8-K: Nasdaq Delisting Threat Looms for American Rebel Holdings

American Rebel Holdings faces delisting from Nasdaq due to insufficient publicly held shares and a trading halt, despite a recent reverse stock split and a note-to-equity exchange.

Summary

• American Rebel Holdings (AREB) entered into a Purchase and Exchange Agreement on March 19, 2026, to exchange a $250,012.50 portion of a $11.7 million promissory note for 33,335 shares of its Series D Convertible Preferred Stock at $7.50 per share.
• The company received a notice from Nasdaq on March 23, 2026, indicating non-compliance with the minimum 500,000 publicly held shares requirement (Listing Rule 5550(a)(4)) following a 1-for-100 reverse stock split effective the same day.
• Nasdaq's staff determined the company has approximately 247,279 post-reverse-split publicly held shares, which serves as an additional basis for delisting.
• Trading in AREB securities was placed in a Qualification Halt by Nasdaq effective March 23, 2026, which will remain until the company regains compliance with the Publicly Held Shares requirement.
• The company also remains non-compliant with the minimum $1 bid price requirement.
• On March 23, 2026, holders of 9,000 shares of Series D Convertible Preferred Stock converted such shares into 45,000 shares of common stock, bringing the company's corrected current issued and outstanding common shares to 227,554.
• The company believes that a "stockholder-friendly fractional-share and round-lot top-up process" currently underway through DTC and CEDE & Co. should restore compliance with Nasdaq's publicly held shares requirement, citing historical distributions of 4,053,452 shares and 5,868,547 shares after previous reverse splits.

Sentiment

Score: 2

Explanation: StockSavvy.ai views this as highly negative due to the immediate trading halt and the additional Nasdaq delisting threat, indicating severe compliance issues and significant uncertainty for investors. While a debt-to-equity exchange occurred, it is overshadowed by the listing crisis.

Positives

• Secured an exchange agreement for a portion of a promissory note, converting debt into equity (Series D Convertible Preferred Stock).
• Management expresses belief that the ongoing fractional-share and round-lot top-up process should restore Nasdaq compliance, based on historical precedent.

Negatives

• Received an additional Nasdaq deficiency notice for failing to meet the minimum 500,000 publicly held shares requirement, adding to existing delisting concerns.
• Trading in the company's securities has been halted by Nasdaq, effective March 23, 2026, and will remain halted until compliance is regained.
• The company remains non-compliant with the minimum $1 bid price requirement.
• The company's reported post-reverse-split common shares outstanding (227,554) is lower than Nasdaq's cited publicly held shares (247,279), and both are significantly below the 500,000 minimum.
• No assurance regarding the outcome of the Nasdaq hearing, timing of trading resumption, or ability to maintain Nasdaq listing.

Risks

• Potential delisting of securities from The Nasdaq Stock Market due to non-compliance with minimum publicly held shares and minimum bid price requirements.
• Uncertainty regarding the timing and final amount of shares to be issued through the fractional-share and round-lot top-up process, and Nasdaq's acceptance of these shares for compliance purposes.
• Risk that the Nasdaq Hearings Panel may affirm delisting, impose conditions, or deny further relief.
• The Qualification Halt on trading may remain in place longer than anticipated, or trading may not resume on Nasdaq at all.
• The reverse stock split may not result in a sustained increase in the market price of the common stock or achieve intended regulatory benefits.
• Company may require additional capital, which may not be available on acceptable terms or at all.
• Potential for dilution from future equity issuances, conversions, warrant exercises, or other capital-raising transactions.
• Continued operational losses, liquidity and working-capital constraints, and going-concern risks.
• Volatility, reduced trading liquidity, regulatory scrutiny, processing delays, clearing/settlement issues, cybersecurity incidents, systems failures, litigation, claims, investigations, supply chain disruptions, and changes in market conditions.

Future Outlook

The company anticipates that the ongoing stockholder-friendly fractional-share and round-lot top-up process, associated with the reverse stock split, should lead to the issuance of additional shares and restore compliance with Nasdaq's minimum publicly held shares requirement. However, there is no assurance regarding the timing, final amount of such shares, or Nasdaq's acceptance of the company's position. The outcome of the Nasdaq Hearings Panel hearing, the timing of any trading resumption, or the company's ability to maintain its Nasdaq listing remain uncertain.

Management Comments

• "The Company emphasizes that the stockholder-friendly fractional-share and round-lot top-up process associated with the reverse stock split remains underway through DTC, CEDE & Co., brokerage firms and other nominees."
• "As previously described by the Company and its transfer agent, the broker election process occurs at the beneficial-holder level, after which the resulting round-up shares are expected to be issued and reflected through CEDE & Co. and beneficial holder accounts."
• "The Company believes that, when brokerage firms complete their elections with DTC and the related stockholder-friendly fractional-share and round-lot top-up shares are issued and reflected, the Company should be in compliance with the Nasdaq minimum publicly held shares requirement."
• "The Company intends to address the additional publicly held shares deficiency, the continued minimum bid price non-compliance language cited by Staff, the Qualification Halt, the pending DTC/CEDE election process and the Companys compliance plan at todays Nasdaq Hearings Panel hearing."

Industry Context

StockSavvy.ai notes that companies facing Nasdaq delisting often employ reverse stock splits to boost share price and meet minimum bid requirements. However, this filing highlights the additional challenge of meeting publicly held share requirements, which can be exacerbated by reverse splits if not managed carefully with mechanisms like fractional share rounding. The trading halt further isolates the stock from broader market trends, making it difficult for investors to react to news.

Comparison to Industry Standards

• StockSavvy.ai observes that while reverse stock splits are a common tactic for companies to regain compliance with Nasdaq's minimum bid price, the failure to meet the minimum publicly held shares requirement (500,000) after a 1-for-100 split, resulting in only 247,279 publicly held shares (Nasdaq's figure), indicates a significantly low public float compared to typical Nasdaq-listed companies.
• Many small-cap companies maintain public floats well into the millions of shares to ensure liquidity and broad investor participation.
• The company's reliance on a "stockholder-friendly fractional-share and round-lot top-up process" to bridge a gap of over 250,000 shares is an aggressive strategy, and its success is not guaranteed, especially given Nasdaq's strict adherence to listing rules.

Stakeholder Impact

• Shareholders face significant uncertainty regarding the company's Nasdaq listing, potential delisting, and the indefinite trading halt. Existing shareholders may experience reduced liquidity and potential loss of investment value.
• The investor (AJ Automotive Group Inc.) acquired Series D Convertible Preferred Stock through a debt-to-equity exchange, subject to a 4.99% beneficial ownership limitation and Rule 144 restrictions.
• Creditors (218 LLC) had a portion of their promissory note exchanged for equity, reducing the debt owed to them by the company.

Next Steps

• The company will continue with the stockholder-friendly fractional-share and round-lot top-up process through DTC, CEDE & Co., brokerage firms, and other nominees.
• The company intends to address the publicly held shares deficiency, minimum bid price non-compliance, and the Qualification Halt at the Nasdaq Hearings Panel hearing.
• The Purchaser may purchase additional portions of the promissory note up to an additional $250,000.00 within ninety days after the initial closing.

Key Dates

Recommendation

The company faces an immediate trading halt and an additional Nasdaq delisting threat due to severe non-compliance with listing rules, specifically the minimum publicly held shares requirement. While management expresses optimism about a "top-up process," there is no assurance of success or timely resolution. The indefinite trading halt eliminates liquidity, and the ongoing delisting process creates extreme uncertainty. These factors indicate a high probability of significant capital loss and make the stock highly speculative and unsuitable for most investors.

Keywords

Nasdaq delisting, reverse stock split, common stock, publicly held shares, trading halt, promissory note, debt-to-equity exchange, corporate governance, SEC filing, AREB, American Rebel Holdings