8-K: American Rebel Holdings Secures $155,250 Loan and Expands Beer Sales Online

American Rebel Holdings, Inc. announces a new loan agreement for $155,250 and the expansion of American Rebel Light Lager online sales to 40 US states.

Summary

• American Rebel Holdings, Inc. entered into a Securities Purchase Agreement with 1800 Diagonal Lending, LLC on February 10, 2025, securing a loan of $155,250.
• After deducting an original issue discount of $20,250 and fees of $6,000, the company received net proceeds of $129,000.
• The loan is subject to a repayment schedule of five payments, totaling $178,537.00, with the first payment of $89,268.50 due on August 15, 2025.
• Subsequent payments of $22,317.13 are due on the fifteenth of each month thereafter.
• In the event of default, the company is obligated to pay 150% of the outstanding principal plus accrued interest and default interest at 22% per annum.
• The lender has the option to convert the outstanding principal into restricted shares of common stock at a 25% discount to the market price, limited to 4.99% of the total outstanding common stock.
• The company authorized the issuance of 441,670 shares of common stock upon conversion of Series D Convertible Preferred Stock and 61,984 shares, valued at $75,000, to a lender for financing fees.
• On February 13, 2025, American Rebel announced that American Rebel Light Lager is now available for online purchase in 40 US states through a partnership with Bevstack.

Sentiment

Score: 5

Explanation: The announcement contains both positive and negative elements. The loan provides needed capital, and the expanded online sales are a positive development. However, the loan terms are unfavorable, and the potential for dilution exists. The company's financial statements are specifically excluded from the definition of SEC Documents due to the May 3, 2024 BF Borgers SEC action.

Positives

• The loan provides American Rebel Holdings with $129,000 in immediate working capital.
• The expansion of online beer sales to 40 states increases market reach and potential revenue streams.
• The conversion option for the lender is capped at 4.99% of the total outstanding common stock.
• The company has the right to prepay the note in full at any time with no prepayment penalty.

Negatives

• The loan carries a high effective interest rate due to the original issue discount and fees.
• A default triggers a significant penalty of 150% of the outstanding principal plus interest.
• The conversion of preferred stock and issuance of shares for fees dilutes existing shareholders' equity.
• The company's financial statements are specifically excluded from the definition of SEC Documents due to the May 3, 2024 BF Borgers SEC action.

Risks

• Failure to meet the loan repayment schedule could result in default and significant financial penalties.
• The conversion of the loan into common stock could dilute existing shareholders' equity.
• The company's reliance on a single lender for financing increases its vulnerability to changes in the lender's investment strategy.
• The company's financial statements are specifically excluded from the definition of SEC Documents due to the May 3, 2024 BF Borgers SEC action.
• The forward-looking statements regarding online beer sales are subject to risks and uncertainties, including consumer demand and logistical challenges.

Future Outlook

The company anticipates increased revenue through online beer sales and aims to expand its distribution network. The company also anticipates additional tranches of financing during the next twelve (12) months in the aggregate amount of up to $1,000,000.00 subject to further agreement by and between the Company and the Buyer

Management Comments

• American Rebel CEO Andy Ross stated that customers can now enjoy Americas Patriotic, God-Fearing, Constitution-Loving, National Anthem-Singing, Stand Your Ground Beer across 40 US states.
• Andy Ross also noted that potential investors can now try the beer, which is beneficial because people love our brand and what we stand for, but they also want to love the taste of our beer.

Industry Context

The expansion of online alcohol sales reflects a growing trend in the beverage industry, with companies leveraging e-commerce platforms to reach a wider customer base. The partnership with Bevstack aligns with this trend, providing American Rebel with access to a network of retailers and compliant shipping solutions.

Comparison to Industry Standards

• The loan terms, including the high interest rate and default penalties, are less favorable than those typically seen in traditional bank loans for established companies.
• The online sales strategy mirrors similar initiatives by craft breweries and larger beverage companies to capitalize on the growing e-commerce market.
• Companies like Boston Beer (Sam Adams) and Constellation Brands (Corona, Modelo) have also invested in direct-to-consumer sales channels.
• The potential for future financing of up to $1,000,000 is subject to further agreement by and between the Company and the Buyer.

Stakeholder Impact

• Shareholders may experience dilution if the lender converts the loan into common stock.
• Employees may benefit from the increased revenue and potential for growth.
• Customers will have increased access to American Rebel Light Lager through online sales.
• Suppliers may see increased demand for their products as the company expands its beer production and distribution.

Next Steps

• The company will use the loan proceeds for general working capital purposes.
• The company will continue to expand its online beer sales and distribution network.
• The company will need to manage its debt obligations and avoid default.
• The company will need to agree to further financing with the Buyer to receive additional tranches of financing during the next twelve (12) months in the aggregate amount of up to $1,000,000.00

Key Dates