8-K: Company Secures High-Cost Debt, Restructures Leadership Amidst Financial Reporting Challenges

The company announced new debt financing totaling $300,000, significant executive appointments, and strategic business expansions, while also disclosing issues with past financial statements.

Summary

• Secured two new promissory notes on July 7, 2025, totaling $354,200 in principal, which yielded net proceeds of $300,000 for general working capital.
• The 1800 Diagonal Lending, LLC note has a principal amount of $296,700 with a $38,700 Original Issue Discount, resulting in $250,000 net proceeds, and a total payback of $352,331.00 over ten payments starting January 15, 2026.
• The Boot Capital LLC note has a principal amount of $57,500 with a $7,500 Original Issue Discount, resulting in $50,000 net proceeds, and a total payback of $68,281.00 over ten payments starting January 15, 2026.
• Converted $12,317.97 of interest and $150,554.76 of principal from a December 13, 2024, OID Note into 11,790 and 159,994 shares of common stock, respectively, totaling 171,784 shares.
• Doug Grau stepped down as President and Interim Principal Accounting Officer effective July 1, 2025, to lead a new wholly-owned subsidiary, American Rebel Productions, LLC.
• Darin Fielding was appointed Interim Principal Accounting Officer effective July 1, 2025, and Corey Lambrecht assumed the additional role of President.
• Expanded American Rebel Light Beer distribution into Mississippi on July 10, 2025, through a partnership with Clark Beverage Group, Inc.

Sentiment

Score: 4

Explanation: While the company is actively pursuing strategic growth initiatives and expanding its product distribution, the reliance on high-cost debt financing with significant discounts, coupled with the critical issue of unaudited and unwarranteed past financial statements due to auditor problems, indicates underlying financial challenges and risks that outweigh the positive operational developments.

Positives

• Successfully secured $300,000 in new debt financing to support general working capital needs.
• Initiated a strategic expansion into content creation with the formation of American Rebel Productions, LLC, leveraging Doug Grau's extensive industry experience.
• Continued geographic expansion of American Rebel Light Beer distribution into Mississippi, broadening market reach.
• Appointed Darin Fielding, a licensed CPA with nearly 25 years of financial and accounting experience, as Interim Principal Accounting Officer, reflecting a planned leadership transition.

Negatives

• The new promissory notes include substantial Original Issue Discounts ($38,700 for the 1800 Note and $7,500 for the Boot Note), indicating high upfront costs for the company.
• The total payback amounts for the new notes ($352,331 for the 1800 Note on $250,000 net proceeds, and $68,281 for the Boot Note on $50,000 net proceeds) suggest very high effective interest rates.
• The company cannot represent or warrant the accuracy of its financial statements for the years ended December 31, 2022, and 2023, due to the SEC action against its former auditor, BF Borgers, necessitating a re-audit.
• The conversion of previous debt into 171,784 shares of common stock indicates ongoing reliance on dilutive financing methods for existing shareholders.

Risks

• Failure to make timely payments of principal or interest on the promissory notes could trigger an Event of Default, leading to accelerated repayment obligations at 150% of the outstanding amount plus default interest of 22% per annum.
• Breach of any material covenants, representations, or warranties contained in the notes or purchase agreements could result in an Event of Default.
• Risk of delisting of common stock from Nasdaq or other exchanges if listing requirements are not maintained.
• Failure to materially comply with the reporting requirements of the Securities Exchange Act of 1934.
• Cessation of operations or the company admitting it is generally unable to pay its debts as they become due.
• Failure to provide fully executed Irrevocable Transfer Agent Instructions by a successor transfer agent could lead to an Event of Default.
• Failure to deliver common stock upon conversion by the specified deadline due to willful action or inaction could incur a penalty of $2,000 per day.
• Failure to maintain the required reserved amount of shares for conversion could constitute an Event of Default.
• The company's financial statements for the years ended December 31, 2022, and 2023, are explicitly excluded from the definition of SEC Documents and cannot be warranted due to the BF Borgers SEC action, posing a significant risk to financial transparency and investor confidence.
• Forward-looking statements are subject to significant risks and uncertainties, and actual future performance may differ materially from expectations.

Future Outlook

The company plans to continue expanding its brand platform through content creation via American Rebel Productions, LLC, and further grow its American Rebel Light Beer distribution nationally. Management expects these strategic initiatives to enhance brand visibility, diversify revenue streams, and support the growth of core product lines.

Management Comments

• "We've always believed in the power of storytelling to build loyalty around the American Rebel brand. This planned new venture will allow me to continue working directly with Doug to leverage his exceptional talent and decades of experience in content creation." CEO Andy Ross on American Rebel Productions.
• "Together, we'll amplify our message, elevate our brand, and ensure that everything we produce resonates deeply with our customers and reinforces the patriotic values at the heart of American Rebel." CEO Andy Ross on American Rebel Productions.
• "We are thrilled to partner with Clark Beverage Group to bring American Rebel Light to Mississippi. Clark's history, reputation, and footprint across the Southeast make them an ideal partner as we continue executing our strategic national expansion." Todd Porter, President of American Rebel Beverage.
• "Mississippi embodies the spirit of our brand: proud tradition, deep-rooted values, and patriotic pride. Mississippi reflects everything our beer stands for — pride in tradition, strength of character, and love of country." Todd Porter, President of American Rebel Beverage.
• "I'm excited to bring American Rebel to the land of the Ole Miss Rebels — where pride runs deep, tradition lives loud, and freedom always finds a home. There's nothing more American than raising a cold one that stands for what matters. It's a cold can of conviction — America's Patriotic, God Fearing, Constitution Loving, National Anthem Singing, Stand Your Ground Beer — brewed for those who don't back down and won't blend in." CEO Andy Ross on Mississippi beer expansion.

Industry Context

The company's expansion into content creation aligns with a broader trend of brands seeking to deepen customer engagement and diversify revenue streams beyond core products, leveraging media for brand storytelling. The continued expansion of its light beer distribution reflects the competitive and dynamic nature of the beverage industry, where market penetration and strategic partnerships are crucial for growth. The emphasis on 'patriotic' branding positions the company within a niche market appealing to specific consumer values.

Management Changes

Legal Proceedings

• The company's financial statements for the years ended December 31, 2022, and 2023, are specifically excluded from the definition of SEC Documents, and the company cannot represent or warrant their accuracy due to the May 3, 2024, SEC action against its former auditor, BF Borgers. This implies a regulatory issue affecting past financial disclosures.

Stakeholder Impact

• Shareholders face potential dilution from debt-to-equity conversions and the high cost of new debt, which could negatively impact shareholder value. The lack of warranted financial statements for past periods creates uncertainty regarding the company's financial health.
• Employees may experience shifts in roles and responsibilities due to management restructuring, with new opportunities arising within the American Rebel Productions subsidiary.
• New creditors (1800 Diagonal Lending, LLC and Boot Capital LLC) benefit from strong protections in the loan agreements, including high default interest rates and conversion rights at a discount, which are favorable in a default scenario.
• Customers may benefit from expanded product availability through new distribution channels for American Rebel Light Beer and new content offerings from American Rebel Productions, aiming to enhance brand engagement.

Next Steps

• Repay the 1800 Note and Boot Note in ten monthly payments, with the first payment due January 15, 2026.
• Doug Grau is expected to serve as the initial President of the new American Rebel Productions, LLC upon its formal establishment.
• Continue developing original content through American Rebel Productions to amplify brand identity and connect with customers.
• Further national expansion of American Rebel Light Beer distribution.
• Re-audit of financial statements for the years ended December 31, 2022, and 2023.
• Maintain corporate existence and comply with 1934 Act reporting requirements.

Key Dates

Recommendation

Keywords

Debt Financing, Promissory Note, Capital Raise, Management Change, Distribution Expansion, Beverage Industry, Content Creation, SEC Filing, Financial Reporting, Accredited Investor, Original Issue Discount, Convertible Debt, Corporate Governance