8-K: American Rebel Expands RAEK Stake, Secures Tony Stewart Sponsorship

American Rebel Holdings, Inc. announced the acquisition of additional RAEK Data membership interests, a new sponsorship deal with True Speed Enterprises, and an amended stock incentive plan, alongside significant Series D Preferred Stock issuances to executives and partners.

Summary

• Exercised an option to purchase an additional 2.0% fully diluted ownership interest in RAEK Data, LLC for $1,000,000.00.
• Paid the RAEK Data purchase price by delivering 133,334 shares of Series D Convertible Preferred Stock, with a stated value of $7.50 per share, totaling an aggregate stated value of $1,000,005.00 (including a $5.00 administrative fee).
• Entered into a Sponsorship Agreement with True Speed Enterprises, Inc. (TSE), a company owned by Tony Stewart, effective December 31, 2025, through December 31, 2026.
• The Sponsorship Agreement grants American Rebel exclusivity in the beer category for certain sponsorship benefits associated with TSE and its affiliated entities.
• The total sponsorship fee of $750,007.50 was paid through the issuance of 100,001 shares of Series D Convertible Preferred Stock (63,334 shares to TSE and 36,667 shares to Eldora Speedway Inc., an affiliate of TSE).
• Committed to filing a registration statement on Form S-1 with the SEC within ten business days to register the resale of common stock underlying the Series D Convertible Preferred Stock issued to TSE and its affiliate, including 42,667 shares issued in October 2025 to Tony Stewart Racing Nitro, LLC.
• The Board of Directors approved an Amended and Restated 2025 Stock Incentive Plan (SIP) on December 31, 2025, limiting the aggregate maximum number of shares of Common Stock that may be issued under the SIP to 1,250,000 shares, which will not be adjusted upon a reverse stock split.
• Issued 133,334 shares of Series D Convertible Preferred Stock, valued at $1,000,005, to RAEK Data.
• Issued 63,334 shares of Series D Convertible Preferred Stock to TSE, valued at $475,005, and 36,667 shares to Eldora Speedway, Inc., valued at $275,002.50, for the Sponsorship Agreement.
• Authorized the issuance of 62,211 shares of Series D Convertible Preferred Stock to Doug Grau, former president, for $466,581.10 in accrued debt (advances).
• Issued 73,439 shares of Series D Convertible Preferred Stock to Charles A. Ross, Jr., Chairman and CEO, for $550,791.96 in accrued bonuses and other owed amounts, reserving 367,195 common shares under the SIP for conversion.
• Issued 69,381 shares of Series D Convertible Preferred Stock to Corey Lambrecht, COO, President, and Director, for $520,351.28 in accrued bonuses, other owed amounts, and accrued board member fees, reserving 346,905 common shares under the SIP for conversion.
• Issued 23,923 shares of Series D Convertible Preferred Stock to Michael Dean Smith, an independent director, for $179,416.67 in accrued board member fees, reserving 119,615 common shares under the SIP for conversion.
• Issued 23,923 shares of Series D Convertible Preferred Stock to C. Stephen Cochennet, an independent director, for $179,416.67 in accrued board member fees, reserving 119,615 common shares under the SIP for conversion.
• Issued 36,439 shares of Series D Convertible Preferred Stock to Larry Sinks, an independent director, for $153,291.66 in accrued board member fees and $120,000.00 in loan interest, reserving 102,195 common shares under the SIP for conversion of shares issued for board fees.
• All Series D Convertible Preferred Stock issuances were exempt from registration under Section 4(a)(2), Section 3(a)(9), and/or Regulation D of the Securities Act.

Sentiment

Score: 3

Explanation: While strategic moves like the RAEK Data expansion and Tony Stewart sponsorship offer potential long-term benefits, the immediate impact of significant dilution from preferred stock issuances, particularly to insiders for accrued obligations, and the future selling pressure from the S-1 registration, suggest a negative short-term outlook for common shareholders. The penalty clauses in the sponsorship agreement also highlight significant risks.

Positives

• Expanded ownership in RAEK Data, LLC by an additional 2.0%, potentially strengthening strategic alignment or data capabilities.
• Secured a high-profile sponsorship with True Speed Enterprises, Inc. (Tony Stewart), providing exclusive beer category rights and significant brand exposure in motorsports through December 31, 2026.
• The Amended and Restated 2025 Stock Incentive Plan aims to attract and retain key employees, officers, directors, and consultants by offering equity participation, aligning their interests with the company's growth.

Negatives

• Significant dilution for existing common shareholders due to the issuance of a large number of Series D Convertible Preferred Stock shares to fund acquisitions, sponsorships, and settle accrued debts and bonuses for management and directors.
• The stated value of $7.50 per share for the Series D Preferred Stock, convertible into common stock at a 1:5 ratio (implying $1.50 per common share equivalent), may not reflect the current market value of common stock, potentially indicating a premium or a mechanism to manage dilution perception.
• The commitment to file an S-1 registration statement for the resale of common stock underlying the Series D Preferred Stock issued to TSE and its affiliate creates a future overhang and potential selling pressure on the common stock.
• The 2025 Stock Incentive Plan's share limit of 1,250,000 shares of Common Stock will not be adjusted for reverse stock splits, which could result in a larger percentage of outstanding shares being allocated to the plan if a reverse split occurs.

Risks

• Dilution Risk: The substantial issuance of Series D Convertible Preferred Stock, convertible into common stock, will dilute the ownership percentage of existing common shareholders.
• Registration Statement Risk: The commitment to file an S-1 registration statement for the resale of common stock underlying the Series D Preferred Stock could lead to significant selling pressure once the registration becomes effective.
• Liquidity Risk for Preferred Stock Holders: The Series D Preferred Stock issued is unregistered and restricted, limiting immediate liquidity for the recipients.
• Market Perception Risk: The use of preferred stock to settle accrued debts and bonuses for insiders might be viewed negatively by the market, potentially impacting investor confidence.
• Operational Risk: The success of the True Speed Enterprises sponsorship depends on effective marketing and brand leverage within the highly competitive motorsports industry.
• Financial Obligation Risk: The sponsorship fee of $750,007.50, although paid in stock, represents a significant commitment and potential future dilution.
• Regulatory Compliance Risk: Failure to file the S-1 registration statement within ten business days or to maintain its effectiveness could trigger a penalty, requiring the issuance of an additional 30,000 shares of Preferred Stock (valued at $225,000.00) to TSE.
• Stock Price Volatility Risk: The sponsorship agreement includes a clause for additional preferred stock issuance to TSE if the company's common stock is suspended from trading for more than five trading days or delisted from NASDAQ.

Future Outlook

The company plans to file an S-1 registration statement within ten business days of December 31, 2025, to register the resale of common stock underlying the Series D Convertible Preferred Stock issued to True Speed Enterprises and its affiliate. The sponsorship agreement with True Speed Enterprises runs through December 31, 2026, indicating a commitment to brand promotion in motorsports for the upcoming year. The amended stock incentive plan is designed to attract and retain talent, supporting future growth.

Management Comments

• The SIP is intended to enable the Company to continue to attract able employees, officers, directors and consultants and to provide a means whereby those individuals upon whom the responsibilities rest for growth of the Company, and whose present and potential contributions are of importance, can acquire and maintain Common Stock ownership, thereby strengthening their concern for the Company’s welfare.

Industry Context

The sponsorship with True Speed Enterprises, Inc., owned by motorsports icon Tony Stewart, strategically positions American Rebel Holdings' beer brand within the highly visible and passionate motorsports industry. This move suggests a strategy to leverage celebrity endorsement and event marketing to gain market share in the competitive beer category. The acquisition of additional RAEK Data interests could indicate a focus on data analytics or technology integration, which is a growing trend across various industries for competitive advantage.

Comparison to Industry Standards

• The use of preferred stock to fund acquisitions and settle debts is a common financing mechanism, particularly for smaller companies or those seeking to conserve cash. However, the significant volume of preferred stock issued to insiders for accrued bonuses and debt settlement might be viewed as less favorable compared to cash payments or market-priced common stock issuances, potentially raising corporate governance questions regarding shareholder dilution.
• Sponsorships with high-profile sports figures like Tony Stewart are standard in consumer goods, especially beverages, for brand visibility. The exclusivity in the beer category is a strong benefit, comparable to major brands securing similar deals in other sports.
• The 1:5 conversion ratio for Series D Preferred Stock to common stock, combined with a stated value of $7.50 per preferred share, implies a common stock equivalent price of $1.50 per share ($7.50 / 5). This should be compared to the prevailing market price of AREB common stock to assess the effective price at which these shares are being issued relative to public investors.

Management Changes

Corporate Governance

Related Party Transactions

• Issuance of 73,439 shares of Series D Convertible Preferred Stock to Charles A. Ross, Jr., the Company's Chairman and CEO, for accrued bonuses and other owed amounts totaling $550,791.96.
• Issuance of 69,381 shares of Series D Convertible Preferred Stock to Corey Lambrecht, the Company's COO, President and a director, for accrued bonuses, other owed amounts and accrued board member fees totaling $520,351.28.
• Issuance of 23,923 shares of Series D Convertible Preferred Stock to Michael Dean Smith, an independent director, for accrued board member fees totaling $179,416.67.
• Issuance of 23,923 shares of Series D Convertible Preferred Stock to C. Stephen Cochennet, an independent director, for accrued board member fees totaling $179,416.67.
• Issuance of 36,439 shares of Series D Convertible Preferred Stock to Larry Sinks, an independent director, for accrued board member fees of $153,291.66 and loan interest of $120,000.00.
• Issuance of 62,211 shares of Series D Convertible Preferred Stock to Doug Grau, former president of the Company, for accrued debt (advances) in the amount of $466,581.10.
• Sponsorship Agreement with True Speed Enterprises, Inc., a company owned by Tony Stewart, and its affiliate Eldora Speedway, Inc., also owned by Tony Stewart.

Stakeholder Impact

• Shareholders: Significant dilution from the issuance of Series D Convertible Preferred Stock, especially to insiders and for the sponsorship. Future selling pressure from the S-1 registration. Potential long-term benefits from strategic acquisitions and high-profile sponsorships if successful.
• Employees/Management/Directors: Benefit from equity participation through the amended SIP and direct issuance of Series D Preferred Stock for accrued compensation and debt, aligning their interests with the company's performance.
• Partners (RAEK Data, True Speed Enterprises): RAEK Data receives $1M in preferred stock, increasing American Rebel's ownership. True Speed Enterprises and its affiliates receive $750K in preferred stock for sponsorship, gaining a new partner.
• Customers: Potential increased brand awareness for American Rebel's beer products through the motorsports sponsorship.

Next Steps

• File a registration statement on Form S-1 with the SEC within ten business days of December 31, 2025, to register the resale of common stock underlying the Series D Convertible Preferred Stock issued to TSE and Tony Stewart Racing Nitro, LLC.
• Use best efforts to cause the S-1 registration statement to be declared effective promptly and maintain its effectiveness as required by law.
• Coordinate the Option Closing for RAEK Data additional interests, including confirming the number of newly issued membership units and exchanging draft closing documents.
• Implement the Amended and Restated 2025 Stock Incentive Plan, including granting awards and reserving common stock for conversion of Series D Preferred Stock issued to executives and directors.
• Execute the sponsorship benefits with True Speed Enterprises, Inc. through December 31, 2026, leveraging the beer category exclusivity and branding presence.

Key Dates

Recommendation

The substantial issuance of Series D Convertible Preferred Stock, particularly to insiders for accrued obligations, signals significant dilution for existing common shareholders. The commitment to file an S-1 registration for these shares creates a future overhang, likely leading to selling pressure. While the RAEK Data acquisition and Tony Stewart sponsorship offer strategic potential, the immediate financial implications and the risk of further dilution or stock price volatility (as evidenced by penalty clauses in the sponsorship agreement) outweigh the positives. Investors should consider selling to avoid potential downside from dilution and market pressure.

Keywords

American Rebel Holdings, RAEK Data, True Speed Enterprises, Tony Stewart, Sponsorship, Series D Preferred Stock, Stock Incentive Plan, Equity Compensation, Motorsports, Beer Category, SEC Filing, 8-K, Dilution, Corporate Governance