UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

[X]

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

for the quarterly period endedSeptember 30, 20172022

OR

[   ]☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

for the transition period from ___ to ___

Commission file number333-201607001-41267

AMERICAN REBEL HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

Securities registered pursuant to Section 12(b) of the Act:

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [   ] ☒ No [X]☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [   ] ☒ No [X]☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [   ]☐

Indicate by check mark whether the registrant is a shell company (as defined in rule 12b-2 of the Exchange Act). Yes [   ] ☐ No [X] ☒

The number of shares of the registrant’s common stock outstanding as of November 20, 201714, 2022, was 23,771,00016,553,033 shares.

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AMERICAN REBEL HOLDINGS, INC.

INDEX TO QUARTERLY REPORT ON FORM 10-Q

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Part I. Financial Information

Item 1.- Interim Condensed Consolidated Financial Statements (unaudited)

AMERICAN REBEL HOLDINGS, INC.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

See Notes to Financial Statements.

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AMERICAN REBEL HOLDINGS, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

See Notes to Financial Statements.

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AMERICAN REBEL HOLDINGS, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

See Notes to Financial Statements.

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AMERICAN REBEL HOLDINGS, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICITSTOCKHOLDERS’ EQUITY/(DEFICIT)

See Notes to Financial Statements.

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AMERICAN REBEL HOLDINGS, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

See Notes to Financial Statements.

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AMERICAN REBEL HOLDINGS, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 20172022

(unaudited)

NOTE 1 –ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

OrganizationGeneral

American Rebel Holdings, Inc. (the “Company”) operates primarily as a designer, manufacturer, and marketer of branded safes and personal security, self-defense products. Additionally, the Company designs and produces branded apparel and other accessories.

The “Company”Company promotes and sells its products primarily through a growing network of dealers, in select regional retailers and local specialty safe, sporting goods, hunting and firearms stores, as well as online, including its website and e-commerce platforms such as Amazon.com.

The information on our website does not constitute a part of this report.

Listing, Reorganization and Acquisition of Champion Entities

The Company was incorporated on December 15, 2014 (date of inception), under the laws of the State of Nevada, as CubeScape, Inc. EffectiveThe Company filed a registration statement on Form S-1, which was declared effective by the United States Securities and Exchange Commission (the “SEC”) on October 14, 2015. Twenty-six (26) investors invested at a price of $0.80 per share for a total of $60,000. The direct public offering closed on December 11, 2015.

On 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 stockholder, American Rebel, Inc. on June 19, 2017. As a result, American Rebel, Inc. became a wholly ownedwholly-owned subsidiary of the Company.

The aforementioned acquisition of American Rebel, Inc. was accounted for as a reverse merger. Themerger, which involved issuance by the Company issued 17,421,000of 217,763 shares of its common stock and issued6,250 warrants to purchase 500,000 shares of common stock to shareholders of American Rebel, Inc., and cancelled 9,000,000112,500 shares of common stock previously owned by American Rebel, Inc.

On June 29, 2022, the Company entered into a stock and membership interest purchase agreement with Champion Safe Co., Inc. (“Champion Safe”), Superior Safe, LLC (“Superior Safe”), Safe Guard Security Products, LLC (“Safe Guard”), Champion Safe De Mexico, S.A. de C.V. (“Champion Safe Mexico”) and, together with Champion Safe, Superior Safe, and Safe Guard, collectively, the (“Champion Entities”) and Mr. Ray Crosby (“Seller”) (the “Champion Purchase Agreement”), pursuant to which the Company agreed to acquire all of the issued and outstanding capital stock and membership interests of the Champion Entities from the Seller. This transaction was completed on July 29, 2022. We have included the Champion Entities assets and liabilities as of that date and the subsequent financial activity through the date of this Report in our Condensed Consolidated Financial Statements. For all intent and purposes, the Champion Entities have been integrated with our existing operations and are under the control of our management team.

The closing of the acquisition occurred on July 29, 2022. Under the terms of the Champion Purchase Agreement, the Company filed a registration statementpaid the Seller (i) cash consideration in the amount of $9,150,000, along with (ii) cash deposits in the amount of $350,000, and (iii) reimbursed Seller for $397,420 of agreed upon acquisitions and equipment purchases completed by the Seller and the Champion Entities since June 30, 2021.

For purposes of this Quarterly Report on Form S-1 which was declared effective by the U.S. Securities and Exchange Commission on October 14, 2015. Twenty six (26) investors invested at a price of $0.01 per share for a total of $60,000. The direct public offering closed on December 11, 2015.

Nature of operations

The Company is developing branded products in the self-defense and patriotic product areas that are promoted and sold using personal appearance, music, internet and television avenues. The Company’s products will be under the10-Q, “American Rebel” “we,” “our,” “us,” or similar references refers to American Rebel BrandHoldings, Inc. and imprinted.its consolidated subsidiaries, unless the context requires otherwise.

Interim Financial Statements and Basis of Presentation

The accompanying unaudited interim financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information, and with the rules and regulations of the United States Securities and Exchange Commission (the “SEC”)SEC set forth in Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by the U.S. GAAP for complete financial statements. The unaudited interim financial statements furnished reflect all adjustments (consisting of normal recurring accruals) which are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented. Unaudited interim results are not necessarily indicative of the results for the full fiscal year. These financial statements should be read along with the Annual Report filed on Form 10-K of the Company for the period ended December 31, 20162021, and notes thereto contained. And the Current Report filed on Form 8-K of the Company dated June 19, 2017.

Principles of Consolidation

The Consolidated Financial Statements include the accounts of the Company and its majority-owned subsidiary.subsidiaries, American Rebel, Inc., and the Champion Entities. All significant intercompany accounts and transactions have been eliminated.

Year end

The Company’s year-end is December 31.

Cash and cash equivalents

For the purpose of the statements of cash flows, all highly liquid investments with an original maturity of three months or less are considered to be cash equivalents. The carrying value of these investments approximates fair value.

Inventory and Inventory Deposits

Inventory consists of backpacks, jackets, safes and accessories manufactured to our design and held for resale and are carried at the lower of cost (First-in, First-out Method) or market value. The Company determines the estimate for the reserve for slow moving or obsolete inventories by regularly evaluating individual inventory levels, projected sales and current economic conditions. The Company also makes deposit payments on inventory to be manufactured that are carried separately until the goods are received into inventory.

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Fixed assets and depreciation

Property and equipment isare stated at cost net of accumulated depreciation. Additions and improvements are capitalized while ordinary maintenance and repair expenditures are charged to expense as incurred. Depreciation is recorded by the straight-line method over the estimated useful life of the asset, which ranges from five to seven years.

Revenue recognition

In accordance with ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”), revenues are recognized when control of the promised goods or services is transferred to our clients, in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods and services. To achieve this core principle, we apply the following five to seven years.

Investment

During June 2016, American Rebel, Inc. purchasedsteps: (1) Identify the contract with a 60% controlling interestclient; (2) Identify the performance obligations in the Company withcontract; (3) Determine the intenttransaction price; (4) Allocate the transaction price to merge. The merger was completed on June 19, 2017performance obligations in the contract; and has been accounted for(5) Recognize revenues when or as the company satisfies a reverse merger with comparative financial history being that of American Rebel, Inc., its wholly owned subsidiary.performance obligation.

Revenue recognition

We recognize revenueThese steps are met when all of the following conditions are satisfied: (1) therean order is persuasive evidence of an arrangement; (2)received, a price is agreed, and the product is shipped or service has been provideddelivered to the consumer; (3) the amount of fees to be paid by the consumer is fixed or determinable; and (4) the collection of our fees or product revenue is probable.that customer.

The Company will record revenue when it is realizable and earned and product has been shipped to the consumers or that our service has been rendered to the consumer. License income will be reported as income when the Company has completed any responsibility to earn the income and when any earned royalties are received.

Advertising costs

Advertising costs are expensed as incurred; Marketing costs which we consider to be advertising costs incurred were $96,789$119,122 and $122,981$34,669 for the three monththree-month periods ended September 30, 20172022, and 2016,2021, respectively and $282,382$349,341 and $294,428, respectively,$138,783 for the nine monthnine-month periods then ended.

Fair valueValue of financial instrumentsFinancial Instruments

Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of September 30, 20172022, and December 31, 2016,2021, respectively. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values. These financial instruments include cash, and accounts payable. Fair values were assumed to approximate carrying values for cash and payables because they are short term in nature and their carrying amounts approximate fair values or they are payable on demand.

Level 1:The preferred inputs to valuation efforts are “quoted prices in active markets for identical assets or liabilities,” with the caveat that the reporting entity must have access to that market. Information at this level is based on direct observations of transactions involving the same assets and liabilities, not assumptions, and thus offers superior reliability. However, relatively few items, especially physical assets, actually trade in active markets.

Level 2: FASB acknowledged that active markets for identical assets and liabilities are relatively uncommon and, even when they do exist, they may be too thin to provide reliable information. To deal with this shortage of direct data, the board provided a second level of inputs that can be applied in three situations.

Level 3: If inputs from levels 1 and 2 are not available, the Financial Accounting Standards Board (the “FASB”) acknowledges that fair value measures of many assets and liabilities are less precise. The board describes Level 3 inputs as “unobservable,” and limits their use by saying they “shall be used to measure fair value to the extent that observable inputs are not available.” This category allows “for situations in which there is little, if any, market activity for the asset or liability at the measurement date”. Earlier in the standard, FASB explains that “observable inputs” are gathered from sources other than the reporting company and that they are expected to reflect assumptions made by market participants.

Stock-based compensation

The Company records stock basedstock-based compensation in accordance with the guidance in ASC Topic 505 and 718 which requires the Company to recognize expense related to the fair value of its employee stock option awards. This eliminates accounting for share-based compensation transactions using the intrinsic value and requires instead that such transactions be accounted for using a fair-value-based method. The Company recognizes the cost of all share-based awards on a graded vesting basis over the vesting period of the award.

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The Company accounts for equity instruments issued in exchange for the receipt of goods or services from other than employees in accordance with FASB ASC 718-10 and the conclusions reached by the FASB ASC 505-50. Costs are measured at the estimated fair market value of the consideration received or the estimated fair value of the equity instruments issued, whichever is more reliably measurable. The value of equity instruments issued for consideration other than employee services is determined on the earliest of a performance commitment or completion of performance by the provider of goods or services as defined by FASB ASC 505-50.

During June, 2017, and prior to the merger, the Company recorded $1,400,000 in compensation expense for the issuance of 2,800,000 shares of common stock. During July, 2017 the Company recorded $59,000 in interest expense and $66,000 in loan discount for the issuance of 250,000 shares of common stock in connection with a working capital loan. During August 2017, the Company recorded $50,000 in prepaid expense for the issuance of 100,000 shares of common stock in connection with purchase of an exclusive trade show booth space. The common stock was valued at a price of $0.50 per share consistent with earlier sales of common stock by American Rebel, Inc. as well as the present conversion price of the Company’s convertible debentures.

Earnings per share

The Company follows ASC Topic 260 to account for earnings per share. Basic earnings per common share (“EPS”) calculations are determined by dividing net income by the weighted average number of shares of common stock outstanding during the year. Diluted earnings per common share calculations are determined by dividing net income by the weighted average number of common shares and dilutive common share equivalents outstanding. During periods when common stock equivalents, if any, are anti-dilutive they are not considered in the computation.

Income taxes

The Company follows ASC Topic 740 for recording provision for income taxes. Deferred tax assets and liabilities are computed based upon the difference between the financial statement and income tax basis of assets and liabilities using the enacted marginal tax rate applicable when the related asset or liability is expected to be realized or settled. Deferred income tax expense or benefit is based on the changes in the asset or liability for each period. If available evidence suggests that it is more likely than not that some portion or the entire deferred tax asset will not be realized, a valuation allowance is required to reduce the deferred tax asset to the amount that is more likely than not to be realized. Future changes in such valuation allowance are included in the provision for deferred income tax in the period of change.

Deferred income tax may arise from temporary differences resulting from income and expense items reported for financial accounting and tax purposes in different periods. Deferred taxes are classified as current or non-current, depending on the classification of assets and liabilities to which they relate. Deferred taxes arising from temporary differences that are not related to an asset or liability are classified as current or non-current depending on the periods in which the temporary differences are expected to reverse.

The Company applies a more-likely-than-not recognition threshold for all tax uncertainties. ASC Topic 740 only allows the recognition of tax benefits that have a greater than fifty percent likelihood of being sustained upon examination by taxing authorities. As of September 30, 20172022, and December 31, 2016,2021, the Company reviewed its tax positions and determined there were no outstanding, or retroactive tax positions with less than a 50% likelihood of being sustained upon examination by the taxing authorities, therefore this standard has not had a material effect on the Company.

The Company does not anticipate any significant changes to its total unrecognized tax benefits within the next 12 months.

The Company classifies tax-related penalties and net interest as income tax expense. For the threethree-month and nine monthnine-month periods ended September 30, 20172022, and 2016,2021, respectively, no income tax expense has been recorded.

Use of estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ significantly from those estimates.

Recent pronouncementsRight of Use Assets and Lease Liabilities

The Company evaluated recent accounting pronouncements through September 30, 2017 and believes that none have a material effect onIn February 2016, the Company’s financial statements except for the following.

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In August, 2014, FASB issued ASU No. 2014-15,Presentation of Financial Statements - Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entities Ability to continue as a Going Concern2016-02, Leases (Topic 842). The standard is intendedrequires lessees to define management's responsibility to decide whether there is substantial doubt about an organization's ability to continuerecognize almost all leases on the balance sheet as a going concernRight-of-Use (“ROU”) asset and a lease liability and requires leases to provide related footnote disclosures.be classified as either an operating or a finance type lease. The standard requires management to decide whether there are conditionsexcludes leases of intangible assets or events that raise substantial doubt about the entity's ability to continue as a going concern within one year after the date that the financial statements are issued.inventory. The standard provides guidance to an organization's management, with principles and definitions that are intended to reduce diversity in the timing and content of disclosures that are commonly provided by organizations in the footnotes. The standard becomesbecame effective for the annualCompany beginning January 1, 2019. The Company adopted ASC 842 using the modified retrospective approach, by applying the new standard to all leases existing at the date of initial application. Results and disclosure requirements for reporting periods beginning after January 1, 2019, are presented under ASC 842, while prior period ending after December 15, 2016,amounts have not been adjusted and continue to be reported in accordance with early application permitted.our historical accounting under ASC 840. The adoptionCompany elected the package of practical expedients permitted under the standard, which also allowed the Company to carry forward historical lease classifications. The Company also elected the practical expedient related to treating lease and non-lease components as a single lease component for all equipment leases as well as electing a policy exclusion permitting leases with an original lease term of less than one year to be excluded from the ROU assets and lease liabilities.

Under ASC 842, the Company determines if an arrangement is a lease at inception. ROU assets and liabilities are recognized at commencement date based on the present value of remaining lease payments over the lease term. For this pronouncementpurpose, the Company considers only payments that are fixed and determinable at the time of commencement. As most of the Company’s leases do not provide an implicit rate, the Company estimated the incremental borrowing rate in determining the present value of lease payments. The ROU asset also includes any lease payments made prior to commencement and is recorded net of any lease incentives received. The Company’ lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise such options.

Operating leases are included in operating lease Right-of-Use assets and operating lease liabilities, current and non-current, on the Company’s consolidated balance sheets.

Recent pronouncements

The Company has implemented all new accounting pronouncements that are in effect and is evaluating any that may impact its financial statements. The Company does not expected tobelieve that there are any new accounting pronouncements that have been issued that might have a material impact on our financial statements. Management's evaluations regarding the events and conditions that raise substantial doubt regarding the Company's ability to continue as a going concern are disclosed in Note 2 below.

In August 2015, FASB issued ASU 2015-14,Revenue from Contracts with Customers: Deferral of Effective Date. In 2014 FASB issued ASU 2014-09,Revenue from Contracts with Customers,which provided a framework for addressing revenue recognition issues and replaces almost all existing revenue recognition guidance in current U.S. GAAP. The core principle of ASU 2014-09 is for companies to recognize revenue for the transfer of goods or services to customers in amounts that reflect the consideration to which the company expects to be entitled in exchange for those goods or services. ASU 2014-09 also resulted in enhanced disclosures about revenue, provide guidance for transactions that were not previously addressed comprehensively, and improve guidance for multiple-element arrangements. The amendments in ASU 2015-14 defer the effective date of the new revenue recognition guidance to annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Early adoption is permitted to the original effective date (December 15, 2016), including interim periods within that reporting period. Management is evaluating the future impact of this guidance on the Company’s financial statements and notes thereto.

In August 2015, FASB issued ASU 2015-15,Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements. The Company previously reported that in April 2015, the FASB issued ASU 2015-03,Simplifying the Presentation of Debt Issuance Costs, which simplifies the presentation of debt issuance costs by requiring that debt issuance costs related to a recognized liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The amendments in ASU 2015-15 address the absence of authoritative guidance within ASU 2015-03 for debt issuance costs related to line-of-credit arrangements such that the SEC staff would not object to an entity deferring and presenting debt issuance costs as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. ASU 2015-15 and ASU 2015-03 are effective for financial statements of public business entities issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Early adoption is permitted for financial statements that have not been previously issued. The adoption of this guidance is not expected to have a material impact on the Company'sits financial position or results of operations or cash flows.operations.

In September 2015, the FASB issued ASU 2015-16,Business Combinations: Simplifying the Accounting for Measurement-Period Adjustments. The amendments in this ASU require that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined; calculated as if the accounting had been completed at the acquisition date. For public business entities, the amendments in this ASU are effective for fiscal years beginning after December 15, 2015, including interim periods within those fiscal years. The amendments in this ASU should be applied prospectively with earlier application permitted for financial statements that have not been issued. The adoption of this guidance did not have a material impact on the Company’s financial position, results of operations or cash flows.

Amendments clarifying guidance in Topic 205, Risks and Uncertainties, are applicable to entities that have not commenced planned principal operations, which we have commenced recently.

NOTE 2 – GOING CONCERN

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the recoverability of assets and the satisfaction of liabilities in the normal course of business. As noted above, the Company is in the development stage and, accordingly, hasits revenue from its planned operations does not yet generated significant revenues from operations.cover its operating expenses. Since inception, the Company has been engaged in financing activities and executing its business plan of operations and incurring costs and expenses related to developing products and market identity, obtaining inventory, and preparing for public product launch.launch and ultimately selling products. As a result, the Company incurred net income (losses) for the nine months ended September 30, 20172022, and 20162021 of ($2,527,232)6,377,731) and ($976,986) 4,890,090), respectively. The Company’s accumulated deficit was ($4,870,249)33,347,388) as of September 30, 20172022, and ($2,343,017)26,969,657) as of December 31, 2016.2021. The Company’s working capital deficit was ($355,083)$7,328,272 as of September 30, 2017 and2022, compared to a deficit of ($915,455)4,171,277) as of December 31, 2016. In addition,2021. The increase in working capital from December 31, 2021, to September 30, 2022, is due to the Company closing on its registered public offering in February 2022 and subsequent private investment in public equity (“PIPE”) transaction completed in July 2022 and the acquisition of Champion. Until recently the Company’s development activities since inception have been sustained through equity and debt financing and the deferral of payments on accounts payable and other expenses.

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The ability of the Company to continue as a going concern is dependent upon its ability to raise capital from the sale of its equity and, ultimately, the achievement of significant operating revenues. Management is in discussion with its investment bank, EF Hutton a division of Benchmark Investments, LLC, and other broker dealers regarding additional funding initiatives or financings through the market.

Management believes sufficient funding can be secured through the obtaining of loans, as well as future offerings of its preferred and common stock to institutional and other financial sources.stock. However, no assurance can be given that the Company will obtain this additional working capital, or if obtained, that such funding will not cause substantial dilution to its stockholders. If the Company is unable to secure such additional funds from these sources, it may be forced to change or delay some of its business plan rollout.objectives.

These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might result from this uncertainty.

NOTE 3- 3 – INVENTORY AND DEPOSITS

Inventory and deposits includesinclude the following:

SCHEDULE OF INVENTORY AND DEPOSITS

NOTE 4 – INVESTMENT

During June 2016, American Rebel, Inc. purchased a 60% controlling interest the Company with the intent to merge. The merger was completed on June 19, 2017 and American Rebel, Inc. has become a wholly owned subsidiary. The transaction has been recorded as a reverse merger with the consolidated ongoing history of the Company being that of American Rebel, Inc. The $35,000 investment in CubeScape, Inc has been eliminated in consolidation and netted into additional paid-in capital.

NOTE 5 – PROPERTY AND EQUIPMENT

Property and equipment includesinclude the following:

SCHEDULE OF PROPERTY AND EQUIPMENT

For the threenine months ended September 30, 20172022, and 20162021 we recognized $15,507$11,311 and $14,561$2,744 in depreciation expense, respectively, and $45,622 and $43,055 for the nine month periods then ended.respectively. We depreciate these assets over a period of sixty (60) months which has been deemed their useful life. In January, 2016We recognized only two months and three days of depreciation expense from the assets that we acquired three vehicles from related parties and assumedwith the debt secured by the vehicles as described at Note 7Champion purchase.

NOTE 5 – Notes Payable. Accordingly, the recorded cost of each vehicle is the amount of debt assumed under each related loan, or a total of $277,886.

NOTE 6 –RELATEDRELATED PARTY NOTE PAYABLE AND RELATED PARTY TRANSACTIONS

For the year ended December 31, 2016, the Company received loans from its sole officer and director totaling $221,155. The balance at December 31, 2016 was $221,155. During the nine months ended September 30, 2017, the company repaid $117,005 of these loans resulting in a balance at September 30, 2017 of $104,150. These loans are due on demand and carry no interest.

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During the nine months ended September 30, 2017, the Company entered into several convertible debt instruments with stockholders in the amount of $1,075,000, for a total of $1,675,000. The Company accrued interest expense on this convertible debt of $116,915, for a total of $135,427 at September 30, 2017. Of this amount borrowed under the convertible debt, $1,633,787 was loaned to American Rebel, Inc., the Company’s former majority stockholder and now the Company’s wholly owned subsidiary, as a working capital loan to pay its operating expenses including legal, accounting, product development, brand expansion, and marketing costs. The majority stockholder also used the proceeds of these loans to purchase inventory of its initial product scheduled to launch during 2017. This loan is eliminated in consolidation.

During the year ended December 31, 2016, the Company acquired three vehicles from various related parties and assumed the debt secured by each one of the vehicles. Accordingly, the recorded value for each vehicle iswas the total debt assumed underfrom each related loan, orfor a total of $277,886. (See Note 7 – Notes Payable.)$277,886.

Charles A. Ross, Jr. serves as the Company’s sole officer and director.CEO. Compensation for Mr. Ross was $150,000$552,000 and $142,500,$90,000, respectively for the nine months ended September 30, 20172022, and 2016, and $187,5002021. Compensation for the yearnine months ended December 31, 2016.September 30, 2022 includes several bonuses approved by the Board of Directors.

Doug Grau serves as the Company’s President. Compensation for Mr. Ross received a grantGrau was $278,000 and $60,000, respectively for the nine months ended September 30, 2022, and 2021. Compensation for the nine months ended September 30, 2022 includes several bonuses approved by the Board of 1,000,000 shares of American Rebel, Inc. common stock, valued at $0.50 per share in June 2017, prior to the acquisition. These shares were part of the 6,500,000 shares exchanged for Company common stock in the acquisition of American Rebel, Inc. completed on June 19, 2017.Directors.

NOTE 76 – NOTES PAYABLE – NONRELATED PARTIESNON-RELATED PARTY

Effective January 1, 2016, the Company acquired three vehiclesa vehicle from variousa related partiesparty in exchange for the assumption of the liabilitiesliability related to those vehicles.this vehicle. The liabilitiesliability assumed areis as follows at September 30, 20172022 and December 31, 2016.2021.

SCHEDULE OF NOTES PAYABLE TO NON-RELATED PARTIES

Current and long-term portion. Total loan balance is reported as current because loans are past due, become due within one year or are expected toas the loan will be repaid within one year.years time.

NOTE 87 – NOTES PAYABLE – WORKING CAPITAL

On July 6, 2017,During the Company’snine months ending September 30, 2022, the Company through one of its wholly-owned operating subsidiarysubsidiaries completed the sale of a secured promissory note in the principal amount of $250,000 with an interest rate of 12% per annum to a private investor, and current stockholder.several short-term notes under similar terms as its other short-term notes totaling $60,000. The note isnotes are secured by a pledge of allcertain items of the Company’s current inventory and the chief executive officer’s personal guaranty. This working capital note requires payments equal to 75% of current sales and matures in 180 days. In connection with this note,

During the nine months ending September 30, 2022, the Company issued 250,000and one of the Company’s wholly-owned operating subsidiaries repaid $2,541,634 of these short-term notes and successfully completed the conversion of short-term notes with a face value of $1,950,224 and accrued interest into shares of its common stock to the noteholder valued at $0.50 per share forwith a total of $125,000. The fair value of the common stock issued was$2,803,632, resulting in a Loss on extinguishment of debt of $1,376,756 recorded asin our Condensed Consolidated Statement of Operations. The conversion of a discount to the note payable. The discount will be amortized over the termmajor portion of the agreement tooutstanding short-term notes payable and accrued interest expense usingwas done in connection with the straight-line method that approximates the effective interest method. As ofregistered public offering completed in February 2022.

At September 30, 2017,2022, and December 31, 2021, the discounted outstanding balance due on the working capital notenotes payable was $183,355, including discount of $66,000.$603,840 and $3,879,428, respectively. These amounts do not include accrued interest payable for each respective time period.

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NOTE 9- CONVERTIBLE DEBENTURE8 – RELATED PARTY

Since September 16, 2016, the Company sold convertible debentures in the amount of $1,675,000 in the form of 12% three year convertible term notes. Interest is accrued at an annual rate of 12% and is payable in common stock at maturity. Both principal and interest may be converted into common stock at a price of $0.50 per share after the passage of 181 days. The Company may redeem the debenture at its option or force conversion after common stock trades at a price in excess of $1.00 per share for five days. The Holder may force redemption after the Company raises $3 million dollars in equity. The holders of the convertible debentures were issued three year warrants to purchase 1,675,000 shares of the Company’s common stock at $1.00 per share. As of September 30, 2017, the Company received $1,675,000 under this convertible debenture. The Company received an additional $410,000 in October and November 2017 (see Note 12 – Subsequent Events).

The convertible debenture holder, based on its agreement, with maturities beginning September 16, 2019 has the option to convert their principal and interest into 3,350,000 (plus 270,855 for accrued interest) shares of common stock. The fair value of the embedded beneficial conversion feature resulted in no discount to the convertible debenture – related party at September 30, 2017.

The Company analyzed the conversion option for derivative accounting consideration under ASC 815-15 “Derivatives and Hedging” and fair value measurement under ASC 820 and determined that the beneficial conversion feature under the convertible debenture should be recorded as a discount to debt if market was more than the conversion feature.

The convertible debenture - related party is measured at fair value at the end of each reporting period or termination of the debenture agreement with the change in fair value recorded to earnings. The fair value of the embedded beneficial conversion feature did not result in a discount to the convertible debenture - related party. The discount if and when we have one will be amortized over the term of agreement or modification to the agreement to interest expense using the straight-line method that approximates the effective interest method.

The Company used the eight steps to determine fair value under ASC 820. (1) Identify the item to be valued and the unit of account. (2) Determine the principal or most advantageous market and the relevant market participants. (3) Select the valuation premise to be used for asset measurements. (4) Consider the risk assumptions applicable to liability measurements. (5) Identify available inputs. (6) Select the appropriate valuation technique(s). (7) Make the measurement. (8) Determine amounts to be recognized and information to be disclosed.

Fair value was determined by the market price of the Company’s publicly traded stock with no discount allowed. This was determined as of the effective date of the agreement entered convertible debenture - related party. The conversion price was then compared to fair value, determined by market price and the difference between the two multiplied by the number of shares that would be issued upon conversion. The Company has not had any market activity within its public market. Private transactions between willing buyers and willing sellers have ranged from $0.02 to $0.50 per share. These transactions were not conducted through a broker dealer network.

As of September 30, 2017, the outstanding balance due the convertible debentures holders was $1,675,000, including $0 in original issue discount or interest.

NOTE 10 – EMBEDDED DERIVATIVES – FINANCIAL INSTRUMENTS

Since September 2016 the Company entered into a financial instrument, which consists of a convertible debenture, containing a conversion feature. Generally financial instruments are convertible into shares of the Company’s common stock; at prices that are either marked to the volume weighted average price of the Company’s publicly traded stock or a static price determinative from each financial instrument agreement. These prices may be at a significant discount to market as determined overall by the volume weighted average price of the Company’s publicly traded common stock. The Company for all intent and purposes considers these discounts to be fair market value as would be determined in an arm’s length transaction with a willing buyer and the restrictive nature of the common stock issued, unless issued pursuant to a registration or some other registered shares with the SEC.

The Company accounts for the fair value of the conversion feature in accordance with ASC 815-15,Derivatives and Hedging; Embedded Derivatives, which requires the Company to bifurcate and separately account for the conversion features as an embedded derivative contained in the Company’s convertible debt and original issue discount notes payable. The Company is required to carry the embedded derivative on its balance sheet at fair value and account for any unrealized change in fair value as a component in its results of operations. The Company valued the embedded derivatives using eight steps to determine fair value under ASC 820. (1) Identify the item to be valued and the unit of account. (2) Determine the principal or most advantageous market and the relevant market participants. (3) Select the valuation premise to be used for asset measurements. (4) Consider the risk assumptions applicable to liability measurements. (5) Identify available inputs. (6) Select the appropriate valuation technique(s). (7) Make the measurement. (8) Determine amounts to be recognized and information to be disclosed.

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The fair value of the conversion feature of the financial instrument as of September 30, 2017 was $0. The Company did not record any expense associated with the embedded derivatives at September 30, 2017. No embedded derivative expense was realized as there was no change in the conversion price. The conversion price for this financial instrument was $0.50 per share which is higher than market as there have been no sales of the Company’s common stock.

NOTE 11 – INCOME TAXES

At September 30, 20172022 and December 31, 2016,2021, the Company had a net operating loss carryforward of $4,870,249 $33,347,388 and $2,343,017,$26,969,657, respectively, which begins to expire in 2034.

Components of net deferred tax asset, including a valuation allowance, are as follows:

SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES

Valuation allowance for deferred tax assets as of September 30, 20172022, and December 31, 20162021, was $1,704,587$7,002,951 and $820,056,$5,663,628, respectively. In assessing the recovery of the deferred tax asset, management considers whether it is more likely than not that some portion or the entire deferred tax asset will not be realized. The ultimate realization of the deferred tax asset is dependent upon the generation of future taxable income in the periods in which those temporary differences become deductible. Management considers the scheduled reversals of future deferred tax assets, projected future taxable income, and tax planning strategies in making this assessment. As a result, management determined it was more likely than not deferred tax assets will not be realized as of September 30, 20172022, and December 31, 20162021, and recognized 100% valuation allowance for each period.period.

Reconciliation between the statutory rate and the effective tax rate for both periods and as of December 31, 2016:2021:

SCHEDULE OF EFFECTIVE INCOME TAX RATE RECONCILIATION

NOTE 129 – SHARE CAPITAL

The Company is authorized to issue 100,000,000600,000,000 shares of its $0.001$0.001 par value common stock and 1,000,00010,000,000 shares of its $0.001$0.001 par value preferred stock.

Common stock

On December 15, 2014,February 7, 2022, the Company effectuated a reverse split of its issued to its founder, then an officer and director of the Company, 6,000,000outstanding shares of its $0.001 par value common stock at a priceratio of $0.001 per1-for-80. The share for services provided upon organization. The services were valued at $6,000.numbers and pricing information in this report are adjusted to reflect the reverse stock split.

Common stock and preferred stock

On January 15, 2015, the Company issued to its founder 3,000,000February 3, 2022, multiple Series B Convertible Preferred stockholders converted 201,358 shares of its $0.001 par value common stock at a price of $0.008 per share for certain intangible assets and tangible assets (see Note 3 - Intangible Assets). Mr. David Estus, then our sole officer and director, incurred more than $50,000 in developing or acquiring the intangible and tangible assets for which the Company valued at $24,000.

The Company filed a registration statement on Form S-1 which was declared effective by the U.S. Securities and Exchange Commission on October 14, 2015. The Form S-1 allowed the Companytheir Series B Convertible Preferred Stock to solicit investors for investment in a direct public offering of $60,000. Twenty six (26) investors invested at a price of $0.01 per share for the entire offering which closed on December 11, 2015.

The Company issued 17,421,000 shares of its common stock and issued warrants to purchase 500,000251,698 shares of common stock to shareholders of American Rebel, Inc. and cancelled 9,000,000the Company.

On February 3, 2022, the Company converted two outstanding notes into 186,067 shares of common stock owned by American Rebel, Inc.of the Company.

On February 10, 2022, the Company received an equity investment of $10,500,000 to completepurchase 2,530,121 shares of the acquisitionCompany’s common stock through a registered public offering at $4.15 per share.

On July 12, 2022, we entered into a PIPE transaction with Armistice Capital Master Fund Ltd. for the purchase and sale of American Rebel, Inc. which was accounted$12,887,976.31 of securities, consisting of (i) 509,311 shares of Common Stock at $1.11 per share, (ii) prefunded warrants (the “Prefunded Warrants”) that are exercisable into 11,202,401 shares of Common Stock (the “Prefunded Warrant Shares”) at $1.10 per Prefunded Warrant, and (iii) immediately exercisable warrants to purchase up to 23,423,424 shares of Common Stock at an initial exercise price of $0.86 per share and will expire five years from the date of issuance.

On August 22, 2022, 100,000 shares of Common Stock were issued in return for services as a reverse merger.component of a February 2022 services agreement.

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During June 2017, prior to the merger, American Rebel, Inc issued 2,800,000month of August 2022, Armistice Capital Master Fund Ltd. exercised 440,441 Prefunded Warrants. Along with the exercise notice and payment of $4,404.41, 440,441 shares of common stock as compensationwere issued.

During the month of September 2022, Armistice Capital Master Fund Ltd. exercised 2,682,960 Prefunded Warrants. Along with several exercise notices and recorded an expense based on fair market value of $0.50 per share for a total expense of $1,400,000. On June 19, 2017, in connection with the merger and acquisition of the subsidiary, the Company exchanged 17,421,000payments totaling $26,829.60, 2,682,960 shares of common stock with stockholders of American Rebel, Inc. and cancelled 9,000,000 shares of common stock held by American Rebel, Inc. American Rebel, Inc. became a wholly owned subsidiary of the Company upon completion of the exchange.were issued.

On July 6, 2017, the Company’s wholly-owned operating subsidiary completed the sale of a secured promissory note in the principal amount of $250,000 with an interest rate of 12% per annum to a private investor, and current stockholder. The note is secured by a pledge of all of the Company’s current inventory and the chief executive officer’s personal guaranty. This working capital note requires payments equal to 75% of current sales and matures in 180 days. In connection with this note, the Company issued 250,000 shares of its common stock to the noteholder.

On August 6, 2017, the Company’s wholly-owned subsidiary completed an agreement to acquire a right to a trade show booth location early in 2018. In connection with this acquisition, the Company issued 100,000 shares of its common stock to the seller.

At September 30, 20172022 and December 31, 2016,2021, there were 23,771,0008,474,033 and 14,621,0001,597,370 shares of common stock issued and outstanding, respectively; and 75,143 and 276,501 shares of Series B preferred stock issued and outstanding, respectively, and 100,000 and 100,000 shares of its Series A preferred stock issued and outstanding, respectively.

NOTE 1310 – WARRANTS AND OPTIONS

Since September 16, 2016,Prefunded Warrants and Warrants issued in connection with the convertible debenture –related party (see Note 8 – Convertible Debenture – Related Party) the Company issued three year warrants to purchase 1,675,000 shares of the Company’s common stock at $1.00 per share. In conjunction with sale of convertible debt subsequent to September 30, 2017, the Company issued warrants to purchase an additional 410,000shares on identical terms.PIPE

On June 19, 2017, the Company issued five year warrants to purchase 500,000 shares of the Company’s common stock at $0.50 per share as compensation.

As of September 30, 2017,2022, there were 2,175,000 warrants8,456,843 Prefunded Warrants issued and outstanding. As of December 31, 2016,2021, there were 600,000no Prefunded Warrants issued and outstanding. The Prefunded Warrants were purchased by the holders of the warrants for $1.10 per warrant. The Prefunded Warrants require the payment of an additional $0.01 per warrant and the written notice of exercise to the Company to convert the Prefunded Warrant into one share of common stock of the Company. During the period ended September 30, 2022, the Company received notice on 3,123,491 Prefunded Warrants converting into 3,123,491 shares of common stock.

Along with the Prefunded Warrants the PIPE investors were issued immediately exercisable warrants to purchase up to 23,423,424 shares of the Company’s common stock with an exercise price of $0.86 per share expiring five years from the date of issuance, or July 11, 2027. Each Prefunded Warrant and share of common stock issued in the PIPE transaction received two warrants that were exercisable at $0.86 per share with a five-year expiry.

As of September 30, 2022, there were 35,867,869 warrants issued and outstanding, which includes the remaining balance of 8,456,843 Prefunded Warrants. As of December 31, 2021, there were 701,776 warrants outstanding to acquire additional shares of common stock.

The Company evaluates outstanding warrants as derivative liabilities and will recognize any changes in the fair value through earnings. The Company determined that the Warrantswarrants have an immaterial fair value at September 30, 2017.2022. The warrants do not trade in a highly active securities market, and as such, the Company estimated the fair value of these common stock equivalents using Black-Scholes and the following assumptions:

Expected volatility was based primarily on historical volatility. Historical volatility was computed using daily pricing observations for recent periods. The Company’s common stock has not traded so the volatility computation was based on other similarly situated companies. The Company believes this method produced an estimate that was representative of the Company’s expectations of future volatility over the expected term which due to their maturity period as expiry, it was three years. The Company had no reason to believe future volatility over the expected remaining life of these common stock equivalents was likely to differ materially from historical volatility. Expected life was based on three years due to the expiry of maturity. The risk-free rate was based on the U.S. Treasury rate that corresponded to the expected term of the common stock equivalents.

SCHEDULE OF FAIR VALUE MEASUREMENT

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Stock Purchase WarrantWarrants