American Rebel (AREB) Stock: Jumps 392% in a Day Following Private Placement Announcement

American Rebel (AREB) Stock: Jumps 392% in a Day Following Private Placement Announcement

TLDR

• American Rebel stock (AREB) surged 392% on Friday, closing at $19.50
• The company announced a $2.5 million private placement with potential for $8.5 million more from warrant exercises
• Funds will be used for working capital and general corporate purposes
• The company recently expanded from safes and security products into the beverage industry with American Rebel Light Beer
• The deal is expected to close around April 7, with H.C. Wainwright & Co. as the exclusive placement agent

American Rebel Holdings (AREB) saw its stock price skyrocket by 392.42% on Friday, closing at $19.50 after announcing a private placement deal expected to bring in $2.5 million.

The stock saw massive trading volume of over 81 million shares, compared to its average daily volume of around 1.5 million.

The Nashville-based company, known primarily as a designer and manufacturer of safes and security products, has recently ventured into the beverage industry with its American Rebel Light Beer.

The private placement agreement involves the sale of 724,640 shares of common stock or pre-funded warrants, along with series A and short-term series B warrants. The purchase price was set at $3.45 per share.

Warrant Details and Additional Funding

The series A warrants and series B warrants will have an exercise price of $2.95 per share and will be immediately exercisable upon issuance. Series A warrants will expire after five years, while the short-term series B warrants have an eighteen-month expiration period.

If all warrants are fully exercised on a cash basis, American Rebel could receive an additional $8.5 million in gross proceeds. However, the company noted that there’s no guarantee that the warrants will be exercised or that cash proceeds will be received.

H.C. Wainwright & Co. is acting as the exclusive placement agent for the offering, which is expected to close on or around April 7, 2025.

The company plans to use the net proceeds for working capital and other general corporate purposes.

Recent Company Developments

American Rebel has been working to diversify its business. While it has operated primarily as a manufacturer of safes and personal security products, it recently expanded into the beverage industry.

Its new American Rebel Light Beer is described as a premium domestic light lager with “all natural, crisp, clean taste with a lighter feel.” The product contains approximately 100 calories, 3.2 carbohydrates, and 4.3% alcoholic content per 12 oz serving.

The beer is marketed with patriotic messaging, described in company materials as “America’s Patriotic, God-Fearing, Constitution-Loving, National Anthem-Singing, Stand Your Ground Beer.”

American Rebel produces the beer in partnership with AlcSource and notes that it’s now available online in 40 states through a partnership with Bevstack.

The company has faced some financial and compliance challenges recently. According to information from Investing.com, American Rebel had a market capitalization of just $0.39 million before this announcement and has struggled with weak gross profit margins of about 6%.

In its most recent financial results, the company reported revenues of $2.3 million for the third quarter of fiscal year 2024 and $9.6 million for the first nine months.

The company also recently regained compliance with NASDAQ’s filing requirements after submitting its overdue Q3 report. Additionally, American Rebel implemented a 1-for-25 reverse stock split to enhance the stock’s marketability and maintain compliance with NASDAQ’s minimum bid price requirement.

This corporate action reduced the number of issued and outstanding shares from approximately 15 million to about 600 thousand.

After the regular trading session on Friday, AREB stock fell 26.56% in after-hours trading, dropping $5.18 to $14.32.

The securities being offered in the private placement are not registered under the Securities Act of 1933 or applicable state securities laws. This means they cannot be sold in the United States without registration or an applicable exemption from registration requirements.

American Rebel has agreed to file a resale registration statement covering these securities.

Investors should note that the extreme price movement reflects the micro-cap nature of the stock, with the company’s market capitalization reaching approximately $11.67 million during intraday trading on Friday.

The 52-week price range for the stock is quite wide, spanning from $1.10 to $231.75, illustrating the volatile nature of this security.

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