8-K: American Rebel Raises $3.19M, Executes 1-for-20 Reverse Split

American Rebel Holdings, Inc. secured $3.19 million through Series D Preferred Stock issuances and implemented a 1-for-20 reverse stock split with shareholder protections to maintain Nasdaq compliance.

Summary

• American Rebel Holdings, Inc. (AREB) entered into a Minority Membership Interest Purchase Agreement with RAEK Data, LLC on September 30, 2025.
• The Company issued 200,000 shares of Series D Convertible Preferred Stock to RAEK for $1,500,000, acquiring a 3.0% ownership interest (79,436 membership units) in RAEK.
• On October 1, 2025, the Company entered into a Securities Purchase Agreement with Horberg Enterprises LP, selling 100,000 shares of Series D Convertible Preferred Stock for $750,000.
• Proceeds from the Horberg agreement were used to repay a $500,000 OID Note held by Horberg, with the remaining $250,000 allocated for general working capital.
• Additional Series D Convertible Preferred Stock was issued: 20,000 shares for $150,000 in accrued fees to DeMint Law, PLLC, 70,000 shares for $525,000 cash to two accredited investors, and 35,000 shares for $262,500 cash to six accredited investors.
• In total, 425,000 shares of Series D Convertible Preferred Stock were issued for an aggregate value of $3,187,500.
• The Company announced a 1-for-20 reverse stock split, effective October 3, 2025, to proactively ensure compliance with Nasdaq's minimum bid price requirement.
• The reverse split includes shareholder protections: any shareholder holding at least 100 shares pre-split will hold at least 100 shares post-split, and fractional shares will be rounded up to the nearest whole share.
• As of October 1, 2025, 11,272,815 common shares were outstanding, expected to reduce to approximately 563,000 post-split before protections, then increase to at least 1,000,000 shares after round-up adjustments.
• The Company appeared before a Nasdaq panel on September 30, 2025, to address its stockholder equity deficiency, believing recent transactions have cured it.

Sentiment

Score: 6

Explanation: The Company successfully raised significant capital and proactively addressed Nasdaq compliance issues with a reverse stock split and shareholder protections. However, the underlying need for these actions (low stock price, equity deficiency) indicates ongoing challenges, and the Nasdaq panel decision remains a key uncertainty.

Positives

• Successfully raised $3,187,500 through Series D Convertible Preferred Stock issuances, strengthening the Company's financial position.
• Proactive implementation of a 1-for-20 reverse stock split to ensure ongoing Nasdaq minimum bid price compliance before a deficiency notice is issued.
• Inclusion of shareholder protections in the reverse split, such as 100-share rounding and fractional share round-ups, designed to mitigate negative impact on small investors.
• Management believes recent transactions have cured the stockholder equity deficiency, positioning the Company above the $2.5 million Nasdaq threshold.
• Repayment of a $500,000 OID Note, reducing debt.
• Investment in RAEK Data, LLC, a data technology company, potentially expanding the Company's strategic reach.

Negatives

• The necessity of a reverse stock split indicates the common stock price was below Nasdaq's minimum bid price requirement.
• The Company had a stockholder equity deficiency that was not cured prior to the expiration of the 180-day extension in August 2025, requiring a Nasdaq panel appearance.
• The effectiveness of shareholder protections in the reverse split (round-up provisions) depends on timely responses from brokerage platforms, with potential for some shareholders not receiving full benefits due to delays or non-responses.
• The creation of a 'temporary ultra-low float scenario' post-split is expected to increase price volatility.

Risks

• There is no assurance that the Nasdaq panel will concur with management's position regarding the cured stockholder equity deficiency or render a favorable ruling, potentially impacting the Company's listing status.
• The effectiveness of the reverse stock split's round-up provisions for beneficial shareholders depends on timely responses from brokerage platforms to CEDE/DTC notifications; delays or non-responses may result in some shareholders not receiving the full benefit of these protections.
• The temporary ultra-low float scenario created by the reverse split is expected to increase both trading activity and price volatility.
• General risks associated with forward-looking statements, including the ability to effectively execute the business plan and the success of promotional activities.

Future Outlook

The Company anticipates the 1-for-20 reverse stock split, effective October 3, 2025, will help maintain Nasdaq compliance by increasing the share price above the minimum bid requirement, strengthen liquidity, and facilitate broader retail brokerage deposits. Post-split, the number of common shares outstanding is expected to initially reduce to approximately 563,000, then increase to at least 1,000,000 shares after round-up protections, potentially creating a temporary ultra-low float scenario with increased trading activity and price volatility. Management believes recent debt conversions, minority equity investments, and equity issuances have positioned the Company above Nasdaq's $2.5 million minimum stockholder equity threshold, pending the Nasdaq panel's decision.

Management Comments

• American Rebel is taking proactive corporate action to ensure compliance before any notice is issued.
• By acting early, American Rebel demonstrates its commitment to maintaining its Nasdaq listing, shareholder protections, and an orderly trading market.
• The reverse stock split does not negatively change the economic value held by any shareholder. Each investor's overall ownership remains the same in dollar terms.
• Increasing the share price above Nasdaq's compliance threshold strengthens the Company's ability to maintain a robust, orderly, and liquid market for its shares, making it easier for investors to buy and sell on traditional trading platforms.
• Management believes these actions have collectively positioned the Company above the $2.5 million minimum stockholder equity threshold required by Nasdaq.

Industry Context

American Rebel Holdings, Inc., known as 'America's Patriotic Brand,' is a diversified lifestyle company with offerings in safes, beer, apparel, and accessories. The proactive reverse stock split and capital raises are common strategies employed by smaller public companies to maintain Nasdaq listing compliance and improve financial stability, especially when facing minimum bid price and equity deficiencies. The entry into the data technology sector via the RAEK investment suggests a strategic diversification beyond its core patriotic lifestyle products, potentially aiming to leverage first-party data for marketing and digital performance, a growing trend across various consumer-facing industries.

Legal Proceedings

• The Company's financial statements for the years ended December 31, 2022, and 2023 are subject to re-audit.
• There was a mention of the 'BF Borgers SEC action' in the Horberg Securities Purchase Agreement.

Related Party Transactions

• Horberg Enterprises LP, an accredited investor, purchased 100,000 shares of Series D Convertible Preferred Stock for $750,000, with $500,000 of the proceeds used to repay an existing OID Note held by Horberg dated July 31, 2025.

Stakeholder Impact

• Shareholders: The reverse stock split aims to maintain Nasdaq listing, which is generally positive for shareholders. Protections like 100-share rounding and fractional share round-ups are designed to benefit smaller shareholders, though their effectiveness depends on broker responses. The capital raise dilutes existing common shareholders but strengthens the company's financial position and addresses compliance issues.
• Creditors: Repayment of the $500,000 OID Note to Horberg Enterprises LP improves the Company's debt profile.
• Employees: General working capital infusion ($250,000 from Horberg) can support ongoing operations.

Next Steps

• Company to prepare and file a registration statement with the SEC on Form S-1 within 30 business days of September 30, 2025, to register the common stock underlying the Series D Convertible Preferred Stock issued to RAEK.
• Company to file a registration statement on Form S-1 with the SEC within thirty (30) business days of October 1, 2025, registering the resale of the Common Stock underlying the Preferred Stock issued to Horberg.
• Nasdaq panel decision regarding the stockholder equity deficiency is pending.
• Brokers and custodians will adjust accounts for the reverse stock split in coordination with CEDE/DTC, with round-up shares expected to be distributed within approximately 10 business days following the reverse split.

Key Dates

Recommendation

While the Company has taken proactive steps to address Nasdaq compliance through a reverse stock split and has successfully raised capital to improve its financial position and cure an equity deficiency, significant uncertainties remain. The outcome of the Nasdaq panel decision is critical, and the effectiveness of shareholder protections in the reverse split relies on external broker actions. The underlying business performance and long-term strategy for sustained growth are not fully detailed in this filing, making a 'hold' recommendation appropriate until further clarity on these factors and the Nasdaq ruling is available. The capital raise and debt repayment are positive, but the need for these actions highlights past challenges.

Keywords

American Rebel Holdings, AREB, Reverse Stock Split, Nasdaq Compliance, Series D Preferred Stock, Capital Raise, RAEK Data, Horberg Enterprises, Stockholder Equity, Data Technology, Patriotic Brand, Beer, Safes, Apparel