8-K: American Rebel Converts Preferred Stock, Releases Funds

American Rebel Holdings, Inc. announced the release of $250,000 from a deposit account and the conversion of 490 Series E Preferred Stock shares into 2,450,000 common shares with Streeterville Capital.

Summary

• American Rebel Holdings, Inc. received a release of $250,000 from a Deposit Account Control Agreement (DACA) held at Lakeside Bank, previously established with its subsidiary ARH Sub, LLC and Streeterville Capital, LLC.
• The company entered into five Exchange Agreements with Streeterville Capital, LLC on February 25, 2026.
• Pursuant to these agreements, 490 shares of Series E Preferred Stock were exchanged and converted into 2,450,000 shares of common stock.
• The effective conversion price for the common shares was $0.20 per share.
• The common shares issued are restricted securities, exempt from registration under Section 4(a)(2) and/or Regulation D of the Securities Act.
• For Rule 144 purposes, the holding period for the newly issued common shares will include Streeterville Capital's holding period of the Preferred Shares from August 22, 2025.

Sentiment

Score: 5

Explanation: StockSavvy.ai views this as a neutral event. While the release of $250,000 provides immediate liquidity, the conversion of preferred stock into a significant number of common shares introduces dilution for existing shareholders, balancing the overall impact.

Positives

• The release of $250,000 from the DACA provides additional liquidity and working capital to the company.
• The conversion of Series E Preferred Stock into common stock simplifies the company's capital structure by reducing preferred stock obligations.

Negatives

• The issuance of 2,450,000 new common shares will result in dilution for existing common stockholders.
• The effective conversion price of $0.20 per share may be below the prevailing market price, potentially increasing the dilutive impact.

Risks

• Dilution of existing common stockholders' ownership percentage and earnings per share due to the issuance of 2,450,000 new common shares.
• The newly issued common shares are restricted securities, which means Streeterville Capital, LLC faces limitations on their immediate resale without registration or an applicable exemption.

Future Outlook

The filing does not contain explicit forward-looking statements or guidance regarding future financial performance, operational targets, or strategic direction beyond the immediate execution of these financing-related transactions.

Management Comments

• Company represents, warrants and agrees that for the purposes of Rule 144, the holding period of the Exchange Shares will include Investor's holding period of the Preferred Shares from August 22, 2025.
• Company acknowledges and understands that the representations and agreements of Company in this Section 4 are a material inducement to Investor's decision to consummate the transactions contemplated herein.

Industry Context

StockSavvy.ai notes that companies, particularly those in growth phases or with specific financing needs, frequently utilize convertible instruments like preferred stock and secured notes to attract capital. The subsequent conversion of preferred stock to common stock, as detailed here, is a standard mechanism for investors to realize their equity stake, though it inherently leads to dilution for existing common shareholders. The release of funds from a DACA is also a common practice to manage and disburse capital from structured financing arrangements.

Comparison to Industry Standards

• The conversion of preferred stock to common stock is a standard financing mechanism, often observed in venture-backed or growth companies seeking to simplify their capital structure or allow investors to convert their equity-like instruments.
• The use of Section 4(a)(2) and Regulation D for unregistered sales of equity securities is a common practice for private placements to accredited investors like Streeterville Capital, LLC, aligning with typical capital-raising strategies for non-public offerings.
• The effective conversion price of $0.20 per share should be evaluated against the prevailing market price of AREB common stock around February 25, 2026, to fully assess the favorability of the conversion terms and the dilutive impact on existing shareholders relative to industry norms for such transactions.

Related Party Transactions

• The company engaged in a note purchase agreement with Streeterville Capital, LLC for a secured promissory note of $5,470,000.
• The company entered into five Exchange Agreements with Streeterville Capital, LLC for the conversion of Series E Preferred Stock into common stock.

Stakeholder Impact

• **Common Shareholders**: Experience dilution of their ownership percentage due to the issuance of 2,450,000 new common shares.
• **Streeterville Capital, LLC (Investor/Creditor)**: Converts a portion of its preferred equity stake into common equity, altering its investment profile from a fixed-income-like instrument to a direct equity holding.
• **Company**: Gains $250,000 in immediate liquidity and simplifies its capital structure by reducing outstanding preferred stock.

Next Steps

• The Exchange Shares will be issued to Streeterville Capital, LLC on or before February 26, 2026.
• On the Issuance Date, the Preferred Shares will be cancelled, and all obligations of the Company under the Preferred Shares shall be deemed fulfilled.

Key Dates

Recommendation

The filing presents a mixed bag of events. The release of $250,000 provides immediate liquidity, which is positive for the company's short-term financial position. However, the conversion of 490 shares of Series E Preferred Stock into 2,450,000 common shares at an effective price of $0.20 per share will result in significant dilution for existing common stockholders. Without further context on the company's current operational performance or the prevailing market price of AREB common stock, the dilutive effect balances the liquidity gain, suggesting a 'hold' position as investors await more comprehensive financial updates to fully assess the long-term implications.

Keywords

American Rebel Holdings, AREB, Streeterville Capital, Preferred Stock Conversion, Common Stock Issuance, SEC Filing, 8-K, Capital Structure, Dilution, Restricted Securities, Liquidity