S-1/A: American Rebel Holdings Files S-1/A for Share Resale Amidst Financial Challenges and Bank Default

American Rebel Holdings, Inc. has filed an S-1/A registration statement for the resale of up to 4,760,316 shares by selling stockholders, with the company not receiving direct proceeds from the sale, while grappling with ongoing net losses, material weaknesses in internal controls, and a defaulted credit facility with Bank of America.

Summary

• The filing is an Amendment No. 2 to Form S-1, primarily for the resale of up to 4,760,316 shares of common stock by existing selling stockholders.
• American Rebel Holdings, Inc. will not receive any proceeds from the sale of shares by the Selling Stockholders, but could receive up to approximately $8,551,008 if warrants are exercised.
• The company operates as a designer, manufacturer, and marketer of branded safes, personal security and self-defense products, apparel, and recently launched American Rebel Light Beer.
• As of December 31, 2024, the company had an accumulated deficit of $64,491,550 and has not been profitable since its inception in December 2014.
• Material weaknesses in internal control over financial reporting and disclosure controls were identified as of December 31, 2024, and 2023, leading to restatements of financial statements for 2023 and 2022.
• The company received a notice of default and demand for payment from Bank of America on July 25, 2024, regarding a $2 million credit facility that expired on February 28, 2024, despite being current on payments.
• A Forbearance Agreement was entered into with Bank of America on May 30, 2025, extending the forbearance period until June 30, 2025, with a $100,000 principal payment made and an option to extend for 30 days with an additional $100,000 payment.
• The company is also facing a trademark infringement lawsuit from Liberty Safe and Security Products, Inc., which management believes is without merit and anticipates an amicable settlement.
• Two reverse stock splits were effected: 1-for-9 on October 2, 2024, and 1-for-25 on March 31, 2025.
• A private placement closed on April 8, 2025, generating approximately $2.5 million in gross proceeds for the company, intended for general corporate purposes and working capital.
• New investors in this offering will experience immediate and substantial dilution, with a dilution of $1.46 per share based on an assumed offering price of $1.38 per share, compared to a pro forma as adjusted net tangible book value of ($0.08) per share.

Sentiment

Score: 3

Explanation: The company faces significant financial distress, evidenced by persistent net losses, a substantial accumulated deficit, and critical material weaknesses in internal controls. The ongoing legal dispute and default with Bank of America pose immediate liquidity and operational risks. While the company outlines growth strategies and competitive advantages in its product design and US manufacturing, these are overshadowed by the severe financial and governance challenges, including substantial dilution for new investors and concentrated voting power with management.

Positives

• The company has a powerful brand identity predicated on patriotism and security, aiming to be 'America's Patriotic Brand'.
• Products feature advanced security elements like Four-Way Active Boltworks, Double Plate Steel Doors, and Diamond-Embedded Armor Plate, offering higher-end features at mid-line price points.
• Management believes the gun safe industry is experiencing rapid growth and innovation, with increasing federal, state, and local regulation for safe storage expected to positively impact business.
• The company has a competitive advantage due to its safes being manufactured in the U.S., mitigating risks from import tariffs and supply chain disruptions affecting China-based competitors.
• American Rebel Light Beer, launched regionally in mid-2024, has received a 'very strong' initial response, capitalizing on brand licensing potential.
• The company has regained compliance with Nasdaq listing rules regarding annual meetings, bid price, and timely periodic report filings.

Negatives

• The company has not been profitable since its inception in December 2014 and had an accumulated deficit of $64,491,550 as of December 31, 2024.
• Material weaknesses in internal control over financial reporting and disclosure controls were identified for 2023 and 2024, leading to restatements of financial statements.
• The company received a notice of default and faces a lawsuit from Bank of America regarding a $2 million credit facility, indicating significant liquidity and debt management challenges.
• New investors will experience immediate and substantial dilution, with a dilution of $1.46 per share.
• The company's common stock may be affected by limited trading volume and price volatility.
• Management (CEO, President, COO) holds Series A Preferred Stock with superior voting rights (1,000 to 1), controlling over 79% of available stockholder votes, which could delay or prevent a change in control.
• The company is dependent on a limited number of suppliers for critical materials and manufacturing, posing risks of disruption and increased costs.
• Tariffs on goods from China and Mexico may affect financial results for backpack and apparel suppliers, and finding a suitable U.S. alternative is uncertain.
• The company's ability to maintain its Nasdaq listing is still at risk due to not meeting the Stockholders Equity Requirement, with an extension granted until August 18, 2025.

Risks

• Inability to achieve or sustain profitability, given a history of net losses and an accumulated deficit of $64,491,550 as of December 31, 2024.
• Failure to remediate identified material weaknesses in internal control over financial reporting and disclosure controls, which could impair the ability to produce timely and accurate financial statements and affect investor confidence.
• Adverse financial impact from tariffs or border adjustment taxes on products manufactured in China and Mexico.
• Significant dilution of stockholders' voting power and ownership interest through future issuances of additional shares or preferred stock, especially given the board's authority to issue preferred stock without stockholder approval.
• Concentration of control by executive officers and directors through super-voting Series A Preferred Stock (over 79% of votes), potentially delaying or preventing a change in control.
• Volatility and limited trading volume of common stock, which could adversely impact its market price.
• Potential delisting from the Nasdaq Capital Market if the company fails to meet listing requirements, particularly the Stockholders Equity Requirement, which could reduce liquidity and ability to raise capital.
• Substantial future sales of common stock by Selling Stockholders could cause the market price to decline and encourage short sales.
• Breach of covenants under debt or other financing agreements, including the Purchase Agreement, which could result in the issuance of additional shares, financial penalties, or default.
• Dependence on a limited number of suppliers for materials and manufacturing, leading to potential disruptions, delays, and increased costs.
• Inability to introduce new products that track customer preferences, impacting success.
• Failure to protect intellectual property could lead to loss of competitive advantage or substantial litigation costs.
• Dependence on the availability and regulation of ammunition and firearm storage, as a significant portion of revenues are derived from demand for safes and personal security products for firearms storage.
• Uncertainty regarding the outcome of current litigation, including the trademark infringement lawsuit and the Bank of America credit facility lawsuit.
• Inability to raise additional financing for working capital, especially for purchasing critical inventory.
• Shortages of components and materials, as well as supply chain disruptions, may delay or reduce sales and increase costs.
• Lack of long-term purchase commitments from customers, allowing them to cancel, reduce, or delay orders, which could reduce revenue and increase costs.
• Limited corporate history makes it difficult to evaluate the business and future prospects, increasing investment risks.
• Adverse state or federal legislation or regulation that increases compliance costs, or adverse findings by regulators.
• Changes in 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.
• Dependence of future success on the general economy.
• Adequacy of cash resources and working capital.

Future Outlook

The company aims to enhance its position as a premium designer, producer, and marketer of safes and personal security products through organic growth, targeted strategic acquisitions, and expanding operations via brand licensing. It anticipates positive impacts on safe sales from increasing state and federal regulations requiring firearm storage. The company expects to continue improving business operations, including production quantities and efficiency, and to leverage customer data for continuous improvements. Management believes the American Rebel brand has significant future licensing value.

Management Comments

• "We believe that when it comes to their homes, consumers place a premium on their security and privacy."
• "We believe our products are designed to safely store firearms, as well as store our customers priceless keepsakes, family heirlooms and treasured memories and other valuables, and we aim to make our products accessible at various price points for home and office use."
• "American Rebel is boldly positioning itself as America’s Patriotic Brand in a time when national spirit and American values are being rekindled and redefined."
• "There’s a growing need to know how to protect yourself, your family, your neighbors or even a room full of total strangers, says American Rebel’s Chief Executive Officer Andy Ross. That need is in the forethought of every product we design."
• "American Rebel America’s 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."
• "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."
• "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

The company operates in the personal security and self-defense product industry, with a primary focus on gun safes, a segment experiencing rapid growth and innovation. It also has a presence in apparel and has expanded into the beverage industry with American Rebel Light Beer. The increasing federal, state, and local governmental regulation of gun storage is seen as a positive driver for the safe business. The company positions itself as a patriotic lifestyle brand, similar to Harley-Davidson, aiming to build a community around American ideals. Competition in the North American safe industry is dominated by a few companies, with the company highlighting its U.S. manufacturing as a competitive advantage against China-based manufacturers affected by tariffs.

Comparison to Industry Standards

• The company's safes incorporate 'Four-Way Active Boltworks' and '12-gauge and heavier US-made steel,' which are presented as superior to the 'Three-Way Boltworks' prevalent in many competitors' safes and offer features not often available at its price point.
• The 'Double Plate Steel Door' and 'Double-Steel Door Casement' designs are claimed to offer up to 16 times greater door strength and rigidity and more than quadruple the strength of the door opening compared to industry standards, based on internal tests.
• The use of 'Diamond-Embedded Armor Plate' for drill resistance is highlighted as an advanced security feature.
• The company's U.S. manufacturing of safes provides a competitive advantage over China-based manufacturers like Steelwater and Alpha-Guardian, which have struggled under import tariffs, suggesting better supply chain stability and cost control in that specific product line.

Management Changes

Corporate Governance

Legal Proceedings

• On July 23, 2024, the company received notice of a complaint filed in the U.S. District Court for the District of Utah by Liberty Safe and Security Products, Inc., alleging trademark infringement (purported use of 'Freedom' in safe sales), federal false designation of origin and unfair competition, violation of Utah deceptive trade practices, Utah unfair competition, and damages. Management believes the lawsuit is without merit and has initiated settlement discussions.
• On March 21, 2025, Bank of America filed a complaint in the Fourth Judicial District Court in 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) alleging four causes of action related to a $2 million credit facility: (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. This follows a notice of default received on July 25, 2024, after the credit facility expired on February 28, 2024.
• On May 30, 2025, Champion and the company entered into a Forbearance Agreement with Bank of America, agreeing to forbear from exercising certain remedies until June 30, 2025, with a $100,000 principal payment made and an option to extend for 30 days with an additional $100,000 payment.

Related Party Transactions

• 124,812 shares of Series A Convertible Preferred Stock were issued to three members of management (Charles A. Ross, Jr., Doug E. Grau, and Corey Lambrecht), which have superior voting rights (1,000 to 1) over common stock, resulting in over 79% of the available stockholder votes.
• On November 20, 2023, Corey Lambrecht, the appointed Chief Operating Officer, was issued 25,000 shares of Series A Super Voting Convertible Preferred Stock under the terms of his employment agreement.
• On December 30, 2023, the company authorized the issuance of 18 shares of common stock to Mr. Ross (CEO) and 10 shares to Mr. Grau (President) under the 2021 LTIP (not yet issued as of the report date).
• 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 (Common Stockholders)**: Face immediate and substantial dilution from the offering, as the company's net tangible book value is negative and the offering price is significantly higher. Their voting power is significantly diluted by the super-voting Series A Preferred Stock held by management, limiting their influence on corporate actions. The ongoing financial losses, material weaknesses, and bank default pose significant risks to their investment value.
• **Selling Stockholders**: Are the direct beneficiaries of this offering, as they are reselling their shares and receiving all proceeds from the sale.
• **Employees**: The company's financial instability, including ongoing losses and debt issues, could impact job security or future compensation. Management's efforts to remediate internal control weaknesses and improve operations could affect employee roles and responsibilities.
• **Customers**: The company aims to improve customer satisfaction through high-quality products, timely delivery, and efficient customer service. Continued supply chain disruptions or financial difficulties could impact product availability or support.
• **Suppliers**: The company's dependence on a limited number of suppliers and fluctuating material prices could affect its ability to maintain consistent relationships or pay for supplies, potentially impacting supplier stability.
• **Creditors (e.g., Bank of America)**: The company is in default on a credit facility, leading to legal proceedings and a forbearance agreement, indicating a high risk for creditors and potential for further actions if obligations are not met.

Next Steps

• Continue to implement remediation plans for identified material weaknesses in internal control over financial reporting throughout the fiscal year ending December 31, 2025.
• Monitor stockholders' equity and consider further available options to evidence compliance with Nasdaq's Stockholders Equity Requirement by August 18, 2025.
• Pay all remaining unpaid principal, accrued interest, fees, attorneys' fees, and expenses owing under the Bank of America credit facility by June 30, 2025, or make an additional $100,000 payment by July 1, 2025, to extend the forbearance period to July 31, 2025.
• Continue settlement discussions with Liberty Safe and Security Products, Inc. regarding the trademark infringement lawsuit.
• Opportunistically pursue organic growth, targeted strategic acquisitions, and brand licensing to enhance market position.
• Increase daily production quantities through equipment acquisitions, expanded shifts, and process improvements.
• Expand distribution to sporting goods stores, farm and home stores, and other independent retailers, as well as online customer base, upon securing additional funding and expanding manufacturing facilities.
• Seek an alternative supplier for backpacks and apparel with capacity to produce commercial volumes in the United States.

Key Dates

Recommendation

Keywords

Safes, Personal Security Products, Firearms Storage, Concealed Carry, Apparel, SEC Filing, S-1/A, Stock Resale, Nasdaq, Corporate Governance, Risk Factors, Financial Reporting, Internal Controls, Litigation, Debt Default, Dilution, American Rebel, AREB, Light Beer