DEF 14C: American Rebel Holdings Stockholders Approve Private Placements via Written Consent

American Rebel Holdings' majority stockholders approved several private placement transactions and the issuance of securities through a written consent, avoiding the need for a stockholder meeting.

Summary

• American Rebel Holdings, Inc. has received approval from a majority of its stockholders, holding Series A Convertible Preferred Stock and Common Stock, via written consent dated January 10, 2025, to proceed with private placement transactions and the issuance of securities.
• This action bypasses the need for a special meeting of stockholders, as permitted by Nevada law (NRS 78.320).
• The Information Statement, dated January 28, 2025, is being furnished to stockholders to inform them of this corporate action, as required by the Securities Exchange Act of 1934.
• The approval of these actions will become effective 20 calendar days after the Definitive Information Statement is mailed to stockholders, which is expected to occur on or about January 29, 2025.
• The private placements involve the issuance of common stock and convertible securities to various investors, including 1800 Diagonal Lending LLC, Kingdom Building, Inc., Coventry Enterprises, LLC, Berke Bakay, Bakay Capital Fund, LP, Alumni Capital LP, Osher Capital Partners, LLC, Horberg Enterprises LP, and Silverback Capital Corporation.
• These placements are subject to Nasdaq Listing Rule 5635, which requires stockholder approval for issuances exceeding 20% of outstanding common stock or voting power at a price below market value.
• The company is currently in default in its obligations to 1800 Diagonal.
• The company may issue a maximum of 10,628,515 shares of Common Stock pursuant to the Private Placements.

Sentiment

Score: 4

Explanation: The document highlights necessary approvals for financing but also reveals defaults and potentially dilutive financing terms, resulting in a negative sentiment.

Positives

• The company secured necessary approvals for private placements without incurring the costs and time associated with a stockholder meeting.
• The written consent satisfies Nasdaq requirements for stockholder approval, allowing the company to maintain its listing.
• The private placements provide the company with additional capital through various financing arrangements.

Negatives

• The company is currently in default in its obligations to 1800 Diagonal.
• The company has entered into several complex financing agreements with potentially dilutive effects on existing shareholders.
• The reliance on private placements may indicate difficulty in accessing more traditional forms of financing.

Risks

• The company's ongoing defaults on obligations to 1800 Diagonal Lending, LLC could trigger acceleration clauses and potentially significant financial penalties.
• The conversion of notes and preferred stock into common stock could dilute existing shareholders' equity.
• The company's ability to meet its financial obligations under these agreements is uncertain, especially given the default status with 1800 Diagonal.
• The company's continued reliance on private placements may signal underlying financial instability.

Future Outlook

The company intends to proceed with the private placements and issuance of securities, subject to the 20-day waiting period after the Information Statement is mailed and compliance with Nasdaq listing rules.

Management Comments

• The Board elected to utilize the Written Consent of the Voting Stockholders in order to significantly reduce the costs and management time involved in soliciting and obtaining proxies to approve the Actions, and in order to effectuate the Actions as early as possible.

Industry Context

Small-cap companies often rely on private placements to raise capital, especially when access to public markets is limited or cost-prohibitive. However, the terms of these placements can be complex and potentially dilutive to existing shareholders.

Comparison to Industry Standards

• The use of original issue discounts (OID) and high-interest rates in some of the promissory notes is common in distressed financing situations, but it also reflects the higher risk associated with lending to the company.
• The conversion features and warrants attached to some of the securities are typical incentives for investors in private placements, but they can also lead to significant dilution if the company's stock price increases.
• Compared to larger, more established companies, American Rebel's reliance on private placements highlights its limited access to traditional capital markets.

Stakeholder Impact

• Existing shareholders face potential dilution from the conversion of notes and preferred stock into common stock.
• The company's employees and customers may be affected by the company's financial stability and ability to execute its business plan.
• The investors in the private placements will receive securities with varying rights and potential returns, depending on the terms of the agreements.

Next Steps

• The company will proceed with the private placements and issuance of securities after the 20-day waiting period.
• The company will need to manage its obligations under the various financing agreements, including addressing the defaults with 1800 Diagonal.
• The company may need to seek stockholder approval for additional share issuances if the conversions exceed the 19.99% limit outlined in the Osher Capital Partners agreement.

Key Dates

Keywords

private placement, written consent, stockholder approval, securities issuance, Nasdaq Listing Rule 5635, common stock, convertible securities, American Rebel Holdings, financing, default