8-K: American Rebel Holdings Secures $135K Convertible Note

American Rebel Holdings, Inc. has entered into a Securities Purchase Agreement for a $135,000 convertible promissory note with GS Capital Partners, LLC, with a conversion price at 75% of the lowest trading price.

Summary

• American Rebel Holdings, Inc. entered into a Securities Purchase Agreement (SPA) with GS Capital Partners, LLC on July 31, 2026.
• The agreement involves a Convertible Promissory Note with an original principal amount of $135,000.
• The Note has an original issue discount of $13,500, resulting in net proceeds of $121,500 before transaction expenses.
• The Note matures on July 13, 2027, with principal payments in seven installments starting 181 days after the issue date.
• The Note is convertible into common stock at 75% of the lowest trading price in the five days prior to conversion.
• The company issued 59,000 shares of common stock as a commitment fee.
• Approximately 3,701,799 shares are reserved for potential conversion.
• On August 6, 2026, Silverback Capital Corporation requested 500,000 shares of Common Stock, valued at approximately $65,700.

Sentiment

Score: 3

Explanation: StockSavvy.ai views this as a negative development due to the dilutive nature of the convertible note and the significant discount at which it can be converted, indicating potential financial distress.

Positives

• Secured $121,500 in net proceeds from the convertible note issuance.
• Received a commitment fee in the form of 59,000 shares of common stock.

Negatives

• The convertible note carries a significant original issue discount of $13,500.
• The conversion price is set at a substantial discount (75% of the lowest trading price) to the common stock, indicating potential future dilution.
• The company issued 59,000 shares as a commitment fee, further diluting existing shareholders.
• The issuance of 500,000 shares to Silverback Capital Corporation on August 6, 2026, represents a significant equity issuance.

Risks

• Potential for significant dilution of common stock due to the convertible note's conversion terms.
• The company's reliance on debt financing, particularly with a discount, may suggest financial strain.
• The conversion price being tied to the lowest trading price could incentivize downward pressure on the stock price.
• Transaction-related expenses of approximately $5,000 will reduce net proceeds.

Future Outlook

The company has reserved approximately 3,701,799 shares for potential issuance upon conversion of the convertible note, indicating a future dilution event is possible depending on stock price performance.

Industry Context

StockSavvy.ai notes that the use of deeply discounted convertible notes is a common, albeit often dilutive, financing method for companies facing capital constraints or seeking to avoid more stringent equity offerings. This strategy can be a double-edged sword, providing immediate cash but potentially harming existing shareholders if the stock price does not recover.

Stakeholder Impact

• Shareholders: Potential for significant dilution of ownership and earnings per share due to the convertible note's terms and the issuance of commitment fee shares.
• Creditors: The company's reliance on this type of financing may indicate ongoing financial challenges, potentially impacting creditor confidence.
• Investors (GS Capital Partners): Potential for significant returns if the company's stock price increases, but also risk associated with the company's financial stability.

Next Steps

• Principal payments on the Note will commence 181 days after the issue date and continue for six months.
• The Note may be converted into shares of common stock at the discretion of the investor, subject to trading price conditions.
• The company has reserved shares for potential conversion.

Key Dates

Recommendation

The issuance of a convertible note with a deep discount (75% of the lowest trading price) and a significant original issue discount, coupled with the issuance of commitment shares, strongly suggests financial distress and a high likelihood of substantial future dilution. This is a negative signal for existing shareholders, warranting a sell recommendation.

Keywords

Convertible Note, Securities Purchase Agreement, Capital Raise, Equity Issuance, Dilution, Debt Financing, Common Stock