Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations

The Financial Statements have been prepared in accordance with generally accepted accounting policies in the United States ("GAAP"). Except as otherwise disclosed, all dollar figures included therein and in the following management discussion and analysis are quoted in United States dollars.

Description of Our Business

Overview

We are boldly positioning ourselves as America's Patriotic Brand. We have identified the market opportunity to design, manufacture, and market beverages and innovative concealed carry products and safes. We access our market uniquely through our positioning as America's Patriotic Brand and the appeal of our products as well as through the profile and public persona of our founder and Chief Executive Officer, Andy Ross. Andy hosted his own television show for 12 years, has made multiple appearances over the years at trade shows, and is well-known in the archery world as the founder of Ross Archery, which was the world's fastest-growing bow company in 2007 and 2008. Andy has released 3 CDs, done numerous radio and print interviews, and performed many concerts in front of thousands of people. Andy has the ability to present American Rebel to large numbers of potential customers through the appeal of his music and other supporting appearances. For example, his appearance on the History Channel hit show Counting Cars in February 2014 has been viewed by over 2 million times. Bringing innovative products that satisfy an existing demand to the market through exciting means is the American Rebel blueprint for success.

As a corporate policy, we will not incur any cash obligations that we cannot satisfy with known resources, of which there are currently none except as described in "Liquidity" below or elsewhere in this Quarterly Report. We believe that the perception that many people have of a public company makes it more likely that they will accept restricted securities from a public company as consideration for indebtedness to them than they would from a private company. We have not performed any studies of this matter. Our conclusion is based on our own observations. Additionally, the issuance of restricted shares will dilute the percentage of ownership interest of our stockholders.

The Company operates primarily as a designer, manufacturer and marketer of beverages, branded safes and personal security and self-defense products. Additionally, the Company designs and produces branded apparel and accessories.

We believe that when it comes to their homes, consumers place a premium on their security and privacy. Our products are designed to offer our customers convenient, efficient and secure home and personal safes from a provider that they can trust. We are committed to offering products of enduring quality that allow customers to keep their valuable belongings protected and to express their patriotism and style, which is synonymous with the American Rebel brand.

Our safes and personal security products are constructed primarily of U.S.-made steel. We believe our products are designed to safely store firearms, as well as store our customers' priceless keepsakes, family heirlooms and treasured memories and other valuables, and we aim to make our products accessible at various price points for home and office use. We believe our products are designed for safety, quality, reliability, features and performance.

To enhance the strength of our brand and drive product demand, we work with our manufacturing facilities and various suppliers to emphasize product quality and mechanical development in order to improve the performance and affordability of our products while providing support to our distribution channel and consumers. We seek to sell products that offer features and benefits of higher-end safes at mid-line price ranges.

We believe that safes are becoming a 'must-have appliance' in a significant portion of households. We believe our current safes provide safety, security, style and peace of mind at competitive prices.

In addition to branded safes, we offer an assortment of personal security products as well as apparel and accessories for men and women under the Company's American Rebel brand. Our backpacks utilize what we believe is a distinctive sandwich-method concealment pocket, which we refer to as Personal Protection Pocket, to hold firearms in place securely and safely. The concealment pockets on our Freedom 2.0 Concealed Carry Jackets incorporate a silent operation opening and closing with the use of a magnetic closure.

We believe that we have the potential to continue to create a brand community presence around the core ideals and beliefs of America, in part through Andy Ross, who has written, recorded and performs a number of songs about the American spirit of independence. We believe our customers identify with the values expressed by our Chief Executive Officer through the "American Rebel" brand.

Through our growing network of dealers, we promote and sell our products in select regional retailers and local specialty safe, sporting goods, hunting and firearms stores, as well as online, including our website and e-commerce platforms such as Amazon.com.

American Rebel is boldly positioning itself as "America's Patriotic Brand" in a time when national spirit and American values are being rekindled and redefined. American Rebel is an advocate for the 2nd Amendment and conveys a sense of responsibility to teach and preach good common practices of gun ownership. American Rebel products keep you concealed and safe inside and outside the home. American Rebel Safes protect your firearms and valuables from children, theft, fire and natural disasters inside the home; and American Rebel Concealed Carry Products provide quick and easy access to your firearm utilizing American Rebel's Proprietary Protection Pocket in its backpacks and apparel outside the home. The initial company product releases embrace the "concealed carry lifestyle" with a focus on concealed carry products, apparel, personal security and defense. "There's a growing need to know how to protect yourself, your family, your neighbors or even a room full of total strangers," says Andy Ross. "That need is in the forethought of every product we design."

The "concealed carry lifestyle" refers to a set of products and a set of ideas around the emotional decision to carry a gun everywhere you go. The American Rebel brand strategy is similar to the successful Harley-Davidson Motorcycle philosophy, referenced in this quote from Richard F. Teerlink, Harley's chairman and former chief executive, "It's not hardware; it is a lifestyle, an emotional attachment. That's what we have to keep marketing to." As an American icon, Harley has come to symbolize freedom, rugged individualism, excitement and a sense of "bad boy rebellion." American Rebel - America's Patriotic Brand has significant potential for branded products as a lifestyle brand. Its innovative Concealed Carry Product line and Safe line serve a large and growing market segment; but it is important to note we have product opportunities beyond Concealed Carry Products and Safes. One such opportunity is American Rebel Light Lager. American Rebel Light Beer is "America's Patriotic, God-Fearing, Constitution-Loving, National Anthem-Singing, Stand Your Ground Beer." Management believes a significant opportunity exists to enter the $110+ billion-dollar beer industry with a premium domestic beer. Current distribution agreements are in place for the states of Kansas and Tennessee and portions of Ohio and Connecticut.

American Rebel & Champion Safes

Keeping your guns in a location only appropriate trusted members of the household can access should be a top priorities for every responsible gun owner. Whenever a new firearm is purchased, the owner should look for a way to store and secure it. Storing the firearm in a gun safe will prevent it from being misused by young household members, and it will prevent it from being stolen in a burglary or damaged in a fire or natural disaster. Gun safes may seem pricy at first glance, but once the consumer is educated on their role to protect expensive firearms and other valuables such as jewelry and important documents, the price is justified.

Champion Safe Co. produces large floor safes in a variety of models and sizes as well as small portable keyed safes. Additional opportunities exist for us to develop Wall Safes and Handgun Boxes.

Reasons gun owners should own a gun safe:

	●	If you are a gun owner and you have children, many states have a law in place that require you to store your gun locked in a safe, away from children. This will prevent your children from getting the gun and hurting themselves or someone else.
	●	Some states have a law in place that require you to keep your gun locked away when it is not in use, even if you don't have children in your home. California has a law that requires you to have your gun locked in a firearms safety device that is considered safe by the California Department of Justice (DOJ). When you buy a safe, you should see if it has approval from the California DOJ.
	●	Many gun owners own more guns than insurance will cover. Many insurance companies only cover $3,000 worth of guns. Are your weapons worth more? If so, you should invest in a gun safe to make sure your guns are protected from fire, water, and thieves.
	●	Many insurance companies may give you a discount if you own a gun safe. If you own a gun safe or you purchase one, you should see if your insurance company is one that offers a discount for this. A safe can protect your guns and possibly save you money.
	●	Do people know you own guns? You might not know that many burglaries are carried out by people they know.
	●	If a person you know breaks into your home, steals your gun, and murders someone, you could be charged with a crime you didn't commit, or the victim's family could sue you.
	●	Gun safes can protect your guns in the event your home goes up in flames. When buying a safe, you should see if it will protect your firearm or any other valuables from fire damage.
	●	You might be the type of person that has a gun in your home for protection. A gun locked in a safe can still offer you protection. There are quick access gun safes on the market. With a quick access gun safe, you can still retrieve your gun in a few seconds, but when it is not needed, it will be protected.

A gun safe is the best investment a gun owner can make because the safe can protect guns from thieves, fire, water, or accidents. Bills or ballot measures to require safe storage have been discussed in Delaware, Washington, Oregon, Missouri and Virginia; and various laws are on the books in California and Massachusetts. The gun safe industry is experiencing growth and innovation. Andy Ross and the rest of the American Rebel team are committed to fulfilling the opportunity in the gun safe market and filling the identified void.

Below is a summary of the different safes we offer:

i.

Large Safes - our current large model safe collection consists of six premium safes. All of our large safes share the same high-quality workmanship, are constructed out of 11-gauge U.S.-made steel and feature a double plate steel door, double-steel door casements and reinforced door edges. Each of these safes provide up to 75 minutes of fire protection at 1200 degrees Fahrenheit. Our safes offer a fully adjustable interior to fit our customers' needs. Depending on the model, one side of the interior may have shelves and the other side set up to accommodate long guns. There are optional additions such as Rifle Rod Kits and Handgun Hangers to increase the storage capacity of the safe. These large safes offer greater capacity for secure storage and protection, and our safes are designed to prevent unauthorized access, including in the event of an attempted theft, natural disaster or fire. We believe that a large, highly visible safe acts as a deterrent to any prospective thief.

	ii.	Personal Safes - the safes in our compact safe collection are easy to operate and carry as they fit into briefcases, desks or under vehicle seats. These personal safes meet Transportation Security Administration ("TSA") airline firearm guidelines and fit comfortably in luggage when required by travel regulations.
	iii.	Vault Doors - our U.S.-made vault doors combine style with theft and fire protection for a look that fits any decor. Newly-built, higher-end homes often add vault rooms and we believe our vault doors, which we designed to facilitate secure access to such vault rooms, provide ideal solutions for the protection of valuables and shelter from either storms or intruders. Whether it's in the context of a safe room, a shelter, or a place to consolidate valuables, our American Rebel in- and out-swinging vault doors provide maximum functionality to facilitate a secure vault room. American Rebel vault doors are constructed of 4 ½" double steel plate thickness, A36 carbon steel panels with sandwiched fire insulation, a design that provides greater rigidity, security and fire protection. Active boltworks, which is the locking mechanism that bolts the safe door closed so that it cannot be pried open and three external hinges that support the weight of the door, are some of the features of the vault door. For safety and when the door is used for a panic or safe room, a quick release lever is installed inside the door.

Upcoming Product Offerings

To further complement our diverse product offerings, we intend to introduce additional products throughout 2025. Below is a summary of potential upcoming product offerings:

Wall Safes - wall safes can be easily hidden and provide "free" storage space since they are able to be tucked into the space between your wall and studs.

Economy Safe Line - we are exploring enhancing our safe line through the introduction of entry level safes built in North America to compete with other safes imported from overseas.

Our results of operations and financial condition may be impacted positively and negatively by certain general macroeconomic and industry wide conditions

Recent Developments

Minority Interest Agreements

During the three months ended September 30, 2025, we entered into multiple agreements to acquire minority ownership interests in certain entities.

On September 2, 2025, we executed a Membership Interest Purchase Agreement with Sydona Enterprises, LLC, d/b/a Schmitty's, acquiring a 19.01% ownership interest in Schmitty's. The consideration for this acquisition included the issuance of 426,155 shares of common stock and prefunded warrants to purchase an additional 1,183,191 shares of common stock at $0.01 per share. The total value of the transaction was approximately $1.99 million. This strategic investment positions American Rebel to leverage Schmitty's established presence in the smokeless market, aligning with the Company's expansion into the $10 billion smokeless category. The partnership aims to enhance Schmitty's retail distribution and explore licensing opportunities under the "America's Patriotic Brand" umbrella.

On September 30, 2025, we entered into a Membership Interest Purchase Agreement with RAEK Data, LLC to acquire a minority membership interest in the entity. Pursuant to the agreement, we issued 200,000 shares of Series D Convertible Preferred Stock to RAEK Data, LLC in exchange for its ownership interest. The shares were issued at a stated value of $7.50 per share, resulting in an aggregate transaction value of $1,500,000. This transaction was accounted for as an equity acquisition, with the acquired noncontrolling interest recorded at fair value on the acquisition date. The acquisition provides the Company with additional operational influence.

218 3^rd Avenue Asset Acquisition

On August 19, 2025, we entered into a Purchase and Sale Agreement with 218 LLC (the "Seller") for the sale of an approximately 20,829 square foot four story commercial retail building located at 218 3rd Avenue North, Nashville, Tennessee 37201 ("218 3rd Avenue") for a sale price of $14.1 million. On September 15, 2025, we entered into a mutual termination agreement of the Purchase Agreement. On the same day, we entered into a membership interest purchase agreement (the "MIPA") to purchase all of the outstanding membership interests in 218 3^rd Avenue.

We have agreed to pay Seller $14,100,000, the appraised value of 218 3^rd Avenue, for all of the ownership interests in the Seller in tranches over twelve months. Upon execution of the MIPA, we authorized the issuance of 280,000 shares of Series D Convertible Preferred Stock, valued at $7.50 per share ($2,1000,000 in value), for the purchase of 30% of the outstanding membership interests in the Seller.

Further, we shall pay the Seller $300,000 of the purchase price in three non-refundable $100,000 installments; the first installment shall be payable 15 days following execution of the MIPA and shall purchase an additional 1% of the outstanding membership interests in the Seller; the second installment shall be payable 45 days following execution of the Agreement and shall purchase an additional 1% of the outstanding membership interests in the Seller; and the third installment shall be payable 75 days following execution of the Agreement and shall purchase an additional 1% of the outstanding membership interests in the Seller.

In addition, we executed a 12-month, 6% per annum promissory note in the amount of the $11,700,000 payable to the Seller. Seller may, from time to time, convert a portion of principal and interest under the Note into tranches of 200,000 shares of the Company's Series D Convertible Preferred Stock (valued at $1,500,000) and simultaneously convert such preferred stock into 1,000,000 shares of Common Stock and then sell such shares, or in other amounts that do not exceed a 4.99% beneficial ownership, and apply the proceeds towards the principal and interest of the Note. Each conversion shall purchase an additional 1% ownership interest in Seller. We agreed to issue to Seller an additional 18,800 shares of Series D Convertible Preferred Stock, valued at $141,000, as a convenience fee.

Damon Note Purchase Agreement

On August 22, 2025, the Company entered into a note purchase agreement (the "NPA") with Streeterville Capital, LLC, a Utah limited liability company ("Streeterville"), for the purchase by the Company of a portion of a certain $6,470,000 secured promissory note dated June 26, 2024 (the "Damon Note") in Damon, Inc., a British Columbia corporation ("Damon") held by Streeterville. Damon is a public company, registered as a foreign private issuer with the SEC, with its common shares traded on the OTCID Basic Market under the symbol "DMNIF".

Upon the terms and conditions set forth in the NPA, Streeterville sold, transferred and assigned to the Company, and the Company agreed to purchase from Streeterville, $2,000,000 of the Damon Note in consideration for the issuance to Streeterville of 2,000 shares of the Company's newly authorized Series E Preferred Stock, par value $0.001 per share. In the event the Company's common stock is ever delisted from Nasdaq, Streeterville will have the right to repurchase the portion of the purchased Damon Note from the Company in exchange for cancellation of the shares of Series E Preferred Stock.

The Damon Note is secured by certain collateral of Damon as set forth in the transaction documents between Streeterville and Damon. The Company and Streeterville agreed that the security interest held in the collateral by Streeterville will be held pari passu for benefit of both parties. Any and all rights, benefits and proceeds of the collateral will be shared pro rata by the Company and Streeterville (based on the then-outstanding balances of the Damon Note and the portion of the Damon Note purchased by the Company). Any decision regarding when, how and whether to pursue collections or other actions against Damon will be determined by Streeterville in consultation with the Company. The Company covenanted and agreed that it will not pursue any collections or other action against Damon without Streeterville's consent.

Establishment of American Rebel Beer

On August 9, 2023, we entered into a Master Brewing Agreement with Associated Brewing. Under the terms of the Brewing Agreement, Associated Brewing has been appointed as the exclusive producer and seller of American Rebel branded spirits, with the initial product being American Rebel Light Beer. American Rebel Light Beer launched regionally in 2024. We paid a setup fee and security deposit to Associated Brewing. We established American Rebel Beverages, LLC as a wholly-owned subsidiary specifically to hold our alcohol licenses and conduct operations for our beer business.

Expansion into New Business Categories

Expanding Scope of Operations Activities by Offering Servicing Dispensaries and Brand Licensing

We continually seek to target new consumer segments for our safes. As we believe that safes are becoming a must-have household appliance, we strive to establish authenticity by selling our products to additional groups, and to expand our direct-to-consumer presence through our website and our showroom currently in Lenexa, Kansas.

Further, we expect the cannabis dispensary industry to be a material growth segment for our business. Several cannabis dispensary operators have expressed interest in the opportunity to help them with their inventory locking needs. Cannabis dispensaries have various insurance requirements and local ordinances requiring them to secure their inventory when the dispensary is closed. Dispensary operators have been purchasing gun safes and independently taking out the inside themselves to allow them to store cannabis inventory. Recognizing what seems to be a growing need for cannabis dispensary operators, we have designed a safe tailor-made for the cannabis industry. American Rebel has a long list of dispensary operators, growers, and processors interested in the Company's inventory control solutions. We believe that dispensary operators, growers, and processors are another fertile new growth market for our Vault Doors products, as many in the cannabis space have chosen to install entire vault rooms instead of individual inventory control safes-the American Rebel Vault Door has been the choice for that purpose.

Further, we believe that American Rebel has significant potential for branded products as a lifestyle brand. As the American Rebel Brand continues to grow in popularity, we anticipate generating additional revenues from licensing fees earned from third parties who wish to engage the American Rebel community. While the Company does not currently generate material revenues from licensing fees, our management team believes the American Rebel brand name may in the future have significant licensing value to third parties that seek the American Rebel name to brand their products to market to the American Rebel target demographic. For example, a tool manufacturer that wants to pursue an alternative marketing plan for a different look and feel could license the American Rebel brand name for their line of tools and market their tools under our distinct brand. This licensee would benefit from the strong American Rebel brand with their second line of American Rebel branded tools as they would continue to sell both of the lines of tools. Conversely, American Rebel could potentially benefit as a licensee of products. If American Rebel determines a third party has designed, engineered, and manufactured a product that would be a strong addition to the American Rebel catalog of products, American Rebel could license that product from the third-party and sell the licensed product under the American Rebel brand.

Results of Operations

From inception through September 30, 2025, we have generated an accumulated deficit of $93,513,226. We expect to incur additional losses during fiscal year ending December 31, 2025, and beyond, principally as a result of our increased investment in inventory, manufacturing capacity, marketing and sales expenses, and other growth initiatives.

Three Months Ended September 30, 2025 Compared to Three Months Ended September 30, 2024

Revenue ('Sales') and cost of goods sold ('Cost of Sales')

For the three months ended September 30, 2025, we reported Revenues of $1,877,518 compared to Revenues of $2,337,786 for the three months ended September 30, 2024. The decrease in Revenues of $460,268 (or (20%) period over period) for the current period compared to the three months ended September 30, 2024 is attributable to slower sales for 2025 and current market conditions. For the three months ended September 30, 2025, we reported Cost of Goods Sold of $2,075,288 compared to Cost of Goods Sold of $2,835,763 for the three months ended September 30, 2024. The decrease in Cost of Goods Sold of $760,475 (or (27%) period over period) for the current period is primarily attributable to the decrease in revenue. For the three months ended September 30, 2025, we reported Gross Margin of $(197,770), compared to Gross Margin of $(497,977) for the three months ended September 30, 2024 and a Gross Margin percentage of (11%) for the three months ended September 30, 2025 compared to (21%)% for the three months ended September 30, 2024. In general, second amendment businesses have experienced a slowdown in sales volume during the past year.

Operating Expenses

Total operating expenses for the three months ended September 30, 2025 were $3,482,401 compared to $542,695 for the three months ended September 30, 2024 as further described below. Overall, we experienced a $2,939,706 increase in operating expenses period over period. This increase is primarily due to the large adjustment made to compensation expense - officers - deferred comp - related party made during the three months ended September 30, 2024 as a result of the 2023 and 2022 re-audits. There was also a slight increase in administrative and other expenses due to increased accounting and legal fees and increased marketing and brand development costs.

For the three months ended September 30, 2025, we incurred consulting/payroll and other costs (along with officer compensation) of $903,397 compared to consulting/payroll and other costs (along with officer compensation) of $(1,932,565) for the three months ended September 30, 2024. The increase in consulting/payroll and other costs of $2,835,962 was due to the adjustment in the deferred compensation expense due to common stock equivalents on our Series A preferred stock as identified and corrected during the period ended September 30, 2024 upon finalization of the 2023 re-audit. We expects to try and maintain our consulting/payroll and other costs as we endeavor to further expand our sales volume.

For the three months ended September 30, 2025, we incurred rental expense, warehousing, outlet expense of $39,742, compared to rental expense, warehousing, outlet expense of $103,562 for the three months ended September 30, 2024. The decrease in rental expense, warehousing, outlet expense of $63,820 is due to cost cutting on leases and properties that the Company rents to conduct the Champion business acquisition as well as other cost cutting measures or efficiencies put in place.

For the three months ended September 30, 2025, we incurred product development expenses of $160,209 compared to product development expenses of $277,483 for the three months ended September 30, 2024. The decrease in product development expenses of $117,274 is due to the timing of development expenses in connection with the private label beer. We expect to maintain some level of expense on a go-forward basis with new products and efforts being expended for future sales growth and product needs.

For the three months ended September 30, 2025, we incurred marketing and brand development expenses of $739,976 compared to marketing and brand development expenses of $624,509 for the three months ended September 30, 2024. The increase in marketing and brand development expenses of $115,467 (or 42% period over period) relates primarily to market awareness efforts for American Rebel Beer as well as expenses associated with our Tony Stewart activities and general push forward on sales efforts.

For the three months ended September 30, 2025, we incurred administrative and other expense of $1,602,039 compared to administrative and other expense of $1,414,889 for the three months ended September 30, 2024. The increase in administrative and other expense of $187,150 (or 13% period over period) relates directly to increased professional fees including accounting and legal fees.

For the three months ended September 30, 2025, we incurred depreciation and amortization expense of $37,038 compared to depreciation and amortization expense of $54,817 for the three months ended September 30, 2024. The increase primarily relates to amortization related to intangible assets.

Other income and expenses

For the three months ended September 30, 2025, we incurred interest expense of $329,231 compared to interest expense of $649,216 for the three months ended September 30, 2024. The decrease in interest expense of $319,985 is due to a significant number of notes we have entered into and subsequently converted or modified. For the three months ended September 30, 2025, we incurred a loss on debt extinguishment of $1,213,772 and loss on settlement of liability of $7,000 compared to a loss on debt extinguishment of $62,505 for the three months ended September 30, 2024. This is due to the increased amount of conversions of debt into equity in 2025 and the amended Streeterville loan payable.

Net Loss

Net loss for the three months ended September 30, 2025 amounted to $5,230,027, resulting in a loss per share of $(32.44), compared to a net loss of $1,747,957 for the three months ended September 30, 2024, resulting in a loss per share of $(3,032.24) (adjusted for various reverse stock splits). The increase in the net loss for the three months ended September 30, 2025 compared to the three months ended September 30, 2024 is primarily due to a myriad of expenses that we incurred in the quarter, such as professional and legal fees, increased costs in marketing, and the softening of gross margin on sales as well as a significant loss on debt extinguishment.

Nine Months Ended September 30, 2025 Compared to Nine Months Ended September 30, 2024

Revenue ('Sales') and cost of goods sold ('Cost of Sales')

For the nine months ended September 30, 2025, we reported Revenues of $7,231,439 compared to Revenues of $9,637,016 for the nine months ended September 30, 2024. The decrease in Revenues of $2,405,577 (or (25%) period over period) for the current period compared to the nine months ended September 30, 2024 is attributable to slower sales for 2025 and current market conditions. For the nine months ended September 30, 2025, we reported Cost of Goods Sold of $7,171,528 compared to Cost of Goods Sold of $9,263,015 for the nine months ended September 30, 2024. The decrease in Cost of Goods Sold of $2,091,487 (or (23%) period over period) for the current period is primarily attributable to the decrease in revenue. For the nine months ended September 30, 2025, we reported Gross Margin of $59,911, compared to Gross Margin of $374,001 for the nine months ended September 30, 2024. The decrease in Gross Margin of $314,090 (or (84%) period over period) for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 is again due a decrease in sales and increased costs of goods sold. Gross Margin percentage for the nine months ended September 30, 2025 was 1% compared to 4% for the nine months ended September 30, 2024. In general, second amendment businesses have experienced a slowdown in sales volume during the past twelve months and this is in line with what we have experienced in our business.

Operating Expenses

Total operating expenses for the nine months ended September 30, 2025 were $10,904,780 compared to $7,639,863 for the nine months ended September 30, 2024 as further described below. Overall, we experienced a $3,264,917 increase in operating expenses period over period. This increase is primarily due to an increase in administrative and other expenses due to increased accounting and legal fees and increased marketing and brand development costs.

For the nine months ended September 30, 2025, we incurred consulting/payroll and other costs (along with officer compensation) of $2,944,253 compared to consulting/payroll and other costs (along with officer compensation) of $1,967,639 for the nine months ended September 30, 2024. The increase in consulting/payroll and other costs of $(1,859,348) was due to merit increases and a change in the executive team. We expect to try and maintain its consulting/payroll and other costs as we endeavor to further expand our sales volume.

For the nine months ended September 30, 2025, we incurred rental expense, warehousing, outlet expense of $145,108, compared to rental expense, warehousing, outlet expense of $335,743 for the nine months ended September 30, 2024. The decrease in rental expense, warehousing, outlet expense of $190,635 is due to cost cutting on leases and properties that the Company rents to conduct the Champion business acquisition as well as other cost cutting measures or efficiencies put in place.

For the nine months ended September 30, 2025, we incurred product development expenses of $902,033 compared to product development expenses of $713,883 for the nine months ended September 30, 2024. The increase in product development expenses of $188,150 is due to the timing of development expenses in connection with the private label beer. We expect to maintain some level of expense on a go-forward basis with new products and efforts being expended for future sales growth and product needs.

For the nine months ended September 30, 2025, we incurred marketing and brand development expenses of $2,406,274 compared to marketing and brand development expenses of $1,189,219 for the nine months ended September 30, 2024. The increase in marketing and brand development expenses of $1,217,055 (or 102% period over period) relates primarily to market awareness efforts for American Rebel Beer as well as expenses associated with our Tony Stewart activities and general push forward on sales efforts.

For the nine months ended September 30, 2025, we incurred administrative and other expense of $4,397,199 compared to administrative and other expense of $3,323,566 for the nine months ended September 30, 2024. The increase in administrative and other expense of $1,073,633 (or 32% period over period) relates directly to increased professional fees including accounting and legal fees.

For the nine months ended September 30, 2025, we incurred depreciation and amortization expense of $109,913 compared to depreciation and amortization expense of $109,813 for the nine months ended September 30, 2025. Depreciation and amortization expense remained consistent, and we expect it to remain consistent.

Other income and expenses

For the nine months ended September 30, 2025, we incurred interest expense of $1,483,357 compared to interest expense of $2,128,357 for the nine months ended September 30, 2024 The decrease in interest expense of $645,000 is due to a significant number of notes we have entered into and subsequently converted or modified.

For the nine months ended September 30, 2025, we incurred a loss on debt extinguishment of $13,531,557 and loss on settlement of liability of $2,586,509 compared to a loss on extinguishment of debt of $312,505 for the nine months ended September 30, 2024. This is due to several additional conversions of debt into equity during the nine months ended September 30, 2025 as well as the amended Streeterville loan payable.

Net Loss

Net loss for the nine months ended September 30, 2025 amounted to $28,427,026, resulting in a loss per share of $(113.30), compared to a net loss of $9,702,239 for the nine months ended September 30, 2024, resulting in a loss per share of $(6,664.86) (adjusted for various reverse stock splits). The increase in the net loss for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 is primarily due to a myriad of expenses that we incurred, such as professional and legal fees, increased costs in marketing, and the softening of gross margin on sales as well as the significant loss on debt extinguishment as mentioned above.

Liquidity and Capital Resources

We are a company still in the growth and acquisition stage and our revenue from operations does not cover our operating expenses. Working capital decreased by $8,709,796 period over period where we had a working capital deficit of $(8,940,228) at December 31, 2024 compared to a working capital deficit balance of $(17,650,023) at September 30, 2025. This working capital decrease was due to increased expenses launching new products and slowing sales in its legacy business. We have funded our operations primarily through the issuance of capital stock, convertible debt, and other securities and will continue so into the near future and beyond.

During the nine months ended September 30, 2025, we reduced anticipated cash outflows of $27.7 million through the issuance of common stock in exchange for settlement of our outstanding debt and payables.

As we continue with the launch of American Rebel Beer and continue to maintain the American Rebel branded safes and concealed carry product line, as well our Champion line of products, we expect to continue to devote significant resources in the areas of capital expenditures, marketing, sales, and operational expenditures. We may from time to time incur significant capital needs for these expenditures and for our business. We cannot fully predict what those needs will be and the impact to our business.

We expect to require additional funds to further develop our business and acquisition plan, including the launch of additional products in addition to aggressively marketing our safes and concealed carry product line. Since it is impossible to predict with certainty the timing and amount of funds required to establish profitability, we anticipate that we will raise additional funds through equity or debt offerings or otherwise in order to meet our expected future liquidity requirements. Any such financing that we undertake will likely be dilutive to existing stockholders.

In addition, we expect to need additional funds to respond to business opportunities and challenges, including our ongoing operating expenses, protecting our intellectual property, developing or acquiring new lines of business and enhancing our operating infrastructure. While we may need to seek additional funding for such purposes, we may not be able to obtain financing on acceptable terms, or at all. In addition, the terms of our financings may be dilutive to, or otherwise adversely affect, holders of our common stock. We may also seek additional funds through arrangements with collaborators or other third parties. We may not be able to negotiate any such arrangements on acceptable terms, if at all. If we are unable to obtain additional funding on a timely basis, we may be required to curtail or terminate some or all of our product lines.

Promissory Notes - Working Capital

Over the past twelve months, we entered into various working capital notes with a total balance of $18,453,772 as of September 30, 2025. The promissory notes have various terms - refer to Note 10 of our consolidated financial statements for the specific terms of each promissory note.

Critical Accounting Estimates

Our discussion and analysis of our financial condition and results of operations are based upon our Condensed Consolidated Financial Statements, which have been prepared in accordance with GAAP. The preparation of these financial statements requires us to make estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure at the date of the financial statements and for the period then ended. On an ongoing basis, we evaluate the estimates used. We base our estimates on historical experience, current conditions and various other assumptions that we believe to be reasonable under the circumstances. These estimates form the basis for making judgments about the carrying values of assets and liabilities. Actual results may differ from these estimates. Our critical accounting estimates include the following, which are listed in no particular order:

Revenue Recognition

In accordance with ASC 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 to, and the product is shipped or delivered to that customer. Additionally, the Company offers extended warranties for the locking mechanism of its safes, which are separately purchased by customers. Warranty income is recognized over time based on the estimated useful life of the locks, which approximates 10 years. Unrecognized warranty income is presented as deferred revenue in the accompanying consolidated financial statements.

Fair Value of Financial Instruments

Fair value estimates are based upon certain market assumptions and pertinent information available to management. The respective carrying value of certain financial instruments approximates their fair values.

The three levels of inputs used to measure fair value are as follows:

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.