10-Q: American Rebel Holdings Q2 Loss Widens Amid Beer Growth, Nasdaq Risk

American Rebel Holdings reported a significantly wider net loss in Q2 2025, driven by substantial debt extinguishment and liability settlements, despite strong growth in its beverage segment and strategic expansions.

Summary

• Reported a net loss of $18,137,743 for the three months ended June 30, 2025, a 245% increase from $5,253,004 in the prior year period.
• Experienced a negative gross margin of $(31,373) for Q2 2025, compared to a positive gross margin of $30,655 in Q2 2024.
• Revenue for Q2 2025 decreased by 13% to $2,842,596 from $3,255,393 in Q2 2024, primarily due to slower sales in the legacy business and current market conditions.
• Incurred a significant loss on debt extinguishment of $11,817,991 and a loss on settlement of liability of $1,692,144 during Q2 2025.
• The beverage segment (American Rebel Light Beer) showed significant growth, increasing its percentage of total revenue to 3.5% in Q2 2025 from 0.7% in Q2 2024.
• Champion Safe Company reported a 30% year-over-year sales increase with Northwest Safe, a key retailer.
• American Rebel Light Beer launched in Mississippi with a record-breaking opening order and is now available in 12 states since September 2024.
• Reported strong sales and initial placement velocity for American Rebel Light Beer with independent retailers, driving 57% of total sales and 80% of its national distribution footprint from this channel.
• Secured over 1,100 new independent accounts for American Rebel Light Beer in the past five months, averaging over 200 new placements monthly.
• Achieved aggressive restocking rates at Total Wine & More locations, with May 2025 accounts averaging a 146% increase over initial orders by July 2025, and top 5 accounts surging to a 509% cumulative reorder rate.
• Received a Nasdaq notification on February 19, 2025, for non-compliance with the minimum stockholders' equity requirement ($2,500,000) and was granted an extension until August 18, 2025, to regain compliance.
• Management identified a material weakness in internal control over financial reporting due to inadequate management reviews and insufficient technical accounting competencies.
• The ability to continue as a going concern is dependent on raising additional capital and achieving profitability, with management believing sufficient funding can be secured through loans and equity offerings.
• Defaulted on a Bank of America line of credit, leading to a lawsuit and a forbearance agreement that expired on July 31, 2025, with $1,831,014.51 due as of that date.
• Raised $2.5 million through a private placement in April 2025 and secured a $5,470,000 secured promissory note from Streeterville Capital, LLC in June 2025, with $4,625,000 held as restricted cash.
• Doug Grau stepped down as President and Interim Principal Accounting Officer, with Darin Fielding appointed as Principal Accounting Officer and Corey Lambrecht assuming the additional role of President, effective July 1, 2025.

Sentiment

Score: 3

Explanation: The company faces severe financial challenges, including a significant increase in net loss, negative gross margin, a 'going concern' warning, Nasdaq non-compliance, and a default on a major line of credit. While the beverage segment shows promising growth and strategic expansions are underway, these positives are heavily overshadowed by the existential financial risks and operational weaknesses.

Positives

• American Rebel Light Beer achieved a record-breaking launch in Mississippi with Clark Beverage Group, accelerating its national rollout to 12 states since September 2024.
• The beverage segment's contribution to total revenue significantly increased to 3.5% in Q2 2025 from 0.7% in Q2 2024, indicating strong growth in this new business line.
• American Rebel Light Beer demonstrated strong sales velocity and initial placement with independent retailers, accounting for 57% of total sales and 80% of its national distribution footprint.
• Secured over 1,100 new independent accounts for American Rebel Light Beer in the past five months, averaging more than 200 new placements monthly.
• Reported aggressive restocking rates at Total Wine & More locations, with May 2025 accounts averaging a 146% increase over initial orders by July 2025, and top 5 accounts showing a 509% cumulative reorder rate.
• Champion Safe Company achieved a 30% year-over-year sales increase through its partnership with Northwest Safe, a respected industry retailer.
• Cash, cash equivalents, and restricted cash increased significantly to $5,082,212 at June 30, 2025, from $452,785 at June 30, 2024, primarily due to financing activities.
• Working capital deficit improved to $(4,637,940) at June 30, 2025, from $(8,940,228) at December 31, 2024.
• Successfully raised $2.5 million through a private placement in April 2025 and secured a $5,470,000 secured promissory note from Streeterville Capital, LLC in June 2025.
• Interest expense decreased by 59% in Q2 2025 compared to Q2 2024, and by 22% in H1 2025 compared to H1 2024, due to debt conversions and modifications.

Negatives

• Reported a significantly wider net loss of $18,137,743 for Q2 2025, a 245% increase from $5,253,004 in Q2 2024.
• Experienced a negative gross margin of $(31,373) for Q2 2025, compared to a positive gross margin of $30,655 in Q2 2024, indicating that cost of goods sold exceeded revenue.
• Revenue for Q2 2025 decreased by 13% year-over-year, and by 27% for H1 2025, primarily due to slower sales in the legacy safe business and challenging market conditions.
• Incurred a substantial loss on debt extinguishment of $11,817,991 in Q2 2025 and $12,317,785 in H1 2025, significantly impacting net loss.
• Recognized a loss on settlement of liability of $1,692,144 in Q2 2025 and $2,579,509 in H1 2025.
• The company's accumulated deficit grew to $(88,283,199) as of June 30, 2025, from $(65,086,200) at December 31, 2024.
• A 'going concern' warning was issued, indicating substantial doubt about the company's ability to continue operations without additional capital.
• Received a Nasdaq notification for non-compliance with the minimum stockholders' equity requirement and faces a deadline of August 18, 2025, to regain compliance.
• Management identified a material weakness in internal control over financial reporting due to inadequate management reviews and insufficient technical accounting competencies, leading to ineffective disclosure controls and procedures.
• Defaulted on a Bank of America line of credit, resulting in a lawsuit and an outstanding balance of $1,831,014.51 as of July 31, 2025, which was not paid by the forbearance deadline.
• Prior financial statements for Q2 2024 and H1 2024 should not be relied upon due to the dismissal of the previous auditor and subsequent re-audits, creating uncertainty regarding historical performance.

Risks

• Ability to maintain compliance with Nasdaq listing standards.
• Potential adverse effects of new tariffs on business and financial condition.
• Risk that future acquisitions and operations of new manufacturing facilities and/or sales organizations might prove unsuccessful.
• Inability to remediate identified material weaknesses in internal control over financial reporting and disclosure controls and procedures.
• Material adverse consequences from failure to timely file certain periodic reports with the SEC and prior restatements.
• Dependence on the ability to introduce new products that track customer preferences.
• Inability to protect intellectual property, potentially leading to competitive disadvantage or substantial litigation costs.
• Reliance on demand for safes and personal security products for firearms storage, which is affected by the availability and regulation of ammunition and firearm storage.
• Compromised operational capacity affecting the ability to meet demand for safes as the company integrates acquisitions.
• Shortages of components and materials, as well as supply chain disruptions, which may delay or reduce sales and increase costs.
• Lack of long-term purchase commitments from customers, and their ability to cancel, reduce, or delay orders.
• Inability to effectively meet shortand long-term obligations.
• Difficulty in evaluating business and future prospects due to limited corporate history, increasing investment risks.
• Inability to raise additional financing for working capital.
• Inability to generate sufficient revenue in targeted markets to support operations.
• Significant dilution resulting from financing activities.
• Actions and initiatives taken by both current and potential competitors.
• Inability to diversify operations.
• Changes in U.S. GAAP or in the legal, regulatory, and legislative environments.
• Deterioration in general global economic, market, and political conditions.
• Inability to efficiently manage operations.
• Inability to achieve future operating results.
• Unavailability of funds for capital expenditures.
• Inability of management to effectively implement strategies and business plans.

Future Outlook

We anticipate continued national rollout and market share capture for American Rebel Light Beer, aiming to become 'Americas Next Great Beverage Brand.' We expect to maintain some level of product development expenses for new products and future sales growth. We plan to capitalize on the 'reset season' for regional and national retail chain expansion for American Rebel Light Beer. We also expect to require additional funds for business development, acquisitions, marketing, and operational expenditures, and plan to raise capital through equity or debt offerings. We are working towards an amicable resolution with Bank of America and anticipate filing a new Reg. A+ offering in 2025.

Management Comments

• Andy Ross, CEO and Founder of American Rebel Holdings, stated, 'Mississippi embodies the heart and soul of American Rebel Light Beer faith, grit, patriotism, and pride. There’s no place in America where the words God-Fearing, Constitution-Loving, National Anthem-Singing, and Stand Your Ground ring louder or truer. When you crack open a cold American Rebel Light, you’re holding more than a beer – you’re holding a statement of identity. It’s a flag in a can.'
• Todd Porter, President of American Rebel Beverage, commented, 'We’re not just distributing a beer; we’re championing a movement. Clark Beverage Group gets it—they see the passion, the quality, and the patriotism behind American Rebel Light. Together, we’re bringing Mississippi a beer that’s as bold as they are.'
• Jeff Brasher, Vice President – Alcohol MS, Clark Beverage Group, said, 'Clark Beverage Group is honored to bring American Rebel Light Beer to Mississippi, and we’re excited to see it take off across the state!'
• Tom Mihalek, CEO of Champion Safe Company, stated, 'A six-figure, two-truckload opening order isn’t just a purchase—it’s a commitment to what Champion now stands for: precision, performance, and market readiness. The Seaworth deal isn’t just another dealer activation—it’s a strategic signal that leading dealers like Seaworth believe in what we’re building.'
• Jon Minder, Vice President of Sales & Marketing at Champion Safe, noted, 'Their decision to partner with us reinforces the value of our recent product enhancements, dealer-first approach, and unwavering commitment to American craftsmanship—qualities today’s customers truly demand.'
• Matt Hagan, four-time NHRA World Champion, remarked, 'This was a get-healthy weekend for us. We’ve been on the backside of great races all season. This time, everything clicked. Huge thanks to Tony Stewart, Dodge, and the entire crew for pushing through the challenges and putting me in position to win.'
• John Hall, Pro Stock Motorcycle rider, stated, 'Riding for American Rebel has elevated everything—from mindset to results. We’re not just showing up. We’re showing out. Rebel up!'
• Pamela Turner, National Account Manager for American Rebel Beverages, highlighted, 'Reset season is where shelf space gets decided—and American Rebel Light Beer enters with momentum, metrics, and market validation.'
• Andy Ross, CEO, on American Rebel Light Beer's market position: 'We didn’t hope American Rebel Light Beer would win—we launched it to dominate. We’re not riding trends. We’re leading a red-blooded revolution in American Beer Industry. Our mission is clear: become the #1 Domestic Light Beer in America period. And patriotic consumers aren’t just behind us—they’re demanding us.'

Industry Context

The company operates in the competitive beverage industry with its American Rebel Light Beer, leveraging a patriotic brand identity and grassroots marketing through motorsports and events to gain market share. In the safe and personal security product market, it is responding to increased demand driven by outdoor lifestyles, responsible firearm ownership, and regulated cannabis storage. The filing notes a general slowdown in sales volume for 'second amendment businesses' over the past twelve months, which aligns with the company's legacy business performance. The strategic timing of beverage distribution expansion into 'reset season' reflects an understanding of industry-specific retail cycles.

Comparison to Industry Standards

• The filing claims American Rebel Light Beer is 'Americas fastest-growing beer' and aims to be the '#1 Domestic Light Beer in America,' but does not provide specific comparative sales data or market share figures against named competitors or industry benchmarks to substantiate these claims.
• The 30% year-over-year sales growth for Champion Safe Co. with Northwest Safe is a positive indicator, but no industry average growth rates for the safe market or specific competitor performance are provided for direct comparison.
• The reported slowdown in sales volume for 'second amendment businesses' is a general industry trend mentioned, suggesting the company's legacy safe business performance is in line with broader market conditions, but no specific comparable companies or projects are detailed.

Management Changes

Corporate Governance

Legal Proceedings

• Liberty Safe and Security Products, Inc. filed a complaint on July 23, 2024, alleging trademark infringement and unfair competition related to the use of the term 'Freedom' in safe sales. Management believes the lawsuit is without merit and anticipates an amicable settlement.
• Bank of America filed a complaint against the Company on March 21, 2025, seeking no less than $1,906,743 due to an uncured default on a line of credit. A forbearance agreement was entered into on May 30, 2025, but the Company failed to make the final payment by the extended deadline of July 31, 2025, with $1,831,014.51 due as of that date.

Related Party Transactions

• Loans from officers (unsecured, non-interest-bearing demand notes) totaled approximately $455,462 outstanding as of June 30, 2025.
• A Director's Note with Lawrence Sinks for a principal amount of $400,000, plus $120,000 in accrued interest, remained outstanding as of June 30, 2025, past its September 30, 2024 due date.
• Compensation for CEO Charles A. Ross, Jr., former President Doug E. Grau, and COO Corey Lambrecht includes stock awards, with Series A preferred stock vesting on various dates.

Stakeholder Impact

• Shareholders face significant risks including potential delisting from Nasdaq, substantial dilution from ongoing capital raises and debt-to-equity conversions, and uncertainty regarding the company's ability to continue as a going concern.
• Creditors, particularly Bank of America, are impacted by the company's default on its line of credit and the ongoing legal proceedings, with other lenders facing high interest rates and potential conversion of debt to equity.
• Employees are affected by management changes, including the stepping down of Doug Grau and the appointment of Darin Fielding and Corey Lambrecht to new roles.
• Customers of American Rebel Light Beer benefit from expanded distribution and marketing efforts, increasing product availability and brand visibility.
• Customers of Champion Safe Company benefit from strategic dealer expansion and a focus on product quality and American-made craftsmanship.

Next Steps

• Regain compliance with Nasdaq's minimum stockholders' equity requirement by the August 18, 2025 deadline.
• Continue efforts to resolve the defaulted Bank of America line of credit through an amicable resolution.
• File a new Reg. A+ offering in 2025 to raise additional capital.
• Continue to develop and launch new products, including Biometrics Safes, 2A Lockers, Wall Safes, and an Economy Safe Line.
• Aggressively market safes and concealed carry product lines.
• Expand American Rebel Light Beer distribution, focusing on chain account development during 'reset season' for regional and national retail chains.
• Continue multi-channel marketing campaigns to amplify brand and investor awareness.
• Address and remediate the identified material weaknesses in internal control over financial reporting and disclosure controls and procedures.

Key Dates

Recommendation

The company is in a highly precarious financial position, evidenced by a 'going concern' warning, a significantly widening net loss, negative gross margins, and a default on a major bank loan. The Nasdaq non-compliance notice and the identified material weaknesses in internal controls further compound the risk of delisting and operational instability. While the American Rebel Light Beer segment shows promising growth and market penetration, these operational positives are severely overshadowed by the company's fundamental financial distress, high debt burden, and the likelihood of substantial future dilution. A seasoned investor would recognize these as critical red flags indicating a high probability of significant capital loss.

Keywords

American Rebel Holdings, AREB, Quarterly Report, SEC filing, financial results, net loss, revenue, gross margin, American Rebel Light Beer, Champion Safe Company, Nasdaq compliance, going concern, debt extinguishment, capital raise, distribution expansion, motorsports sponsorship, patriotic brand, internal controls, Bank of America default, Series D Preferred Stock, common stock conversion