8-K: American Rebel Announces 1-for-20 Reverse Stock Split

American Rebel Holdings, Inc. will effect a 1-for-20 reverse stock split on October 3, 2025, to regain Nasdaq minimum bid price compliance and issued $90,000 in preferred stock for commissions.

Summary

• A 1-for-20 reverse stock split was approved by the Board of Directors on September 16, 2025, and will become effective on October 3, 2025.
• The primary purpose of the reverse stock split is to regain compliance with The Nasdaq Capital Market's minimum bid price requirement of $1.00 per share.
• Fractional shares resulting from the split will be rounded up to the nearest whole number, and shareholders holding 100 or more shares prior to the split will retain a minimum of 100 shares post-split.
• The Company issued 12,000 shares of Series D Convertible Preferred Stock, valued at $90,000, to Carter, Terry & Company Inc. on September 16, 2025, as partial payment for commissions owed on a recent financing.
• The Company has the option, at its sole discretion, to satisfy the $90,000 fee obligation in cash instead of registering the underlying common stock for the Series D Preferred Shares.
• As of September 17, 2025, the Company had 10,228,741 shares of common stock issued and outstanding, which will reduce to approximately 514,000 shares post-split (excluding rounding adjustments).

Sentiment

Score: 3

Explanation: The reverse stock split is a necessary action to maintain Nasdaq listing, which is a positive for continued trading, but it stems from a negative situation (low share price). The issuance of preferred stock for commissions also suggests financial constraints. The shareholder protection measures are a minor positive amidst a generally negative event.

Positives

• A proactive measure is being taken to regain compliance with Nasdaq's minimum bid price requirement, which is crucial for maintaining the Company's listing.
• Shareholder protection measures are in place, including rounding up fractional shares and ensuring no current owner of 100 or more shares is reduced to less than 100 shares.
• The Company has NOT received a deficiency notice regarding the bid price rule from Nasdaq, indicating that this action is preventative rather than reactive to a formal warning.
• The reverse stock split is intended to enhance the deposit ability and marketability of the stock.

Negatives

• The necessity of a 1-for-20 reverse stock split indicates a significantly low share price, often a symptom of underlying business challenges or poor market perception.
• Issuing preferred stock for commission payments, rather than cash, suggests potential cash flow constraints or a preference to conserve liquid capital.
• Reverse stock splits can sometimes be perceived negatively by the market, potentially leading to further selling pressure post-split.

Risks

• The reverse stock split may not achieve the desired effect of maintaining Nasdaq listing if the stock price continues to decline post-split.
• Market perception of a reverse stock split can be negative, potentially leading to further selling pressure.
• Failure to register the common stock underlying the Series D Preferred Shares within 30 days could lead to additional obligations or issues.
• The Company's ability to raise adequate working and expansion capital is a significant risk factor.
• Challenges exist in efficiently incorporating acquisitions into operations.
• Risks are present in the Company's ability to introduce new products and meet production demands.
• The Company faces risks in expanding its sales organization to address existing and new markets.
• There are inherent risks associated with the effects of the reverse stock split on the Company's stock and its ability to continue to meet Nasdaq listing requirements.

Future Outlook

The Company aims for the reverse stock split to enhance stock marketability and ensure continued compliance with Nasdaq's minimum bid price requirement. Management acknowledges risks related to raising capital, integrating acquisitions, introducing new products, meeting production demands, expanding sales, and the overall effects of the reverse stock split on Nasdaq listing requirements.

Management Comments

• The Company is committed to pro-actively protecting the interests of its stockholders, particularly those owning round lots of 100 or more shares.
• Stockholders holding at least 100 shares prior to the reverse stock split will retain a minimum of 100 shares post-split.
• Fractional shares resulting from the reverse stock split will be rounded up to the nearest whole share to maintain liquidity and shareholder equity.

Industry Context

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Corporate Governance

Stakeholder Impact

• Shareholders: The number of shares held will decrease by a factor of 20, but the proportional ownership and voting power remain virtually unchanged (except for minor rounding adjustments). Shareholders with 100+ shares are protected from falling below 100 shares. The per-share price is expected to increase.
• Holders of Derivative Securities (warrants, options): The number of common shares issuable upon exercise will decrease proportionately, and exercise prices will be adjusted upwards to maintain the same total price.
• Carter, Terry & Company Inc.: Received 12,000 shares of Series D Convertible Preferred Stock valued at $90,000 as partial commission payment, with an agreement for registration of underlying common stock or a cash payment option.

Next Steps

• The Company will register the common stock underlying conversion of the Series D Preferred Shares within thirty (30) calendar days, unless it elects to pay the $90,000 fee in cash.
• Common Stock is expected to begin trading on a Reverse Stock Split-adjusted basis on Nasdaq at the opening of the market on October 3, 2025.
• Securities Transfer Corporation will provide instructions to stockholders with physical certificates regarding the exchange process.

Key Dates

Recommendation

While the reverse stock split addresses a critical Nasdaq listing requirement, which is a necessary step, it does not fundamentally change the company's underlying business performance. The issuance of preferred stock for commissions suggests financial constraints. Investors should hold to observe the post-split trading behavior and any subsequent operational improvements or financial results before making further investment decisions. The proactive measure to maintain listing is a positive, but the reasons for the low share price persist.

Keywords

American Rebel Holdings, AREB, Reverse Stock Split, Nasdaq Compliance, Series D Preferred Stock, Unregistered Securities, Corporate Governance, Stock Split, Equity Financing, Shareholder Protection