COMMITMENTS AND CONTINGENCIES |
12 Months Ended |
|---|---|
Dec. 31, 2025 | |
| Commitments and Contingencies Disclosure [Abstract] | |
| COMMITMENTS AND CONTINGENCIES | NOTE 16 – COMMITMENTS AND CONTINGENCIES
Legal Proceedings
During the years ended December 31, 2025 and 2024, various claims and lawsuits, incidental to the ordinary course of our business, may be brought against the Company. In the opinion of management, after consultation with legal counsel, resolution of any of these matters is not expected to have a material effect on the Company’s consolidated financial statements.
Liberty Safe and Security Products, Inc.
On July 23, 2024, the Company received notice of a complaint filed in the U.S. District Court for the District of Utah by Liberty Safe and Security Products, Inc. (“Liberty”), in connection with the marketing and sale of the Company’s and its subsidiaries, Champion Safe Company, Inc., line of safe products. As of the date of this Report, the complaint has not been served on the Company or Champion Safe. In the complaint, Liberty alleges trademark infringement as a result of the purported use of the term “Freedom” in the sale of safes, federal false designation of origin and unfair competition, violation of Utah deceptive trade practices, Utah unfair competition, and damages to Liberty. Management believes that this lawsuit is without merit; however, has initiated settlement discussions with Liberty and anticipates an amicable settlement to be forthcoming. At this time, Management does not believe a settlement with Liberty will have a material effect on its business or financial condition.
Contractual Obligations
There were no off-balance sheet arrangements that have, or are reasonably likely to have, a material effect on the consolidated financial statements. As of December 31, 2025 and 2024 there were no outstanding letters of credit issued during the normal course of business.
Nasdaq Compliance
As previously disclosed, on February 19, 2025, the Company received a letter (the “Notification Letter”) from The Nasdaq Stock Market (“Nasdaq”) stating that the Company was not in compliance with Nasdaq Listing Rule 5550(b)(1) (the “Rule”) because the stockholders’ equity of the Company as of September 30, 2024, as reported in the Company’s Quarterly Report on Form 10-Q filed with the SEC on February 7, 2025, was below the minimum requirement of $2,500,000 (the “Stockholders’ Equity Requirement”).
Pursuant to Nasdaq’s Listing Rules, the Company had 45 calendar days (until April 7, 2025), to submit a plan to evidence compliance with the Rule (a “Compliance Plan”). The Company submitted a Compliance Plan within the required time and amended it subsequently to provide additional information to Nasdaq.
On June 11, 2025, the Company received a letter from Nasdaq accepting the Compliance Plan and granting an extension through August 18, 2025 to evidence compliance with the Rule.
On August 20, 2025, the Company received a subsequent notice from Nasdaq citing continued non-compliance with the Rule due to insufficient stockholders’ equity. The Company requested a hearing before the Nasdaq Hearings Panel, which was held on September 30, 2025. On October 20, 2025, the Panel granted a conditional extension to continue the Company’s Nasdaq listing, requiring the Company to demonstrate compliance with the Stockholders’ Equity Requirement by November 15, 2025.
On October 20, 2025, the Company received a decision letter from the Nasdaq Hearings Panel granting the Company’s request to continue its listing on Nasdaq, subject to the condition that, on or before November 15, 2025, the Company shall demonstrate compliance with Nasdaq Listing Rule 5550(b)(1) (the “Equity Rule”). This decision follows the Company’s hearing before the Panel on September 30, 2025, regarding its non-compliance with the Equity Rule.
On November 21, 2025, the Company received a compliance letter from the Nasdaq Hearings Panel (“Panel”) confirming the Company is in compliance with Nasdaq Listing Rule 5550(b)(1) (the “Equity Rule”).
In its November 21, 2025 letter, the Panel advised that, based on the Nasdaq Listing Qualifications Staff’s compliance worksheet, American Rebel has satisfied the exception previously granted under the Equity Rule. Under Nasdaq Listing Rule 5815(d)(4)(B), the Company will be subject to a mandatory one-year Panel monitoring period beginning on the date of the letter.
On February 4, 2026, the Company received a written notice (the “Notice”) from the Nasdaq Listing Qualifications Department of The Nasdaq Stock Market LLC (“Nasdaq”) indicating that the Nasdaq staff (the “Staff”) determined that the Company’s common stock failed to maintain a minimum bid price of $1.00 per share for 30 consecutive business days, in violation of Nasdaq Listing Rule 5550(a)(2) (the “Rule”). As a result of non-compliance with the Rule, the Staff determined to delist the Company’s securities (common stock (“AREB”) and publicly traded warrants (“AREBW”)) from The Nasdaq Capital Market at the opening of business on February 13, 2026, unless the Company was to request an appeal of the determination by February 11, 2026.
In the event the Company fails to evidence compliance within the extension period, the Company will have the right to a hearing before Nasdaq’s Hearing Panel. The hearing request would stay any suspension or delisting action pending the conclusion of the hearing process and the expiration of any additional extension period granted by the panel following the hearing.
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.
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