DEF 14C: American Rebel Holdings Stockholders Approve Reverse Stock Split to Maintain Nasdaq Listing

American Rebel Holdings' stockholders have approved a reverse stock split of up to 1-for-25 to increase the per-share trading price and maintain its Nasdaq listing.

Summary

• American Rebel Holdings, Inc. has received stockholder approval via written consent to implement a reverse stock split of its common stock at a ratio of up to 1-for-25.
• The primary reason for the reverse stock split is to increase the per-share trading price to maintain the company's listing on the Nasdaq Capital Market, which requires a minimum bid price of $1.00 per share.
• The reverse stock split will be implemented at the discretion of the Board of Directors within 12 months of the approval date.
• The action will become effective on or after March 31, 2025, which is 20 calendar days following the date American Rebel first mailed the Information Statement to its stockholders.
• The reverse stock split will not affect the par value of the common stock, and no fractional shares will be issued; instead, they will be rounded up to the nearest whole share.
• The voting and conversion rights of the Series A, C, and D Preferred Stock will remain unaffected by the reverse stock split.
• The company's officers and directors beneficially own a significant percentage of the common stock, with Charles A. Ross, Jr., Doug Grau, and Corey Lambrecht holding the largest portions.
• The reverse stock split is intended to constitute a reorganization within the meaning of Section 368 of the Code.

Sentiment

Score: 6

Explanation: The sentiment is neutral. While the reverse stock split is a necessary step to maintain the Nasdaq listing, it also carries risks and potential negative consequences. The document focuses on providing information rather than promoting a positive outlook.

Positives

• Maintaining the Nasdaq listing could improve investor confidence and access to capital.
• A higher stock price may improve the perception of the stock as an investment security.
• The reverse stock split could assist with future potential capital raises.
• A higher stock price may appeal to a broader range of investors.
• The reverse stock split may reduce stockholder transaction costs.

Negatives

• The market price of the common stock may decline after the reverse stock split due to factors outside the company's control.
• Delisting from the Nasdaq Capital Market may adversely affect the company's ability to raise additional financing.
• Delisting could negatively affect the value and liquidity of the common stock.
• The reverse stock split could be used by management to oppose a hostile takeover attempt or delay changes in control.

Risks

• The company may not be able to maintain a bid price over the minimum bid price requirement for continued listing on the Nasdaq Capital Market.
• Delisting from the Nasdaq Capital Market could lead to a limited availability of market quotations for the company's securities.
• The company could face significant adverse consequences if its common stock is quoted on the OTC Bulletin Board or in the pink sheets.
• The reverse stock split could make the accomplishment of a merger or similar transaction more difficult, even if it is beneficial to stockholders.

Future Outlook

The Board of Directors will determine the timing of the reverse stock split within 12 months, based on market conditions and what is most advantageous to the company and its stockholders. The Board also reserves the right to not proceed with the reverse stock split if it is no longer in the company's best interest.

Management Comments

• The Board believes it would not be in the best interests of our company and our stockholders to incur the costs of holding a special meeting.
• The Board has the maximum flexibility to react to current market conditions and to therefore achieve the purposes of the Reverse Stock Split, if implemented, and to act in the best interests of American Rebel and its stockholders.

Industry Context

Reverse stock splits are a relatively common strategy for companies facing delisting from exchanges due to low share prices. Many companies in similar situations, particularly smaller-cap firms, have employed this tactic to regain compliance with minimum bid price requirements.

Comparison to Industry Standards

• Many companies facing Nasdaq delisting have implemented reverse stock splits.
• The 1-for-25 ratio is within the typical range for reverse stock splits, although some companies have opted for more aggressive ratios.
• The decision to allow the board discretion over the timing and implementation of the split is also a common practice.

Stakeholder Impact

• Shareholders will see a reduction in the number of shares they hold, but their percentage ownership will remain the same (except for fractional shares).
• Employees with stock options or equity awards will see adjustments to the number of shares and exercise prices.
• The company's ability to raise capital and attract investors could be affected by the reverse stock split and its impact on the stock price.

Next Steps

• The Board of Directors will determine the timing of the filing of the amendment to the Articles of Incorporation to effectuate the Reverse Stock Split.
• American Rebel's transfer agent will act as exchange agent for purposes of implementing the exchange of stock certificates for record holders.
• Stockholders will be asked to surrender certificates representing pre-Reverse Stock Split shares in exchange for a book entry or certificates representing post-Reverse Stock Split shares.

Key Dates

Keywords

reverse stock split, Nasdaq, listing, common stock, American Rebel Holdings, stockholders, dilution