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American Rebel Holdings Inc. (NASDAQ:AREB), a miscellaneous fabricated metal products manufacturer with a market capitalization of $1.64 million, announced on Friday that it has entered into a financing agreement with five accredited investors. According to InvestingPro data, the company has been struggling with weak financial health, receiving a score of 0.95 (WEAK) and showing negative EBITDA of $12.56 million. The agreement, dated May 27, 2025, consists of five two-year promissory notes totaling $450,000.
The notes carry an original issue discount of $67,500 and guaranteed interest of the same amount, resulting in net proceeds of $315,000 for the company. The full amount of $450,000 is due on or before May 27, 2027. Proceeds from the notes will be used for general working capital and potentially to address the Bank of America lawsuit. InvestingPro analysis reveals the company is quickly burning through cash, with a concerning current ratio of 0.4, indicating potential liquidity challenges. (Unlock 14 more key insights with InvestingPro.)
The notes also provide conversion rights, allowing lenders to convert the outstanding principal into restricted shares of Series D Convertible Preferred Stock at $7.50 per share, which in turn is convertible into common stock. However, each lender has agreed to limit their stock ownership to less than 4.99% of the total outstanding common stock into which the preferred stock can be converted.
In the event of default, the company will owe 130% of the sum of the outstanding principal plus accrued interest and any amounts owed due to the conversion rights. After 180 days from the issuance date, the company has the option to prepay the outstanding principal amount of the notes by paying 125% of the principal amount to be redeemed.
Additionally, the company held its annual meeting of stockholders on May 20, 2025, where several proposals were approved, including the election of directors, the affirmation of GBQ Partners LLC as independent auditors, the adoption of the 2025 Stock Incentive Plan, and the authorization of a 1-for-25 reverse stock split.
This financial move, as reported in the SEC filing, is aimed at strengthening American Rebel Holdings’ financial position and supporting its operational needs. The company’s stock, currently trading at $1.55, has experienced significant volatility, with negative gross profit margins of -6.8%. InvestingPro analysis indicates the stock is currently trading below its Fair Value, though investors should note the company’s challenging financial metrics before making investment decisions.
In other recent news, American Rebel Holdings, Inc. has been actively expanding the distribution of its American Rebel Light Beer. The company announced a new partnership with North Florida Sales to introduce the beer to the Jacksonville, St. Augustine, and Lake City markets, reinforcing its presence in Florida. Additionally, a distribution agreement with Adams Beverages will see the beer available in 28 counties across North Carolina. These strategic moves are part of American Rebel’s broader efforts to establish a national footprint for its light beer, which is produced with all-natural ingredients and no added sweeteners.
American Rebel Light Beer gained significant exposure during the NHRA 4-Wide Nationals at zMAX Dragway, an event broadcast on FOX Broadcasting’s FS1. CEO Andy Ross expressed satisfaction with the brand’s performance and distribution expansion, which has exceeded expectations. The company also hosted a board meeting and investor dinner at Mar-a-Lago to discuss further growth initiatives and potential acquisitions. These developments underscore American Rebel’s commitment to becoming a leading name in the beverage industry.
In addition to distribution efforts, American Rebel is promoting its brand through a series of concerts at the Charlotte Motor Speedway, featuring CEO Andy Ross. The concerts coincide with the Coca-Cola (NYSE:KO) 600 NASCAR weekend and aim to boost the visibility of American Rebel Light Beer. The company continues to focus on expanding its market reach while maintaining its patriotic brand values.
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