S-1/A: American Rebel Holdings Files S-1/A for Resale of 4.76 Million Shares by Selling Stockholders Amidst Financial Challenges and Legal Battles

American Rebel Holdings, Inc. filed an S-1/A registration statement for the resale of up to 4,760,316 shares of common stock by selling stockholders, while the company itself will not receive proceeds from these sales but could gain up to $8.55 million from warrant exercises, amidst ongoing financial losses, material weaknesses in internal controls, and legal challenges.

Summary

• The filing is an S-1/A for the registration of up to 4,760,316 shares of common stock for resale by existing selling stockholders.
• The company will not receive any proceeds from the sale of shares by the selling stockholders.
• However, the company would receive up to approximately $8,551,008 if the associated pre-funded warrants and warrants are exercised for cash.
• The shares being registered include 3,677,548 shares from April 4, 2025, Securities Purchase Agreements (Common Stock, Pre-Funded Warrants, Series A Warrants, Series B Warrants, PA Warrants) and 1,082,768 shares from piggy-back registration rights.
• The company reported an accumulated deficit of $64,491,550 as of December 31, 2024.
• Net tangible book value as of December 31, 2024, was approximately ($7.6) million, or ($99.74) per share.
• Pro forma net tangible book value after the April 2025 Private Placement was ($2.1) million, or ($1.00) per share.
• Pro forma as adjusted net tangible book value after this offering (assuming $1.38/share) would be approximately ($0.3) million, or ($0.08) per share, indicating immediate dilution of $1.46 per share to new investors.
• The company has identified material weaknesses in its internal control over financial reporting as of December 31, 2024 and 2023, which led to restatements of financial statements for 2023 and 2022.
• American Rebel Holdings operates as a designer, manufacturer, and marketer of branded safes and personal security and self-defense products, and also produces branded apparel and accessories.
• The company launched American Rebel Light Beer regionally in mid-2024 through a Master Brewing Agreement with Associated Brewing.
• Management (Charles A. Ross, Jr., Doug E. Grau, Corey Lambrecht) holds Series A Preferred Stock with superior voting rights (1,000 to 1 over common stock), controlling over 79% of available stockholder votes.
• The company is facing a lawsuit from Liberty Safe and Security Products, Inc. for alleged trademark infringement related to the term "Freedom" in safe sales, federal false designation of origin, and unfair competition. Management believes the lawsuit is without merit but has initiated settlement discussions.
• Bank of America filed a complaint against the company and its subsidiaries on March 21, 2025, for breach of loan documents and other claims related to a $2 million master credit facility that expired on February 28, 2024, despite the company being current on payments.
• The company has experienced multiple Nasdaq non-compliance notices related to annual meeting requirements (regained), bid price (regained after reverse split), and timely filing of periodic reports (regained). As of February 19, 2025, it was non-compliant with the $2.5 million stockholders' equity requirement.
• The company completed a 1-for-9 reverse stock split on October 2, 2024, and a 1-for-25 reverse stock split on March 31, 2025.

Sentiment

Score: 3

Explanation: The document highlights significant financial distress, including a large accumulated deficit, material weaknesses in internal controls leading to restatements, ongoing Nasdaq non-compliance issues (especially stockholders' equity), and active lawsuits related to debt default and trademark infringement. While there are growth strategies and potential warrant exercise proceeds, the pervasive financial and operational challenges indicate a highly speculative and risky investment.

Positives

• Potential to receive up to $8,551,008 from warrant exercises, providing a potential source of capital.
• Strong brand identity focused on patriotism and security, which the company believes sets it apart from competitors.
• Product design and development emphasize advanced features and US-made steel, offering competitive value in the safe market.
• Focus on product performance with features like Double Plate Steel Door, Reinforced Door Edge, Double-Steel Door Casement, and Diamond-Embedded Armor Plate, enhancing security and durability.
• Established trusted brand with retailers and consumers for delivering reliable, secure safe solutions.
• Reported high customer satisfaction and loyalty, cultivated through distinctive products and service.
• Proven management team led by CEO Charles A. Ross, Jr., with a stated focus on profitability and quality.
• Multi-pronged growth strategy includes organic growth, targeted acquisitions, and brand licensing, aiming for long-term value.
• Expected positive impact on safe sales from increasing federal, state, and local governmental regulation of gun storage.
• Competitive advantage due to US-based safe manufacturing, mitigating supply chain uncertainties and tariff impacts faced by international competitors.
• Successful launch of American Rebel Light Beer, leveraging the existing brand identity into a new product category.
• CEO's public profile and social media presence are leveraged for marketing and brand adoption.
• Successful participation in trade shows has proven effective in introducing products and engaging customers.

Negatives

• The company has not been profitable since its inception in December 2014 and reported a significant accumulated deficit of $64,491,550 as of December 31, 2024.
• Identified material weaknesses in internal control over financial reporting for both December 31, 2024, and 2023, which led to restatements of financial statements, raising concerns about financial reliability.
• Significant dilution risk for existing stockholders due to past and potential future capital raises, as well as the immediate dilution for new investors in this offering.
• Management's Series A Preferred Stock grants them superior voting rights (1,000 to 1 over common stock), controlling over 79% of stockholder votes, which could hinder corporate governance and prevent a change in control.
• Ongoing legal proceedings include a trademark infringement lawsuit from Liberty Safe and a breach of loan documents complaint from Bank of America, indicating significant operational and financial disputes.
• The company is not in compliance with Nasdaq's $2.5 million stockholders' equity requirement as of February 19, 2025, risking delisting from the exchange.
• Dependence on a limited number of suppliers for manufacturing materials and third-party facilities for backpacks/apparel, posing risks of disruption and increased costs.
• Fluctuating prices and unstable supply of raw materials (e.g., steel, locks, fireboard) could negatively impact profitability if increased costs cannot be recouped.
• Inability to meet or approach the cost of manufacturing small quantities of custom-made goods in the US for backpacks and apparel, leading to reliance on overseas suppliers and exposure to tariff risks.
• The company is not selling any shares in this offering, meaning no direct capital infusion from the resale of shares by selling stockholders.
• New investors purchasing securities in this offering will experience immediate and substantial dilution of $1.46 per share.

Risks

• Inability to achieve or sustain profitability, given the company's history of net losses since inception and a large accumulated deficit.
• Material weaknesses in internal control over financial reporting and disclosure controls and procedures, which could impair the ability to produce timely and accurate financial statements, adversely affecting operating results, stock price, and access to capital markets.
• Restatement of previously issued consolidated financial statements, resulting in unanticipated costs and potentially affecting investor confidence and raising reputational issues.
• Financial results may be adversely affected by tariffs or border adjustment taxes or other import restrictions, particularly for products manufactured outside the U.S. like backpacks and apparel.
• Significant dilution of stockholders' voting power and ownership interest through efforts to obtain financing and satisfy obligations via additional share issuances.
• Concentration of voting control by executive officers and directors through super-voting preferred stock, which could delay or prevent a change in control.
• The board of directors has the authority to issue additional series of preferred stock with terms that may not be beneficial to common stockholders and could adversely affect stockholder voting power.
• Limited trading volume and potential volatility of the common stock price, which could adversely impact its value.
• Risk of short sellers driving down the market price of the common stock through negative commentary.
• Inability to maintain a listing of common stock on the Nasdaq Capital Market due to non-compliance with listing standards, such as the stockholders' equity requirement.
• Delisting from Nasdaq could significantly impair the ability to raise capital, reduce liquidity, and trigger defaults under existing material arrangements.
• Dependence on the continued supply of materials for manufacturing and third-party facilities for products, with risks of disruption and increased costs.
• Lack of long-term purchase commitments from customers, allowing them to cancel, reduce, or delay orders, which could reduce revenue and increase costs.
• Success depends on the ability to introduce new products that track customer preferences.
• Inability to protect intellectual property, potentially leading to loss of competitive advantage or substantial litigation costs.
• Dependence of revenues on demand for safes and personal security products, which is tied to the availability and regulation of ammunition and firearm storage.
• Adverse state or federal legislation or regulation that increases compliance costs or adverse findings by regulators.
• Changes in generally accepted accounting principles (U.S. GAAP) or in the legal, regulatory, and legislative environments.
• Deterioration in general or global economic, market, and political conditions.
• Inability to efficiently manage operations or achieve future operating results.
• Unavailability of funds for capital expenditures.
• Inability to recruit and hire key employees.
• Inability of management to effectively implement strategies and business plans.
• Adequacy of cash resources and working capital.

Future Outlook

American Rebel Holdings anticipates continued growth by focusing on organic expansion in existing markets, pursuing targeted strategic acquisitions to enhance product offerings and manufacturing capabilities, and expanding operations through brand licensing. The company expects increasing federal, state, and local gun storage regulations to positively impact safe sales. Management aims to enhance production by increasing daily quantities, improving operational availability, and reducing downtime, believing this will lead to increased market share. The company also anticipates generating additional revenues from licensing fees as the American Rebel brand grows in popularity.

Management Comments

• "We believe that when it comes to their homes, consumers place a premium on their security and privacy."
• "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."
• "We believe that safes are becoming a must-have appliance in a significant portion of households."
• "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 our Chief Executive Officer, Charles A. Andy Ross, who has written, recorded and performs a number of songs about the American spirit of independence."
• "American Rebel is boldly positioning itself as Americas Patriotic Brand in a time when national spirit and American values are being rekindled and redefined."
• "Theres a growing need to know how to protect yourself, your family, your neighbors or even a room full of total strangers, says American Rebels Chief Executive Officer Andy Ross. That need is in the forethought of every product we design."
• "The American Rebel brand strategy is similar to the successful Harley-Davidson Motorcycle philosophy, referenced in this quote from Richard F. Teerlink, Harleys chairman and former chief executive, Its not hardware; it is a lifestyle, an emotional attachment. Thats what we have to keep marketing to."
• "American Rebel Americas 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."
• "American Rebel Chief Executive Officer 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 with American Rebel Gun Safes."
• "We believe we are progressing toward long-term, sustainable growth, and our business has, and our future success will be driven by, the following competitive strengths."
• "We believe we made significant progress in 2024 in the largest growing segment of the safe industry, sales to first-time buyers."
• "We have right-sized our manufacturing operation and made many key design improvements."
• "We intend to opportunistically pursue the strategies described below to continue our upward trajectory and enhance stockholder value."
• "We believe that interest in safes increase, as well as in our complimentary concealed carry backpacks and apparel as a byproduct, when interest of the general population in firearms increase."
• "We believe that by enhancing our brand recognition, our market share might grow correspondingly."
• "Our management team reflects a balanced approach to tenure that will allow the board of directors to benefit from a mix of newer members who bring fresh perspectives and seasoned directors who bring continuity and a deep understanding of our complex business."
• "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."
• "Despite being current on all payments under the credit facility and actively working with the bank for a long-term solution to repay the credit facility, on July 25, 2024, Champion Safe Company received a notice of default and demand for payment from the bank."
• "The Company plans to defend the complaint, while continuing to work with Bank of American on a settlement."
• "While we are currently in a capital raise utilizing our Series C and D Preferred Stock, we do not believe that the terms of the offering are at a deep discount."

Industry Context

American Rebel Holdings operates in the personal security and self-defense product market, primarily focusing on gun safes and concealed carry apparel, alongside a new venture into light beer. The gun safe industry is experiencing rapid growth and innovation, partly driven by increasing state and federal regulations requiring safe firearm storage. The company positions itself as 'America's Patriotic Brand,' appealing to a demographic that values freedom and the Second Amendment, similar to Harley-Davidson's lifestyle branding. Its competitive advantage in the safe market stems from its U.S.-based manufacturing, which mitigates supply chain risks and tariff impacts faced by China-based competitors like Steelwater and Alpha-Guardian. The company's expansion into beverages and its CEO's public persona aim to leverage its brand identity beyond its core product lines.

Comparison to Industry Standards

• American Rebel's safes utilize "Four-Way Active Boltworks" and 12-gauge or heavier US-made steel, which they state is superior to the "Three-Way Boltworks" prevalent in many competitors' safes.
• Their "Double Plate Steel Door" design offers up to 16 times greater door strength and rigidity compared to thin metal bent doors, based on industry-standard strength tests.
• The "Double-Steel Door Casement" more than quadruples the strength of the door opening and provides a more secure and pry-resistant door mounting, based on industry-standard strength tests.
• The "Diamond-Embedded Armor Plate" uses industrial diamond bonded to tungsten steel alloy, which is harder than cobalt or carbide drills, designed to dull drill bits during break-in attempts.
• The company believes its products offer features and benefits of higher-end safes at mid-line price ranges, suggesting a competitive value proposition.
• The company's U.S.-based manufacturing for safes provides a competitive advantage over China-based manufacturers (e.g., Steelwater, Alpha-Guardian) who have struggled under import tariffs and supply chain uncertainties.

Corporate Governance

Legal Proceedings

• On July 23, 2024, the company received notice of a complaint filed by Liberty Safe and Security Products, Inc. in the U.S. District Court for the District of Utah, alleging trademark infringement (use of "Freedom" in safe sales), federal false designation of origin, unfair competition, and violation of Utah deceptive trade practices. The complaint has not been served, and management believes it is without merit but has initiated settlement discussions.
• On March 21, 2025, Bank of America filed a complaint in the Fourth Judicial District Court in Utah County, Utah, against the company and its subsidiaries (Champion Safe Company, Inc., American Rebel, Inc., Superior Safe Co., L.L.C., and Safe Guard Security Products LC). The complaint alleges four causes of action related to a $2 million master credit facility that expired on February 28, 2024: (i) Breach of the Loan Documents Champion Safe; (ii) Breach of the Loan Documents Guarantors; (iii) Breach of the Implied Covenant of Good Faith and Fair Dealing all parties; and (iv) Unjust Enrichment Champion Safe. The company plans to defend the complaint while seeking a settlement.

Related Party Transactions

• Three members of management (Charles A. Ross, Jr., Doug E. Grau, Corey Lambrecht) own 124,812 shares of Series A Preferred Stock, which have superior voting rights (1,000 to 1 over common stock), giving them over 79% of the available stockholder votes. These shares are convertible into common stock at a 500 to 1 ratio.
• On December 30, 2023, the company authorized the issuance of 18 shares of common stock to Mr. Ross and 10 shares to Mr. Grau under the 2021 LTIP (these shares have not been issued as of the date of the Annual Report).
• On November 20, 2023, the company issued Corey Lambrecht 25,000 shares of Series A Preferred Stock under the terms of his employment agreement.
• On November 11, 2024, the company authorized the issuance of 1,760 shares of common stock to Charles A. Ross, Jr., upon the conversion of 88 shares of Series A Convertible Preferred Stock.
• On December 29, 2024, the company authorized the issuance of 2,000 shares of common stock to Corey Lambrecht upon the conversion of 100 shares of Series A Convertible Preferred Stock.

Stakeholder Impact

• Shareholders: Will experience immediate and substantial dilution from this offering, face potential further dilution from future capital raises, and are subject to significant share price volatility. The concentration of voting power with management through preferred stock limits their influence. Risk of delisting from Nasdaq could severely impact liquidity and investment value.
• Creditors: The notice of default and lawsuit from Bank of America regarding a credit facility indicates a heightened risk for creditors, despite the company stating it is current on payments.
• Employees: While not directly mentioned, the company's ongoing financial losses, material weaknesses, and legal challenges could indirectly affect employee morale, job security, or future compensation.
• Customers: Potential for disruptions in product availability or quality if supply chain issues or financial instability impact manufacturing or distribution.
• Suppliers: Face risks related to the company's financial health, including potential delays or issues with payments, and are subject to the company's limited flexibility in changing suppliers.

Next Steps

• The company intends to use net proceeds from the April 2025 Private Placement for general corporate purposes and working capital.
• Management plans to continue implementing remediation plans for material weaknesses in internal control throughout fiscal year ending December 31, 2025.
• The company plans to defend the complaint filed by Bank of America while continuing to work on a settlement.
• The company will continue to monitor its stockholders' equity and consider options to evidence compliance with Nasdaq's Stockholders' Equity Requirement.
• If delisted from Nasdaq, the company intends to apply for listing on one of the OTC Markets.
• The company intends to opportunistically pursue organic growth, targeted strategic acquisitions, and brand licensing.
• The company is in the process of locating an alternative supplier for commercial volumes of backpacks and apparel.
• The company intends to expand distribution to sporting goods stores, farm and home stores, other independent retailers, and its online customer base upon securing additional funding and expanding manufacturing facilities.
• The company will continue efforts to enhance production by increasing daily production quantities through equipment acquisitions, expanded shifts, and process improvements.
• The company will direct a portion of marketing dollars to social media and leverage assets for cross-promotion.
• The company will occasionally purchase paid print advertising to support editorial and events.

Key Dates

Recommendation

Keywords

American Rebel Holdings, AREB, SEC Filing, S-1/A, Common Stock Resale, Selling Stockholders, Warrants, Private Placement, Gun Safes, Personal Security Products, Concealed Carry, Apparel, American Rebel Beer, Nasdaq Listing, Financial Reporting, Internal Controls, Litigation, Debt Default, Dilution, Corporate Governance, Risk Factors, Patriotic Brand, Firearms Storage