ITEM 1A. Risk Factors 11
ITEM 1B. Unresolved Staff Comments 32
ITEM 2. Properties 34
ITEM 3. Legal Proceedings 34
ITEM 4. Mine Safety Disclosures 34
PART II
ITEM 6. [Reserved] 39
ITEM 7A. Quantitative and Qualitative Disclosures About Market Risk 47
ITEM 8. Financial Statements and Supplementary Data 48
ITEM 9A. Controls and Procedures 49
ITEM 9B. Other Information 50
ITEM 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 52
PART III
ITEM 10. Directors, Executive Officers and Corporate Governance 53
ITEM 11. Executive Compensation 58
ITEM 14. Principal Accountant Fees and Services 67
PART IV
ITEM 15. Exhibits and Financial Statement Schedules 68
SIGNATURES 71
CERTIFICATIONS
FORWARD-LOOKING
STATEMENTS
This
Annual Report on Form 10-K (“Annual Report” or “Report”) contains forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange
Act of 1934, as amended (the “Exchange Act”). These forward-looking statements are not historical facts but rather are based
on current expectations, estimates and projections. We may use words such as “may,” “could,” “should,”
“anticipate,” “expect,” “project,” “position,” “intend,” “target,”
“plan,” “seek,” “believe,” “foresee,” “outlook,” “estimate” and
variations of these words and similar expressions to identify forward-looking statements. These statements are not guarantees of future
performance and are subject to certain risks, uncertainties and other factors, some of which are beyond our control, are difficult to
predict and could cause actual results to differ materially from those expressed or forecasted. These risks and uncertainties include
the following:
● our ability to efficiently manage and repay our debt obligations;
● the effect of new tariffs on our business and financial condition;
● the outcome of current litigation;
● significant dilution resulting from our financing activities:
● actions and initiatives taken by both current and potential competitors;
● our future operating results;
● our ability to diversify our operations;
● our inability to effectively meet our short- and long-term obligations;
● deterioration in general or global economic, market and political conditions;
● inability to efficiently manage our operations;
● inability to achieve future operating results;
● the unavailability of funds for capital expenditures;
● our ability to recruit and hire key employees;
● our business prospects;
● any contractual arrangements and relationships with third parties;
● the dependence of our future success on the general economy;
● any possible financings; and
● the adequacy of our cash resources and working capital.
Because
the factors referred to above could cause actual results or outcomes to differ materially from those expressed in any forward-looking
statements made by us, you should not place undue reliance on any such forward-looking statements. New factors emerge from time to time,
and their emergence is impossible for us to predict. In addition, we cannot assess the impact of each factor on our business or the extent
to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking
statements.
This
Annual Report should be read completely and with the understanding that actual future results may be materially different from what we
expect. The forward-looking statements included in this Annual Report are made as of the date of this Annual Report and should be evaluated
with consideration of any changes occurring after the date of this Annual Report. We will not update forward-looking statements even
though our situation may change in the future and we assume no obligation to update any forward-looking statements, whether as a result
of new information, future events or otherwise.
Except
as otherwise indicated by the context, references in this Annual Report to “Company,” “American Rebel Holdings,”
“American Rebel,” “we,” “us” and “our” are references to American Rebel Holdings, Inc.
and its operating subsidiaries, American Rebel Beverages, LLC, American Rebel, Inc., Champion Safe Co., Inc., Superior Safe, LLC, Safe
Guard Security Products, LLC and Champion Safe De Mexico, S.A. de C.V. All references to “USD” or United States Dollar refer
to the legal currency of the United States of America.
AVAILABLE
INFORMATION
We
file annual, quarterly and special reports and other information with the SEC. You can read these SEC filings and reports over the Internet
at the SEC’s website at www.sec.gov. You can also obtain copies of the documents at prescribed rates by writing to the Public Reference
Section of the SEC at 100 F Street, NE, Washington, DC 20549 on official business days between the hours of 10:00 am and 3:00 pm. Please
call the SEC at (800) SEC-0330 for further information on the operations of the public reference facilities. We will provide a copy of
our Annual Report to security holders, including audited financial statements, at no charge, upon receipt of a written request to us
at American Rebel Holdings, Inc., 5115 Maryland Way, Suite 303, Brentwood, Tennessee 37027.
PART
I
ITEM
1. BUSINESS
Recent
Development and Events
Introduction
of American Rebel Beer
On
August 9, 2023, the Company entered into a Master Brewing Agreement with Associated Brewing. Under the terms of the Brewing Agreement,
Associated Brewing has been appointed as the exclusive producer and seller of American Rebel branded spirits, with the initial product
being American Rebel Light Beer. American Rebel Light Beer launched regionally in mid-2024. The Company paid a setup fee and security
deposit to Associated Brewing. In late 2023, the Company established American Rebel Beverages, LLC as a wholly-owned subsidiary specifically
to hold the alcohol licenses and operate the beer business.
Corporate
Summary
American
Rebel Holdings, Inc. was incorporated on December 15, 2014, in the State of Nevada and is authorized to issue 600,000,000 shares of $0.001
par value common stock (“Common Stock”) and 10,000,000 shares of $0.001 par value preferred stock (“Preferred Stock”).
The
Company operates primarily as a designer, manufacturer and marketer of branded safes and personal security and self-defense products.
Additionally, the Company designs and produces branded apparel and accessories.
We
believe that when it comes to their homes, consumers place a premium on their security and privacy. Our products are designed to offer
our customers convenient, efficient and secure home and personal safes from a provider that they can trust. We are committed to offering
products of enduring quality that allow customers to keep their valuable belongings protected and to express their patriotism and style,
which is synonymous with the American Rebel brand.
Our
safes and personal security products are constructed primarily of U.S. made steel. We believe our products are designed to safely store
firearms, as well as store our customers’ priceless keepsakes, family heirlooms and treasured memories and other valuables, and
we aim to make our products accessible at various price points for home and office use. We believe our products are designed for safety,
quality, reliability, features and performance.
To
enhance the strength of our brand and drive product demand, our manufacturing facilities and various suppliers emphasize product quality
and mechanical development in order to improve the performance and affordability of our products while providing support to our distribution
channel and consumers. We seek to sell products that offer features and benefits of higher-end safes at mid-line price ranges.
We
believe that safes are becoming a ‘must-have appliance’ in a significant portion of households. We believe our current safes
provide safety, security, style and peace of mind at competitive prices.
In
addition to branded safes, we offer an assortment of personal security products as well as apparel and accessories for men and women
under the Company’s American Rebel brand. Our backpacks utilize what we believe is a distinctive sandwich-method concealment pocket,
which we refer to as Personal Protection Pocket, to hold firearms in place securely and safely. The concealment pockets on our Freedom
3.0 Concealed Carry Jackets incorporate a silent operation opening and closing with the use of a magnetic closure.
We
believe that we have the potential to continue to create a brand community presence around the core ideals and beliefs of America, in
part through our Chief Executive Officer, Charles A. “Andy” Ross, who has written, recorded and performs a number of songs
about the American spirit of independence. We believe our customers identify with the values expressed by our Chief Executive Officer
through the “American Rebel” brand.
Through
our growing network of dealers, we promote and sell our products in select regional retailers and local specialty safe, sporting goods,
hunting and firearms stores, as well as online, including our website.
American
Rebel is boldly positioning itself as “America’s Patriotic Brand” in a time when national spirit and American values
are being rekindled and redefined. American Rebel is an advocate for the 2nd Amendment and conveys a sense of responsibility to teach
and preach good common practices of gun ownership. American Rebel products keep you concealed and safe inside and outside the home. American
Rebel Safes protect your firearms and valuables from children, theft, fire and natural disasters inside the home; and American Rebel
Concealed Carry Products provide quick and easy access to your firearm utilizing American Rebel’s Proprietary Protection Pocket
in its backpacks and apparel outside the home. The initial company product releases embrace the “concealed carry lifestyle”
with a focus on concealed carry products, apparel, personal security and defense. “There’s a growing need to know how to
protect yourself, your family, your neighbors or even a room full of total strangers,” says American Rebel’s Chief Executive
Officer Andy Ross. “That need is in the forethought of every product we design.”
The
“concealed carry lifestyle” refers to a set of products and a set of ideas around the emotional decision to carry a gun everywhere
you go. The American Rebel brand strategy is similar to the successful Harley-Davidson Motorcycle philosophy, referenced in this quote
from Richard F. Teerlink, Harley’s chairman and former chief executive, “It’s not hardware; it is a lifestyle, an emotional
attachment. That’s what we have to keep marketing to.” As an American icon, Harley has come to symbolize freedom, rugged
individualism, excitement and a sense of “bad boy rebellion.” American Rebel – America’s Patriotic Brand has
significant potential for branded products as a lifestyle brand. Its innovative Concealed Carry Product line and Safe line serve a large
and growing market segment; but it is important to note we have product opportunities beyond Concealed Carry Products and Safes.
American
Rebel Safes
Keeping
your guns in a location only appropriate trusted members of the household can access should be one of the top priorities for every responsible
gun owner. Whenever a new firearm is purchased, the owner should look for a way to store and secure it. Storing the firearm in a gun
safe will prevent it from being misused by young household members, and it will prevent it from being stolen in a burglary or damaged
in a fire or natural disaster. Gun safes may seem pricy at first glance, but once the consumer is educated on their role to protect expensive
firearms and other valuables such as jewelry and important documents, the price is justified.
American
Rebel produces large floor safes in a variety of sizes as well as small portable keyed safes. Additional opportunities exist for the
Company to develop Wall Safes and Handgun Boxes.
Reasons
gun owners should own a gun safe:
A
gun safe is the best investment a gun owner can make because the safe can protect guns from thieves, fire, water, or accidents. Bills
or ballot measures to require safe storage have been discussed in Delaware, Washington, Oregon, Missouri and Virginia; and various laws
are on the books in California and Massachusetts. Even a figure as staunchly pro-gun as Texas’s Republican lieutenant governor,
Dan Patrick, called on gun-owning parents to lock up their weapons after the Santa Fe shooting. The gun safe industry is experiencing
rapid growth and innovation. American Rebel Chief Executive Officer Andy Ross and the rest of the American Rebel team are committed to
fulfilling the opportunity in the gun safe market and filling the identified void with American Rebel Gun Safes.
Our
Competitive Strengths
We
believe we are progressing toward long-term, sustainable growth, and our business has, and our future success will be driven by, the
following competitive strengths:
●
Powerful Brand Identity – we believe we have developed a distinctive brand that sets us apart from our competitors. This has contributed
significantly to the success of our business. Our brand is predicated on patriotism and quintessential American character: protecting
our loved ones. We strive to equip our safes with technologically advanced features that offer customers advanced security to provide
the peace of mind they need. Maintaining, protecting and enhancing the “American Rebel” brand is critical to expanding our
loyal enthusiasts base, network of dealers and other partners. Through our branded apparel and accessories, we seek to further enhance
our connection with the American Rebel community and share the values of patriotism and safety for which our Company stands for. We strive
to continue to meet their need for our safes and our success will depend largely on our ability to maintain customer trust, become a
gun safe storage leader and continue to provide high-quality safes.
●
Product Design and Development – our current safe model relies on time-tested features, such as Four-Way Active Boltworks, pinning
the door shut on all four sides (compared to Three-Way Bolt works, which is prevalent in many of our competitors’ safes), and benefits
that would not often be available in our price point, including 12-gauge and heavier US-made steel. The sleek exterior of our safes has
garnered attention and earned the moniker from our dealers as the “safe with an attitude.” When we set out to enter the safe
market, we wanted to offer a safe that we would want to buy, one that would get our attention and provide excellent value for the cost.
●
Focus on Product Performance - since the introduction of our first safes, we have maintained a singular focus on creating a full range
of safe, quality, reliable safes that were designed to help our customers keep their family and valuables safe at all times. We incorporate
advanced features into our safes that are designed to improve strength and durability. Key elements of some of our current model safes’
performance include:
Double
Plate Steel Door - 4 1⁄2” Thick
Reinforced
Door Edge – 7/16” Thick
Double-Steel
Door Casement
Steel
Walls – 11-Gauge
Diameter
Door Bolts – 1 1⁄4” Thick
Four-Way
Active Boltworks
Diamond-Embedded
Armor Plate
*
Double Plate Steel Door is formed from two U.S.-made steel plates with fire insulation sandwiched inside. Thicker steel is placed on
the outside of the door while the inner steel provides additional door rigidity and attachment for the locking mechanism and bolt works.
The door edge is reinforced with up to four layers of laminated steel. Pursuant to industry-standard strength tests performed, this exclusive
design offers up to 16 times greater door strength and rigidity than the “thin metal bent to look thick” doors.
*
Double-Steel Door Casement is formed from two or more layers of steel and is welded around the perimeter of the door opening. Pursuant
to industry-standard strength tests performed, it more than quadruples the strength of the door opening and provides a more secure and
pry-resistant door mounting. We install a Double-Steel Door CasementTM on our safes. We believe the reinforced door casement feature
provides important security as the safe door is often a target for break-in attempts.
*
Diamond-Embedded Armor Plate Industrial diamond is bonded to a tungsten steel alloy hard plate. Diamond is harder than either a cobalt
or carbide drill. If drilling is attempted the diamond removes the cutting edge from the drill, thus dulling the drill bit to where it
will not cut.
●
Trusted Brand - We believe that we have developed a trusted brand with both retailers and consumers for delivering reliable, secure safe
solutions.
●
Customer Satisfaction - We believe we have established a reputation for delivering high-quality safes and personal security products
in a timely manner, in accordance with regulatory requirements and our retailers’ delivery requirements and supporting our products
with a consistent merchandising and marketing message. We believe that our high level of service, combined with strong consumer demand
for our products and our focused distribution strategy, produces substantial customer satisfaction and loyalty. We believe we have cultivated
an emotional connection with the brand which symbolizes a lifestyle of freedom, rugged individualism, excitement and a sense of bad boy
rebellion.
●
Proven Management Team - Our founder and Chief Executive Officer, Charles A. Ross, Jr., has led the expansion and focus on the select
product line we offer today. We believe that Mr. Ross had an immediate and positive impact on our brand, products, team members, and
customers. Under Mr. Ross’s leadership, we believe that we have built a strong brand and strengthened the management team. We are
refocusing on the profitability of our products, reinforcing the quality of safes to engage customers and drive sales. We believe our
management team possesses an appropriate mix of skills, broad range of professional experience, and leadership designed to drive board
performance and properly oversee the interests of the Company, including our long-term corporate strategy. Our management team reflects
a balanced approach to tenure that will allow the board of directors to benefit from a mix of newer members who bring fresh perspectives
and seasoned directors who bring continuity and a deep understanding of our complex business.
Our
Growth Strategy
Our
goal is to enhance our position as a designer, producer and marketer of premium safes and personal security products. We have established
plans to grow our business by focusing on three key areas: (1) organic growth and expansion in existing markets; (2) targeted strategic
acquisitions that increase our on-premise and online product offerings, distributor and retail footprint and/or have the ability to increase
and improve our manufacturing capabilities and output, and (3) expanding the scope of our operations through brand licensing.
We
have developed what we believe is a multi-pronged growth strategy, as described below, to help us capitalize on a sizable opportunity.
Through methodical sales and marketing efforts, we believe we have implemented several key initiatives we can use to grow our business
more effectively. We believe we made significant progress in 2024 in the largest growing segment of the safe industry, sales to first-time
buyers. We have right-sized our manufacturing operation and made many key design improvements. We intend to opportunistically pursue
the strategies described below to continue our upward trajectory and enhance stockholder value. Key elements of our strategy to achieve
this goal are as follows:
Organic
Growth and Expansion in Existing Markets - Build our Core Business
The
cornerstone of our business has historically been our safe product offerings. We are focused on continuing to develop our home, office
and personal safe product lines. We are investing in adding what we believe are distinctive and advanced technological solutions for
our safes and protective product lines.
We
are working to increase floor space dedicated to our safes and strengthen our online presence in order to expand our reach to new enthusiasts
and build our devoted American Rebel community. We intend to continue to endeavor to create and provide retailers and customers with
what we believe are responsible, safe, reliable and stylish products, and we expect to concentrate on tailoring our supply and distribution
logistics in response to the specific demands of our customers.
Additionally,
our Concealed Carry Product line and Safe line serve a large market segment. We believe that interest in safes increase, as well as in
our complimentary concealed carry backpacks and apparel as a byproduct, when interest of the general population in firearms increase.
In addition, certain states (such as Massachusetts, California, New York and Connecticut) are starting to legislate new storage requirements
in respect of firearms, which is expected to have a positive impact on the sale of safes.
We
continue to strive to strengthen our relationships and our brand awareness with our current distributors, dealers, manufacturers, specialty
retailers and consumers and to attract other distributors, dealers, and retailers. We believe that the success of our efforts depends
on the distinctive features, quality, and performance of our products; continued manufacturing capabilities and meeting demand for our
safes; the effectiveness of our marketing and merchandising programs; and the dedicated customer support.
In
addition, we seek to improve customer satisfaction and loyalty by offering distinctive, high-quality products on a timely and cost-attractive
basis and by offering efficient customer service. We regard the features, quality, and performance of our products as the most important
components of our customer satisfaction and loyalty efforts, but we also rely on customer service and support for growing our business.
Furthermore,
we intend to continue improving our business operations, including research and development, component sourcing, production processes,
marketing programs, and customer support. Thus, we are continuing our efforts to enhance our production by increasing daily production
quantities through equipment acquisitions, expanded shifts and process improvements, increased operational availability of our equipment,
reduced equipment down times, and increased overall efficiency.
We
believe that by enhancing our brand recognition, our market share might grow correspondingly. Industry sources estimate that 70 million
to 80 million people in the United States own an aggregate of more than 400 million firearms, creating a large potential market for our
safes and personal security products. We are focusing on the premium segment of the market through the quality, distinctiveness, and
performance of our products; the effectiveness of our marketing and merchandising efforts; and the attractiveness of our competitive
pricing strategies.
Targeted
Strategic Acquisitions for Long-term Growth
We
are consistently evaluating and considering acquisition opportunities that fit our overall growth strategy as part of our corporate mission
to accelerate long-term value for our stockholders and create integrated value chains.
Expanding
Scope of Operations Activities through Brand Licensing
We
continually seek to target new consumer segments for our safes. As we believe that safes are becoming a must-have household appliance,
we strive to establish authenticity by selling our products to additional groups, and to expand our direct-to-consumer presence through
our website and our showroom currently in Lenexa, Kansas.
Further,
we believe that American Rebel has significant potential for branded products as a lifestyle brand. As the American Rebel Brand continues
to grow in popularity, we anticipate generating additional revenues from licensing fees earned from third parties who wish to engage
the American Rebel community. While the Company does not currently generate material revenues from licensing fees, our management team
believes the American Rebel brand name may in the future have significant licensing value to third parties that seek the American Rebel
name to brand their products to market to the American Rebel target demographic. For example, a tool manufacturer that wants to pursue
an alternative marketing plan for a different look and feel could license the American Rebel brand name for their line of tools and market
their tools under our distinct brand. This licensee would benefit from the strong American Rebel brand with their second line of American
Rebel branded tools as they would continue to sell both of the lines of tools. Conversely, American Rebel could potentially benefit as
a licensee of products. If American Rebel determines a third party has designed, engineered, and manufactured a product that would be
a strong addition to the American Rebel catalog of products, American Rebel could license that product from the third-party and sell
the licensed product under the American Rebel brand.
If
creating a new product is the best path to growing the business, we will create a new product. American Rebel Light Beer capitalizes
on the American Rebel brand and presents an exceptional product. American Rebel Light is a Premium Domestic Light Lager Beer –
All Natural, Crisp, Clean and Bold Taste with a Lighter Feel. With approximately 100 calories, 3.2 carbohydrates, and 4.3% alcoholic
content per 12 oz serving, American Rebel Light Beer delivers a lighter option for those who love great beer but prefer a more balanced
lifestyle. It’s all natural with no added supplements and importantly does not use corn, rice, or other sweeteners typically found
in mass produced beers. Initial response to America’s Patriotic, God-Fearing, Constitution-Loving, National Anthem-Singing, Stand
Your Ground Beer has been very strong.
Our
website addresses are www.americanrebel.com, www.championsafe.com, www.superiorsafe.com and www.americanrebelbeer.com. Information available
on our websites is not incorporated by reference in and is not deemed a part of this Annual Report, Form 10-K.
Competition
The
North American safe industry is dominated by a small number of companies. We compete primarily on the quality, safety, reliability, features,
performance, brand awareness, and price of our products. Our primary competitors include companies such as Liberty Safe, Fort Knox Security
Products, American Security, Sturdy Safe Company, Homeland Security Safes, SentrySafe and as well as certain other domestic manufacturers,
as well as certain China-based manufactured safes. Safes manufactured in China, including Steelwater and Alpha-Guardian, have struggled
under the import tariffs initiated under the administration of U.S President Donald Trump. We believe that given the current substantial
uncertainty related to the supply chain and delivery of international goods, we have a competitive advantage because our safes are not
manufactured overseas.
Intellectual
Property
Our
commercial success depends in part on our ability to obtain and maintain intellectual property protection for our brand and technology,
defend and enforce our intellectual property rights, preserve the confidentiality of our trade secrets, operate our business without
infringing, misappropriating or otherwise violating the intellectual property or proprietary rights of third parties and prevent third
parties from infringing, misappropriating or otherwise violating our intellectual property rights. We rely on a combination of patent,
copyright and trade secret laws in the United States to protect our proprietary technology. We rely on a number of United States registered,
pending and common law trademarks to protect our brand “American Rebel”.
On
May 29, 2018, US Patent No. 9,984,552, Firearm Detecting Luggage, was issued to us. The term of the patent is 20 years from the issuance
date. In addition to our patent, we rely upon unpatented trade secrets and know-how and continuing technological development and maintain
our competitive position. Trade secrets and know-how, however, can be difficult to protect. We seek to protect our proprietary information,
in part, by entering into confidentiality and proprietary rights agreements with our employees and independent contractors.
Regulation
The
storage of firearms and ammunition is subject to increasing federal, state and local governmental laws. While the current legislative
climate does not appear to seek to limit possession of firearms, there is apparent momentum to require safe storage of firearms and ammunition.
Although our safes, which are the primary driver of our sales and revenues, are designed to protect any valuables, a significant number
of our safes’ end users have traditionally been gun enthusiasts, collectors, hunters, sportsmen and competitive shooters. Therefore,
we expect the increasing federal, state and local governmental regulation of gun storage to have a materially positive effect on our
business.
Our
Customers
We
primarily market and sell our products to safe-only specialty stores and independent gun stores nationwide. We sell our products online
to individuals desiring home, personal and office protection, as well as to recreational shooters and hunters. Our customers choose us
for a number of reasons, including the breadth and availability of the products we offer, our extensive expertise, and the quality of
our customer service.
We
believe the nature of our solutions and our high-touch customer service model strengthens relationships, builds loyalty and drives repeat
business as our customers’ businesses expand. In addition, we feel as if our premium product lines and comprehensive product portfolio
position us well to meet our customers’ needs. Furthermore, we fully anticipate that we will be able to leverage all of the data
that we are collecting from our existing customer base to make continuous improvements to our offerings and better serve our current
and new customers in the future.
We
intend to expand our distribution to sporting goods stores, farm and home stores, other independent retailers as well as our online customer
base upon securing additional funding and expanding our manufacturing facilities.
Suppliers
We
are dependent on the continued supply of materials for the manufacturing of our safes, as well as the continued supply and manufacturing
of backpacks and apparel at third-party facilities locations, which are critical to our success. Any event that causes a disruption of
the operation of these facilities for even a relatively short period of time would adversely affect our ability to ship and deliver our
safes and other products and to provide service to our customers. We have previously experienced, including during the first months after
the spread of the COVID-19 pandemic, and may in the future experience, launch and production ramp up delays for our products as a result
of disruption at our suppliers and our suppliers’ manufacturing partners. Additionally, we have to date fully qualified only a
very limited number of such suppliers and have limited flexibility in changing suppliers. Any disruption in the supply of materials for
our branded safes from our suppliers could limit our sales.
Furthermore,
the cost of safes depends in part upon the prices and availability of raw manufacturing materials such as steel, locks, fireboard, hinges,
pins and other metals. The prices for these materials fluctuate and their available supply may be unstable, depending on market conditions
and global demand for these materials, including as a result of increased global production of electric vehicles and energy storage products.
Any reduced availability of these materials may impact our access to these parts and any increases in their prices may reduce our profitability
if we cannot recoup the increased costs through increased safe prices. Moreover, any such attempts to increase product prices may harm
our brand, prospects and operating results.
We
currently rely on third-party suppliers to ship our products to our customers. We have found that dedicated truckloads from our warehouse
to our dealers reduce freight damage and provide the overall best shipping solution. Several companies offer dedicated truckload shipping.
Increased sales will offer the opportunity to establish regional distribution centers.
Sales
and Marketing
We
market our products to consumers through independent safe specialty stores, select national and regional retailers, local specialty firearms
stores, as well as via e-commerce. We maintain consumer-focused product marketing and promotional campaigns, which include print and
digital advertising campaigns; social and electronic media; product demonstrations; point-of-sales materials; in-store training; and
in-store retail merchandising. Our use of social media includes Facebook, and YouTube.
Marketing
Team Aligned with Sales Force to Maximize Our Industry Visibility to Drive Revenue
Our
Chief Executive Officer, Charles A. Ross, is familiar to many in the industry due to his twelve years on television as the host of Maximum
Archery World Tour and later American Rebel, that was broadcast on The Outdoor Channel, Sportsman Channel and the Pursuit
Channel. Our Marketing and Sales teams have established American Rebel as a brand that our customers want and a brand that they are proud
to embrace and bring into their homes.
Direct
Marketing
In
light of the expertise required to deliver and install safes that weigh 500-1000 pounds, direct marketing is utilized to create awareness
and provide information. Our website, AmericanRebel.com, has proven to be a very valuable tool in introducing potential customers to
our products. Infomercials and direct-to-consumer campaigns are vehicles to expand our reach at the appropriate time. Currently the demand
from our current customers and future customer pool of independent safe specialty stores is high. As the Company grows and seeks out
new customers to expand its customer base, direct marketing will be an asset for American Rebel. Chief Executive Officer, Charles A.
Ross, was basically making infomercials to promote his Ross Archery products when he was filming Maximum Archery World Tour during
the mid-2000s.
Social
Media and Thought Leadership
A
portion of marketing dollars will be directed to social media. American Rebel and Chief Executive Officer Charles A. Ross have large
followings on social media and a dedicated social media campaign will efficiently reach large numbers of potential customers and brand
adopters. We will leverage our social media assets to cross-promote locally with independent safe specialty store customers to pull out
product through the sales channel. Driving demand and awareness of our products to our customers will expand their loyalty to American
Rebel and increase each stores’ commitment to our brand.
Trade
Shows
Trade
shows have been an important medium to introducing our brand and our products. The NRA Annual Meeting, a consumer trade show, is a valuable
opportunity to meet and greet our final customers. When we launched our Concealed Carry line of products at the NRA Annual Meeting in
Atlanta, GA, in the Spring of 2017, the response from the meeting attendees was overwhelming. We immediately knew the product line resonated
with consumers. Similarly, when we introduced our line of safes at the 2019 NRA Annual Meeting in the Spring of 2019, we knew we were
on to something significant. The USCCA (United States Concealed Carry Association) has an annual Concealed Carry and Home Defense Expo.
This is an excellent opportunity to meet, greet and sell product to our final customers, the buying public. The Iowa Deer Classic and
Illinois Deer Classic are carryovers from our Chief Executive Officer Charles A. Ross’ hosting duties on Maximum Archery World
Tour, but we have found that many potential safe buyers attend these shows.
Three
industry-only trade shows we attend are the SHOT Show, Nation’s Best Sports (NBS) Spring and Fall Buying Markets, and the Sports,
Inc trade show. The SHOT Show is very high-profile show that most movers and shakers in the firearms industry attend. Operated by the
National Shooting Sports Foundation, the SHOT Show is the first trade show of the calendar year and is a great opportunity to introduce
the year’s new products. NBS operates buying group shows where retailers who are members of NBS attend the Spring and Fall Market
Buying shows to place orders. NBS provides an excellent base of customers for us to introduce our products. Sports, Inc. is a buying
group show where retailers who are members of Sports, Inc. attend to make purchases from attending vendors.
Paid
Advertising
We
will occasionally purchase paid print advertising to support editorial and events. The American Shooting Journal has been very supportive
of our business has featured an interview with our Chief Executive Officer in one of past issues of the magazine.
Legal
Proceedings
Various
claims and lawsuits, incidental to the ordinary course of our business, may be brought against the Company from time-to-time.
On
July 23, 2024, the Company received notice of a complaint filed in the U.S. District Court for the District of Utah by Liberty Safe and
Security Products, Inc. (“Liberty”), in connection with the marketing and sale of the Company’s and its subsidiaries,
Champion Safe Company, Inc., line of safe products. As of the date of this Report, the complaint has not been served on the Company or
Champion Safe. In the complaint, Liberty alleges trademark infringement as a result of the purported use of the term “Freedom”
in the sale of safes, federal false designation of origin and unfair competition, violation of Utah deceptive trade practices, Utah unfair
competition, and damages to Liberty. Management believes that this lawsuit is without merit; however has initiated settlement discussions
with Liberty and anticipates an amicable settlement to be forthcoming. At this time, Management does not believe a settlement with Liberty
will have a material effect on its business or financial condition.
As
reported by the Company in the Form 8-K dated August 7, 2024, during February 2023, the Company entered into a $2 million master credit
agreement (credit facility) with Bank of America. The credit facility is secured by all the assets of the Company’s Champion subsidiaries
and guaranteed by the Company, the Champion subsidiaries and the Company’s CEO. The Line of Credit expired on February 28, 2024,
but the Company and Champion Safe Company have been actively working with the bank to extend or modify the credit facility. Despite being
current on all payments under the credit facility and actively working with the bank for a long-term solution to repay the credit facility,
on July 25, 2024, Champion Safe Company received a notice of default and demand for payment from the bank. On March 21, 2025, Bank of
America filed a complaint in the Fourth Judicial District Court in and for Utah County, State of Utah (Case No. 250401345) against the
Company and its subsidiaries (Champion Safe Company, Inc., American Rebel, Inc., Superior Safe Co., L.L.C. and Safe Guard Security Products
LC) alleging four causes of action related to the credit facility: (i) Breach of the Loan Documents – Champion Safe; (ii) Breach
of the Loan Documents – Guarantors (the Company, American Rebel, Inc., Superior Safe Co., L.L.C. and Safe Guard Security Products
LC); (iii) Breach of the Implied Covenant of Good Faith and Fair Dealing – all parties; and (iv) Unjust Enrichment – Champion
Safe. The Company plans to defend the complaint, while continuing to work with Bank of American on a settlement.
From
time to time, however, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business.
Litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may
harm our business.
Corporate
History
The
Company was incorporated on December 15, 2014, under the laws of the State of Nevada, as CubeScape, Inc. Effective January 5, 2017, the
Company amended its articles of incorporation and changed its name to American Rebel Holdings, Inc. The Company completed a business
combination with its majority shareholder, American Rebel, Inc. on June 19, 2017. On July 29, 2022, the Company closed on the acquisition
of Champion.
ITEM
1A. Risk Factors
The
following risk factors should be considered in connection with an evaluation of our business:
In
addition to other information in this Annual Report, the following risk factors should be carefully considered in evaluating our business
because such factors may have a significant impact on our business, operating results, liquidity and financial condition. As a result
of the risk factors set forth below, actual results could differ materially from those projected in any forward-looking statements. Additional
risks and uncertainties not presently known to us, or that we currently consider to be immaterial, may also impact our business, result
of operations, liquidity and financial condition. If any such risks occur, our business, operating results, liquidity and financial condition
could be materially affected in an adverse manner. Under such circumstances, if and when a trading market for our various securities
(besides our Common Stock and certain Common Stock Purchase Warrants) is established, the trading price of these securities could decline,
and you may lose all or part of your investment.
OUR
SECURITIES INVOLVE A HIGH DEGREE OF RISK AND, THEREFORE, SHOULD BE CONSIDERED EXTREMELY SPECULATIVE. THEY SHOULD NOT BE PURCHASED BY
PERSONS WHO CANNOT AFFORD THE POSSIBILITY OF THE LOSS OF THE ENTIRE INVESTMENT.
RISKS
RELATED TO THE BEER INDUSTRY
We
face substantial competition within the beer industry.
The
beer categories within the United States are highly competitive due to the participation of large domestic and international brewers
in the categories and the increasing number of craft brewers and craft distilleries, who distribute similar beers we sell and that have
similar pricing and target drinkers.
The
two largest brewers in the United States, AB InBev and Molson Coors, participate actively in mass appeal beer offerings as well as the
High End and Beyond Beer categories, through numerous launches of new hard seltzers, flavored malt beverages and spirit RTDs from existing
brands or new brands, importing and distributing import brands, and with their own domestic specialty beers, either by developing new
brands or by acquiring, in whole or part, existing brands. Imported beers, such as Corona®, Heineken®, Modelo Especial® and
Stella Artois®, continue to compete aggressively in the United States and have gained market share over the last ten years. All of
these brands and companies have substantially greater financial resources, marketing strength and distribution networks than we do. We
anticipate competition to be strong as some existing beverage companies are building more capacity, expanding geographically and adding
more SKUs and styles. The potential for growth in the sales of hard seltzers, flavored malt beverages, craft-brewed domestic beers, imported
beers and spirits RTDs is expected to increase the competition in the market for beer occasions within the United States and, as a result,
we anticipate we will face competitive pricing pressures and the demand for and market share of our products, when introduced, may fluctuate
and possibly decline.
Our
American Rebel Light Lager, competes generally with other alcoholic beverages. We anticipate competing with other beer and beverage companies
not only for drinker acceptance and loyalty, but also for traditional retail shelf, cold box and tap space, as well as e-commerce placement
and for marketing focus by our distributors and their customers, when established, all of which are anticipated to distribute and sell
other alcoholic beverage products. All of our potential competitors at this point in time have substantially greater financial resources,
marketing strength and distribution networks than we do. Moreover, the introduction of new products by competitors that compete directly
with our first beer and future products or that diminish the importance of our anticipated products to retailers or distributors may
have a material adverse effect on our business and financial results.
Further,
the alcoholic beverage industry has seen continued consolidation among brewers in order to take advantage of cost savings opportunities
for supplies, distribution and operations. Also, in the last several years, both AB InBev and Molson Coors have introduced numerous new
hard seltzers and purchased multiple regional craft breweries and craft distilleries with the intention to expand the capacity and distribution
of these brands.
More
recently in 2021 and into 2022, large non-alcoholic beverage companies including Coca-Cola Company (“Coke”), Pepsi and Monster
Beverage Corporation (“Monster”) have begun to enter these markets through licensing agreements with alcoholic beverage companies
to develop alcohol versions of existing traditional non-alcohol brands. Coke has entered into agreements with Molson Coors to develop,
market and sell Topo Chico brand Hard Seltzer and Simply Spiked Lemonade. Coke announced agreements with Constellation to develop, market
and sell FRESCATM Mixed, a line of spirits RTDs and with Brown Forman to develop, market and sell Jack Daniel’s® Tennessee
Whiskey and Coca-Cola®TM Ready-to-Drink Cocktail. The Boston Brewing Company has entered into an agreement with Pepsi to develop,
market and sell alcohol beverages which include Hard Mountain Dew, to take advantage of this trend. Pepsi entered an agreement in late
2022 with FIFCO USA, a New York based brewery, to develop, market and sell Lipton Hard Iced Tea which launched in 2023. Lastly, Monster,
acquired CANarchy Craft Brewery Collective (“CANarchy”) in early 2022 and launched the Beast Unleashed, a new brand of flavored
malt beverages in early 2023 and in January 2024 Monster announced CANarchy will operate under the name of Monster Brewing Company, another
testament to craft breweries and distilleries widespread acceptance.
Due
to the increased leverage that these combined operations will have in distribution and sales and marketing expenses, the costs to us
for competing is anticipated to be great. The potential exists for these large competitors to increase their influence with their distributors,
making it difficult for smaller beverage companies to maintain their market presence or enter new markets. The continuing consolidation
could reduce the contract brewing capacity that is available to us. These potential increases in the number and availability of competing
brands, the costs to compete, reductions in contract brewing capacity and decreases in distribution support and opportunities may have
a material adverse effect on our business and financial results.
The
global beer industry and the broader alcohol industry are constantly evolving, and our position within these industries and the success
of our products in our markets may fundamentally change. If we do not successfully transform along with the evolving industries, market
dynamics and consumer preferences, our business and financial results could be materially adversely affected.
The
brewing industry has significantly evolved over the years becoming an increasingly consolidated beer market. The industry has now become
increasingly complex and competitive as the consolidation of brewers has resulted in fewer major market participants. As a result of
the increased consolidation of brewers and the dynamic of expanding new segments within the industry with new market entrants, including
the non-alcohol market, the markets in which we intend to operate, may evolve at a disadvantage to our market position. Ongoing evolution
in certain beer markets, together with emerging changes in consumer preferences, have resulted in a significant increase in market entrants,
consumer choices and market competition, as well as increased government scrutiny. In addition, local governments may intervene, which
may fundamentally accelerate transformational changes to such markets. For example, the beer markets in the U.S. have long consisted
of a select number of significant market participants with government-regulated routes to market.
Changes
in public attitudes and drinker tastes could harm our business. Regulatory changes in response to public attitudes could adversely affect
our business.
The
alcoholic beverage industry has been the subject of considerable societal and political attention for several years, due to public concern
over alcohol-related social problems, including driving under the influence, underage drinking and health consequences from the misuse
of alcohol, including alcoholism. As an outgrowth of these concerns, the possibility exists that advertising by beer producers could
be restricted, that additional cautionary labeling or packaging requirements might be imposed, that further restrictions on the sale
of alcohol might be imposed or that there may be renewed efforts to impose increased excise or other taxes on beer sold in the United
States.
The
domestic beer industry, other than the market for High End beer occasions and Beyond Beer occasions, has experienced a decline in shipments
over the last ten years. We believe that this decline is due to declining alcohol consumption per person in the population, drinkers
trading up to drink high quality, more flavorful hard seltzers. beers and spirts RTDs, health and wellness trends and increased competition
from wine and spirits companies. If consumption of our products, when introduced, in general were to come into disfavor among domestic
drinkers, or if the domestic alcohol beverage industry were subjected to significant additional societal pressure or governmental regulations,
our business could be materially adversely affected.
Additionally,
certain states are considering or have passed laws and regulations that allow the sale and distribution of marijuana. Currently it is
not possible to predict the impact of this on sales of alcohol, but it is possible that legal marijuana usage could adversely impact
the demand for our products.
We
are dependent on distributors.
In
the United States, where our beer is currently sold only in a limited number of states, we are selling most of our beer to independent
beer distributors for distribution to retailers and, ultimately, to drinkers. Although we have engaged multiple distributors, sustained
growth will require us to maintain such relationships and possibly enter into agreements with additional distributors. Changes in control
or ownership within the distribution network could lead to less support of our products.
Contributing
to distribution risk is the fact that our distribution agreements, when entered into, are anticipated to be generally terminable by the
distributor on relatively short notice. While these distribution agreements are anticipated to contain provisions giving us enforcement
and termination rights, some state laws prohibit us from exercising these contractual rights. Our ability to maintain distribution arrangements
may be adversely affected by the fact that many distributors are reliant on one of the major beer producers for a large percentage of
their revenue and, therefore, they may be influenced by such producers. If our distribution agreements are terminated, we may not be
able to enter into new distribution agreements on substantially similar terms, which may result in an increase in the costs of distribution.