American Rebel(AREB) - 2025 Q3 - Quarterly Report

Acquisitions and Investments - The company acquired a 19.01% ownership interest in Schmitty's for approximately $1.99 million, enhancing its position in the $10 billion smokeless market [251]. - The company has entered into a Membership Interest Purchase Agreement with RAEK Data, LLC, issuing 200,000 shares valued at $1,500,000 to acquire a minority interest [253]. - The company has agreed to pay $14.1 million for the purchase of all ownership interests in 218 3rd Avenue, Nashville, with payments structured over twelve months [254]. Product Development and Market Expansion - The company plans to introduce additional products throughout 2025, including wall safes and an economy safe line to compete with imported products [249]. - The company is exploring opportunities in the $110+ billion beer industry with its American Rebel Light Lager, with current distribution agreements in Kansas, Tennessee, Ohio, and Connecticut [243]. - The company has designed a safe specifically for the cannabis industry, targeting dispensary operators, growers, and processors as a new growth market for its products [263]. - The company established American Rebel Beverages, LLC as a wholly-owned subsidiary to hold alcohol licenses and conduct operations for its beer business, launching American Rebel Light Beer regionally in 2024 [261]. Financial Performance - For the three months ended September 30, 2025, the company reported revenues of $1,877,518, a decrease of $460,268 (or 20%) compared to $2,337,786 for the same period in 2024 [266]. - The cost of goods sold for the three months ended September 30, 2025 was $2,075,288, down $760,475 (or 27%) from $2,835,763 in the prior year [266]. - The net loss for the three months ended September 30, 2025 was $5,230,027, resulting in a loss per share of $(32.44), compared to a net loss of $1,747,957 and a loss per share of $(3,032.24) for the same period in 2024 [275]. - Total operating expenses for the three months ended September 30, 2025 were $3,482,401, an increase of $2,939,706 compared to $542,695 for the same period in 2024 [267]. - For the nine months ended September 30, 2025, revenues were $7,231,439, a decrease of $2,405,577 (or 25%) from $9,637,016 in the same period in 2024 [276]. - The gross margin for the nine months ended September 30, 2025 was $59,911, down $314,090 (or 84%) compared to $374,001 for the same period in 2024 [276]. - For the nine months ended September 30, 2025, the company incurred a net loss of $28,427,026, resulting in a loss per share of $(113.30), compared to a net loss of $9,702,239 and a loss per share of $(6,664.86) for the same period in 2024 [286]. Expenses and Financial Challenges - Marketing and brand development expenses for the nine months ended September 30, 2025 were $2,406,274, an increase of $1,217,055 (or 102%) compared to $1,189,219 for the same period in 2024 [281]. - Administrative and other expenses increased by $1,073,633 (or 32%) to $4,397,199 for the nine months ended September 30, 2025, primarily due to increased professional fees [282]. - Interest expense decreased by $645,000 to $1,483,357 for the nine months ended September 30, 2025, compared to $2,128,357 for the same period in 2024 [284]. - The company reported a loss on debt extinguishment of $13,531,557 for the nine months ended September 30, 2025, significantly higher than the loss of $312,505 for the same period in 2024 [285]. - Working capital deficit increased by $8,709,796, from $(8,940,228) at December 31, 2024, to $(17,650,023) at September 30, 2025, due to increased expenses and slowing sales [287]. - The company reduced anticipated cash outflows by $27.7 million through the issuance of common stock for the settlement of outstanding debt and payables during the nine months ended September 30, 2025 [288]. - The company expects to incur additional losses during the fiscal year ending December 31, 2025, primarily due to increased investments in inventory, manufacturing capacity, and marketing expenses [265]. Strategic Focus and Brand Development - The company is committed to producing safes constructed primarily of U.S.-made steel, emphasizing safety, quality, and reliability [237]. - The company emphasizes the importance of gun safes for responsible gun ownership, particularly in light of potential legal requirements for safe storage [247]. - The company aims to create a brand community around American values, leveraging the public persona of its CEO, Andy Ross [241]. - The company is focused on enhancing product quality and affordability to drive demand and support its distribution channels [238]. - The company expects to continue significant investments in capital expenditures, marketing, and operational expenditures to support product launches and business growth [289]. - The company may seek additional funding through equity or debt offerings, which could be dilutive to existing stockholders [291].