieu thereof), series A warrants to purchase up to
On
April 7 2025, the Purchaser, pursuant to the Purchase and Exchange Agreement dated November 11, 2024, as amended on February 19, 2025,
sent the Company a twenty-third closing notice for the exchange of $
On April 8, 2025, Coventry Enterprises converted a portion of their debt into shares of common stock.
On April 9, 2025, Coventry Enterprises converted a portion of their debt into shares of common stock.
On April 9, 2025, Coventry Enterprises converted a portion of their debt into shares of common stock.
On April 9, 2025, 1800 Diagonal Lending converted a portion of their debt into shares of common stock.
On April 10, 2025, Coventry Enterprises converted a portion of their debt into shares of common stock.
On April 10, 2025, Coventry Enterprises converted a portion of their debt into shares of common stock.
On April 10, 2025, Coventry Enterprises converted a portion of their debt into shares of common stock.
On April 10, 2025, the Company authorized the issuance of shares of common stock to an accredited investor upon the conversion of shares of Series D Convertible Preferred Stock.
On
April 10, 2025, the Purchaser, pursuant to the Purchase and Exchange Agreement dated November 11, 2024, as amended on February 19, 2025,
sent the Company a twenty-fifth closing notice for the exchange of $
On April 11, 2025, Coventry Enterprises converted a portion of their debt into shares of common stock.
On
April 13, 2025, the Company received a conversion notice from a current noteholder, whereby the noteholder converted all $
On April 14, 2025, the Company authorized the issuance of shares of common stock, valued at $ per share, to a financier pursuant to the terms of a settlement and conversion agreement.
On April 14, 2025, the Company authorized the issuance of shares of common stock, valued at $ per share, to a lender pursuant to the terms of a settlement and conversion agreement.
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On April 14, 2025, Coventry Enterprises converted a portion of their debt into shares of common stock.
On
April 15, 2025, SCC requested the issuance of shares of Common Stock to SCC pursuant to the Second Settlement Agreement, representing
a payment of approximately $
On
April 16, 2025, SCC requested the issuance of shares of Common Stock to SCC pursuant to the Second Settlement Agreement, representing
a payment of approximately $
On
April 23, 2025, SCC requested the issuance of shares of Common Stock to SCC pursuant to the Second Settlement Agreement, representing
a payment of approximately $
On
April 24, 2025, SCC requested the issuance of shares of Common Stock to SCC pursuant to the Second Settlement Agreement, representing
a payment of approximately $
On
April 24, 2025, SCC requested the second issuance of shares of Common Stock to SCC pursuant to the Second Settlement Agreement,
representing a second payment of approximately $
On
April 25, 2025, SCC requested the issuance of shares of Common Stock to SCC pursuant to the Second Settlement Agreement, representing
a payment of approximately $
On
April 28, 2025, SCC requested the issuance of shares of Common Stock to SCC pursuant to the Second Settlement Agreement, representing
a payment of approximately $
On
May 6, 2025, SCC requested the issuance of shares of Common Stock to SCC pursuant to the Second Settlement Agreement, representing
a payment of approximately $
On May 6, 2025, 1800 Diagonal Lending converted a portion of their debt into shares of common stock.
On
May 30, 2025, a lender, pursuant to an OID Note dated November 11, 2024, converted $
On
June 30, 2025, a lender, pursuant to an OID Note dated December 13, 2024, converted $
On
July 12, 2025, a holder of shares of Series D Preferred Stock converted such shares into shares of common stock at a conversion
price per share of $
Effective
August 1, 2025, the Company entered into a 5-month strategic advisory agreement, pursuant to which the Company issued the advisor
shares of Series D Convertible Preferred Stock valued at $
On August 1, 2025, the Company authorized the issuance of shares of common stock to Corey Lambrecht, the Company’s President/COO and a director, upon the conversion of shares of Series A Convertible Preferred Stock.
On August 1, 2025, the Company authorized the issuance of shares of common stock to Charles A. Ross, Jr., the Company’s CEO and chairman, upon the conversion of shares of Series A Convertible Preferred Stock.
On August 11, 2025, shares of Series D preferred stock were converted into shares of common stock.
| 32 |
On August 13, 2025, 1800 Diagonal Lending converted a portion of their debt into shares of common stock.
On August 14, 2025, 1800 Diagonal Lending converted a portion of their debt into shares of common stock.
On
August 15, 2025, the Company entered into an Exchange and Settlement Agreement with Agile Capital Funding, LLC, exchanging all amounts
due under a loan agreement for shares of common stock and a three-year pre-funded warrant to purchase
On August 18, 2025, 1800 Diagonal Lending converted a portion of their debt into shares of common stock.
On
August 19, 2025, the Company issued shares of common stock and a pre-funded warrant for the purchase of
On August 19, 2025, 1800 Diagonal Lending converted a portion of their debt into shares of common stock.
On August 21, 2025, 1800 Diagonal Lending converted a portion of their debt into shares of common stock.
On August 22, 2025, the Company issued shares of Series E Preferred Stock in exchange for a portion of the purchased Damon Note.
On
August 25, 2025, the Company issued shares of common stock and a pre-funded warrant for the purchase of
On
August 26, 2025, the Company entered into a Securities Exchange Agreement with Agile Capital Funding, LLC, exchanging all amounts due
under a loan agreement for shares of common stock and a three-year pre-funded warrant to purchase
On September 5, 2025, 1800 Diagonal Lending converted a portion of their debt into shares of common stock.
On
September 8, 2025, the Company received a subscription agreement for the purchase of shares of Series D Convertible Preferred
Stock at $ per share for cash consideration of $
On September 9, 2025, 1800 Diagonal Lending converted a portion of their debt into shares of common stock.
On September 10, 2025, 1800 Diagonal Lending converted a portion of their debt into shares of common stock.
On
September 15, 2025, the Company issued shares of Series D Convertible Preferred Stock for the purchase of
On September 16, 2025, the Company issued shares of Series D Convertible Preferred Stock to Carter, Terry & Company Inc. for partial payment of commissions owed on a recent financing.
On September 25, 2025, the Company authorized the issuance of shares of common stock to Corey Lambrecht, the Company’s President/COO and a director, upon the conversion of shares of Series A Convertible Preferred Stock.
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On September 25, 2025, the Company authorized the issuance of shares of common stock to Charles A. Ross, Jr., the Company’s CEO and chairman, upon the conversion of shares of Series A Convertible Preferred Stock.
On
September 30, 2025, the Company issued shares of Series D Convertible Preferred Stock to RAEK for the purchase of
LTIP Shares
On April 9, 2025, the Company registered an aggregate of shares of common stock pursuant to the 2021 Long-Term Incentive Plan and the 2025 Stock Incentive Plan. shares have been issued under the 2025 Stock Incentive Plan through September 30, 2025.
New Preferred Stock Series and Designations and Reg. A+ Offering
On May 10, 2024, the Company’s board of directors approved the designation of a new Series D Convertible Preferred Stock (the “Series D Designation”). The Series D Designation was filed by the Company with the Secretary of State of Nevada on May 10, 2024, and designated shares of Series D Preferred Stock, $ par value per share. The Series D Preferred Stock has the following rights:
Stated Value. Each share of Series D Preferred Stock has an initial stated value of $.
Conversion at Option of Holder. Each share of Series D Preferred Stock shall be convertible into shares of Common Stock at a fixed ratio of 1:5 ( share of Series D Preferred Stock converts into shares of Common Stock), at the option of the holder thereof, at any time following the issuance date of such share of Series D Preferred Stock at the Company’s office or any transfer agent for such stock. The conversion ratio shall not be adjusted for stock splits, stock dividends, recapitalizations or similar events.
Forced Conversion – If the closing price of the Company’s Common Stock during any ten consecutive trading day period has been at or above $ per share (as adjusted for stock splits, stock dividends recapitalizations and similar events), then the Company shall have the right to require the holder of the Series D Preferred Stock to convert all, or any portion of, the shares of Series D Preferred Stock held by such holder for shares of Common Stock. If the Company elects to cause a forced conversion of the shares of Series D Preferred Stock, then it must simultaneously take the same action with respect to all of the other shares of Series D Preferred Stock then outstanding on a pro rata basis.
Voting Rights. The Series D Preferred Stock has no voting rights relative to matters submitted to a vote of the Company’s stockholders (other than as required by law). The Company may not amend its articles of incorporation or the Series D Designation (whether by merger, consolidation, or otherwise) to materially and adversely change the rights, preferences or voting power of the Series D Preferred Stock without the affirmative vote of at least two-thirds of the votes entitled to be cast on such matter by holders of the Company’s outstanding shares of Series D Preferred Stock, voting together as a class.
Conversion of Revenue Interest Loan for Preferred Stock Series D and Potential Issuance of Common Stock Equivalents from the Conversion of Series D
On
May 13, 2024 the Company and the holder of one of the Revenue Interest Loans entered into a settlement and conversion agreement (“Securities
Exchange Agreement”), whereby the Company issued shares of Series D convertible preferred stock as full satisfaction for
the revenue participation interest agreement or loan. The Series D convertible preferred stock was purchased at $ per share. Total
loan balance and premium payment for inducement for this Revenue Interest Loan on the date of settlement and conversion was $
The Securities Exchange Agreement is intended to be effected as an exchange of securities issued by the Company pursuant to Section 3(a)(9) of the Securities Act. For the purposes of Rule 144, the Company acknowledges that the holding period of the Securities Exchange Agreement (and upon conversion thereof, if any, into shares of the Company’s common stock) may be tacked onto the holding period of the Series D Preferred Stock received by the holder. The Company agrees not to take a position contrary to this unless required by regulatory authorities and their determination to the contrary.
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On July 10, 2024, the Company entered into a separately negotiated Conversion Agreement (the “Conversion Agreement”) with the Series D convertible preferred stock holder, pursuant to which the holder agreed to convert the shares of Series D convertible preferred stock it held into shares of common stock, par value $ per share, of the Company. The shares of common stock underlying the Series D convertible preferred stock was reduced and repriced from $ per share to $ per share (which this price represents the closing price for the Company’s common stock on NASDAQ for the day immediately preceding the date of the Conversion Agreement).
Refer to Note 8 – Notes Payable – Working Capital, for additional information regarding the settlement of debt liabilities through the issuances of Series D Preferred Stock, common stock, pre-funded warrants and convertible notes during the nine months ended September 30, 2025.
NOTE 14 – LEASES AND LEASED PREMISES
Rental Payments under Non-cancellable Operating Leases and Equipment Leases
The Company, through its purchase of Champion, acquired several long-term leases for two manufacturing facilities, three office spaces, five distribution centers, and five retail spaces. Four of its distribution centers also have retail operations for which it leases its facilities. Lease terms on the various spaces’ range from a month-to-month lease (30 days) to a long-term lease expiring in September of 2028.
Rent
expense for operating leases totaled approximately $
The Company does not have any equipment leases whereby we finance this equipment needed for operations at competitive finance rates. New equipment to be financed in the near term, if necessary, may not be obtainable at competitive pricing with increasing interest rates.
Right of Use Assets and Lease Liabilities
Lease expense for operating leases consists of the lease payments plus any initial direct costs, net of lease incentives, and is recognized on a straight-line basis over the lease term.
The Company’s operating leases are comprised primarily of facility leases. and as such we have no finance leases for our vehicles or equipment currently at this time.
Balance sheet information related to our leases is presented below:
| Balance Sheet location | September 30, 2025 | December 31, 2024 | ||||||||
| (Unaudited) | (Audited) | |||||||||
| Operating leases: | ||||||||||
| Right-of-use lease assets | $ | $ | ||||||||
| Right-of-use lease liability, current | Other current liabilities | $ | $ | |||||||
| Right-of-use lease liability, long-term | Right-of-use operating lease liability | $ | $ | |||||||
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As of September 30, 2025, weighted-average remaining lease term and discount rate were as follows:
| September 30, 2025 | ||||
| Weighted Average Remaining Lease Term: | ||||
| Operating leases | ||||
| Weighted Average Discount Rate: | ||||
| Operating leases | % | |||
The minimum future annual payments under non-cancellable leases during the next five years and thereafter, at rates now in force, are as follows:
| Operating leases | ||||
| 2025 | $ | |||
| 2026 | ||||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| Total future minimum lease payments, undiscounted | ||||
| Less: Imputed interest | ( | ) | ||
| Present value of future minimum lease payments | $ | |||
NOTE 15 – COMMITMENTS AND CONTINGENCIES
Legal Proceedings
During the nine months ended September 30, 2025 and 2024, various claims and lawsuits, incidental to the ordinary course of our business, may be brought against the Company. In the opinion of management, after consultation with legal counsel, resolution of any of these matters is not expected to have a material effect on the Company’s consolidated financial statements.
Liberty Safe and Security Products, Inc.
On July 23, 2024, the Company received notice of a complaint filed in the U.S. District Court for the District of Utah by Liberty Safe and Security Products, Inc. (“Liberty”), in connection with the marketing and sale of the Company’s and its subsidiaries, Champion Safe Company, Inc., line of safe products. As of the date of this Report, the complaint has not been served on the Company or Champion Safe. In the complaint, Liberty alleges trademark infringement as a result of the purported use of the term “Freedom” in the sale of safes, federal false designation of origin and unfair competition, violation of Utah deceptive trade practices, Utah unfair competition, and damages to Liberty. Management believes that this lawsuit is without merit; however has initiated settlement discussions with Liberty and anticipates an amicable settlement to be forthcoming. At this time, Management does not believe a settlement with Liberty will have a material effect on its business or financial condition.
Bank of America
On
May 30, 2025, the Company entered into a Forbearance Agreement (the “Forbearance Agreement”). Subject to the terms of the
Forbearance Agreement, Bank of America has agreed to forbear, during the Forbearance Period (as defined below), from exercising certain
of their available remedies under the Credit Agreement with respect to or arising out of the Company’s failure to make payment
on the outstanding principal amount on the Line of Credit. As a result of the uncured default, Bank of America filed a complaint against
the Company on March 21, 2025 in the Fourth Judicial District Court, in and for Utah County, Utah (Case No. 250401345) seeking no less
than $
| ● | On the sooner to occur of (i) June 30, 2025 or (ii) the termination of the Forbearance Period in accordance with the Termination of Forbearance Period Section of the Forbearance Agreement, all remaining unpaid principal, accrued interest, fees, attorneys’ fees, and expenses and other amounts owing under the Credit Agreement shall be due and payable in full; |
| 36 |
| ● | The
Company made a principal payment in the amount of $ | |
| ● | Should
the Company fail to pay Bank of America all remaining unpaid principal, accrued interest, fees, attorneys’ fees, and expenses
and other amounts owing under the Credit Agreement and the Forbearance Agreement by close of business on June 30, 2025, the Company
may, upon an additional payment of $ |
On
June 26, 2025, the Company entered into a note purchase agreement with Streeterville Capital, LLC (“Streeterville”)
pursuant to which the Company issued and sold to Streeterville a secured promissory note in the original principal amount of $
Contractual Obligations
The Company does not believe there are any off-balance sheet arrangements that have, or are reasonably likely to have, a material effect on the condensed consolidated financial statements. As of September 30, 2025 and December 31, 2024 there were no outstanding letters of credit issued during the normal course of business.
Nasdaq Compliance
As
previously disclosed, on February 19, 2025, the Company received a letter (the “Notification Letter”) from The Nasdaq Stock
Market (“Nasdaq”) stating that the Company was not in compliance with Nasdaq Listing Rule 5550(b)(1) (the “Rule”)
because the stockholders’ equity of the Company as of September 30, 2024, as reported in the Company’s Quarterly Report on
Form 10-Q filed with the SEC on February 7, 2025, was below the minimum requirement of $
Pursuant to Nasdaq’s Listing Rules, the Company had 45 calendar days (until April 7, 2025), to submit a plan to evidence compliance with the Rule (a “Compliance Plan”). The Company submitted a Compliance Plan within the required time and amended it subsequently to provide additional information to Nasdaq.
On June 11, 2025, the Company received a letter from Nasdaq accepting the Compliance Plan and granting an extension through August 18, 2025 to evidence compliance with the Rule.
On August 20, 2025, the Company received a subsequent notice from Nasdaq citing continued non-compliance with the Rule due to insufficient stockholders’ equity. The Company requested a hearing before the Nasdaq Hearings Panel, which was held on September 30, 2025. On October 20, 2025, the Panel granted a conditional extension to continue the Company’s Nasdaq listing, requiring the Company to demonstrate compliance with the Stockholders’ Equity Requirement by November 15, 2025.
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In the event the Company fails to evidence compliance within the extension period, the Company will have the right to a hearing before Nasdaq’s Hearing Panel. The hearing request would stay any suspension or delisting action pending the conclusion of the hearing process and the expiration of any additional extension period granted by the panel following the hearing.
Executive Employment Agreements and Independent Contractor Agreements
The Company has written employment agreements with various other executive officers. All payments made to its executive officers and significant outside service providers are analyzed and determined by the board of directors’ compensation committee; some payments made to independent contractors (or officer payments characterized as non-employee compensation) may be subject to backup withholding or general withholding of payroll taxes, may make the Company responsible for the withholding and remittance of those taxes. Generally outside service providers are responsible for their own withholding and payment of taxes. Certain state taxing authorities may otherwise disagree with that analysis and Company policy.
NOTE 16 – SEGMENT REPORTING
Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision maker (“CODM”) in making decisions regarding resource allocation and assessing performance.
The
Company views its operations and manages its business as
The single segment’s principal measure of segment profit and loss is consolidated revenue, gross margin, and total operating expenses. The CODM considers actual and forecasted numbers when evaluating performance.
NOTE 17 – SUBSEQUENT EVENTS
The Company evaluated all events that occurred after the balance sheet date of September 30, 2025, through the date the financial statements were issued and determined that there were the following subsequent events:
Horberg Enterprises Securities Purchase Agreement
On
October 1, 2025, the Company entered into a Securities Purchase Agreement with Horberg, pursuant to which Horberg purchased shares
of the Company’s Series D Convertible Preferred Stock for $
Sale/Issuance of Equity Securities
On
October 2, 2025, the Company received subscription agreements for the purchase of shares of Series D Convertible Preferred Stock
at $ per share to six accredited investors for cash consideration of $
On October 3, 2025, a holder of shares of Series D Convertible Preferred Stock converted such shares into shares of common stock. On October 6, 2025, the same holder converted an additional shares of Series D Convertible Preferred Stock into shares of common stock.
On October 3, 2025, five holders of shares of Series D Convertible Preferred Stock converted such shares into shares of common stock.
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On October 3, 2025, in connection with the round lot share rounding associated with the reverse stock split, the Company issued shares of common stock to twenty stockholders of record effected by the rounding.
On October 6, 2025, two holders of shares of Series D Convertible Preferred Stock converted such shares into shares of common stock.
On October 6, 2025, in connection with the round lot share rounding associated with the reverse stock split, the Company issued shares of common stock to CEDE & Co. for distribution to stockholders effected by the rounding.
On October 7, 2025, three holders of shares of Series D Convertible Preferred Stock converted such shares into shares of common stock.
On October 8, 2025, a holder of shares of Series D Convertible Preferred Stock converted such shares into shares of common stock.
On
October 8, 2025, Schmitty’s exercised
On October 9, 2025, 1800 Diagonal Lending converted a portion of their debt into shares of common stock.
On October 10, 2025, a holder of shares of Series D Convertible Preferred Stock converted such shares into shares of common stock.
On October 10, 2025, two holders of shares of Series D Convertible Preferred Stock converted such shares into shares of common stock.
On October 13, 2025, 1800 Diagonal Lending converted a portion of their debt into shares of common stock.
On October 13, 2025, two holders of shares of Series D Convertible Preferred Stock converted such shares into shares of common stock.
On October 14, 2025, two holders of shares of Series D Convertible Preferred Stock converted such shares into shares of common stock.
On October 14, 2025, in connection with the round lot share rounding associated with the reverse stock split, the Company issued shares of common stock to CEDE & Co. for distribution to stockholders effected by the rounding.
On October 15, 2025, a holder of shares of Series D Convertible Preferred Stock converted such shares into shares of common stock.
On October 16, 2025, a holder of shares of Series D Convertible Preferred Stock converted such shares into shares of common stock.
On October 22, 2025, a holder of shares of Series D Convertible Preferred Stock converted such shares into shares of common stock.
On October 24, 2025, a holder of shares of Series D Convertible Preferred Stock converted such shares into shares of common stock.
On October 28, 2025, two holders of shares of Series D Convertible Preferred Stock converted such shares into shares of common stock.
On November 4, 2025, a holder of shares of Series D Convertible Preferred Stock converted such shares into shares of common stock.
On November 6, 2025, SCC requested the
issuance of shares of Common Stock to SCC, representing a payment of approximately $
| 39 |
Reverse Stock Split
On
October 3, 2025, the Company effectuated a
1800 Diagonal Note
On
October 14, 2025, the Company entered into a Securities Purchase Agreement with 1800 Diagonal Lending, LLC, an accredited investor (the
“Lender”), pursuant to which the Lender made a loan to the Company, evidenced by a promissory note in the principal amount
of $
| Payment Date | Amount of Payment | |||
| November 15, 2025 | $ | |||
| December 15, 2025 | ||||
| January 15, 2026 | ||||
| February 28, 2026 | ||||
| March 15, 2026 | ||||
| April 15, 2026 | ||||
| May 15, 2026 | ||||
| June 15, 2026 | ||||
| July 15, 2026 | ||||
| August 15, 2026 | ||||
| September 15, 2026 | ||||
| October 15, 2026 | ||||
| November 15, 2026 | ||||
| December 15, 2026 | ||||
| January 15, 2027 | ||||
Total payback | $ | |||
Upon
the occurrence and during the continuation of any Event of Default, the Note shall become immediately due and payable and the Company
will be obligated to pay to the Lender, in full satisfaction of its obligations, an amount equal to 150% times the sum of (w) the then
outstanding principal amount of the Note plus (x) accrued and unpaid interest on the unpaid principal amount of the Note to the date
of payment plus (y) default interest, if any, at the rate of
Only
upon an occurrence of an event of default under the Note, the Lender may convert the outstanding unpaid principal amount of the Note
into restricted shares of common stock of the Company at a discount of
| 40 |
Nasdaq Hearings Panel Decision
On October 20, 2025, the Company received a decision letter from the Nasdaq Hearings Panel granting the Company’s request to continue its listing on Nasdaq, subject to the condition that, on or before November 15, 2025, the Company shall demonstrate compliance with Nasdaq Listing Rule 5550(b)(1) (the “Equity Rule”). This decision follows the Company’s hearing before the Panel on September 30, 2025, regarding its non-compliance with the Equity Rule.
Silverback Capital Agreement
On
October 28, 2025, the Company entered into a third Settlement Agreement and Stipulation (the “ Second Settlement Agreement”)
with Silverback Capital Corporation (“SCC”) to settle outstanding claims owed to SCC. Pursuant to the Settlement Agreement,
SCC has agreed to purchase certain outstanding payables between the Company and designated vendors of the Company totaling $
FORWARD LOOKING STATEMENTS
This Quarterly Report on Form 10-Q (“Quarterly Report”) contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These forward-looking statements are not historical facts but rather are based on current expectations, estimates and projections. We may use words such as “may,” “could,” “should,” “anticipate,” “expect,” “project,” “position,” “intend,” “target,” “plan,” “seek,” “believe,” “foresee,” “outlook,” “estimate” and variations of these words and similar expressions to identify forward-looking statements. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and other factors, some of which are beyond our control, are difficult to predict and could cause actual results to differ materially from those expressed or forecasted. These risks and uncertainties include, but are not limited to, the following:
| ● | our ability to maintain compliance with the continued listing standards of Nasdaq; | |
| ● | the effect of new tariffs on our business and financial condition; | |
| ● | we consummated the purchase of our safe manufacturer and sales organizations, and future acquisitions and operations of new manufacturing facilities and/or sales organizations might prove unsuccessful and could fail; | |
| ● | risk that we will not be able to remediate identified material weaknesses in our internal control over financial reporting and disclosure controls and procedures; | |
| ● | our failure to timely file certain periodic reports with the SEC and our prior restatements have had, and may in the future have further, material adverse consequences to our business, our financial condition, results of operations and our cash flows; | |
| ● | our success depends on our ability to introduce new products that track customer preferences; | |
| ● | if we are unable to protect our intellectual property, we may lose a competitive advantage or incur substantial litigation costs to protect our rights; | |
| ● | as a significant portion of our revenues are derived by demand for our safes and the personal security products for firearms storage, we depend on the availability and regulation of ammunition and firearm storage; | |
| ● | as we continue to integrate the purchase of our safe manufacturer and sales organization, any compromised operational capacity may affect our ability to meet the demand for our safes, which in turn may affect our generation of revenue; | |
| ● | 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; | |
| ● | 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; | |
| ● | our inability to effectively meet our short- and long-term obligations; | |
| ● | given our limited corporate history, it is difficult to evaluate our business and future prospects, and increases the risks associated with an investment in our securities; | |
| ● | our inability to raise additional financing for working capital; | |
| ● | our ability to generate sufficient revenue in our targeted markets to support operations; | |
| ● | significant dilution resulting from our financing activities; | |
| ● | the actions and initiatives taken by both current and potential competitors; | |
| ● | our ability to diversify our operations; | |
| ● | the fact that our accounting policies and methods are fundamental to how we report our financial condition and results of operations, and they may require management to make estimates about matters that are inherently uncertain; | |
| ● | changes in U.S. GAAP or in the legal, regulatory and legislative environments in the markets in which we operate; | |
| ● | the deterioration in general of global economic, market and political conditions; | |
| ● | the inability to efficiently manage our operations; | |
| ● | the inability to achieve future operating results; | |
| ● | the unavailability of funds for capital expenditures; | |
| ● | the inability of management to effectively implement our strategies and business plans; and | |
| ● | the other risks and uncertainties detailed in this report. |
Because the factors referred to above could cause actual results or outcomes to differ materially from those expressed in any forward-looking statements made by us, you should not place undue reliance on any such forward-looking statements. New factors emerge from time to time, and their emergence is impossible for us to predict. In addition, we cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.
This Quarterly Report should be read completely and with the understanding that actual future results may be materially different from what we expect. The forward-looking statements included in this Quarterly Report are made as of the date of this Quarterly Report and should be evaluated with consideration of any changes occurring after the date of this Quarterly Report. We will not update forward-looking statements even though our situation may change in the future and we assume no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.
Except as otherwise indicated by the context, references in this report to “Company,” “American Rebel Holdings,” “American Rebel,” “we,” “us” and “our” are references to American Rebel Holdings, Inc. and its operating subsidiaries, American Rebel, Inc., American Rebel Beverages, LLC, ARH Sub, LLC, Champion Safe Co., Inc., Superior Safe, LLC, Safe Guard Security Products, LLC and Champion Safe De Mexico, S.A. de C.V. All references to “USD” or United States Dollar refer to the legal currency of the United States of America.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The Financial Statements have been prepared in accordance with generally accepted accounting policies in the United States (“GAAP”). Except as otherwise disclosed, all dollar figures included therein and in the following management discussion and analysis are quoted in United States dollars.
Description of Our Business
Overview
We are boldly positioning ourselves as America’s Patriotic Brand. We have identified the market opportunity to design, manufacture, and market beverages and innovative concealed carry products and safes. We access our market uniquely through our positioning as America’s Patriotic Brand and the appeal of our products as well as through the profile and public persona of our founder and Chief Executive Officer, Andy Ross. Andy hosted his own television show for 12 years, has made multiple appearances over the years at trade shows, and is well-known in the archery world as the founder of Ross Archery, which was the world’s fastest-growing bow company in 2007 and 2008. 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. 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.
As a corporate policy, we will not incur any cash obligations that we cannot satisfy with known resources, of which there are currently none except as described in “Liquidity” below or elsewhere in this Quarterly Report. We believe that the perception that many people have of a public company makes it more likely that they will accept restricted securities from a public company as consideration for indebtedness to them than they would from a private company. We have not performed any studies of this matter. Our conclusion is based on our own observations. Additionally, the issuance of restricted shares will dilute the percentage of ownership interest of our stockholders.
The Company operates primarily as a designer, manufacturer and marketer of beverages, branded safes and personal security and self-defense products. Additionally, the Company designs and produces branded apparel and accessories.
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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 are committed to offering products of enduring quality that allow customers to keep their valuable belongings protected and to express their patriotism and style, which is synonymous with the American Rebel brand.
Our safes and personal security products are constructed primarily of U.S.-made steel. We believe our products are designed to safely store firearms, as well as store our customers’ priceless keepsakes, family heirlooms and treasured memories and other valuables, and we aim to make our products accessible at various price points for home and office use. We believe our products are designed for safety, quality, reliability, features and performance.
To enhance the strength of our brand and drive product demand, we work with our manufacturing facilities and various suppliers to emphasize product quality and mechanical development in order to improve the performance and affordability of our products while providing support to our distribution channel and consumers. We seek to sell products that offer features and benefits of higher-end safes at mid-line price ranges.
We believe that safes are becoming a ‘must-have appliance’ in a significant portion of households. We believe our current safes provide safety, security, style and peace of mind at competitive prices.
In addition to branded safes, we offer an assortment of personal security products as well as apparel and accessories for men and women under the Company’s American Rebel brand. Our backpacks utilize what we believe is a distinctive sandwich-method concealment pocket, which we refer to as Personal Protection Pocket, to hold firearms in place securely and safely. The concealment pockets on our Freedom 2.0 Concealed Carry Jackets incorporate a silent operation opening and closing with the use of a magnetic closure.
We believe that we have the potential to continue to create a brand community presence around the core ideals and beliefs of America, in part through Andy Ross, who has written, recorded and performs a number of songs about the American spirit of independence. We believe our customers identify with the values expressed by our Chief Executive Officer through the “American Rebel” brand.
Through our growing network of dealers, we promote and sell our products in select regional retailers and local specialty safe, sporting goods, hunting and firearms stores, as well as online, including our website and e-commerce platforms such as Amazon.com.
American Rebel is boldly positioning itself as “America’s Patriotic Brand” in a time when national spirit and American values are being rekindled and redefined. American Rebel is an advocate for the 2nd Amendment and conveys a sense of responsibility to teach and preach good common practices of gun ownership. American Rebel products keep you concealed and safe inside and outside the home. American Rebel Safes protect your firearms and valuables from children, theft, fire and natural disasters inside the home; and American Rebel Concealed Carry Products provide quick and easy access to your firearm utilizing American Rebel’s Proprietary Protection Pocket in its backpacks and apparel outside the home. The initial company product releases embrace the “concealed carry lifestyle” with a focus on concealed carry products, apparel, personal security and defense. “There’s a growing need to know how to protect yourself, your family, your neighbors or even a room full of total strangers,” says Andy Ross. “That need is in the forethought of every product we design.”
The “concealed carry lifestyle” refers to a set of products and a set of ideas around the emotional decision to carry a gun everywhere you go. The American Rebel brand strategy is similar to the successful Harley-Davidson Motorcycle philosophy, referenced in this quote from Richard F. Teerlink, Harley’s chairman and former chief executive, “It’s not hardware; it is a lifestyle, an emotional attachment. That’s what we have to keep marketing to.” As an American icon, Harley has come to symbolize freedom, rugged individualism, excitement and a sense of “bad boy rebellion.” American Rebel – America’s Patriotic Brand has significant potential for branded products as a lifestyle brand. Its innovative Concealed Carry Product line and Safe line serve a large and growing market segment; but it is important to note we have product opportunities beyond Concealed Carry Products and Safes. One such opportunity is American Rebel Light Lager. American Rebel Light Beer is “America’s Patriotic, God-Fearing, Constitution-Loving, National Anthem-Singing, Stand Your Ground Beer.” Management believes a significant opportunity exists to enter the $110+ billion-dollar beer industry with a premium domestic beer. Current distribution agreements are in place for the states of Kansas and Tennessee and portions of Ohio and Connecticut.
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American Rebel & Champion Safes
Keeping your guns in a location only appropriate trusted members of the household can access should be a top priorities for every responsible gun owner. 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. Gun safes may seem pricy at first glance, but once the consumer is educated on their role to protect expensive firearms and other valuables such as jewelry and important documents, the price is justified.
Champion Safe Co. produces large floor safes in a variety of models and sizes as well as small portable keyed safes. Additional opportunities exist for us to develop Wall Safes and Handgun Boxes.
Reasons gun owners should own a gun safe:
| ● | If you are a gun owner and you have children, many states have a law in place that require you to store your gun locked in a safe, away from children. This will prevent your children from getting the gun and hurting themselves or someone else. | |
| ● | Some states have a law in place that require you to keep your gun locked away when it is not in use, even if you don’t have children in your home. California has a law that requires you to have your gun locked in a firearms safety device that is considered safe by the California Department of Justice (DOJ). When you buy a safe, you should see if it has approval from the California DOJ. | |
| ● | Many gun owners own more guns than insurance will cover. Many insurance companies only cover $3,000 worth of guns. Are your weapons worth more? If so, you should invest in a gun safe to make sure your guns are protected from fire, water, and thieves. | |
| ● | Many insurance companies may give you a discount if you own a gun safe. If you own a gun safe or you purchase one, you should see if your insurance company is one that offers a discount for this. A safe can protect your guns and possibly save you money. | |
| ● | Do people know you own guns? You might not know that many burglaries are carried out by people they know. | |
| ● | If a person you know breaks into your home, steals your gun, and murders someone, you could be charged with a crime you didn’t commit, or the victim’s family could sue you. | |
| ● | Gun safes can protect your guns in the event your home goes up in flames. When buying a safe, you should see if it will protect your firearm or any other valuables from fire damage. | |
| ● | You might be the type of person that has a gun in your home for protection. A gun locked in a safe can still offer you protection. There are quick access gun safes on the market. With a quick access gun safe, you can still retrieve your gun in a few seconds, but when it is not needed, it will be protected. |
A gun safe is the best investment a gun owner can make because the safe can protect guns from thieves, fire, water, or accidents. Bills or ballot measures to require safe storage have been discussed in Delaware, Washington, Oregon, Missouri and Virginia; and various laws are on the books in California and Massachusetts. The gun safe industry is experiencing growth and innovation. Andy Ross and the rest of the American Rebel team are committed to fulfilling the opportunity in the gun safe market and filling the identified void.
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Below is a summary of the different safes we offer:
| i. | Large Safes – our current large model safe collection consists of six premium safes. All of our large safes share the same high-quality workmanship, are constructed out of 11-gauge U.S.-made steel and feature a double plate steel door, double-steel door casements and reinforced door edges. Each of these safes provide up to 75 minutes of fire protection at 1200 degrees Fahrenheit. Our safes offer a fully adjustable interior to fit our customers’ needs. Depending on the model, one side of the interior may have shelves and the other side set up to accommodate long guns. There are optional additions such as Rifle Rod Kits and Handgun Hangers to increase the storage capacity of the safe. These large safes offer greater capacity for secure storage and protection, and our safes are designed to prevent unauthorized access, including in the event of an attempted theft, natural disaster or fire. 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. These personal safes meet Transportation Security Administration (“TSA”) airline firearm guidelines and fit comfortably in luggage when required by travel regulations. | |
| iii. | Vault Doors – our U.S.-made vault doors combine style with theft and fire protection for a look that fits any decor. Newly-built, higher-end homes often add vault rooms and we believe our vault doors, which we designed to facilitate secure access to such vault rooms, provide ideal solutions for the protection of valuables and shelter from either storms or intruders. Whether it’s in the context of a safe room, a shelter, or a place to consolidate valuables, our American Rebel in- and out-swinging vault doors provide maximum functionality to facilitate a secure vault room. American Rebel vault doors are constructed of 4 ½” double steel plate thickness, A36 carbon steel panels with sandwiched fire insulation, a design that provides greater rigidity, security and fire protection. Active boltworks, which is the locking mechanism that bolts the safe door closed so that it cannot be pried open and three external hinges that support the weight of the door, are some of the features of the vault door. For safety and when the door is used for a panic or safe room, a quick release lever is installed inside the door. |
Upcoming Product Offerings
To further complement our diverse product offerings, we intend to introduce additional products throughout 2025. Below is a summary of potential upcoming product offerings:
Wall Safes – wall safes can be easily hidden and provide “free” storage space since they are able to be tucked into the space between your wall and studs.
Economy Safe Line – we are exploring enhancing our safe line through the introduction of entry level safes built in North America to compete with other safes imported from overseas.
Our results of operations and financial condition may be impacted positively and negatively by certain general macroeconomic and industry wide conditions
Recent Developments
Minority Interest Agreements
During the three months ended September 30, 2025, we entered into multiple agreements to acquire minority ownership interests in certain entities.
On September 2, 2025, we executed a Membership Interest Purchase Agreement with Sydona Enterprises, LLC, d/b/a Schmitty’s, acquiring a 19.01% ownership interest in Schmitty’s. The consideration for this acquisition included the issuance of 426,155 shares of common stock and prefunded warrants to purchase an additional 1,183,191 shares of common stock at $0.01 per share. The total value of the transaction was approximately $1.99 million. This strategic investment positions American Rebel to leverage Schmitty’s established presence in the smokeless market, aligning with the Company’s expansion into the $10 billion smokeless category. The partnership aims to enhance Schmitty’s retail distribution and explore licensing opportunities under the “America’s Patriotic Brand” umbrella.
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On September 30, 2025, we entered into a Membership Interest Purchase Agreement with RAEK Data, LLC to acquire a minority membership interest in the entity. Pursuant to the agreement, we issued 200,000 shares of Series D Convertible Preferred Stock to RAEK Data, LLC in exchange for its ownership interest. The shares were issued at a stated value of $7.50 per share, resulting in an aggregate transaction value of $1,500,000. This transaction was accounted for as an equity acquisition, with the acquired noncontrolling interest recorded at fair value on the acquisition date. The acquisition provides the Company with additional operational influence.
218 3rd Avenue Asset Acquisition
On August 19, 2025, we entered into a Purchase and Sale Agreement with 218 LLC (the “Seller”) for the sale of an approximately 20,829 square foot four story commercial retail building located at 218 3rd Avenue North, Nashville, Tennessee 37201 (“218 3rd Avenue”) for a sale price of $14.1 million. On September 15, 2025, we entered into a mutual termination agreement of the Purchase Agreement. On the same day, we entered into a membership interest purchase agreement (the “MIPA”) to purchase all of the outstanding membership interests in 218 3rd Avenue.
We have agreed to pay Seller $14,100,000, the appraised value of 218 3rd Avenue, for all of the ownership interests in the Seller in tranches over twelve months. Upon execution of the MIPA, we authorized the issuance of 280,000 shares of Series D Convertible Preferred Stock, valued at $7.50 per share ($2,1000,000 in value), for the purchase of 30% of the outstanding membership interests in the Seller.
Further, we shall pay the Seller $300,000 of the purchase price in three non-refundable $100,000 installments; the first installment shall be payable 15 days following execution of the MIPA and shall purchase an additional 1% of the outstanding membership interests in the Seller; the second installment shall be payable 45 days following execution of the Agreement and shall purchase an additional 1% of the outstanding membership interests in the Seller; and the third installment shall be payable 75 days following execution of the Agreement and shall purchase an additional 1% of the outstanding membership interests in the Seller.
In addition, we executed a 12-month, 6% per annum promissory note in the amount of the $11,700,000 payable to the Seller. Seller may, from time to time, convert a portion of principal and interest under the Note into tranches of 200,000 shares of the Company’s Series D Convertible Preferred Stock (valued at $1,500,000) and simultaneously convert such preferred stock into 1,000,000 shares of Common Stock and then sell such shares, or in other amounts that do not exceed a 4.99% beneficial ownership, and apply the proceeds towards the principal and interest of the Note. Each conversion shall purchase an additional 1% ownership interest in Seller. We agreed to issue to Seller an additional 18,800 shares of Series D Convertible Preferred Stock, valued at $141,000, as a convenience fee.
Damon Note Purchase Agreement
On August 22, 2025, the Company entered into a note purchase agreement (the “NPA”) with Streeterville Capital, LLC, a Utah limited liability company (“Streeterville”), for the purchase by the Company of a portion of a certain $6,470,000 secured promissory note dated June 26, 2024 (the “Damon Note”) in Damon, Inc., a British Columbia corporation (“Damon”) held by Streeterville. Damon is a public company, registered as a foreign private issuer with the SEC, with its common shares traded on the OTCID Basic Market under the symbol “DMNIF”.
Upon the terms and conditions set forth in the NPA, Streeterville sold, transferred and assigned to the Company, and the Company agreed to purchase from Streeterville, $2,000,000 of the Damon Note in consideration for the issuance to Streeterville of 2,000 shares of the Company’s newly authorized Series E Preferred Stock, par value $0.001 per share. In the event the Company’s common stock is ever delisted from Nasdaq, Streeterville will have the right to repurchase the portion of the purchased Damon Note from the Company in exchange for cancellation of the shares of Series E Preferred Stock.
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The Damon Note is secured by certain collateral of Damon as set forth in the transaction documents between Streeterville and Damon. The Company and Streeterville agreed that the security interest held in the collateral by Streeterville will be held pari passu for benefit of both parties. Any and all rights, benefits and proceeds of the collateral will be shared pro rata by the Company and Streeterville (based on the then-outstanding balances of the Damon Note and the portion of the Damon Note purchased by the Company). Any decision regarding when, how and whether to pursue collections or other actions against Damon will be determined by Streeterville in consultation with the Company. The Company covenanted and agreed that it will not pursue any collections or other action against Damon without Streeterville’s consent.
Establishment of American Rebel Beer
On August 9, 2023, we entered into a Master Brewing Agreement with Associated Brewing. Under the terms of the Brewing Agreement, Associated Brewing has been appointed as the exclusive producer and seller of American Rebel branded spirits, with the initial product being American Rebel Light Beer. American Rebel Light Beer launched regionally in 2024. We paid a setup fee and security deposit to Associated Brewing. We established American Rebel Beverages, LLC as a wholly-owned subsidiary specifically to hold our alcohol licenses and conduct operations for our beer business.
Expansion into New Business Categories
Expanding Scope of Operations Activities by Offering Servicing Dispensaries and Brand Licensing
We continually seek to target new consumer segments for our safes. 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. Several cannabis dispensary operators have expressed interest in the opportunity to help them with their inventory locking needs. Cannabis dispensaries have various insurance requirements and local ordinances requiring them to secure their inventory when the dispensary is closed. Dispensary operators have been purchasing gun safes and independently taking out the inside themselves to allow them to store cannabis inventory. Recognizing what seems to be a growing need for cannabis dispensary operators, we have designed a safe tailor-made for the cannabis industry. American Rebel has a long list of dispensary operators, growers, and processors interested in the Company’s inventory control solutions. We believe that dispensary operators, growers, and processors are another fertile new growth market for our Vault Doors products, as many in the cannabis space have chosen to install entire vault rooms instead of individual inventory control safes—the American Rebel Vault Door has been the choice for that purpose.
Further, we believe that American Rebel has significant potential for branded products as a lifestyle brand. As the American Rebel Brand continues to grow in popularity, we anticipate generating additional revenues from licensing fees earned from third parties who wish to engage the American Rebel community. While the Company does not currently generate material revenues from licensing fees, our management team believes the American Rebel brand name may in the future have significant licensing value to third parties that seek the American Rebel name to brand their products to market to the American Rebel target demographic. For example, a tool manufacturer that wants to pursue an alternative marketing plan for a different look and feel could license the American Rebel brand name for their line of tools and market their tools under our distinct brand. 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. 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.
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Results of Operations
From inception through September 30, 2025, we have generated an accumulated deficit of $93,513,226. We expect to incur additional losses during fiscal year ending December 31, 2025, and beyond, principally as a result of our increased investment in inventory, manufacturing capacity, marketing and sales expenses, and other growth initiatives.
Three Months Ended September 30, 2025 Compared to Three Months Ended September 30, 2024
Revenue (‘Sales’) and cost of goods sold (‘Cost of Sales’)
For the three months ended September 30, 2025, we reported Revenues of $1,877,518 compared to Revenues of $2,337,786 for the three months ended September 30, 2024. The decrease in Revenues of $460,268 (or (20%) period over period) for the current period compared to the three months ended September 30, 2024 is attributable to slower sales for 2025 and current market conditions. For the three months ended September 30, 2025, we reported Cost of Goods Sold of $2,075,288 compared to Cost of Goods Sold of $2,835,763 for the three months ended September 30, 2024. The decrease in Cost of Goods Sold of $760,475 (or (27%) period over period) for the current period is primarily attributable to the decrease in revenue. For the three months ended September 30, 2025, we reported Gross Margin of $(197,770), compared to Gross Margin of $(497,977) for the three months ended September 30, 2024 and a Gross Margin percentage of (11%) for the three months ended September 30, 2025 compared to (21%)% for the three months ended September 30, 2024. In general, second amendment businesses have experienced a slowdown in sales volume during the past year.
Operating Expenses
Total operating expenses for the three months ended September 30, 2025 were $3,482,401 compared to $542,695 for the three months ended September 30, 2024 as further described below. Overall, we experienced a $2,939,706 increase in operating expenses period over period. This increase is primarily due to the large adjustment made to compensation expense – officers – deferred comp – related party made during the three months ended September 30, 2024 as a result of the 2023 and 2022 re-audits. There was also a slight increase in administrative and other expenses due to increased accounting and legal fees and increased marketing and brand development costs.
For the three months ended September 30, 2025, we incurred consulting/payroll and other costs (along with officer compensation) of $903,397 compared to consulting/payroll and other costs (along with officer compensation) of $(1,932,565) for the three months ended September 30, 2024. The increase in consulting/payroll and other costs of $2,835,962 was due to the adjustment in the deferred compensation expense due to common stock equivalents on our Series A preferred stock as identified and corrected during the period ended September 30, 2024 upon finalization of the 2023 re-audit. We expects to try and maintain our consulting/payroll and other costs as we endeavor to further expand our sales volume.
For the three months ended September 30, 2025, we incurred rental expense, warehousing, outlet expense of $39,742, compared to rental expense, warehousing, outlet expense of $103,562 for the three months ended September 30, 2024. The decrease in rental expense, warehousing, outlet expense of $63,820 is due to cost cutting on leases and properties that the Company rents to conduct the Champion business acquisition as well as other cost cutting measures or efficiencies put in place.
For the three months ended September 30, 2025, we incurred product development expenses of $160,209 compared to product development expenses of $277,483 for the three months ended September 30, 2024. The decrease in product development expenses of $117,274 is due to the timing of development expenses in connection with the private label beer. We expect to maintain some level of expense on a go-forward basis with new products and efforts being expended for future sales growth and product needs.
For the three months ended September 30, 2025, we incurred marketing and brand development expenses of $739,976 compared to marketing and brand development expenses of $624,509 for the three months ended September 30, 2024. The increase in marketing and brand development expenses of $115,467 (or 42% period over period) relates primarily to market awareness efforts for American Rebel Beer as well as expenses associated with our Tony Stewart activities and general push forward on sales efforts.
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For the three months ended September 30, 2025, we incurred administrative and other expense of $1,602,039 compared to administrative and other expense of $1,414,889 for the three months ended September 30, 2024. The increase in administrative and other expense of $187,150 (or 13% period over period) relates directly to increased professional fees including accounting and legal fees.
For the three months ended September 30, 2025, we incurred depreciation and amortization expense of $37,038 compared to depreciation and amortization expense of $54,817 for the three months ended September 30, 2024. The increase primarily relates to amortization related to intangible assets.
Other income and expenses
For the three months ended September 30, 2025, we incurred interest expense of $329,231 compared to interest expense of $649,216 for the three months ended September 30, 2024. The decrease in interest expense of $319,985 is due to a significant number of notes we have entered into and subsequently converted or modified. For the three months ended September 30, 2025, we incurred a loss on debt extinguishment of $1,213,772 and loss on settlement of liability of $7,000 compared to a loss on debt extinguishment of $62,505 for the three months ended September 30, 2024. This is due to the increased amount of conversions of debt into equity in 2025 and the amended Streeterville loan payable.
Net Loss
Net loss for the three months ended September 30, 2025 amounted to $5,230,027, resulting in a loss per share of $(32.44), compared to a net loss of $1,747,957 for the three months ended September 30, 2024, resulting in a loss per share of $(3,032.24) (adjusted for various reverse stock splits). The increase in the net loss for the three months ended September 30, 2025 compared to the three months ended September 30, 2024 is primarily due to a myriad of expenses that we incurred in the quarter, such as professional and legal fees, increased costs in marketing, and the softening of gross margin on sales as well as a significant loss on debt extinguishment.
Nine Months Ended September 30, 2025 Compared to Nine Months Ended September 30, 2024
Revenue (‘Sales’) and cost of goods sold (‘Cost of Sales’)
For the nine months ended September 30, 2025, we reported Revenues of $7,231,439 compared to Revenues of $9,637,016 for the nine months ended September 30, 2024. The decrease in Revenues of $2,405,577 (or (25%) period over period) for the current period compared to the nine months ended September 30, 2024 is attributable to slower sales for 2025 and current market conditions. For the nine months ended September 30, 2025, we reported Cost of Goods Sold of $7,171,528 compared to Cost of Goods Sold of $9,263,015 for the nine months ended September 30, 2024. The decrease in Cost of Goods Sold of $2,091,487 (or (23%) period over period) for the current period is primarily attributable to the decrease in revenue. For the nine months ended September 30, 2025, we reported Gross Margin of $59,911, compared to Gross Margin of $374,001 for the nine months ended September 30, 2024. The decrease in Gross Margin of $314,090 (or (84%) period over period) for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 is again due a decrease in sales and increased costs of goods sold. Gross Margin percentage for the nine months ended September 30, 2025 was 1% compared to 4% for the nine months ended September 30, 2024. In general, second amendment businesses have experienced a slowdown in sales volume during the past twelve months and this is in line with what we have experienced in our business.
Operating Expenses
Total operating expenses for the nine months ended September 30, 2025 were $10,904,780 compared to $7,639,863 for the nine months ended September 30, 2024 as further described below. Overall, we experienced a $3,264,917 increase in operating expenses period over period. This increase is primarily due to an increase in administrative and other expenses due to increased accounting and legal fees and increased marketing and brand development costs.
For the nine months ended September 30, 2025, we incurred consulting/payroll and other costs (along with officer compensation) of $2,944,253 compared to consulting/payroll and other costs (along with officer compensation) of $1,967,639 for the nine months ended September 30, 2024. The increase in consulting/payroll and other costs of $(1,859,348) was due to merit increases and a change in the executive team. We expect to try and maintain its consulting/payroll and other costs as we endeavor to further expand our sales volume.
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For the nine months ended September 30, 2025, we incurred rental expense, warehousing, outlet expense of $145,108, compared to rental expense, warehousing, outlet expense of $335,743 for the nine months ended September 30, 2024. The decrease in rental expense, warehousing, outlet expense of $190,635 is due to cost cutting on leases and properties that the Company rents to conduct the Champion business acquisition as well as other cost cutting measures or efficiencies put in place.
For the nine months ended September 30, 2025, we incurred product development expenses of $902,033 compared to product development expenses of $713,883 for the nine months ended September 30, 2024. The increase in product development expenses of $188,150 is due to the timing of development expenses in connection with the private label beer. We expect to maintain some level of expense on a go-forward basis with new products and efforts being expended for future sales growth and product needs.
For the nine months ended September 30, 2025, we incurred marketing and brand development expenses of $2,406,274 compared to marketing and brand development expenses of $1,189,219 for the nine months ended September 30, 2024. The increase in marketing and brand development expenses of $1,217,055 (or 102% period over period) relates primarily to market awareness efforts for American Rebel Beer as well as expenses associated with our Tony Stewart activities and general push forward on sales efforts.
For the nine months ended September 30, 2025, we incurred administrative and other expense of $4,397,199 compared to administrative and other expense of $3,323,566 for the nine months ended September 30, 2024. The increase in administrative and other expense of $1,073,633 (or 32% period over period) relates directly to increased professional fees including accounting and legal fees.
For the nine months ended September 30, 2025, we incurred depreciation and amortization expense of $109,913 compared to depreciation and amortization expense of $109,813 for the nine months ended September 30, 2025. Depreciation and amortization expense remained consistent, and we expect it to remain consistent.
Other income and expenses
For the nine months ended September 30, 2025, we incurred interest expense of $1,483,357 compared to interest expense of $2,128,357 for the nine months ended September 30, 2024 The decrease in interest expense of $645,000 is due to a significant number of notes we have entered into and subsequently converted or modified.
For the nine months ended September 30, 2025, we incurred a loss on debt extinguishment of $13,531,557 and loss on settlement of liability of $2,586,509 compared to a loss on extinguishment of debt of $312,505 for the nine months ended September 30, 2024. This is due to several additional conversions of debt into equity during the nine months ended September 30, 2025 as well as the amended Streeterville loan payable.
Net Loss
Net loss for the nine months ended September 30, 2025 amounted to $28,427,026, resulting in a loss per share of $(113.30), compared to a net loss of $9,702,239 for the nine months ended September 30, 2024, resulting in a loss per share of $(6,664.86) (adjusted for various reverse stock splits). The increase in the net loss for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 is primarily due to a myriad of expenses that we incurred, such as professional and legal fees, increased costs in marketing, and the softening of gross margin on sales as well as the significant loss on debt extinguishment as mentioned above.
Liquidity and Capital Resources
We are a company still in the growth and acquisition stage and our revenue from operations does not cover our operating expenses. Working capital decreased by $8,709,796 period over period where we had a working capital deficit of $(8,940,228) at December 31, 2024 compared to a working capital deficit balance of $(17,650,023) at September 30, 2025. This working capital decrease was due to increased expenses launching new products and slowing sales in its legacy business. We have funded our operations primarily through the issuance of capital stock, convertible debt, and other securities and will continue so into the near future and beyond.
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During the nine months ended September 30, 2025, we reduced anticipated cash outflows of $27.7 million through the issuance of common stock in exchange for settlement of our outstanding debt and payables.
As we continue with the launch of American Rebel Beer and continue to maintain the American Rebel branded safes and concealed carry product line, as well our Champion line of products, we expect to continue to devote significant resources in the areas of capital expenditures, marketing, sales, and operational expenditures. We may from time to time incur significant capital needs for these expenditures and for our business. We cannot fully predict what those needs will be and the impact to our business.
We expect to require additional funds to further develop our business and acquisition plan, including the launch of additional products in addition to aggressively marketing our safes and concealed carry product line. Since it is impossible to predict with certainty the timing and amount of funds required to establish profitability, we anticipate that we will 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 will likely be dilutive to existing stockholders.
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. 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. We may not be able to negotiate any such arrangements on acceptable terms, if at all. If we are unable to obtain additional funding on a timely basis, we may be required to curtail or terminate some or all of our product lines.
Promissory Notes – Working Capital
Over the past twelve months, we entered into various working capital notes with a total balance of $18,453,772 as of September 30, 2025. The promissory notes have various terms – refer to Note 10 of our consolidated financial statements for the specific terms of each promissory note.
Critical Accounting Estimates
Our discussion and analysis of our financial condition and results of operations are based upon our Condensed Consolidated Financial Statements, which have been prepared in accordance with GAAP. The preparation of these financial statements requires us to make estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure at the date of the financial statements and for the period then ended. On an ongoing basis, we evaluate the estimates used. We base our estimates on historical experience, current conditions and various other assumptions that we believe to be reasonable under the circumstances. These estimates form the basis for making judgments about the carrying values of assets and liabilities. Actual results may differ from these estimates. Our critical accounting estimates include the following, which are listed in no particular order:
Revenue Recognition
In accordance with ASC 606, Revenue from Contracts with Customers, revenues are recognized when control of the promised goods or services is transferred to our clients, in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods and services. To achieve this core principle, we apply the following five steps: (1) Identify the contract with a client; (2) Identify the performance obligations in the contract; (3) Determine the transaction price; (4) Allocate the transaction price to performance obligations in the contract; and (5) Recognize revenues when or as the company satisfies a performance obligation.
These steps are met when an order is received, a price is agreed to, and the product is shipped or delivered to that customer. Additionally, the Company offers extended warranties for the locking mechanism of its safes, which are separately purchased by customers. Warranty income is recognized over time based on the estimated useful life of the locks, which approximates 10 years. Unrecognized warranty income is presented as deferred revenue in the accompanying consolidated financial statements.
Fair Value of Financial Instruments
Fair value estimates are based upon certain market assumptions and pertinent information available to management. The respective carrying value of certain financial instruments approximates their fair values.
The three levels of inputs used to measure fair value are as follows:
Level 1: The preferred inputs to valuation efforts are “quoted prices in active markets for identical assets or liabilities,” with the caveat that the reporting entity must have access to that market. Information at this level is based on direct observations of transactions involving the same assets and liabilities, not assumptions, and thus offers superior reliability. However, relatively few items, especially physical assets, actually trade in active markets.
Level 2: FASB acknowledged that active markets for identical assets and liabilities are relatively uncommon and, even when they do exist, they may be too thin to provide reliable information. To deal with this shortage of direct data, the board provided a second level of inputs that can be applied in three situations.
Level 3: If inputs from levels 1 and 2 are not available, FASB acknowledges that fair value measures of many assets and liabilities are less precise. The board describes Level 3 inputs as “unobservable,” and limits their use by saying they “shall be used to measure fair value to the extent that observable inputs are not available.” This category allows “for situations in which there is little, if any, market activity for the asset or liability at the measurement date”. Earlier in the standard, FASB explains that “observable inputs” are gathered from sources other than the reporting company and that they are expected to reflect assumptions made by market participants.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
Not applicable.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934, as amended (Exchange Act), is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms. Our disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to management as appropriate to allow timely decisions regarding required disclosures. There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives, and management necessarily is required to use its judgment in evaluating the cost-benefit relationship of possible controls and procedures.
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An evaluation was carried out under the supervision and with the participation of the Company’s management, including the CEO and Interim Principal Accounting Officer, of the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report as defined in Exchange Act Rule 13a-15(e) and Rule 15d-15(e). Based on that evaluation, the CEO and Interim Principal Accounting Officer have concluded that, as of the end of the period covered by this report, the Company’s disclosure controls and procedures were not effective.
Management has concluded that there is a material weakness in internal control over financial reporting due to deficiencies in the design and operation of internal controls. The material weakness resulted in material adjustments to the financial statements included in the Original Form 10-K for the years ended December 31, 2023 and 2022, which were driven by the following: (1) inadequate management reviews, and (2) insufficient technical accounting competencies within the organization.
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements would not be prevented or detected on a timely basis. As a result of the material weakness, our CEO and Interim Principal Accounting Officer have concluded that, as of September 30, 2025, the end of the period covered by this report, our disclosure controls and procedures were not effective at a reasonable assurance level.
Changes in Internal Control over Financial Reporting
There were no changes in the Company’s internal controls over financial reporting that occurred during the period ended September 30, 2025 that have materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.
Part II: Other Information
Item 1 - Legal Proceedings
Liberty Safe
On July 23, 2024, the Company received notice of a complaint filed in the U.S. District Court for the District of Utah by Liberty Safe and Security Products, Inc. (“Liberty”), in connection with the marketing and sale of the Company’s and its subsidiaries, Champion Safe Company, Inc., line of safe products. As of the date of this Report, the complaint has not been served on the Company or Champion Safe. In the complaint, Liberty alleges trademark infringement as a result of the purported use of the term “Freedom” in the sale of safes, federal false designation of origin and unfair competition, violation of Utah deceptive trade practices, Utah unfair competition, and damages to Liberty. Management believes that this lawsuit is without merit; however has initiated settlement discussions with Liberty and anticipates an amicable settlement to be forthcoming. The Company and its counsel has been working on a settlement to this matter; however, on September 30, 2025 the Company received a copy of an order granting motion for entry of default. The Company continues to work with Liberty in settling this matter and at this time, management does not believe a settlement with Liberty will have a material effect on its business or financial condition.
Bank of America
As previously disclosed in the Form 8-K filed on June 10, 2025, on May 30, 2025, Champion Safe Company, Inc. (the “Borrower”), a wholly-owned subsidiary of American Rebel Holdings, Inc. (the “Company”), entered into a Forbearance Agreement (the “Forbearance Agreement”) by and among the Borrower, the guarantors identified therein (collectively, the “Guarantors”), and Bank of America, N.A. (the “Bank”) under the line of credit, dated as of February 10, 2023, by and among the Borrower, the Guarantors, and the Bank (the “Credit Agreement”).
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Subject to the terms of the Forbearance Agreement, the Bank had agreed to forbear, until July 31, 2025, from exercising certain of their available remedies under the Credit Agreement with respect to or arising out of the Borrower’s failure to make payment on the outstanding principal amount of the Term Loan on the Expiration Date, as amended (as defined in the Credit Agreement) (the “Identified Default”).
As a result of the uncured Identified Default, the Bank filed a complaint against Borrower and Guarantors on March 21, 2025 in the Fourth Judicial District Court, in and for Utah County, Utah (Case No. 250401345) seeking no less than $1,906,742.88, plus outstanding and accruing attorneys’ fees, all pre and post- judgment interest, equitable relief in favor of Bank, and any other relief that the Court deemed just and proper (collectively, the “Litigation”).
Subject to the terms of the Forbearance Agreement, the Bank had agreed to abstain from pursuing its claims against Borrower and Guarantors in the Litigation through the Forbearance Period (defined below), provided that neither Borrower nor Guarantors breach any terms of the Forbearance Agreement. Further, the Borrower and Guarantors executed a Confession of Judgment and Verified Statement in connection with the Forbearance Agreement.
Bank agreed to forbear from exercising its rights and remedies under the Credit Agreement through the close of business on July 31, 2025 (the “Forbearance Period”) on the following terms and conditions:
● On the sooner to occur of (i) July 31, 2025 or (ii) the termination of the Forbearance Period in accordance with the Termination of Forbearance Period Section of the Forbearance Agreement, all remaining unpaid principal, accrued interest, fees, attorneys’ fees, and expenses and other amounts owing under the Credit Agreement shall be due and payable in full; and
● Champion made a principal payment in the amount of $100,000.00 on the execution of the Forbearance Agreement and an additional $100,000 on June 30, 2025, which extended the original Forbearance Period from June 30, 2025 to July 31, 2025.
Champion did not make the final payment of all amounts owed under the Credit Agreement on July 31, 2025. As of July 25, 2025, the Bank issued a payoff statement showing:
| 1. | Principal Balance | $1,642,129.00 | |
| 2. | Interest | $58,403.91 | |
| 3. | Default Interest | $94,352.56 | |
| 4. | Legal Fees | $28,046.95 (which increased to $36,129.04 by July 31, 2025) |
Total due to the Bank as of July 31, 2025 was $1,831,014.51 and accrues interest at the rate of $570.23 per day afterwards. This does not include any additional fees, expenses, penalties or costs.
On September 15, 2025, Bank of America was repaid the $1,860,955.45 owed under the line of credit. Bank of America dismissed the lawsuit and filed a UCC-3 termination and release of all collateral under the line of credit. This matter is now fully resolved, with no outstanding obligations remaining.
From time to time, however, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. Litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business.
Item 1a – Risk Factors
Factors that could cause or contribute to differences in our future financial and operating results include those discussed in the risk factors set forth in Item 1A of our Annual Report on Form 10-K, as amended, for the year ended December 31, 2024. These risks are not the only risks that we face. Additional risks not presently known to us or that we do not currently consider significant may also have an adverse effect on the Company. If any of the risks actually occur, our business, results of operations, cash flows or financial condition could suffer.
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Item 2 - Unregistered Sales of Equity Securities
On July 12, 2025, a holder of shares of Series D Preferred Stock converted such shares into 15,000 shares of common stock at a conversion price per share of $30.
Effective August 1, 2025, the Company entered into a 5-month strategic advisory agreement, pursuant to which the Company issued the advisor 4,000 shares of Series D Convertible Preferred Stock valued at $30,000.
On August 1, 2025, the Company authorized the issuance of 8,750 shares of common stock to Corey Lambrecht, the Company’s President/COO and a director, upon the conversion of shares of Series A Convertible Preferred Stock.
On August 1, 2025, the Company authorized the issuance of 8,750 shares of common stock to Charles A. Ross, Jr., the Company’s CEO and chairman, upon the conversion of shares of Series A Convertible Preferred Stock.
On August 11, 2025, a holder of shares of Series D Preferred Stock converted such shares into 2,500 shares of common stock at a conversion price per share of $30.
On August 11, 2025, a holder of 10,000 shares of Series D Preferred Stock converted such shares into 50,000 shares of common stock at a conversion price per share of $30.
Between August 13 and August 21, 2025, the Company issued an aggregate of 10,765 shares of common stock to a lender in connection with the conversion of a promissory note originally entered into on February 10, 2025.
On August 13, 2025, 1800 Diagonal Lending converted a portion of their debt into 45,198 shares of common stock.
On August 14, 2025, 1800 Diagonal Lending converted a portion of their debt into 39,548 shares of common stock.
On August 18, 2025, 1800 Diagonal Lending converted a portion of their debt into 40,579 shares of common stock.
On August 18, 2025, the Company authorized the issuance of the 20,725 shares of common stock and 34,984 shares of common stock underlying Prefunded Warrants.
On August 19, 2025, the Company issued 25,000 shares of Series D Convertible Preferred Stock to a strategic advisor for services to be rendered pursuant to a strategic advisory agreement for the period from August 18, 2025 through June 30, 2027.
On August 19, 2025, 1800 Diagonal Lending converted a portion of their debt into 38,261 shares of common stock.
On August 21, 2025, 1800 Diagonal Lending converted a portion of their debt into 51,696 shares of common stock.
On August 22, 2025, the Company authorized the issuance of 2,000 shares of Series E Preferred Stock in exchange for a note purchase agreement.
On September 3, 2025, the Company authorized the issuance of 6,667 shares of Series D Convertible Preferred Stock to Eventus Advisory Group LLC for accrued fees of $50,000 and 20,000 shares of Series D Convertible Preferred Stock to DeMint Law, PLLC for accrued fees of $150,000.
On September 4, 2025, the Company issued 25,000 shares of common stock to FMW Media Services pursuant to the terms of a Consulting Services Agreement dated August 28, 2025.
Between September 5 and September 10, 2025, the Company issued an aggregate of 11,798 shares of common stock to a lender in connection with the conversion of a promissory note originally entered into on March 3, 2025.
On September 5, 2025, 1800 Diagonal Lending converted a portion of their debt into 56,497 shares of common stock.
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On September 7, 2025, the Company authorized the issuance of 24,000 shares of Series D Convertible Preferred Stock to MZ Digital, LLC for accrued fees of $150,000 and 4,000 shares of Series D Convertible Preferred Stock for an invoice dated July 23, 2025.
On September 8, 2025, the Company received a subscription agreement for the purchase of 40,000 shares of Series D Convertible Preferred Stock at $7.50 per share to an accredited investor for cash consideration of $300,000.
On September 9, 2025, 1800 Diagonal Lending converted a portion of their debt into 104,362 shares of common stock.
On September 10, 2025, 1800 Diagonal Lending converted a portion of their debt into 75,097 shares of common stock.
On September 10, 2025, the Company issued a lender a two year warrant to purchase up to 225,000 shares of Series D Convertible Preferred Stock at $7.50 per share.
On September 15, 2025, the Company issued 280,000 shares of Series D Convertible Preferred Stock for the purchase of 30% of the outstanding membership interests in a private limited liability company and 18,800 shares of Series D Convertible Preferred Stock for the commitment fee to the seller.
On September 16, 2025, the Company issued 12,000 shares of Series D Convertible Preferred Stock, valued at $90,000, to Carter, Terry & Company Inc. (“Carter Terry”) for partial payment of commissions owed on a recent financing completed by the Company. The Company agreed to register the shares of common stock underlying conversion of the Series D Preferred Shares within thirty (30) calendar days. At any time prior to the registration of the Series D Preferred Shares, the Company may elect, in its sole discretion, to satisfy the $90,000 fee obligation in cash, payable directly to Carter Terry.
On September 25, 2025, the Company authorized the issuance of 8,750 shares of common stock to Charles A. Ross, Jr., the Company’s Chairman and CEO, upon the conversion of shares of Series A Convertible Preferred Stock.
On September 25, 2025, the Company authorized the issuance of 8,750 shares of common stock to Corey Lambrecht, the Company’s President, COO and a director, upon the conversion of shares of Series A Convertible Preferred Stock.
On September 30, 2025, the Company authorized the issuance of the 200,000 shares of Series D Convertible Preferred Stock to RAEK Data, LLC for the acquisition of membership interests valued at $1,500,000.
On September 30, 2025, the Company authorized the issuance of 20,000 shares of Series D Convertible Preferred Stock to DeMint Law, PLLC for accrued fees in the amount of $150,000.
On September 30, 2025, the Company received two subscription agreements for the purchase of 70,000 shares of Series D Convertible Preferred Stock at $7.50 per share to two accredited investors for cash consideration of $525,000.
Subsequent Issuances after Quarter-End
On October 2, 2025, the Company authorized the issuance of 100,000 shares of Series D Convertible Preferred Stock for $750,000 pursuant to a securities purchase agreement.
On October 2, 2025, the Company received subscription agreements for the purchase of 35,000 shares of Series D Convertible Preferred Stock at $7.50 per share to six accredited investors for cash consideration of $262,500.
On October 3, 2025, the Company effectuated a 1-for-20 reverse stock split. On October 3, 2025, in connection with the round lot share rounding associated with the reverse stock split, the Company issued 2,502 shares of common stock to twenty stockholders of record effected by the rounding. On October 14, 2025, in connection with the round lot share rounding associated with the reverse stock split, the Company issued 4,053,452 shares of common stock to CEDE & Co. for distribution to stockholders effected by the rounding.
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On October 3, 2025, a holder of 5,000 shares of Series D Convertible Preferred Stock converted such shares into 25,000 shares of common stock. On October 6, 2025, the same holder converted an additional 1,000 shares of Series D Convertible Preferred Stock into 5,000 shares of common stock.
On October 9, 2025, 1800 Diagonal Lending converted a portion of their debt into 25,005 shares of common stock.
On October 10, 2025, a holder of 5,000 shares of Series D Convertible Preferred Stock converted such shares into 25,000 shares of common stock.
On October 13, 2025, 1800 Diagonal Lending converted a portion of their debt into 26,817 shares of common stock.
On October 22, 2025, a holder of 12,500 shares of Series D Convertible Preferred Stock converted such shares into 62,500 shares of common stock.
On October 24, 2025, a holder of 5,000 shares of Series D Convertible Preferred Stock converted such shares into 25,000 shares of common stock. On October 28, 2025, the same holder converted an additional 5,000 shares of Series D Convertible Preferred Stock into 25,000 shares of common stock.
On November 6, 2025, SCC requested the issuance of 180,754 shares of Common Stock to SCC, representing a payment of approximately $180,754.
All of the above-described issuances (if any) were exempt from registration pursuant to Section 4(a)(2), Section 3(a)(9), Section 3(a)(10) 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. 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 therefrom.
Issuer Purchases of Equity Securities
We did not repurchase any of our equity securities during the quarter ended September 30, 2025.
Item 3 – Defaults upon Senior Securities
The Company is in the growth and acquisition stage and, accordingly, has not yet reached profitability from its operations. Since inception, the Company has been engaged in financing activities and executing its plan of operations and incurring costs and expenses related to product development, branding, inventory buildup and product launch. As a result, the Company has continued to incur significant net losses from operations and cash flow difficulties. The Company’s accumulated deficit was ($92,987,390) as of September 30, 2025 and ($65,086,200) as of December 31, 2024. The Company has experienced cash flow restraints and has missed payments due under several financing agreements. To date, the majority of lenders have been working with the Company towards amenable solutions to remedy any issues related to such agreements.
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 significant operating revenues and profitability. The Company had previously had an effective Reg. A+ offering seeking to raise approximately $20.0 million; however, due to the termination of its prior PCAOB accountants and the requirement to re-audit its financial statements for the past two years for inclusion in the Reg. A+ offering documents the Company is unable to access any capital under the offering and the offering expired. The Company anticipates filing a new Reg. A+ offering in 2025.
Management believes that sufficient funding can be secured through the obtaining of loans, as well as future offerings of its preferred and common stock. However, no assurance can be given that the Company will obtain this additional working capital, or if obtained, that such funding will not cause substantial dilution to its existing stockholders. Most of the Company’s current debt instruments are charging high interest rates. These interest payments and/or premium repayments and prepayments may make it difficult for it to enter into new debt agreements. If the Company is unable to secure such additional funds from these sources, it may be forced to change or delay some of its business objectives and efforts. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern.
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Item 4 – Mine Safety Disclosures
Not applicable.
Item 5 – Other Information
On July 31, 2025, the Company entered into a two-year promissory notes with an accredited investor (the “Lender”) in the gross principal amount of $500,000 (the “Note”). An original issue discount of $75,000 and guaranteed interest of $75,000 was applied on the issuance date, resulting in net loan proceeds to the Company of $350,000, which were received on August 8, 2025. The Notes are required to be paid in one lump sum payment of $500,000 on or before July 31, 2027. In addition, on the 150th day after the issuance date of the Note, the Company shall pay the Lender a monitoring fee of $10,000.00.
Proceeds from the Note is intended to be utilized to support the Company’s ongoing refinancing efforts with Bank of America. Specifically, the Borrower intends to apply such proceeds toward extending the existing forbearance agreement with Bank of America through December 31, 2026, or such other date as may be mutually agreed upon between the Company and Bank of America. In the event the Company successfully negotiates a continued forbearance or full satisfaction of its obligations with Bank of America, any remaining available net proceeds shall be used for general corporate purposes, including but not limited to working capital, operational expansion, and strategic initiatives aligned with the Company’s business objectives.
Minor Default shall mean a specific type of default under the Note that occurs solely as a result of the Company’s failure to pay the monitoring fee when due, and such failure remains uncured for a period of thirty (30) calendar days following the due date. A Minor Default shall trigger acceleration of the Note, but the total amount due and payable shall be equal to one hundred five percent (105%) of the outstanding Principal amount of the Note, plus any accrued and unpaid Interest and fees, if any, as of the date of acceleration.
Upon the occurrence and during the continuation of any Event of Default, the Note shall become immediately due and payable and the Company will be obligated to pay to the Lender, in full satisfaction of its obligations, an amount equal to 130% times the sum of (w) the then outstanding principal amount of the Note plus (x) accrued and unpaid interest on the unpaid principal amount of the Note to the date of payment plus (y) any amounts owed to the Lender pursuant to the conversion rights referenced below.
At any time after one hundred eighty days of the issuance date of the Note, upon five (5) business days’ written notice to Lender, the Company has the option of prepaying the outstanding principal amount of the Note, in whole or in part, by paying to the Lender a sum of money equal to one hundred thirty-five percent (135%) of the principal amount to be redeemed, together with any and all other sums due, accrued or payable to the Lender arising under the Note.
At any time after one hundred eighty days of the issuance date of the Note, the Company and the Lender may mutually agree to allow the Lender to convert the outstanding unpaid principal amount of the Note into restricted shares of Series D Convertible Preferred Stock of the Company at $7.50 per share (each share of Series D Convertible Preferred Stock in convertible into five shares of common stock). The Lender agreed to limit the amount of stock received to less than 4.99% of the total outstanding common stock into which the Series D Convertible Preferred Stock is convertible into. There are no warrants or other derivatives attached to the Note. The Company granted the Lender piggy-back registration rights on the shares of common stock issuable upon conversion of the Series D Convertible Preferred Stock. The Company agreed to reserve a number of shares of Series D Convertible Preferred Stock, and common stock issuable upon conversion thereof, equal to three times the number of shares of Series D Convertible Preferred Stock (200,000 shares of Series D Convertible Preferred Stock in total), and common stock issuable upon conversion thereof (1,000,000 shares of common stock in total), which may be issuable upon conversion of the Note at all times.
The foregoing description of the Note and of all of the parties’ rights and obligations under the Note is qualified in their entirety by reference to the OID Note, a copy of which is filed as Exhibit 10.1 to this Current Report on Form 8-K, and of which is incorporated herein by reference.
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In addition to the Note, the Company entered into a 5-month strategic advisory agreement with the Lender. As consideration for the advisory services, the Company issued the advisor 4,000 shares of Series D Convertible Preferred Stock valued at $30,000.
Nasdaq Hearings Panel Decision
On October 20, 2025, the Company received a decision letter from the Nasdaq Hearings Panel (“Panel”) granting the Company’s request to continue its listing on The Nasdaq Stock Market LLC (“Nasdaq”), subject to the condition that, on or before November 15, 2025, the Company shall demonstrate compliance with Nasdaq Listing Rule 5550(b)(1) (the “Equity Rule”). This decision follows the Company’s hearing before the Panel on September 30, 2025, regarding its non-compliance with the Equity Rule.
As previously reported in a Current Report on Form 8-K filed on August 20, 2025, the Company received written notice from Nasdaq’s Listing Qualifications Department (the “Staff”) indicating that the Company did not timely regain compliance with the Equity Rule. The Company requested a hearing before the Panel, at which it presented its plan to evidence compliance with the Equity Rule as of September 30, 2025.
In its written notice, the Panel stated on or before November 15, 2025, the Company shall demonstrate compliance with the Equity Rule by filing a timely public disclosure describing the transactions undertaken by the Company to achieve compliance and demonstrate long-term compliance with the Equity Rule, and by providing an indication of its equity following those transactions. The Company may do so by including in the public filing a balance sheet not older than 60 days with pro forma adjustments for any significant transactions or events occurring on or before the report date.
The Panel further stated that during the granted exception period the Company must promptly notify the Panel of any significant developments, particularly any event, condition or circumstance that may impact its ability to meet the terms of the exception granted by the Panel and that the Panel reserves the right to reconsider the granted exception in such an instance. The Company is diligently working to timely satisfy the terms of the Panel’s decision; however, there can be no assurance that the Company will be able to do so. In the event that the Company is unable to meet the terms of the Panel’s decision, the Company will be subject to delisting from Nasdaq.
SB Capital Agreement
On October 28, 2025, the Company entered into a Settlement Agreement and Stipulation (the “Settlement Agreement”) with Silverback Capital Corporation (“SCC”) to settle outstanding claims owed to SCC. Pursuant to the Settlement Agreement, SCC has agreed to purchase certain outstanding payables between the Company and designated vendors of the Company totaling $6,228,853.99 (the “Payables”) and will exchange such Payables for a settlement amount payable in shares of common stock of the Company (the “Settlement Shares”). The Settlement Shares shall be priced at 75% of the average of the three lowest traded prices during the five trading day period prior to a share request, which is subject to a floor price. In the event the Company’s market price decreases to or below $1.00 per share, then either the Company or SCC may declare a default. SCC has agreed that it will not become the beneficial owner of more than 4.99% of common stock of the Company at any point in time. The Settlement Agreement and the issuance of the Settlement Shares was approved by the Circuit Court of the Twelfth Judicial Circuit Court for Manatee County, Florida (the “Court”) on November 5, 2025 (Case No. 2025 CA 2642). The Court entered an Order confirming the fairness of the terms and conditions of the Settlement Agreement and the issuance of the Settlement Shares.
In connection with the SCC Settlement Agreement, on November 6, 2025, SCC requested the issuance of 180,754 shares of Common Stock to SCC, representing a payment of approximately $180,754. The issuance of the Settlement Shares is in process with the Company’s transfer agent and is being made in reliance upon the exemption from registration provided by Section 3(a)(10) of the Securities Act of 1933, as amended, which exempts from registration any securities issued in exchange for one or more outstanding securities, claims or property interests where the terms and conditions of such issuance and exchange are approved by a court of competent jurisdiction after a hearing upon the fairness of such terms and conditions at which all persons to whom it is proposed to issue securities in such exchange have the right to appear.
The foregoing description of the Settlement Agreement and of all of the parties’ rights and obligations under the Settlement Agreement are qualified in its entirety by reference to the Settlement Agreement, a copy of which is filed as Exhibit 10.1 to this Quarterly Report on Form 10-Q, and of which is incorporated herein by reference.
Item 6 – Exhibits
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# Filed herewith.
‡ Furnished herewith.
† Indicates management contract or compensatory plan or arrangement.
** The XBRL related information in Exhibit 101 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability of that section and shall not be incorporated by reference into any filing or other document pursuant to the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing or document.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Dated: November 10, 2025
| AMERICAN REBEL HOLDINGS, INC. | ||||
| (Registrant) | ||||
| By: | /s/ Charles A. Ross, Jr. | By: | /s/ Darin Fielding | |
| Charles A. Ross, Jr., CEO | Darin Fielding | |||
| (Principal Executive Officer) | President (Interim Principal Accounting Officer) | |||
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