8-K: American Rebel Holdings Changes Auditors and Secures Kansas Beer Distribution License

American Rebel Holdings dismissed its auditor, BF Borgers CPA PC, and announced a license to distribute its beer in Kansas.

Summary

• American Rebel Holdings dismissed BF Borgers CPA PC as its independent auditor on May 3, 2024, a decision approved by the audit committee.
• The previous audits by BF Borgers for 2022 and 2023 did not contain adverse opinions, disclaimers, or modifications, except for a going concern explanatory paragraph.
• There were no disagreements between American Rebel and BF Borgers regarding accounting or auditing matters.
• BF Borgers is currently not permitted to practice before the SEC, so a letter of agreement was not requested.
• American Rebel is currently interviewing replacement auditors.
• On May 2, 2024, American Rebel announced it received a license to distribute its beer in Kansas through Standard Beverage Corporation.
• American Rebel has a distribution agreement with Standard Beverage, which has a large facility in Lenexa, Kansas.
• Standard Beverage is the largest single alcohol distributor in Kansas.
• American Rebel's CEO, Andy Ross, noted the company has commitments from top sports bars, retail outlets, venues, and Kansas-based music festivals.
• The launch of American Rebel Beer is a primary goal of their current Reg A+ offering.

Sentiment

Score: 4

Explanation: The sentiment is mixed. The positive news of the beer distribution license is offset by the negative news of the auditor dismissal and the speculative nature of the Reg A+ offering. The auditor issue is a significant concern.

Positives

• American Rebel secured a license to distribute its beer in Kansas, expanding its market reach.
• The company has a strong distribution partner in Standard Beverage Corporation.
• There are commitments from key venues in Kansas to carry American Rebel Beer.
• The company is actively working to replace its auditor.

Negatives

• The dismissal of BF Borgers as the auditor may raise concerns about the company's financial oversight.
• BF Borgers is not currently permitted to practice before the SEC.
• The company is in the process of finding a new auditor, which could cause delays.

Risks

• The company's forward-looking statements are subject to significant risks and uncertainties.
• Actual future performance and results could differ from the forward-looking statements.
• The company's Reg A+ offering is highly speculative and involves significant risks.
• The investment in American Rebel could be illiquid for an indefinite period of time.
• There is no guarantee that the company's application to list on Nasdaq Capital Market will be approved.

Future Outlook

The company intends to launch American Rebel Beer in Kansas and is working to list its Series C Preferred Stock on the Nasdaq Capital Market, though there is no guarantee of success.

Management Comments

• Andy Ross, Chief Executive Officer of American Rebel, stated they are very excited to have their license and distribution agreement to sell American Rebel Beer throughout the state of Kansas.
• Andy Ross also mentioned the company has commitments from top sports bars, retail outlets, venues and Kansas-based music festivals.

Industry Context

The move into the beverage industry is a significant shift for American Rebel, which has primarily focused on safes and personal security products. The company is leveraging its existing brand and distribution network to enter a new market. The partnership with Standard Beverage, a major distributor in Kansas, is a strategic move to gain market share.

Comparison to Industry Standards

• The dismissal of an auditor is not uncommon, but the circumstances surrounding BF Borgers' inability to practice before the SEC is unusual and may raise concerns.
• The move into the beverage industry is a diversification strategy similar to other companies that have expanded their product lines.
• The partnership with a large distributor like Standard Beverage is a common strategy for new entrants in the beverage market, similar to how craft breweries partner with established distributors.
• The company's reliance on a Reg A+ offering for funding is a less common approach compared to traditional venture capital or debt financing, and carries higher risk.

Stakeholder Impact

• Shareholders may be concerned about the auditor change and the speculative nature of the Reg A+ offering.
• Employees may be affected by the company's expansion into the beverage industry.
• Customers in Kansas will have access to American Rebel Beer.
• Suppliers may see increased demand due to the new product launch.
• Creditors may be impacted by the company's capital raising activities.

Next Steps

• American Rebel will continue interviewing replacement independent registered public accounting firms.
• The company will launch American Rebel Beer in Kansas.
• The company will continue with its Reg A+ offering.
• The company will seek to list its Series C Preferred Stock on the Nasdaq Capital Market.

Key Dates

Keywords

American Rebel, Auditor, BF Borgers, Beer Distribution, Kansas, Standard Beverage, Reg A+ Offering, Accounting, Nasdaq, Financial Statements