Cover
Cover - shares | 6 Months Ended | |
Jun. 30, 2023 | Aug. 14, 2023 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Jun. 30, 2023 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2023 | |
Current Fiscal Year End Date | --12-31 | |
Entity File Number | 001-41267 | |
Entity Registrant Name | AMERICAN REBEL HOLDINGS, INC. | |
Entity Central Index Key | 0001648087 | |
Entity Tax Identification Number | 47-3892903 | |
Entity Incorporation, State or Country Code | NV | |
Entity Address, Address Line One | 909 18th Avenue South | |
Entity Address, Address Line Two | Suite A | |
Entity Address, City or Town | Nashville | |
Entity Address, State or Province | TN | |
Entity Address, Postal Zip Code | 37212 | |
City Area Code | (833) | |
Local Phone Number | 267-3235 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 2,842,311 | |
Common Stock [Member] | ||
Title of 12(b) Security | Common Stock | |
Trading Symbol | AREB | |
Security Exchange Name | NASDAQ | |
Common Stock Purchase Warrants [Member] | ||
Title of 12(b) Security | Common Stock Purchase Warrants | |
Trading Symbol | AREBW | |
Security Exchange Name | NASDAQ |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 2,733,253 | $ 356,754 |
Accounts receivable | 1,982,483 | 1,613,489 |
Prepaid expense | 160,295 | 207,052 |
Inventory | 8,563,465 | 7,421,696 |
Inventory deposits | 310,587 | 309,684 |
Total Current Assets | 13,750,083 | 9,908,675 |
Property and Equipment, net | 402,157 | 456,525 |
OTHER ASSETS: | ||
Lease deposits | 29,120 | 18,032 |
Right-of-use lease assets | 1,487,271 | 1,977,329 |
Goodwill | 4,200,000 | 4,200,000 |
Total Other Assets | 5,716,391 | 6,195,361 |
TOTAL ASSETS | 19,868,630 | 16,560,561 |
CURRENT LIABILITIES: | ||
Accounts payable and other accrued expense | 2,288,920 | 2,523,551 |
Accrued interest | 103,919 | 103,919 |
Loan – Officer – related party | 146,000 | |
Loans – Working capital | 1,482,449 | 602,643 |
Line of credit | 1,359,683 | |
Right-of-use lease liabilities, current | 965,529 | 992,496 |
Total Current Liabilities | 6,346,500 | 4,222,609 |
Right-of-use lease liabilities, long-term | 521,742 | 984,833 |
TOTAL LIABILITIES | 6,868,242 | 5,207,442 |
STOCKHOLDERS’ EQUITY (DEFICIT): | ||
Preferred stock value | ||
Common Stock, $0.001 par value; 600,000,000 shares authorized; 748,720 and 677,221 issued and outstanding, respectively at June 30, 2023 and December 31, 2022 | 749 | 677 |
Additional paid in capital | 47,929,533 | 45,465,077 |
Accumulated deficit | (34,930,069) | (34,112,810) |
TOTAL STOCKHOLDERS’ EQUITY (DEFICIT) | 13,000,388 | 11,353,119 |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | 19,868,630 | 16,560,561 |
Series A Preferred Stock [Member] | ||
STOCKHOLDERS’ EQUITY (DEFICIT): | ||
Preferred stock value | 100 | 100 |
Series B Preferred Stock [Member] | ||
STOCKHOLDERS’ EQUITY (DEFICIT): | ||
Preferred stock value | $ 75 | $ 75 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 175,000 | 175,000 |
Preferred stock, shares outstanding | 175,000 | 175,000 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 600,000,000 | 600,000,000 |
Common stock, shares issued | 748,720 | 677,221 |
Common stock, shares outstanding | 748,720 | 677,221 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Income Statement [Abstract] | ||||
Revenue | $ 3,670,571 | $ 338,706 | $ 8,072,670 | $ 492,786 |
Cost of goods sold | 2,982,688 | 241,078 | 5,774,014 | 337,797 |
Gross margin | 687,883 | 97,628 | 2,298,656 | 154,989 |
Expenses: | ||||
Consulting/payroll and other costs | 931,505 | 246,407 | 1,876,104 | 709,396 |
Rental expense, warehousing, outlet expense | 275,474 | 502,134 | ||
Product development costs | 113,190 | 16,495 | 146,463 | |
Marketing and brand development costs | 172,617 | 149,249 | 425,342 | 230,219 |
Administrative and other | 833,851 | 1,172,418 | 1,195,000 | 1,610,723 |
Depreciation and amortization expense | 25,275 | 455 | ||
Total operating expense | 2,238,722 | 1,681,719 | 4,069,440 | 2,698,156 |
Operating income (loss) | (1,550,839) | (1,584,091) | (1,770,784) | (2,543,167) |
Other Income (Expense) | ||||
Interest expense, net | (148,437) | (18,001) | (155,547) | (310,406) |
Employee retention credit funds, net of costs to collect | 1,107,672 | 1,107,672 | ||
Gain/(loss) on sale of equipment | 1,400 | 1,400 | ||
Net income (loss) before income tax provision | (590,204) | (1,602,092) | (817,259) | (4,230,329) |
Provision for income tax | ||||
Net income (loss) | $ (590,204) | $ (1,602,092) | $ (817,259) | $ (4,230,329) |
Net Loss per share - basic | $ (0.87) | $ (20.75) | $ (1.21) | $ (33.37) |
Net Loss per share - diluted | $ (0.87) | $ (20.75) | $ (1.21) | $ (33.37) |
Weighted average number of shares - basic | 679,000 | 126,760 | 678,000 | 126,760 |
Weighted average number of shares - diluted | 679,000 | 126,760 | 678,000 | 126,760 |
Depreciation and amortization expense | $ 54,365 | $ 1,355 | ||
Gain/(loss) on extinguishment of debt | $ (1,376,756) |
Condensed Consolidated Statem_2
Condensed Consolidated Statement of Stockholders' Equity/Deficit (Unaudited) - USD ($) | Common Stock [Member] | Preferred Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Total |
Balance at Dec. 31, 2021 | $ 64 | $ 377 | $ 22,798,839 | $ (26,969,657) | $ (4,170,337) |
Balance, shares at Dec. 31, 2021 | 63,895 | ||||
Sale of common stock | $ 106 | 9,038,350 | 9,038,456 | ||
Sale of common stock, net, shares | 106,345 | ||||
Common stock issued as compensation | $ 9 | 969,526 | 969,535 | ||
Common stock issued as compensation, shares | 9,345 | ||||
Preferred stock converted into common stock | $ 10 | (202) | 192 | ||
Preferred stock converted into common stock, shares | 10,068 | ||||
Conversion of debt into warrants | 1,566,559 | 1,566,559 | |||
Net loss | (4,230,329) | (4,230,329) | |||
Balance at Jun. 30, 2022 | $ 189 | 175 | 34,373,466 | (31,199,986) | 3,173,844 |
Balance, shares at Jun. 30, 2022 | 189,653 | ||||
Balance at Dec. 31, 2022 | $ 677 | 175 | 45,465,077 | (34,112,810) | 11,353,119 |
Balance, shares at Dec. 31, 2022 | 677,221 | ||||
Sale of common stock | $ 72 | 312,380 | $ 312,452 | ||
Sale of common stock, net, shares | 71,499 | 615,000 | |||
Net loss | (817,259) | $ (817,259) | |||
Sale of 615,000 pre-funded common stock warrants $4.36 per share, exercise price of $0.01 | 2,681,400 | 2,681,400 | |||
Prefunded common stock warrant offering costs and fees | (529,324) | (529,324) | |||
Effect o reverse stock split round lot shares of 2,093,591 | $ 2,094 | (2,094) | |||
Effect o reverse stock split round lot shares of 2,093,591, shares | 2,093,591 | ||||
Post quarter effectuation | $ (2,094) | 2,094 | |||
Post quarter effectuation, shares | (2,093,591) | ||||
Balance at Jun. 30, 2023 | $ 749 | $ 175 | $ 47,929,533 | $ (34,930,069) | $ 13,000,388 |
Balance, shares at Jun. 30, 2023 | 748,720 |
Condensed Consolidated Statem_3
Condensed Consolidated Statement of Stockholders' Equity/Deficit (Unaudited) (Parenthetical) | 6 Months Ended |
Jun. 30, 2023 $ / shares shares | |
Number of shares issued | 615,000 |
Pre-funded stock price per share | $ / shares | $ 4.36 |
Warrants exercise price per share | $ / shares | $ 0.01 |
Common Stock [Member] | |
Number of shares issued | 71,499 |
Effect o reverse stock split round lot shares of 2,093,591, shares | 2,093,591 |
Condensed Consolidated Statem_4
Condensed Consolidated Statement of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
CASH FLOW FROM OPERATING ACTIVITIES: | ||
Net income (loss) | $ (817,259) | $ (4,230,329) |
Depreciation and amortization | 54,365 | 1,355 |
Gain on sale of equipment | (1,400) | |
Compensation paid through issuance of common stock | 969,535 | |
Amortization of loan discount | 1,000,457 | |
Adjustments to reconcile net loss to cash (used in) operating activities: | ||
Accounts receivable | (368,993) | (172,307) |
Prepaid expenses | 46,756 | (469,295) |
Inventory | (1,142,671) | (140,639) |
Inventory deposits and other | (11,087) | (224,894) |
Accounts payable and accrued expense | (234,630) | (637,706) |
Net Cash (Used in) Operating Activities | (2,474,919) | (3,903,823) |
CASH FLOW FROM INVESTING ACTIVITIES: | ||
Disposition/(purchase) of fixed assets | 1,402 | (13,651) |
Net Cash Provided by/(Used in) Investing Activities | 1,402 | (13,651) |
CASH FLOW FROM FINANCING ACTIVITIES: | ||
Proceeds from sale of common stock and prefunded warrants, net of offering costs paid of $529,324 and $1,461,544, respectively | 2,464,528 | 9,038,456 |
Proceeds from line of credit | 1,700,000 | |
Proceeds (repayments) of loans – officer - related party | 146,000 | (81,506) |
Principal payments on line of credit, net | (340,317) | |
Proceeds from working capital loan | 1,000,000 | |
Principal payments on working capital loan – recent | (117,800) | |
Proceeds from working capital loan – pre-existing lender | 60,000 | |
Principal payments on working capital loan - pre-existing lender | (2,395) | |
Principal payment on loans – nonrelated parties | (2,607,108) | |
Net Cash Provided by Financing Activities | 4,850,016 | 6,409,842 |
CHANGE IN CASH | 2,376,499 | 2,492,368 |
CASH AT BEGINNING OF PERIOD | 356,754 | 17,607 |
CASH AT END OF PERIOD | 2,733,253 | 2,509,975 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | ||
Interest | 156,252 | 206,607 |
Income taxes | ||
Non-cash investing and financing activities: | ||
Conversion of debt into equity | $ 1,950,224 |
Condensed Consolidated Statem_5
Condensed Consolidated Statement of Cash Flows (Unaudited) (Parenthetical) - USD ($) | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Statement of Cash Flows [Abstract] | ||
Net of offering costs paid | $ 529,324 | $ 1,461,544 |
ORGANIZATION AND SUMMARY OF SIG
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization The Company was incorporated on December 15, 2014 Nature of operations The Company develops and sells branded products in the self-defense, safe storage and other patriotic product areas using a wholesale distribution network, utilizing personal appearances, musical venue performances, as well e-commerce and television. The Company’s products are marketed under the American Rebel Brand and are proudly imprinted with such branding. Through its acquisition of the “Champion Entities” (which consists of Champion Safe Co., Inc., Superior Safe, LLC, Safe Guard Security Products, LLC, and Champion Safe De Mexico, S.A. de C.V.) the Company promotes and sells its safe and storage products through a growing network of dealers, in select regional retailers and local specialty safe, sporting goods, hunting and firearms retail outlets, as well as through online avenues, including website and e-commerce platforms. The Company sells its products under the Champion Safe Co., Superior Safe Company and Safe Guard Safe Co. brands as well as the American Rebel Brand. To varying degrees, the consequences of the COVID-19 pandemic continue to affect our operating business. Significant government and private sector actions have taken place to control the spread and mitigate the economic effects of the virus and its variants. The development of geopolitical conflicts, supply chain disruptions and government actions to slow rapid inflation in recent years have produced varying effects on our business. The economic effects from these events over long term cannot be reasonably estimated at this time. Accordingly, estimates used in the preparation of our financial statements, including those associated with the evaluation of certain long-lived assets, goodwill and other intangible assets for impairment, expected credit losses on amounts owed to us (through accounts receivable) and the estimations of certain losses assumed under warranty and other liability contracts, may be subject to significant adjustments in future periods. 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 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, 2022, and notes thereto contained, filed on April 14, 2023. Principles of Consolidation The condensed consolidated financial statements include the accounts of the Company and its wholly-owned 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, other storage products 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 an estimate for the reserve of slow moving or obsolete inventories by regularly evaluating individual inventory levels, projected sales and current economic conditions. The Company makes deposit payments on certain inventory to be manufactured that are carried separately until the manufactured goods are received into inventory. Fixed assets and depreciation Property and equipment are 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 using the straight-line method over the estimated useful life of the asset, which ranges from five to seven years. Revenue recognition In accordance with Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers, 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 steps: ( 1) Identify the contract with a client; (2) Identify the performance obligations in the contract; (3) Determine the transaction price; (4) Allocate the transaction price to performance obligations in the contract; and (5) Recognize revenues when or as the company satisfies a performance obligation. These steps are met when an order is received, a price is agreed, and the product is shipped or delivered to that customer. Advertising costs Advertising costs are expensed as incurred; Marketing costs which we consider to be advertising costs incurred were $ 172,617 149,249 425,342 230,219 Fair Value of Financial Instruments Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of June 30, 2023, and December 31, 2022, 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, 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-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. The Company accounts for equity instruments issued in exchange for the receipt of goods or services from other than employees in accordance with ASC 718-10 and the conclusions reached 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 ASC 505-50. Earnings per share Net loss per common share is computed by dividing net loss by the weighted average common shares outstanding during the period as defined by ASC 260 - 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. Dilutive common share equivalents are negligible or immaterial as dilutive shares to be issued during net loss years were non-existent. For the three months ended June 30, 2023 and June 30, 2022, net loss per share was $ (0.87) (20.75) (1.21) (33.37) Fully diluted shares outstanding is the total number of shares that the Company would theoretically have if all dilutive securities were exercised and converted into shares. Dilutive securities include options, warrants, convertible debt, preferred stock and anything else that can be converted into shares. Potential dilutive shares consist of the incremental common shares issuable upon the exercise of dilutive securities, calculated using the treasury stock method. The calculation of dilutive shares outstanding excludes out-of-the-money options (i.e., such options’ exercise prices were greater than the average market price of our common shares for the period) because their inclusion would have been antidilutive. Out-of-the-money stock options totaled none and none as of June 30, 2023 and December 31, 2022, respectively. All other dilutive securities are listed below. The following table illustrates the total number of common shares that would be converted from common stock equivalents issued and outstanding at the end of each period presented; as of June 30, 2023 and as of June 30, 2022, respectively. SCHEDULE OF EARNINGS PER SHARE June 30, 2023 June 30, 2022 Shares used in computation of basic earnings per share for the periods ended 678,000 126,760 Total dilutive effect of outstanding stock awards or common stock equivalents 1,078 75,500 Shares used in computation of fully diluted earnings per share for the periods ended June 30, 2023 and June 30, 2022, respectively 1,756,000 202,260 Net income (loss) $ (817,259 ) $ (4,230,329 ) Fully diluted income (loss) per share $ ( 0.47 ) $ ( 20.92 ) In periods of losses, diluted loss per share is computed on the same basis as basic loss per share as the inclusion of any other potential shares outstanding would be anti-dilutive. 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 June 30, 2023, and December 31, 2022, the Company reviewed its tax positions and determined there were no outstanding, or retroactive tax positions with less than a 50% likelihood 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 three-month and six-month periods ended June 30, 2023, and 2022, respectively, no 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. Warranties The Company’s safe manufacturing business estimates its exposure to warranty claims based on both current and historical (with respect to the Champion Entities) product sales data and warranty costs (actual) incurred. The Company assesses the adequacy of its recorded warranty liability each quarter and adjusts the amount as necessary. Warranty liability is included in our accrued expense accounts in the accompanying condensed consolidated balance sheets. We estimate that warranty liability is nominal or negligible based on the superior quality of products and our excellent customer relationships. Warranty liability recorded was $ 93,458 99,238 Business Combinations The Company accounts for business combinations in accordance with ASC Topic 805, Business Combinations, and as further defined by ASU 2017-01, Business Combinations (Topic 805), which requires the purchase price to be measured at fair value. When the purchase consideration consists entirely of shares of our common stock, the Company calculates the purchase price by determining the fair value, as of the acquisition date, of shares issued in connection with the closing of the acquisition and, if the transaction involves contingent consideration based on achievement of milestones or earn-out events, the probability-weighted fair value, as of the acquisition date, of shares issuable upon the occurrence of future events or conditions pursuant to the terms of the agreement governing the business combination. If the transaction involves such contingent consideration, our calculation of the purchase price involves probability inputs that are highly judgmental due to the inherent unpredictability of future results, particularly by growth-stage companies. The Company recognizes estimated fair values of the tangible assets and intangible assets acquired, including in process research and development (“IPR&D”), and liabilities assumed as of the acquisition date, and we record as goodwill any amount of the purchase price of the tangible and intangible assets acquired and liabilities assumed in excess of the fair value (see Note 8 - Goodwill and Acquisition of Champion Entities for further information in accordance with ASC 805-10-55-37 through ASC 805-10-55-50). Right of Use Assets and Lease Liabilities In February 2016, the FASB issued Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842). The standard requires lessees to recognize almost all leases on the balance sheet as a Right-of-Use (“ROU”) asset and a lease liability and requires leases to be classified as either an operating or a finance type lease. The standard excludes leases of intangible assets or inventory. The standard became effective for the Company 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 amounts have not been adjusted and continue to be reported in accordance with our historical accounting under ASC 840. The Company 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 purpose, 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’s 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 condensed consolidated balance sheets. Recent pronouncements The Company evaluated recent accounting pronouncements through June 30, 2023, and believes that none have a material effect on the Company’s financial statements. Concentration risks Prior to the closing of the Champion Entities, the Company purchased a substantial portion (over 20 %) of its inventory from 2 third-party vendors. With the closing and integration of the Champion Entities, the Company no longer purchases a substantial portion (over 20 %) of its inventory from the 2 third-party vendors. As of June 30, 2023, the net amount due to these 2 third-party vendors (accounts payable and accrued expense) was $ 0 . The loss of vendor relationships could have a material effect on the Company; however, the Company believes sufficient suppliers could be substituted should these third-party vendors/suppliers become unavailable or non-competitive for us. |
GOING CONCERN
GOING CONCERN | 6 Months Ended |
Jun. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
GOING CONCERN | 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 growth and acquisition stage and, accordingly, has not yet reached profitability from its operations. Since inception, the Company has been engaged in financing activities and executing its business plan of operations and incurring costs and expenses related to product development, branding, inventory buildup and product launch. As a result, the Company has continued to incur net losses for the six months ended June 30, 2023, and 2022 of ($ 817,259 ) and ($ 4,230,329 34,930,069 ) as of June 30, 2023, and ($ 34,112,810 ) as of December 31, 2022. The Company’s working capital was $ 7,403,583 as of June 30, 2023, compared to $ 6,678,562 as of December 31, 2022. The increase in working capital from December 31, 2022, to June 30, 2023, is due to the Company increasing its overall inventory and accounts receivable balances offset by smaller increases in liabilities as well as incurring a net loss during the six months ending June 30, 2023. 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 and profitability. Management believes that sufficient funding can be secured through the obtaining of loans, as well as future offerings of its preferred and common 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 existing 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 objectives and efforts. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. 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 be necessary should the Company be unable to continue as a going concern. |
INVENTORY AND DEPOSITS
INVENTORY AND DEPOSITS | 6 Months Ended |
Jun. 30, 2023 | |
Inventory Disclosure [Abstract] | |
INVENTORY AND DEPOSITS | NOTE 3 – INVENTORY AND DEPOSITS Inventory and deposits include the following: SCHEDULE OF INVENTORY AND DEPOSITS June 30, 2023 December 31, 2022 (unaudited) (audited) Inventory – finished goods $ 8,563,465 $ 7,421,696 Inventory deposits 310,587 309,684 Total Inventory and deposits $ 8,874,052 $ 7,731,380 With the integration of Champion we eliminated the need to hold inventory with our American Rebel, Inc. subsidiary at its facility. We do not believe we have a risk of concentration in our purchasing of inventory materials, sourcing needs or manufacturing. As reported in our Annual Report filed on Form 10-K Champion added approximately $ 5,400,000 600,000 |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 6 Months Ended |
Jun. 30, 2023 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | NOTE 4 – PROPERTY AND EQUIPMENT Property and equipment include the following: SCHEDULE OF PROPERTY AND EQUIPMENT June 30, 2023 December 31, 2022 (unaudited) (audited) Plant, property and equipment $ 367,317 $ 367,317 Vehicles 423,515 448,542 Property and equipment gross 790,832 815,859 Less: Accumulated depreciation (388,675 ) (359,334 ) Net property and equipment $ 402,157 $ 456,525 For the six months ended June 30, 2023, and 2022 we recognized $ 54,365 1,355 |
RELATED PARTY NOTE PAYABLE AND
RELATED PARTY NOTE PAYABLE AND RELATED PARTY TRANSACTIONS | 6 Months Ended |
Jun. 30, 2023 | |
Related Party Transactions [Abstract] | |
RELATED PARTY NOTE PAYABLE AND RELATED PARTY TRANSACTIONS | NOTE 5 – RELATED PARTY NOTE PAYABLE AND RELATED PARTY TRANSACTIONS Charles A. Ross, Jr. serves as the Company’s CEO. Compensation for Mr. Ross includes a base salary and a bonus based upon certain performance measures approved by the Board of Directors. Doug Grau serves as the Company’s President. Compensation for Mr. Grau includes a base salary and a bonus based upon certain performance measures approved by the Board of Directors. Mr. Grau lent the Company approximately $ 146,000 |
LINE OF CREDIT _ FINANCIAL INST
LINE OF CREDIT – FINANCIAL INSTITUTION | 6 Months Ended |
Jun. 30, 2023 | |
Debt Disclosure [Abstract] | |
LINE OF CREDIT – FINANCIAL INSTITUTION | NOTE 6 – LINE OF CREDIT – FINANCIAL INSTITUTION During February 2023, the Company entered into a $ 2 2.05 7.22 SCHEDULE OF LINE OF CREDIT June 30, 2023 December 31, 2022 (unaudited) (audited) Line of credit from a financial institution. $ 1,359,683 $ - Total recorded as a current liability $ 1,359,683 $ - Current and long-term portion. As of June 30, 2023 the total balance due of $ 1,359,683 The Company paid a one-time loan fee equal to 0.1% of the Line of Credit amount available. In the likelihood of default, the default interest automatically increases to 6 2.05 The Company drew down on the Line of Credit initially in the amount of $ 1.7 340,317 |
NOTES PAYABLE _ WORKING CAPITAL
NOTES PAYABLE – WORKING CAPITAL | 6 Months Ended |
Jun. 30, 2023 | |
Debt Disclosure [Abstract] | |
NOTES PAYABLE – WORKING CAPITAL | NOTE 7 – NOTES PAYABLE – WORKING CAPITAL SCHEDULE OF WORKING CAPITAL June 30, 2023 December 31, 2022 (unaudited) (audited) Working capital loan with a limited liability company domiciled in the state of Georgia. The working capital loan is demand loan and accrues interest at 12% th 600,000 600,000 Working capital loans with a major financial institution converted from a revolving line of credit to a strict payoff loan agreement with the major financial institution. Annual interest rate approximates 22.5% 249 2,643 Working capital loan agreement with a limited liability company domiciled in the state of New York. The working capital loan is secured by all the assets of the Company that is not secured by the first priority interest of the major financial institution line of credit facility as well as a personal guaranty by our CEO, Mr. Charles A Ross. The working capital loan requires payments of $ 20,000 20,000 882,200 - $ 1,482,449 $ 602,643 Total recorded as a current liability $ 1,482,449 $ 602,643 On April 14, 2023, the Company entered into a $ 1,000,000 Business Loan and Security Agreement (the “Secured Loan”) with an accredited investor lending source (the “Lender”). Under the Secured Loan, the Company received the loan net of fees of $ 20,000 20,000 each, for a total repayment of $ 1,280,000 41.4 %. The Secured Loan is secured by all of the assets of the Company and its subsidiaries second to a first priority lien secured the holder of the Line of Credit. Furthermore, the Company’s Chief Executive Officer, provided a personal guaranty for the Secured Loan. The Secured Loan provides for a default fee of $ 15,000 80,000 During the six months ending June 30, 2022, the Company completed the sale of several short-term notes under similar terms as its other short-term notes totaling $ 60,000 During the six months ending June 30, 2022, the Company repaid $ 2,541,634 1,950,224 2,803,632 1,376,756 At June 30, 2023, and December 31, 2022, the outstanding balance due on all of the working capital notes payable was $ 1,482,449 and $ 602,643 , respectively. These amounts do not include interest payable on the various notes where interest was not paid in full per the terms of the notes. As of June 30, 2023, the Company was in default on $ 600,000 of the notes payable – working capital as the $ 600,000 in notes were due and payable by March 31, 2023. Subsequent to June 30, 2023, the Company refinanced this $ 600,000 note with the accredited investor and this note is no longer in default. Please see Note 15 – SUBSEQUENT EVENTS. |
GOODWILL AND ACQUISITION OF THE
GOODWILL AND ACQUISITION OF THE CHAMPION ENTITIES | 6 Months Ended |
Jun. 30, 2023 | |
Goodwill And Acquisition Of Champion Entities | |
GOODWILL AND ACQUISITION OF THE CHAMPION ENTITIES | NOTE 8 – GOODWILL AND ACQUISITION OF THE CHAMPION ENTITIES Goodwill Goodwill is initially recorded as of the acquisition date and is measured as any excess of the purchase price over the estimated fair value of the identifiable net assets acquired. Goodwill is not amortized, but rather is subject to impairment testing annually (on the first day of the fourth quarter), or between annual tests whenever events or changes in circumstances indicate that the fair value of a reporting unit may be below its carrying amount. We first perform a qualitative assessment to evaluate goodwill for potential impairment. If based on that assessment it is more likely than not that the fair value of the reporting unit is below its carrying value, a quantitative impairment test is necessary. The quantitative impairment test requires determining the fair value of the reporting unit. We use the income approach, whereby we calculate the fair value based on the present value of estimated future cash flows using a discount rate that approximates our weighted average cost of capital. The process of evaluating the potential impairment of goodwill is subjective and requires significant estimates and assumptions about the future such as sales growth, gross margins, employment costs, capital expenditures, inflation and future economic and market conditions. Actual future results may differ from those estimates. If the carrying value of the reporting unit’s assets and liabilities, including goodwill, exceeds its fair value, impairment is recorded for the excess, not to exceed the total amount of goodwill allocated to the reporting unit. As of June 30, 2023 and December 31, 2022, we had goodwill of $ 4,200,000 4,200,000 nd The Company policy is to review its goodwill for impairment periodically (based on economic conditions) and more specifically in the 4 th Business Combination Consideration On June 29, 2022, the Company entered into a stock and membership interest purchase agreement with Champion Safe Co., Inc., Superior Safe, LLC, Safe Guard Security Products, LLC, Champion Safe De Mexico, S.A. de C.V. (the “Champion Entities” or “Champion”) and Mr. Ray Crosby (the “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. The acquisition occurred on July 29, 2022. Under the terms of the Champion Purchase Agreement, the Company paid the Seller (i) cash consideration of approximately $ 9,150,000 350,000 400,000 350,000 200,000 150,000 Accounting for the Business Combination Under the acquisition method of accounting, the acquired tangible and intangible assets and assumed liabilities are recognized based on their estimated fair values as of the business combination closing date. Pro forma adjustments were preliminary and based on estimates of the fair value and useful lives of the assets acquired and liabilities assumed as of December 31, 2022 which have been prepared to illustrate the estimated effect of the business combination (see Note 15 – Pro Forma Condensed Combined Financial Information (Unaudited) to our Annual Report filed on Form 10-K). The Company may recognize a negligible deferred tax benefit as a result of the acquisition. Due to the acquisition, a temporary differences between book and tax basis for the intangible assets acquired may result in a deferred tax liability and additional goodwill, which we believe to be negligible. The acquisition was accounted for as a business combination in accordance with ASC 805. As such, the total purchase consideration was allocated to the assets acquired and liabilities assumed based on their fair values as of July 29, 2022. The purchase price allocation is dependent upon certain valuation and other studies that have not yet been completed, nor may never be completed. Accordingly, the pro forma purchase price allocation may be subject to further adjustments. There can be no assurances that additional analyses and final determination of valuations will result in a change to the estimates of fair value set forth below. The following is the estimate of the fair value of the assets acquired, liabilities assumed, and ensuing goodwill identified, reconciled to the purchase price transferred: SCHEDULE OF ASSETS ACQUIRED AND LIABILITY ASSUMED Cash $ - Accounts receivable 1,337,130 Inventory 5,229,426 Fixed assets 473,326 Deposits and other assets 53,977 Customer list and other intangibles** 637,515 Accounts payable (1,609,657 ) Accrued expenses and other (84,297 ) Goodwill 4,200,000 Consideration $ 10,237,420 Consideration: Payments of cash direct to Seller $ 8,455,177 Debt payments on behalf of Seller - guarantor 1,442,243 Payments to various service providers 340,000 Total Purchase Price $ 10,237,420 The Company’s estimates of fair values of the net assets acquired are based on the information that was available at the date of the acquisition, and the Company may continue to evaluate the underlying inputs and assumptions used in its valuations and would be subject to change. Preliminary estimates are subject to change during the measurement period, which we have determined to be one year from the date of the acquisition, which is July 29, 2023. (**- Customer lists and other intangibles are combined with goodwill at the end of each period and evaluated as to fair value. At June 30, 2023 and December 31, 2022, it was determined that total intangible assets (which includes goodwill) has a fair value of $ 4.2 |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Jun. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 9 – INCOME TAXES At June 30, 2023 and December 31, 2022, the Company had a net operating loss carryforward of $ 34,930,069 34,112,810 Components of net deferred tax asset, including a valuation allowance, are as follows: SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES June 30, 2023 December 31, 2022 (unaudited) (audited) Deferred tax asset: Net operating loss carryforward $ 7,335,000 $ 7,163,690 Total deferred tax asset 7,335,000 7,163,690 Less: Valuation allowance (7,335,000 ) (7,163,690 ) Net deferred tax asset $ - $ - Valuation allowance for deferred tax assets as of June 30, 2023, and December 31, 2022, was $ 7,335,000 7,163,690 As a result, management determined it was more likely than not deferred tax assets will not be realized as of June 30, 2023, and December 31, 2022, and recognized 100% valuation allowance for each period. Reconciliation between the statutory rate and the effective tax rate for both periods and as of June 30, 2023 and December 31, 2022: SCHEDULE OF EFFECTIVE INCOME TAX RATE RECONCILIATION Federal statutory rate ( 21.0 )% State taxes, net of federal benefit ( 0.0 )% Change in valuation allowance 21.0 % Effective tax rate 0.0 % On August 16, 2022, the Inflation Reduction Act of 2022 (“the 2022 act”) was signed into law. The 2022 act contains numerous provisions, including a 15 1 |
SHARE CAPITAL
SHARE CAPITAL | 6 Months Ended |
Jun. 30, 2023 | |
Equity [Abstract] | |
SHARE CAPITAL | NOTE 10 – SHARE CAPITAL The Company is authorized to issue 600,000,000 0.001 10,000,000 0.001 On June 27, 2023, the Company effectuated a reverse split of its issued and outstanding shares of common stock at a ratio of 1-for-25 The June 30, 2023 share numbers do not reflect any adjustment due to the 100-share round lot rounding up that has been inherent in the Company’s reverse stock splits since 2022. A shareholder that held a minimum of 100 shares pre-reverse split, based on the reverse stock split now holds less than 100 shares of our common stock will be issued an additional number of shares to ensure that they continue to maintain at least 100 shares of our common stock in ownership. 1 Common stock and preferred stock For the month of February 2022 the following transactions occurred: On February 3, 2022, multiple Series B Convertible Preferred stockholders converted 201,358 10,068 7,443 10,500,000 101,205 103.75 For the month of July 2022 the following transactions occurred: On July 12, 2022, we entered into a PIPE transaction with Armistice Capital Master Fund Ltd. for the purchase and sale of $ 12,887,976.31 20,372 27.75 448,096 27.50 936,937 21.50 For the month of August 2022 the following transactions occurred: On August 22, 2022, 4,000 shares of common stock were issued in return for services as a component of a February 2022 services agreement. During the month of August 2022, Armistice Capital Master Fund Ltd. exercised 17,618 Prefunded Warrants. Along with the exercise notice and payment of $4,404.41, 17,618 shares of common stock were issued For the month of September 2022 the following transactions occurred: During the month of September 2022, Armistice Capital Master Fund Ltd. exercised 107,318 Prefunded Warrants. Along with several exercise notices and payments totaling $26,829.60, 107,318 shares of common stock were issued For the month of October 2022 the following transactions occurred: During the month of October 2022, Armistice Capital Master Fund Ltd. exercised 323,160 Prefunded Warrants. Along with several exercise notices and payments totaling $80,790.00, 323,160 shares of common stock were issued For the month of November 2022 the following transactions occurred: During the month of November 2022, Calvary Fund exercised 15,099 Calvary Warrants (see Note 11 – Warrants and Options). Along with an exercise notice and payment totaling $3,774.84, 15,099 shares of common stock were issued For the month of June 2023 the following transactions occurred: On June 27, 2023, we entered into a PIPE transaction with Armistice Capital Master Fund Ltd. for the purchase and sale of $ 2,993,850.63 71,499 4.37 615,000 4.37 686,499 4.24 At June 30, 2023 and December 31, 2022, there were 748,720 and 677,221 shares of common stock issued and outstanding, respectively; and 75,143 and 75,143 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. |
WARRANTS AND OPTIONS
WARRANTS AND OPTIONS | 6 Months Ended |
Jun. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
WARRANTS AND OPTIONS | NOTE 11 – WARRANTS AND OPTIONS On February 10, 2022, the Company received an equity investment of $ 10,500,000 101,205 103.75 101,205 129.6875 15,181 129.6875 129.6875 50.25 On February 11, 2022, we entered into a transaction with Calvary Fund, the provider of our 2021 bridge financing for the retirement of its debt instrument, principal and interest with a combined value of $ 1,566,659.00 15,099 103.75 15,099 129.6875 129.6875 50.25 On July 12, 2022, we entered into a PIPE transaction with Armistice Capital Master Fund Ltd. for the purchase and sale of $ 12,887,976.31 20,372 27.75 448,096 27.50 936,937 21.50 On June 27, 2023, we entered into a PIPE transaction with Armistice Capital Master Fund Ltd. for the purchase and sale of $ 2,993,850.63 71,499 4.37 615,000 4.37 686,499 4.24 As of December 31, 2022, no Prefunded Warrants remained issued and outstanding with respect to the July PIPE transaction. The Prefunded Warrants were purchased in their entirety by the holders of the warrants for $ 27.50 0.25 448,096 448,096 Calvary Fund exercised all of its Calvary Warrants by November 30, 2022 requiring the payment of an additional $ 0.25 15,099 50.25 Along with the Prefunded Warrants the PIPE investors were issued immediately exercisable warrants to purchase up to 936,937 21.50 21.50 As of December 31, 2022, there were 1,096,455 2,397,954 The Company evaluates outstanding warrants as derivative liabilities and will recognize any changes in the fair value through earnings. The Company determined that the warrants have an immaterial fair value at December 31, 2022 and June 30, 2023. 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 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 June 30, 2023 December 31, 2022 (unaudited) (audited) Stock Price $ 3.50 $ 4.75 Exercise Price $ 21.50 $ 21.50 Term (expected in years) 4.3 4.5 Volatility 32.12 % 38.14 % Annual Rate of Dividends 0.0 % 0.0 % Risk Free Rate 4.64 % 4.69 % Stock Purchase Warrants The following table summarizes all warrant activity for the year ended December 31, 2022, and for the six months ended June 30, 2023. SCHEDULE OF WARRANT ACTIVITY Shares Weighted- Average Exercise Price Per Share Remaining term Intrinsic value Outstanding and Exercisable at December 31, 2021 28,072 $ 220.00 2.95 - Granted 116,386 $ 129.6875 5.00 - Granted in Debt Conversion 15,099 $ 129.6875 5.00 Granted Prefunded Warrants 463,195 $ 0.25 5.00 Granted in PIPE transaction 936,937 $ 21.50 5.00 Exercised (463,195 ) $ 0.25 - - Expired (38 ) - - - Outstanding and Exercisable at December 31, 2022 (audited) 1,096,455 30.50 4.50 - Granted 1,301,499 $ 4.37 5.00 - Exercised - $ 0.01 5.00 - Expired - - - - Outstanding and Exercisable at June 30, 2023 (unaudited) 2,397,954 $ 26.50 4.50 - |
LEASES AND LEASED PREMISES
LEASES AND LEASED PREMISES | 6 Months Ended |
Jun. 30, 2023 | |
Leases And Leased Premises | |
LEASES AND LEASED PREMISES | NOTE 12 – LEASES AND LEASED PREMISES Rental Payments under Non-cancellable Operating Leases and Equipment Leases The Company through its purchase of Champion acquired several long term (more than month-to-month) leases for two manufacturing facilities, three office spaces, five distribution centers and five retail spaces. Four of its distribution centers also have retail operations for which it leases facilities. Lease terms on the various spaces expiry from a month-to-month lease (30 days) to a long-term lease expiring in March of 2027. Rent expense for operating leases totaled approximately $ 453,320 and $ 0 for the six months ended June 30, 2023, and 2022, respectively. The Company does not have any equipment leases whereby we finance this equipment needed for operations at competitive finance rates. New equipment to be financed in the near term, if necessary, may not be obtainable at competitive pricing with increasing interest rates. Rental equipment expense for finance leases totaled approximately $ 0 0 Right of Use Assets and Lease Liabilities In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). The standard requires lessees to recognize almost all leases on the balance sheet as a Right-of-Use (“ROU”) asset and a lease liability and requires leases to be classified as either an operating or a finance type lease. The standard excludes leases of intangible assets or inventory. The standard became effective for the Company 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 amounts have not been adjusted and continue to be reported in accordance with our historical accounting under ASC 840. The Company 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 purpose, 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’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise such options. On January 1, 2019, the Company adopted ASC 842 which increases transparency and comparability by recognizing a lessee’s rights and obligations resulting from leases by recording them on the balance sheet as lease assets and lease liabilities. ASC 842 requires the recognition of the right-of-use (“ROU”) assets and related operating and finance lease liabilities on the balance sheet. The Company adopted the new guidance using the modified retrospective approach with a cumulative-effect adjustment recorded on January 1, 2019. The adoption of ASC 842 resulted in the recognition of ROU assets of $ 0 0 The Company elected the package of practical expedients permitted within the standard, which allow an entity to forgo reassessing (i) whether a contract contains a lease, (ii) classification of leases, and (iii) whether capitalized costs associated with a lease meet the definition of initial direct costs. Also, the Company elected the expedient allowing an entity to use hindsight to determine the lease term and impairment of ROU assets and the expedient related to land easements which allows the Company not to retrospectively treat land easements as leases; however, the Company must apply lease accounting prospectively to land easements if they meet the definition of a lease. For contracts entered into on or after the effective date, at the inception of a contract the Company will assess whether the contract is, or contains, a lease. The Company’s assessment is based on: (i) whether the contract involves the use of a distinct identified asset, (ii) whether the Company obtained the right to substantially all the economic benefit from the use of the asset throughout the period, and (iii) whether the Company has the right to direct the use of the asset. Leases entered into prior to January 1, 2019, are accounted for under ASC 840 and were not reassessed for classification. For operating leases, the lease liability is initially and subsequently measured at the present value of the unpaid lease payments. For finance leases, the lease liability is initially measured in the same manner and date as for operating leases, and is subsequently measured at amortized cost using the effective interest method. The Company generally uses its incremental borrowing rate as the discount rate for leases, unless an interest rate is implicitly stated in the lease. The lease term for all of the Company’s leases includes the noncancellable period of the lease plus any additional periods covered by either a Company option to extend the lease that the Company is reasonably certain to exercise, or an option to extend the lease controlled by the lessor. All ROU assets are reviewed for impairment. Lease expense for operating leases consists of the lease payments plus any initial direct costs, net of lease incentives, and is recognized on a straight-line basis over the lease term. Lease expense for finance leases consists of the amortization of the asset on a straight-line basis over the earlier of the lease term or its useful life and interest expense determined on an amortized cost basis. The lease payments are allocated between a reduction of the lease liability and interest expense. The Company’s operating leases are comprised primarily of facility leases and as such we have no finance leases for our vehicles or equipment currently at this time. Balance sheet information related to our leases is presented below: SCHEDULE OF BALANCE SHEET INFORMATION RELATED TO LEASES Balance Sheet location 2023 2022 June 30, Balance Sheet location 2023 2022 Operating leases: Right-of-use lease assets Right-of-use operating lease assets $ 1,487,271 $ - Right-of-use lease liability, current Other current liabilities 965,529 - Right-of-use lease liability, long-term Right-of-use operating lease liability 521,742 - Finance leases: Right-of-use lease assets Property, plant and equipment - - Right-of-use lease liability, current Current portion of long-term debt - - Right-of-use lease liability, long-term Long-term debt - - The following provides details of the Company’s lease expense: SCHEDULE OF LEASE EXPENSE 2023 2022 Six Months Ended June 30, 2023 2022 Operating lease expense, net $ 453,320 $ - Finance lease expense: Amortization of assets - - Interest on lease liabilities - - Total finance lease expense - - Operating lease expense, net $ 453,320 $ - Other information related to leases is presented below: SCHEDULE OF OTHER INFORMATION RELATED TO LEASES 2023 2022 Right-of-use assets acquired in exchange for operating lease obligations $ 1,487,271 $ - Cash Paid For Amounts Included In Measurement of Liabilities: Operating cash flows from finance leases - - Operating cash flows from operating leases 490,058 - Weighted Average Remaining Lease Term: Operating leases 3.0 0.0 Finance leases 0.0 0.0 Weighted Average Discount Rate: Operating leases 5.00 % 5.00 % Finance leases n/a % n/a % The minimum future annual payments under non-cancellable leases during the next five years and thereafter, at rates now in force, are as follows: SCHEDULE OF FUTURE MINIMUM RENTAL PAYMENTS FOR OPERATING LEASE Finance leases Operating leases 2023 (six months remaining) $ - $ 596,892 2024 - 688,526 2025 - 163,794 2026 - 62,792 2027 - 3,733 Thereafter - - Total future minimum lease payments, undiscounted - 1,515,737 Less: Imputed interest (- ) (85,257 ) Present value of future minimum lease payments $ - $ 1,430,480 Total Current Liabilities Total Current Liabilities Rental expense totaled approximately $ 453,000 0 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 13 – COMMITMENTS AND CONTINGENCIES Legal Proceedings During the six-month periods ended June 30, 2023 and 2022, various claims and lawsuits, incidental to the ordinary course of our business, may be brought against the Company from time-to-time. In the opinion of management, and after consultation with legal counsel, resolution of any of these matters (of which there are none) is not expected to have a material effect on the condensed consolidated financial statements. Contractual Obligations The Company does not believe there are any off-balance sheet arrangements that have, or are reasonably likely to have, a material effect on the condensed consolidated financial statements. As of June 30, 2023 and December 31, 2022 there was approximately $ 0 0 1,359,683 Executive Employment Agreements and Independent Contractor Agreements The Company has written employment agreements with various other executive officers. All payments made to its executive officers and significant outside service providers are analyzed and determined by the board of directors compensation committee; some payments made to independent contractors (or officer payments characterized as non-employee compensation) may be subject to backup withholding or general withholding of payroll taxes, may make the Company responsible for the withholding and remittance of those taxes. Generally outside service providers are responsible for their own withholding and payment of taxes. Certain state taxing authorities may otherwise disagree with that analysis and Company policy. |
OTHER INCOME _ EMPLOYEE RETENTI
OTHER INCOME – EMPLOYEE RETENTION CREDIT | 6 Months Ended |
Jun. 30, 2023 | |
Other Income and Expenses [Abstract] | |
OTHER INCOME – EMPLOYEE RETENTION CREDIT | NOTE 14 – OTHER INCOME – EMPLOYEE RETENTION CREDIT The Company retained the services of a tax service professional to provide the Company with the specialized tax services. The services included identifying various tax initiatives as well as specifically tasking the tax service professional in applying for and the tax filings for (tax) credits available under the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”). The Company received approximately $ 1,286,000 178,500 1,107,500 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Jun. 30, 2023 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 15 – SUBSEQUENT EVENTS The Company evaluated all events that occurred after the balance sheet date of June 30, 2023, through the date the financial statements were issued and determined that there were the following subsequent events: The Company refinanced a $ 600,000 450,000 150,000 300,000 The Depository Trust and Clearing Corporation (the “DTCC”) which handles the clearing and settlement of virtually all broker-to-broker equity, listed corporate and municipal bond and unit investment trust (UIT) transactions in the U.S. equities markets 1-for-25 2.1 100 100 2.1 |
ORGANIZATION AND SUMMARY OF S_2
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | Organization The Company was incorporated on December 15, 2014 |
Nature of operations | Nature of operations The Company develops and sells branded products in the self-defense, safe storage and other patriotic product areas using a wholesale distribution network, utilizing personal appearances, musical venue performances, as well e-commerce and television. The Company’s products are marketed under the American Rebel Brand and are proudly imprinted with such branding. Through its acquisition of the “Champion Entities” (which consists of Champion Safe Co., Inc., Superior Safe, LLC, Safe Guard Security Products, LLC, and Champion Safe De Mexico, S.A. de C.V.) the Company promotes and sells its safe and storage products through a growing network of dealers, in select regional retailers and local specialty safe, sporting goods, hunting and firearms retail outlets, as well as through online avenues, including website and e-commerce platforms. The Company sells its products under the Champion Safe Co., Superior Safe Company and Safe Guard Safe Co. brands as well as the American Rebel Brand. To varying degrees, the consequences of the COVID-19 pandemic continue to affect our operating business. Significant government and private sector actions have taken place to control the spread and mitigate the economic effects of the virus and its variants. The development of geopolitical conflicts, supply chain disruptions and government actions to slow rapid inflation in recent years have produced varying effects on our business. The economic effects from these events over long term cannot be reasonably estimated at this time. Accordingly, estimates used in the preparation of our financial statements, including those associated with the evaluation of certain long-lived assets, goodwill and other intangible assets for impairment, expected credit losses on amounts owed to us (through accounts receivable) and the estimations of certain losses assumed under warranty and other liability contracts, may be subject to significant adjustments in future periods. |
Interim Financial Statements and Basis of Presentation | 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 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, 2022, and notes thereto contained, filed on April 14, 2023. |
Principles of Consolidation | Principles of Consolidation The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, American Rebel, Inc., and the Champion Entities. All significant intercompany accounts and transactions have been eliminated. |
Year-end | Year-end The Company’s year-end is December 31. |
Cash and cash equivalents | 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 and Inventory Deposits Inventory consists of backpacks, jackets, safes, other storage products 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 an estimate for the reserve of slow moving or obsolete inventories by regularly evaluating individual inventory levels, projected sales and current economic conditions. The Company makes deposit payments on certain inventory to be manufactured that are carried separately until the manufactured goods are received into inventory. |
Fixed assets and depreciation | Fixed assets and depreciation Property and equipment are 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 using the straight-line method over the estimated useful life of the asset, which ranges from five to seven years. |
Revenue recognition | Revenue recognition In accordance with Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers, 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 steps: ( 1) Identify the contract with a client; (2) Identify the performance obligations in the contract; (3) Determine the transaction price; (4) Allocate the transaction price to performance obligations in the contract; and (5) Recognize revenues when or as the company satisfies a performance obligation. These steps are met when an order is received, a price is agreed, and the product is shipped or delivered to that customer. |
Advertising costs | Advertising costs Advertising costs are expensed as incurred; Marketing costs which we consider to be advertising costs incurred were $ 172,617 149,249 425,342 230,219 |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of June 30, 2023, and December 31, 2022, 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, 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 | Stock-based compensation The Company records stock-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. The Company accounts for equity instruments issued in exchange for the receipt of goods or services from other than employees in accordance with ASC 718-10 and the conclusions reached 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 ASC 505-50. |
Earnings per share | Earnings per share Net loss per common share is computed by dividing net loss by the weighted average common shares outstanding during the period as defined by ASC 260 - 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. Dilutive common share equivalents are negligible or immaterial as dilutive shares to be issued during net loss years were non-existent. For the three months ended June 30, 2023 and June 30, 2022, net loss per share was $ (0.87) (20.75) (1.21) (33.37) Fully diluted shares outstanding is the total number of shares that the Company would theoretically have if all dilutive securities were exercised and converted into shares. Dilutive securities include options, warrants, convertible debt, preferred stock and anything else that can be converted into shares. Potential dilutive shares consist of the incremental common shares issuable upon the exercise of dilutive securities, calculated using the treasury stock method. The calculation of dilutive shares outstanding excludes out-of-the-money options (i.e., such options’ exercise prices were greater than the average market price of our common shares for the period) because their inclusion would have been antidilutive. Out-of-the-money stock options totaled none and none as of June 30, 2023 and December 31, 2022, respectively. All other dilutive securities are listed below. The following table illustrates the total number of common shares that would be converted from common stock equivalents issued and outstanding at the end of each period presented; as of June 30, 2023 and as of June 30, 2022, respectively. SCHEDULE OF EARNINGS PER SHARE June 30, 2023 June 30, 2022 Shares used in computation of basic earnings per share for the periods ended 678,000 126,760 Total dilutive effect of outstanding stock awards or common stock equivalents 1,078 75,500 Shares used in computation of fully diluted earnings per share for the periods ended June 30, 2023 and June 30, 2022, respectively 1,756,000 202,260 Net income (loss) $ (817,259 ) $ (4,230,329 ) Fully diluted income (loss) per share $ ( 0.47 ) $ ( 20.92 ) In periods of losses, diluted loss per share is computed on the same basis as basic loss per share as the inclusion of any other potential shares outstanding would be anti-dilutive. |
Income taxes | 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 June 30, 2023, and December 31, 2022, the Company reviewed its tax positions and determined there were no outstanding, or retroactive tax positions with less than a 50% likelihood 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 three-month and six-month periods ended June 30, 2023, and 2022, respectively, no |
Use of estimates | 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. |
Warranties | Warranties The Company’s safe manufacturing business estimates its exposure to warranty claims based on both current and historical (with respect to the Champion Entities) product sales data and warranty costs (actual) incurred. The Company assesses the adequacy of its recorded warranty liability each quarter and adjusts the amount as necessary. Warranty liability is included in our accrued expense accounts in the accompanying condensed consolidated balance sheets. We estimate that warranty liability is nominal or negligible based on the superior quality of products and our excellent customer relationships. Warranty liability recorded was $ 93,458 99,238 |
Business Combinations | Business Combinations The Company accounts for business combinations in accordance with ASC Topic 805, Business Combinations, and as further defined by ASU 2017-01, Business Combinations (Topic 805), which requires the purchase price to be measured at fair value. When the purchase consideration consists entirely of shares of our common stock, the Company calculates the purchase price by determining the fair value, as of the acquisition date, of shares issued in connection with the closing of the acquisition and, if the transaction involves contingent consideration based on achievement of milestones or earn-out events, the probability-weighted fair value, as of the acquisition date, of shares issuable upon the occurrence of future events or conditions pursuant to the terms of the agreement governing the business combination. If the transaction involves such contingent consideration, our calculation of the purchase price involves probability inputs that are highly judgmental due to the inherent unpredictability of future results, particularly by growth-stage companies. The Company recognizes estimated fair values of the tangible assets and intangible assets acquired, including in process research and development (“IPR&D”), and liabilities assumed as of the acquisition date, and we record as goodwill any amount of the purchase price of the tangible and intangible assets acquired and liabilities assumed in excess of the fair value (see Note 8 - Goodwill and Acquisition of Champion Entities for further information in accordance with ASC 805-10-55-37 through ASC 805-10-55-50). |
Right of Use Assets and Lease Liabilities | Right of Use Assets and Lease Liabilities In February 2016, the FASB issued Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842). The standard requires lessees to recognize almost all leases on the balance sheet as a Right-of-Use (“ROU”) asset and a lease liability and requires leases to be classified as either an operating or a finance type lease. The standard excludes leases of intangible assets or inventory. The standard became effective for the Company 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 amounts have not been adjusted and continue to be reported in accordance with our historical accounting under ASC 840. The Company 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 purpose, 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’s 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 condensed consolidated balance sheets. |
Recent pronouncements | Recent pronouncements The Company evaluated recent accounting pronouncements through June 30, 2023, and believes that none have a material effect on the Company’s financial statements. |
Concentration risks | Concentration risks Prior to the closing of the Champion Entities, the Company purchased a substantial portion (over 20 %) of its inventory from 2 third-party vendors. With the closing and integration of the Champion Entities, the Company no longer purchases a substantial portion (over 20 %) of its inventory from the 2 third-party vendors. As of June 30, 2023, the net amount due to these 2 third-party vendors (accounts payable and accrued expense) was $ 0 . The loss of vendor relationships could have a material effect on the Company; however, the Company believes sufficient suppliers could be substituted should these third-party vendors/suppliers become unavailable or non-competitive for us. |
ORGANIZATION AND SUMMARY OF S_3
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
SCHEDULE OF EARNINGS PER SHARE | SCHEDULE OF EARNINGS PER SHARE June 30, 2023 June 30, 2022 Shares used in computation of basic earnings per share for the periods ended 678,000 126,760 Total dilutive effect of outstanding stock awards or common stock equivalents 1,078 75,500 Shares used in computation of fully diluted earnings per share for the periods ended June 30, 2023 and June 30, 2022, respectively 1,756,000 202,260 Net income (loss) $ (817,259 ) $ (4,230,329 ) Fully diluted income (loss) per share $ ( 0.47 ) $ ( 20.92 ) |
INVENTORY AND DEPOSITS (Tables)
INVENTORY AND DEPOSITS (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Inventory Disclosure [Abstract] | |
SCHEDULE OF INVENTORY AND DEPOSITS | Inventory and deposits include the following: SCHEDULE OF INVENTORY AND DEPOSITS June 30, 2023 December 31, 2022 (unaudited) (audited) Inventory – finished goods $ 8,563,465 $ 7,421,696 Inventory deposits 310,587 309,684 Total Inventory and deposits $ 8,874,052 $ 7,731,380 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Property, Plant and Equipment [Abstract] | |
SCHEDULE OF PROPERTY AND EQUIPMENT | Property and equipment include the following: SCHEDULE OF PROPERTY AND EQUIPMENT June 30, 2023 December 31, 2022 (unaudited) (audited) Plant, property and equipment $ 367,317 $ 367,317 Vehicles 423,515 448,542 Property and equipment gross 790,832 815,859 Less: Accumulated depreciation (388,675 ) (359,334 ) Net property and equipment $ 402,157 $ 456,525 |
LINE OF CREDIT _ FINANCIAL IN_2
LINE OF CREDIT – FINANCIAL INSTITUTION (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Debt Disclosure [Abstract] | |
SCHEDULE OF LINE OF CREDIT | SCHEDULE OF LINE OF CREDIT June 30, 2023 December 31, 2022 (unaudited) (audited) Line of credit from a financial institution. $ 1,359,683 $ - Total recorded as a current liability $ 1,359,683 $ - |
NOTES PAYABLE _ WORKING CAPIT_2
NOTES PAYABLE – WORKING CAPITAL (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Debt Disclosure [Abstract] | |
SCHEDULE OF WORKING CAPITAL | SCHEDULE OF WORKING CAPITAL June 30, 2023 December 31, 2022 (unaudited) (audited) Working capital loan with a limited liability company domiciled in the state of Georgia. The working capital loan is demand loan and accrues interest at 12% th 600,000 600,000 Working capital loans with a major financial institution converted from a revolving line of credit to a strict payoff loan agreement with the major financial institution. Annual interest rate approximates 22.5% 249 2,643 Working capital loan agreement with a limited liability company domiciled in the state of New York. The working capital loan is secured by all the assets of the Company that is not secured by the first priority interest of the major financial institution line of credit facility as well as a personal guaranty by our CEO, Mr. Charles A Ross. The working capital loan requires payments of $ 20,000 20,000 882,200 - $ 1,482,449 $ 602,643 Total recorded as a current liability $ 1,482,449 $ 602,643 |
GOODWILL AND ACQUISITION OF T_2
GOODWILL AND ACQUISITION OF THE CHAMPION ENTITIES (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Champion Safe Co Inc [Member] | |
Restructuring Cost and Reserve [Line Items] | |
SCHEDULE OF ASSETS ACQUIRED AND LIABILITY ASSUMED | SCHEDULE OF ASSETS ACQUIRED AND LIABILITY ASSUMED Cash $ - Accounts receivable 1,337,130 Inventory 5,229,426 Fixed assets 473,326 Deposits and other assets 53,977 Customer list and other intangibles** 637,515 Accounts payable (1,609,657 ) Accrued expenses and other (84,297 ) Goodwill 4,200,000 Consideration $ 10,237,420 Consideration: Payments of cash direct to Seller $ 8,455,177 Debt payments on behalf of Seller - guarantor 1,442,243 Payments to various service providers 340,000 Total Purchase Price $ 10,237,420 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES | Components of net deferred tax asset, including a valuation allowance, are as follows: SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES June 30, 2023 December 31, 2022 (unaudited) (audited) Deferred tax asset: Net operating loss carryforward $ 7,335,000 $ 7,163,690 Total deferred tax asset 7,335,000 7,163,690 Less: Valuation allowance (7,335,000 ) (7,163,690 ) Net deferred tax asset $ - $ - |
SCHEDULE OF EFFECTIVE INCOME TAX RATE RECONCILIATION | Reconciliation between the statutory rate and the effective tax rate for both periods and as of June 30, 2023 and December 31, 2022: SCHEDULE OF EFFECTIVE INCOME TAX RATE RECONCILIATION Federal statutory rate ( 21.0 )% State taxes, net of federal benefit ( 0.0 )% Change in valuation allowance 21.0 % Effective tax rate 0.0 % |
WARRANTS AND OPTIONS (Tables)
WARRANTS AND OPTIONS (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
SCHEDULE OF FAIR VALUE MEASUREMENT | SCHEDULE OF FAIR VALUE MEASUREMENT June 30, 2023 December 31, 2022 (unaudited) (audited) Stock Price $ 3.50 $ 4.75 Exercise Price $ 21.50 $ 21.50 Term (expected in years) 4.3 4.5 Volatility 32.12 % 38.14 % Annual Rate of Dividends 0.0 % 0.0 % Risk Free Rate 4.64 % 4.69 % |
SCHEDULE OF WARRANT ACTIVITY | The following table summarizes all warrant activity for the year ended December 31, 2022, and for the six months ended June 30, 2023. SCHEDULE OF WARRANT ACTIVITY Shares Weighted- Average Exercise Price Per Share Remaining term Intrinsic value Outstanding and Exercisable at December 31, 2021 28,072 $ 220.00 2.95 - Granted 116,386 $ 129.6875 5.00 - Granted in Debt Conversion 15,099 $ 129.6875 5.00 Granted Prefunded Warrants 463,195 $ 0.25 5.00 Granted in PIPE transaction 936,937 $ 21.50 5.00 Exercised (463,195 ) $ 0.25 - - Expired (38 ) - - - Outstanding and Exercisable at December 31, 2022 (audited) 1,096,455 30.50 4.50 - Granted 1,301,499 $ 4.37 5.00 - Exercised - $ 0.01 5.00 - Expired - - - - Outstanding and Exercisable at June 30, 2023 (unaudited) 2,397,954 $ 26.50 4.50 - |
LEASES AND LEASED PREMISES (Tab
LEASES AND LEASED PREMISES (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Leases And Leased Premises | |
SCHEDULE OF BALANCE SHEET INFORMATION RELATED TO LEASES | Balance sheet information related to our leases is presented below: SCHEDULE OF BALANCE SHEET INFORMATION RELATED TO LEASES Balance Sheet location 2023 2022 June 30, Balance Sheet location 2023 2022 Operating leases: Right-of-use lease assets Right-of-use operating lease assets $ 1,487,271 $ - Right-of-use lease liability, current Other current liabilities 965,529 - Right-of-use lease liability, long-term Right-of-use operating lease liability 521,742 - Finance leases: Right-of-use lease assets Property, plant and equipment - - Right-of-use lease liability, current Current portion of long-term debt - - Right-of-use lease liability, long-term Long-term debt - - |
SCHEDULE OF LEASE EXPENSE | The following provides details of the Company’s lease expense: SCHEDULE OF LEASE EXPENSE 2023 2022 Six Months Ended June 30, 2023 2022 Operating lease expense, net $ 453,320 $ - Finance lease expense: Amortization of assets - - Interest on lease liabilities - - Total finance lease expense - - Operating lease expense, net $ 453,320 $ - |
SCHEDULE OF OTHER INFORMATION RELATED TO LEASES | Other information related to leases is presented below: SCHEDULE OF OTHER INFORMATION RELATED TO LEASES 2023 2022 Right-of-use assets acquired in exchange for operating lease obligations $ 1,487,271 $ - Cash Paid For Amounts Included In Measurement of Liabilities: Operating cash flows from finance leases - - Operating cash flows from operating leases 490,058 - Weighted Average Remaining Lease Term: Operating leases 3.0 0.0 Finance leases 0.0 0.0 Weighted Average Discount Rate: Operating leases 5.00 % 5.00 % Finance leases n/a % n/a % |
SCHEDULE OF FUTURE MINIMUM RENTAL PAYMENTS FOR OPERATING LEASE | SCHEDULE OF FUTURE MINIMUM RENTAL PAYMENTS FOR OPERATING LEASE Finance leases Operating leases 2023 (six months remaining) $ - $ 596,892 2024 - 688,526 2025 - 163,794 2026 - 62,792 2027 - 3,733 Thereafter - - Total future minimum lease payments, undiscounted - 1,515,737 Less: Imputed interest (- ) (85,257 ) Present value of future minimum lease payments $ - $ 1,430,480 Total Current Liabilities Total Current Liabilities |
SCHEDULE OF EARNINGS PER SHARE
SCHEDULE OF EARNINGS PER SHARE (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Shares used in computation of basic earnings per share for the periods ended | 678,000 | 126,760 | ||
Total dilutive effect of outstanding stock awards or common stock equivalents | 1,078 | 75,500 | ||
Shares used in computation of fully diluted earnings per share for the periods ended June 30, 2023 and June 30, 2022, respectively | 1,756,000 | 202,260 | ||
Net income (loss) | $ (590,204) | $ (1,602,092) | $ (817,259) | $ (4,230,329) |
Fully diluted income (loss) per share | $ 0.47 | $ 20.92 |
ORGANIZATION AND SUMMARY OF S_4
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Product Information [Line Items] | |||||
Entity incorporation, date of incorporation | Dec. 15, 2014 | ||||
Marketing and advertising cost | $ 172,617 | $ 149,249 | $ 425,342 | $ 230,219 | |
Earnings per share basic | $ (0.87) | $ (20.75) | $ (1.21) | $ (33.37) | |
Earnings per share diluted | $ (0.87) | $ (20.75) | $ (1.21) | $ (33.37) | |
Income tax examination description | less than a 50% likelihood | less than a 50% likelihood | |||
Income tax expense | |||||
Warrant liability | 99,238 | $ 93,458 | |||
Third Party Vendor [Member] | |||||
Product Information [Line Items] | |||||
Accounts Payable and Accrued Liabilities | $ 0 | $ 0 | |||
Supplier Concentration Risk [Member] | Inventory [Member] | Third Party Vendor [Member] | |||||
Product Information [Line Items] | |||||
Concentration Risk, Percentage | 20% | 20% |
GOING CONCERN (Details Narrativ
GOING CONCERN (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||
Net losses | $ 590,204 | $ 1,602,092 | $ 817,259 | $ 4,230,329 | |
Retained Earnings (Accumulated Deficit) | 34,930,069 | 34,930,069 | $ 34,112,810 | ||
Represents the monetary amount of Working Capital Deficit, as of the indicated date | $ 7,403,583 | $ 7,403,583 | $ 6,678,562 |
SCHEDULE OF INVENTORY AND DEPOS
SCHEDULE OF INVENTORY AND DEPOSITS (Details) - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 |
Inventory Disclosure [Abstract] | ||
Inventory – finished goods | $ 8,563,465 | $ 7,421,696 |
Inventory deposits | 310,587 | 309,684 |
Total Inventory and deposits | $ 8,874,052 | $ 7,731,380 |
INVENTORY AND DEPOSITS (Details
INVENTORY AND DEPOSITS (Details Narrative) - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 |
Inventory | $ 8,874,052 | $ 7,731,380 |
Deposits | 600,000 | |
American Rebel Inc [Member] | Champion Acquisition [Member] | ||
Inventory | $ 5,400,000 |
SCHEDULE OF PROPERTY AND EQUIPM
SCHEDULE OF PROPERTY AND EQUIPMENT (Details) - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment gross | $ 790,832 | $ 815,859 |
Less: Accumulated depreciation | (388,675) | (359,334) |
Net property and equipment | 402,157 | 456,525 |
Property, Plant and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment gross | 367,317 | 367,317 |
Vehicles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment gross | $ 423,515 | $ 448,542 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details Narrative) - USD ($) | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 54,365 | $ 1,355 |
RELATED PARTY NOTE PAYABLE AN_2
RELATED PARTY NOTE PAYABLE AND RELATED PARTY TRANSACTIONS (Details Narrative) | Jun. 30, 2023 USD ($) |
Mr. Doug Grau [Member] | |
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | |
Loan | $ 146,000 |
SCHEDULE OF LINE OF CREDIT (Det
SCHEDULE OF LINE OF CREDIT (Details) - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 |
Line of Credit Facility [Line Items] | ||
Total recorded as a current liability | $ 1,359,683 | |
Line of Credit [Member] | ||
Line of Credit Facility [Line Items] | ||
Total recorded as a current liability | $ 1,359,683 |
SCHEDULE OF WORKING CAPITAL (De
SCHEDULE OF WORKING CAPITAL (Details) - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 |
Short-Term Debt [Line Items] | ||
Total recorded as a current liability | $ 1,482,449 | $ 602,643 |
Working Capital Loan One [Member] | ||
Short-Term Debt [Line Items] | ||
Total recorded as a current liability | 600,000 | 600,000 |
Working Capital Loan Two [Member] | ||
Short-Term Debt [Line Items] | ||
Total recorded as a current liability | 249 | 2,643 |
Working Capital Loan Three [Member] | ||
Short-Term Debt [Line Items] | ||
Total recorded as a current liability | $ 882,200 |
SCHEDULE OF NOTES PAYABLE TO NO
SCHEDULE OF NOTES PAYABLE TO NON-RELATED PARTIES (Details) (Parenthetical) - USD ($) | 6 Months Ended | |
Jul. 05, 2024 | Jun. 30, 2023 | |
Working Capital Loan One [Member] | ||
Short-Term Debt [Line Items] | ||
Debt interest rate | 12% | |
Working Capital Loan Two [Member] | ||
Short-Term Debt [Line Items] | ||
Debt interest rate | 22.50% | |
Working Capital Loan Three [Member] | ||
Short-Term Debt [Line Items] | ||
Debt Instrument, Periodic Payment | $ 20,000 | $ 20,000 |
LINE OF CREDIT _ FINANCIAL IN_3
LINE OF CREDIT – FINANCIAL INSTITUTION (Details Narrative) - USD ($) | 1 Months Ended | 6 Months Ended | |
Feb. 28, 2023 | Jun. 30, 2023 | Dec. 31, 2022 | |
Line of Credit Facility [Line Items] | |||
Line of credit, current | $ 1,359,683 | ||
Master Credit Agreement [Member] | |||
Line of Credit Facility [Line Items] | |||
Line of credit | $ 2,000,000 | ||
Percentage of interest rate period end | 2.05% | ||
Total percentage of interest rate during period | 7.22% | ||
Line of credit description | The Company paid a one-time loan fee equal to 0.1% of the Line of Credit amount available. In the likelihood of default, the default interest automatically increases to 6% over the BSBY plus 2.05% rate. | ||
Interest rate, increase (decrease) | 6% | ||
Line of credit, maximum borrowing capacity | $ 1,700,000 | ||
Line of credit, draws | $ 340,317 |
NOTES PAYABLE _ WORKING CAPIT_3
NOTES PAYABLE – WORKING CAPITAL (Details Narrative) - USD ($) | 1 Months Ended | 6 Months Ended | |||||
Apr. 20, 2023 | Aug. 14, 2023 | Jun. 30, 2023 | Jun. 30, 2022 | Apr. 14, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | |
Short-Term Debt [Line Items] | |||||||
Proceeds from debt | $ 1,482,449 | $ 602,643 | |||||
Loss on extinguishment of debt | $ (1,376,756) | ||||||
Business Loan And Security Agreement [Member] | |||||||
Short-Term Debt [Line Items] | |||||||
Proceeds from debt | $ 1,000,000 | ||||||
Loan net of fees | 20,000 | ||||||
Periodic payment | $ 20,000 | ||||||
Repayment of debt | $ 1,280,000 | ||||||
Interest rate | 41.40% | ||||||
Debt instrument, default amount | $ 15,000 | ||||||
Payments of lender fee | $ 80,000 | ||||||
Short-Term Debt [Member] | |||||||
Short-Term Debt [Line Items] | |||||||
Debt instrument, face amount | 60,000 | ||||||
Short-Term Debt One [Member] | |||||||
Short-Term Debt [Line Items] | |||||||
Repayment of debt | 2,541,634 | ||||||
Debt conversion, face value | 1,950,224 | ||||||
Loss on extinguishment of debt | 1,376,756 | ||||||
Short-Term Debt One [Member] | Common Stock [Member] | |||||||
Short-Term Debt [Line Items] | |||||||
Debt conversion, face value | $ 2,803,632 | ||||||
Notes Payable | |||||||
Short-Term Debt [Line Items] | |||||||
Debt instrument, default amount | $ 600,000 | $ 600,000 | |||||
Notes Payable | Investor [Member] | Subsequent Event [Member] | |||||||
Short-Term Debt [Line Items] | |||||||
[custom:RefinancedAmount] | $ 600,000 |
SCHEDULE OF ASSETS ACQUIRED AND
SCHEDULE OF ASSETS ACQUIRED AND LIABILITY ASSUMED (Details) - USD ($) | Jul. 29, 2022 | Jun. 30, 2023 | Dec. 31, 2022 |
Restructuring Cost and Reserve [Line Items] | |||
Goodwill | $ 4,200,000 | $ 4,200,000 | |
Champion Safe Co Inc [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Cash | |||
Accounts receivable | 1,337,130 | ||
Inventory | 5,229,426 | ||
Fixed assets | 473,326 | ||
Deposits and other assets | 53,977 | ||
Customer list and other intangibles** | 637,515 | ||
Account payable | (1,609,657) | ||
Accrued expenses | (84,297) | ||
Goodwill | 4,200,000 | ||
Consideration | 10,237,420 | ||
Payments in cash to seller | 8,455,177 | ||
Debt paid on behalf of seller | 1,442,243 | ||
Payments to service providers | 340,000 | ||
Total purchase price | $ 10,237,420 |
GOODWILL AND ACQUISITION OF T_3
GOODWILL AND ACQUISITION OF THE CHAMPION ENTITIES (Details Narrative) - USD ($) | Jul. 29, 2022 | Jun. 30, 2023 | Dec. 31, 2022 |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||
Goodwill | $ 4,200,000 | $ 4,200,000 | |
Intangible assets | $ 4,200,000 | $ 4,200,000 | |
Champion Safe Co Inc [Member] | |||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||
Goodwill | $ 4,200,000 | ||
Business combination, consideration transferred | 10,237,420 | ||
Payments to acquire businesses | 150,000 | ||
Champion Safe Co Inc [Member] | Investor One [Member] | |||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||
Acquisition of cost | 350,000 | ||
Champion Safe Co Inc [Member] | Investor Two [Member] | |||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||
Acquisition of cost | 200,000 | ||
Champion Purchase Agreement [Member] | |||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||
Business combination, consideration transferred | 9,150,000 | ||
Cash deposits | 350,000 | ||
Payments for Previous Acquisition | $ 400,000 |
SCHEDULE OF DEFERRED TAX ASSETS
SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES (Details) - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 |
Income Tax Disclosure [Abstract] | ||
Net operating loss carryforward | $ 7,335,000 | $ 7,163,690 |
Total deferred tax asset | 7,335,000 | 7,163,690 |
Less: Valuation allowance | (7,335,000) | (7,163,690) |
Net deferred tax asset |
SCHEDULE OF EFFECTIVE INCOME TA
SCHEDULE OF EFFECTIVE INCOME TAX RATE RECONCILIATION (Details) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2023 | Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | ||
Federal statutory rate | 21% | 21% |
State taxes, net of federal benefit | 0% | 0% |
Change in valuation allowance | 21% | 21% |
Effective tax rate | 0% | 0% |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) - USD ($) | 6 Months Ended | ||
Aug. 16, 2022 | Jun. 30, 2023 | Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |||
Net operating loss carryforward | $ 34,930,069 | $ 34,112,810 | |
Valuation allowance for deferred tax assets | $ 7,335,000 | $ 7,163,690 | |
Valuation allowance description | As a result, management determined it was more likely than not deferred tax assets will not be realized as of June 30, 2023, and December 31, 2022, and recognized 100% valuation allowance for each period. | ||
Corporate alternative minimum income tax rate | 15% | ||
Percentage ogexcise tax on corporate stock repurchases | 1% |
SHARE CAPITAL (Details Narrativ
SHARE CAPITAL (Details Narrative) - USD ($) | 1 Months Ended | 6 Months Ended | ||||||||||||||||
Jun. 27, 2023 | Jun. 27, 2023 | Nov. 30, 2022 | Aug. 22, 2022 | Jul. 12, 2022 | Jul. 12, 2022 | Jul. 12, 2022 | Feb. 10, 2022 | Feb. 10, 2022 | Feb. 03, 2022 | Nov. 30, 2022 | Oct. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | Jul. 01, 2022 | Feb. 11, 2022 | |
Class of Stock [Line Items] | ||||||||||||||||||
Common stock, shares authorized | 600,000,000 | 600,000,000 | ||||||||||||||||
Common stock, par value | $ 0.001 | $ 0.001 | ||||||||||||||||
Preferred stock, shares authorized | 10,000,000 | 10,000,000 | ||||||||||||||||
Preferred stock, par value | $ 0.001 | $ 0.001 | ||||||||||||||||
Reserse split | 1-for-25 | The June 30, 2023 share numbers do not reflect any adjustment due to the 100-share round lot rounding up that has been inherent in the Company’s reverse stock splits since 2022. A shareholder that held a minimum of 100 shares pre-reverse split, based on the reverse stock split now holds less than 100 shares of our common stock will be issued an additional number of shares to ensure that they continue to maintain at least 100 shares of our common stock in ownership. | ||||||||||||||||
Minimum shares | 71,499 | 20,372 | 615,000 | |||||||||||||||
Debt conversion, converted instrument, shares issued | 15,099 | |||||||||||||||||
Shares new issues | 2,993,850.63 | |||||||||||||||||
Exercisable of warrants | 615,000 | 615,000 | 448,096 | 448,096 | 448,096 | 448,096 | 15,099 | |||||||||||
Common Stock, Shares, Issued | 748,720 | 677,221 | ||||||||||||||||
Common Stock, Shares, Outstanding | 748,720 | 677,221 | ||||||||||||||||
Private Investment In Public Equity [Member] | ||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||
Exercisable of warrants | 15,181 | 15,181 | ||||||||||||||||
Armistice Capital Master Fund Ltd [Member] | Private Investment In Public Equity [Member] | ||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||
Exercisable of warrants | 101,205 | 101,205 | ||||||||||||||||
Armistice Capital Master Fund Ltd [Member] | Private Investment In Public Equity [Member] | Prefunded Warrants [Member] | ||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||
Exercisable of warrants | 448,096 | 448,096 | 448,096 | |||||||||||||||
Armistice Capital Master Fund Ltd [Member] | ||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||
Sale of stock consideration received per transaction | $ 2,993,850.63 | $ 12,887,976.31 | ||||||||||||||||
Shares new issues | 71,499 | 20,372 | ||||||||||||||||
Exercisable of warrants | 686,499 | 686,499 | 936,937 | 936,937 | 936,937 | |||||||||||||
Sale of stock description of transaction | For the month of October 2022 the following transactions occurred: During the month of October 2022, Armistice Capital Master Fund Ltd. exercised 323,160 Prefunded Warrants. Along with several exercise notices and payments totaling $80,790.00, 323,160 shares of common stock were issued | For the month of September 2022 the following transactions occurred: During the month of September 2022, Armistice Capital Master Fund Ltd. exercised 107,318 Prefunded Warrants. Along with several exercise notices and payments totaling $26,829.60, 107,318 shares of common stock were issued | ||||||||||||||||
Exercisable of warrants | 615,000 | 615,000 | ||||||||||||||||
Calvary Fund [Member] | ||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||
Sale of stock description of transaction | For the month of November 2022 the following transactions occurred: During the month of November 2022, Calvary Fund exercised 15,099 Calvary Warrants (see Note 11 – Warrants and Options). Along with an exercise notice and payment totaling $3,774.84, 15,099 shares of common stock were issued | |||||||||||||||||
Febrauary Twenty Twenty Two Service Agreement [Member] | Armistice Capital Master Fund Ltd [Member] | ||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||
Sale of stock description of transaction | For the month of August 2022 the following transactions occurred: On August 22, 2022, 4,000 shares of common stock were issued in return for services as a component of a February 2022 services agreement. During the month of August 2022, Armistice Capital Master Fund Ltd. exercised 17,618 Prefunded Warrants. Along with the exercise notice and payment of $4,404.41, 17,618 shares of common stock were issued | |||||||||||||||||
Common Stock [Member] | ||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||
Minimum shares | 71,499 | 106,345 | ||||||||||||||||
Cconversion of stock | 10,068 | |||||||||||||||||
Debt conversion, converted instrument, shares issued | 7,443 | |||||||||||||||||
Shares purchased | 101,205 | |||||||||||||||||
Exercisable of warrants | 686,499 | 686,499 | 936,937 | 936,937 | 936,937 | |||||||||||||
Common Stock, Shares, Issued | 748,720 | |||||||||||||||||
Common Stock, Shares, Outstanding | 677,221 | |||||||||||||||||
Common Stock [Member] | Armistice Capital Master Fund Ltd [Member] | ||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||
Excerice price share | $ 4.37 | $ 27.75 | ||||||||||||||||
Common Stock [Member] | Subscription Arrangement [Member] | ||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||
Equity method investment received | $ 10,500,000 | |||||||||||||||||
Shares purchased | 101,205 | |||||||||||||||||
Stock price per share | $ 103.75 | $ 103.75 | ||||||||||||||||
Prefunded Warrants [Member] | Armistice Capital Master Fund Ltd [Member] | ||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||
Excerice price share | 4.24 | $ 21.50 | ||||||||||||||||
Shares issued price per share | $ 4.37 | $ 4.37 | $ 27.50 | |||||||||||||||
Series B Preferred Stock [Member] | ||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||
Cconversion of stock | 201,358 | |||||||||||||||||
Series B Preferred Stock [Member] | Preferred Stock [Member] | ||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||
Common Stock, Shares, Issued | 75,143 | |||||||||||||||||
Common Stock, Shares, Outstanding | 75,143 | |||||||||||||||||
Series A Preferred Stock [Member] | Preferred Stock [Member] | ||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||
Common Stock, Shares, Issued | 100,000 | |||||||||||||||||
Common Stock, Shares, Outstanding | 100,000 |
SCHEDULE OF FAIR VALUE MEASUREM
SCHEDULE OF FAIR VALUE MEASUREMENT (Details) | Jun. 30, 2023 | Dec. 31, 2022 |
Measurement Input, Share Price [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Risk Free Rate | 3.50 | 4.75 |
Measurement Input, Exercise Price [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Risk Free Rate | 21.50 | 21.50 |
Measurement Input, Expected Term [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Term (expected in years) | 4 years 3 months 18 days | 4 years 6 months |
Measurement Input, Price Volatility [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Risk Free Rate | 32.12 | 38.14 |
Measurement Input, Expected Dividend Rate [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Risk Free Rate | 0 | 0 |
Measurement Input, Risk Free Interest Rate [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Risk Free Rate | 4.64 | 4.69 |
SCHEDULE OF WARRANT ACTIVITY (D
SCHEDULE OF WARRANT ACTIVITY (Details) - USD ($) | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Share-Based Payment Arrangement [Abstract] | |||
Outstanding and exercisable - Beginning | 1,096,455 | 28,072 | |
Weighted average exercise price per share - Beginning | $ 30.50 | $ 220 | |
Remaining term | 4 years 6 months | 2 years 11 months 12 days | |
Intrinsic value - Beginning | |||
Outstanding and exercisable - Granted | 1,301,499 | 116,386 | |
Weighted average exercise price per share - Granted | $ 4.37 | $ 129.6875 | |
Remaining term - granted | 5 years | 5 years | |
Intrinsic value - Granted | |||
Outstanding and exercisable - Granted in Debt Conversion | 15,099 | ||
Weighted average exercise price per share - Granted in Debt Conversion | $ 129.6875 | ||
Remaining term - Granted in Debt Conversion | 5 years | ||
Outstanding and exercisable - Granted Prefunded Warrants | 463,195 | ||
Weighted average exercise price per share - Granted Prefunded Warrants | $ 0.25 | ||
Remaining term - Granted Prefunded Warrants | 5 years | ||
Outstanding and exercisable - Granted in PIPE transaction | 936,937 | ||
Weighted average exercise price per share - Granted in PIPE transaction | $ 21.50 | ||
Remaining term - Granted in PIPE transaction | 5 years | ||
Outstanding and exercisable - Exercised | (463,195) | ||
Weighted average exercise price per share - Exercised | $ 0.01 | $ 0.25 | |
Intrinsic value - Exercised | |||
Outstanding and exercisable - Expired | (38) | ||
Weighted average exercise price per share - Expired | |||
Intrinsic value - Expired | |||
Outstanding and exercisable - Exercised | 463,195 | ||
Remaining term - Exercised | 5 years | ||
Outstanding and exercisable - Ending | 2,397,954 | 1,096,455 | 28,072 |
Weighted average exercise price per share - Ending | $ 26.50 | $ 30.50 | $ 220 |
Intrinsic value - Ending |
WARRANTS AND OPTIONS (Details N
WARRANTS AND OPTIONS (Details Narrative) - USD ($) | 6 Months Ended | 12 Months Ended | ||||||||
Jun. 27, 2023 | Nov. 30, 2022 | Jul. 12, 2022 | Feb. 11, 2022 | Feb. 10, 2022 | Feb. 10, 2022 | Feb. 03, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||
Purchase of warrants | 615,000 | 448,096 | 15,099 | 448,096 | ||||||
Warrant exercise price | $ 4.37 | $ 0.25 | $ 27.50 | $ 129.6875 | $ 129.6875 | $ 129.6875 | $ 0.01 | $ 0.25 | ||
Proceeds from notes payable | $ 1,566,659 | |||||||||
Sale of stock | $ 12,887,976.31 | |||||||||
Number of shares issued | 71,499 | 20,372 | 615,000 | |||||||
Sale of stock | 2,993,850.63 | |||||||||
Share price | $ 4.37 | |||||||||
Conversion of warrants | 15,099 | |||||||||
Prefunded Warrants To Calvary [Member] | ||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||
Purchase of warrants | 936,937 | |||||||||
Warrant exercise price | $ 21.50 | 21.50 | ||||||||
Additional Prefunded Warrants [Member] | ||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||
Warrant exercise price | $ 50.25 | |||||||||
Maximum [Member] | ||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||
Warrant exercise price | $ 129.6875 | |||||||||
Minimum [Member] | ||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||
Warrant exercise price | $ 50.25 | |||||||||
Private Investment In Public Equity [Member] | ||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||
Purchase of warrants | 15,181 | 15,181 | ||||||||
Warrant exercise price | $ 103.75 | |||||||||
Armistice Capital Master Fund Ltd [Member] | Private Investment In Public Equity [Member] | ||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||
Purchase of warrants | 101,205 | 101,205 | ||||||||
Warrant exercise price | $ 129.6875 | $ 129.6875 | ||||||||
Common Stock [Member] | ||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||
Stock repurchased shares | 101,205 | |||||||||
Purchase of warrants | 686,499 | 936,937 | ||||||||
Warrant exercise price | $ 4.24 | $ 21.50 | ||||||||
Number of shares issued | 71,499 | 106,345 | ||||||||
Conversion of warrants | 7,443 | |||||||||
Common Stock [Member] | Subscription Arrangement [Member] | ||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||
Equity method investment received | $ 10,500,000 | |||||||||
Stock repurchased shares | 101,205 | |||||||||
Stock price per share | $ 103.75 | $ 103.75 | ||||||||
Warrants [Member] | ||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||
Warrant exercise price | $ 27.75 | $ 27.50 | ||||||||
Warrant [Member] | ||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||
Warrants issued and outstanding | 1,096,455 | |||||||||
Warrants issued and outstanding | 2,397,954 |
SCHEDULE OF BALANCE SHEET INFOR
SCHEDULE OF BALANCE SHEET INFORMATION RELATED TO LEASES (Details) - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 | Jun. 30, 2022 |
Right-of-use lease liability, long-term | $ 1,487,271 | $ 1,977,329 | |
Right Of Use Operating Lease Assets [Member] | |||
Right-of-use lease liability, long-term | 1,487,271 | ||
Other Current Liabilities [Member] | |||
Right-of-use lease liability, long-term | 965,529 | ||
Right Of Use Operating Lease Liability [Member] | |||
Right-of-use lease liability, long-term | 521,742 | ||
Property, Plant and Equipment [Member] | |||
Right-of-use lease liability, long-term | |||
Current Portion Of Long Term Debt [Member] | |||
Right-of-use lease liability, long-term |
SCHEDULE OF LEASE EXPENSE (Deta
SCHEDULE OF LEASE EXPENSE (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Leases And Leased Premises | ||
Operating lease expense, net | $ 453,320 | |
Amortization of assets | ||
Interest on lease liabilities | ||
Total finance lease expense |
SCHEDULE OF OTHER INFORMATION R
SCHEDULE OF OTHER INFORMATION RELATED TO LEASES (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Leases And Leased Premises | ||
Right-of-use assets acquired in exchange for operating lease obligations | $ 1,487,271 | |
Operating cash flows from finance leases | ||
Operating cash flows from operating leases | $ 490,058 | |
Operating leases, remaining lease term | 3 years | 0 years |
Finance leases, remaining lease term | 0 years | 0 years |
Operating leases, weighted average discount rate | 5% | 5% |
SCHEDULE OF FUTURE MINIMUM RENT
SCHEDULE OF FUTURE MINIMUM RENTAL PAYMENTS FOR OPERATING LEASE (Details) | Jun. 30, 2023 USD ($) |
Leases And Leased Premises | |
Finance leases, 2023 (nine months remaining) | |
Operating lease, 2023 (nine months remaining) | 596,892 |
Finance leases, 2024 | |
Operating lease, 2024 | 688,526 |
Finance leases, 2025 | |
Operating lease, 2025 | 163,794 |
Finance leases, 2026 | |
Operating lease, 2026 | 62,792 |
Finance leases, thereafter | |
Operating lease, 2027 | 3,733 |
Operating lease, thereafter | |
Finance leases, total lease payments | |
Operating lease, total lease payments | 1,515,737 |
Operating lease, less imputed interest | (85,257) |
Total finance lease liabilities | |
Total operating lease liabilities | $ 1,430,480 |
Finance Lease, Liability, Statement of Financial Position [Extensible Enumeration] | Liabilities, Current |
Operating Lease, Liability, Statement of Financial Position [Extensible Enumeration] | Liabilities, Current |
LEASES AND LEASED PREMISES (Det
LEASES AND LEASED PREMISES (Details Narrative) - USD ($) | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
[custom:RentExpenseForOperatingLeases] | $ 453,320 | $ 0 | |
Rental equipment expense for finance leases | 0 | 0 | |
Operating lease right of use asset | 1,487,271 | $ 1,977,329 | |
Operating lease liabilities | 1,430,480 | ||
Rent expenses | 453,000 | $ 0 | |
Accounting Standards Update 2016-02 [Member] | |||
Operating lease right of use asset | 0 | ||
Operating lease liabilities | $ 0 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 |
Commitments and Contingencies Disclosure [Abstract] | ||
Outstanding letters of credit | $ 0 | $ 0 |
Line of credit | $ 1,359,683 |
OTHER INCOME _ EMPLOYEE RETEN_2
OTHER INCOME – EMPLOYEE RETENTION CREDIT (Details Narrative) - US Treasury and Government [Member] | 6 Months Ended |
Jun. 30, 2023 USD ($) | |
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | |
Received tax credit | $ 1,286,000 |
Refunds and credits for retaining | 178,500 |
Employee [Member] | |
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | |
Refunds and credits for retaining | $ 1,107,500 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - USD ($) | 1 Months Ended | 6 Months Ended | 9 Months Ended | ||||
Jun. 27, 2023 | Jun. 27, 2023 | Jul. 12, 2022 | Aug. 14, 2023 | Jun. 30, 2023 | Jun. 30, 2022 | Sep. 30, 2023 | |
Subsequent Event [Line Items] | |||||||
Reserse split | 1-for-25 | The June 30, 2023 share numbers do not reflect any adjustment due to the 100-share round lot rounding up that has been inherent in the Company’s reverse stock splits since 2022. A shareholder that held a minimum of 100 shares pre-reverse split, based on the reverse stock split now holds less than 100 shares of our common stock will be issued an additional number of shares to ensure that they continue to maintain at least 100 shares of our common stock in ownership. | |||||
Sale of common stock, net, shares | 71,499 | 20,372 | 615,000 | ||||
Common Stock [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Sale of common stock, net, shares | 71,499 | 106,345 | |||||
Depository Trust And Clearing Corporation [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Reserse split | 1-for-25 | ||||||
Depository Trust And Clearing Corporation [Member] | Common Stock [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Sale of common stock, net, shares | 2,100,000 | 2,100,000 | |||||
Shares,issued | 100 | 100 | |||||
Notes Payable | Investor [Member] | Subsequent Event [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Refinanced amount | $ 600,000 | ||||||
Notes Payable | Investor [Member] | Subsequent Event [Member] | March Thirty One Twenty Twenty Three [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Refinanced amount | 600,000 | ||||||
Notes Payable | Investor [Member] | Subsequent Event [Member] | July 1 2023 [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Refinanced amount | 450,000 | ||||||
Notes Payable | Investor [Member] | Subsequent Event [Member] | December 31 2023 [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Refinanced amount | 150,000 | ||||||
Notes Payable | Investor [Member] | Subsequent Event [Member] | June 30 2024 [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Refinanced amount | $ 300,000 |