American Rebel(AREB) - 2024 Q4 - Annual Report

Financing Agreements - The company entered into a Master Brewing Agreement with Associated Brewing, appointing them as the exclusive producer and seller of American Rebel branded spirits, with the initial product being American Rebel Light Beer, set to launch regionally in early 2024[284]. - On January 1, 2024, the company entered into a new loan agreement with an existing lender for $150,000, with a principal balance bearing interest at 12$235,750 with an effective interest rate of 81.1%, requiring total repayment of $271,112 by December 31, 2024[286]. - The company secured a$1,300,000 business loan with a total repayment of $1,664,000, bearing interest at 22.8$250,000, with repayment in equal weekly installments of $17,875[296]. - A subordinated business loan of$1,312,500 was secured on July 8, 2024, with principal and interest due on January 20, 2025, requiring weekly payments of $67,500[297]. - The company entered into multiple Revenue Interest Purchase Agreements, with investors receiving monthly payments ranging from$7,500 to $50,000 starting June 1, 2024[289][293]. - On September 4, 2024, a securities purchase agreement was made for a loan of$300,000, with total payback of $336,000 due in eight payments[302]. Financial Performance - For the year ended December 31, 2024, the company reported revenues of$11,420,268, a decrease of $4,577,928 (or 29$15,998,196 for the year ended December 31, 2023[311]. - The cost of goods sold for the year ended December 31, 2024 was $11,539,905, down$2,659,355 (or 19%) from $14,199,260 in the previous year[312]. - The company experienced a negative gross margin of$(119,637) for the year ended December 31, 2024, compared to a gross margin of $1,798,936 for the year ended December 31, 2023, representing a decrease of$1,918,573 (or 107%) period over period[312]. - Total operating expenses increased by $1,536,547 (or 15$12,100,478 for the year ended December 31, 2024, compared to $10,563,931 for the year ended December 31, 2023[313]. - Interest expense surged to$3,969,485 for the year ended December 31, 2024, compared to $363,567 in the previous year, an increase of$3,605,918[321]. - The company incurred a net loss of $17,604,364 for the year ended December 31, 2024, resulting in a loss per share of$(306.91), compared to a net loss of $9,731,701 and a loss per share of$(857.02) for the year ended December 31, 2023[325]. Expense Analysis - Marketing and brand development expenses rose by $1,035,919 (or 79$2,354,809 for the year ended December 31, 2024, compared to $1,318,890 for the year ended December 31, 2023[318]. - The company incurred product development expenses of$385,800 for the year ended December 31, 2024, an increase of $253,272 (or 191$132,528 in the previous year[317]. - Administrative and other expenses increased by $2,841,749 (or 89$6,049,555 for the year ended December 31, 2024, compared to $3,207,806 for the year ended December 31, 2023[319]. - The company reported no impairment of goodwill and intangible assets for the year ended December 31, 2024, compared to an impairment of$1,912,559 for the year ended December 31, 2023[324]. Capital and Liquidity - The Company incurred net losses of $17,604,364 for the year ended December 31, 2024, compared to$9,731,701 for 2023, with an accumulated deficit of $65,086,200 as of December 31, 2024[326]. - The Company's working capital deficit was$8,940,228 as of December 31, 2024, a decline from a surplus of $2,545,744 as of December 31, 2023[326]. - Management is in discussions with investment banks regarding further capital campaigns to raise funds necessary for operations and acquisitions[327]. - The Company anticipates needing to raise additional funds through equity or debt offerings to meet future liquidity requirements, which may dilute existing stockholders[330]. - Additional funds are expected to be required for ongoing operating expenses, intellectual property protection, and business development[331]. Accounting and Regulatory Updates - The Company has classified its convertible debt issued in 2024 in accordance with ASC 2020-06, effective for smaller reporting companies for fiscal years beginning after December 15, 2023[335]. - The FASB issued ASU No. 2023-09 to enhance income tax disclosures, effective for the Company for annual periods beginning after December 15, 2024[336]. - ASU No. 2023-07 requires public companies to disclose significant segment expenses and is effective for fiscal years beginning after December 15, 2023[337]. - The Company continuously monitors accounting pronouncements from the FASB for applicability to its operations[339].