As filed with the Securities and Exchange Commission on February 3, 2022

Registration No. 333-260646


UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

AMENDMENT NO. 4

TO

FORM S-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

AMERICAN REBEL HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

Nevada737247-3892903

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM S-1/PRE-EFFECTIVE AMENDMENT NO. 1

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933


CUBESCAPE, INC.

(Exact name of registrant as specified in its charter)

NEVADA

(State or other jurisdiction of

incorporation or organization)

7372

(Primary Standard Industrial

Classification Code Number)

47-3892903

(I.R.S. Employer

Identification Number)

1854 Oxford Avenue, Cardiff-by-the-Sea, California 92007 (760) 613-6257

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)


The Corporate Place, Inc., 601 E. Charleston Street, Suite 100, Las Vegas, Nevada 89104
(801) 885-0113

(Name, address, including zip code, and telephone number, including area code, of agent of service)


Copies of communications to:

Krueger LLP

Blair Krueger, Esq.

Kenneth J. Yonika, CPA

7486 La Jolla Boulevard

La Jolla, California 92037

(858) 405-7385

From time to time after the effective date of this Registration Statement

(Approximate date of commencement of proposed sale to the public)


718 Thompson Lane, Suite 108-199

Nashville, Tennessee, 37204

(833)267-3235

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

Charles A. Ross, Jr.

Chief Executive Officer

718 Thompson Lane, Suite 108-199

Nashville, Tennessee, 37204

(833) 267-3235

(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copies to:

Joseph Lucosky, Esq.

Adele Hogan, Esq.

Lucosky Brookman LLP

101 Wood Avenue South

Woodbridge, New Jersey 08830

Telephone: (732) 395-4400

Keith Billotti, Esq.

Seward & Kissel LLP

One Battery Park Plaza

New York, New York 10004

Telephone: (212) 574-1200

Approximate date of commencement of proposed sale to the public:

As soon as practicable after the effective date of this registration statement.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 check the following box:.box. ☒


If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. .


If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. .


If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.     .


Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Securities Exchange Act (Check One):of 1934.


Large accelerated filer

.

Accelerated filer

.

Non-accelerated filer

.

Smaller reporting company

 X.

(Do not check if a smaller reporting company)

Emerging growth company








CALCULATION OF REGISTRATION FEE



Title of Each Class Of Securities To Be Registered

 



Amount To Be Registered

 

Proposed Maximum Offering Price Per Share1

 


Proposed Maximum Aggregate Offering Price1

 


Amount of Registration Fee

 

 

 

 

 

 

 

 

 

Common stock, $ .001

par value per share

 

6,000,000 shares

 

$0.01

 

$ 60,000

 

$ 6.97*



1Estimated solelyIf an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for purposed of calculating the registration fee under Rule 457(a) and (o)complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. This

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall also cover any additional shares of common stock whichthereafter become issuable by reason of any stock split, stock dividend, anti-dilution provisions or similar transaction effected without the receipt of consideration which resultseffective in an increase in the numberaccordance with Section 8(a) of the outstanding shares of common stock ofSecurities Act or until the registrant.


THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING, PURSUANT TO SECTIONregistration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said section 8(a), MAY DETERMINE.may determine.







The information contained in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and it iswe are not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.


Subject to completion September 25, 2015

PRELIMINARY PROSPECTUSSUBJECT TO COMPLETION, DATED FEBRUARY 3, 2022


6,000,000 SHARES

COMMON STOCK


CUBESCAPE,AMERICAN REBEL HOLDINGS, INC.


CubeScape,

2,258,065 Units

Each Unit Consisting of One Share of Common Stock and

One Warrant to Purchase Common Stock

2,258,065 Pre-funded Units

Each Pre-funded Unit Consisting of a Pre-funded Warrant to Purchase One Share of Common Stock and a Warrant to Purchase One Share of Common Stock

 

We are offering 2,258,065 units (each a “Unit” and collectively, the “Units”) of American Rebel Holdings, Inc. (“CSI”(the “Company,” “American Rebel,” “we,” “our” or “us”) with each Unit consisting of one share of Common Stock, par value $0.001, which we refer to as the “Company”“Common Stock”, and one warrant (each a “Warrant”) to purchase one share of Common Stock. The Units have no stand-alone rights and will not be certified or issued as stand-alone securities. We anticipate a public offering price between $4.15 and $5.15 per Unit. Furthermore, the 2,258,065 units amount referenced above is based on the Units being sold at $4.65 per Unit, the mid-point of the estimated offering price range, and such Units amount is subject to change if the Unit price is less than $4.65 in such manner to maintain gross proceeds in the amount of $10.5 million. For instance, if the Unit price is $4.15 per Unit, the number of Units to be sold in the offering shall be 2,530,121. The Warrants included in the Units are exercisable immediately and have an exercise price of $5.81 per share (125% of the price per Unit sold in this offering.) The Warrants will be listed for sale a maximumtrading as described below and will expire five years from the date of 6,000,000their issuance. This offering also includes the shares of Common Stock issuable from time to time upon exercise of the Warrants.

We are also offering to those purchasers, if any, whose purchase of Units in this offering would otherwise result in the purchaser, together with its common stockaffiliates and certain related parties, beneficially owning more than 4.99% (or, at the election of the purchaser, 9.99%) of our outstanding Common Stock immediately following the consummation of this offering, the opportunity to purchase, if the purchaser so chooses, pre-funded units (each fixed“Pre-funded Unit”) in lieu of Units that would otherwise result in the purchaser’s beneficial ownership exceeding 4.99% (or, at the election of the purchaser, 9.99%) of our outstanding Common Stock. Each Pre-funded Unit will consist of a pre-funded warrant to purchase one share of our Common Stock at an exercise price of $0.01 per share. There is no minimumshare (each a “Pre-funded Warrant”) and a Warrant. Subject to limited exceptions, a holder of Pre-funded Warrants will not have the right to exercise any portion of its Pre-funded Warrants if the holder, together with its affiliates, would beneficially own in excess of 4.99% (or, at the election of the holder, such limit may be increased to up to 9.99%) of the number of shares that must beCommon Stock outstanding immediately after giving effect to such exercise. The purchase price of each Pre-funded Unit is equal to the price per Unit being sold by us for the offering to close, and we will retain all proceeds from the sale of any of the offered shares that are sold. The offering is being conducted on a self-underwritten, best efforts basis, which means our founder, and CEO, Mr. David Estus, will attempt to sell the shares. This prospectus will permit our founder and CEO to sell the shares directly to the public with no commission or other remuneration payable to him for any the shares he may sell. Mr. Estus will sell the shares and intends to offer them to friends, family members as well as business acquaintances. In offering the securities on our behalf, Mr. Estus will rely on the safe harbor from broker-dealer registration set forth in Rule 3a4-1 under the Securities and Exchange Act of 1934. The intended methods of communication include, without limitation, telephone and personal contacts. For more information, see the section of this prospectus entitled “Plan of Distribution”.


The proceeds from the sale of the shares in this offering, minus $0.01. The Pre-funded Warrants will be payableimmediately exercisable, subject to The Krueger Group, LLP - Attorney-Client Trust Account. All subscription funds willthe exercise limitation described in this paragraph, and may be held in a non-interest-bearing account pending the completionexercised at any time until all of the offering. ThePre-funded Warrants are exercised in full.

We are offering up to 2,258,065 Units and up to 2,258,065 Pre-funded Units, in the aggregate not exceeding more than a total of 2,258,065 Units. For each Pre-funded Unit we sell, the number of Units we are offering will be completed 180 days fromdecreased on a one-for-one basis. Units and Pre-funded Units will not be issued or certificated. The shares of Common Stock and/or Pre-funded Warrants, as the case may be, and the Warrants included in the Units or the Pre-funded Units, can only be purchased together in this offering, but the securities contained in the Units or Pre-funded Units will be issued separately and will be immediately separable upon issuance.

Our Common Stock is currently quoted on the OTCQB tier of the OTC Market Group, Inc. under the symbol “AREB.” The last reported sale price of our Common Stock on February 2, 2022 was $0.057 per share. We have applied to list our Common Stock and Warrants on The Nasdaq Capital Market (“Nasdaq Capital Market”) under the symbols “AREB” and “AREBW,” respectively. Our Nasdaq listing application has been approved subject to notice of issuance.

For purposes of the registration statement of which this prospectus forms a part, the assumed public offering price per Unit is $4.65 (the mid-point of the estimated offering price range). The actual offering price per Unit will be as determined between EF Hutton, division of Benchmark Investments, LLC, as representative of the underwriters (the “Representative”) and us at the time of pricing and may be issued at a discount to the current market price of our Common Stock. Factors to be considered will include our historical performance and capital structure, prevailing market conditions and overall assessment of our business. The market price of our Common Stock will be one of several factors to be considered in determining the actual offering price.

Unless otherwise noted, the share and per share information in this prospectus reflects a reverse stock split of the outstanding Common Stock of the Company at an assumed one-for-eighty (1:80) ratio to occur immediately following the effective date of the registration statement of which this prospectus unless extended by our boardforms a part but prior to the closing of directors (the “Board of Directors”) for an additional 180 days. There is no minimum number of shares that must be sold. All subscription agreements and checks for payment of shares are irrevocable (except as to any state that requires a statutory cooling-off period or provide for rescission rights). For more information, see the section of this prospectus entitled “Plan of Distribution”.offering.


There is currently no public or established market for our shares. Consequently, our shareholders will not be able to sell their shares in an organized market place and may be limited to selling their shares privately. Accordingly, an investmentInvesting in our common stock is considered an illiquid investment.


We are an “emerging growth company” as defined in the Jumpstart Our Business Startups Act (“JOBS Act”), and will therefore be subject to reduced public company reporting requirements.  securities involves a high degree of risk. See Risk Factors“Risk Factors” beginning on page 9.


THIS INVESTMENT INVOLVES A HIGH DEGREE OF RISK. YOU SHOULD PURCHASE ONLY IF YOU CAN AFFORD A COMPLETE LOSS OF YOUR INVESTMENT. SEE “RISK FACTORS” BEGINNING ON PAGE 9 




NUMBER OF SHARES





OFFERING PRICE




UNDERWRITING DISCOUNTS & COMMISSIONS




PROCEEDS TO THE COMPANY

 

 

 

 

 

Per Share

1

$0.01

$0.00

$0.01

Total

6,000,000

$60,000

$0.00

$60,000


This15 of this prospectus. You should carefully consider these risk factors, as well as the information contained in this prospectus, is not an offer to sell these securities, and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.






INVESTING IN OUR SECURITIES INVOLVES A HIGH DEGREE OF RISK. YOU SHOULD PURCHASE ONLY IF YOU CAN AFFORD A COMPLETE LOSS OF YOUR INVESTMENT. SEE “RISK FACTORS” BEGINNING AT PAGE 9.


We are selling the shares without an underwriter and may not be able to sell all or evenbefore purchasing any of the sharessecurities offered herein.by this prospectus.


OUR AUDITORS HAVE SUBSTANTIAL DOUBT ABOUT OUR ABILITY TO CONTINUE AS A GOING CONCERN.


NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.


THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES, AND IT IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.

Per UnitPer Pre-funded UnitTotal
Public offering price (1)$$$
Underwriting discounts and commissions (2)$$$
Proceeds, before expenses, to us (3)$$$

(1)The public offering price and underwriting discount and commissions in respect of each Unit or Pre-funded Unit correspond to a public offering price per share of Common Stock of $ 4.65 and a public offering price per accompanying warrant of $ 0.
(2)This table depicts broker-dealer commissions of 8% of the gross offering proceeds. Underwriting discounts and commissions do not include a non-accountable expense allowance equal to 1% of the public offering price payable to the Representative. See “Underwriting” beginning on page 79 for disclosure regarding compensation payable to the Representative by us.
(3)We estimate the total expenses of this offering will be approximately $1,050,000. Assumes no exercise of the option we have granted to the Representative as described below.


We have granted a 45 day option to the Representative, exercisable one or more times in whole or in part, to purchase up to an additional 338,710 shares of Common Stock or 338,710 Pre-funded Warrants and/or up to an additional 338,710 Warrants (based on the assumed public offering price of $4.65 per Unit, the mid-point of the estimated offering price range described above), at the public offering price per share of Common Stock and per Warrant, respectively, less, in each case, the underwriting discounts payable by us. This option equals 15% of the Common Stock, or Pre-funded Warrants and/or Warrants in this offering, which may be allocated in the sole discretion of the Representative. The securities issuable upon exercise of this option are identical to those offered by this prospectus and have been registered under the registration statement of which this prospectus forms a part. 


The Representative expects to deliver the securities against payment in New York, New York on or about ______ , 2022.

Sole Book-Running Manager

EF HUTTON

division of Benchmark Investments, LLC

The date of this prospectus is                    ____________, 2015., 2022



TABLE OF CONTENTS




Page
Cautionary Note Regarding Forward-Looking Statementsii
Prospectus Summary1
Risk Factors15
Use of Proceeds34
Dividend Policy35
Capitalization36
Dilution37
Management’s Discussion and Analysis of Financial Condition and Results of Operations38
Business47
Management58
Executive and Director Compensation62
Principal Stockholders67
Certain Relationships and Related Person Transactions69
Description of our Securities70
Material U.S. Federal Income Tax Considerations76
Underwriting79
Legal Matters83
Experts83
Where You Can Find Additional Information83
Index to Financial StatementsF-1



PROSPECTUS SUMMARY


About CubeScape, Inc.


We are an internet portal - based , software - driven, cubicle panelThrough and wall covering business. The Company was incorporated under the laws of the State of Nevada on December 15, 2014. On January 15, 2015 we entered into an agreement with our founder, Mr. David Estus, at which time we acquired a comprehensive business plan, certain tangible assets and intangible assets with which we started CubeScape’s business operations. Mr. Estus has been working on the CubeScape business model for many years since obtaining the ‘CUBESCAPES’ trademark from the United States Patent and Trademark Office on April 17, 2007. As of September 25, 2015, we had one employee, our founder and executive officer, Mr. Estus. Throughincluding _______ (the 25th day after the date of this report, Mr. Estus has devoted between 10prospectus), all dealers effecting transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to a dealer’s obligation to deliver a prospectus when acting as an underwriter and 20 hours per weekwith respect to an unsold allotment or subscription.

You should rely only on the information contained in this prospectus. Neither we nor the underwriter have authorized anyone to provide any information or to make any representations other than those contained in this prospectus we have prepared. We take no responsibility for, and can provide no assurance as to the Company’s business operations. Wereliability of, any other information that others may give you. This prospectus is an offer to sell only the securities offered hereby, but only under circumstances and in jurisdictions where it is lawful to do so. The information contained in this prospectus is current only as of its date. You should also read this prospectus together with the additional information described under “Additional Information.”

i

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements that reflect our current expectations and views of future events, all of which are subject to risks and uncertainties. Forward-looking statements give our current expectations or forecasts of future events. You can identify these statements by the fact that they do not relate strictly to historical or current facts. In some cases, you can identify forward-looking statements by terminology such as “may,” “might,” “should,” “intends,” “expects,” “plans,” “goals,” “projects,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” or “continue” or the negative of these terms or other comparable terminology. These forward-looking statements should be evaluated with consideration given to the risks and uncertainties inherent in our business that could cause actual results and events to differ materially from those in the forward-looking statements.

Such forward-looking statements are based on a series of expectations, assumptions, estimates and projections about our Company, are not guarantees of future results or performance, and involve significant risks, uncertainties and other factors, including assumptions and projections, for all future periods. Our actual results may differ materially from any future results expressed or implied by such forward-looking statements. Such factors include, among others:

our ability to achieve positive cash flow from operations and new business opportunities;

our current reliance on a sole manufacturer and supplier for the production of our safes;

our new manufacturing partner’s ability to meet production demands, both quantitively and qualitatively;

our ability to expand our sales organization to address effectively existing and new markets that we intend to target;

impact from future regulatory, judicial, and legislative changes or developments in the U.S. and foreign countries;

our ability to compete effectively in a competitive industry;

our ability to identify suitable acquisition candidates to consummate acquisitions on acceptable terms, or to successfully integrate acquisitions in connection with the execution of our growth strategy, the failure of which could disrupt our operations and adversely impact our business and operating results;

our ability to obtain funding for our operations;

our creditors not accelerating debt obligations;

our ability to satisfy debt obligations going forward;

our ability to attract collaborators and strategic arrangements;

our ability to meet the Nasdaq Capital Market continued listing requirements;

our sole manufacturer’s ability to find adequate replacement in events of shortages of components and materials, and manage chain disruptions;

our current reliance on our founder and Chief Executive Officer, Charles A, Ross;

general business and economic conditions, including macroeconomic conditions resulting from the global COVID-19 pandemic;

our ability to meet our financial obligations as they become due; and

the rate and degree of market acceptance and demand of our products.

The forward-looking statements contained in this prospectus are based on our current expectations and beliefs concerning future developments and their potential effects on us. There can be no assurance that future developments affecting us will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. The foregoing list of important factors does not include all such factors, nor necessarily present them in order of importance. For additional information regarding risk factors that could affect the Company’s, see “Risk Factors” beginning on page 15 of this prospectus, and as may be included from time-to-time in our reports filed with the Securities and Exchange Commission (the “SEC”).

ii

The Company intends the forward-looking statements to speak only as of the time of such statements and does not undertake or plan to update or revise such forward-looking statements as more information becomes available or to reflect changes in expectations, assumptions or results. The Company can give no assurance that such expectations or forward-looking statements will prove to be correct. An occurrence of, or any material adverse change in, one or more of the risk factors or risks and uncertainties referred to in this prospectus, could materially and adversely affect our results of operations, financial condition, and liquidity, and our future performance. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

Industry Data and Forecasts

This prospectus contains data related to the permanent and temporary safes and concealed self-defense products industry in the United States. This industry data includes projections that are based on a number of assumptions which have been derived from industry and government sources which we believe to be reasonable. We have not independently verified such third-party information. Industry and market data could be inaccurate because of the method by which sources obtained their data and because information cannot be verified with complete certainty due to the limits on the availability and reliability of raw data, the voluntary nature of the data gathering process and other limitations and uncertainties. Industry and market data are often forecasts by industry experts best equipped to make forecasts, but all forecasts bear a certain degree of uncertainty and should not be relied upon as facts. Such data and estimates are necessarily subject to a high degree of uncertainty and risk due to a variety of factors, including those described in “Risk Factors.” The permanent and temporary safes and concealed self-defense products industries may not grow at the rate projected by industry data, or at all. The failure of the industries to grow as anticipated is likely to have a compensatory agreementmaterial adverse effect on our business and the market price of our Common Stock. In addition, the rapidly changing nature of the permanent and temporary safes and concealed self-defense industries subjects any projections or estimates relating to the growth prospects or future condition of our industries to significant uncertainties. Furthermore, if any one or more of the assumptions underlying the industry data turns out to be incorrect, actual results may, and are likely to, differ from the projections based on these assumptions.

iii

PROSPECTUS SUMMARY

The following highlights certain information contained elsewhere in place with Mr. Estus. Forthis prospectus. It does not contain all the remainder of 2015, Mr. Estus has agreeddetails concerning this offering, including information that may be important to continueyou. You should carefully review this entire prospectus including the section entitled “Risk Factors” and the consolidated historical and consolidated pro forma financial statements and accompanying notes contained herein. See “Where You Can Find More Information.” Unless the context otherwise requires, we use the terms “we,” “us,” “the Company,” “American Rebel” and “our” to provide these services without an agreement with us. Therefer to American Rebel Holdings, Inc. and its wholly-owned subsidiary American Rebel, Inc.

Our Company has agreed to revisit this compensation arrangement in December 2015. Mr. Estus provides his creative energies to another business entity in the computer and video gaming industry from which he derives his primary income.


The Company issued 6,000,000 sharesoperates primarily as a marketer and designer of its common stock to Mr. Estus on December 15, 2014 (at inception) in exchange for his organizational services. These services were valued at $6,000. As described above, in January 2015 Mr. Estus sold tobranded 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 comprehensivepremium on their security and extensive business plan packedprivacy. 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 over ten yearsthe American Rebel brand.

Our safes and personal security products are constructed primarily of research and development efforts, software development costs relatedU.S.-made steel. We believe our products are designed to our design portal, along with certain office furnishings and computing equipment. The Company issued to Mr. Estus 3,000,000 shares of common stock with a stated value of $24,000 or $0.008 per share. Mr. Estus incurred or paid in excess of $36,000 over the previous 24 months in the advancement, refinement and development of the CubeScape business plan,safely store firearms, as well as equipmentstore our customers’ priceless keepsakes, family heirlooms and treasured memories, and aim to be used in its business operations. The Company believes $24,000 representsmake our products accessible at various price points for home use. We believe our products are designed for safety, quality, reliability, features and performance.

To enhance the fair valuestrength of the tangibleour brand and intangible assets purchased. Total costs incurred by Mr. Estus during the prior ten years could very well be in excess of $50,000, not taking into account Mr. Estus’ services, which valued at $0 for purposes of Topic 5-Gdrive product demand, we work with our sole supplier and in accordance with generally accepted accounting principles (“GAAP”).


We are an early stage business enterprise (“development stage entity”)manufacturer to emphasize product quality and have limited financial resources. We have not established or attempted to establish a source of equity or debt financing. We intend on open having discussions with advisors and other financial resources regarding the financing or securing of working capital for business operations and growth. Our auditors included an explanatory paragraph in their report on our financial statements that states that “the Company’s losses from operations raise substantial doubt about its ability to continue as a going concern”. We will continue to improve upon our business plan and its operations. We intend to hire consultants, graphic designers and other artists to assist with themechanical development and writing of software code for our design portal and smartphone apps, along with progressive graphics for our intended product. To date, we have incurred significant quantifiable and unquantifiable costs related to this development. We have a significant amount of work that needs to be completed and working capital that needs to be secured in order to bringimprove the performance and affordability of our productproducts while providing support to market. To date,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. We are in the process of developing a newly designed model safe, which is expected to be produced in the U.S. We anticipate our new model safe will offer and be equipped with technologically advanced features, such as independent bolt works operation, double-steel door-jamb framing, and a standardized geared locking mechanism.

In addition to branded safes, we have not developed any saleable productoffer an assortment of personal security products as well as apparel and cannot predict whenaccessories for men and women under the Company’s American Rebel brand. Our backpacks utilize what we believe is a saleable product will be ultimately developed. 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 our Chief Executive Officer, Charles A. “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

1

Our Products

Safes

We offer a wide range of home, office and personal safe models, in a broad assortment of sizes, features and styles, which are constructed with U.S.-made steel. Demand for our safes is growing moderately across all segments of our customers, including individuals and families seeking to protect their valuables, businesses seeking to protect valuables and irreplaceable items such as artifacts and jewelry, and dispensaries servicing the community that seek to protect their inventory and cashflow. Traditionally, our safes have particularly appealed to responsible gun owners, sportsmen, competitive shooters and hunters seeking a premium and responsible solution to secure valuables and firearms, to prevent theft and to protect loved ones. We expect to benefit from increasing awareness of and need for safe storage of firearms in future periods.

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 also 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 guidelinesand fit comfortably in luggage when required by travel regulations.

iii.Vault Doors – our U.S.-made vault doors combine style 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.

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Dispensary Safes - our HG-INV Inventory Safe, a safe tailor-made for the cannabis community, provides cannabis and horticultural plant home growers a reliable and safe solution to protect their inventory. Designed with medical marijuana or recreational cannabis dispensaries in mind, and increasing governmental and insurance industry regulation to lock inventory after hours, we believe our HG-INV Inventory Safe delivers a high-level of user experience.

Personal Security

In addition to home, office and personal safes, we offer certain other security products, such as our concealed carry backpack selection. Our backpacks consist of an advantageassortment of sizes, features and styles. Our XL, Large, and Medium concealed carry backpacks feature our proprietary “Personal Protection Pocket” which utilizes a sandwich method to keep handguns secure and in the desired and easily accessible position. The sandwich method is comprised of two foam pads that surround or sandwich the firearm in place. The user can access the isolated Protection Pocket from either side of the backpack. These concealed carry backpacks are designed for everyday use while keeping firearms concealed, safe and easily accessible.

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i.The Extra-Large Freedom and Cartwright CCW Backpack – our largest concealed carry backpack. This backpack offers ample storage, including a dedicated top loading laptop pouch and additional tablet sleeve. Both compartments are padded to protect your devices. Two large open compartments make this backpack practical for carrying items such as laptops or documents from one place to another, and the multiple interior compartments offer space to store other personal items. Our proprietary “Personal Protection Pocket” allows quick and easy access to your handgun from either side. Our Extra-Large Freedom and Cartwright CCW Backpack is available in a variety of designs and trim color options.

ii.Large Freedom and Cartwright CCW Backpack - our most popular concealed carry backpack. This backpack offers ample storage, including a dedicated top loading laptop pouch and an additional tablet sleeve. Both compartments are padded to protect your items. The size of the compartment opening makes this backpack practical for carrying documents, folders or whatever you need to tote from one place to another. Our Large Freedom and Cartwright CCW Backpack includes our proprietary “Personal Protection Pocket” and is available in the Freedom and Cartwright style as well as a variety of designs and trim color options.

iii.Medium Freedom CCW Backpack - this backpack offers ample storage, including a dedicated top loading laptop/tablet compartment and two liquid container pouches. The laptop/tablet compartment is padded to protect your devices. The opening is practical for carrying personal items while on the go. Our Medium Freedom CCW Backpack includes our proprietary “Personal Protection Pocket” and is available in a variety of trim color options.

iv.Small Plus CCW Backpack – our small one-strap concealed carry backpack is designed for those on the go and is suitable for use while running, jogging biking. Our concealment pocket contains a holster and attaches to the interior with hook and loop material. Soft fleece-lined pockets for your tablet, glasses case and accessories are also included. Our Small Plus CCW Backpack is available in dark blue or in our signature patriotic “We The People” design.

v.Small Freedom CCW Backpack – this one strap pack contains a holster and attaches to the interior with hook and loop material. There is also plenty of room for a small tablet, cell phone, chargers and other necessities. Available in a variety of trim color options.

Apparel and Accessories

We offer a wide range of concealed carry jackets, vests and coats for men and women. We also offer patriotic apparel for the whole family, with the American Rebel imprint. Our apparel line serves as “point man” for the brand, often acting as the first point of exposure that people have to all things American Rebel. Our apparel line is designed and branded to be stylish, patriotic and bold. We emphasize styling that complements our founderenthusiasts’ and CEO’s professional history. Management believes that Mr. Estus’ video gamecustomers’ lifestyle, representing the values of our community and software developmentquintessential American character. The American Rebel clothing line style is not only a fashion statement; we seek to cultivate a sense of pride of belonging to our patriotic family, in your adventures and in life.

i.Cartwright Winter Coats and Jackets – engineered for comfort, warmth, versatility and mobility, our Cartwright winter collection lends textural warmth to these performance-ready, cold-weather essentials. Our Concealed Carry Coats are designed with purpose and informed by the rugged demands of the everyday hard worker. Its quality construction and workmanship are designed to keep you warm and shielded from the elements. Left-hand and right-hand concealed pocket access provides for secure and safe concealment of your firearm with easy access on either side.

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ii.Freedom 2.0 CCW Jackets and Vests for Men and Women - our lightweight jackets collection is designed with magnetic pocket closures for silent, secure and safe concealment. Our lightweight jackets are crafted to facilitate easy firearm access for both right-handed and left-handed carriers.

iii.American Rebel T-Shirts Collection - American Rebel’s T-shirts collection is created for those who embrace patriotism and the spirit of an endless summer.

In addition to our apparel line, we also offer select supplemental accessories for our products, including space savings items for our safes such as hangers, lights kits, moisture guard, and rifle rod kits.

Upcoming Product Offerings

To further complement our diverse product offerings, we intend to introduce additional products in the year of 2022. Below is a summary of our upcoming product offerings:

i.Biometrics Safes – we will be introducing our line of wall safes and handgun boxes with biometrics, WiFi and Bluetooth technologies. These Biometric Safes have been designed, engineered and are ready for production.
ii.Personal Security Device – we are developing a non-lethal device that deters an attacker with an audible siren, which would draw attention to the attacker, as well as notifying the user’s support network that help is needed and providing the location of the attack.
iii.Wall Safes – the upcoming 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.
iv.Youth Protection Backpack – with the objective of keeping kids safe at school, we are designing the Youth Protection Backpack, which will incorporate a light-weight ballistic shield to provide protection when needed for our children as they go through their school day activities.

Our Competitive Strengths

We believe we are progressing toward long-term, sustainable growth, and our business relationshipshas, and our future success will be very valuabledriven by, the following competitive strengths:

Powerful Brand Identity – we believe we have developed a distinctive brand that sets us apart from our competitors. This has contributed significantly to the success of our business. Our brand is predicated on patriotism and quintessential American character: protecting our loved ones. We strive to equip our safes with technologically advanced features that offer customers advanced security to provide the peace of mind they need. Maintaining, protecting and enhancing the “American Rebel” brand is critical to expanding our loyal enthusiasts base, network of dealers and other partners. Through our branded apparel and accessories, we seek to further enhance our connection with the American Rebel community and share the values of patriotism and safety for which our Company stands for. We strive to continue to meet their need for our premium safes and will depend largely on our ability to maintain customer trust, become a gun safe storage leader and continue to provide high-quality safes.

Product Design and Development – our current safe model relies on time-tested features, such as Four-Way Active Boltworks, pinning the door shut on all four sides (compared to Three-Way Bolt works, which is prevalent in our competitors’ safes), and benefits that would not often be available in our price point, including 11-gauge US-made steel. The sleek exterior of our safes has garnered attention and earned the moniker from our dealers as the “safe with an attitude.” When we set out to enter the safe market, we wanted to offer a safe that we would want to buy, one that would get our attention and provide excellent value for the cost.

Focus on Product Performance - since the introduction of our first safes, we have maintained a singular focus on creating a full range of safe, quality, reliable safes that were designed to help our customers keep their family and valuables safe at all times. We incorporate advanced features into our safes that are designed to improve strength and durability. Key elements of our current model safes’ performance include:

Double Plate Steel Door - 4 ½” Thick

Reinforced Door Edge – 7/16” Thick

Double-Steel Door Casement

Steel Walls – 11-Gauge

Diameter Door Bolts – 1 ¼” Thick

Four-Way Active Boltworks – AR-50(14), AR-40(12), AR-30(10), AR-20(10), AR-15(8), AR-12(8)

Diamond-Embedded Armor Plate

* Double Plate Steel Door is formed from two U.S.-made steel plates with fire insulation sandwiched inside. Thicker steel is placed on the outside of the door while the inner steel provides additional door rigidity and attachment for the locking mechanism and bolt works. The door edge is reinforced with up to four layers of laminated steel. Pursuant to industry-standard strength tests performed, this exclusive design offers up to 16 times greater door strength and rigidity than the “thin metal bent to look thick” doors.

* Double-Steel Door Casement is formed from two or more layers of steel and is welded around the perimeter of the door opening. Pursuant to industry-standard strength tests performed, it more than quadruples the strength of the door opening and provides a more secure and pry-resistant door mounting. Our manufacturer installs a Double-Steel Door Casement™ on our safes. We believe the reinforced door casement feature provides important security as the safe door is often a target for break-in attempts.

* Diamond-Embedded Armor Plate Industrial diamond is bonded to a tungsten steel alloy hard plate. Diamond is harder than either a cobalt or carbide drill. If drilling is attempted the diamond removes the cutting edge from the drill, thus dulling the drill bit to where it will not cut.

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Trusted Brand - we believe that we have developed a trusted brand with both retailers and consumers for delivering reliable, secure safes solutions.

Customer Satisfaction - we believe we have established a reputation for delivering high-quality safes and personal security products in a timely manner, in accordance with regulatory requirements and our retailers’ delivery requirements and supporting our products with a consistent merchandising and marketing message. We also believe that our high level of service, combined with strong consumer demand for our products and our focused distribution strategy, produces substantial customer satisfaction and loyalty. We also believe we have cultivated an emotional connection with the brand which symbolizes a lifestyle of freedom, rugged individualism, excitement and a sense of bad boy rebellion.

Proven Management Team - our founder and Chief Executive Officer, Charles A. Ross, Jr., has led the expansion and focus on the select product line we offer today. We believe that Mr. Ross had an immediate and positive impact on our brand, products, team members, and customers. Under Mr. Ross’s leadership, we believe that we have built a strong brand and strengthened the management team. We are refocusing on the profitability of our products, reinforcing the quality of safes to engage customers and drive sales. We believe our management team possess an appropriate mix of skills, broad range of professional experience, and leadership designed to drive board performance and properly oversee the interests of the Company, including our long-term corporate strategy. Our management team also reflects a balanced approach to tenure that will allow the Board to benefit from a mix of newer members who bring fresh perspectives and seasoned directors who bring continuity and a deep understanding of our complex business.

Our Growth Strategy

Our goal is to enhance our position as a designer, producer and marketer of premium safes and personal security products. We have established plans to grow our business by focusing on three key areas: (1) organic growth and expansion in executingexisting markets; (2) strategic acquisitions, and improving(3) expanding the scope of our coreoperation activities to the dispensaries U.S. community.

We have developed what we believe is a multi-pronged growth strategy, as described below, to help us capitalize on a sizable opportunity. Through methodical sales and marketing efforts, we believe we have implemented several key initiatives we can use to grow our business operationsmore effectively. We believe we have made significant progress in 2021 in the form of nearly $200,000 in sales to first-time buyers. We also intend to opportunistically pursue the strategies described below to continue our upward trajectory and prospects.enhance stockholder value. Key elements of our strategy to achieve this goal are as follows:


Organic Growth and Expansion in Existing Markets - Build our Core Business

The Companycornerstone of our business has no current intentions, plans, arrangements, commitments or understandingshistorically been our safes product offering. We are focused on continuing to engagedevelop our home, office and personal safes product lines. We are investing in a merger or acquisition with another company nor does the Company or any of its shareholders have any plansadding what we believe are distinctive technology solutions to enter into a change of control or similar type of transaction.our safes.


Business Operations


CubeScape is a progressive cubicle panel and wall covering business. CubeScape’s coverings are designed to be a wrap-around one-piece with a panoramic presentation of media art chosen by the user. These coverings can be made for many uses besides office cubicles, currently our primary focus. Our product offering, wrap-around coverings run the gamut from scenes from nature, sports and action-oriented themes, to fantasy-based, to game - related, and even current and historical pop-art cultural themes. Our wrap-around coverings will be made of non-permanent , high quality decorative materials designed to be easily applied and removed with little or no damage to walls or other surfaces upon which they are applied. Besides our vast array of stock photo art, customers can create custom wrap-around coverings using a proprietary design website or portal (currently under development).






We maintain a vast library of contemporary images that are both hipalso working to increase floor space dedicated to our safes and cutting edge. Contemporary themes developed primarily bystrengthen our founder have becomeonline presence in order to expand our specialty : rock concerts, club scenes, inner-city,reach to new enthusiasts and urban themes to fascinating industrial settings.build our devoted American Rebel community. We intend to produce our wrap-around covers through a quality-focused manufacturer (made in America) specializing in vinyl, durable coverings, drop shipped by selected US partners, where the finished product, a unique wrap-around covering (much like a poster, but superior in quality and durability), arrives in a convenient cardboard tube, readycontinue to applyendeavor to your cubicle wall or other surface. Our strategy is to exploit what we believe to be a growing market for non-permanent decal-based décor, targeting the office cubicle environment and other work space environments. New materials and adhesives reach the marketplace each and every month which may stimulate new product-lines for us, such as automobile (graphic) wraps, life-size (or larger than life) wall (vinyl posters) of sports figures, semi-permanent or other-use wraps that provide protection from the elements of naturecreate and provide a unique personality to otherwise yet inanimate objects. Through our developmentretailers and recent growth, we have identified an untapped market that may contain more than 100 million cubicle-bound workers (or “cube jockeys”) in the United States alone. We believe cube jockeys are ready for a change.  


We intend to develop the brand “CubeScape” for durable, high quality panoramic vinyl wall graphics using an interactive design portal , all to be made in America. Our design portal will provide our users with the ability to create unique wall and cubicle panel art that enhances office and cubicle space with a new approach to work space aesthetics. These products are intended to be high resolution wall graphics depicting professional art, stock photos, or user provided images blended in a unique and personal format, constructed of vinyl and low-tack adhesive.


We believe our design portal will enable the creation of custom designs, providing an environment reducing stress and fatigue of toiling in the modern work-place environment, the “cubicle”. Corporate logos may be integrated in wall graphics providing corporate sponsorship for uses in decorating work space at no cost. In order to attract large user customers (employers with 49 or more employees), we will seek to identify cost-saving opportunities and define economic return for employers through increased employee productivity because of our products. We believe our design portal will become an integral part of an office design and layout with unique and lasting upgrades to what are utter drab work space environments. Our design portal and graphics printing service is intended to provide a three-step process providing customers with what we believe are responsible, safe, reliable and stylish products, and we expect to concentrate on tailoring our supply and distribution logistics in response to the specific demands of our customers.

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We are currently developing a new model of our home and office safes. Our new safe model, which we expect to introduce at industry trade shows in early 2022, is to be built in the U.S. through our collaboration with Industrial Maintenance Incorporated (“IMI”). The new “Made in the USA” safe model is expected to be manufactured in Topeka, Kansas, and is ready to begin production. We believe IMI’s location is very advantageous, as it is located near our sales office in Lenexa, Kansas.

We expect the new planned model to include additional features, such as a reinforced door and upgraded locking mechanism, and increased fire rating, among others. We are focused on developing best in class, compelling combination of functionality, convenience and style without compromising performance of our safes. We intend to use our designing and developing processes to enhance technological and time to market advantages over incumbent safes manufacturers.

While we currently rely on third-party manufactures for the production of our current line of safes, apparel and accessories, we believe that the expected addition of manufacturing capabilities following the signing of the contract with the aforementioned manufacturer, which we anticipate to work exclusively with us, would allow us, among other benefits, to ramp up our production levels to meet expected demand for our products, provide us greater autonomy over the manufacturing process, and add what we believe are distinctive features.

Additionally, our Concealed Carry Product line and Safe line serve a large and growing market segment. We believe that interest in safes increase, as well as in our complimentary concealed carry backpacks and apparel as a byproduct, when interest of the general population in firearms increase. To this extent, the FBI’s National Instant Criminal Background Check System (NICS), which we believe serves as a proxy for gun sales since a background check is generally needed to purchase a firearm, reported a record number of background checks in 2020, 39,695,315. The prior annual record for background checks was 2019’s 28,369,750. In 2021, there were 38,876,673 background checks conducted, similar to that of 2020’s annual record which was 40% higher than the previous annual record in 2019. While we do not expect this increase in background checks to necessarily translate to an equivalent number of additional safes purchased, we do believe it might be an indicator of the increased demand in the safe market. In addition, certain states (such as Massachusetts, California, New York and Connecticut) are starting to legislate new storage requirements in respect of firearms, which is expected to have positive impact on the sale of safes.

We continue to strive to strengthen our relationships with our current distributors, dealers, manufacturers and specialty retailers and to attract other distributors, dealers, and retailers. We believe that the success of our efforts depends on the distinctive features, quality, and performance of our products; continued manufacturing capabilities and meeting demand for our safes; the effectiveness of our marketing and merchandising programs; and the dedicated customer support.

In addition, we seek to improve customer satisfaction and loyalty by offering distinctive, high-quality products on a timely and cost-attractive basis and by offering efficient customer service. We regard the features, quality, and performance of our products as the most important components of our customer satisfaction and loyalty efforts, but we also rely on customer service and support for growing our business.

Furthermore, we intend to continue improving our business operations, including research and development, component sourcing, production processes, marketing programs, and customer support. Thus, we are continuing our efforts to enhance our production by increasing daily production quantities through equipment acquisitions, expanded shifts and process improvements, increased operational availability of our equipment, reduced equipment down times, and increased overall efficiency.

We believe that by enhancing our brand recognition, our market share might grow correspondingly. Industry sources estimate that 70 million to 80 million people in the United States own an aggregate of more than 400 million firearms, creating a large potential market for our safes and personal security products. We are focusing on the premium segment of the market through the quality, distinctiveness, and performance of our products; the effectiveness of our marketing and merchandising efforts; and the attractiveness of our competitive pricing strategies.

Strategic Acquisitions for Long-term Growth 

We are consistently evaluating and considering acquisitions opportunities that fit our overall growth strategy as part of our corporate mission to accelerate long-term value for our stockholders and create integrated value chains.

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 in Lenexa, Kansas.

Further, we expect the cannabis dispensary industry to be a unique approachmaterial growth segment for our business. Several cannabis dispensary operators have expressed interest in the opportunity to integrating corporate office work spacehelp them with art. We believe this approachtheir inventory locking needs. Cannabis dispensaries have various insurance requirements and local ordinances requiring them to secure their inventory when the dispensary is necessary for breaking current office work space decisions, creating a long-lasting consumer relationship and happy, productive cube jockeys.


Through the assistance of a software development firm (whose servicesclosed. Dispensary operators have been solicited since early 2011)purchasing gun safes and independently taking out the effortsinside 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. With the legal cannabis hyper-growth market expected to exceed $43 billion by 2025, and an increasing number of our founder, Mr. Estus states where the growth and cultivation of cannabis is legal (California, Colorado, Hawaii, Maine, Maryland, Michigan, Montana, New Mexico, Oregon, Rhode Island, Vermont and Washington), we believe we are well positioned to address the need of dispensaries. 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 design portalVault 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 generate material revenues from licensing fees, our management 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 also 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.

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Competition

The safe industry is taking shapedominated by a small number of companies. We compete primarily on the quality, safety, reliability, features, performance, brand awareness, and product design methodprice of our products. Our primary competitors Superior Safe, Champion Safe as well as certain other domestic and international safe manufacturers. We believe that given the current substantial uncertainty related to the supply chain and delivery of international goods, we have a competitive advantage because of what we believe is near completion. our affinity marketing with the American Rebel brand and the fact our safes are not manufactured overseas.

Financing Arrangements

We developedcurrently have a durablenumber of financing arrangements, including term loan agreement and technical frameworkpromissory notes, that we rely on to finance our operation. In certain cases, including the interest payments thereunder, those financing arrangements are payable in shares. We have recently been in and program design alongcontinue to be in default under certain of those financing arrangements. Most of those financing arrangements that were in default have been renegotiated. We continue to be in default under two of our financing arrangements with outstanding borrowings of an aggregate amount of approximately $280,000.

As of the date hereof, we are in breach of a note that was due on August 3, 2021, and a note that was due on October 13, 2021; no acceleration of the debt or notice of defaults, however, have been sent by the aforementioned note holders. We plan to repay these financing arrangements with a sticky (“gooey” or graphical user interface, “GUI”) interface that has been successfulportion of the proceeds from this Offering. As a result, we will no longer be in default of our financing arrangements.

For a complete description of our credit facilities and the financial and restrictive covenants contained therein, please see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Financing Arrangements.”

Please see our risk factors in connection therewith, including “Our substantial level of indebtedness and our current liquidity constraints could adversely affect our financial condition and our ability to service our indebtedness, which could negatively impact your ability to recover your investment in the computerCommon Stock,” “Our indebtedness could adversely affect our business and video game industry.limit our ability to plan for or respond to changes in our business, and we may be unable to generate sufficient cash flow to satisfy significant debt service obligations,” and “Despite the Company’s indebtedness levels, we are able to incur substantially more debt. This could further increase the risks associated with its leverage.”

Intellectual Property

We believe our commercial success depends in part on our ability to obtain and maintain intellectual property protection for our brand and technology, defend and enforce our intellectual property rights, preserve the confidentiality of our trade secrets, operate our business without infringing, misappropriating or otherwise violating the intellectual property or proprietary rights of third parties and prevent third parties from infringing, misappropriating or otherwise violating our intellectual property rights. We rely on a combination of patent, copyright and trade secret laws in the United States to protect our proprietary technology. We also rely on a number of United States registered, pending and common law trademarks to protect our brand “American Rebel”.

On May 29, 2018, US Patent No. 9,984,552, Firearm Detecting Luggage, was issued to us. The term of the patent is 20 years from the issuance date. In addition to our patent, we rely upon unpatented trade secrets and know-how and continuing technological development and maintain our competitive position. Trade secrets and know-how, however, can be difficult to protect. We seek to protect our proprietary information, in part, by entering into confidentiality and proprietary rights agreements with our employees and independent contractors.

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Regulation

The storage of firearms and ammunition is subject to increasing federal, state and local governmental laws. While the current legislative climate does not appear to seek to limit possession of firearms, there is apparent momentum to require safe storage of firearms and ammunition. Although our safes, which are the primary driver of our sales and revenues, are designed to protect any valuables, a significant number of our safes’ end users have traditionally been gun enthusiasts, collectors, hunters, sportsmen and competitive shooters. Therefore, we expect the increases to federal, state and local governmental regulation of gun storage to have a positive effect on our business.

Effects of COVID-19

Coronavirus (“COVID-19”) and Related Market Impact. The COVID-19 outbreak has presented evolving risks and developments domestically and internationally, as well as new opportunities for our business. Although the pandemic has not materially impacted our results and operations adversely, our ability to satisfy demand for our products could be negatively impacted by mandatory forced production disruptions of our safes’ sole third-party manufacturer and strategic partners. Any significant disruption to communications and travel, including travel restrictions and other potential protective quarantine measures against COVID-19 by governmental agencies, could make it difficult for us to deliver goods and services to our customers. Further, travel restrictions and protective measures against COVID-19 could cause the Company to incur additional unexpected labor costs and expenses or could restrain the Company’s ability to retain the highly skilled personnel the Company needs for its operations. The extent to which COVID-19 impacts the Company’s business, sales and results of operations will depend on future developments, which are uncertain and cannot be currently predicted.

Additionally, as a result of COVID-19, at any time we may be subject to increased operating costs, supply interruptions, and difficulties in obtaining raw materials and components. To address these challenges, we continue to monitor our supply chain. We have not yet formed any meaningful industry relationshipsrecently entered into a contract with a third-party manufacturer to exclusively assemble our upcoming new line of safes. We believe that this vertical integration would allow us, among other benefits, to ramp up our production levels to meet expected demand for our products, provide us greater autonomy over the manufacturing process, and add what we believe are distinctive features to our safes.

We expect that the demand for home, office and personal safety and security products would remain stable, in part due to customers spending more time working remotely, increasing regulation mandating safe storage, and substantial uncertainty related to the supply chain and delivery of international goods, which in turn translate into, we believe, growth in demand for our home and personal safes as a U.S. company. We, however, cannot guarantee, that demand for our safes and personal security products will keep growing through the end of the 2021 calendar year and beyond.

Further, due to the effects of COVID-19, our management have reduced unnecessary marketing expenditures as part of continued efforts to adjust the Company’s operations to address changes in the office furnituresafes and vault industry, butand particularly to improve staff and human capital expenditures, while maintaining overall workforce levels.

Due to the substantial uncertainty related to the effects of the pandemic, its duration and the related market impacts, including the economic stimulus activity, we intend to. The Companyare unable to predict the specific impact the pandemic and related restrictions (including the lifting or re-imposing of restrictions due to any current or future variants of the COVID-19 virus or otherwise) will seek the assistance of established sales and marketing consultants that focus on office furniture and design in order to develop a sales and marketing strategy that capitalizeshave on our product.results of operations, liquidity or long-term financial results.


We intend

Risks Affecting Us

Our business is subject to staff our organizationnumerous risks and its management team with various skills such as product design, engineering, software development along with a strong emphasisuncertainties, including those discussed in the section titled “Risk Factors” beginning on graphics designpage 15 and media/art.elsewhere in this prospectus. These risks include the following:


we currently do not own a manufacturing facility, and future acquisition and operation of new manufacturing facilities might prove unsuccessful and could fail;

as we currently rely on a sole third-party manufacturer for our safes production, our compromised operational capacity may affect our ability to meet the demand for our safes, which in turn may affect our generation of revenue;
our success depends, in part, on our ability to introduce new products that track customer preferences;
maintaining and strengthening our brand to generate and maintain ongoing demand for our products;

as a significant portion of our revenues is derived by demand for our safes and personal security products for firearms storage purposes, we depend on the regulation of firearms and ammunition storage, as well as various economic, social and political factors;

shortages of components and materials, as well as supply chain disruptions, may delay or reduce our sales and increase our costs, thereby harming our results of operations;

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we do not have long-term purchase commitments from our customers, and their ability to cancel, reduce, or delay orders could reduce our revenue and increase our costs;

we face a high degree of market competition that could result in our losing or failing to gain market share;

the inability to efficiently manage our operations;

the inability to achieve future operating results; 

the inability of management to effectively implement our strategies and business plans;

given our limited corporate history it is difficult to evaluate our business and future prospects and increases the risks associated with an investment in our securities;

the loss of our founder and Chief Executive Officer, Charles A, Ross, could harm our business;

our inability to service our existing and future indebtedness or other liabilities, the failure of which could result in insolvency proceedings and result in a total loss of your equity investment;

our inability to raise additional financing for working capital;

the unavailability of funds for capital expenditures;

our inability to access lending, capital markets and other sources of liquidity, if needed, on reasonable terms, or at all, or obtain amendments, extensions and waivers of financial maintenance covenants, among other material terms;

our ability to continue as a going concern absent obtaining adequate new debt or equity financing, raising additional funds and achieving sufficient sales levels;

our ability to expand our e-commerce business and sales organization to effectively address existing and new markets that we intend to target, and to generate sufficient revenue in those targeted markets to support operations;

our inability to generate significant cash flow from sales of our products, which could lead to a substantial increase in indebtedness and negatively impact our ability to comply with the financial covenants, as applicable, in our debt agreements;

War, terrorism, other acts of violence or natural or manmade disasters such as a pandemic, epidemic, outbreak of an infectious disease or other public health crisis – such as COVID-19 – may affect the markets in which the Company operates, as well as global economic, market and political conditions;

our ability to identify suitable acquisition candidates to consummate acquisitions on acceptable terms, or to successfully integrate acquisitions in connection with the execution of our growth strategy, the failure of which could disrupt our operations and adversely impact our business and operating results; 

applicable laws and changing legal and regulatory requirements, including U.S. GAAP changes, could harm our business and financial results;

if we are unable to protect our intellectual property, we may lose a competitive advantage or incur substantial litigation costs to protect our rights;

the fact that our accounting policies and methods are fundamental to how we report our financial condition and results of operations, and they may require management to make estimates about matters that are inherently uncertain;

significant dilution resulting from our financing activities;

our Management has control over key decision-making matters as a result of their control of a majority of our voting stock;

the actions and initiatives taken by both current and potential competitors; and
the other risks and uncertainties detailed in this report.

Corporate Information

Our principal executive offices are located at 1854 Oxford Avenue, Cardiff-by-the-Sea, California 92007.718 Thompson Lane, Suite 108-199, Nashville, Tennessee. Our telephone number is (760) 613-6257.We may refer (833) 267-3235. Our website address is www.americanrebel.com. The information contained on, or that can be accessed through, our website is not a part of this prospectus. Investors should not rely on any such information in deciding whether to ourselves in this prospectus as “CSI,” the “Company,” “we,” or “us”.purchase our securities.


Nasdaq Listing and Reverse Stock Split

We have no revenues, have achieved losses since inception, have limited operations, haveapplied to list our Common Stock and Warrants on the Nasdaq Capital Market under the symbols “AREB” and “AREBW”, respectively. Our Nasdaq listing application has been issued a going concern opinion byapproved subject to notice of issuance.

Except as otherwise indicated, all references to our auditorsCommon Stock, share data, per share data and will rely uponrelated information has been adjusted to reflect the salereverse stock split ratio of 1-for-80 (“Reverse Stock Split”) as if it was effective and as if it had occurred at the beginning of the earliest period presented. The Reverse Stock Split is expected to combine every eighty (80) shares of our common stock and loans from unrelated parties to fund operations.outstanding Common Stock into one (1) share of Common Stock, without any change in the par value per share.


Emerging Growth Company


We are and we will remain an "emerging growth company" as defined under The Jumpstart Our Business Startups Act (the “JOBS Act”), untilexpected to effect the earliest to occur of (i) the last day of the fiscal year during which our total annual revenues equal or exceed $1 billion (subject to adjustment for inflation), (ii) the last day of the fiscal yearReverse Stock Split immediately following the fifth anniversary of our initial public offering, (iii) the date on which we have, during the previous three-year period, issued more than $1 billion in non-convertible debt securities, or (iv) the date on which we are deemed a "large accelerated filer" (with at least $700 million in public float) under the Securities and Exchange Act of 1934, as amended (the “Exchange Act”).






As an "emerging growth company", we may take advantage of specified reduced disclosure and other requirements that are otherwise applicable generally to public companies. These provisions include:


· only two years of audited financial statements in addition to any required unaudited interim financial statements with correspondingly reduced Managements Discussion and Analysis disclosure;

· reduced disclosure about our executive compensation arrangements;

· no requirement that we hold non-binding advisory votes on executive compensation or golden parachute arrangements; and

· exemption from the auditor attestation requirement in the assessment of our internal control over financial reporting.


We have taken advantage of some of these reduced burdens, and thus the information we provide stockholders may be different from what you might receive from other public companies in which you hold shares.


In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. However, we are choosing to “opt out” of such extended transition period, and as a result, we will comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. Section 107 of the JOBS Act provides that our decision to opt out of the extended transition period for complying with new or revised accounting standards is irrevocable.


Notwithstanding the above, we are also currently a “smaller reporting company”, meaning that we are not an investment company, an asset-backed issuer, or a majority-owned subsidiary of a parent company that is not a smaller reporting company and have a public float of less than $75 million and annual revenues of less than $50 million during the most recently completed fiscal year. In the event that we are still considered a “smaller reporting company”, at such time as we cease being an “emerging growth company”, the disclosure we will be required to provide in our SEC filings will increase, but will still be less than it would be if we were not considered either an “emerging growth company” or a “smaller reporting company”.  Specifically, similar to “emerging growth companies”, “smaller reporting companies” are able to provide simplified executive compensation disclosures in their filings; are exempt from the provisions of Section 404(b) of the Sarbanes-Oxley Act (“SOX”) requiring that independent registered public accounting firms provide an attestation report on the effectiveness of internal control over financial reporting; and have certain other decreased disclosure obligations in their SEC filings, including, among other things, only being required to provide two years of audited financial statements in annual reports.


The Offering


We are offering for sale a maximum of 6,000,000 shares of common stock at a fixed price of $0.01 per share (this “Offering”). There is no minimum number of shares that must be sold by us for this Offering to close, and we retain all the proceeds from the sale of the offered shares we sell. This Offering is being conducted on a self-underwritten, best efforts basis, which means our founder, and CEO, Mr. Estus, will attempt to sell all the shares himself. This prospectus permits our founder and CEO to sell the shares directly to the public, with no commission or remuneration. Mr. Estus will sell all of the shares himself and intends to offer them to friends, family and business acquaintances. In offering the securities on our behalf, Mr. Estus will rely on the safe harbor from broker-dealer registration set out in Rule 3a4-1 under the Securities and Exchange Act of 1934 (the “Exchange Act”). The intended methods of communication include, without limitation, telephone and personal contacts.


The proceeds from the sale of shares in this Offering will be made payable to The Krueger Group, LLP – Attorney-Client Trust Account, who acts as CSI’s escrow agent. Krueger LLP also acts as legal counsel for CSI and, therefore, may not be considered an independent third party. All subscription agreements and checks are irrevocable and will be delivered to Krueger LLP at the address provided in the Subscription Agreement (see Exhibit 99.1).


All subscribed funds will be held in a non-interest-bearing account pending the completion of this Offering. This Offering ordinarily will be completed 180 days from the effective date of the registration statement of which this prospectus unless extended byforms a part but prior to the closing of the offering, concurrent with the filing of our Boardsecond amended and restated articles of Directors for an additional 180 days. There is no minimumincorporation to (i) decrease the number of issued and outstanding shares of the Common Stock from 127,789,623 to 1,597,371 shares, (ii) effectuate the Reverse Stock Split. No fractional shares will be issued in connection with the Reverse Stock Split and all such fractional interests will be rounded up to the nearest whole number of shares that must be sold. All subscription agreementsof Common Stock. The conversion or exercise prices of our issued and checks for paymentoutstanding convertible securities, stock options and warrants have had corresponding adjustments. The number of authorized shares of Preferred Stock remains 10,000,000 following the effectuation of the Reverse Split and the voting rights of our Series A Preferred Stock remains at 1,000:1.

9

THE OFFERING

IssuerAmerican Rebel Holdings, Inc.
Securities Offered2,258,065 Units, each consisting of one share of Common Stock and one Warrant (assuming the Representative does not exercise its option). The Units will not be certificated or issued in stand-alone form. The shares of our Common Stock and the Warrants comprising the Units are immediately separable upon issuance and will be issued and tradeable separately. The 2,258,065 Unit amount referenced above is based on the Units being sold at the mid-point of the estimated offering price range of $4.65 per Unit and such Unit amount shall change if the Unit price is less than $4.65 in such manner to maintain the gross proceeds at $10.5 million. For instance, if the Unit price is $4.15 per Unit, the number of Units to be sold in the offering shall be 2,530,121.
We are also offering to those purchasers, if any, whose purchase of Units in this offering would otherwise result in the purchaser, together with its affiliates and certain related parties, beneficially owning more than 4.99% (or, at the election of the purchaser, 9.99%) of our outstanding Common Stock immediately following the consummation of this offering, the opportunity to purchase, if the purchaser so chooses, pre-funded units (each a “Pre-funded Unit”) in lieu of Units that would otherwise result in the purchaser’s beneficial ownership exceeding 4.99% (or, at the election of the purchaser, 9.99%) of our outstanding Common Stock. Each Pre-funded Unit will consist of a Pre-funded Warrant to purchase one share of our Common Stock at an exercise price of $0.01 per share (each a “Pre-funded Warrant”) and a Warrant. The purchase price of each Pre-funded Unit is equal to the price per Unit being sold to the public in this offering, minus $0.01. The Pre-funded Warrants will be immediately exercisable and may be exercised at any time until all of the Pre-funded Warrants are exercised in full. We are offering up to 2,258,065 Units and up to 2,258,065 Pre-funded Units, in the aggregate not exceeding more than a total of 2,258,065 units. For each Pre-funded Unit we sell, the number of Units we are offering will be decreased on a one-for-one basis. Because we will issue one Warrant as part of each Unit or Pre-funded Unit, the number of Warrants sold in this offering will not change as a result of a change in the mix of the Units and Pre-funded Units sold. This prospectus also relates to the offering of the shares of our Common Stock issuable upon exercise of the Pre-funded Warrants.

Public Offering Price

Description of Warrants included

in Units

$4.65 per Unit, which is the mid-point of the estimated offering price range described on the cover of this prospectus. The actual offering price per Unit will be as determined between the Representativeand us at the time of pricing and may be issued at a discount to the current market price of our Common Stock.

The exercise price of the Warrants is $5.81 per share (125% of the public offering price of one Unit). Each Warrant is exercisable for one share of Common Stock, subject to adjustment in the event of stock dividends, stock splits, stock combinations, reclassifications, reorganizations or similar events affecting our Common Stock as described herein. A holder may not exercise any portion of a Warrant to the extent that the holder, together with its affiliates and any other person or entity acting as a group, would own more than 4.99% of the outstanding Common Stock after exercise, as such percentage ownership is determined in accordance with the terms of the Warrants, except that upon notice from the holder to us, the holder may waive such limitation up to a percentage, not in excess of 9.99%. Each Warrant will be exercisable immediately upon issuance and will expire five years after the initial issuance date. The terms of the Warrants will be governed by a Warrant Agency Agreement, dated as of the closing date of this offering, between us and Action Stock Transfer, as the warrant agent (the “Warrant Agent”). This prospectus also relates to the offering of the shares of Common Stock issuable upon exercise of the Warrants. For more information regarding the warrants, you should carefully read the section titled “Description of Our Securities—Warrants” in this prospectus.

OptionWe have granted the Representative an option to purchase up to an additional 338,710 shares of Common Stock or Pre-funded Warrants to purchase up to an additional 338,710 shares of Common Stock and/or Warrants to purchase up to 338,710 shares of Common Stock based on a public offering of $4.65 (equal to 15% of the number of shares of Common Stock and Warrants underlying the Units sold in the offering), from us in any combination thereof, at the public offering price less the underwriting discount and commissions, if any. The Representative may exercise this option in full or in part at any time and from time to time until 45 days after the date of this prospectus.

10

Common Stock outstanding prior to this offering1,849,069 shares of Common Stock outstanding as of February 3, 2022, which includes 251,698 shares of Common Stock converted from Series B Preferred.
Common Stock to be outstanding after this offering4,629,443 shares which includes the 2,258,065 shares being sold as part of the Units offered hereby and 522,309 shares to be issued after the effective date of the registration statement of which this prospectus forms a part but prior to the closing of the offering to convert outstanding debt (assuming that none of the Warrants or the Representative’s Warrants are exercised) and 6,887,508, if the Warrants offered hereby are exercised in full (assuming that none of the Representative’s Warrants are exercised). If the Representative’s option is exercised in full, the total number of shares of Common Stock outstanding immediately after this offering would be 7,226,218 (assuming that none of the Representative’s Warrants are exercised) and 7,564,928 if the Warrants offered hereby are exercised in full.
Use of proceedsWe estimate that the net proceeds to us from this offering will be approximately $9,450,000, or approximately $10,867,500 if the underwriters exercise their option, assuming an offering price of $4.65 per Unit, which is the mid-point of the estimated offering price range described on the cover of this prospectus, after deducting underwriting discounts and commissions and estimated offering expenses payable by us.

We intend to use the net proceeds of this offering as follows:

Approximately $2,600,000 to repay various outstanding indebtedness. For a more detailed description repayment of debt, please see “Use of Proceeds” section.

Approximately $6,850,000 for general corporate purposes, including working capital, increased research and development expenditures and funding our growth strategy. See “Use of Proceeds” for additional information.

Representative’s Warrant

We have agreed to issue to the Representative (or its permitted assignees) Warrants to purchase up to 67,742 shares of Common Stock (and up to 77,937 shares of Common Stock assuming the Representative’s option is exercised in full) which is equal to 3% of the Units offered hereby. We are registering hereby the issuance of the Representative’s Warrants and the shares of Common Stock issuable upon exercise of the Warrants. The Warrants will be exercisable at any time, and from time to time, in whole or in part, during the 4.5 year period commencing 180 days from the effective date of the registration statement of which this prospectus is a part, which period is in compliance with FINRA Rule 5110(e)(1). The Warrants are exercisable for cash or on a cashless basis at a per share price equal to $5.81 per share, or 125% of the public offering price per Unit in the offering. Please see “Underwriting—Representative’s Warrants” for a further description of these Warrants.

Proposed Nasdaq Capital Market Trading Symbol and ListingWe have applied to list our Common Stock and Warrants on the Nasdaq Capital Market under the symbols “AREB” and “AREBW”, respectively. No assurance can be given that such listing will be approved or that a liquid trading market will develop for our Common Stock and Warrants. Our Nasdaq listing application has been approved subject to notice of issuance.
Lock-upsWe, our directors, and executive officers, along with (i) stockholders who own 5% or more of our outstanding Common Stock have agreed with the underwriters not to offer for sale, issue, sell, contract to sell, pledge or otherwise dispose of any of our Common Stock or securities convertible into Common Stock for a period of 180 days (for our directors and executive officers) and 360 days (for the Company itself, and our 5% stockholders), commencing on the date of this prospectus. See “Underwriting” for additional information.

11

Risk FactorsSee “Risk Factors” beginning on page 15 and the other information contained in this prospectus for a discussion of factors you should carefully consider before investing in our securities.
Reverse Stock SplitWe expect to complete a 1:80 Reverse Stock Split immediately following the effective date of the registration statement of which this prospectus forms a part but prior to the closing of the offering.

The total number of shares are irrevocable (except for statesof our Common Stock that require a statutory cooling-off period or provide for rescission rights towill be outstanding after this offering is based on 1,849,069 shares of Common Stock outstanding as of February 3, 2022 (which assumes effectuation of the prospective investor).


The Company will deliverreverse stock certificates forsplit as previously references), and 600,000,000 authorized shares of Common Stock. Unless otherwise indicated, the shares of common stock purchased within 30 daysCommon Stock outstanding after this offering assumes no sale of Pre-funded Warrants in this offering, which, if sold, would reduce the number of Common Stock that we are offering on a one-for-one basis, and, and excludes the following:

● 67,742 shares of Common Stock issuable upon exercise of the close ofRepresentative’s Warrants (or up to 77,937 assuming the Representative’s option is exercised in full) to be issued in connection with this Offering or as soon thereafter as practicable.offering, subject to limited adjustment; and






The offering price● any securities issuable upon exercise of the common stock has been determined arbitrarily and bears no relationship to any objective criterion or value. The price does not bear any relationship to our assets, book value, historical earnings (if any), or net worth.Representative’s option.


12

Shares of common stock offered by us

Maximum of 6,000,000 shares. There is no minimum number of shares that must be sold by us for this Offering to close.

Use of proceeds

The Company will use the proceeds from this Offering to pay for professional fees and other general expenses. Total estimated costs of this Offering ($28,000) is less than the maximum amount of offering proceeds ($60,000).

Termination of this Offering

This Offering will conclude when all 6,000,000 shares of common stock have been sold, or 180 days after this registration statement becomes effective with the Securities and Exchange Commission. We may at our discretion extend this Offering for an additional 180 days.

Risk factors

Purchase of our common stock involves a high degree of risk. The common stock offered in this prospectus is for investment purposes only and currently no market for our common stock exists. Please refer to the sections entitled “Risk Factors” and “Dilution” before making an investment in our common stock.

Trading market


None. While we contacted a market maker to file a Rule 211 application with the Financial Industry Regulatory Authority (“FINRA”) for inclusion of our shares on the Over-the-Counter Bulletin Board (“OTCBB”), such efforts may not be successful and our shares may never be quoted and therefore owners of our common stock may not have a market in which to sell those shares. Also, no estimate may be given as to the time this application may require.


Even if the Company’s common stock is quoted or granted a listing, a market for our shares may never actually develop.


SUMMARY CONSOLIDATED FINANCIAL DATAINFORMATION


The following summary consolidated statements of operations and balance sheet data for the fiscal years ended December 31, 2020, and 2019, have been derived from our audited consolidated financial informationstatements included elsewhere in this prospectus. Additionally, the summary consolidated statements of operations data for the nine months ended September 30, 2021, and 2020 have been derived from our unaudited consolidated financial statements included elsewhere in this prospectus. The summary consolidated balance sheet data as of September 30, 2021, are derived from our unaudited consolidated financial statements that are included elsewhere in this prospectus. The historical financial data presented below is not necessarily indicative of our financial results in future periods, and the results for the nine months ended September 30, 2021, is not necessarily indicative of our operating results to be expected for the full fiscal year ending December 31, 2021, or any other period. You should be read the summary consolidated financial data in conjunction with theour consolidated financial statements and the accompanying notes contained elsewhereand “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Our consolidated financial statements are prepared and presented in this prospectus.


Balance Sheet Data:

 

 

 

 

 

 

As of

June 30, 2015

 

As of

December 31, 2014

 

 

(unaudited)

 

(audited)

Current assets

$

1,000

$

 

 

 

 

 

Other assets

$

28,500

$

 

 

 

 

 

Current liabilities

$

42,410

$

610

 

 

 

 

 

Stockholders equity (deficit)

$

(12,910)

$

(610)


Operating:

 

 

 

 

 

 

For the Six Month Period Ended

June 30, 2015

 

For the Period December 15, 2014 (inception) to December 31, 2014

 

 

(unaudited)

 

(audited)

Net revenues

$

$

Operating expenses

$

36,300

$

6,610

Net (loss)

$

(36,300)

$

(6,610)

Net (loss) per common share basic and diluted

$

(0.00)

$

(0.00)

Weighted average number of shares outstanding - basic and diluted

 

8,750,000

 

6,000,000


accordance with United States generally accepted accounting principles, or U.S. GAAP. Our consolidated financial statements have been prepared on a basis consistent with our audited financial statements and include all adjustments, consisting of normal and recurring adjustments that we consider necessary for a fair presentation of the financial position and results of operations as of and for such periods. The following summary consolidated statements of operations and balance sheet do not reflect the 1-for-80 reverse split of our Common Stock in share totals or per share data.



AMERICAN REBEL HOLDINGS, INC.

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

  

For the
nine months ended
September 30, 2021 

(unaudited)

  For the
nine months ended
September 30, 2020

(unaudited)

  For the year ended
December 31, 2020

(audited)

  For the year ended
December 31, 2019

(audited)

 
Revenue $848,357  $899,238  $1,255,703  $535,109 
Cost of goods sold  716,943   659,006   952,511   379,076 
Gross margin  131,414   240,232   303,192   156,033 
                 
Expenses:                
Consulting – business development  1,774,003   404,700   529,094   3,809,291 
Product development costs  275,780   275,565   320,472   309,061 
Marketing and brand development costs  138,783   331,775   390,294   632,522 
Administrative and other  603,727   1,356,430   1,773,529   1,343,352 
Depreciation expense  2,744   46,521   61,724   62,028 
   2,795,037   2,414,991   3,075,113   6,156,254 
Operating income (loss)  (2,663,623)  (2,174,759)  (2,771,921)  (6,000,221)
                 
Other Income (Expense)                
Interest expense  (1,500,744)  (1,507,662)  (2,292,957)  (1,601,851)
Loss on extinguishment of debt  (725,723)  (919,242)  (916,204)  - 
Net income (loss) before income tax provision  (4,890,090)  (4,601,663)  (5,981,082)  (7,602,072)
Provision for income tax  -   -   -   - 
Net income (loss) $(4,890,090) $(4,601,663) $(5,981,082) $(7,602,072)
Basic and diluted income (loss) per share $(0.05) $(0.08) $(0.10) $(0.25)
Weighted average common shares outstanding - basic and diluted  92,441,000   57,492,000   61,109,000   33,541,000 

See Notes to Financial Statements.


13



AMERICAN REBEL HOLDINGS, INC.

UNAUDITED CONSOLIDATED BALANCE SHEETS

  September 30, 2021  December 31, 2020  December 31, 2019 
ASSETS            
             
CURRENT ASSETS:            
Cash and cash equivalents $218,332  $60,899  $131,656 
Accounts Receivable  179,233   176,844   228,890 
Prepaid expense  163,492   48,640   542,800 
Inventory  687,830   681,709   805,845 
Inventory deposits  76,685   141,164   91,641 
Total Current Assets  1,325,572   1,109,256   1,800,832 
             
Property and Equipment, net  1,799   5,266   66,990 
             
OTHER ASSETS:            
Lease Deposit  -   6,841   6,841 
Total Other Assets  -   6,841   6,841 
             
TOTAL ASSETS $1,327,371  $1,121,363  $1,874,663 
             
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)            
             
CURRENT LIABILITIES:            
Accounts payable and accrued expense  739,793   540,168   684,126 
Accrued Interest – Convertible Debenture – Related Party  287,620   603,471   303,860 
Loan – Officer - Related party  6,526   4,526   4,496 
Loan – Working Capital, net of discounts of $1,375,608 and $777,610  3,617,514   4,672,096   3,595,561 
Loans - Nonrelated parties  12,939   15,649   25,746 
Total Current Liabilities  4,664,392   5,835,910   4,613,789 
             
Convertible Debenture –Related party, net of discounts of $2,110 and $47,110  -   297,890   207,890 
TOTAL LIABILITIES  4,664,392   6,133,800   4,821,679 
             
STOCKHOLDERS’ EQUITY (DEFICIT):            
Preferred stock, $0.001 par value; 10,000,000 shares authorized; 100,000, and 0 issued and outstanding, respectively on September 30, 2021 and December 31, 2020 Preferred shares Class A  100   -   - 
Preferred stock, $0.001 par value; 10,000,000 shares authorized; 276,501, and 0 issued and outstanding, respectively on September 30, 2021 and December 31, 2020 Preferred shares Class B  277   -   - 
Common stock, $0.001 par value; 600,000,000 shares authorized; 120,508,194 and 72,807,929 issued and outstanding, respectively at September 30, 2021 and December 31, 2020  120,508   72,808   43,062 
Additional paid in capital  22,302,897   15,785,468   11,899,553 
Accumulated deficit  25,760,803   (20,870,713)  (14,889,631)
TOTAL STOCKHOLDERS’ EQUITY (DEFICIT)  (3,337,021)  (5,012,437)  (2,947,016)
             
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) $1,327,371  $1,121,363  $1,874,663 

See Notes to Financial Statements.

14

RISK FACTORS


Investing in our securities involves a high degree of risk. You should be aware that there are substantial risks to an investment in our common stock. Carefullycarefully consider these risk factors, along withand evaluate all of the other information includedcontained in this prospectus before you decide to investpurchase any Units, Pre-funded Units, Warrants or Common Stock pursuant to this offering. The risks and uncertainties described in sharesthis prospectus are not the only ones we may face. Additional risks and uncertainties that we do not presently know about or that we currently believe are not material may also adversely affect our business, business prospects, results of operations or financial condition. Any of the risks and uncertainties set forth herein, could materially and adversely affect our business, results of operations and financial condition.

RISKS RELATED TO OUR BUSINESS AND INDUSTRY

We currently do not own a manufacturing facility, and rely on a sole manufacturer and supplier for the production of our common stock.safes; while we have obtained favorable financing arrangements in the past from this manufacturer and supplier, there is no assurance that a future supplier would provide similar favorable financing arrangements


If anyWe currently rely on a sole manufacturer and supplier for the production of our safes. We do not have control over the operations of the following riskfacilities of the third-party manufacturer that we use. While we may acquire our own manufacturing facility in the future to provide us greater flexibility and control over our products manufacturing needs, the operation of such a future plant might prove unsuccessful and fail.

The manufacturer of our safes has extended favorable financing arrangements in the past, but there is no assurance that a future supplier would provide similar favorable financing arrangements. Therefore, the continued supply and manufacturing of our sales by our sole manufacturer and supplier are critical to our success. Any event that causes a disruption of the operation of our safes’ sole manufacturer for even a relatively short period of time would adversely affect our ability to ship and deliver our safes and other products and to provide service to our customers. We have previously experienced, including during the first months after the spread of COVID-19 pandemic, and may in the future experience, launch and production ramp up delays for our products as a result of disruption at our supplier’s manufacturing partners.

Additionally, we have fully qualified only a very limited number of suppliers in the past and have limited flexibility in changing suppliers. Any disruption in the supply of our branded safes from our supplier could limit the availability of our sales and negatively impact our revenues. In the long term, we intend to supplement safes manufactured by our supplier with safes manufactured by us, which we believe will be more efficient and result in a greater manufacturing volume and under our control. Our efforts to develop and manufacture such safes, however, have required and may require significant investments, and there can be no assurance that we will be able to achieve these targets in the timeframes that we have planned or at all. If we are unable to do so, we may have to curtail our planned safes or procure additional safes from suppliers at potentially greater costs, either of which may harm our business and operating results.

15

Furthermore, the cost of safes, whether manufactured by our supplier or by us, depends in part upon the prices and availability of raw manufacturing materials such as steel, locks, fireboard, hinges, pins and other metals. The prices for these materials fluctuate and their available supply may be unstable, depending on market conditions and global demand for these materials, including as a result of increased global production of electric vehicles and energy storage products. Any reduced availability of these materials may impact our access to these parts and any increases in their prices may reduce our profitability if we cannot recoup the increased costs through increased safe prices. Moreover, any such attempts to increase product prices may harm our brand, prospects and operating results.

We have secured an exclusivity contract with a third-party manufacturer to assemble our new line of safes. We believe that this vertical integration would allow us, among other benefits, to ramp up our production levels to meet expected demand for our products, provide us greater autonomy over the manufacturing process

Our success depends upon our ability to introduce new products that track customer preferences.

Our success depends upon our ability to introduce new products that track consumer preferences. Our efforts to introduce new products into the market may not be successful, and new products that we introduce may not result in customer or market acceptance. We develop new products that we believe will match consumer preferences. The development of a new product is a lengthy and costly process and may not result in the development of a marketable or profitable product. Failure to develop new products that are attractive to consumers could decrease our sales, operating margins, and market share and could adversely affect our business, operating results, and financial condition.

Our business depends on maintaining and strengthening our brand, as well as our reputation as a producer of high-quality goods, to maintain and generate ongoing demand for our products, and any harm to our brand could result in a significant reduction in such demand which could materially adversely affect our results of operations.

The “American Rebel” name and brand image are integral to the growth of our business, as well as to the implementation of our strategies for expanding our business. Our success depends on the value and reputation of our brand, which, in turn, depends on factors weresuch as the quality, design, performance, functionality and durability of our products, e-commerce sales and retail partner floor spaces, our communication activities, including advertising, social media and public relations, and our management of the customer experience, including direct interfaces through customer service. Maintaining, promoting, and positioning our brand are important to occur,expanding our customer base and will depend largely on the success of our marketing and merchandising efforts and our ability to provide consistent, high-quality consumer experiences. To sustain long-term growth, we must continue to successfully promote our products to consumers, as well as other individuals, who value and identify with our brand.

Ineffective marketing, negative publicity, product diversion to unauthorized distribution channels, product or manufacturing defects, and those and other factors could rapidly and severely diminish customer confidence in us. Maintaining and enhancing our brand image are important to expanding our customer base. If we are unable to maintain or enhance our brand in current or new markets, or if we fail to continue to successfully market and sell our products to our existing customers or expand our customer base, our growth strategy and results of operations could be harmed.

Additionally, independent third parties and consumers often review our products as well as those of our competitors. Perceptions of our offerings in the marketplace may be significantly influenced by these reviews, which are disseminated via various media, including the internet. If reviews of our products are negative, or less positive as compared to those of our competitors, our brand may be adversely affected and our results of operations materially harmed.

As a significant portion of our revenues is derived by demand for our safes and personal security products for firearms storage purposes, we depend on the availability and regulation of ammunition storage, as well as various economic, social and political factors.

Our performance is influenced by a variety of economic, social, and political factors. General economic conditions and consumer spending patterns can negatively impact our operating results. Economic uncertainty, unfavorable employment levels, declines in consumer confidence, increases in consumer debt levels, increased commodity prices, and other economic factors may affect consumer spending on discretionary items and adversely affect the demand for our products. In times of economic uncertainty, consumers tend to defer expenditures for discretionary items, which affects demand for our products. Any substantial deterioration in general economic conditions that diminish consumer confidence or discretionary income could reduce our sales and adversely affect our operating results. Economic conditions also affect governmental political and budgetary policies. As a result, economic conditions also can have an effect on the sale of our products to law enforcement, government, and military customers. 

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Political and other factors also can affect our performance. Concerns about presidential, congressional, and state elections and legislature and policy shifts resulting from those elections can affect the demand for our products. As most of our revenue is generated from sales of safes, which are purchased in large numbers for firearms storage, speculation surrounding control of firearms, firearm products, and ammunition at the federal, state, and local level and heightened fears of terrorism and crime can affect consumer demand for our products. Often, such concerns result in an increase in near-term consumer demand and subsequent softening of demand when such concerns subside. Inventory levels in excess of customer demand may negatively impact operating results and cash flow.

Federal and state legislatures frequently consider legislation relating to the regulation of firearms, including amendment or repeal of existing legislation. Existing laws may also be affected by future judicial rulings and interpretations firearm products, ammunition, and safe gun storage. If such restrictive changes to legislation develop, we could find it difficult, expensive, or even impossible to comply with them, impeding new product development and distribution of existing products.

Shortages of components and materials, as well as supply chain disruptions, may delay or reduce our sales and increase our costs, thereby harming our results of operations.

The inability to obtain sufficient quantities of raw materials and components, including those necessary for the production of our products could result in reduced or delayed sales or lost orders. Any delay in or loss of sales or orders could adversely impact our operating results. Many of the materials used in the production of our products are available only from a limited number of suppliers. We do not have long-term supply contracts with any suppliers. As a result, we could be subject to increased costs, supply interruptions, and difficulties in obtaining raw materials and components.

Our reliance on third-party suppliers for various raw materials and components for our products exposes us to volatility in the availability, quality, and price of these raw materials and components. Our orders with certain of our suppliers may represent a very small portion of their total orders. As a result, they may not give priority to our business, leading to potential delays in or cancellation of our orders. A disruption in deliveries from our third-party suppliers, capacity constraints, production disruptions, price increases, or decreased availability of raw materials or commodities could have an adverse effect on our ability to meet our commitments to customers or increase our operating costs. Quality issues experienced by third party suppliers can also adversely affect the quality and effectiveness of our products and result in liability and reputational harm.

We do not have long-term purchase commitments from our customers, and their ability to cancel, reduce, or delay orders could reduce our revenue and increase our costs.

Our customers do not provide us with firm, long-term volume purchase commitments, but instead issue purchase orders for our products as needed. As a result, customers can cancel purchase orders or reduce or delay orders at any time. The cancellation, delay, or reduction of customer purchase orders could result in reduced sales, excess inventory, unabsorbed overhead, and reduced income from operations.

We often schedule internal production levels and place orders for products with third party manufacturers before receiving firm orders from our customers. Therefore, if we fail to accurately forecast customer demand, we may experience excess inventory levels or a shortage of products to deliver to our customers. Factors that could affect our ability to accurately forecast demand for our products include the following:

an increase or decrease in consumer demand for our products or for the products of our competitors;

our failure to accurately forecast consumer acceptance of new products;

new product introductions by us or our competitors;

changes in our relationships within our distribution channels;

changes in general market conditions or other factors, which may result in cancellations of orders or a reduction or increase in the rate of reorders placed by retailers;

changes in laws and regulations governing the activities for which we sell products, such as hunting and shooting sports; and
changes in laws and regulations regarding the possession and sale of medical or recreational controlled- substances.

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Inventory levels in excess of consumer demand may result in inventory write-downs and the sale of excess inventory at discounted prices, which could have an adverse effect on our business, operating results, and financial condition. If we underestimate demand for our products, our suppliers may not be able to react quickly enough to meet consumer demand, resulting in delays in the shipment of products and lost revenue, and damage to our reputation and customer and consumer relationships. We may not be able to manage inventory levels successfully to meet future order and reorder requirements.

We face intense competition that could result in our losing or failing to gain market share and suffering reduced sales.

We operate in intensely competitive markets that are characterized by price erosion and competition from major domestic and international companies. Competition in the markets in which we operate is based on a number of factors, including price, quality, performance, reliability, styling, product features, and warranties, and sales and marketing programs. This intense competition could result in pricing pressures, lower sales, reduced margins, and lower market share.

Our competitors include nationwide safe manufacturers enterprises, and various smaller manufacturers and importers. Most of our competitors have greater market recognition, larger customer bases, and substantially greater financial, technical, marketing, distribution, and other resources than we possess and that afford them competitive advantages. As a result, they may be able to devote greater resources to the promotion and sale of products, to invest more funds in intellectual property and product development, to negotiate lower prices for raw materials and components, to deliver competitive products at lower prices, and to introduce new products and respond to consumer requirements more quickly than we can.

Our competitors could introduce products with superior features at lower prices than our products and could also bundle existing or new products with other more established products to compete with us. Certain of our competitors may be willing to reduce prices and accept lower profit margins to compete with us. Our competitors could also gain market share by acquiring or forming strategic alliances with other competitors.

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Finally, we may face additional sources of competition in the future because new distribution methods offered by the Internet and electronic commerce have removed many of the barriers to entry historically faced by start-up companies. Retailers also demand that suppliers reduce their prices on products, which could lead to lower margins. Any of the foregoing effects could cause our sales to decline, which would harm our financial position and results of operations.

Our ability to compete successfully depends on a number of factors, both within and outside our control. These factors include the following:

our success in developing, producing, marketing, and successfully selling new products;

our ability to efficiently manage our operations;

our ability to implement our strategies and business plans;

our ability to achieve future operating results;

our ability to address the needs of our consumer customers;

the pricing, quality, performance, and reliability of our products;

the quality of our customer service;

the efficiency of our production; and

product or technology introductions by our competitors.

Because we believe technological and functional distinctions among competing products in our markets are perceived by many end-user consumers to be relatively modest, effectiveness in marketing and manufacturing are particularly important competitive factors in our business.

We have a limited operating history on which you can evaluate our company.

We have a limited operating history on which you can evaluate our company. The corporate entity has existed since 2014 and started engaging in its current primary business operations in April 2019. As a result, our business will be subject to many of the problems, expenses, delays, and risks inherent in the establishment of a relatively new business enterprise.

We have a limited operating history upon which an evaluation of our business plan or performance and prospects can be made. Our business and prospects must be considered in the light of the potential problems, delays, uncertainties and complications encountered in connection with a newly established business and creating a new line of products. The risks include, in part, the possibility that we will not be able to develop functional and scalable products, or that although functional and scalable, our products and will not be economical to market; that our competitors hold proprietary rights that preclude us from marketing such products; that our competitors market a superior or equivalent product; that our competitors have such a significant advantage in brand recognition that our products will not be considered by potential customers; that we are not able to upgrade and enhance our technologies and products to accommodate new features as the market evolves; or the failure to receive necessary regulatory clearances for our products. To successfully introduce and market our products at a profit, we must establish brand name recognition and competitive advantages for our products. There are no assurances that we can successfully address these challenges. If it is unsuccessful, we and our business, financial condition and operating results of operations or future prospects could be materially and adversely affected.

The current and future expense levels are based largely on estimates of planned operations and future revenues. It is difficult to accurately forecast future revenues because our business is relatively new, and our market is rapidly developing. If our forecasts prove incorrect, the business, operating results and our financial condition will be materially and adversely affected. If that happens, the market priceMoreover, we may be unable to adjust our spending in a timely manner to compensate for any unanticipated reduction in revenue. As a result, any significant reduction in revenues would immediately and adversely affect our common stock, if any, could decline,business, financial condition and prospective investors would likely lose all or even part of their investment.operating results.


Risks RelatedWe are highly dependent on Charles A. Ross, our Chief Executive Officer. The loss of our Chief Executive Officer, whose knowledge, leadership and industry reputational upon which we rely, could harm our ability to the Businessexecute our business plan.


We are highly dependent on Charles A. Ross, our Chief Executive Officer, Chairman of our Board of Directors and largest stockholder. Our success depends heavily upon the continued contributions of Mr. Ross, whose leadership, industry reputation entrepreneurial background and creative marketing skills may be difficult to replace at this stage in our business development, and on our ability to attract and retain similarly positioned prominent leaders. If we were to lose the services of our Chief Executive Officer, our ability to execute our business plan may be harmed and we may be forced to limit operations until such time as we could hire suitable replacements.

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CSIWe cannot predict when we will achieve profitability.

We have not been profitable and cannot predict when or if we will achieve profitability. We have experienced net losses since our inception in December 2014.

We cannot predict when we will achieve profitability, if ever. Our inability to become profitable may force us to curtail or temporarily discontinue our research and development programs and our day-to-day operations. Furthermore, there can be no assurance that profitability, if achieved, can be sustained on an ongoing basis. As of September 30, 2021, we had an accumulated deficit of $25,760,803.

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There is substantial doubt regarding our ability to continue as a going concern absent obtaining adequate new debt or equity financing and achieving sufficient sales levels.

Our management has virtually no financial resources. Our independent registered auditors’ report includes an explanatory paragraph statingdetermined that there is substantial doubt about our ability to continue as a going concern.


CSI is an early stage company and virtually nothe report of our independent registered public accounting firm on our consolidated financial resources currently available to it. We had tangible assets of none and $3,852 as ofstatements for the years ended December 31, 20142020, and June 30, 2015, respectively. We had negative working capital of $610 and $41,410 as of December 31, 2014 and June 30, 2015, respectively. We had a stockholders’ deficit of $610 and $12,910 at December 31, 2014 and June 30, 2015, respectively. Our independent registered auditors2019 included an explanatory paragraph in their opinion on our financial statements as of and forwith respect to the period ended December 31, 2014 that states that Company losses from operations raise substantial doubt about itsforegoing. Our ability to continue as a going concern. Weconcern is dependent upon our ability to raise additional capital and implement our business plan. This determination was based on the following factors: (i) the Company has a working capital deficit as of December 31, 2020, used cash in operations of approximately $2.5 million in 2020, and the Company’s available cash as of the date of this filing will not be sufficient to fund its anticipated level of operations for the next twelve (12) months; (ii) the Company will require additional financing for the fiscal year ending December 31, 2021 to continue at its expected level of operations; and (iii) if the Company fails to obtain the needed capital, it will be requiredforced to seek additional financing beyonddelay, scale back, or eliminate some or all of its development activities or perhaps cease operations. In the amount that may be received from this Offering. Financing sought may be inopinion of management, these factors, among others, raise substantial doubt about the form of equity or debt from sources yet to be identified. Until we complete this Offering mostability of the efforts of our founder, President and CEO will be spent on the registration efforts with limited efforts in the execution of our business plan and operations. Pending the successful completion of this Offering, we will seek additional financing to further pursue and execute on our business steps. No assurances can be given that we will generate sufficient revenue (or any at all) or obtain the necessary financingCompany to continue as a going concern.concern as of the date of the end of the period covered by this prospectus and for one year from the issuance of the consolidated financial statements.


American Rebel has limited financial resources. There is substantial doubt about our ability to continue as a going concern if we are unable to raise additional funds.

We expect to require additional funds to further develop our business plan, including the anticipated launch of new products, in addition to continuing to market 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 need to 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 may be dilutive to existing stockholders.

Our substantial level of indebtedness and our current resourcesliquidity constraints could adversely affect our financial condition and sourceour ability to service our indebtedness, which could negatively impact your ability to recover your investment in the Common Stock.

We have a substantial amount of working capital funds, primarily consistsindebtedness, which requires significant interest payments. As of September 30, 2021, following the financial restructuring that occurred on September 29, 2021 (the “Cavalry Bridge Loan”), we and our subsidiary had approximately $5,116,044 of indebtedness outstanding and approximately $5,061,430 as of December 31, 2021. As part of the Debt Restructuring, we entered into a financing transaction with accredited investor Cavalry Fund I, L.P., a Delaware limited partnership (“Cavalry”), that provided, among other covenants, for (i) optional conversion of amount due under the underlying loan into shares of the Company’s Common Stock, (ii) a mandatory conversion pursuant to which the principal amount and any accrued or unpaid interest automatically convert into the Company’s Common Stock, or into the Company’s Common Stock and warrants, if warrants are included in certain subsequent financing events, and (iii) encumbrances on all of the assets of the Company, including a lien on and security interest in all of the issued and outstanding equity interests of the wholly-owned subsidiary of the Company. Further, in connection with the Cavalry Bridge Loan, the Company entered into a registration rights agreement whereby the Company agreed to file a registration statement covering Cavalry’s resale of all of the Common Stock underlying the loan and the warrants following 30 days of the entering into the Cavalry Bridge Loan (See full description of the terms of the Cavalry Bridge Loan on page 40 below). The Cavalry Bridge Loan will be converted into 336,230 shares of Common Stock following the effective date of the registration statement of which this prospectus forms a part but prior to the closing of the offering.

Although we are currently in default under certain our loans, from unaffiliated third parties whoour creditors have not sought to accelerate loans and we plan to repay all defaulted indebtedness with proceeds of the offering. However, if our creditors accelerate the loans, it could have a material negative impact on the Company and its financial condition. Our substantial level of indebtedness and the current constraints on our liquidity could have important consequences, including the following:

we must use a substantial portion of our cash flow from operations to pay interest and principal on our indebtedness, which reduces or will reduce funds available to us for other purposes such as working capital, capital expenditures, other general corporate purposes and potential acquisitions;
we may be unable to comply with financial and other restrictive covenants contained in the agreements governing our indebtedness, including the financial maintenance covenants in our credit facility once the current waiver period expires and the covenant renews in March 2021, which could result in an event of default that, if not cured or waived, would have an adverse effect on our business and prospects and could force us into bankruptcy or liquidation. In the event of a bankruptcy or liquidation, the claims in respect of indebtedness rank senior to claims of an equity holder, and you would likely suffer a total loss on your investment in the Common Stock;

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our ability to refinance such indebtedness or to obtain additional financing for working capital, capital expenditures, acquisitions or general corporate purposes may be impaired;

our inability to access lending, capital markets and other sources of liquidity, if needed, on reasonable terms, or at all, or obtain amendments, extensions and waivers of financial maintenance covenants, among other material terms; and

there are significant constraints on our ability to generate liquidity through incurring additional debt.

We and our subsidiary may be able to incur substantial additional indebtedness in the future, subject to the restrictions contained in the agreements governing our indebtedness. To the extent new indebtedness is added to our debt levels, the related risks that we now face could intensify. If we are business associatesunable to comply with our covenants under our indebtedness our liquidity may be further adversely affected.

Our ability to meet our expenses, to remain in compliance with our covenants under our debt instruments and to make future principal and interest payments in respect of our founder, Presidentdebt depends on, among other factors, our operating performance, competitive developments and CEO. These sources we believefinancial market conditions, all of which are significantly affected by financial, business, economic and other factors. We are not able to control many of these factors. Given current industry and economic conditions, our cash flow may not be sufficient to keepallow us to pay principal and interest on our business operations functioningdebt and meet our other obligations.

The sales of our safes are dependent in large part on the sales of firearms.

We market safes and other personal security products for sale to a wide variety of consumers. Although our customer base is large and diverse, and our products serve our customers’ different needs, our products have been particularly popular among collectors, hunters, sportsmen, competitive shooters, and gun enthusiasts. The sale of safe firearms storage and security components is influenced by the next threesale and usage of firearms. Sales of firearms are influenced by a variety of economic, social, and political factors, which may result in volatile sales.

Our financial results may be affected by tariffs or border adjustment taxes or other import restrictions.

Our current backpack and apparel suppliers have facilities both in China and Mexico and the imposition of tariffs or border adjustment taxes may affect our financial results. The current political climate is hostile to six months. We do not have a formal agreement with our founder and CEO, nor with the unaffiliated third parties to fund the Company’s working capital needs; however, our founder’s and CEO’s current plan is to perform mostcompanies manufacturing goods outside of the Company’s operational needs on his own without any cash compensation while he seeks other sourcesUS. At the current manufacturing levels, it is impractical to seek manufacturing facilities in the United States as US manufacturers are unable to meet or even approach the cost of funding. This may include seekingmanufacturing small quantities of custom-made goods. We are in the process of locating an alternative supplier which will have the capacity to delay or defer paymentsproduce commercial volumes of our backpacks and apparel to third party vendors and unaffiliated third parties. To date, this type of deferred payment method has helped us withmeet our working capital needs. The Company developed much of its initial design of its portal and associated internal-use software through the efforts of Mr. Estus. We currently spend between $5,000 and $10,000 per month in operational expenses not related to this Offering. Weexpected demands. However, we have not generated any revenues fromyet located a suitable supplier and, even if we are able to do so, there is no guarantee that our manufacturing process will scale to produce our products in quantities sufficient to meet demand.

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An inability to expand our e-commerce business and sales organization to effectively address existing and new markets that we intend to target could reduce our future growth and impact our business and operating results.

Consumers are increasingly purchasing products online. We operate a direct-to-consumer e-commerce store to maintain an online presence with our expenses will continueend users. The future success of our online operations depends on our ability to use our marketing resources to communicate with existing and potential customers. We face competitive pressure to offer promotional discounts, which could impact our gross margin and increase our marketing expenses. We are limited, however, in our ability to fully respond to competitor price discounting because we cannot market our products at prices that may produce adverse relationships with our customers that operate brick and mortar locations as they may perceive themselves to be accrued or deferred until sufficient financingat a disadvantage based on lower e-commerce pricing to end consumers. There is obtained. Financing may be obtained from our founder or others who are familiar with our founder and loan us the necessary funds to pay for these expenses. We have received interest-free short term loans and deferred the payment of services for third party vendors to fund our operations. No assurances can be givenno assurance that we will be able to continuesuccessfully expand our e-commerce business to receive fundsrespond to shifting consumer traffic patterns and direct-to-consumer buying trends.

In addition, e-commerce and direct-to-consumer operations are subject to numerous risks, including implementing and maintaining appropriate technology to support business strategies; reliance on third-party computer hardware/software and service providers; data breaches; violations of state, federal or international laws, including those relating to firearms and ammunition sales; online privacy; credit card fraud; telecommunication failures; electronic break-ins and similar disruptions; and disruption of Internet service. Our inability to adequately respond to these risks and uncertainties or to successfully maintain and expand our direct-to-consumer business may have an adverse impact on our business and operating results.

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We sell products that create exposure to potential product liability, warranty liability, or personal injury claims and litigation.

Our products are used to store, in part, items that involve risk of personal injury and death. Our products expose us to potential product liability, warranty liability, and personal injury claims and litigation relating to the use or misuse of our products, including allegations of defects in manufacturing, defects in design, a failure to warn of dangers inherent in the product or activities associated with the product, negligence, and strict liability. If successful, any such claims could have a material adverse effect on our business, operating results, and financial condition. Defects in our products may result in a loss of sales, recall expenses, delay in market acceptance, and damage to our reputation and increased warranty costs, which could have a material adverse effect on our business, operating results, and financial condition. Although we maintain product liability insurance in amounts that we believe are reasonable, we may not be able to maintain such insurance on acceptable terms, if at all, in the future and product liability claims may exceed the amount of insurance coverage. In addition, our reputation may be adversely affected by such claims, whether or not successful, including potential negative publicity about our products.

Our indebtedness could adversely affect our business and limit our ability to plan for or respond to changes in our business, and we may be unable to generate sufficient cash flow to satisfy significant debt service obligations.

As of December 1, 2021, our consolidated indebtedness was $5,008,183, with approximately $1,624,953 due to related parties. Our indebtedness could have important consequences, including the following:

increasing our vulnerability to general adverse economic and industry conditions;

reducing the availability of our cash flow for other purposes;

limiting our flexibility in planning for, or reacting to, changes in our business and the industries in which we operate, which would place us at a competitive disadvantage compared to our competitors that may have less debt; and

having a material adverse effect on our business if we fail to comply with the covenants in our debt agreements, because such failure could result in an event of default that, if not cured or waived, could result in all or a substantial amount of our indebtedness becoming immediately due and payable.

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Further, nearly 6% of our current indebtedness is in default, which subjects us to potential litigation, increased fees and expenses, increased interest rates and other potential damages. The Company is in negotiations with debt holders who hold notes in default to cure the defaults. The Company plans to repay defaulted indebtedness with the proceeds from these sources or continuethe offering. However, if our operations beyondcreditors accelerate the loans, it could have a month-to-month basis.


2.

CSI is and will continue to be completely dependentmaterial negative impact on the servicesCompany and its financial condition.

Our ability to repay our significant indebtedness will depend on our ability to generate cash, whether through cash from operations or cash raised through the issuance of additional equity-based securities. To a certain extent, our ability to generate cash is subject to general economic, financial, competitive, legislative, regulatory, and other factors that are beyond our control. If our business does not generate sufficient cash flow from operations or if future equity financings are not available to us in amounts sufficient to enable us to fund our liquidity needs, our financial condition and operating results may be adversely affected. If we cannot make scheduled principal and interest payments on our debt obligations in the future, we may need to refinance all or a portion of our founder, president, and CEO, David Estus,indebtedness on or before maturity, sell assets, delay capital expenditures, cease operations or seek additional equity.

Despite the loss of whose services may cause our business operations to cease, and we will need to engage and retain qualified employees and consultants to further implement our strategy.


Our operations and business strategy are completely dependent upon the knowledge and business connections of Mr. Estus, our founder and CEO. He is under no contractual obligation to remain employed by us. If he should choose to leave us for any reason, or if he becomes ill and is unable to work for an extended period of time before we have hired additional personnel, our operations will likely fail. Even ifCompany’s indebtedness levels, we are able to find personnel, itincur substantially more debt. This could further increase the risks associated with its leverage.

We may incur substantial additional indebtedness in the future, although certain terms of current debt agreements prohibit us from doing so. To the extent that we incur additional indebtedness, the risks associated with its substantial indebtedness describe above, including its possible inability to service its debt, will increase.

At this stage of our business operations, even with our good faith efforts, investors in our company may lose some or all of their investment.

Because the nature of our business is uncertainexpected to change as a result of shifts in the industries in which we operate, competition, and the development of new and improved technology, management forecasts are not necessarily indicative of future operations and should not be relied upon as an indication of future performance. Further, we have raised substantial debt and equity to fund our business operations, which to date have generated insufficient revenue to support our working capital needs.

While management believes its estimates of projected occurrences and events are within the timetable of its business plan, our actual results may differ substantially from those that are currently anticipated. If our revenues do not increase to a level to support our working capital needs, we will be forced to seek equity capital to fund our operations and repay our substantial debt balances, which may not be available to us on acceptable terms or at all.

Product defects could adversely affect the results of our operations.

The design, manufacture and marketing of our products involve certain inherent risks. Manufacturing or design defects, unanticipated use of our products, or inadequate disclosure of risks relating to the use of our products can lead to injury or other adverse events. The Company may not properly anticipate customer applications of our products and our products may fail to survive such unanticipated customer use. If the Company’s products fail to adequately perform to meet the customer’s expectations, the customer may demand refunds or replacements which will negatively affect the Company’s profitability.

We could be exposed to significant liability claims if we are unable to obtain insurance at acceptable costs and adequate levels or otherwise protect ourselves against potential product liability claims.

Our products support the use and access to firearms and if our products are ineffective, we could require protection against potential product liability claims.

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We will not be profitable unless we can demonstrate that our products can be manufactured at low prices.

To date, we have manufactured our products in limited volume. As the Company creates demand for its products, our projections require the benefit of volume discounts as we increase the size of our order. We can offer no assurance that either we or our manufacturing partners will develop efficient, automated, low-cost manufacturing capabilities and processes to meet the quality, price, engineering, design and production standards or production volumes required to successfully mass market our products. Even if we or our manufacturing partners are successful in developing such manufacturing capability and processes, we do not know whether we or they will be timely in meeting our product commercialization schedule or the production and delivery requirements of potential customers. A failure to develop such manufacturing processes and capabilities could find someone who could develop and executehave a material adverse effect on our business along the lines describedand financial results.

Our profitability in this prospectus.part is dependent on material and other manufacturing costs. We will fail without the services of Mr. Estusare unable to offer any assurance that either we or an appropriate replacement(s).


We intend to acquire key-man life insurance on the life of Mr. Estus naming the Company as the beneficiary when and if we obtain the necessary resources to do so and he is insurable. We have not yet procured such insurance, and there is no guarantee that wea manufacturing partner will be able to obtainreduce costs to a level that will allow production of a competitive product or that any product produced using lower cost materials and manufacturing processes will not suffer from a reduction in performance, reliability and longevity.

War, terrorism, other acts of violence or natural or manmade disasters such key-man life insuranceas a pandemic, epidemic, outbreak of an infectious disease or other public health crisis may affect the markets in which the Company operates, the Company’s customers, the Company’s delivery of products and customer service, and could have a material adverse impact on our business, results of operations, or financial condition.

Our business and supply chain may be adversely affected by instability, disruption or destruction in a geographic region in which it operates, regardless of cause, including war, terrorism, riot, civil insurrection or social unrest, and natural or manmade disasters, including famine, food, fire, earthquake, storm or pandemic events and spread of disease (including the outbreak of COVID-19).

Such events may cause customers to suspend their decisions on using the Company’s products and services, make it impossible to access some of our inventory, and give rise to sudden significant changes in regional and global economic conditions and cycles that could interfere with purchases of goods or services and commitments to develop new products and services. These events also pose significant risks to the Company’s personnel and to physical facilities, transportation and operations, which could materially adversely affect the Company’s financial results.

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Any significant disruption to communications and travel, including travel restrictions and other potential protective quarantine measures against COVID-19 or other public health crisis by governmental agencies, could make it difficult for the Company to deliver goods services to its customers. War, riots, or other disasters may increase the need for our products and demand by government and military may make it difficult for use to provide products to customers. Further, travel restrictions and protective measures against COVID-19 could cause the Company to incur additional unexpected labor costs and expenses or could restrain the Company’s ability to retain the highly skilled personnel the Company needs for its operations. Due to the substantial uncertainty related to the effects of the pandemic, its duration and the related market impacts, including the economic stimulus activity, we are unable to predict the specific impact the pandemic and related restrictions (including the lifting or re-imposing of restrictions due to the Omicron variant or otherwise) will have on our results of operations, liquidity or long-term financial results.

We believe COVID-19 has not yet had a materially adverse effect on our operational results, but could at any time and without notice in the foreseeable future. Accordingly, itAs a result of COVID-19, at any time we may be subject to increased operating costs, supply interruptions, and difficulties in obtaining raw materials and components. COVID-19 has resulted in restrictions, postponements and cancelations of meetings, conferences, trade shows and the impact, extent and duration of the government-imposed restrictions on travel and public gatherings as well as the overall effect of the COVID-19 virus is importantcurrently unknown.

The costs of being a public company could result in us being unable to continue as a going concern.

As a public company, we are required to comply with numerous financial reporting and legal requirements, including those pertaining to audits and internal control. The costs of maintaining public company reporting requirements could be significant and may preclude us from seeking financing or equity investment on terms acceptable to us and our stockholders. We estimate these costs to be in excess of $100,000 per year and may be higher if our business volume or business activity increases significantly. Our current estimate of costs does not include the necessary expenses associated with compliance, documentation and specific reporting requirements of Section 404 as we will not be subject to the full reporting requirements of Section 404 until we exceed $700 million in market capitalization.

If our revenues are insufficient or non-existent, or we cannot satisfy many of these costs through the issuance of shares or debt, we may be unable to satisfy these costs in the normal course of business. This would certainly result in our being unable to continue as a going concern.

Any acquisitions that we are able to attract, motivatepotentially undertake will involve significant risks, and retain highly qualified and talented personnel or independent contractors to furtherany acquisitions that we undertake in the future could disrupt our business, efforts.


Mr. Estus’ outside employment commitment does not limit or restrict him from being involved withdilute stockholder value, and harm our Company, and his outside employment allows him the flexibility to provide at least 20 hours or more per week to the Company.






3.operating results.

Because we have recently commenced business operations, we face a high risk of business failure.


We were formed on December 15, 2014. MostPart of our effortsgrowth strategy is to date have been relatedexpand our operations through strategic acquisitions to executingenhance existing products and offer new products, enter new markets and businesses, strengthen and avoid interruption from our business plansupply chain, and commencing business operations. Through June 30, 2015enhance our position in current markets and businesses. Acquisitions involve significant risks and uncertainties. We cannot accurately predict the timing, size, and success of any future acquisitions. We may be unable to identify suitable acquisition candidates or to complete the acquisitions of candidates that we have had no revenues. We face a high risk of business failure. The likelihood of success must be consideredidentify. Increased competition for acquisition candidates or increased asking prices by acquisition candidates may increase purchase prices for acquisitions to levels beyond our financial capability or to levels that would not result in light of itsthe returns required by our acquisition criteria. Unforeseen expenses, complicationsdifficulties, and delays frequently encountered in connection with expansion through acquisitions could inhibit our growth and negatively impact our operating results. 

Our ability to complete acquisitions that we desire to make will depend upon various factors, including the establishmentfollowing:

the availability of suitable acquisition candidates at attractive purchase prices;
the ability to compete effectively for available acquisition opportunities;
the availability of cash resources, borrowing capacity, or stock at favorable price levels to provide required purchase prices in acquisitions;
the ability of management to devote sufficient attention to acquisition efforts; and
the ability to obtain any requisite governmental or other approvals.

We may have little or no experience with certain acquired businesses, which could involve significantly different supply chains, production techniques, customers, and expansioncompetitive factors than our current business. This lack of experience would require us to rely to a great extent on the management teams of these acquired businesses. These acquisitions also could require us to make significant investments in systems, equipment, facilities, and personnel in anticipation of growth. These costs could be essential to implement our growth strategy in supporting our expanded activities and resulting corporate structure changes. We may be unable to achieve some or all of the benefits that we expect to achieve as we expand into these new markets within the time frames we expect, if at all. If we fail to achieve some or all of the benefits that we expect to achieve as we expand into these new markets, or do not achieve them within the time frames we expect, our business, financial condition, and results of operations could be adversely affected.

Unforeseen expenses, difficulties, and delays frequently encountered in connection with future acquisitions could inhibit our growth and negatively impact our profitability. Any future acquisitions may not meet our strategic objectives or perform as anticipated. In addition, the competitive environmentsize, timing, and success of any future acquisitions may cause substantial fluctuations in whichour operating results from quarter to quarter. These interim fluctuations could adversely affect the Company will operate. There can be no assurance that future revenues from salesmarket price of our intended productsCommon Stock.

If we finance any future acquisitions in whole or servicesin part through the issuance of Common Stock or securities convertible into or exercisable for Common Stock, existing stockholders will occur orexperience dilution in the voting power of their Common Stock and earnings per share could be significant enough or thatnegatively impacted. The extent to which we will be able or willing to sell at a profit, if at all. Future revenues or profits, if any,use our Common Stock for acquisitions will depend on many factors, including, but not limited to, initial (and continued)the market acceptanceprice of our products or servicesCommon Stock from time-to-time and the successful implementationwillingness of potential acquisition candidates to accept our Common Stock as full or partial consideration for the sale of their businesses. Our inability to use our Common Stock as consideration, to generate cash from operations, or to obtain additional funding through debt or equity financings to pursue an acquisition could limit our growth.

RISKS RELATED TO OUR LEGAL AND REGULATORY ENVIRONMENT

Failure to comply with applicable laws and changing legal and regulatory requirements could harm our business and financial results.

Our policies and procedures are reasonably designed to comply with applicable laws, accounting and reporting requirements, tax rules and other regulations and requirements, including those imposed by the SEC, and foreign countries, as well as applicable trade, labor, safety, environmental, labeling and gun safety related laws, such as the Protection of Lawful Commerce in Arms Act as well as state laws. The complexity of the planned strategy.regulatory environment in which we operate and the related cost of compliance are both increasing due to additional or changing legal and regulatory requirements, our ongoing expansion into new markets and new channels, and the fact that foreign laws occasionally conflict with domestic laws. In addition to potential damage to our reputation and brand, failure by us or our business partners to comply with the various applicable laws and regulations, as well as changes in laws and regulations or the manner in which they are interpreted or applied, may result in litigation, civil and criminal liability, damages, fines and penalties, increased cost of regulatory compliance and restatements of our financial statements and have an adverse impact on our business and financial results.


26

Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited.

As of September 30, 2021, and December 31, 2020, we had net operating loss carryforwards, or NOLs, for federal and state income tax purposes of $25,760,803 and $20,870,713, respectively, which begins to expire in 2034.Net operating loss carryforwards are available to reduce future taxable income. The Company hasfederal net operating losses generated before 2018 will begin to expire in 2032. The federal net operating losses generated in and after 2018 may be carried forward indefinitely. The expiration of state NOL carryforwards vary by state and begin to expire in 2024. It is possible that we will not yet acquiredgenerate taxable income in time to use NOLs before their expiration, or fully developed productsat all. Under Section 382 and Section 383 of the Internal Revenue Code of 1986, as amended, or servicesthe Code, if a corporation undergoes an “ownership change,” the corporation’s ability to use its pre-change NOLs and other tax attributes to offset its post-change income may be limited. In general, an “ownership change” will occur if there is a cumulative change in our ownership by “5 percent stockholders” that are saleable in the marketplace. Weexceeds 50 percentage points over a rolling three-year period. Similar rules may notapply under state tax laws. Our ability to use NOLs and other tax attributes to reduce future taxable income and liabilities may be able fully develop any product or servicesubject to annual limitations as a result of prior ownership changes and ownership changes that may occur in the future because(which may be outside our control).

Under the Tax Cuts and Jobs Act of a lack2017, or the Tax Act, as amended by the CARES Act, NOLs arising in tax years beginning after December 31, 2017, are subject to an 80% of funds or financing to do so.taxable income limitation (as calculated before taking the NOLs into account) for tax years beginning after December 31, 2020. In order for us to fully develop or acquire any product or service, we must be able to secure the necessary financing beyond this Offering. In the early stages of operations, we will attempt to keep costsaddition, NOLs arising in tax years 2018, 2019, and 2020 are subject to a minimum. The costfive-year carryback and indefinite carryforward, while NOLs arising in tax years beginning after December 31, 2020, also are subject to developindefinite carryforward but cannot be carried back. Our NOLs may also be subject to limitations in other jurisdictions. For example, California recently enacted legislation suspending the use of NOLs for taxable years 2020, 2021, and 2022 for many taxpayers. In future years, if and when a net deferred tax asset is recognized related to our products or servicesNOLs, the changes in the carryforward/carryback periods as currently outlinedwell as the new limitation on use of NOLs may very well be in excess of $100,000. We have no established source of funds to undertake the business strategy as outlined. Until we obtain funding, if ever, we will keepsignificantly impact our operating costs as low as possible with our founder, and CEO providing most of the administrative and other functions on his own without any cash compensation. We currently use the services of outside software developers with which we have been working with on an as “needed basis”. The software developers provide their services on a deferment basis enabling us to not have to pay them immediately or even near term. We do not expect to pay them in full or even partiallyvaluation allowance assessments for a period of time even once we complete this Offering. This methodology could result in our design portal and smartphone app development extending beyond another two to three years. NOLs generated after December 31, 2017.

If we are unable to obtain adequate fundingprotect our intellectual property, we may lose a competitive advantage or financing, the Company faces the likelihoodincur substantial litigation costs to protect our rights.

Our future success depends upon our proprietary technology. Our protective measures, including patent and trade secret protection, may prove inadequate to protect our proprietary rights. The right to stop others from misusing our trademarks, service marks, and patents in commerce depends to some extent on our ability to show evidence of business failure. There are no assurancesenforcement of our rights against such misuse in commerce. Our efforts to stop improper use, if insufficient, may lead to loss of trademark and service mark rights, brand loyalty, and notoriety among our customers and prospective customers. The scope of any patent that we willhave or may obtain may not prevent others from developing and selling competing products. The validity and breadth of claims covered in technology patents involve complex legal and factual questions, and the resolution of such claims may be able to raise any fundshighly uncertain, and expensive. In addition, our patents may be held invalid upon challenge, or establish any financing for our growth.


The Company’s future profitability, if any, could be materially and adversely impacted if our productsothers may claim rights in or services were to experience poor operating results. Our ability to achieve profitability will be dependent on the abilityownership of our future productspatents. Company owned trademarks are listed under the heading Intellectual Property on pages 7 and 55.

Federal regulation and enforcement may adversely affect the implementation of medical controlled substance laws and regulations may negatively impact our revenues and profits.

Currently, many states plus the District of Columbia have laws or servicesregulations that recognize, in one form or another, legitimate medical uses for cannabis and consumer use of cannabis in connection with medical treatment. Many other states are considering similar legislation. Conversely, under the Controlled Substance Act (the “CSA”), the policies and regulations of the Federal government and its agencies are that cannabis has no medical benefit and a range of activities including cultivation and the personal use of cannabis is prohibited. Unless and until Congress amends the CSA with respect to generate sufficient operating cash flowmedical marijuana, as to fund future growththe timing or acquisitions. Therescope of any such potential amendments there can be no assurance, there is a risk that federal authorities may enforce current federal law. Active enforcement of the current federal regulatory position on cannabis may thus indirectly and adversely affect our future resultsrevenues and profits. The risk of operations willstrict enforcement of the CSA in light of Congressional activity, judicial holdings, and stated federal policy remains uncertain.

27

The DOJ has not historically devoted resources to prosecuting individuals whose conduct is limited to possession of small amounts of marijuana for use on private property but has relied on state and local law enforcement to address marijuana activity. In the event the DOJ reverses its stated policy and begins strict enforcement of the CSA in states that have laws legalizing medical marijuana and recreational marijuana in small amounts, there may be profitablea direct and adverse impact to our business and our revenue and profits. Furthermore, H.R. 83, enacted by Congress on December 16, 2014, provides that none of the funds made available to the DOJ pursuant to the 2015 Consolidated and Further Continuing Appropriations Act may be used to prevent certain states, including Nevada and California, from implementing their own laws that authorized the use, distribution, possession, or cultivation of medical marijuana.

Variations in state and local regulation and enforcement in states that have legalized medical controlled substance that may restrict marijuana-related activities, including activities related to medical cannabis and Biotech complex work on cannabis, may negatively impact our revenues and profits.

Individual state laws do not always conform to the federal standard or to other states laws. A number of states have decriminalized marijuana to varying degrees, other states have created exemptions specifically for medical cannabis, and several have both decriminalization and medical laws. Nineteen states and the District of Columbia and Guam have legalized the recreational use of cannabis. Variations exist among states that have legalized, decriminalized, or created medical marijuana exemptions. For example, Alaska and Colorado have limits on the number of marijuana plants that can be homegrown. In most states, the cultivation of marijuana for personal use continues to be prohibited except for those states that allow small-scale cultivation by the individual in possession of medical marijuana needing care or that person’s caregiver. Active enforcement of state laws that prohibit personal cultivation of marijuana may indirectly and adversely affect our strategy willbusiness and our revenue and profits.

It is possible that federal or state legislation could be successfulenacted in the future that would prohibit us or even beginpotential customers from using our products, and if such legislation were enacted, our revenues could decline, leading to generatea loss in your investment.

We are not aware of any revenues.federal or state regulation that regulates the sale of indoor cultivation equipment to medical or recreational marijuana growers. The extent to which the regulation of drug paraphernalia under the CSA is applicable to the sale of our dispensaries is found in the definition of “drug paraphernalia.” Drug paraphernalia means any equipment, product, or material of any kind that is primarily intended or designed for use in manufacturing, compounding, converting, concealing, producing processing, preparing, injecting, ingesting, inhaling, or otherwise introducing into the human body a controlled substance, possession of which is unlawful.


4.Marijuana remains illegal under federal law

Cannabis is illegal under U.S. federal law. In those states in which the use of cannabis has been legalized, its use remains a violation of federal law pursuant to the Controlled Substances Act (21 U.S.C. § 811). The Controlled Substances Act classifies cannabis as a Schedule I controlled substance, and as such, medical and adult use cannabis use is illegal under U.S. federal law. Unless and until Congress amends the Controlled Substances Act with respect to cannabis (and the President approves such amendment), there is a risk that federal authorities may enforce current federal law. Since federal law criminalizing the use of cannabis pre-empts state laws that legalize its use, enforcement of federal law regarding cannabis is a significant risk and would likely result in our inability to precede with our business plans, especially in respect of expanding the reach of our dispensaries sale.

We are indirectly engaged in the medical and adult use cannabis industry in the United States where local state law permits such activities. The legality of the production, cultivation, extraction, distribution, retail sales, transportation and use of cannabis differs among states in the United States. Due to the current regulatory environment in the United States, new risks may emerge, and management may not have or ever have the resources or ability to implement and manage our growth strategy.


Although the Company expects to experience growth based on the ability to implement and execute its business strategy, significant operations may never occur because the business plan may never be fully implemented because of the lack of funds in order to do so. If the Company’s growth strategy is implemented, of which no assurances can be provided, a significant strain on management, operating systems or financial resources may be imposed. Failure by the Company’s management to manage this expected growth, if it occurs, or unexpected difficulties are encountered during this growth, could have a material adverse impact on the Company’s results of operations or financial condition.


The Company’s ability to operate profitable revenue generating products or service lines (if we are able to establish any product predict all such risks.

As of September 2021, there are 36 states, plus the District of Columbia (and the territories of Guam, Puerto Rico, the U.S. Virgin Islands and the Northern Mariana Islands), that have laws and/or service lines at all) will depend upon a numberregulations that recognize, in one form or another, legitimate medical uses for cannabis and consumer use of factors, including: (i) identifying appropriatecannabis in connection with medical treatment. In addition, Alaska, California, Colorado, Illinois, Maine, Massachusetts, Michigan, Nevada, Oregon, Vermont, Washington and satisfactory sales channels; (ii) generating sufficient funds from our then-existing operations or obtaining third-party financing or additional capitalthe District of Columbia have legalized cannabis for adult use.

Due to develop new product or service lines; (iii) the Company’s management teamconflicting views between state legislatures and our financialthe federal government regarding cannabis, cannabis businesses are subject to inconsistent laws and accounting controls; and (iv) staffing, training and retention of skilled personnel, if any at all. These factors most likely will be beyond the Company’s control and may be adversely affected by the economy or actions taken by competing businesses. Moreover, potential products or services that may meet the Company’s focus and other criteria for developing new products or services, if we are able to develop or acquire at all, are believed to be severely limited.regulations. There can be no assurance that the Companyfederal government will be ablenot enforce federal laws relating to executecannabis and manage a growth strategy effectively or at all.


5.

We may not be successful in hiring technical personnel because of the competitive market for qualified people.


The Company's future success depends largely on its abilityseek to attract, hire, train and retain highly qualified personnel to provide the Company's services. Competition for such personnel may be intense. There can be no assuranceprosecute cases involving cannabis businesses that the Company will be successful in attracting and retaining the specific personnel it requires to conduct and expand its operations successfully or to differentiate itself from its competitors. The Company's results of operations and growth prospects could be materially adversely affected if the Company were unable to attract, hire, train and retain such qualified personnel.






6.

Our reliance on referrals from outside contacts to develop business may not be effective.


The Company initially will rely on our founder and CEO, Mr. Estus, for a majority of its business leads and believes that other industry consultants will also be an important source of business referralsare otherwise compliant with state laws in the foreseeable future. However, as is typical within the industry, there are no contractual requirements that these industry consultants or outside representatives will use or recommend the Company's professional services in connection with product sales or the sale of specific services offered by the Company. We currently have no contracts or agreements in place with any outside sales representatives or business professionals (industry consultants). No assurances can be given that using independent outside sales reps will result in any meaningful numbers of sales leads or referrals.


7.

Fluctuations in our financial results make quarterly comparisons and financial forecasting difficult.


The Company's future or projected quarterly operating results may vary and reduced levels of earnings or continued losses may be experienced in one or more quarters. Fluctuations in the Company's quarterly operating results could result from a variety of factors, including changes in the levels of revenues, the size and timing of orders, changes in the mix of future projects, the timing of new offerings by the Company or its competitors, new office openings by the Company, changes in pricing policies by the Company or its competitors, market acceptance of new and enhanced services offered by the Company or its competitors, changes in operating expenses, availability of qualified personnel, disruption in sources of related product and services, the effect of potential acquisitions and industry and general economic factors. The Company will have limited or no control over many of these factors. The Company's expenses we believe will be based upon, in part, on its expectation as to future or projected revenues. If revenue levels are below expectations, operating results are likely to be adversely affected.


Because of these fluctuations and uncertainties, our future operating results may fail to meet the expectations of investors. If this happens, any trading price of our common stock could be materially adversely affected.

8.

There are significant potential conflicts of interest.


Our personnel will be required to commit substantial time to our affairs and, according­ly, these individual(s) (particularly our founder and CEO) may have a conflict of interest in allocating management time among business activities. In the course of other business activities, certain key personnel (particularly our founder and CEO) may become aware of business opportu­nities which may be appropriate for presenta­tion to us, as well as other businesses with which they are affiliated. As such, there may be con­flicts of interest in determining to which entity a particular business opportunity should be presented to. We cannot provide any assurance that our efforts to eliminate the potential impact of conflicts of interest will be effective.


9.

We will need to establish additional relationships with developers and consultants to fully develop and market our company and its intended products or services.


We do not possess all of the resources necessary to develop our products or services on a mass scale. We will need to develop a network of third-party agents that will be able to carry out our intended market penetration, as well as enhance marketing or sales force strategy through appropriate arrangements with local developers and consultants to develop our products and services. IfWhile we are not ablesubject to enlistthese laws, the servicesuncertainty of third-party vendors,U.S. federal enforcement practices going forward and the inconsistency between U.S. federal and state laws and regulations present risks for our dispensary safes business, including incurring substantial costs associated with compliance or seek out consultants,altering certain aspects of our business will suffer.plan.


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10.

Following the effective date of our Registration Statement, of which this prospectus is a part, we will beWe are subject to the periodic reporting requirements of Section 15(d) and 12(g) of the Exchange Act that will require us to incur audit fees and legal fees in connection with the preparation of such reports. These additional costs could reduce or eliminate our ability to earn a profit.


Following the effective date of our registration statement of which this prospectus is a part, we will beWe are required to file periodic reports with the SEC pursuant to the Exchange Act and the rules and regulations promulgated thereunder. In order to comply with these requirements, our independent registered public accounting firm will have to review our financial statements on a quarterly basis and audit our financial statements on an annual basis. Moreover, our legal counsel will have to review and assist in the preparation of such reports. The costs charged by these professionals for such services cannot be accurately predicted at this time because factors such as the number and type of transactions that we engage in, and the complexity of our reports cannot be determined at this time and will affect the amount of time to be spent by our auditors and attorneys. However, the incurrence of such costs will obviously be an expense to our operations and thus have a negative effect on our ability to meet our overhead requirements and earn a profit.






However, for as long as we remain an “emerging growth company”a smaller reporting company as defined in the Jumpstart Our Business Startups ActItem 10(f)(1) of 2012, or JOBS Act,Regulation S-K, we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies”smaller reporting companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, reduced financial statement disclosure in registration statements, which must include two years of audited financial statements, reduced financial statement disclosure in annual reports on Form 10-K,and exemptions from the requirementsauditor attestation of holding an annual nonbinding advisory vote on executive compensation and seeking nonbinding stockholder approvalmanagement’s assessment of any golden parachute payments not previously approved.internal control over financial reporting. We may take advantage of these reporting exemptions until we are no longer an “emerging growtha smaller reporting company.


We will remain an “emerging growth company” for up to five years, although we would cease to be an “emerging growth company” prior to such time if we have more than $1.0 billion in annual revenue, more than $700 million in market value of our common stock is held by non-affiliates or we issue more than $1.0 billion of non-convertible debt over a three-year period.


If we cannot provide reliable financial reports or prevent fraud, our business and operating results could be harmed, investors could lose confidence in our reported financial information, and the trading price of our common stock,Common Stock, if a market ever develops, could drop significantly.


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11.

Our internal controls may be inadequate, which could cause our financial reporting to be unreliable and lead to misinformation being disseminated to the public.


Our management is responsible for establishing and maintaining adequate internal control over our financial reporting. As defined in Exchange Act Rule 13a-15(f), internal control over financial reporting is a process designed by, or under the supervision of, the principal executive and principal financial officer and effected by the Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:


pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company;

provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and/or directors of the Company; and

provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.

·

pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company;


·

provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and/or directors of the Company; and


·

provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company's assets that could have a material effect on the financial statements.


Our internal controls may be inadequate or ineffective, which could cause financial reporting to be unreliable and lead to misinformation being disseminated to the public. Furthermore, our accounting policies and methods are fundamental to how we report our financial condition and results of operations, and they may require our management to make estimates about matters that are inherently uncertain. Investors relying upon this misinformation may make an uninformed investment decision.


Failure to achieve and maintain an effective internal control environment could cause us to face regulatory action and also cause investors to lose confidence in our reported financial information, either of which could have a material adverse effect on the Company’s business, financial condition, results of operations and future prospects.


However, our auditors will not be required to formally attest to the effectiveness of our internal control over financial reporting pursuant to Section 404 until we are no longer an “emerging growth company” as defined in the JOBS Act if we take advantage of the exemptions available to us through the JOBS Act.a smaller reporting company.


RISKS RELATED TO AN INVESTMENT IN OUR SECURITIES

12.

The costs of being a public company could result in us being unable to continue as a going concern.


As a public company, we are required to comply with numerous financial reporting and legal requirements, including those pertaining to audits and internal control. The costs of maintaining all public company reporting requirements could be significant and may preclude us from seeking financing or equity investment on terms acceptable to us and our shareholders. We estimate these costs to be in excess of $75,000 per year and may be higher if our business volume or business activity increases significantly. Our current estimate of costs does not include the necessary expenses associated with compliance, documentation and specific reporting requirements of Section 404 as we will not be subject to the full reporting requirements of Section 404 until we exceed $75 million in market capitalization or we decide to opt-out of the “emerging growth company” as defined under the JOBS Act. This exemption is available to us under the JOBS Act or until we have been public for more than five years.






If our revenues are insufficient or non-existent, and/or we cannot satisfy many of these costs through the issuance of shares or debt, we may be unable to satisfy these costs in the normal course of business. This would certainly result in our being unable to continue as a going concern.


13.

Having only one director limits our ability to establish effective independent corporate governance procedures and increases the control of our founder, president, and CEO.


We have only one directorPersons who serves as our sole officer. Accordingly, we cannot establish board committees comprised of independent members to oversee such functions as compensation or audit issues. In addition, currently a vote of the board is decided in favor of the chairman (who is our sole officer), which gives him complete control over all corporate issues.


Until we have a larger board of directors that include independent members, if ever, there will be limited oversight of our CEO’s (and founder’s) decisions and activities with little ability for minority shareholders to challenge or reverse such activities and decisions, even if they are not in the best interests of minority shareholders.


Risks Related to Our Common Stock


14.

The Company is selling the shares offered in this prospectus without an underwriter and may not be able to sell all or any of the shares offered herein.


The shares of common stock are being offered on our behalf by Mr. Estus, our founder and CEO, on a best-efforts basis. No broker-dealer has been retained as an underwriter and no broker-dealer is under any obligation to purchase any shares of common stock. There are no firm commitments to purchase any of the shares in this Offering. Consequently, there is no guarantee that the Company, through its founder, and CEO, is capable of selling all, or any, of the shares of common stock offered hereby. The sale of a small number of shares increases the likelihood that no market will ever develop for our common stock.


15.

Since there is no minimum for this Offering, if only a few persons purchase shares of our common stock they willCommon Stock may lose their money without us ever being even able to develop a market.

In the event that no market forto purchase our shares.


Since therecommon shares is no minimum with respect to the number of shares to be sold by the Company in this Offering, if a small number of shares are sold, we will be unable to even attempt to create a public market of any kind. In such an event,ever created, it is likely that the entire investment of a purchaser in our common stockCommon Stock would be lost. Even if all of the shares in this Offering are purchased, we could have the very same result.


16.

The offering price of our common stock has been determined arbitrarily.


Our offering price has not been determined by an independent financial evaluation, market mechanism or by our auditors,Stockholders’ voting power and is therefore, to a large extent, arbitrary. Our PCAOB-registered public accounting firm has not reviewed management's valuation and, therefore, expresses no opinion as to the fairness of the offering price. As a result, the price of the shares in this Offering may not reflect the value perceived by the market. There can be no assurance that the common stock offered hereby is worth the price for which it will be offered and investors may, therefore, lose a portion of, or their entire, investment.


17.

Shareholdersownership interest may be diluted significantly through our efforts to obtain financing and satisfy obligations through issuance of additional shares.shares.


We do not have a committed sourceOur Second Amended and Restated Articles of financing. Wherever possible,Incorporation authorizes our Board of Directors will attempt to use non-cash considerationissue up to satisfy obligations. In many instances,600,000,000 shares of Common Stock and up to 10,000,000 shares of preferred stock, of which we believe that the non-cash consideration will consisthave designated 100,000 shares as Series A – Super Voting Convertible Preferred Stock (“Series A Preferred Stock”) (which were issued to two members of restrictedour current management, Messrs. Charles A. Ross, Jr. and Douglas Grau, and have superior voting rights of 1,000 to 1 over shares of our common stock. OurCommon Stock, resulting in nearly 96% of the available stockholder votes upon the closing of the offering.). While the Certificate of Designation is named “Certificate of Designation of Series A Convertible Preferred Stock”, the Company’s Existing Series A Preferred Stock is not convertible into shares of Common Stock of the Company or redeemable by either the Company or another person. The power of the Board of Directors has authority, without actionto issue shares of Common Stock, preferred stock or votewarrants or options to purchase shares of Common Stock or preferred stock is generally not subject to stockholder approval, except for issuances of more than 20% of the shareholders, to issue allcompany’s outstanding Common Stock or partvoting power.

Given that we do not have committed sources of the authorized (100,000,000) shares but unissued (85,000,000) shares assuming the sale of 6,000,000 shares in this Offering. In addition, if a trading market develops for our common stock,financing, we may attempt to raise capital by selling shares, possibly at a deep discount to market. These actions willmay result in dilution of the ownership interests and voting power of existing shareholders,stockholders, further dilute common stockCommon Stock book value, and that dilution may be material.






18.

The proposed aggregate proceedsdelay, defer or prevent a change of this Offering are slightly more than the estimated costscontrol. As of this Offering, so the Company may not receive any economic benefit from the completion of this Offering.


The proposed maximum aggregate proceeds of this Offering ($60,000) are slightly more than the proposed costs to complete this Offering ($28,000). We have estimated the costs of this Offering ; however , these costs could significantly rise through delay and other conditions that areFebruary 3, 2022, we had approximately 2.55 million total shares outstanding, out of our control. We may, therefore, receive no financial benefit from the completion of this Offering and may pay for some of the offering costs from proceeds of operations or from other sources such as loans from officer(s) or other related and non-related parties.


19.

The interests of shareholders may be hurt because we can issue shares to individuals or entities that support existing management with such issuances serving to enhance existing management’s ability to maintain control of our company.


Our Board of Directors has authority, without action or vote of the shareholders, to issue all or part of the authorized but unissued common shares. Such issuances may be issued to parties or entities committed to supporting existing management and the interests of existing management which may not be the same as the interests of other shareholders. Our ability to issue shares without shareholder approval serves to enhance existing management’s ability to maintain control of our company.


20.

Our articles of incorporation provide for indemnification of officers and directors at our expense and limit their liability that may result in a major cost to us and hurt the interests of our shareholders because corporate resources may be expended for the benefit of officers and directors.


Our Articles of Incorporation at Article XI provide for indemnification as follows: “No director or officer of the corporation shall be personally liable to the corporation or any of its stockholders for damages for breach of fiduciary duty as a director or officer; provided, however, that the foregoing provision shall not eliminate or limit the liability of a director or officer: (i) for acts or omissions which involve intentional misconduct, fraud or knowing violation of law; or (ii) the payment of dividends in violation of Section 78.300 of the Nevada Revised Statutes. Any repeal or modification of an Article by the stockholders of the corporation shall be prospective only, and shall not adversely affect any limitation of the personal liability of a director or officer of the corporation for acts or omissions prior to such repeal or modification”.


We have been advised that, in the opinion of the SEC, indemnification for liabilities arising under federal securities laws is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification for liabilities arising under federal securities laws, other than the payment by us of expenses incurred or paid by a director, officer or controlling person in the successful defense of any action, suit or proceeding, is asserted by a director, officer or controlling person in connection with our activities, we will (unless in the opinion of our counsel, the matter has been settled by controlling precedent) submit to a court of appropriate jurisdiction, the question whether indemnification by us is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. The legal process relating to this matter if it1,849,069 were to occur is likely to be very costly and may result in us receiving negative publicity, eitherof which factors is likely to materially reduce the market and price for our shares, if such a market ever develops.


21.

Currently, there is no established public market for our securities, and there can be no assurances that any established public market will ever develop or that our common stock will be quoted for trading and, even if quoted, it is likely to be subject to significant price fluctuations.


Prior to the date of this prospectus, there has not been any established trading market for our common stock, and there is currently no established public market whatsoever for our securities. We have contacted a market maker to file an application with FINRA on our behalf so as to be able to quote the shares on the OTCBB maintained by FINRA commencing upon the effectiveness of our registration statement of which this prospectus is a part and the subsequent closing of this Offering. There can be no assurance that the market maker’s application when filed will be accepted by FINRA nor can we estimate as to the time period that the application will require. We are not permitted to file such application on our own behalf. If the application is accepted, there can be no assurances as to whether:


(i)

any market for our shares will develop;


(ii)

the prices at which our common stock will trade; or


(iii)

the extent to which investor interest in us will lead to the development of an active, liquid trading market. Active trading markets generally result in lower price volatility and more efficient execution of buy and sell orders for investors.






If we become able to have our shares of common stock quoted on the OTCBB,Common Stock, $0.001 par value, 100,000 were Preferred shares Class A, $0.001 par value, and 75,143 were Preferred shares Class B, $0.001 par value. As of December 31, 2021, we will then try, through a broker-dealer and its clearing firm, to become eligible with the Depository Trust Company (“DTC”) to permit our shares to trade electronically. If an issuer is not “DTC-eligible,” then its shares cannot be electronically transferred between brokerage accounts, which, based on the realities of the marketplace as it exists today (especially the OTCBB), means thathad approximately 701,776 shares of Common Stock issuable upon exercise of outstanding stock warrants with a company will not be traded (technically the shares can be traded manually between accounts, but this may take many days and is not a realistic option for issuers relying on broker dealers for stock transactions, like all companies on the OTCBB. What this boils down to is while DTC-eligibility is not a requirement to trade on the OTCBB, it is a necessity to process trades if a company’s stock is going to trade with any volume. There are no assurances that our shares will ever become DTC-eligible or, if they do, how long it will take.


In addition, our common stock is unlikely to be followed by any financial analysts, and there may be few institutions acting as market makers for our common stock. Either of these factors could adversely affect the liquidity and trading price of our common stock. Until our common stock is fully distributed and an orderly market develops in our common stock, if ever, the price at which it trades is likely to fluctuate significantly. Prices for our common stock will be determined in the marketplace and may be influenced by many factors, including the depth and liquidity of the market for shares of our common stock, developments affecting our business, including the impact of the factors referred to elsewhere in these Risk Factors, investor perception of the Company and general economic and market conditions. No assurances can be provided that an orderly or liquid market will ever develop for our common stock.


Because of the anticipated low price of the securities being registered, many brokerage firms may not be willing to effect transactions in these securities. Purchasers of our securities should be aware that any market that develops will be subject to the penny stock restrictions. See “Plan of Distribution” and Risk Factor Number 22 below.


22.

Any market that develops in shares of our common stock will be subject to the penny stock regulations and restrictions pertaining to low priced stocks that will create a lack of liquidity and make trading difficult or impossible.


The trading of our securities, if any, will be in the over-the-counter market which is commonly referred to as the OTCBB as maintained by FINRA. As a result, an investor may find it difficult to dispose of, or to obtain accurate quotations as to the price of, our securities.


Rule 3a51-1 of the Exchange Act establishes the definition of a “penny stock,” for purposes relevant to us, as any equity security that has a minimum bid price of less than $5.00 per share or with anweighted average exercise price of less than $5.00$8.45 per share, subjectshare.

Additionally, series of preferred stock may carry the preferred right to a limited numberour assets upon liquidation, the right to receive dividend payments before dividends are distributed to the holders of exceptions which are not available to us. It is likely that our shares will be considered to be penny stocks for the immediately foreseeable future. This classification severely and adversely affects any market liquidity for our common stock.


For any transaction involving a penny stock, unless exempt, the penny stock rules require that a brokerCommon Stock, superior voting or dealer approve a person's account for transactions in penny stocksconversion rights and the broker or dealer receive from the investor a written agreementright to the transaction setting forth the identity and quantityredemption of the penny stock to be purchased. In order to approveshares, together with a person's account for transactions in penny stocks, the broker or dealer must obtain financial information and investment experience and objectives of the person and make a reasonable determination that the transactions in penny stocks are suitable for that person and that that person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks.


The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prepared by the SEC relating to the penny stock market, which, in highlight form, sets forth:


·

the basis on which the broker or dealer made the suitability determination; and


·

that the broker or dealer received a signed, written agreement from the investorpremium, prior to the transaction.


Disclosure also has to be made about the risks of investing in penny stock in both public offerings and in secondary trading and commissions’ payable to both the broker-dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor in cases of fraud in penny stock transactions. Additionally, monthly statements have to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks.






Because of these regulations, broker-dealers may not wish to engage in the above-referenced necessary paperwork and disclosures or may encounter difficulties in their attempt to sell sharesredemption of our common stock, which may affect the ability of selling shareholders or other holders to sell their shares in any secondary market and have the effect of reducing the level of trading activity in any secondary market. These additional sales practice and disclosure requirements could impede the sale of our securities, if and when our securities become publicly traded. In addition, the liquidity for our securities may decrease, with a corresponding decrease in the price of our securities. Our shares, in all probability, will be subject to such penny stock rules for the foreseeable future and our shareholders will, in all likelihood, find it difficult to sell their securities.Common Stock.


23.

The market for penny stocks has experienced numerous frauds and abuses that could adversely impact investors in our stock.

30


Company management believes that the market for penny stocks has suffered from patterns of fraud and abuse. Such patterns include:


·

Control of the market for the security by one or a few broker-dealers that are often related to the promoter or issuer;

·

Manipulation of prices through prearranged matching of purchases and sales and false and misleading press releases;

·

“Boiler room” practices involving high pressure sales tactics and unrealistic price projections by sales persons;

·

Excessive and undisclosed bid-ask differentials and markups by selling broker-dealers; and

·

Wholesale dumping of the same securities by promoters and broker-dealers after prices have been manipulated to a desired level, along with the inevitable collapse of those prices with consequent investor losses.


24.

Any trading market that may develop may be restricted by virtue of state securities “Blue Sky” laws that prohibit trading absent compliance with individual state laws. These restrictions may make it difficult or impossible to sell shares in those states.


There is currently no established public market for our common stock, and there can be no assurance that any established public market will develop in the foreseeable future. Transfer of our common stock may also be restricted under the securities or securities regulations laws promulgated by various states and foreign jurisdictions, commonly referred to as “Blue Sky” laws. Absent compliance with such individual state laws, our common stock may not be traded in such jurisdictions. Because the securities registered hereunder have not been registered for resale under the blue sky laws of any state, the holders of such shares and persons who desire to purchase them in any trading market that might develop in the future, should be aware that there may be significant state blue sky law restrictions upon the ability of investors to sell the securities and of purchasers to purchase the securities. These restrictions prohibit the secondary trading of our common stock. We currently do not intend to and may not be able to qualify securities for resale in at least 17 states which do not offer manual exemptions (or may offer manual exemptions but may not to offer one to us if we are considered to be a shell company at the time of application) and require shares to be qualified before they can be resold by our shareholders. Accordingly, investors should consider the secondary market for our securities to be a limited one. See also “Plan of Distribution-State Securities-Blue Sky Laws”.


25.

Our board of directors (consisting of one person, our founder, president, and CEO) has the authority, without stockholder approval, to issue preferred stock with terms that may not be beneficial to common stockholdersCommon Stockholders and with the ability to affect adversely stockholder voting power and perpetuate their control over us.


Our articlesSecond Amended and Restated Articles of incorporationIncorporation allow us to issue shares of preferred stock without any vote or further action by our stockholders. Our Board of Directors has the authority to fix and determine the relative rights and preferences of preferred stock. Our Board of Directors has the authority to issue preferred stock without further stockholder approval, including large blocks of preferred stock. As a result, our Board of Directors could authorize the issuance of a series of preferred stock that would grant to holders the preferred right to our assets upon liquidation, the right to receive dividend payments before dividends are distributed to the holders of common stockCommon Stock and the right to the redemption of the shares, together with a premium, prior to the redemption of our common stock.Common Stock.






26.Our Common Stock may be affected by limited trading volume and our share price may be volatile, which could adversely impact the value of our Common Stock, and Quotes on OTC markets may not be indicative of the share prices of corporations whose shares are traded on national stock exchanges such as NASDAQ .

The ability

There can be no assurance that an active trading market in our Common Stock will be maintained. Our Common Stock is likely to experience significant price and volume fluctuations in the future, which could adversely affect the market price of our founderCommon Stock without regard to our operating performance and CEOthe market price of our Common Stock after this offering may drop below the price you pay. Quotes on OTC markets, on which are the Company’s Common Stock is currently listed, may not be indicative of the share prices of corporations whose shares are traded on national stock exchanges such as NASDAQ. In addition, we believe that factors such as our operating results, quarterly fluctuations in our financial results and changes in the overall economy or the condition of the financial markets, including as the result of the COVID-19 pandemic, could cause the price of our Common Stock to controlfluctuate substantially. These fluctuations may also cause short sellers to periodically enter the market in the belief that we will have poor results in the future. We cannot predict the actions of market participants and, therefore, can offer no assurances that the market for our business may limitCommon Stock will be stable or eliminate minority shareholders’ ability to influence corporate affairs.appreciate over time.

31

Investors in this offering will experience immediate and substantial dilution in net tangible book value.


UponThe public offering price per Unit is substantially higher than the net tangible book value per share of our outstanding shares of Common Stock. As a result, investors in this offering will incur immediate dilution of $3.63 per share, based on the assumed public offering price of $4.65 per Unit, the mid-point of the estimated offering price range described on the cover of this prospectus. Investors in this offering will pay a price per Unit that substantially exceeds the book value of our assets after subtracting our liabilities. To the extent that the Warrants sold in this offering are exercised, you will experience further dilution. See “Dilution” for a more complete description of how the value of your investment will be diluted upon the completion of this Offering,offering.

Immediately prior to the consummation of this offering, we expect to have approximately 701,776 outstanding stock options to purchase our founderCommon Stock with an average exercise price of $8.45. To the extent that these options are exercised, there may be further dilution.

Warrants are speculative in nature.

The Warrants and CEO will beneficially own an aggregatethe Pre-funded Warrants included in the Units and Pre-funded Units, respectively, in this offering do not confer any rights of 60 percentCommon Stock ownership on their holders, such as voting rights or the right to receive dividends, but rather merely represent the right to acquire shares of our common stock assumingCommon Stock at a fixed price for a limited period of time. Specifically, commencing on the saledate of all shares being registered. Becauseissuance, holders of his beneficial stock ownership, our founder,the Warrants and CEO will be in a positionPre-funded Warrants may exercise their right to continueacquire the Common Stock and pay an exercise price of per share, prior to elect our Board of Directors, decide all matters requiring stockholder approval and determine our policies. The interests of our founder and CEO may differfive years from the interestsdate of other shareholdersissuance, after which date any unexercised Warrants and Pre-funded Warrants will expire and have no further value. Until holders of the Warrants and Pre-funded Warrants acquire Common Stock upon exercise of the Warrants or Pre-funded Warrants, the holders will have no rights with respect to the Common Stock issuable upon exercise of the Warrants and Pre-funded Warrants. Upon exercise of the Warrants or Pre-funded Warrants, the holder will be entitled to exercise the rights of a Stockholder as to the security exercised only as to matters for which the record date occurs after the exercise. Moreover, following this offering, the market value of the Warrants is uncertain and there can be no assurance that the market value of the Warrants will equal or exceed their public offering price. There can be no assurance that the market price of the Common Stock will ever equal or exceed the exercise price of the Warrants and Pre-funded Warrants, and consequently, whether it will ever be profitable for holders of the Warrants and Pre-funded Warrants to exercise the Warrants or Pre-funded Warrants.

Although our Nasdaq listing application to list the Warrants included in the Units has been approved subject to notice of issuance,, there is no assurance that an active trading market will develop.

Although our Nasdaq listing application to list the Warrants included in the Units has been approved subject to notice of issuance, there can be no assurance that there will be an active trading market for the Warrants. There is presently no established public trading market for the Pre-funded Warrants being offered in this offering and we do not expect a market to develop. In addition, we do not intend to apply to list the Pre-funded Warrants on any securities exchange or nationally recognized trading system, including the Nasdaq. Without an active trading market, the liquidity of shares, businessthe Warrants and Pre-funded Warrants will be limited.

Provisions of the Warrants and Pre-funded Warrants offered by this prospectus could discourage an acquisition of us by a third party.

In addition to the discussion of the provisions of our governing organizational documents, certain provisions of the Warrants and Pre-funded Warrants offered by this prospectus could make it more difficult or expensive for a third party to acquire us. The Warrants and Pre-funded Warrants prohibit us from engaging in certain transactions withconstituting “fundamental transactions” unless, among other things, the surviving entity assumes our obligations under the Warrants and Pre-funded Warrants. These and other provisions of the Warrants and Pre-funded Warrants offered by this prospectus could prevent or salesdeter a third party from acquiring us even where the acquisition could be beneficial to other companies, selection ofyou.

Our executive officers and directors, and their affiliated entities, along with our two other business decisions. Minority shareholders would have no way of overriding decisions made by our founder and CEO. This level of control may have an adverse impact on the market valuelargest stockholders, own a significant percentage of our stock and will be able to exert significant control over matters subject to stockholder approval.

Upon consummation of this offering (based on shares becauseoutstanding as of January 12, 2022), our founderexecutive officers and CEO may institute or undertake transactions, policies or programs that may result in losses, may not take any steps to increasedirectors, together with entities affiliated with such individuals, along with our visibility in the financial community or may sell sufficient numbers of shares to significantly decrease our price per share.


27.

Alltwo other largest stockholders, will beneficially own approximately 20.1% of our presently issuedCommon Stock (approximately 18.5% if the underwriters’ option is exercised in full). Accordingly, these stockholders may, as a practical matter, continue to be able to control the election of a majority of our directors and outstanding common shares are restricted under Rule 144the determination of all corporate actions after this offering. This concentration of ownership could delay or prevent a change in control of the Securities Act,Company.

Additionally, as amended. Whenreferenced above, we issued 100,000 shares of Series A Preferred Stock to two members of our current management, Messrs. Charles A. Ross, Jr. and Douglas Grau, which have superior voting rights of 1,000 to 1 over shares of our Common Stock, resulting in nearly 96% of the restrictionavailable stockholder votes upon the closing of the offering. While the Certificate of Designation is named “Certificate of Designation of Series A Convertible Preferred Stock”, the Company’s Existing Series A Preferred Stock is not convertible into shares of Common Stock of the Company or redeemable by either the Company or another person.

We do not anticipate that we will pay dividends on any or all of these shares is lifted,our Common Stock and, the shares are soldconsequently, your ability to achieve a return on your investment will depend on appreciation in the open market, the price of our common stock could be adversely affected.Common Stock.


All ofWe have never declared or paid any dividends on our Common Stock. We intend to retain any earnings to finance the presently outstanding shares of common stock (9,000,000 shares) are “restricted securities” as defined under Rule 144 promulgated under the Securities Actoperation and may only be sold pursuant to an effective registration statement or an exemption from registration, if available. Rule 144 provides in essence that a person who is not an affiliate and has held restricted securities for a prescribed period of at least six (6) months if purchased from a reporting issuer or twelve (12) months (as is the case herein) if purchased from a non-reporting Company, may, under certain conditions, sell all or any of his shares without volume limitation, in brokerage transactions. Affiliates, however, may not sell shares in excess of one percent of the Company’s outstanding common stock every three months. As a result of revisions to Rule 144 which became effective on February 15, 2008, there is no limit on the amount of restricted securities that may be sold by a non-affiliate (i.e., a stockholder who has not been an officer, director or control person for at least 90 consecutive days) after the restricted securities have been held by the owner for the aforementioned prescribed period of time. A sale under Rule 144 or under any other exemption from the Act, if available, or pursuant to registration of shares of common stock of present stockholders, may have a depressive effect upon the price of the common stock in any market that may develop.


All 9,000,000 issued and outstanding sharesexpansion of our common stock are owned by our founder,business, and CEO, which consists of 6,000,000 and 3,000,000 shares issued for organizational services and tangible and intangible assets which may be sold commencing one year from the date that this Offering is completed. See “Market for Securities”.


28.

Wewe do not expect to payanticipate paying any cash dividends in the foreseeable future. In addition, in the future we may enter into agreements that prohibit or restrict our ability to declare or pay dividends on our Common Stock. As a result, you may only receive a return on your investment in our Common Stock if the market price of our Common Stock increases.

32

We have broad discretion in the use of the net proceeds from this offering and may not use them effectively.


Our management will have broad discretion in the application of the net proceeds from this offering, including for any of the purposes described in the section entitled “Use of Proceeds,” and you will not have the opportunity as part of your investment decision to assess whether the net proceeds will be used appropriately. Because of the number and variability of factors that will determine our use of the net proceeds from this offering, their ultimate use may vary substantially from their currently intended use. Furthermore, our management will have broad discretion in the application of the net proceeds, and investors will be relying on our judgment regarding the application of the net proceeds of this offering.

The failure by our management to apply these funds effectively could harm our business. Pending their use, we may invest the net proceeds from this offering in short-term, investment-grade, interest-bearing securities. These investments may not yield a favorable return to our stockholders. If we do not invest or apply the net proceeds from this offering in ways that enhance stockholder value, we may fail to achieve expected financial results, which could cause our stock price to decline.

RISKS RELATED TO THE INDUSTRY

The industry in which we operate is competitive, price sensitive and subject to risks of governmental regulations or laws. If our competitors are better able to develop and market products that are more effective, less costly, easier to use, or are otherwise more attractive, we may be unable to compete effectively with other companies.

The safe and personal security industry is characterized by intense competition. We will face competition on the basis of product features, reliability, price, apparent value, and other factors. Competitors may include large safe makers and other companies, some of which have significantly greater financial and marketing resources than we do, and firms that are more specialized than we are with respect to particular markets. Our competition may respond more quickly to new or emerging styles, undertake more extensive marketing campaigns, have greater financial, marketing and other resources than ours or may be more successful in attracting potential customers, employees and strategic partners.

Our industry could experience greater scrutiny and regulation by governmental authorities, which may lead to greater governmental regulation in the future.

The rapidly growing interest in new concealed carry products that this rapidly growing market may attract the attention of government regulators and legislators. The current trend in legislation is to roll back or minimize access to firearms restrictions, but there can be no assurance that this trend will continue.

33

USE OF PROCEEDS

Based upon an assumed public offering price of $4.65 per Unit (the mid-point of the estimated offering price range described on the cover of this prospectus), we estimate that the net proceeds in this offering will be approximately $9,450,000 after deducting underwriting discounts and commissions and estimated offering expenses payable by us, or $10,867,500 if the Representative exercises its option in full.

The Company intends to use the net proceeds from this offering as follows:

Approximately $1,087,123 to repay outstanding indebtedness to an accredited related party which bears interest at 12% and is due October 6, 2024. Since this indebtedness was incurred within one year, the use of proceeds for this indebtedness was $638,331.27 to repay a note from a corporation, an initial payment of $100,000 toward repayment of a note from an accredited investor, an initial payment of $100,000 toward repayment of a note from an accredited investor, a payment of $50,000 to retire a note from an accredited investor, a purchase of $110,000 worth of inventory from our manufacturer and the balance of working capital;
Approximately $576,985 to repay outstanding indebtedness to an accredited related party which bears interest at 8.4% and is due February 15, 2022;
Approximately $50,000 to repay outstanding indebtedness to an accredited related party which bears 0% interest and is due December 1, 2022. Since this indebtedness was incurred within one year, the use of proceeds for this indebtedness was a $100,000 deposit toward the purchase of inventory from our manufacturer;
Approximately $36,161 to repay outstanding indebtedness to an accredited investor which bears interest at 15% and is due February 15, 2022;
Approximately $225,000 to repay outstanding indebtedness to an accredited investor which bears interest at 0% and was due February 16, 2022;
Approximately $53,692 to repay outstanding indebtedness to an institutional investor which bears interest at 16% and was due August 3, 2021 (no acceleration of the debt or notice of default has been sent by this note holder);
Approximately $224,000 to repay outstanding indebtedness to an accredited investor which bears interest at 12% and was due October 13, 2021 (no acceleration of the debt or notice of default has been sent by this note holder);
Approximately $109,764 to repay outstanding indebtedness to an accredited investor which bears interest at 12% and is due February 15, 2022;
Approximately $131,852 to repay outstanding indebtedness to an accredited investor which bears interest at 18% and is due February 15, 2022;
Approximately $21,792 to repay outstanding indebtedness to an accredited investor which bears interest at 12% and is due February 15, 2022;
Approximately $7,152 to repay outstanding indebtedness to an accredited investor which bears interest at 12% and is due February 15, 2022;
Approximately $6,868,375 for general corporate purposes, including working capital, increased research and development expenditures and funding our growth strategies.

We plan to use the net proceeds we receive from this offering, and any proceeds from the exercise of Warrants or Pre-funded Warrants, for the following purposes:

  

Use of Net

Proceeds

 
Working Capital $2,000,000 
Research and Development $500,000 
Repayment of Debt $2,600,000 
Funding for Growth Strategies $4,350000 

The foregoing represents our current intentions based upon our present plans and business conditions to use and allocate the net proceeds of this offering. Our management, however, will have some flexibility and discretion to apply the net proceeds of this offering. If an unforeseen event occurs or business conditions change, we may use the proceeds of this offering differently than as described in this prospectus. To the extent that the net proceeds we receive from this offering are not immediately used for the above purposes, we intend to invest our net proceeds in short-term, interest-bearing bank deposits or debt instruments.

Assuming all 2,258,065 Units are sold by us and assuming no sale of Pre-funded Units, we expect that the net proceeds, together with our existing cash and cash equivalents will enable us to fund our operations for at least 24 months. In addition, we have granted the Representative a 45-day option to purchase up to an additional 338,710 shares of Common Stock, or Pre-funded Warrants to purchase up to 338,710 shares of Common Stock and/or Warrants to purchase up to 338,710 shares of Common Stock based on a public offering of $4.65 (equal to 15% of the number of shares of Common Stock, Pre-funded Warrants and Warrants underlying the Units or Pre-funded Units sold in the offering). We will use the proceeds from the sale of these additional shares for repayment of debt, working capital and general corporate purposes.

The expected use of net proceeds represents our intentions based upon our current plans and business conditions, which could change in the future as our plans and business conditions evolve and change. The amounts and timing of our actual expenditures, specifically with respect to working capital, may vary significantly depending on numerous factors. As a result, our management will retain broad discretion over the allocation of such net proceeds. Furthermore, in the event we make significant capital expenditures, the net proceeds of this offering may not be sufficient to fund such expenditures, and we may need to raise additional capital. Pending any ultimate use of any portion of the proceeds from this offering, if the anticipated proceeds will not be sufficient to fund all the proposed purposes, our management will determine the order of priority for using the proceeds, as well as the amount and sources of other funds needed.

34

DIVIDEND POLICY

We have never declared or paid any cash dividends on our commoncapital stock. We do not expectAny future determination to paydeclare cash dividends will be made at the discretion of our Board, subject to applicable laws, and will depend on a number of factors, including our common stock at any time in the foreseeable future. The future paymentfinancial condition, results of dividends directly depends upon our future earnings,operations, capital requirements, financial requirementscontractual restrictions, general business conditions, and other factors that our Board of Directors will consider. Sincemay deem relevant. Nevada law limits when we can pay dividends on our equity securities. Further, our continuing operating losses require us to use funds we receive in financings to meet our working capital needs, and we do not anticipateexpect to pay dividends in the near term. We may also be restricted from paying dividends per restrictive covenants in existing debt agreements.

35

CAPITALIZATION

Set forth below is our cash dividends on our common stock, return on your investment, if any, will depend solelyand capitalization as of September 30, 2021:

on an increase, if any,actual basis;

● on a pro forma basis to reflect : (i) the issuance and sale of the Units by us in this offering at the public offering price of $4.65, after deducting the estimated discounts, non-accountable expense allowance and the estimated offering expenses payable by us for net proceeds of $9,450,000; (ii) the automatic conversion of the Cavalry Bridge Loan into 336,230 shares of Common Stock and 336,230 warrants to purchase Common Stock based on (a) a principal amount owed as of January 31, 2022 of $1,150,000, and (b) accrued interest owed as of January 31, 2022 of $23,441; (iii) the conversion of debt into 186,066 shares of Common Stock based on principal amount owed as of January 31, 2022 of $747,985; and (iv) the repayment of $2,600,000 in debt as detailed in the marketUse of Proceeds section of this prospectus.

  As of September 30, 2021 
  

 

Actual

(unaudited)

  

Pro Forma As Adjusted

(unaudited)

 
Cash $218,332  $7,086,707 
Total Liabilities  (4,664,392)   (161,341) 
   -   - 
Preferred stock, Series A, $0.001 par value; 10,000,000 shares authorized; 100,000 issued and outstanding as of September 30, 2021  100   100 
Preferred stock, Series B, $0.001 par value; 10,000,000 shares authorized; 276,501 shares issued and outstanding as of September 30, 2021 $277  $75 
Common Stock, $0.001 par value; 600,000,000 shares authorized; 1,506,353 shares issued and outstanding as of September 30, 2021 $1,507  $4,287 
Additional paid-in capital $22,421,898  $33,791,082 
Accumulated (deficit) $(25,760,803) $(25,760,803)
Total stockholders’ equity $(3,337,021) $8,034,741 

You should read the information in the table above together with our unaudited consolidated financial statements and related notes, and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” each included elsewhere in this prospectus. The figures referenced in this “Capitalization” section reflect the Reverse Stock Split of the outstanding Common Stock of the Company at an assumed one-for-eighty (1:80) ratio to occur immediately following the effective date but prior to the closing of the offering.

The table above under the heading “Actual” is based on 1,506,353 shares of Common Stock outstanding as of September 30, 2021, and excludes the following as of that date:

● 465,512 shares of Common Stock issuable upon exercise of outstanding stock warrants, with a weighted average exercise price of $8.80 per share;

● 345,627 shares of Common Stock issuable upon conversion of 276,501 shares of Series B Preferred Stock as of September 30, 2021;

● any securities issuable upon exercise of the Representative’s option.

36

DILUTION

If you invest in our Units or Pre-funded Units in this offering, your interest will be diluted to the extent of the difference between the public offering price per share of Common Stock that is part of the Unit or Pre-funded Unit, as applicable, and the as adjusted net tangible book value per share of Common Stock immediately after this offering. The figures referenced in this “Dilution” section reflect the Reverse Stock Split of the outstanding Common Stock of the Company at an assumed one-for-eighty (1:80) ratio to occur immediately following the effective date but prior to the closing of the offering.

Our historical net tangible book value as of September 30, 2021, was ($4,711,382), or ($1.988) per share of Common Stock. Our historical net tangible book value is the amount of our total tangible assets less our liabilities. Historical net tangible book value per share of Common Stock is our historical net tangible book value divided by the number of outstanding Common Stock as of September 30, 2021.

The pro forma net tangible book value of our common stock.Common Stock as of September 30, 2021, was $1.023 per share of Common Stock. Pro forma net tangible book value per share represents our total tangible assets less our total liabilities, divided by the number of outstanding Common Stock, after giving effect to the pro forma adjustments referenced under “Capitalization.”


29.

After giving effect to the sale of Units that we are offering, and assuming no sale of any Pre-funded Units, attributing no value to the Warrants, at an assumed initial public offering price of $4.65 per share, which is the mid-point of the estimated offering price described on the cover of the prospectus, after deducting underwriting discounts and commissions and estimated offering expenses payable by us, our net tangible book value on a pro forma adjusted basis as of September 30, 2021, would have been $1.023 per share of Common Stock. This amount represents an immediate increase in net tangible book value of $3.011 per share of Common Stock to our existing stockholders and an immediate dilution of $3.627 per share of Common Stock to new investors purchasing Common Stock in this offering. We are an “emerging growth company” and cannot be certain whetherdetermine dilution by subtracting the reduced disclosure requirements applicable to emerging growth companies will make our common stock less attractive to investors.pro forma as adjusted net tangible book value per share after this offering from the amount of cash that a new investor paid for a share of Common Stock.


We are an “emerging growth company,” as defined

Each $1.00 increase or decrease in the JOBS Act,assumed public offering price of $4.65 per share would increase or decrease the net proceeds to us from this offering by approximately $0.90 assuming that the amount of Units offered by us, as set forth on the cover page of this prospectus, remains the same, and after deducting underwriting discounts and commissions payable by us. We may also increase or decrease the number of Units we are offering. An increase or decrease of 1,000 Units offered by us in this offering would increase or decrease the net proceeds to us by approximately $4,185, assuming that the assumed price per Unit to the public remains the same, and after deducting underwriting discounts and commissions payable by us. We do not expect that a change by these amounts in the offering price to the public or the Common Stock offered by us would have a material effect on our uses of the proceeds from this offering, although it may accelerate the time at which we will need to seek additional capital.

The following table illustrates this dilution:

Assumed initial public offering price per share (attributing no value to the Warrants) $4.650 
Net tangible book value per Common Stock as of September 30, 2021 $(1.988)
Pro forma net tangible book value per share of Common Stock as of September 30, 2021 $1.023
Pro forma as adjusted net tangible book value per share of Common Stock as of September 30, 2021, to give effect to this offering $

1.023

Dilution per share to new investors in this offering $(3.627)

A $1 increase (decrease) in the assumed initial public offering price of $4.65 per share of Common Stock, would increase (decrease) the as adjusted net tangible book value per share by $0.10, and increase (decrease) dilution to new investors by $0.90 per share, in each case assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting underwriting discounts and commissions and estimated offering expenses payable by us.

The foregoing discussion and table do not take advantageinto account further dilution to new investors that could occur upon the exercise of outstanding Warrants having a per share exercise or conversion price less than the per share offering price to the public in this offering.

If the underwriters exercise in full their option to purchase additional Common Stock in this offering, the as adjusted net tangible book value after the offering would be $1.238 per share, the increase in net tangible book value to existing stockholders would be $3.227 per share, and the dilution to new investors would be $3.412 per share, in each case assuming an initial public offering price of $4.65 per share.

The table above under the heading “Actual” is based on 1,506,353 shares of Common Stock outstanding as of September 30, 2021 and excludes the following as of that date:

● 345,627 shares of Common Stock issuable upon conversion of 276,501 shares of Series B Preferred Stock as of September 30, 2021;

● any securities issuable upon exercise of the Representative’s option.

37

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction with our consolidated financial statements and related notes appearing elsewhere in this Prospectus. In addition to historical information, this discussion and analysis contains forward-looking statements that involve risks, uncertainties, and assumptions. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies”factors, including but not limited to not being required to comply withthose set forth in “Risk Factors.”

Overview

The Company focuses primarily on marketing branded safes and personal security products, including concealed carry/self-defense products. Additionally, the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reportsCompany designs and proxy statements,produces branded apparel and exemptions from the requirements of holding an annual non-binding advisory vote on executive compensationother accessories. The Company promotes and nonbinding stockholder approval of any golden parachute payments not previously approved. We cannot predict if investors will find our common stock less attractive because we will rely on these exemptions. If some investors find our common stock less attractive assells its products primarily through retailers using a result, there may be a less active trading market for our common stockdealer network, various leading national and our stock price may be more volatile.






In addition, Section 107 of the JOBS Act provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. However, we are choosing to “opt out” of such extended transition period,regional retailers, local specialty sports, hunting and as a result, we will comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. Section 107 of the JOBS Act provides that our decision to opt out of the extended transition period for complying with new or revised accounting standards is irrevocable.


30.

Because we are not subject to compliance with rules requiring the adoption of certain corporate governance measures, our stockholders have limited protection against interested director transactions, conflicts of interestfirearms stores. The Company also markets and similar matters.


The Sarbanes-Oxley Act of 2002,sells its products online, through its website, as well as rule changes proposedon Amazon.com where customers can place an order for the Company’s branded backpacks and enacted byapparel items. The Company’s products have the American Rebel Brand imprint.

Recent Developments and Trends

Amended and Restated Articles of Incorporation

Pursuant to the May 21, 2021, majority consent of stockholders in lieu of an annual meeting, the Company amended and restated its Articles of Incorporation effective as of July 14, 2021. A copy of the amended and restated articles of incorporation were attached to the Form 8-K filed with the SEC on July 28, 2021, as Exhibit 3.1.

Articles – Amended Designation of Series B Preferred Stock

Effective July 26, 2021, the New Yorkboard of directors of the Company approved an amendment to the certificate of designation of the Company’s Series B Preferred Stock to increase the authorized shares of Series B Preferred Stock from 250,000 shares to 350,000. The amended certificate of designation was attached to the Form 8-K with the SEC filed on July 28, 2021, as Exhibit 4.1.

Amended and AmericanRestated Articles of Incorporation, Bylaws and Reverse Stock ExchangesSplit

On November 26, 2021, the Company filed a Schedule 14C with the Securities and Exchange Commission to amend our Articles of Incorporation and Bylaws, and to approve the Reverse Stock Split. These amendments to the Company’s Articles of Incorporation and Bylaws will become effective on or after December 20, 2021.

The amendments to our Articles of Incorporation are modifications to: (i) adopt a forum selection provision (Article XIII) to require that any or all internal corporate claims, including claims made in the right of the Company, shall be brought solely and exclusively in any or all of the courts of the State of Nevada; (ii) adopt a severability provision (Article XIV); and (iii) restate the Articles of Incorporation. The amendments to our Bylaws are modifications to better reflect the business of the Company and in order to improve administrative and governing procedures for it and the NASDAQprotection of its stockholders.

The Board of Directors recommended, and the voting stockholders approved an amendment (Article VI) to the Company’s Articles of Incorporation to effectuate a Reverse Stock Split at a ratio of up to one-for-200, as the Board of Directors may determine. The Board of Directors believe that the Reverse Stock Split is beneficial for the Company’s potential listing of Common Stock on Nasdaq Capital Market and improving marketability and liquidity of the Company’s Common Stock.

The description of the amendments to the Articles of Incorporation and Bylaws, and approval of the Reverse Stock Split is qualified in its entirety by reference to the actual changes in the Articles of Incorporation, copies of which are attached as Appendix A and B, and Bylaws, a copy of which is attached as Appendix C, to the Company’s definitive Information Schedule 14C, filed with the Securities and Exchange Commission on November 26, 2021.

Results of Operations

From inception through September 30, 2021, we have generated an operating deficit of $25,760,803. We expect to incur additional losses during the fiscal year ending December 31, 2021, and beyond, principally as a result of Sarbanes-Oxley, require the implementation of various measures relating to corporate governance. These measures are designed to enhance the integrity of corporate managementour increased investment in inventory, marketing expenses, and the securities marketslimited sales of our new products as we seek to establish them in the marketplace.

Nine Months Ended September 30, 2021 Compared To Nine Months Ended September 30, 2020

Revenue and applycost of goods sold

For the nine months ended September 30, 2021, we reported Sales of $848,357, compared to securities that are listed on those exchanges orSales of $899,238 for the NASDAQ Stock Market. Becausenine months ended September 30, 2020.

For the nine months ended September 30, 2021, we are not presently requiredreported Cost of Sales of $716,943, compared to comply with manyCost of Sales of $659,006 for the nine months ended September 30, 2020.

For the nine months ended September 30, 2021, we reported Gross Profit of $131,414, compared to Gross Profit of $240,232 for the nine months ended September 30, 2020. Sales of our products began during the fourth quarter of 2016.

Operating Expenses

Total operating expenses for the nine months ended September 30, 2021, were $2,795,037 compared to $2,414,991 for the nine months ended September 30, 2020, as further described below.

For the nine months ended September 30, 2021, we incurred consulting and business development expenses of $1,774,003, compared to consulting and business development expenses of $404,700 for the nine months ended September 30, 2020. The change in consulting and business development expenses was due to the issuance of stock as compensation.

For the nine months ended September 30, 2021, we incurred product development expenses of $275,780, compared to product development expenses of $275,565 for the nine months ended September 30, 2020. There was no significant change in product development expenses.

For the nine months ended September 30, 2021, we incurred marketing and brand development expenses of $138,783, compared to marketing and brand development expenses of $331,775 for the nine months ended September 30, 2020. The change in marketing and brand development expenses relates primarily to a decrease of activities related to the ongoing COVID-19 pandemic, public health restrictions and cost-saving measures.

For the nine months ended September 30, 2021, we incurred general and administrative expenses of $603,727, compared to general and administrative expenses of $1,356,430 for the nine months ended September 30, 2020. The change relates primarily to a decrease in administrative expenses establishing company processes and procedures and cost-saving measures.

38

For the nine months ended September 30, 2021, we incurred depreciation expense of $2,744, compared to depreciation expense of $46,521 for the nine months ended September 30, 2020. The decrease in depreciation expense relates primarily to the maturity of depreciable assets.

Other income and expenses

For the nine months ended September 30, 2021, we incurred interest expense of $1,500,744, compared to interest expense of $1,507,662 for the nine months ended September 30, 2020. The similar amount of interest expense is due to ongoing debt refinancing and conversions of debt to equity. Included in this total interest expense, during the nine months ended September 30, 2021, we incurred interest expense by amortization of the corporate governance provisions and because we chose to avoid incurringdiscount recorded for the substantial additional costs associated with such compliance any sooner than legally required, we have not yet adopted these measures.


Because none of our directors (currently one person) are independent directors, we do not currently have independent audit or compensation committees. As a result, these directors have the ability, among other things, to determine their own level of compensation. Until we comply with such corporate governance measures, regardless of whether such compliance is required, the absence of such standards of corporate governance may leave our stockholders without protections against interested director transactions, conflicts of interest, if any, and similar matters and investors may be reluctant to provide us with funds necessary to expand our operations.


We intend to comply with all corporate governance measures relating to director independence as and when required. However, we may find it very difficult or be unable to attract and retain qualified officers, directors and members of board committees required to provide for our effective management as a result of Sarbanes-Oxley Act of 2002. The enactment of the Sarbanes-Oxley Act of 2002 has resulted in a series of rules and regulations by the SEC that increase responsibilities and liabilities of directors and executive officers. The perceived increased personal risk associated with these recent changes may make it more costly or deter qualified individuals from accepting these roles. The perceived increased personal risk associated with these recent changes may make it more costly or deter qualified individuals from accepting these roles. Some of these corporate governance measures have been metered by the JOBS Act of 2012. See Risk Factor Number 30 above.


31.

You may have limited access to information regarding our business because our obligations to file periodic reports with the SEC could be automatically suspended under certain circumstances.


As of the effective date of our registration statement of which this prospectus is a part, we will become subject to certain informational requirements of the Exchange Act, as amended and we will be required to file periodic reports (i.e., annual, quarterly and material events) with the SEC which will be immediately available to the public for inspection and copying. In the event during the year that our registration statement becomes effective, these reporting obligations may be automatically suspended under Section 15(d) of the Exchange Act if we have less than 300 shareholders and do not file a registration statement on Form 8-A (of which we have no current plans to file). If this occurs after the year in which our registration statement becomes effective, we will no longer be obligated to file such periodic reports with the SEC and access to our business information would then be even more restricted. After this registration statement on Form S-1 becomes effective, we may be required to deliver periodic reports to security holders as proscribed by the Exchange Act, as amended. However, we will not be required to furnish proxy statements to security holders and our directors, officers and principal beneficial owners will not be required to report their beneficial ownership of securities to the SEC pursuant to Section 16 of the Exchange Act. Previously, a company with more than 500 shareholders of record and $10 million in assets had to register under the Exchange Act. However, the JOBS Act raises the minimum shareholder threshold from 500 to either 2,000 persons or 500 persons who are not "accredited investors" (or 2,000 persons in the case of banks and bank holding companies). The JOBS Act excludes securities received by employees pursuant to employee stock incentive plans for purposes of calculating the shareholder threshold. This means that access to information regarding our business and operations will be limited.


For all of the foregoing reasons and others set forth herein, an investment in our securities in any market that may develop in the future involves a high degree of risk.






USE OF PROCEEDS


We will apply the proceeds from the Offering to pay for accounting, legal and professional fees associated with this Offering. Total estimated costs of this Offering ($28,000) are less than the maximum amount of Offering proceeds ($60,000) providing us with approximately $32,000 in working capital. Total estimated costs of the Offering, which principally relates to professional costs, are expected to consist of the following:


SEC Registration fee

$

6.97

NASD filing fee

 

100.00

Accounting fees and expenses

 

7,000.00

Transfer agent fees

 

1,500.00

Blue sky fees and expenses

 

2,500.00

Miscellaneous expenses

 

1,893.03

Legal fees and expenses(relating to the preparation of our registration statement from inception to effective date and related documents)

 

15,000.00

Total

$

28,000.00


As funds are obtained from the saleissuance of shares offering costs will be paid in the sequence listed in the table regardless of the amount of dollars collected. If all of the registered shares are sold, all costs will be paid for in full including legal fees which currently amount to $15,000. From the maximum Offering proceeds received we will pay all expenses associated with this Offering which include SEC registration fee, NASD filing fee, accounting and auditing fees, transfer agent fees, blue sky fees, and other expenses which are estimated to be $13,000, leaving approximately $32,000 of cash on hand for general operating expenses.


Upon beginning our Form S-1 process, we paid our legal counsel $5,000. We owe our legal counsel an additional $10,000 upon completion of this Offering. Our plans will not change regardless of whether the maximum proceeds are achieved, except to the extent indicated in MD&A “Liquidity” section.


Net proceeds from the sale of the maximum offering is estimated to be approximately $32,000. We intend to utilize the estimated net proceeds following this Offering for thefollowing purposes, for which we have presented if we sold 25%, 50%, 75% and 100%:

 

 

1,500,000 SHARES

(25% OF THE MAXIMUM OFFERING)

3,000,000 SHARES

(50% OF THE MAXIMUM OFFERING)

4,500,000 SHARES

(75% OF THE MAXIMUM OFFERING)

6,000,000 SHARES

(100% OF THE MAXIMUM

OFFERING)

 

 

 

 

 

 

 

 

Total Proceeds

 

$ 15,000

$ 30,000

$   45,000

$ 60,000

 

  

 

 

 

 

 

 

Less: Offering Expenses

 

 

 

 

 

 

    Accounting fees

 

   7,000

    7,000

    7,000

7,000

 

Legal fees

 

15,000

15,000

15,000

15,000

 

Blue sky fees and other

 

2,607

2,607

2,607

2,607

 

Transfer agent fees

 

1,500

1,500

1,500

1,500

 

Miscellaneous expenses

 

1,893

1,893

1,893

1,893

 

  

 

 

 

 

 

 

Net Proceeds from Offering

 

$ (13,000)

$  2,000

$   17,000

$ 32,000

 

  

 

 

 

 

 

 

Use of Net Proceeds

 

 

 

 

 

 

  

 

 

 

 

 

 

Accounting Fees (1)

 

$               -

$           -

$     6,000

 $  12,000

 

Legal (2)

 

-

-

4,000

8,000

 

Working Capital (3)(4)

 

(13,000)

2,000

7,000

12,000

 

  

 

 

 

 

 

 

Total Use of Net Proceeds

 

$ (13,000)

$  2,000

$  17,000

$ 32,000

 

 

 

 

 

 

 

 






(1)

Accounting Fees .. We have allocated up to $12,000 in PCAOB accounting fees and other services associated with our financial reports for a twelve month period. If we are unable to secure the maximum Offering proceeds we will seek to defer a portion of those costs or borrow funds to pay for the fees.


(2)

Legal Fees.   We have allocated up to $8,000 in services for a twelve month period. If we are unable to secure the maximum offering proceeds we will seek to defer a portion of those costs or borrow funds to pay for the fees.


(3)

Working Capital .. Includes any application deemed appropriate for the company to maintain operations, including but not limited to the expenses relating to development of our portal and application software.


(4)

Working Capital (Negative) .. We will need to borrow at least $13,000 to pay for estimated Offering expenses of $28,000 and another $20,000 for legal and accounting along with any development costs for our portal and application software.


THIS OFFERING


We will spend substantially more in costs on this Offering and our public reporting requirements than it will receive in proceeds if the maximum offering amount is achieved. These costs may very well exceed our current and anticipated revenues, significantly. The Company believes the risks are worth taking because management believes, based on its own observation (not based on any formal studies), that current and potential vendors, consultants and other service providers will be more open to providing their services to a public company than a small, privately-held startup company. Management’s belief is based solely on informal consultation with various business and legal professionals who are known to us and have public company experience. These discussions developed our belief that being a public company may afford our business (management and its shareholders) with a higher degree of recognition than is normally attained as a small private (or non-public) business enterprise. We believe this may increase our ability or options to obtain financing for our growth. In addition, by being a public company we believe this may increase our future opportunities to raise funds or to pay vendors by issuing equity rather than cash. We cannot predict the likelihood of our observations and initial conclusions on the benefits of being a public company will prove to be accurate or even beneficial to us at all.


We are offering for sale a maximum of 6,000,000 shares of common stock at a fixed price of $0.01 per share. There is no minimum number of shares that must be sold by us for this Offering to close and we will retain all the proceeds from the sale of any of the offered shares that are sold. This Offering is being conducted on a self-underwritten, best efforts basis, which means our founder and CEO, Mr. Estus, will attempt to sell the shares. This prospectus permits our founder and CEO to sell the shares directly to the public, with no commission or other remuneration. Mr. Estus will sell the shares and intends to offer them to friends, family and business acquaintances. In offering the securities on our behalf, Mr. Estus will rely primarily on the safe harbor from broker-dealer registration set out in Rule 3a4-1 under the Securities and Exchange Act of 1934. The intended methods of communication include, without limitation, telephone and personal contacts.


As discussed aboveCommon Stock in connection with our selling effortsworking capital loans of $885,920, compared to $462,072 during the nine months ended September 30, 2020, in this Offering, Mr. Estus will not register as a broker-dealer pursuant to Section 15interest expense by amortization of the Exchange Act, as amended, but rather will rely upondiscount recorded for the “safe harbor” provisionsissuance of Rule 3a4-1, promulgated under the Exchange Act, as amended. Generally speaking, Rule 3a4-1 provides an exemption from the broker-dealer registration requirementsshares of the Exchange Act for persons associated with an issuer that participate in an offering of the issuer’s securities. Mr. Estus is not subject to any statutory disqualification, as that term is defined in Section 3(a)(39) of the Exchange Act. Mr. Estus will not be compensatedCommon Stock in connection with his participationworking capital loans.

Net Loss

Net loss for the nine months ended September 30, 2021, amounted to $4,890,090, resulting in a loss per share of $0.05, compared to $4,601,663 for the nine months ended September 30, 2020, resulting in a loss per share of $0.08. The slight increase in the net loss from the nine months ended September 30, 2020, to the nine months ended September 30, 2021, is primarily due to the use of stock as compensation. The Loss on Extinguishment of Debt of $725,723 incurred in the nine months ended September 30, 2021, and $919,242 incurred during the nine months ended September 30, 2020, created by the issuance of Common and Preferred Stock to eliminate short term debt and accrued interest expense continued the Company’s efforts to reduce debt.

Three Months Ended September 30, 2021 Compared To Three Months Ended September 30, 2020

Revenue and cost of goods sold

For the three months ended September 30, 2021, we reported Sales of $295,490, compared to Sales of $279,308 for the three months ended September 30, 2020.

For the three months ended September 30, 2021, we reported Cost of Sales of $280,212, compared to Cost of Sales of $228,584 for the three months ended September 30, 2020.

For the three months ended September 30, 2021, we reported Gross Profit of $15,278, compared to Gross Profit of $50,724 for the three months ended September 30, 2020. Sales of our products began during the fourth quarter of 2016.

Operating Expenses

Total operating expenses for the three months ended September 30, 2021, were $971,882 compared to $618,808 for the three months ended September 30, 2020, as further described below.

For the three months ended September 30, 2021, we incurred consulting and business development expenses of $656,784, compared to consulting and business development expenses of $136,877 for the three months ended September 30, 2020. The change in consulting and business development expenses was due to the issuance of stock as compensation.

For the three months ended September 30, 2021, we incurred product development expenses of $42,720, compared to product development expenses of $89,578 for the three months ended September 30, 2020. The change in product development expenses relates primarily to a decrease of activities in preparation of new product launches.

For the three months ended September 30, 2021, we incurred marketing and brand development expenses of $34,669, compared to marketing and brand development expenses of $90,305 for the three months ended September 30, 2020. The change in marketing and brand development expenses relates primarily to a decrease of activities including major trade shows due to the COVID-19 pandemic and public health restrictions.

For the three months ended September 30, 2021, we incurred general and administrative expenses of $236,763, compared to general and administrative expenses of $286,541 for the three months ended September 30, 2020. The change relates primarily to a decrease in administrative expenses establishing company processes and procedures.

For the three months ended September 30, 2021, we incurred depreciation expense of $946, compared to depreciation expense of $15,507 for the three months ended September 30, 2020. The decrease in depreciation expense relates primarily to the maturity of depreciable assets.

Other income and expenses

For the three months ended September 30, 2021, we incurred interest expense of $382,601, compared to interest expense of $681,076 for the three months ended September 30, 2020. Included in this Offeringtotal interest expense, during the three months ended September 30, 2021, we incurred interest expense by amortization of the payment of commissions or other remuneration based either directly or indirectly on transactions in our securities. Mr. Estus is not, nor has he been within the past 12 months, a broker or dealer, and he is not, nor has he been within the past 12 months, an associated person of a broker or dealer. At the end of this Offering, Mr. Estus will continue to perform dutiesdiscount recorded for the Company or on its behalf other thanissuance of shares of Common Stock in connection with working capital loans of $216,636, compared to $198,990 during the transactionsthree months ended September 30, 2020, in its securities. Mr. Estus may not participate in selling an offeringinterest expense by amortization of securitiesthe discount recorded for any issuer more than once every 12 months other than in reliance on Exchange Act Rule 3a4-1(a)(4)(i) or (iii).


The proceeds from the saleissuance of shares of Common Stock in this Offering will be made payable to The Krueger Group, LLP- Attorney-Client Trust Account, our escrow agent. Krueger LLP, which also acts as our legal counsel, may not be considered an independent third party. All subscription agreements and checks are irrevocable and should be delivered to Krueger LLP at the address provided on the Subscription Agreement.connection with working capital loans.


We will receive all proceeds from the sale of the 6,000,000 shares being offered. None of the proceeds will be received by anyone other than the Company. The price per share is fixed at $0.01Net Loss

Net loss for the duration of this Offering.






All subscribed funds will be heldthree months ended September 30, 2021, amounted to $1,426,780, resulting in a non-interest-bearing account pending the completion of this Offering. This Offering will be completed 180 days from the effective date of this prospectus (or such earlier date when all 6,000,000 shares are sold), unless extended by our Board for an additional 180 days. There is no minimum number of shares that must be sold in this Offering. All subscription agreements and checks for payment of shares are irrevocable (except as to any states that require a statutory cooling-off period or rescission right).


The Company will deliver stock certificates attributable to shares of common stock purchased directly by the purchasers within 30 days of the close of this Offering or as soon thereafter as practicable.


We have the right to accept or reject subscriptions in whole or in part, for any reason or for no reason. All monies from rejected subscriptions will be returned immediately by us to the subscriber, without interest or deductions. Subscriptions for securities will be accepted or rejected within 72 hours after we receive them.


This Offering may terminate on the earlier of:


i.

the date when the sale of all 6,000,000 shares is completed, or


ii.

180 days after the effective date of this S-1 Registration Statement or any extension thereto.


The offering price of the common stock has been determined arbitrarily and bears no relationship to any objective criterion of value. The price does not bear any relationship to our assets, book value, historical earnings or net worth.


The purchase of the common stock in this Offering involves a high degree of risk. The common stock offered in this prospectus is for investment purposes only, and currently no market for our common stock exists. While a market maker has prospectively agreed to file a Rule 211 application with FINRA in order to apply for the inclusion of our common stock in the OTCBB, such efforts may not be successful, and our shares may never be quoted and owners of our common stock may not have a market in which to sell their shares. Also, no estimate may be given as to the time that this application process may require.


If we become able to have our shares of common stock quoted on the OTCBB, we will then try, through a broker-dealer and the broker-dealer’s clearing firm, to become eligible with the DTC to permit our shares to be traded electronically. If an issuer is not “DTC-eligible,” its shares cannot be electronically transferred between brokerage accounts, which, based on the realities of the marketplace as it exists today (especially the OTCBB), means that shares of an issuer will not be able to be traded (technically the shares can be traded manually between accounts, but this may take days and is not a realistic option for issuers relying on broker-dealers for stock transactions , like all the companies on the OTCBB). What this boils down to is that while DTC-eligibility is not a requirement to trade on the OTCBB, it is however a necessity to efficiently process trades on the OTCBB if a company’s stock is going to trade with any volume. There are no assurances that our shares will ever become DTC-eligible or, if they do, how long it may take.


Please refer to the sections of this prospectus entitled “Risk Factors” and “Dilution” before making an investment in the common stock of the Company.


DETERMINATION OF OFFERING PRICE


The offering price of the shares has been determined arbitrarily by us. The price does not bear any relationship to our assets, book value, earnings, or other established criteria for valuing a privately held company. In determining the number of shares to be offered and the offering price, we took into consideration our cash on hand and the amount of money we would need to complete a portion of our business plan. Accordingly, the offering price should not be considered an indication of the actual value of the securities.


DILUTION


“Dilution” represents the difference between the offering price of the shares of common stock hereby being offered and the net book valueloss per share of common stock immediately after completion$0.01, compared to $1,318,085 for the three months ended September 30, 2020, resulting in a loss per share of this Offering. “Net book value” is$0.02. The increase in the amount that resultsnet loss from subtracting total liabilities from total assets. In this Offering, the level of dilution is increased as a result of the relatively low net book value of our issued and outstanding common stock and because the proceeds of the Offering are slightly more than our estimated costs (based on the maximum Offering proceeds received). Assuming all of the shares of common stock offered herein are sold, the purchasers in this Offering will lose most of the value of their shares purchased in that each purchased share will have a net book value of $0.0013 a reduction of 87%. Net book value of existing shareholders’ shares will increase from $(0.0014) to $0.0013 because proceeds received from this Offering are more than estimated costs of this Offering.






The following table illustrates the dilutionthree months ended September 30, 2020, to the purchasers of the common stock in this Offering as of June 30, 2015:


 

ASSUMING THE SALE OF:

 

1,500,000 SHARES

(25% OF THE MAXIMUM OFFERING)

3,000,000 SHARES

(50% OF THE MAXIMUM OFFERING)

4,500,000 SHARES

(75% OF THE MAXIMUM OFFERING)

6,000,000 SHARES

(MAXIMUM OFFERING)

 

 

 

 

 

OFFERING PRICE/ SHARE

$ 0.01

$ 0.01

$ 0.01

$ 0.01

 

 

 

 

 

BOOK VALUE/ SHARE BEFORE THE OFFERING

$(0.0014)

$(0.0014)

$(0.0014)

$(0.0014)

 

 

 

 

 

BOOK VALUE/ SHARE AFTER THE OFFERING

$(0.0025)

$(0.0009)

$0.0003

$0.0013

 

 

 

 

 

NET INCREASE (DECREASE) TO ORIGINAL SHAREHOLDERS

$(0.0010)

$0.0005

$0.0017

$0.0027

 

 

 

 

 

DECREASE IN INVESTMENT TO NEW SHAREHOLDERS

$(0.0125)

$(0.0109)

$(0.0097)

$(0.0087)

 

 

 

 

 

DILUTION TO NEW SHAREHOLDERS (%)

100%

100%

97%

87%


The following table summarizes the number and percentage of shares purchased the amount and percentage of consideration paid and the average price per Share paid by our existing stockholders and by new investors in this Offering:


 

PRICE PER SHARE

NUMBER OF SHARES HELD

PERCENTAGE OF OWNERSHIP

CONSIDERATION PAID

6,000,000 SHARES SOLD

 

 

 

 

EXISTING SHAREHOLDERS

$0.00333

9,000,000

60%

$30,000

INVESTORS IN THIS OFFERING

$0.01

6,000,000

40%

$60,000

 

 

 

 

 

4,500,000 SHARES SOLD

 

 

 

 

EXISTING SHAREHOLDERS

$0.00333

9,000,000

67%

$30,000

INVESTORS IN THIS OFFERING

$0.01

4,500,000

33%

$45,000

 

 

 

 

 

3,000,000 SHARES SOLD

 

 

 

 

EXISTING SHAREHOLDERS

$0.00333

9,000,000

75%

$30,000

INVESTORS IN THIS OFFERING

$0.01

3,000,000

25%

$30,000

 

 

 

 

 

1,500,000 SHARES SOLD

 

 

 

 

EXISTING SHAREHOLDERS

$0.00333

9,000,000

86%

$30,000

INVESTORS IN THIS OFFERING

$0.01

1,500,000

14%

$15,000


DIVIDEND POLICY


We have never paid cash or any other form of dividend on our common stock, and we do not anticipate paying cash dividends in the foreseeable future. Moreover, any future credit facilities might contain restrictions on our ability to declare and pay dividends on our common stock. We plan to retain all earnings, if any, for the foreseeable future for use in the operation of our business and to fund the pursuit of future growth. Future dividends, if any will depend on, among other things, our results of operations, capital requirements and on such other factors as our Board of Directors, in its discretion, may consider relevant.






MARKET FOR SECURITIES


There is no established public market for our common stock and a public market may never develop. A market maker has agreed to file an application with FINRA so as to be able to quote the shares of our common stock on the OTCBB maintained by FINRA commencing upon the effectiveness of our registration statement of which this prospectus is a part and the subsequent closing of this Offering. There can be no assurance as to whether such market maker’s application will be accepted by FINRA nor can we estimate the time period that will be required for the application process. Even if our common stock were quoted in a market, there may never be substantial activity in such market. If there is substantial activity, such activity may not be maintained, and no prediction can be made as to what prices may prevail in such market.


If we become able to have our shares of common stock quoted on the OTCBB, we will then try, through a broker-dealer and the broker-dealer’s clearing firm, to become eligible with the DTC to permit our shares to be traded electronically. If an issuer is not “DTC-eligible,” its shares cannot be electronically transferred between brokerage accounts, which, based on the realities of the marketplace as it exists today (especially the OTCBB), means that shares of a issuer will not be able to be traded (technically the shares can be traded manually between accounts, but this may take days and is not a realistic option for issuers relying on broker-dealers for stock transactions - like all the companies on the OTCBB). What this boils down to is that while DTC-eligibility is not a requirement to trade on the OTCBB, it is however a necessity to efficiently process trades on the OTCBB if a company’s stock is going to trade with any volume. There are no assurances that our shares will ever become DTC-eligible or, if they do, how long it may take.


We do not have any common stock or equity subject to outstanding options or warrants to purchase or securities convertible into our common stock or equity. Currently all outstanding shares of common stock are held by Mr. Estus, our founder, and CEO, (9,000,000 shares). In general, under Rule 144, a holder of restricted common shares who is an affiliate at the time of sale or any time during preceding three months will be able to resell their shares subjectended September 30, 2021, is primarily due to the restrictions described below.


If we become a public reporting company under the Exchange Act, and have been for at least 90 days prior to the sale, six months must have elapsed since those shares were acquired from us or by an affiliate, we must remain current in our filings for an additional six months; in all other cases, one year must have elapsed since those shares were acquired from us or by an affiliate to be sold pursuant to Rule 144.


issuance of stock as compensation. The numberLoss on Extinguishment of shares sold by such person within any three-month period cannot exceed the greater of:


·

1%Debt of the total number of our common shares then outstanding; or


·

The average weekly trading volume of our common shares$87,575 incurred during the four calendar weeks preceding the date on which notice on Form 144 with respectthree months ended September 30, 2021, was created by issuance of Common and Preferred Stock to the sale is filed with the SEC (or, if Form 144 is not required to be filed, then four calendar weeks preceding the date the selling broker receives the sell order) (This condition is not currently available to the Company because its securities do not trade on a recognized exchange).eliminate short term debt and accrued interest expense.


Conditions relating to the manner of sale, notice requirements (the filing of Form 144)Liquidity and the availability of current and timely public information about the Company must be satisfied.Capital Resources


All of the presently outstanding shares of our common stock are “restricted securities” as defined under Rule 144 promulgated under the Securities Act and may only be sold pursuant to an effective registration statement or an exemption from registration, if available. The SEC has adopted final rules amending Rule 144 which became effective on February 15, 2008. Pursuant to new Rule 144, one year must elapse from the time a “shellcompany,” as defined in Rule 405 of the Securities Act and Rule 12b-2 of the Exchange Act, ceases to be a “shellcompany” and files a Form 8-K addressing Item 5.06 along with such information as may be required in a Form 10 registration statement filed with the SEC, before a shareholder of restricted securities can resell their holdings in reliance upon Rule 144. The Form 10 information or disclosure is equivalent to the information that a registrant would be required to file if it were registering a class of securities on Form 10 under the Exchange Act. Under amended Rule 144, restricted or unrestricted securities initially issued by a reporting or non-reportingshellcompany or a company that was at any time previously a reporting or non-reportingshellcompany, may only be resold in reliance on Rule 144 if the following conditions are met:


1.

the issuer of the securities that was formerly a reporting or non-reportingshellcompany has ceased to be ashellcompany;


2.

the issuer of the securities is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act;






3.

the issuer of the securities has filed all reports and material required to be filed under Section 13 or 15(d) of the Exchange Act, as applicable, during the preceding twelve months (or shorter period that the Issuer was required to file such reports and materials), other than Form 8-K reports; and


4.

at least one year has elapsed from the time the issuer filed the current Form 10 type information with the SEC reflecting its status as an entity that is not ashellcompany.


Current Public Information


In general, for sales by affiliates and non-affiliates, the satisfaction of the current public information requirement depends on whether we are a public reporting company under the Exchange Act:


·

If we have been a public reporting company for at least 90 days prior to the sale, then the current public information requirement is satisfied if we filed all periodic reports (other than Form 8-K) required to be filed under the Exchange Act during the 12 months preceding the sale (or such shorter period as we have been required to file those reports).


·

If we have not been a public reporting company for at least 90 days prior to the sale, then the requirement is satisfied if specified types of information about us (including our business, management, along with our discussion of financial condition and results of operations) are publicly made available.


However, no assurance can be given as to:


·

the likelihood of a market for our common shares developing,


·

the liquidity of any such market,


·

the ability of the shareholders to sell the shares, or


·

the prices that shareholders may obtain for any of the shares.


No prediction can be made as to the effect, if any, that future sales of shares or the availability of shares for future sale will have on the market price prevailing from time to time. Sales of substantial amounts of our common shares, or the perception that such sales could occur, may adversely affect prevailing market prices of the common shares.


NOTE REGARDING FORWARD-LOOKING STATEMENTS


Certain matters discussed herein are forward-looking statements. Such forward-looking statements contained in this prospectus which is a part of our registration statement involve risks and uncertainties, including statements as to:


·

our future operating results;


·

our business prospects;


·

any contractual arrangements and relationships with third parties;


·

the dependence of our future success on the general economy;


·

any possible financings; and


·

the adequacy of our cash resources and working capital.






These forward-looking statements can generally be identified as such because the context of the statement will include words such as we “believe,” “anticipate,” “expect,” “estimate” or words of similar meaning. Similarly, statements that describe our future plans, objectives or goals are also forward-looking statements. Such forward-looking statements are subject to certain risks and uncertainties which are described in close proximity to such statements and which could cause actual results to differ materially from those anticipated as of the date of this prospectus. Shareholders, potential investors and other readers are urged to consider these factors in evaluating the forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements included herein are only made as of the date of this prospectus, and we undertake no obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances.


MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS


Operations


We were incorporated on December 15, 2014 and soon thereafter acquired our business plan from our founder and president, Mr. Dave Estus. Most of the activity through September 25, 2015 involved the execution of our business plan, business development, development of programming language for use with our portal as well as most recently the preparation of the Company’s financials and other corporate governance efforts in anticipation of this Offering.


We are a development stage company and have limited financial resources.our revenue from our planned operations does not cover our operating expenses. We have not established a sourceworking capital deficit of $4,726,654 on December 31, 2020, and $3,338,820 on September 30, 2021, and have incurred a deficit of $25,760,803 from inception to September 30, 2021. We have funded operations primarily through the issuance of capital stock, convertible debt, and other securities.

During the nine months ended September 30, 2021, we raised net cash of $697,505 by issuance of common and Preferred Shares, as compared to $7,000 for the nine months ended September 31, 2020. During the nine months ended September 30, 2021, we raised net cash of $0 through the issuance of debt instruments, as compared to $125,000 for the nine months ended September 30, 2020. During the nine months ended September 30, 2021, we raised net cash of $2,169,100 through the issuance of notes payable secured by inventory, as compared to $2,208,671 for the nine months ended September 30, 2020. During the nine months ended September 30, 2021, we repaid $0 on loans received from our Chief Executive Officer, as compared to $0 that we repaid in loans from our Chief Executive Officer during the nine months ended September 30, 2020.

As we continue with the launch of our American Rebel safes and concealed carry product line we have devoted and expect to continue to devote significant resources in the areas of capital expenditures and marketing, sales, and operational expenditures.

39

We expect to require additional funds to further develop our business plan, including the anticipated launch of additional products in addition to continuing to market 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 need to raise additional funds through equity or debt financing. Our independent registered public accounting firm has included an explanatory paragraphofferings or otherwise in their report emphasizing the uncertainty of our ability to remain as a going concern. An investor or financial statement reader should read our Risk Factors in full which start on Page 9. Of particular attention should be paid to our Risk Factor about a “going concern”, such as Risk Factor Number 1 and Number 12.


Our plan to continue as a going concern is to reach the point where we begin generating sufficient revenues from our web based business(s) or servicesorder to meet our obligationsexpected future liquidity requirements. Any such financing that we undertake will likely be dilutive to existing stockholders.

In addition, we expect to also 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 a timely basis. The Company has not yet acquiredacceptable terms, or internally fully developed any services.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 acquire or internally developnegotiate any services in the future because of a lack of available funds or financing to do so. In order for us to develop or acquire any services, we must be able to secure the necessary financing, beyond just the proceeds of this Offering. In the early stages of our operations, we will continue to keep costs to a minimum. The cost to develop our business plan as currently outlined will be in excess of $100,000. We have no established current sources of funds to undertake the business plan as outlined. Until we obtain funding,such arrangements on acceptable terms, if ever, we will keep our operating costs as low as possible with our founder, and CEO providing substantially all of the work on his own without any cash compensation. This methodology would result in our development stage extending for at least two to three years.all. If we are unable to obtain adequateadditional funding on a timely basis, we may be required to curtail or financing, the Company faces the ultimate likelihood of business failure. There are no assurances that we will be able to raise any fundsterminate some or establish any financing program for the Company’s growth.


Business


There is no way of accurately predicting when product development will progress to the point of generating any revenue. The timing of development is a function of having sufficient working capital. There is no way of knowing when or if we will be able to raise the funds necessary. If we do, services could be ready within three to six months following when the necessary funds have been secured. If we do not raise sufficient financing, revenue producing activities of any kind will most likely not commence for at least 18 months, if ever.


We are building a company that provides cubicle and office wall covering solutions. We are developing a proprietary website system (design portal) that provides customization of an extensive library of art and stock photography. Our design portal will enable consumers to create custom wall coverings that create an atmosphere that transcends the normal cubicle environment. The user will have access to diverse categories of art and they will be able to input their own cubicle dimension and layout, oriented the art to view points with precise fit to their cubicle walls.  


Our intended design portal, ecommerce system and drop ship services outline a three-step method for providing users with what we believe to be a comprehensive approach to office and cubicle design. We believe this approach will provide an experience in office design that will become the new way to empower cube jockeys with a sense of satisfaction from their work space, valued by both employees and management. We believe this acceptance in office work space will provide rapid growth and popularity. We will create a system that easy to use and promotes creativity. This approach will additionally help us in creating long-lasting return customer relationships.






Our business operations will be comprised of two segments: a) design portal for internet users; and b) integration services for the office furnishings market. We are developing the design portal, middleware and back-office framework with the assistance of an established software development firm. The software development firm with which the Company has been working with is utilized on an as “needed basis”.


We developed the initial design portal framework and coding through both internal and outside sources. We have not yet formalized relationships with manufacturersall of our product drop ship partners or resellerslines.

Financing Arrangements

Debt Restructuring

The Company has recently engaged in a financial restructuring (the “Debt Restructuring”), that we intendincluded extending, renewing, and structuring terms of loans with investors and third-party creditors.

Cavalry Bridge Loan

As part of the Debt Restructuring, on September 29, 2021, the Company entered into a securities purchase agreement (the “Purchase Agreement”) with accredited investor Cavalry.

Pursuant to use.the Purchase Agreement, the Company issued to the Cavalry senior secured convertible promissory note in the aggregate principal amount of $1,150,000 (the “Note”). The net proceeds received by the Company were $1,035,000 (less investor’s fees in the amount of $35,000 owed to Cavalry as contemplated by the Purchase Agreement). The Company intends to seekuse the helpnet proceeds for working capital and general corporate purposes.

The Note has a maturity date of outside sales representatives and marketing consultantsone year from the Closing Date. The Note bear interest at a rate of 6% per annum, which is also payable on maturity. In the event the Company fails to develop a professional sales and marketing strategypay any amount when due under the Note, the interest rate will increase to capitalize on these technologies. We intend to pursue this strategy with further financing and hire an in-house web design and support group.the lesser of 15% or the maximum amount permitted by law.


The Company continues to workBeginning on the developmentdate that is six months following the Closing Date, Cavalry may convert any amount due under the Note at any time, and from time to time, into shares of its design portal through the managementCompany’s Common Stock at a conversion price of $6.00 per share; provided, however, that Cavalry may not convert any portion of the Note that would cause Cavalry to beneficially own in excess of 4.99% of the Company’s Common Stock. The conversion price and skillsnumber of its foundershares of the Company’s Common Stock issuable upon conversion of the Note will be subject to adjustment from time to time for any subdivision or consolidation of shares and CEO, as well as through a web development firm which has been working with us on an as needed basis and as our budget allows.


To date no commercial website or services have been developed through these efforts.other dilutive events.

 

The Note includes a mandatory conversion, pursuant to which the principal amount and any accrued or unpaid interest automatically convert into the Company’s Common Stock, or into the Company’s Common Stock and warrants, if warrants are included in Qualified Financing (as defined below), upon the closing of a public offering for cash of Common Stock or Common Stock equivalents with initial gross proceeds to the Company believes our customerequal to or greater than $8,000,000, and which results in the listing of the Company’s Common Stock on a “national securities exchange” as defined in the Exchange Act of 1934 (“Qualified Financing”), at a price per share equal to the lower of (i) $6.00 and (ii) 75% of the offering price in the Qualified Financing. Any Warrants issued upon conversion would have the same terms as the warrants sold in the offering. Any shares of Common Stock of the Company Cavalry would receive in connection with such mandatory conversion may not be sold until the date that is six months following the Closing date. The offering described in this prospectus, should it be successful, would be a Qualified Financing and trigger a mandatory conversion of the Cavalry Bridge Loan.

The Note contains a number of customary events of default. Additionally, the Note is secured by all of the assets of the Company, including a lien on and security interest in all of the issued and outstanding equity interests of the wholly-owned subsidiary of the Company, pursuant to a security agreement that was entered into in connection with the issuance of the Note (the “Security Agreement”). Additionally, pursuant to a Guaranty, dated as of September 29, 2021 (the “Guaranty”), among the Company and its wholly-owned subsidiary identified therein (the “Guarantor”), obligations under the Purchase Agreement are guaranteed by the Guarantor.

40

In connection with the issuance of the Note, five-year warrants to purchase up to an aggregate of 191,667 shares of the Company’s Common Stock at an exercise price of $8.00 per share were issued to Cavalry.

Cavalry may not exercise the Warrants with respect to any number of Warrant Shares that would cause Cavalry to beneficially own in excess of 4.99% of the Company’s Common Stock. Further, if at any time after the six month anniversary of the Closing Date there is no effective Registration Statement covering the resale of the Warrant Shares at prevailing market prices by Cavalry, then the Warrants may also be exercised at Cavalry’s election, in whole or in part and in lieu of making the cash payment otherwise contemplated to be made to the Company upon such exercise, at such time by means of a “cashless exercise” in which Cavalry will come primarilybe entitled to receive a number of Warrant Shares pursuant to calculation methodology specified in the Warrants. The number of shares of Common Stock to be deliverable upon exercise of the Warrants is subject to adjustment for subdivision or consolidation of shares and other standard dilutive events, or in the event the Company effects a reorganization, reclassification, merger, consolidation, disposition of assets, or other fundamental transaction.

In connection with the issuance of the Note, the Company entered into a registration rights agreement with Cavalry (the “Registration Rights Agreement”) whereby the Company agreed to file a registration statement covering Cavalry’s resale of all of the Common Stock underlying the Note and the Warrants following 30 days of the Closing Date (the “Initial Offering Registration Rights”). On October 28, the Company and Cavalry entered into an amendment to the Registration Rights Agreement pursuant to which the parties agreed to substitute Cavalry’s Initial Offering Registration Rights and all notice and other rights related thereto, with the obligation of the Company to file a secondary registration statement with respect to the Registrable Securities set forth in Section 2(a) of the Registration Rights Agreement within 45 days following the closing date for the later of the exercise of the underwriters’ option to purchase additional securities under this Offering.

Promissory Notes

As part of the Debt Restructuring (as defined above), the Company also entered into replacement notes to extend the maturity on certain prior notes.

On September 15, 2021, the Company entered into a $125,301.76 unsecured Promissory Note with an accredited investor. The unsecured Promissory Note bears an interest rate of 18% per annum and all due and payable interest and principal are due on or before December 15, 2021. A component of the unsecured Promissory Note included a grant of 1,563 shares of restricted Common Stock of the Company. The unsecured Promissory Note contains customary warranties, covenants and representations of the Company. The maturity date on this note was subsequently extended to February 15, 2022.

On September 13, 2021, the Company entered into a $106,000 unsecured Promissory Note with an accredited investor. The unsecured Promissory Note bears 12% interest per annum on the outstanding amount from social media advertising, wordSeptember 13, 2021, and all principal and interest shall be paid by the Company to the accredited investor by December 13, 2021. The Unsecured Promissory Note included a grant of mouth1,250 shares of restricted Common Stock of the Company. The unsecured Promissory Note contains customary warranties, covenants and specific technology conferencesrepresentations of the Company. The maturity date on this note was subsequently extended to February 15, 2022.

On September 13, 2021, the Company entered into a $562,991.78 unsecured Promissory Note with an officer of the Company bearing an interest rate of 8.4% per annum on the outstanding amount from September 13, 2021 and conventions.maturing on December 13, 2021. The unsecured Promissory Note was a replacement of a $200,000 Note dated March 6, 2020, and a replacement of a $300,000 Note dated March 26, 2020. The unsecured Promissory Note satisfies all indebtedness and terms of the March 6, 2020 Note and the March 26, 2020 Note. The March 6, 2020 Note and the March 26, 2020 Note are paid in full. The Promissory Note included a grant of 6,250 shares of restricted Common Stock of the Company. The unsecured Promissory Note contains customary warranties, covenants and representations of the Company.


Our plan to continue

On September 3, 2021, the Company entered into a $34,489 unsecured Promissory Note with an accredited investor. The unsecured Promissory Note bears 15% interest per annum. Principal and interest on the unsecured Promissory Note are due at maturity, December 2, 2021. The Company has also issued 432 shares of Common Stock as a going concerncomponent of this note. This maturity date on this note was subsequently extended to February 28, 2022.

On July 1, 2021, the Company entered into a $600,000 unsecured Promissory Note with an accredited investor. The unsecured Promissory Note bears 12% interest per annum. The principal of the unsecured Promissory Note is due on July 1, 2022. The unsecured Promissory Note contains customary warranties, covenants and representations of the Company.

On June 21, 2021, the Company entered into a $329,609.50 unsecured Promissory Note with an accredited investor. The unsecured Promissory Note bears 12% interest per annum. Principal and interest payments are due in accordance with an amortization schedule with a maturity date of June 21, 2024. The unsecured Promissory Note contains customary warranties, covenants and representations of the Company. The principal and interest due on this note will be converted into shares of Common Stock of the Company after the effective date of the registration statement of which this prospectus forms a part but prior to reach the point where we begin generating sufficient revenues from our webclosing of the offering.

41

On April 18, 2021, the Company entered into a Secured Promissory Note with an accredited investor in the amount of $591,000. The Secured Promissory Note replaced and superseded a prior Secured Note with a remaining balance of $183,000 and a Consolidated Note with a remaining balance of $455,670. Payments under the Secured Promissory Note are due in accordance with a schedule, with the first payment of $100,000 due on or before April 23, 2021, and the final payment of $8,000 due on September 1, 2023. The Secured Promissory Note does not bear interest. The Secured Promissory Note contains customary warranties, covenants and representations of the Company, and a right of first refusal of the accredited investor exercisable in connection with any proposed transfer of all or any portion of the Secured Promissory Note. The principal and interest due on this note will be converted into shares of Common Stock of the Company after the effective date of the registration statement of which this prospectus forms a part but prior to the closing of the offering.

On March 31, 2021, the Company entered into an unsecured Forbearance Agreement with an accredited investor with respect to certain four previous notes between the accredited investor and the Company. The total outstanding amount owed to the accredited investor was $273,187.50 as of March 29, 2021. Pursuant to the Forbearance Agreement, the Company has agreed to pay an initial payment of $100,000, followed by seven monthly payments of $21,648.44 through December 2021, in exchange for delaying the exercise of rights and remedies under the previous notes by the accredited investor based business(s)on the existence of certain events of default. The Forbearance Agreement contains customary warranties, covenants and representations of the Company.

On January 6, 2021, the Company entered into a $40,000 Promissory Note with an accredited investor. The Promissory Note bears 18% interest per annum and the interest and principal on the Note are due at the Notes maturity, January 6, 2022. The maturity date on this note was extended to February 15, 2022.

On October 13, 2020, the Company entered into a $200,000 unsecured Promissory Note with an accredited investor. The unsecured Promissory Note bears 12% per annum interest, paid monthly. The principal of the unsecured Promissory Note was due on October 13, 2021 (no acceleration of the debt or servicesnotice of default has been sent by this note holder). The Promissory Note contains customary warranties, covenants and representations of the Company.

On August 3, 2020, the Company entered into a Self-Amortization Promissory Note with an accredited investor. The Promissory Note bears 12% interest per annum.

On August 22, 2019, the Company entered into a Replacement Note with an accredited investor in the amount of $300,000. The Replacement Note contains a repayment schedule that includes principal and interest. There are three payments remaining on the Replacement Note.

Since September 16, 2016, the Company has sold convertible debentures in the amount of $2,405,000 in the form of 12% three-year convertible term notes. Interest is accrued at an annual rate of 12% and is payable in Common Stock of the Company at maturity. Both principal and interest may be converted into Common Stock at a price of $40.00 per share after the passage of 181 days. The Company may redeem the debenture at its option or force conversion after Common Stock trades at a price in excess of $80.00 per share for five days. The Holder may force redemption after the Company raises $3 million dollars in equity. The holders of the convertible debentures were issued three-year warrants to purchase 3,063 shares of the Company’s Common Stock at $80.00 per share. As of December 31, 2018, the Company received $2,405,000 under this convertible debenture. In April and November of 2018, debentures with face value of $2,060,000 plus accrued interest of $280,529 were converted into 58,513 shares of Common Stock. As of December 31, 2019, the Company had a face value of $345,000 due under this convertible debenture.

The convertible debenture holder, based on its agreement, with maturities beginning September 16, 2019, has the option to convert their principal and interest into 8,625 (plus 763 for accrued interest) shares of Common Stock. The fair value of the embedded beneficial conversion feature resulted in a discount of $227,110 to the convertible debenture related party on December 31, 2019, and a discount of $137,110 at December 31, 2020. As of October 15, 2021, the balance of the convertible debenture is $0.

In order to meet our obligations on a timely basis. The Company has not yet acquiredworking capital needs for the next twelve (12) months, we expect to finance our operations through additional debt or internally fully developed any services.equity offerings. We may not be able to acquirecomplete these or internally develop any services in the future because of a lack of available funds orother financing to do so. In order for us to develop or acquire any services, we must be able to secure the necessary financing, beyond just the proceeds of this offering. In the early stages of our operations, we will continue to keep costs to a minimum. The cost to develop our business plan as currently outlined will be in excess of $100,000. We have no established current sources of funds to undertake the business plan as outlined. Until we obtain funding, if ever, we will keep our operating costs as low as possible with our founder, and CEO providing substantially all of the work on his own without any cash compensation. This methodology would result in our development stage extending for at least two to three years.


We believe that our web based division (once developed, if at all) may begin to generate revenues earlier than the corporate direct sales (once developed, if at all). If we are unable to obtain adequate funding or financing, the Company faces the ultimate likelihood of business failure. There are no assurances that we will be able to raise any funds or establish any financing program for the Company’s growth.


Industry Overview


Privacy-challenged office workers may find it hard to believe, but open-plan offices and cubicles were invented by architects and designers trying to make the work space world a better place; who thought that to break down the social walls that divide people, you had to break down the real walls, as well? Early 20th century modernist architects such as Frank Lloyd Wright saw walls and rooms as downright fascist in their presentation. The spaciousness and flexibility of an open plan, they thought, would liberate homeowners and office dwellers from the confines of their boxes. Businesses took up the idea less out of a democratic ideology than a desire to pack in as many workers as they could. The typical open-plan office during the first half of the 20th century contained long rows of desks occupied by office clerks in a white-collar assembly line.


Cubicles were interior designers’ attempt to bring some soul back in to the office space. In the 1950s, a German design firm broke up the rows of desks (assembly line) into organic groupings with partitions for privacy -- what it called the Bürolandschaft, or “office landscape”. In 1964 famous furniture design company Herman Miller introduced the Action Office system. This offered such improvements as greater surfaces and multiple desk heights. In 1968 Herman Miller began to sell its system in modular components, with the unfortunate consequence of businesses cherry-picking the space-saving aspects of these designs, leaving out the humanizing touch. Herman Miller designer Robert Propst was tasked to "find problems outside the furniture industry and conceive solutions for them". Probst’s nickname , the "Father of the Cubicle”, is a misnomer. When Probst designed the Action Office system, "cubicle farms" or the very notion of it were not his intent. His own research into developing the ‘action office’ philosophically was contrary to the actual cubicle in many ways. The Action Office system was designed to promote productivity, privacy, and health at the expense of inefficient use of space. Cubicles are now typically designed to maximize the efficient use of space.






The efficient "cubicle" became popular in office design, mostly because of the movable wall in the Action Office II system. This saved money in construction and development costs. After their introduction into the marketplace, the Action Office II and other office furniture systems were modified to pack in as many employees as possible into an office space. This progression was contrary to Probst’s vision. Probst stated that "The cubiclizing of people in the modern corporation is monolithic insanity”. During this era businesses began to shift their employees, not only clerks, but all into open-plan offices which maximized space. Today, companies are reverting to pre-cubicle rows of desks, now called “pods” to make them sound vaguely futuristic, which will still need our individualist wrap-around wall coverings.


Although open plans foster ambient awareness and teamwork, an article published in a major Asian health journal found that open plans cause conflict, high blood pressure and increased staff turnover. The next wave of idealistic office furniture planning may strive to achieve aesthetically pleasing and healthy alternatives for cube jockeys who spend eight to ten work hours per day ‘living’ in.


Based on industry reports, online sales of graphic wall coverings (of which cubicle work spaces are a large part of) in the United States may surpass $10 million per annum. Over the next five years this represents more than $50 million in sales, which represents a significant increase to current spending of wall covering graphics and other by-products.


Direct sales are hard to predict, year over year. We believe the confluence of a need for large non-permanent graphic art in combination with the recent advances of printing, printing substrates, adhesives and online customization present an opportunity for us to position our business to introduce our products and services to new consumers.


Office space planning and design are vital components to achieving optimal office space plans. To achieve desired goals, most planners work with professionals that are both knowledgeable in the art and science of Computer Aided Design (CAD). These skills are an invaluable asset and an effective tool. Office space planning consultants with whom we plan to work with should be able to assist us in need and planning of our products to be integrated in successful office space projects which we will make available to them. This relationship building with office planning and design professionals should be helpful in suggesting our products and services for aesthetically pleasing cubicle design coverings.


Competitive Focus


We believe the following will assist us in exploiting the expected growth in custom designed wrap-around cubicle and wall covering market:


(1)Scalability. We believe our design portal and services will become scalable, a solution designed to serve the underserved, fragmented office cubicle design market.


(2)“Sticky” Consumer Relationships. Our business model will provide a solution that is designed to act as a competitive barrier and keep the user engaged with our design portal.


(3)Expertise in Aesthetics. Our founder has extensive experience art and aesthetics which comes from his vast experience in the game development industry. We will seek to capitalize on that expertise.


(4)Speed to Implementation. We believe that afully-developed design portal and vertical distribution system will provide immediate insight into the usage (and behavior) of our customers’ assets.


Growth Strategy


Key elements of our growth strategy shall include:


(1)

Core Products. We plan to enhance our core products through user interface and functionality with our design portal as well as progressive and relevant new features and offerings as soon as reasonably practicable.


(2)

Focus. We intend to organically grow market penetration by: (a) securing contracts with office designers in various markets, (b) exploiting social networks, (c) leveraging development opportunities, and (d) adding solutions to professionals in the market.


(3)

Strategic Alliances. We plan to team with other businesses that have complementary features to our products, when fully developed, thereby reducing our development cost and introducing us to consumers and end-users.


(4)

International Expansion. We intend to expand internationally through partnerships and alliances.






Business Objectives


Our objective is to become a provider of cubicle panel and non-permanent wall coverings. We are perusing the following strategies to achieve this object:


(1)

Initiating website development and ecommerce function, identifying service offerings, promoting, and advertising through social media campaigns.


(2)

Create a national media presence through social media – We will seek to create and enhance a national awareness and aggressively market our products through social media outlets.


(3)

Identify and develop strategic relations with our Drop Ship partners – utilize partners, high volume distribution facility to create highly efficient low cost production model.


Aesthetically pleasing cubicle environments we believe contribute to an employee’s overall productivity and sense of well-being. Cubicle environments can convey a sense of mission reinforcing a business culture that an employer worked hard to develop. We will provide a comprehensive selection of coverings that can be themed oriented or business branded enhancing that culture and productivity. Every cubicle may not have a spectacular window view, but with CubeScape’s product offerings we can provide a view to vistas for the occupant.


CubeScape products can transform any neutral cubicle space into an inspirational space for all to enjoy, not just the occupants. We believe that clients and contractors visiting offices decked out in CubeScape products will instantly recognize our business mission. Depictions of communities are displayed in a variety of graphic form. Printed wall murals, large photographic panels, along with artistic window graphics, can reinforce what any business is all about.


This prospectus includes very limited market and industry data and forecasts that we obtained from internal research, publicly available information and industry publications and surveys. The industry in which we operate is subject to a high degree of uncertainty and risk due to a variety of factors, including those described in the section entitled “Risk Factors”.


The following timeline outlines the steps that we intend to take. Each step outlines the metrics or performance that we must accomplish in order to move forward with our business plan.


Step One (Q1/Q2) ($10,000 est. costs)


Website development: Work with established webhosting businesses and web developer to stand up Cubescape.biz website. Test EDI functionality to drop ship partners and financial institutions.


Step Two (Q2/Q3) ($5,000 est. costs)


Ecommerce: Finalize strategic relations with ecommerce provide to integrate back office functionality between website selected ecommerce system servers.


Step Three (Q3/Q4) ($5,000 est. costs)


Drop ship partners: Establish ordering system between website and drop ship partners. Verify system functionality with ecommerce solution providers. Test entire order process through to shipment verification.


Step Four (Q5) ($5,000 est. costs)


Direct Sales: Develop direct sales strategy with consultants. Work with consultants to identify and approach manufacturers and corporate design specialist.


As mentioned above, our steps are predicated upon the Company obtaining financing either through additional equity or debt beyond our Offering. If we are not able to obtain the financing as determined by the above steps, we will not be able to meet or achieve any of the time-line objectives. If we complete 75%, 50%, 25% or even 10% of our additional financing objectives, we will not be able to pursue any of our action steps. In that case the Company will be forced to proceed on a piecemeal basis using the services of our founder, and CEO and the very limited use of outside contractors when and if limited funds are obtained. Our founder and CEO currently devotes in excess of 20 hours a week to our continued business efforts. There is no realistic way to predict the timing or completion in that scenario.






Without additional financing to this Offering proceeds we will not be able to pursue our business plan or its time-line objectives, and the Company may fail entirely.


It is our plan to seek additional financing from either equity financing or through debt instruments. These efforts will most likely occur after this Offering is complete and the aggregate proceeds have been received. Company’s management has, through relationships and partnerships, begun the necessary work on some of our intended products. Our founder and CEO has primarily provided these services through the date of this prospectus. Our business plan requires further completion of these tasks which require the hiring of employees and/or outside contractors. With the level of sophistication and expertise of our founder and CEO, as well as other various professionals that he knows, the Company should make progress in its development planned product, but currently no specific timeframe can be provided. Most if not all of these actions will be predicated on the Company obtaining the necessary financing to accomplish these steps. If financing is not availabletransactions on terms reasonableacceptable to the Company, and its shareholders, then the progression stepsor at all. Additionally, any future sales of this business plansecurities to finance our operations will not occur as planned and may never occur.


We currently have no sources of financing and no commitments for financing. There are no assurances that welikely dilute existing shareholders’ ownership. The Company cannot guarantee when or if it will obtain sufficient financing or the necessary resources to enter into contractual agreements with outside developers or sales or marketing firms. We currently do not have anygenerate positive cash or other resources to commence the use of outside service providers. If we do not receive any funding or financing, our business is likely to be maintained with limited operations for at least the next 12 months because our founder and CEO, will continue to provide his services without consideration. We have no formal agreement in place with our founder and CEO covering his services, our founder’s and CEO’s plan will be to do all of the administrative and planning work as well as programming and marketing work on his own without consideration while he continues to seek other sources of funding for the Company.


Other


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 prospectus. We believe that the perception that many people have of a public company make 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. However, there can be no assurances that we will be successful in any of those efforts even if we become a public entity. Additionally, the issuance of restricted shares will dilute the percentage of ownership interest of our stockholders.


Results of Operations for the period December 15, 2014 (inception) through December 31, 2014


Expenses


Expenses for the period ended December 31, 2014 were $6,610. Officer’s compensation was $6,000 for the period ended December 31, 2014. Organizational costs were $610 for the period ended December 31, 2014.

Loss before provision for income taxes

Loss before provision for incomes taxes for the period ended December 31, 2014 was $6,610. We recorded no provision for federal or state income taxes. We have not generated any revenues.


Results of Operations for the six month period ended June 30, 2015


Expenses


Expenses for the six month period ended June 30, 2015 were $36,300. Development costs for our internal-use software was $19,200 for the six month period ended June 30, 2015. Administrative costs and other expense was $11,600 for the six month period ended June 30, 2015, which included rent expense due and owing to our founder, Mr. Estus. Amortization and depreciation expense was $5,500 for the six month period ended June 30, 2015. We amortize and depreciate our intangible and tangible assets over twenty-four (24) months.

Loss before provision for income taxes

Loss before provision for incomes taxes for the six month period ended June 30, 2015 was $36,300. We recorded no provision for federal or state income taxes. We have not generated any revenues.






Liquidity


We will pay all costs relating to the Offering which are estimated to be $28,000. These expenses will be paid as and when necessary or otherwise accrued. Absent the ability to pay the remaining amounts upon closing of this Offering, we will need to seek out financial assistance from our shareholders or third parties who may agree to loan us the funds to cover the balance of outstanding professional and related fees relating to our prospectus. To the extent that such liabilities cannot be extended or satisfied in other ways we may seek outside financing or loans. If and when loaned, these loans most likely will be evidenced by non-interest-bearing unsecured notes treated as loans until repaid, if and when CSI has the financial ability to do so. No formal written arrangement exists with respect to anyone’s commitment to loan us funds for this purpose.


Since acquiring the business plan, most of our resources and work have been devoted to executing our business plan, limited writing and testing of software code, testing and mock-up of our internet portal and smartphone apps to be used with our intended product, implementing systems and controls, and completing our registration statement. When the registration statement is completed, we will refocus our work on our product and service offerings as well as push the development of our proprietary software for internal use. We believe the development work needed to initiate and complete software development, attract developers, and initiate our marketing plans, including the development of a saleable product, will range between $100,000 and $150,000 if outside contractors and experts are used. If we are able to secure funding to outsource these procedures, of which there can be no assurance, we can commence the launch of our intended product and services to the end user or consumer. If we are only able to use internal resources only (primarily consisting of the services of our founder, and CEO), the process will take much longer and our initial launch may be limited to a much smaller target market.flow. If we are unable to raise any funds, the development costs would havesufficient capital to be provided byfund our founder and CEO to the extent that heoperations, it is capable and willing to provide such funds. While we have engaged the services of a software development firm which we use on an as “needed basis” their function and assistance is limited. Our goal would be to have product and our internet portal available, sales channels and a comprehensive website up and running within one year, but there is no way of estimating what the likelihood of achieving that goal would be.


Private capital will be solicited from business associates of our founder and CEO or through private investors referred to us by those same business associates. To date, we have not sought any funding source and have not authorized any person or entity to seek out funding on our behalf. If a market for our shares ever develops, of which there can be no assurances, we may use restricted shares of our common stock to compensate employees, consultants and independent contractors whenever possible. We cannot predict the likelihood or source of raising capital or funds that may be needed to complete the development of our product and the stages as outlined above.


We have embarked upon an effort to become a public company and, by doing so, have incurred and will continue to incur additional significant expenses for legal, accounting and related services. Once we become a public entity, subject to the reporting requirements of the Exchange Act of 1934, we will incur ongoing expenses associated with professional fees for accounting, legal and a host of other expenses including annual reports and proxy statements, if required. We estimate these costs to be in excess of $75,000 per year and may be higher if our business volume or business activity increases significantly. Our current estimate of costs does not include the necessary expenses associated with compliance, documentation and specific reporting requirements of Section 404 as we will not be subject to the full reporting requirements of Section 404 until we exceed $75 million in market capitalization or we decide to opt-out of the “emerging growth company” as defined under the JOBS Act. This exemption is available to us under the JOBS Act or until we have been public for more than five years. These obligations we believe reduce our ability and resources to expand our business. We hope to be able to use our status as a public company to increase our ability to use noncash means of settling obligations (i.e. issuance of restricted shares of our common stock) and compensate independent contractors who provide professional services to us, although there can be no assuranceslikely that we will be successfulforced to reduce or cease operations.

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Smith Bridge Loan

On April 9, 2021, the Company consummated a six-month secured bridge loan for an aggregate amount of $1,000,000 (the “Bridge Loan”) from Ronald A. Smith, a significant stockholder and recently appointed Chief Operating Officer. The Bridge Loan has a maturity date of October 9, 2021 (the “Maturity Date”). The loan bears interest at 8% and is to be prepaid from any financing in anyexcess of those efforts. We$2,000,000. If the Company is unable to raise $2,000,000 by the Maturity Date, the Bridge Loan will reduce compensation paidbe extended to management (ifa 36-month term at 12% with varied principal and when we do compensate management whichinterest payments during such extended term. The note underlying the Bridge Loan is secured by all the tangible and intangible assets of the Company that are not currently secured by other indebtedness or that become unencumbered through the repayment of other indebtedness.

Additionally, as part of the Bridge Loan, the Company issued the lender a warrant to purchase 25,000 shares of the Company’s Common Stock at an exercise price of $8.00 per share with a five-year term. The Company also pledged 25,000 shares of Common Stock as security for the foreseeable futureBridge Loan.

Secured Loan

On January 1, 2016, the Company entered into a secured loan agreement in order to finance the acquisition of three vehicles for business purposes. The loan, payable in monthly installments, carries an interest at 12% per annum. The current balance on the loan is limited) if there is insufficient cash generated from operations$15,569. The loan’s financing requirements have been suspended due to satisfy these costs.






We do not have any current plans to raise funds through the sale of securities except as set forth herein. We hopeCOVID-19 pandemic. The Company expects the monthly installments to be able to use our status as a public company to enable us to use non-cash meansreinstated in early 2022. The underlying vehicles serve for promotional business purposes, including at trade shows and dealer events.

Lines of settling obligations and compensate persons or firms providing services to us, although there can be no assurances that we will be successful in any of those efforts. We believe thatCredit

On December 20, 2018, the perception that many people have of a public company make 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 beliefs and the advice that we have received from various business professionals. Issuing shares of common stock to such persons instead of paying cash to them may increase our chances to establish and expand our business and business opportunities. Having shares of our common stock may also give persons a greater feeling of identity with us which may result in referrals. However, these actions, if successful, will result in dilution of the ownership interests of existing shareholders, may further dilute common stock book value, and that dilution may be material. Such issuances may also serve to enhance existing management’s ability to maintain control of CSI because the shares may be issued to parties or entities committed to supporting existing management. CSI may offer shares of its common stock to settle a portion of the professional fees incurred in connection with its registration statement. No negotiations have taken place with any professional and no assurances can be made as to the likelihood that any professional will accept shares in settlement of obligations due them.


As of June 30, 2015, we owed approximately $27,800 in connection with software development costs incurred, consulting services and other expenses. We have notCompany entered into any formal agreements, written or oral,a $25,000 unsecured Loan with any vendors or other providers for paymentan interest rate of services or expenses. There are no other significant liabilities8.98% offered by American Express. The Business Loan has an outstanding balance of $9,693 as of JuneSeptember 30, 2015.


As of June 30, 2015, we owed $14,610 in connection with interest-free demand loans from various unrelated parties, and a related party. The proceeds were used for basic working capital purposes.


Recently Issued Accounting Pronouncements


2021. The Company evaluated recent accounting pronouncements through June 30, 2015 and believes there are none that havemakes a material effect$399 monthly payment on the Company’s financial statements except for the following.Business Loan.


In June of 2014 the Financial Accounting Standards Board issued Accounting Standards Update ASU 2014-10, “Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation” (“ASU 2014-10”). Amendments in ASU 2014-10 remove the definition of a development stage entity from the master glossary of the Accounting Standards Codification, thereby removing the financial reporting distinction between development stage entities and other reporting entities from U.S. GAAP. In addition, the amendments eliminate the requirements for development stage entities to (1) present inception-to-date information in the statements of income, cash flows, and shareholder equity, (2) label the financial statements as those of a development stage entity, (3) disclose a description of the development stage activities in which the entity is engaged, and (4) disclose in the first year in which the entity is no longer a development stage entity that in prior years it had been in the development stage. The Company has adopted the provisions of ASU 2014-10 for the period ending June 30, 2015. The adoption of ASU 2014-10 did not have a significant impact on our results of operations, financial condition or cash flow.


In August, 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements - Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entities Ability to continue as a Going Concern. The standard is intended to define management's responsibility to decide whether there is substantial doubt about an organization's ability to continue as a going concern and to provide related footnote disclosures. The standard requires management to decide whether there are conditions or events that raise substantial doubt about the entity's ability to continue as a going concern within one year after the date that the financial statements are issued. The standard provides guidance to an organization's management, with principles and definitions that are intended to reduce diversity in the timing and content of disclosures that are commonly provided by organizations in the footnotes. The standard becomes effective for the annual period ending after December 15, 2016, with early application permitted. The adoption of this pronouncement is not expected to have a material impact on our financial statements. Management's evaluations regarding the events and conditions that raise substantial doubt regarding the Company's ability to continue as a going concern have been disclosed in Note 2 below.


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


Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on our present or future financial statements.






Critical Accounting Policies


The preparation of financial statements and related footnotes requires us to make judgments, estimates, and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities.


An accounting policy is considered to be critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time the estimate is made, and if different estimates that reasonably could have been used, or changes in the accounting estimates that are reasonably likely to occur periodically, could materially impact the financial statements.


Financial Reporting Release No. 60 requires all companies to include a discussion of critical accounting policies or methods used in the preparation of financial statements. There are no critical policies or decisions that rely on judgments that are based on assumptions about matters that are highly uncertain at the time the estimate is made. Note 1to1 to the financial statements, included elsewhere in this prospectus,report, includes a summary of the significant accounting policies and methods used in the preparation of our financial statements.


Off-Balance Sheet Arrangements


We have no off-balance sheet arrangements, as defined in Item 303(a)(4)(ii) of Regulation S-K, obligations under any guarantee contracts or contingent obligations. We also have no other commitments, other than the costs of being a public company that will increase our operating costs or cash requirements in the future.


None.

BUSINESS


We were incorporated under the laws of the State of Nevada on December 15, 2014, at which time we acquired a business plan, various pieces of information technology, furniture and other office equipment, as well as industry resource materials and business relationships from our founder and CEO. As of September 25, 2015, we had one employee, our founder and CEO, Mr. Estus. For fiscal year 2015, Mr. Estus will devote at least 20 hours a week to us but may increase the number of hours as necessary.


The Company issued 6,000,000 shares of its common stock to Mr. Estus at inception in exchange for organizational services incurred upon incorporation. Following our formation, we issued an additional 3,000,000 shares of our common stock to Mr. Estus, in exchange for a business plan, office furniture, design equipment, computing equipment along with other related industry materials that he developed over a period exceeding 10 years. See also “Certain Relationships and Related Transactions”.


As a senior video game artist with Sony PlayStation of America, Mr. Estus was the third employee to be hired by the newly developed PlayStation division in Rancho Bernardo, California (located outside of San Diego). Mr. Estus experienced a significant amount of rudimentary development at Sony in his career there. Computer graphics in the 80s and early 90s were primarily two-dimensional (2D) with low resolution. Early in 1992 with the debut of the PlayStation system, this format changed forever.


The first platform developed with which Mr. Estus participated in was to support three-dimensional (3D) graphics with a higher pixel resolution. This became a completely new approach to video game graphics. The PlayStation moved game graphics from 2D, flat graphics, to 3D polygonal models and environment. While 3D had its inherent problems, unlike 2D graphics, 3D graphics allowed the user to move closer to the camera plane, feeling immersed. This requires the video game artist to control ‘texel density’, a major concern in the video game industry which caused pixilation of texture maps as they approached the foreground (texel density is the process by which the graphic artist ensures that meshes and textures are proper in height, width and depth for that ‘virtual experience’). Never before had the industry needed to consider texture maps in coming as close as they had to the viewing plane and of course pixilated. Mr. Estus through his role with Sony was on the cutting edge of game development and the new frontier which Sony and its PlayStation system invoked.


Another progressive development Mr. Estus was involved in was integrating movies (commercial media) into video games. Frame rate, resolution were all significant considerations, a balance needed to be struck to achieve the highest resolution possible while maintaining significant high frame rates within the game. Mr. Estus first visualized the idea of continuous wrap-around 3D posters for cubicles and various other wall spaces was while he was at Sony. Mr. Estus’ professional experience has provided him with keen insight to resolution and focal points, such as those needed for successful game products. Through experimentation and multiple manufacturing trial and error, Mr. Estus established the importance of focal point in the product. Focal point is the part of a photograph or digital image that is 100% in focus, whereas, less important elements are not focused. The focal point draws the viewer (or user) into specific viewing area (targets) in the pixilated space. Mr. Estus believes that anyone can take a picture, print it, and slap it on a cubicle wall panel, however that is not what CubeScape is all about. CubeScape will allow the user to actively choose a location within the pixilated space, drawing the viewer in, creating a cozy and comfortable place for the mind to achieve its desired result.




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This we believe is a vital aspect of what will be the CubeScape experience. Mr. Estus will maximize his professional expertise in graphics and the gaming industry providing a supported background for CubeScape product offerings to transform the cube sphere. Mr. Estus believes the cubicle environment is stale, non-progressive and demotivating to the user of the cubicle (the cube jockey).


We are a development stage company and have no specific financial resources. We have not established or attempted to establish a source of equity or debt financing. Our independent registered public accounting firm has included an explanatory paragraph in their report emphasizing the uncertainty of our ability to remain a going concern. We are in the early stages of executing our business plan. We still have a significant amount of work that needs to be completed and funds that need to be raised in order to compete within this sophisticated marketplace. To date, we have not developed any finished products or services and cannot predict when a finished product or services will be developed or externally acquired. We believe that we have an advantage with our founder, and CEO and his industry relationships and the solicitation of their help with growing our business model.


As of June 30, 2015, we had limited assets which consisted of; prepaid expense of $1,000, tangible assets valued at $3,700, net of depreciation expense of $848 and intangible assets relating to our business plan valued at $20,300, net of amortization expense of $4,652 and deferred offering costs of $10,000. In order to fund the development of our business and our working capital needs for the next 12 months, we intend to attempt to secure funding from the sale of common stock, from stockholder or non-related party loans, or from funding provided by strategic joint ventures or partners. Furthermore in order to be able to implement the foregoing plan of operations, we anticipate that we will need to secure financing between $100,000 and $150,000 during the first quarter of calendar year 2016 if we are able to complete this Offering. If we are unsuccessful in raising additional financing, we will not be able to proceed with execution of our business plan.


Based on the exact nature of our business and expected level of competition, we anticipate incurring operating losses into the foreseeable future. Because we currently do not have a fully developed and completed website system (design portal) for our wrap-around products for cubicles and other walls, and our resources are severely limited, we cannot predict if and when we will generate revenues or whether we will become a viable and sustainable business operations. Accordingly, due to our lack of assets, significant operations and for the foreseeable future the ability to generate revenues, our auditors have stated in their opinion that there currently exists substantial doubt about our ability to continue as a going concern.


General Overview


There is no way of accurately predicting when product development will progress to the point of generating any revenue. The timing of business development is a function of having sufficient working capital. There is no way of knowing when or if we will be able to raise the necessary funds. If we do, fully developed product offerings could be ready within three to six months following when the necessary funds have been secured. If we do not raise sufficient financing, revenue producing activities of any kind will most likely not commence until at least 18 months, if ever.


We are building a company that provides cubicle and office wall covering solutions. We are developing a proprietary website system (design portal) that provides customization using our extensive library of art and stock photography. Our design portal will enable the consumer to create custom wall coverings that create an atmosphere that transcends the normal cubicle environment. Users will have access to diverse and ever increasing categories of art, photography, and other graphic materials which they will be able utilize through the input of their cubicle dimension and layout, orient the art with a precise fit to their cubicle walls and/or office work space.  


Our intended design portal, ecommerce system and drop ship services outline a three-step method for providing users with what we believe to be a comprehensive approach to office and cubicle design. We believe this approach will provide an experience in office design that will become the new way to empower cube jockeys with a sense of satisfaction from their work space, and will be valued by both employee and management. We believe this acceptance in office work space will provide rapid growth and popularity. We will create a system that easy to use and promotes creativity. This approach will additionally help us in creating long-lasting return customer relationships.


Our business operations will be comprised of two segments: a) design portal for internet users; and b) integration services for the office furnishings market. The design portal, middleware and back-office framework were developed with the assistance of an established software development firm. The Company developed its initial design of the design portal and web-management software through the efforts of its founder and CEO, and the software development firm with which the Company has been working with on an as “needed basis”.






The design portal development has been through the direct assistance of a software development firm (since early 2011) and the efforts of our founder, Mr. Estus. We developed an initial framework and design. The Company intends to seek the assistance of outside sales and marketing consultants to develop a professional sales and marketing strategy to capitalize on our product designs. We will seek to staff a management team (besides Mr. Estus) with the technical skills necessary in technology, software writing and a strong emphasis on graphics design and artwork. We intend to with further financing create and staff an in-house web development group, which we believe will develop new generations of the design portal and services of a similar nature to our business development in gaming software cubicle and office wall covering solutions.


The Company continues to work on the development of its design portal through the management and skills of its founder, and CEO, as well as through a web development firm which has been working with us on an as needed basis and as our budget allows. To date no commercial website or services has been developed through these efforts. The Company believes initially our customers will come primarily from social media advertising, word of mouth and specific technology shows and conventions.


Our plan to continue as a going concern is to reach the point where we begin generating sufficient revenues from our web based business or services to meet our obligations on a timely basis. The Company has not yet acquired or internally fully developed any services. We may not be able to acquire or internally develop any services in the future because of a lack of available funds or financing to do so. In order for us to develop or acquire any services, we must be able to secure the necessary financing, beyond just the proceeds of this Offering. In the early stages of our operations, we will continue to keep costs to a minimum. The cost to develop our business plan as currently outlined will be in excess of $100,000. We have no established current sources of funds to undertake the business plan as outlined. Until we obtain funding, if ever, we will keep our operating costs as low as possible with our founder and CEO providing substantially all of the work on his own without any cash compensation. This methodology would result in our development stage extending for at least two to three years.


We believe that our web based division (once developed, if at all) may begin to generate revenues earlier than the corporate direct sales (once developed, if at all). If we are unable to obtain adequate funding or financing, the Company faces the ultimate likelihood of business failure. There are no assurances that we will be able to raise any funds or establish any financing program for the Company’s growth.


Industry Overview


Privacy-challenged office workers may find it hard to believe, but open-plan offices and cubicles were invented by architects and designers trying to make the wok space world a better place—who thought that to break down the social walls that divide people, you had to break down the real walls, as well. Early 20th century modernist architects such as Frank Lloyd Wright saw walls and rooms as downright fascist in their presentation. The spaciousness and flexibility of an open plan, they thought, would liberate homeowners and office dwellers from the confines of their boxes. Businesses took up the idea less out of a democratic ideology than a desire to pack in as many workers as they could. The typical open-plan office during the first half of the 20th century contained long rows of desks occupied by office clerks in a white-collar assembly line.


Cubicles were interior designers’ attempt to bring some soul back in to the office space. In the 50s a German design firm broke up the rows of desks (assembly line) into organic groupings with partitions for privacy—what it called the Bürolandschaft, or “office landscape”. In 1964 famous furniture design company Herman Miller introduced the Action Office system. This offered such improvements as greater surfaces and multiple desk heights. In 1968 Herman Miller began to sell its system in modular components, with the unfortunate consequence of businesses cherry-picking the space-saving aspects of these designs, leaving out the humanizing touch. Herman Miller designer Robert Probst was tasked to "find problems outside the furniture industry and conceive solutions for them". Propst’s nickname the "Father of the Cubicle" is a misnomer. When Propst designed the Action Office system, "cubicle farms" or the very notion of it were not his intent. His own research into developing the ‘action office’ philosophically was contrary to the actual cubicle in many ways. The Action Office system was designed to promote productivity, privacy, and health at the expense of inefficient use of space. Cubicles are now typically designed to maximize the efficient use of space.


The efficient "cubicle" became popular in office design. Mostly because of the movable wall in the Action Office II system. This saved money in construction and development costs. After their introduction into the marketplace, the Action Office II and other office furniture systems were modified to pack in as many employees as possible into an office space. This progression was contrary to Probst’s vision. Probst stated that "The cubiclizing of people in the modern corporation is monolithic insanity”. During this era businesses began to shift their employees, not only clerks, but all into open-plan offices which maximized space. Today, companies are reverting to pre-cubicle rows of desks, now called “pods” to make them sound vaguely futuristic, which will still need our individualist wrap-around wall coverings.






Although open plans foster ambient awareness and teamwork, an article published in a major Asian health journal found that open plans cause conflict, high blood pressure and increased staff turnover. The next wave of idealistic office furniture planning will be rather more successful in achieving aesthetically pleasing and healthy alternatives for cube jockeys who spend 8-10 hours per day ‘living’ in.


Based on industry reports, online sales of graphic wall coverings (of which cubicle work spaces are a large part of) in the United States may surpass $10 million per annum. Over the next five years this represents more than $50 million in sales; a significant increase to current spending of wall covering graphics and other by-products.


Direct sales we believe has historically served corporate industrial design and growth is hard to predict, year over year. We believe the confluence of a need for large non-permanent graphic art in combination with the recent advances of printing, printing substrates, adhesives and online customization present an opportunity for us to position our business in introducing product and services.


Office space planning and design are vital components to achieving optimal office space plans. To achieve desired goals, most planners work with professionals that are both knowledgeable in the art and science of Computer Aided Design (CAD). These skills are an invaluable asset and an effective tool. Office space planning consultants with whom we plan to work with should be able to assist us in need and planning of our products to be integrated in successful office space projects which we will make available to them. This relationship building with office planning and design professionals should be helpful in suggesting our products and services for aesthetically pleasing cubicle design coverings.


Competitive Focus


We believe the following will assist us in exploiting the expected growth in custom designed wrap-around cubicle and wall covering market:


(1)

Scalability. We believe our design portal and services will become scalable, a solution designed to serve the underserved, fragmented office cubicle design market.


(2)

“Sticky” Consumer Relationships. Our business model will provide a solution that is designed to act as a competitive barrier and keep the user engaged with our design portal.


(3)

Expertise in Aesthetics. Our founder has extensive experience art and aesthetics which comes from his vast experience in the game development industry. We will seek to capitalize on that expertise.


(4)

Speed to Implementation. We believe that afully-developed design portal and vertical distribution system will provide immediate insight into the usage (and behavior) of our customers’ assets.


Growth Strategy


Key elements of our growth strategy shall include:


(1)

Core Products. We plan to enhance our core products through user interface and functionality with our design portal as well as progressive and relevant new features and offerings as soon as reasonably practicable.


(2)

Focus. We intend to organically grow market penetration by: (a) securing contracts with office designers in various markets, (b) exploiting social networks, (c) leveraging development opportunities, and (d) adding solutions to professionals in the market.


(3)

Strategic Alliances. We plan to team with other businesses that have complementary features to our products, when fully developed, thereby reducing our development cost and introducing us to consumers and end-users.


(4)

International Expansion. We intend to expand internationally through partnerships and alliances.


Business Objectives


Our objective is to become a provider of cubicle panel and non-permanent wall coverings. We are pursuing the following strategies to achieve this object:






(1)

Initiating website development and ecommerce function, identifying service offerings, promoting, and advertising through social media campaigns.


(2)

Create a national media presence through social media – We will seek to create and enhance a national awareness and aggressively market our products through social media outlets.


(3)

Identify and develop strategic relations with our Drop Ship partners – utilize partners, high volume distribution facility to create highly efficient low cost production model.


Aesthetically pleasing cubicle environments we believe contribute to an employee’s overall productivity and sense of well-being. Cubicle environments can convey a sense of mission reinforcing a business culture that an employer worked hard to develop. CubeScape will provide a comprehensive selection of coverings that can be themed oriented or business branded enhancing that culture and productivity. Every cubicle may not have a spectacular window view, but with CubeScape’s product offerings we can provide a view to vistas for the occupant.


CubeScape products we believe will transform any neutral cubicle space into a truly inspirational branded for all to enjoy, not just the occupants. Clients and contractors visiting offices decked out in CubeScape products will instantly recognize your business mission. Depictions of communities you serve are displayed in a variety of graphic form. Printed wall murals, large photographic panels, along with artistic window graphics reinforce what your business is all about. Prompt questions immediately by illustrating your business mission and vision through our product offering. We will assist you in branding your organization with in a cohesive and aesthetically pleasing CubeScape product.


This prospectus includes very limited market and industry data and forecasts that we obtained from internal research, publicly available information and industry publications and surveys. The industry in which we operate is subject to a high degree of uncertainty and risk due to a variety of factors, including those described in the section entitled “Risk Factors”.


The following timeline outlines the steps that we intend to take. Each step outlines the metrics or performance that we must accomplish in order to move forward with our business plan.


Step One (Q1/Q2) ($10,000 est. costs)


Website development: Work with established webhosting businesses and web developer to stand up Cubescape.biz website. Test EDI functionality to drop ship partners and financial institutions.


Step Two (Q2/Q3) ($5,000 est. costs)


Ecommerce: Finalize strategic relations with ecommerce provide to integrate back office functionality between website selected ecommerce system servers.


Step Three (Q3/Q4) ($5,000 est. costs)


Drop ship partners: Establish ordering system between website and drop ship partners. Verify system functionality with ecommerce solution providers. Test entire order process through to shipment verification.


Step Four (Q5) ($5,000 est. costs)


Direct Sales: Develop direct sales strategy with consultants. Work with consultants to identify and approach manufacturers and corporate design specialist.


As mentioned above, our steps are predicated upon the Company obtaining financing either through additional equity or debt beyond this Offering. If we are not able to obtain the financing as determined by the above steps, we will not be able to meet or achieve any of the time-line objectives. If we complete 75%, 50%, 25% or even 10% of our additional financing objectives, we will not be able to pursue any of our action steps. In that case, the Company will be forced to proceed on a piecemeal basis using the services of our founder, and CEO and the very limited use of outside contractors when and if limited funds are obtained. Our founder and CEO currently devotes in excess of 20 hours a week to our continued business efforts. There is no realistic way to predict the timing or completion in that scenario.






Without additional financing to this Offering proceeds we will not be able to pursue our business plan or its time-line objectives, and the Company may fail entirely.


It is our plan to seek additional financing from either equity financing or through debt instruments. These efforts will most likely occur after this Offering is complete and the aggregate proceeds have been received. Our management has, through relationships and partnerships, begun the necessary work on some of our intended products. Our founder and CEO has primarily provided these services through the date of this prospectus. Our business plan requires further completion of these tasks which require the hiring of employees and/or outside contractors. With the level of sophistication and expertise of our founder and CEO, as well as other various professionals that he knows, the Company should make progress in its development planned product, but currently no specific timeframe can be provided. Most if not all of these actions will be predicated on the Company obtaining the necessary financing to accomplish these steps. If financing is not available on terms reasonable to the Company and its shareholders, then the progression steps of this business plan will not occur as planned and may never occur.


We currently have no sources of financing and no commitments for financing. There are no assurances that we will obtain sufficient financing or the necessary resources to enter into contractual agreements with outside developers or sales/marketing firms. We currently do not have any cash or other resources to commence the use of outside service providers. If we do not receive any funding or financing, our business is likely to be maintained with limited operations for at least the next 12 months because our founder and CEO will continue to provide his services without consideration. We have no formal agreement in place with our founder and CEO covering his services, our founder’s and CEO’s plan will be to do all of the administrative and planning work as well as programming and marketing work on his own without consideration while he continues to seek other sources of funding for the Company.


Intellectual Property


We have no patents or trademarks, except for the following: On April 17, 2007, Mr. Estus, our founder applied for the standard trademark ‘CUBESCAPES’ which was given the following serial number by the USPTO #78/830910. The trademark is for the following use and application according to the USPTO - Continuous Wrap-Around Banner Art Posters Made of Paper for Office Space Cubicles.


Each state has its own laws regarding registration of a trademark, including the requirements for keeping the registration valid. Although these laws are similar in many respects, variations exist regarding the time period for renewing the registration. For example a trademark registered in California is valid for only five years and is renewable for successive five-year periods.


Although not required to validate a trademark, federal registration does provide additional benefits for the trademark owner. Included in these benefits are the right to use the symbol “®” and the right to file a trademark infringement lawsuit in federal court. To maintain these benefits, the owner of a federally registered trademark must make additional periodic filings to keep the registration valid. The first filing must be made between the fifth and sixth years after the trademark's registration date, and is called a "declaration of use" or "section 8 filing." This informs the USPTO that the trademark is still in use. The second filing is made between the ninth and 10th years after the trademark's registration date, and includes another declaration of use along with an application for renewal. The third and subsequent filings will also include a declaration of use and application for renewal, and must be done between the ninth and 10th year anniversary after the last filing. We have not registered our trademark.


Failing to file the required renewal applications for a registered trademark will result in the registration being cancelled, but as long as the trademark is still in use, the owner's common law trademark rights are still valid and a new registration application can be filed. Even common law trademark rights become invalid if the owner has abandoned use of the trademark. Non-use of a trademark for three consecutive years is generally considered proof that the owner has abandoned the trademark. We have continued to use our trademark and intend on re-registering and applying for all applicable protections available under the law along with the right to transfer.

 

Government RegulationCritical Accounting Policies

Our discussion and Industry Standards


There are an increasing number of laws and regulations in the United States and abroad pertaining to communications and commerce on the Internet. In addition, a number of legislative and regulatory proposals are under consideration by federal, state, local and foreign governments. Laws or regulations may be adopted with respect to the Internet relating to liability for information retrieved from or transmitted over the Internet, user privacy, taxation and the quality of services and services. Moreover, the application to the Internet of existing laws governing issues such as intellectual property ownership and infringement, pornography, obscenity, libel, gaming, employment and personal privacy is uncertain and developing. Any such legislation or regulation, or the application or interpretation of existing laws, may decrease the growth in the use of the Internet in general, prevent us from delivering our content in different parts of the world and increase our costs of selling services or otherwise operating our business.






Furthermore, legislation regulating online content could limit the growth in use of the Internet generally and decrease the overwhelming acceptance of the Internet as an advertising and e-commerce medium.


Websites typically place identifying data, or cookies, on a user's hard drive without the user's knowledge or consent. Many Internet companies use cookies for a variety of different reasons, including the collection of data derived from the user's Internet activity. Any reduction or limitation in the use of cookies could limit the effectiveness of our sales and marketing efforts utilizing these Internet based companies. Most currently available Web browsers allow users to remove cookies at any time or to prevent cookies from being stored on their hard drive.


Some privacy advocates and governmental bodies have suggested limiting or eliminating the use of cookies. In addition, the European Union (the “EU”) and many countries within have adopted privacy directives or laws that strictly regulate the collection and use of information regarding Internet users that is identifiable to particular individuals. Privacy legislation has been proposed in the United States as well, and the Federal Trade Commission has taken action against website operators that do not comply with state privacy policies. These and other governmental efforts may limit our ability to target advertising or collect and use information regarding the use of our websites. Fears relating to a lack of privacy could also result in a reduction in the number of users or customers which could harm our business and financial results.


Employees


As of September 25, 2015, we had one employee, our founder and CEO, Mr. Estus. During calendar year ending December 31, 2015 (dependent on our financing and available working capital), Mr. Estus will devote at least 20 hours a week to us and may increase the number of hours as necessary. Mr. Estus is allowed to devote this time to our Company as he is not limited or restricted from being involved with us by his other business operations. Mr. Estus currently has no agreement with the Company which provides for payment of his services. We may be limited in seeking the employment of others to assist in future operations. Our founder and CEO’s current plan is to provide all administrative and planning work as well as perform the coding for software and marketing efforts on his own without any cash compensation while he seeks other sources of funding for the Company and its business plan.


Mr. Estus has been compensated through the form of common stock in the Company, and will forego any payments for his services. It is his belief that these actions are in the best interest of the Company and its prospective investors who may invest in this Offering. We may in the future use other independent contractors and consultants to assist in many aspects of our business on an “as needed” or per project basis pending adequate financial resources being available or their ability to defer payment for their services.


Property


Our office and mailing address is 1854 Oxford Avenue, Cardiff-by-the-Sea, California 92007.This space is currently used by us and another business that Mr. Estus operates from this location. The property from which we conduct our operations is owned by Mr. Estus. Mr. Estus charges us $500 per month and pays for all the utilities and maintenance costs required by the facility. There is no written lease agreement and we are on a month-month rental with Mr. Estus.


Litigation


We are not party to any pending, or to our knowledge, threatened litigation of any type.






DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS


Directors and Executive Officers


The following table and text sets forth the names and ages of all our directors and executive officers and key management personnel as of September 25, 2015. Our directors serve until the next annual meeting of stockholders and until their successors are elected and qualified, or until their earlier death, retirement, resignation or removal. Executive officers serve at the discretion of the Board of Directors, and are elected or appointed to serve until the next Board of Directors meeting which may follow the annual meeting of stockholders. Provided is a brief description of the business experience of each director and executive officer and key management personnel during the past five years and indication of directorships held by (if any) of each director in other companies subject to the reporting requirements under the Federal securities Acts.


Name

Age

Position

David L. Estus

51

Chairman, CEO (Principal Executive Officer)

CFO (Principal Financial and Accounting Officer)


David L. Estus, Chairman, CEO , CFO


Mr. Estus is currently the Company’s sole officer and director in the respective capacities of CEO, CFO and Chairman of the Company’s Board of Directors. He has held these positions since December 15, 2014. He is responsible for all duties required of a corporate officer and the development of the business. From May 2005 through the present, Mr. Estus has served as an executive 3D Artist Designer for Monte Roca Game Design Company. Monte Roca Game Design Company is an interactive game company that works closely with game designers in the game market providing creative design expertise along with advanced solutions to game projects. This includes art design concept, 3D environments, character design modelling animation, cutting edge designs which particle effects, dynamic lighting and actor based motion capture animation; all enhancing video game experience. From 1992 to 2005, Mr. Estus served as Senior Art Director with 989 Studios a division of Sony Corporation, which grew to become one of North America’s largest developers of video games. Mr. Estus’ most successful product was the 989 Major League Baseball video game series. The Company believes that Mr. Estus’ experience in the video game industry makes him a valuable member of the Company’s Board of Directors and management team. Mr. Estus also holds an Associate Degree in Art with an emphasis in Computer Graphics received from San Diego Mesa College. Mr. Estus has earned a number of awards for his art work as well as recognition for his advanced pixilation in computer gaming.


Possible Potential Conflicts


The OTCBB on which we plan to have our shares of common stock quoted does not currently have any director independence requirements.


No member of management will be required by us to work on a full-time basis. Accordingly, certain conflicts of interest may arise between us and our officer(s) and director(s) in that they may have other business interests in the future to which they devote their attention, and they may be expected to continue to do so although management time must also be devoted to our business. As a result, conflicts of interest may arise that can be resolved only through their exercise of such judgment as is consistent with each officer's understanding of his/her fiduciary duties to us.


Currently we have only one officer and one director (both of whom are the same person), and will seek to add additional officer(s) and/or director(s) as and when the proper personnel are identified and terms of employment are mutually negotiated and agreed, particularly when we have sufficient capital resources and cash flow to make such offers.


In an effort to resolve potential conflicts of interest, we entered into a written agreement with Mr. Estus specifying that any business opportunities that he may become aware of independently or directly through his association with us (as opposed to disclosure to him of such business opportunities by management or consultants associated with other entities) would be presented by him solely to us.


We cannot provide assurance that our efforts to eliminate the potential impact of conflicts of interest will be effective.






Code of Business Conduct and Ethics


Upon our incorporation in December 2014, we adopted a written code of ethics applicable to our Board of Directors, officers and employees in accordance with applicable securities laws. Our Board of Directors shall oversee compliance with the code of ethics as it relates to the Company through an officer designated by the Board of Directors. Employees are required to report known and suspected breaches of our code of ethics to an appropriate supervisor, or in the case of officers and directors, to a senior officer designated by our Board of Directors. Our code of ethics is designed to deter wrongdoing and to promote:


·

honest and ethical conduct;


·

full, fair, accurate, timely and understandable disclosure in reports and documents that we will file with securities regulators and in our other public communications;


·

compliance with applicable laws, rules and regulations, including insider trading compliance; and


·

accountability for adherence to the code and prompt internal reporting of violations of the code, including illegal or unethical behavior regarding accounting or auditing practices.


A copy of our Code of Business Conduct and Ethics has been filed with the Securities and Exchange Commission as Exhibit 14.1 to our Registration Statement of which this prospectus is a part.


Board of Directors


Directors (currently just one) will hold office until the completion of their term of office, which is not longer than one year, or until their successors have been elected. Our current directors’ term of office expires on December 31, 2015. All officers are appointed annually by the Board of Directors subject to existing employment agreements and serve at the discretion of the board. Currently, our director receive no compensation for his role as a director as he receives compensation for his role as an officer.


As long as we have no additional directors besides our founder, president, chief executive officer, and Chairman, all votes on issues are resolved in favor of the Chairman’s vote.


Involvement in Certain Legal Proceedings


Except as described below, during the past ten years, no present director, executive officer or person nominated to become a director or an executive officer of CSI:


1.

had a petition under the federal bankruptcy laws or any state insolvency law filed by or against, or a receiver, fiscal agent or similar officer appointed by a court for the business or property of such person, or any partnership in which he was a general partner at or within two years before the time of such filing, or any corporation or business association of which he was an executive officer at or within two years before the time of such filing;


2.

was convicted in a criminal proceeding or subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);


3.

was subject to any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining his from or otherwise limiting his involvement in any of the following activities:


i.

acting as a futures commission merchant, introducing broker, commodity trading advisor commodity pool operator, floor broker, leverage transaction merchant, any other person regulated by the Commodity Futures Trading Commission, or an associated person of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person, director or employee of any investment company, bank, savings and loan association or insurance company, or engaging in or continuing any conduct or practice in connection with such activity;


ii.

engaging in any type of business practice; or






iii.

engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of federal or state securities laws or federal commodities laws; or


4.

was the subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of an federal or state authority barring, suspending or otherwise limiting for more than 60 days the right of such person to engage in any activity described in paragraph (3) (i), above, or to be associated with persons engaged in any such activity; or


5.

found by a court of competent jurisdiction (in a civil action), the Securities and Exchange Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and for which the judgment has not been reversed, suspended or vacated.


Committees of the Board of Directors


Concurrent with having sufficient members and resources, the CSI Board of Directors will establish an audit committee and a compensation committee. We believe that we will need a minimum of five directors to have effective committee systems. The audit committee will review the results and scope of the audit and other services provided by the independent auditors and review and evaluate the system of internal controls. The compensation committee will manage any stock option plan we may establish and review and recommend compensation arrangements for the officers. No final determination has yet been made as to the memberships of these committees or when we will have sufficient members to establish committees. See “Executive Compensation” hereinafter.


All directors will be reimbursed by CSI for any expenses incurred in attending directors' meetings provided that CSI has the resources to pay these fees. CSI will consider applying for officers and directors liability insurance at such time when it has the resources to do so.


Summary Executive Compensation Table


The following table shows, for the period from December 15, 2014 (inception) to December 31, 2014, compensation awarded to or paid to, or earned by, our CEO (the “Named Executive Officer”).


SUMMARY COMPENSATION TABLE

Name
and
principal
position
(a)

Year
(b)

Salary
($)
(c)

Bonus
($)
(d)

Stock
Awards
($)
(e)

Option
Awards
($)
(f)

Non-Equity
Incentive
Plan
Compensation
($)
(g)

Nonqualified
Deferred
Compensation
Earnings
($)
(h)

All Other
Compensation
($)
(i)

Total ($)
(j)

(1) David Estus

CEO, CFO and Director

 2014

-

-(2)

-

-

-

-

6,000

6,000(2)


The Company has no formal employment arrangement with Mr. Estus for services. Mr. Estus’ compensation is not based on any percentage calculations. Mr. Estus makes all decisions determining the amount and timing of payment for his compensation and, for the immediate future, Mr. Estus has elected not to receive any payment of compensation which permits us to meet our financial obligations.


(1)Mr. Estus upon inception (December 15, 2014) received 6,000,000 shares of common stock of the Company in exchange for organizational services valued at $6,000. The Company does not intend to issue any additional shares to Mr. Estus for services as an officer or as a director.


(2) Mr. Estus invoices the Company for rental expense of $500 per month on a month-to-month verbal rental agreement. We do not consider the expense to be characterized as additional income to Mr. Estus as it is significantly below fair market value for comparable rents.






Grants of Plan-Based Awards Table

None of our named executive officers received any grants of stock, option awards or other plan-based awards during the period ended December 31, 2014. The Company had no activity with respect to these awards.

Options Exercised and Stock Vested Table

None of our named executive officers exercised any stock options, and no restricted stock units, if any, held by our named executive officers vested during the period ended December 31, 2014. The Company had no activity with respect to these awards.


Outstanding Equity Awards at Fiscal Year-End Table

None of our named executive officers had any outstanding stock or option awards as of December 31, 2014 that would be compensatory to the officer. The Company has not issued any awards to its named executive officers. The Company and its Board of Directors may grant awards as it sees fit to its employees as well as key consultants.


PRINCIPAL SHAREHOLDERS


As of September 25,2015 we had 9,000,000 shares of common stock outstanding held by one shareholder. The chart below sets forth the ownership, or claimed ownership, of certain individuals and/or entities. This chart discloses persons known by the Board of Directors to have, or claim to have: (i) beneficial ownership of more than 5% of the outstanding shares of our common stock as of September 25,2015; (ii) of all directors and executive officers of CSI; and (iii) of our directors and officers as a group.


Title Of Class

Name, Title and Address of Beneficial Owner of Shares(a)

Amount of Beneficial Ownership(b)

Percent of Class

 

 

 

Before Offering

After Offering(d)

Common

David Estus (c)

9,000,000

100.00%

60.00%

 

 

 

 

 

 

 

 

 

 

 

All Directors and Officers as a group (1 person)

9,000,000

 100.00%

60.00%


(a) The address for purposes of this table is 1854 Oxford Avenue, Cardiff-by-the-Sea, California 92007.

(b) Unless otherwise indicated, we believe all persons named in the table have sole voting and investment power with respect to all shares of the common stock beneficially owned by them. A person is deemed to be the beneficial owner of securities which may be acquired by such person within 60 days from the date indicated above upon the exercise of options, warrants or convertible securities. Each beneficial owner’s percentage ownership is determined by assuming that options, warrants or convertible securities that are held by such person (but not those held by any other person) and which are exercisable within 60 days of the date indicated above, have been exercised.

(c) Mr. Estus received 3,000,000 shares for selling certain intangible and tangible assets to the Company on January 15, 2015 , including the business plan, software development costs, computing and other equipment which present the basis for our business.

(d) Assumes the sale of the maximum amount of this Offering (6,000,000 shares of common stock). The aggregate amount of shares to be issued and outstanding after this Offering would be 9,000,000 based upon this assumption.


CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS


The only promoter of the Company is Mr. Estus, founder, CEO, CFO and principal financial officer.


Our office and mailing address is 1854 Oxford Avenue, Cardiff-by-the-Sea, California 92007. This space is provided to us by Mr. Estus. Mr. Estus charges us $500 per month and pays for all utilities and other maintenance costs for the facilities. There is no written lease agreement and we are on a month-month rental notice.


We issued 6,000,000 shares of its common stock to its founder and CEO, Mr. Estus, in exchange for organizational services incurred upon incorporation. These services were valued at $6,000.






Mr. Estus developed our business plan, the foundation for our internal-use software to be used to support our design portal, which we will continue to develop and improve upon. Mr. Estus received 3,000,000 shares of our common stock for selling certain tangible and intangible assets to us. The value of the assets purchased was $24,000, which is far less than the total cost incurred by Mr. Estus.


DESCRIPTION OF CAPITAL STOCK


Introduction.We were incorporated under the laws of the State of Nevada on December 15, 2014. We are authorized to issue 100,000,000 shares of common stock and 1,000,000 shares of preferred stock.


Preferred Stock.Our certificate of incorporation authorizes the issuance of 1,000,000 shares of preferred stock with designation, rights and other preferences determined from time to time by our Board of Directors. No shares of preferred stock have been designated, issued or are outstanding as of September 25, 2015. Accordingly, our Board of Directors is empowered, without stockholder approval, to issue up to 1,000,000 shares of preferred stock with voting, liquidation, conversion, and other rights that could adversely affect the rights of holders of our common stock. We have no intention to issue any shares of preferred stock, there can be no assurance that we will not do so in the future.


Among other rights, our Board of Directors may determine, without further vote or action by our stockholders:


·

the number of shares and the designation of the series;


·

whether to pay dividends on the series and, if so, the dividend rate, whether dividends will be cumulative and, if so, from which date or dates, and the relative rights of priority of payment of dividends on shares of the series;


·

whether the series will have voting rights in addition to the voting rights provided by law and, if so, the terms of the voting rights;


·

whether the series will be convertible into or exchangeable for shares of any other class or series of stock and, if so, the terms and conditions of conversion or exchange;


·

whether or not the shares of the series will be redeemable and, if so, the dates, terms and conditions of redemption and whether there will be a sinking fund for the redemption of that series and, if so, the terms and amount of the sinking fund; and


·

the rights of the shares of the series in the event of our voluntary or involuntary liquidation, dissolution or winding up and the relative rights or priority, if any, of payment of shares of the series.


We presently do not have plans to issue any shares of preferred stock. However, preferred stock could be used to dilute a potential hostile acquirer. Accordingly, any future issuance of preferred stock or any rights to purchase preferred shares may have the effect of making it more difficult for a third party to acquire control of us. This may delay, defer or prevent a change of control in our Company or an unsolicited acquisition proposal. The issuance of preferred stock also could decrease the amount of earnings attributable to, and assets available for distribution to, the holders of our common stock and could adversely affect the rights and powers, including voting rights, of the holders of our common stock.


Common Stock.Our certificate of incorporation authorizes the issuance of 100,000,000 shares of common stock. There are 9,000,000 shares of our common stock issued and outstanding at September 25, 2015 held by one shareholder. The holders of our common stock:


·

have equal ratable rights to dividends from funds legally available for payment of dividends when, as and if declared by the Board of Directors;


·

are entitled to share ratably in all of the assets available for distribution to holders of common stock upon liquidation, dissolution or winding up of our affairs;


·

do not have preemptive, subscription or conversion rights, or redemption or access to any sinking fund; and


·

are entitled to one non-cumulative vote per share on all matters submitted to stockholders for a vote at any meeting of stockholders


See Plan of Distribution regarding negative implications of being classified as a “Penny Stock”.






Authorized but Un-issued Capital Stock.Nevada law does not require stockholder approval for the issuance of authorized shares. These additional shares may be used for a variety of corporate purposes, including future public offerings to raise additional capital or to facilitate corporate acquisitions.


One of the effects of the existence of un-issued and unreserved common stock (or preferred stock) may be to enable our Board of Directors to issue shares to persons friendly to current management, which issuance could render more difficult or discourage an attempt to obtain control of our board by means of a merger, tender offer, proxy contest or otherwise, and thereby protect the continuity of our management and possibly deprive the stockholders of opportunities to sell their shares of our common stock at prices higher than prevailing market prices.


Shareholder Matters.As an issuer of “penny stock” the protection provided by the federal securities laws relating to forward looking statements does not apply to us if our shares are considered to be penny stocks which they currently are and probably will be for the foreseeable future. Although the federal securities law provide a safe harbor for forward-looking statements made by a public company that files reports under the federal securities laws, this safe harbor is not available to issuers of penny stocks. As a result, we will not have the benefit of this safe harbor protection in the event of any claim that the material provided by us, including this prospectus, contained a material misstatement of fact or was misleading in any material respect because of our failure to include any statements necessary to make the statements not misleading.


As a Nevada corporation, we are subject to theNevada Revised Statutes (“NRS” or “Nevada law”). Certain provisions ofNevada law described below create rights that might be deemed material to our shareholders. Other provisions might delay or make more difficult acquisitions of our stock or changes in our control or might also have the effect of preventing changes in our management or might make it more difficult to accomplish transactions that some of our shareholders may believe to be in their best interests.


Directors' Duties. Section 78.138 of Nevada law allows our directors and officers, in exercising their powers to further our interests, to consider the interests of our employees, suppliers, creditors and customers. They can also consider the economy of the state and the nation, the interests of the community and of society and our long-term and short-term interests and shareholders, including the possibility that these interests may be best served by our continued independence. Our directors may resist a change or potential change in control if they, by a majority vote of a quorum, determine that the change or potential change is opposed to or not in our best interest. Our Board of Directors may consider these interests or have reasonable grounds to believe that, within a reasonable time, any debt which might be created as a result of the change in control would cause our assets to be less than our liabilities, render us insolvent, or cause us to file for bankruptcy protection


Dissenters' Rights. Among the rights granted underNevada law which might be considered material is the right for shareholders to dissent from certain corporate actions and obtain payment for their shares (see NRS 92A.380-390). This right is subject to exceptions, summarized below, and arises in the event of mergers or plans of exchange. This right normally applies if shareholder approval of the corporate action is required either byNevada law or by the terms of the articles of incorporation.


A shareholder does not have the right to dissent with respect to any plan of merger or exchange, if the shares held by the shareholder are part of a class of shares which are:


·

listed on a national securities exchange,


·

included in the national market system by the FINRA, or


·

held of record by not less than 2,000 holders.


This exception notwithstanding, a shareholder will still have a right of dissent if it is provided for in the articles of incorporation or if the shareholders are required under the plan of merger or exchange to accept anything but cash or owner's interests, or a combination of the two, in the surviving or acquiring entity, or in any other entity falling in any of the three categories described above in this paragraph.


Inspection Rights.Nevada law also specifies that shareholders are to have the right to inspect company records (see NRS 78.105). This right extends to any person who has been a shareholder of record for at least six months immediately preceding his demand. It also extends to any person holding, or authorized in writing by the holders of, at least 5% of outstanding shares. Shareholders having this right are to be granted inspection rights upon five days' written notice. The records covered by this right include official copies of:






i.

the articles of incorporation, and all amendments thereto,


ii.

bylaws and all amendments thereto; and


iii.

a stock ledger or a duplicate stock ledger, revised annually, containing the names, alphabetically arranged, of all persons who are stockholders of the corporation, showing their places of residence, if known, and the number of shares held by them, respectively.


In lieu of a stock ledger or duplicate stock ledger, Nevada law provides that a corporation may keep a statement setting out the name of the custodian of the stock ledger or duplicate stock ledger, and the present and complete post office address, including street and number, if any, where the stock ledger or duplicate stock ledger specified in this section is kept.


Control Share Acquisitions. Sections 78.378 to 78.3793 of Nevada law contain provisions that may prevent any person acquiring a controlling interest in a Nevada-registered company from exercising voting rights. To the extent that these rights support the voting power of minority shareholders, these rights may also be deemed material. These provisions will be applicable to us as soon as we have 200 shareholders of record with at least 100 of these having addresses in Nevada as reflected on our stock ledger. While we do not yet have the required number of shareholders in Nevada or elsewhere, it is possible that at some future point we will reach these numbers and, accordingly, these provisions will become applicable. We do not intend to notify shareholders when we have reached the number of shareholders specified under these provisions of Nevada law. Shareholders can learn this information pursuant to the inspection rights described above and can see the approximate number of our shareholders by checking under Item 5 of our annual reports on Form 10-K. This form is filed with the Securities and Exchange Commission within 90 days after the close of each fiscal year hereafter. You can view these and our other filings at www.sec.gov in the “EDGAR” database.


Under NRS Sections 78.378 to 78.3793, an acquiring person who acquires a controlling interest in company shares may not exercise voting rights on any of these shares unless these voting rights are granted by a majority vote of our disinterested shareholders at a special shareholders' meeting held upon the request and at the expense of the acquiring person. If the acquiring person's shares are accorded full voting rights and the acquiring person acquires control shares with a majority or more of all the voting power, any shareholder, other than the acquiring person, who does not vote for authorizing voting rights for the control shares, is entitled to demand payment for the fair value of their shares, and we must comply with the demand. An “acquiring person” means any person who, individually or acting with others, acquires or offers to acquire, directly or indirectly, a controlling interest in our shares. “Controlling interest” means the ownership of our outstanding voting shares sufficient to enable the acquiring person, individually or acting with others, directly or indirectly, to exercise one-fifth or more but less than one-third, one-third or more but less than a majority, or a majority or more of the voting power of our shares in the election of our directors. Voting rights must be given by a majority of our disinterested shareholders as each threshold is reached or exceeded. “Control shares” means the company's outstanding voting shares that an acquiring person acquires or offers to acquire in an acquisition or within 90 days immediately preceding the date when the acquiring person becomes an acquiring person.


These Nevada statutes do not apply if a company's articles of incorporation or bylaws in effect on the tenth day following the acquisition of a controlling interest by an acquiring person provide that these provisions do not apply.


According to NRS 78.378, the provisions referred to above will not restrict our directors from taking action to protect the interests of our Company and its shareholders, including without limitation, adopting or executing plans, arrangements or instruments that deny rights, privileges, power or authority to a holder of a specified number of shares or percentage of share ownership or voting power. Likewise, these provisions do not prevent directors or shareholders from including stricter requirements in our articles of incorporation or bylaws relating to the acquisition of a controlling interest in the Company.


Our articles of incorporation and bylaws do not exclude us from restrictions imposed by NRS 78.378 to 78.3793, nor do they impose any more stringent requirements.


Certain Business Combinations. Sections 78.411 to 78.444 of the Nevada law may restrict our ability to engage in a wide variety of transactions with an “interested shareholder”. As was discussed above in connection with NRS 78.378 to 78.3793, these provisions could be considered material to our shareholders, particularly to minority shareholders. They might also have the effect of delaying or making more difficult acquisitions of our stock or changes in our control. These sections of NRS are applicable to any Nevada company with 200 or more stockholders of record and that has a class of securities registered under Section 12 of the 1934 Securities Exchange Act, unless the company's articles of incorporation provide otherwise. By this registration statement, we are not registering our common stock under Section 12(g) of the Exchange Act. Accordingly, upon effectiveness of this registration statement on Form S-1 we will be subject to these statutes.






These provisions of Nevada law prohibit us from engaging in any “combination” with an interested stockholder for three years after the interested stockholder acquired their shares that cause him/her to become an interested shareholder, unless they obtain prior approval from our Board of Directors. The term “combination” is described in NRS 78.416 and includes, among other things, mergers, sales or purchases of assets, and issuances or reclassifications of securities. If the combination did not have prior approval, the interested shareholder may proceed after the three-year period only if the shareholder receives approval from a majority of our disinterested shares or the offer meets the requirements for fairness that are specified in NRS 78.441-42. For the above provisions, a “resident domestic corporation” means a Nevada corporation that has 200 or more shareholders. An “interested stockholder” is defined in NSR 78.423 as someone who is either:


·

the beneficial owner, directly or indirectly, of 10% or more of the voting power of our outstanding voting shares; or


·

our affiliate or associate and who within three years immediately before the date in question, was the beneficial owner, directly or indirectly, of 10% or more of the voting power of our outstanding shares at that time.


Amendments to Bylaws.Our articles of incorporation provide that the power to adopt, alter, amend, or repeal our bylaws is vested exclusively with the Board of Directors. In exercising this discretion, our Board of Directors could conceivably alter our bylaws in ways that would affect the rights of our shareholders and the ability of any shareholder or group to effect a change in our control; however, the board would not have the right to do so in a way that would violate law or the applicable terms of our articles of incorporation.


Transfer Agent.The transfer agent for our common stock is Action Stock Transfer Corporation, 2469 E. Fort Union Blvd, Suite 214, Salt Lake City, Utah 84121. Its telephone number is (801) 274-1088.


PLAN OF DISTRIBUTION


There is no public market for our common stock. Our common stock is currently held by one shareholder. Therefore, current and potential market for our common stock is limited and liquidity of our shares may be severely limited. While we have approached a capable market maker, this market maker has not yet agreed to file an application with FINRA on our behalf. This application when accepted by FINRA would enable the market maker to be able to quote our shares of common stock on the OTCBB as maintained by FINRA. This only occurs upon acceptance of the application by FINRA and may not commence any sooner than the effectiveness of our registration statement of which this prospectus is an integral part of and the closing of this Offering. While we have not yet secured the services of a market maker there can be no assurance as to whether a market maker’s application when filed will be accepted by FINRA nor can we estimate the time period that will be required for the application process after filing. In the absence of quotation or listing, no market is available for investors in our common stock to sell their shares. We cannot provide any assurance that a meaningful trading market will ever develop or that our common stock will ever be quoted or listed for trading.


If the shares of our common stock ever become tradable, the trading price of our common stock could be subject to wide fluctuations in response to various events or factors, many of which are beyond our control. As a result, investors may be unable to sell their shares at or greater than the price at which they are being offered.


This Offering will be conducted on a best-efforts basis utilizing the efforts of Mr. Estus, founder and CEO of the Company. Potential investors include, but are not limited to, family, friends and acquaintances of Mr. Estus. The intended methods of communication include, without limitation, telephone calls and personal contact. In his endeavors to sell this Offering, Mr. Estus will not use any mass advertising methods such as the internet or print media.


Funds received in connection with the sale of our securities will be transmitted immediately into an escrow account. There can be no assurance that all, or any, of the shares will be sold.


Mr. Estus will not receive commissions for any sales originated on our behalf. We believe that Mr. Estus is exempt from registration as a broker under the provisions of Rule 3a4-1 promulgated under the Exchange Act. In particular, Mr. Estus:


1.

Is not subject to a statutory disqualification, as that term is defined in Section 3(a)39 of the Act, at the time of his participation;


a.

Is not to be compensated in connection with his participation by the payment of commissions or other remuneration based either directly or indirectly on transactions in securities;


b.

Is not an associated person of a broker or dealer; and






c.

Meets the conditions of the following:


i.

Primarily performs, or is intended primarily to perform at the end of the Offering, substantial duties for or on behalf of the issuer otherwise than in connection with transactions in securities;


ii.

Was not a broker or dealer, or associated persons of a broker or dealer, within the preceding 12 months; and


iii.

Did not participate in selling an offering of securities for any issuer more than once every 12 months other than in reliance on paragraphs within this section, except that for securities issued pursuant to Rule 415 under the Securities Act of 1933, the 12 months shall begin with the last sale of any security included within a Rule 415 registration


No officers or directors of the Company may purchase any securities in this Offering.


There can be no assurance that all, or any, of the shares will be sold. As of this date, we have not entered into any agreements or arrangements for the sale of the shares with any broker-dealer or sales agent. However, if we were to enter into such arrangements, we will be required to file a post-effective amendment to disclose those arrangements because any broker-dealer participating in the Offering acting as an underwriter and would have to be so named herein. In order to comply with the applicable securities laws of certain states, the securities may not be offered or sold unless they have been registered or qualified for sale in such states or an exemption from such registration or qualification requirement is available and with which we have complied. The purchasers in this Offering and in any subsequent trading market must be residents of such states where the shares have been registered or qualified for sale or an exemption from such registration or qualification requirement is available. As of this date, we have not identified the specific states where this Offering will be sold.


The proceeds from the sale of the shares in this Offering will be payable to The Krueger Group, LLP – Attorney-Client Trust Account (“Escrow Account”), and will be deposited in a non-interest-bearing bank account until the subscription agreements are accepted by the Company. Failure to do so will result in checks being returned to the investor who submitted their check. No interest will be paid to any shareholder, investor or the Company. All subscription agreements and checks are irrevocable (except as to any state that requires a statutory cooling-off period or rescission right). All subscription funds will be held in the Escrow Account pending acceptance of the various subscriptions by CSI, and funds may be released to CSI as received and cleared in the Escrow Account, this may occur regularly until the maximum Offering amount (6,000,000 shares of common stock) has been subscribed to. Thereafter, the escrow agreement shall terminate.


Investors can purchase common stock in this Offering by completing a Subscription Agreement, a copy of which is filed as Exhibit 99.1, and sending it together with payment in full. All payments must be made in U.S. currency either by personal check, bank draft, or cashier check. There is no minimum subscription required by the Company. All subscription agreements and checks are irrevocable (except as to any state that requires a statutory cooling-off period or rescission right). We expressly reserve the right to either accept or reject any subscription, for any reason. Any subscription rejected will be returned to the subscriber within five business days of the rejection date. Furthermore, once a subscription agreement is accepted by us, it will be executed without any confirmation to or from the subscriber. Once we accept a subscription, the subscriber may not withdraw it.


We will pay all expenses incident to the registration, offering and sale of the shares other than commissions or discounts of underwriters, broker-dealers or agents, if any.


Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers and control persons, we have been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.


Any purchaser of our securities should be aware that any market that develops in our stock will be subject to the “penny stock” restrictions.


The trading of our securities, if any, will be in the over-the-counter markets which are commonly referred to as the OTCBB as maintained by FINRA (if and when quoting thereon has occurred). As a result, a purchaser of our securities may find it difficult to dispose of, or to obtain accurate quotations as to the price of, our securities.






OTCBB Considerations


OTCBB securities are not listed or traded on a floor of an organized national or regional stock exchange. Instead, OTCBB securities transactions are conducted through telephonic and Internet services connecting dealers in the orderly trading of securities or “stocks”. OTCBB stocks are traditionally smaller companies that do not meet the financial and listing requirements of a regional or national stock exchange.


To be quoted on the OTCBB, a market maker must file an application on our behalf in order to make a market for our common stock. We are not permitted to file such application on our own behalf. While a market maker has been approached, however, as of the date of this prospectus a market maker has not agreed to file an application with FINRA on our behalf so as to be able to quote our shares of common stock on the OTCBB maintained by FINRA commencing upon the effectiveness of our registration statement of which this prospectus is a part. There can be no assurance that a market maker’s application will be accepted by FINRA, nor can we estimate as to the period of time that the application will require to be approved.


The OTCBB is separate and distinct from the NASDAQ stock market. NASDAQ has no business relationship with issuers of securities quoted on the OTCBB. The SEC’s order handling rules, which apply to NASDAQ-listed securities, do not apply to securities quoted on the OTCBB.


Although the NASDAQ stock market has rigorous listing standards to ensure the quality of its issuers, and can delist issuers for not meeting those standards, the OTCBB has no listing standards. Rather, it is the market maker who chooses to quote a security on the system, files an application, and is therefore obligated to comply with keeping accurate and timely information about the issuer in its files. FINRA cannot deny an application by a market maker to quote the stock of an issuer assuming all of FINRA’s questions relating to its Rule 211 process are answered accurately and satisfactorily. The only requirement for ongoing inclusion in the OTCBB is that the issuer be current in its reporting requirements with the SEC.


Although we anticipate that quotation on the OTCBB will increase liquidity for our common stock, investors may have difficulty in getting orders filled because trading activity on the OTCBB, in general, is not conducted as efficiently and effectively as with NASDAQ-listed securities. As a result, investors’ orders may be filled at a price much different than expected when placed.


Investors must contact a broker-dealer to trade OTCBB securities. Investors do not have direct access to the bulletin board service. For bulletin board securities, there has to be only one market maker.


OTCBB transactions are conducted almost entirely manually. Because there are no automated systems for negotiating trades on the OTCBB, they are conducted via telephone. In times of heavy market volume, the limitations of this process may result in a significant increase in the time it takes to execute investor orders. Therefore, when investors place market orders - an order to buy or sell a specific number of shares at the current market price - it is possible for the price of a stock to go up or down significantly during the lapse of time between placing a market order and getting execution.


If we become able to have our shares of common stock quoted on the OTCBB, we will then try, through a broker-dealer and its clearing firm, to become eligible with the DTC to permit our shares to trade electronically. If an issuer is not “DTC-eligible,” then its shares cannot be electronically transferred between brokerage accounts, which, based on the realities of the marketplace as it exists today (especially the OTCBB), means that shares of a company will not be traded (technically the shares can be traded manually between accounts, but this takes days and is not a realistic option for companies relying on broker dealers for stock transactions - like all the companies on the OTCBB). What this boils down to is that while DTC-eligibility is not a requirement to trade on the OTCBB, it is a necessity to process trades on the OTCBB if a company’s stock is going to trade with any volume. There are no assurances that our shares will ever become DTC-eligible or, if they do, how long it will take.


Because OTCBB stocks are not usually followed by analysts, there most likely will be lower trading volume than for NASDAQ-listed securities or quite possibly none.


Section 15(g) of the Exchange Act

Our shares will be covered by Section 15(g) of the Exchange Act, and Rules 15g-1 through 15g-6 promulgated thereunder. They impose additional sales practice requirements on broker-dealers who sell our securities to persons other than established customers and accredited investors (generally institutions with assets in excess of $5,000,000 or individuals with net worth in excess of $1,000,000 excluding revenue or annual income exceeding $200,000 or $300,000 jointly with their spouses).

Rule 15g-1 exempts a number of specific transactions from the scope of the penny stock rules (but is not applicable to us).





Rule 15g-2 declares unlawful broker-dealer transactions in penny stocks unless the broker-dealer has first provided to the customer a standardized disclosure document.

Rule 15g-3 provides that it is unlawful for a broker-dealer to engage in a penny stock transaction unless the broker-dealer first discloses and subsequently confirms to the customer current quotation prices or similar market information concerning the penny stock in question.

Rule 15g-4 prohibits broker-dealers from completing penny stock transactions for a customer unless the broker-dealer first discloses to the customer the amount of compensation or other remuneration received as a result of the penny stock transaction.

Rule 15g-5 requires that a broker-dealer executing a penny stock transaction, other than one exempt under Rule 15g-1, disclose to its customer, at the time of or prior to the transaction, information about the sales persons compensation.

Rule 15g-6 requires broker-dealers selling penny stocks to provide their customers with monthly account statements.

Rule 3a51-1 of the Exchange Act establishes the definition of a “penny stock,” for purposes relevant to us, as any equity security that has a minimum bid price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to a limited number of exceptions. It is likely that our shares will be considered to be penny stocks for the immediately foreseeable future. For any transaction involving a penny stock, unless exempt, the penny stock rules require that a broker or dealer approve a person's account for transactions in penny stocks and the broker or dealer receive from the investor a written agreement to the transaction setting forth the identity and quantity of the penny stock to be purchased.


In order to approve a person's account for transactions in penny stocks, the broker or dealer must obtain financial information and investment experience and objectives of the person and make a reasonable determination that the transactions in penny stocks are suitable for that person and that that person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks.


The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prepared by the SEC relating to the penny stock market, which, in highlight form, sets forth:


·

the basis on which the broker or dealer made the suitability determination, and

·

that the broker or dealer received a signed, written agreement from the investor prior to the transaction


Disclosure also has to be made about the risks of investing in penny stock in both public offerings and in secondary trading and commission payable to both the broker-dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor in cases of fraud in penny stock transactions. Additionally, monthly statements have to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks.


Many brokers have decided not to trade penny stocks because of the requirements of the penny stock rules and, as a result, the number of broker-dealers willing to act as market makers in such securities is limited. If the Company remains subject to the penny stock rules for any significant period, which is likely, it could have an adverse effect on the market, if any, for the Company’s securities. If our securities become subject to the penny stock rules, investors will find it difficult to dispose of the Company’s securities.


State Securities – Blue Sky Laws


There is no established public market for our common stock, and there can be no assurance that any market will develop in the foreseeable future. Transfer of our common stock may also be restricted under the securities or securities regulations laws promulgated by various states and foreign jurisdictions, commonly referred to as “Blue Sky” laws. Absent compliance with such individual state laws, our common stock may not be traded in such jurisdictions. Because the securities registered hereunder have not been registered for resale under the blue sky laws of any state, the holders of such shares and persons who desire to purchase them in any trading market that might develop in the future, should be aware that there may be significant state blue-sky law restrictions upon the ability of investors to sell the securities and of purchasers to purchase the securities. Accordingly, investors may not be able to liquidate their investments and should be prepared to hold the common stock for an indefinite period of time.


We will consider applying for listing in Mergent, Inc., a leading provider of business and financial information on publicly listed companies, which, once published, will provide CSI with “manual” exemptions in approximately 33 states as indicated in CCH Blue Sky Law Desk Reference at Section 6301 entitled “Standard Manuals Exemptions”. However, we may not be accepted for listing in Mergent or similar services designed to obtain manual exemptions if we are considered to be a “shell company” at the time of application.






Thirty-three states have what is commonly referred to as a “manual exemption” for secondary trading of securities such as those to be resold by selling stockholders under this registration statement. In these states, so long as we obtain and maintain a listing in Mergent, Inc. or Standard and Poor's Corporate Manual, secondary trading of our common stock can occur without any filing, review or approval by state regulatory authorities in these states. These states are: Alaska, Arizona, Arkansas, Colorado, Connecticut, District of Columbia, Florida, Hawaii, Idaho, Indiana, Iowa, Kansas, Maine, Maryland, Massachusetts, Michigan, Mississippi, Missouri, Nebraska, New Jersey, New Mexico, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Rhode Island, South Carolina, Texas, Utah, Washington, West Virginia and Wyoming. We cannot secure this listing, and thus this qualification, until after our registration statement is declared effective. Once we secure this listing (assuming that being a development stage and shell company is not a bar to such listing), secondary trading can occur in these states without further action.


Upon effectiveness of this prospectus, the Company intends to consider (but may not) becoming a “reporting issuer” under Section 12(g) of the Exchange Act, as amended, by way of filing a Form 8-A with the SEC. A Form 8-A is a “short form” registration whereby information about the Company will be incorporated by reference to the Registration Statement on Form S-1, of which this prospectus is a part. Upon filing of the Form 8-A, if done, the Company’s shares of common stock will become “covered securities,” or “federally covered securities” as described in some states’ securities statutes, which means that unless you are an “underwriter” or “dealer,” you may have a “secondary trading” exemption under the laws of most states (and the District of Columbia, Guam, the Virgin Islands and Puerto Rico) to resell the shares of common stock you purchase in this Offering. Four states do impose a filing requirement on the Company: those states are Michigan, New Hampshire, Texas and Vermont. The Company may, at its own cost, make the required notice filings in those states immediately after filing its Form 8-A with the SEC.


We currently do not intend to and may not be able to qualify securities for resale in other states which may require our shares to be qualified before they can be resold by shareholders or prospective investors.


Limitations Imposed by Regulation M


Under applicable rules and regulations under the Exchange Act, any person engaged in the distribution of the shares may not simultaneously engage in market making activities with respect to our common stock for a period of two business days prior to the commencement of such distribution.


LEGAL MATTERS


The validity of the issuance of the shares of common stock offered hereby will be passed upon for us by Krueger LLP, La Jolla, California.


EXPERTS


The financial statements of CSI as of December 31, 2014 and for the period December 15, 2014 (inception) to December 31, 2014 included in this prospectus have been audited by independent registered public accountants and have been so included in reliance upon the report of PLS CPA, A Professional Corp. given on the authority of such firm as experts in accounting and auditing.


UNAUDITED INTERIM FINANCIAL STATEMENTS


The information for the interim period ended June 30, 2015 is unaudited; however, it includes all adjustments considered necessary by management for a fair presentationanalysis of our financial condition and results of operations.






WHERE YOU CAN FIND MORE INFORMATION


Weoperation are based upon our financial statements, which have filedbeen prepared in accordance with the Securities and Exchange Commission a registration statement on Form S-1, including exhibits, schedules and amendments, under the Securities Act with respect to the shares of common stock to be sold in this Offering. This prospectus does not contain all the information includedaccounting principles generally accepted in the registration statement. For further information about us and the sharesUnited States of our common stock to be sold in this Offering, please refer to our registration statement.


AsAmerica. The preparation of the effective date of our registration statement of which this prospectus is a part, we will become subject to certain informational requirements of the Exchange Act, as amended and we will be required to file periodic reports (i.e., annual, quarterly and material events) with the SEC which will be immediately available to the public for inspection and copying. In the event during the year that our registration statement becomes effective, these reporting obligations may be automatically suspended under Section 15(d) of the Exchange Act if we have less than 300 shareholders and do not file a registration statement on Form 8-A (of which we have no current plans to file). If this occurs after the first year in which our registration statement becomes effective, we will no longer be obligated to file such periodic reports with the SEC and access to our business information would then be even more restricted. After this registration statement on Form S-1 becomes effective, we may be required to deliver periodic reports to security holders as proscribed by the Exchange Act, as amended. However, we will not be required to furnish proxy statements to security holders and our directors, officers and principal beneficial owners will not be required to report their beneficial ownership of securities to the SEC pursuant to Section 16 of the Exchange Act. Previously, a company with more than 500 shareholders of record and $10 million in assets had to register under the Exchange Act. The JOBS Act raises the minimum shareholder threshold from 500 to either 2,000 persons or 500 persons who are not "accredited investors" (or 2,000 persons in the case of banks and bank holding companies). The JOBS Act excludes securities received by employees pursuant to employee stock incentive plans for purposes of calculating the shareholder threshold. This means that access to information regarding our business and operations will be limited.


You may read and copy any document we file at the SEC's public reference room at 100 F Street, N. E., Washington, D.C. 20549. You should call the SEC at (800) SEC-0330 for further information on the public reference rooms. Our SEC filings will also be available to the public at the SEC's web site at “http:/www.sec.gov”.


You may request, and we will voluntarily provide, a copy of our filings, including our annual report which will contain audited financial statements, at no cost to you, by writing or telephoning us at the following address:


CubeScape, Inc.

1854 Oxford Avenue

Cardiff-by-the-Sea, California 92007

(760) 613-6257








CUBESCAPE, INC.

(A DEVELOPMENT STAGE COMPANY)


INDEX TO FINANCIAL STATEMENTS


Contents

Page(s)

Report of Independent Registered Public Accounting Firm

F-1

Balance Sheet at December 31, 2014

F-2

Statement of Operations for the Period December 15, 2014 (inception) to December 31, 2014

F-3

Statement of Stockholders’ Equity for the Period December 15, 2014 (inception) to December 31, 2014

F-4

Statement of Cash Flows for the Period December 15, 2014 (inception) to December 31, 2014

F-5

Notes to the Financial Statements

F-6

Unaudited Interim Financial Statements for the Six Month Period Ended June 30, 2015

F-12








PLS CPA, A PROFESSIONAL CORPORATION

t4725 MERCURY STREET #210t SAN DIEGOt CALIFORNIA 92111t

t TELEPHONE (858)722-5953t FAX (858) 761-0341  t FAX (858) 433-2979

t E-MAIL changgpark@gmail.comt



Report of Independent Registered Public Accounting Firm


To the Board of Directors and Stockholders

CubeScape, Inc.



We have audited the accompanying balance sheet of CubeScape, Inc. (A Development Stage “Company”) as of December 31, 2014 and the related statements of operations, changes in shareholders’ equity and cash flows for the period from December 15, 2014 (inception) to December 31, 2014. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.


requires us to make estimates and judgments that affect the reported amounted of assets, liabilities, revenues, and expenses. We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards requirehave identified several accounting principles that we planbelieve are key to the understanding of our financial statements. These important accounting policies require our most difficult subjective judgements.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires us to make estimates and performassumptions that affected the audit to obtain reasonable assurance about whetherreported 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 from those estimates. Significant estimates made in preparing the consolidated financial statements include the valuation of allowances for doubtful accounts, valuation of deferred tax assets, inventories, useful lives of assets, intangible assets, and stock-based compensation.

Inventory

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

Research and Development

To date, we have expensed all costs associated with developing our product specifications, manufacturing procedures, and products through product development expense as this work was done by our design and engineering team.

Revenue Recognition

In accordance with ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”), revenues are recognized when control of the promised goods or services is transferred to our clients, in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods and services. To achieve this core principle, we apply the following five steps: (1) Identify the contract with a test basis, evidence supportingclient; (2) Identify the amounts and disclosuresperformance obligations in the financial statements. An audit also includes assessingcontract; (3) Determine the accounting principles usedtransaction price; (4) Allocate the transaction price to performance obligations in the contract; and significant estimates made by management,(5) Recognize revenues when or as well as evaluating the overall financial statements presentation. company satisfies a performance obligation.

We believe thatadopted this ASC on January 1, 2018. Although the new revenue standard is expected to have an immaterial impact, if any, on our audit provides a reasonable basis forongoing net income, we did implement changes to our opinion.


In our opinion, the financial statements referredprocesses related to above present fairly, in all material respects, the financial position of CubeScape, Inc. as of December 31, 2014,revenue recognition and the resultcontrol activities within them.

Excise Tax

None applicable.

Fair Value of its operations and its cash flows for the period from December 15, 2014 (inception) to December 31, 2014 in conformity with U.S. generally accepted accounting principles.Financial Instruments


The financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company’s losses from operations raise substantial doubt about its ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.




/s/ PLS CPA


PLS CPA, A Professional Corp.

July 8, 2015

San Diego, CA. 92111





Registered with the Public Company Accounting Oversight Board






CUBESCAPE, INC.

(A DEVELOPMENT STAGE COMPANY)

BALANCE SHEET



December 31, 2014

ASSETS

(audited)

CURRENT ASSETS:

Cash and cash equivalents

$

-

 Total Current Assets

-

TOTAL ASSETS

$

-

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)

CURRENT LIABILITIES:

Accounts payable and accrued expense

$

-

Nonrelated party loans

610

TOTAL LIABILITIES

610

STOCKHOLDERS’ EQUITY (DEFICIT):

Preferred stock, $0.001 par value; 1,000,000 shares authorized; none issued or outstanding

-

Common stock, $0.001 par value; 100,000,000 shares authorized; 6,000,000 shares issued and outstanding as of December 31, 2014

6,000

 Additional paid in capital

-

 Deficit accumulated during development stage

(6,610)

TOTAL STOCKHOLDERS’ EQUITY (DEFICIT)

(610)

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)

$

-






See Notes to Financial Statements.






CUBESCAPE, INC.

(A DEVELOPMENT STAGE COMPANY)

STATEMENT OF OPERATIONS



For the period

December 15, 2014

(inception) through

December 31, 2014

(audited)

Revenue

$

-

Cost of revenue

-

Gross margin

-

Expenses:

Officer compensation

6,000

Administrative and other costs

-

Organization expense

610

Loss before income tax

6,610

Provision for income tax

-

Net loss

$

(6,610)

Basic and diluted loss per share

$

(0.00)

Weighted average common shares outstanding - basic and diluted

6,000,000



See Notes to Financial Statements.






CUBESCAPE, INC.

(A DEVELOPMENT STAGE COMPANY)

STATEMENT OF STOCKHOLDERS' DEFICIT



 

Common

Stock

 

Common Stock

Amount

 

Additional

Paid-in

Capital

 

Retained Deficit

 

Total

Balance – December 15, 2014 (inception) shares issued for organization services – officers compensation

6,000,000

$

6,000

$

-

$

-

$

6,000

 

 

 

 

 

 

 

 

 

 

Net loss

-

 

-

 

-

 

(6,610)

 

(6,610)

Balance – December 31, 2014 (audited)

6,000,000

$

6,000

$

-

$

(6,610)

$

(610)



See Notes to Financial Statements.







CUBESCAPE, INC.

(A DEVELOPMENT STAGE COMPANY)

STATEMENT OF CASH FLOWS



For the period

December 15, 2014 (inception) through

December 31, 2014

(audited)

CASH FLOW FROM OPERATING ACTIVITIES:

Net loss

$

(6,610)

Amortization

-

Shares issued for compensation

6,000

Adjustments to reconcile net loss to cash (used in) operating activities:

Change in accrued expense

-

Net Cash (Used in) Operating Activities

(610)

CASH FLOW FROM INVESTING ACTIVITIES

-

CASH FLOW FROM FINANCING ACTIVITIES:

Loan from nonrelated party

610

Loan from related party

-

Net Cash Provided by Financing Activities

610

CHANGE IN CASH

-

CASH AT BEGINNING OF PERIOD

-

CASH AT END OF PERIOD

$

-

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

Cash paid for:

Interest

$

-

Income taxes

$

-


See Notes to Financial Statements.






CUBESCAPE, INC.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO THE FINANCIAL STATEMENTS

DECEMBER 31, 2014


NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES


Organization

The Company was incorporated on December 15, 2014 (date of inception) under the laws of the State of Nevada, as CubeScape, Inc.

Nature of operations

The Company is developing a branded product that utilizes panoramic vinyl wall graphics generated on a proprietary interactive design portal. The proprietary interactive portal is designed to assist the consumer or end-user in creating wall or cubicle panel art, upgrading and/or enhancing plain home, office and cubicle work space with a new approach to workplace aesthetics. The Company’s product will consist of high resolution wall graphics made from professional art, designs, stock-photos and/or user (consumer) provided images that are integrated into unique backdrop. Graphics will be constructed of quality vinyl and low-tack adhesive for ease of application and replacement but durable.


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.


Revenue recognition

We recognize revenue when all of the following conditions are satisfied: (1) there is persuasive evidence of an arrangement; (2) the product or service has been provided to the consumer; (3) the amount of fees to be paid by the consumer is fixed or determinable; and (4) the collection of our fees or product revenue is probable.


The Company will record revenue when it is realizable and earned and product have been shipped to the consumers or that our service has been rendered to the consumer.

Advertising costs

Advertising costs are anticipated to be expensed as incurred; however there were no advertising costs for the period from “Inception” (December 15, 2014) to December 31, 2014.

Fair value of financial instruments

Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of September 30, 2021, and December 31, 2014.2020, respectively. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values. These financial instruments include cash, deferred offering costs 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.


44

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



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 50% likelihood of being sustained upon examination by taxing authorities. As of September 30, 2021, and December 31, 2020, the Company reviewed its tax positions and determined there were no outstanding, or retroactive tax positions with less than a 50% likelihood of being sustained upon examination by the taxing authorities, therefore this standard has not had a material effect on the Company.

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

The Company classifies tax-related penalties and net interest as income tax expense. For the nine-month period ended September 30, 2021, and 2020, respectively, no income tax expense has been recorded.


45



Stock-based compensationStock-Based Compensation

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

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


Earnings per share

TheDuring the three months ended September 30, 2021, the Company follows ASC Topic 260 to account for earnings per share. Basic earnings per common share (“EPS”) calculations are determined by dividing net income by the weighted average number ofissued 123,122 shares of common stock outstanding duringits Common Stock to pay professional and consulting fees. Total fair value of $617,068 was recorded as an expense.

46

BUSINESS

Our Company

American Rebel, America’s Patriotic Brand, operates primarily on designing and marketing branded safes and personal security and self-defense products. Additionally, the year. Diluted earnings per common share calculationsCompany designs and produces branded accessories and apparel, including with concealment pockets.

We believe that when it comes to their homes, consumers place a premium on their security and privacy. Our products are determined by dividing net income bydesigned 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 weighted average numberAmerican Rebel brand.

Our safes and personal security products are constructed primarily of common sharesU.S.-made steel. We believe our products are designed to safely store firearms, as well as store our customers’ priceless keepsakes, family heirlooms and dilutive common share equivalents outstanding. During periods when common stock equivalents, if any,treasured memories, and aim to make our products accessible at various price points for home use. We believe our products are anti-dilutive theydesigned for safety, quality, reliability, features and performance.

To enhance the strength of our brand and drive product demand, we work with our sole supplier and manufacturer 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 not consideredbecoming 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. We are in the computation.


Income taxes

The Company follows ASC Topic 740 for recording provision for income taxes. Deferred tax assets and liabilities are computed based upon the difference between the financial statement and income tax basisprocess of assets and liabilities using the enacted marginal tax rate applicable when the related asset or liabilitydeveloping a newly designed model safe, which is expected to be realizedproduced in the U.S. We anticipate our new model safe will offer and be equipped with technologically advanced features, such as independent boltworks operation, double-steel door-jamb framing, and a standardized geared locking mechanism.

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 our Chief Executive Officer, Charles A. “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.

Our Products

We design, market and sell branded safes and personal security products, including concealed carry/self-defense products, and design and market apparel line and complimentary accessories. We promote and sell our products primarily through retailers using a dealer network, as well as online, through our website, and on Amazon.com, where customers can place an order for our branded backpacks and apparel items.

47

Safes

We offer a wide range of home, office and personal safe models, in a broad assortment of sizes, features and styles, which are constructed with U.S.-made steel. Our safes exhibit the strength and rugged independence that America was built upon. American Rebel’s design makes keeping your firearms more secure in style. Products are marketed under the American Rebel brand. Although demand for our safes is strong across all segments of our customers, including individuals and families who wish to protect their valuables, to collectors and the dispensary servicing community, the demand for safe storage responsible solutions has been particularly strong among gun owners, sportsmen, competitive shooters and hunters alike. We expect to benefit from increasing awareness of and need for safe storage of firearms in future periods.

Large Safes

Our premium large safe collection consists of six premium safes in a range of sizes. 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. We believe that our large safes are ideal for storing valuables of significant size, and that they offer greater capacity for storage and protection. 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. The large safes are designed to be resistant to break-ins, natural disasters and fire damage, and to prevent unauthorized access and to protect your family and their valuables. A large, highly visible safe also is believed to act as a deterrent to any prospective thief. Safe storage is also top priority of our customer base who seeks to responsibly secure their firearms. Whenever a new firearm is purchased, gun owners look for our premium solution to responsible secure them and protect their loved ones.

Our large safes selection includes the following:

AR-50

The AR-50 is our biggest among the most secure safes. The AR-50 safe is designed to be strong, rugged, constructed of 11-gauge American-made steel and maintains capacity to comfortably store over 40 firearms comfortably. This premium gun safe with a double plate steel door, double-steel door casement and reinforced door edge is designed to give our customers added security and peace of mind, with 75 minutes of fire protection at 1200 degrees Fahrenheit as well as a customized shelf solution and optional additional accessories to increase the capacity to hold firearms. 72” tall, 40” wide with a depth of 28.5”.

48

AR-40

The AR-40 has the same footprint as the AR-50; however, it is 12” shorter with a capacity of over 30 firearms. This gun safe contains a double plate steel door, double-steel door casement and reinforced door edge, designed to give our customers secure storage. It provides 75 minutes of fire protection at 1200 degrees Fahrenheit as well as a flexible shelving system to accommodate firearm storage. The dimensions include 60” tall, 40” wide with a depth of 28.5”.

AR-30

The AR-30 offers nearly 50,000 cubic inches of storage. Built with the same strength and ruggedness as the AR-50 and AR-40 models, this safe holds over 20 firearms. This gun safe contains a double plate steel door, double-steel door casement and reinforced door edge. It is designed to give our customers the ability to store their firearms and valuables securely, with 75 minutes of fire protection at 1200 degrees Fahrenheit as well as offering optional add-on accessories to increase storage capacity. The dimensions include 60” tall, 34” wide with a depth of 24.5”.

AR-20

The AR-20 shares the quality workmanship as the other sizes with a capacity for over 15 firearms. This gun safe contains a double plate steel door, double-steel door casement and reinforced door edge is designed to prevent theft and provide protection from fire, flood and accidental access, with 75 minutes of fire protection at 1200 degrees Fahrenheit as well as a customized shelving solution. The dimensions include 60” tall, 28” wide with a depth of 22.5”.

AR-15

The AR-15 fits the bill for narrow spaces with room for over 10 firearms. Same quality construction as our other large safes including a double plate steel door, double-steel door casement and reinforced door edge is designed to give our customers added security and peace of mind, with 75 minutes of fire protection at 1200 degrees Fahrenheit as well as a customized shelving solution. The dimensions include 60” tall, 22” wide with a depth of 22.5”.

49

AR-12

The AR-12 is our shortest safe. It is the perfect size to store AR rifles, handguns and personal valuables. It has a capacity of over 8 AR rifles. Same quality construction as our other large safes including a double plate steel door, double-steel door casement and reinforced door edge is designed to give our customers safe storage and peace of mind, with 75 minutes of fire protection at 1200 degrees Fahrenheit as well as offering optional add-on accessories to increase storage capacity. The dimensions include 40” tall, 26” wide with a depth of 23”.

Personal safes

Our compact safes, which come in two sizes, are a responsible solution for safely secure smaller valuables or settled. Deferred income tax expenseammunition. The AR-110 weighs 5 pounds and is 9.5” x 6.5” x 1.75”. The AR-120 weighs 6 pounds and is 10.5” x 7/5” x 2.1875”. These small, personal safes are easy to operate and carry as they fit into a briefcase, desk or benefitunder a vehicle seat. These personal safes meet (“TSA”) airline firearm guidelines and fit comfortable in luggage where travel regulations require it.

Vault doors

Our U.S.-made Vault Doors combine style with theft and fire protection for a look that fits any decor. Designed to offer superior protection, vault rooms provide ideal solution for the protection of the family and any valuables. 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 is baseda safe room, a shelter, or a place to consolidate valuables, our American Rebel In-Swinging and Out-Swinging Vault Doors provide maximum functionality to a secure vault room. American Rebel vault doors are constructed of two thick, A36 carbon steel panels with sandwiched fire insulation, a design that provides greater rigidity, security and fire protection. The active boltworks and three external hinges are some of the features of the vault door. For safety and to use the door for a panic or safe room door, a quick release lever is installed inside the door.

Dispensaries

Our inventory control safe, the HG-INV Inventory Safe, provides cannabis dispensaries a reliable and safe solution. With wide-spread legalization, medical marijuana or recreational cannabis dispensaries, increasing governmental regulation and insurance requirements to lock their inventory after hours, our HG-INV Inventory Safe delivers a higher level of user experience with customized shelving and inventory notation system. The HG-INV has been introduced to the dispensary industry through trade shows appearances and many of our dealers are actively cultivating dispensary business. Expanding our marketing of the HG-INV can open new markets to American Rebel.

Personal Security

Concealed Carry Backpacks – consist of an assortment of sizes, features and styles. Our XL, Large, and Medium concealed carry backpacks feature our proprietary “Personal Protection Pocket” which utilizes a sandwich method to keep handguns secure and in the desired and easily accessible position. The sandwich method is comprised of two foam pads that surround or sandwich the firearm in place. The user can access the isolated Protection Pocket from either side of the backpack. We believe these distinctive concealed carry products are designed for everyday use while keeping your firearm concealed, safe and easily accessible.

The Extra-Large Freedom and Cartwright CCW Backpack

Our largest concealed carry backpack offers ample storage, including a dedicated top loading laptop pouch and additional tablet sleeve. Both compartments are padded to protect your devices. Two large open compartments make this backpack practical for carrying documents and folders or whatever you need to tote from one place to another. Our proprietary “Protection Pocket” allows quick and easy access to your handgun from either side. Multiple interior compartments are strategically placed to secure extra magazines and accessories. Available in the Freedom and Cartwright style as well as a variety of trim color options.

50

Large Freedom and Cartwright CCW Backpack

Our most popular concealed carry backpack. This backpack offers ample storage, including a dedicated top loading laptop pouch and an additional tablet sleeve. Both compartments are padded to protect your devices. The size of the main compartment opening makes this backpack practical for carrying documents, folders or whatever you need to tote from one place to another. Includes our proprietary “Protection Pocket” and is available in the Freedom and Cartwright style as well as a variety of trim color options.

Medium Freedom CCW Backpack

This medium-sized is designed for those who look to be more streamlined. This backpack offers ample storage, including a dedicated top loading laptop/tablet compartment and two liquid container pouches. The laptop/tablet compartment is padded to protect your devices. The main compartment is practical for carrying documents and folders or whatever you need for everyday use. Includes our proprietary “Protection Pocket”. Available in a variety of trim color options.

Small Plus CCW Backpack

Our small one-strap concealed carry backpack is designed for use while running, jogging, biking or riding a motorcycle. Our concealment pocket contains a holster and attaches to the interior with hook and loop material. Soft fleece lined pockets for your tablet, glasses case and accessories are also included. Available in dark blue or in our signature patriotic “We The People” design.

Small Freedom CCW Backpack

This one strap pack also contains a holster and attaches to the interior with hook and loop material. There is also plenty of room for a small tablet, cell phone, chargers and other necessities. Available in a variety of trim color options.

Apparel

We offer a wide range of concealed carry jackets, vests and coats for men and women, including our Freedom Jacket 2.0 which incorporates a significant advance in the operation of the concealment pocket. We also proudly offer patriotic apparel for the whole family, with the imprint of the American Rebel brand. Our apparel line serves as “point man” for the brand, often the first exposure that people have to all things American Rebel. Our branded apparel line is forever relevant, current and bold. We place emphasis on styling that complements our enthusiast customers’ lifestyle, representing the values of our community and quintessential American character. The American Rebel clothing line style is not only a fashion statement; it is the sense of pride of belonging to our patriotic family, on your adventures and in life. Our apparel collection consists of the following:

Cartwright Coats and Vests

Engineered for comfort, warmth, and versatility and mobility. Our Cartwright Concealed Carry Coats and Vests are designed with purpose and informed by the rugged demands of the everyday hard worker. Its quality construction and workmanship are designed to keep you warm and shielded from the elements. Left-hand and right-hand concealed pocket access provides for secure and safe concealment of your firearm with easy access on either side.

Freedom 2.0 Jackets and Vests for men and women

our lightweight jackets collection is designed with magnetic pocket closures for silent, secure and safe concealment. Our lightweight jackets are crafted to facilitate easy firearm access for both right-handed and left-handed carriers.

American Rebel T-Shirts Collection

American Rebel’s T-shirts collection is created to liberate the spirit of an endless summer inside everyone and to embrace their patriotism

51

Our Competitive Strengths

We believe we are moving forward on a path to long-term, sustainable growth, and our business has, and our future success will be driven by, the following competitive strengths:

Powerful Brand Identity – we believe we have developed a strong brand that sets us apart from our competitors. We believe this is a distinguish factor and will contribute to the future success of our business. Our brand is predicated on patriotism and quintessential American character: protecting our loved ones. We strive to equip our safes with technologically advanced features that offer customers advanced security to provide the peace of mind they need. Maintaining, protecting and enhancing the “American Rebel” brand is critical to expanding our loyal enthusiasts base, network of dealers and other partners. Through branded apparel and accessories, we seek to further develop our connection with the American Rebel community and share the values of patriotism and safety that our Company stands for. We strive to continue to meet their demand for our premium safes and will depend largely on our ability to maintain customer trust, be a gun safe storage leader and continue to provide high-quality safes,

Product Design and Development – our current safe model relies on what we believe are time-tested features, such as Four-Way Active Boltworks, pinning the door shut on all four sides when Three-Way Boltworks are standard in our competitors’ safes, and benefits that would not often be available in our price point, including 11-gauge US-made steel. The sleek exterior of our safes has garnered attention and earned the moniker from our dealers as the “safe with an attitude.” When we set out to enter the safe market, we wanted to offer a safe that we would want to buy, one that would get our attention and provide excellent value for the cost.

Focus on Product Performance - since the introduction of our first safes, we have maintained a singular focus on creating a full range of safe, quality, reliable safes that were designed to help our customers keep their family and valuables safe at all times. We incorporate advanced features into our safes that are designed to improve strength and durability. Key elements of our safes’ performance include:

Double Plate Steel Door - 4 ½” Thick

Reinforced Door Edge – 7/16” Thick

Double-Steel Door Casement

Steel Walls – 11-Gauge

Diameter Door Bolts – 1 ¼” Thick

Four-Way Active Boltworks – AR-50(14), AR-40(12), AR-30(10), AR-20(10), AR-15(8), AR-12(8)

Diamond-Embedded Armor Plate

Double Plate Steel Door is formed from two American made steel plates with fire insulation sandwiched inside. Thicker steel is placed on the outside of the door while the inner steel provides additional door rigidity and attachment for the locking mechanism and bolt works. The door edge is reinforced with up to four layers of laminated steel. This exclusive design offers up to 16 times greater door strength and rigidity than the “thin metal bent to look thick” doors.

Double-Steel Door Casement This casement is formed from two or more layers of steel and is welded around the perimeter of the door opening. It more than quadruples the strength of the door opening and provides a more secure and pry-resistant door mounting. Our manufacturer installs a Double-Steel Door Casement on all of its models. Most of our competitors do not offer the reinforced door casement.

Diamond-Embedded Armor Plate Industrial diamond is bonded to a tungsten steel alloy hard plate. Diamond is harder than either a cobalt or carbide drill. If drilling is attempted the diamond removes the cutting edge from a drill – thus dulling the drill bit to where it will not cut.

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Trusted Brand - we believe that we have developed a trusted brand with both retailers and consumers for delivering reliable, secure safes solutions.

Customer Satisfaction - we believe we have established a reputation for delivering high-quality safes and personal security products in a timely manner, in accordance with regulatory requirements and our retailers’ delivery requirements and supporting our products with a consistent merchandising and marketing message. We also believe that our high level of service, combined with strong consumer demand for our products and our focused distribution strategy, produces substantial customer satisfaction and loyalty. We also believe we have cultivated an emotional connection with the brand which symbolizes a lifestyle of freedom, rugged individualism, excitement and a sense of bad boy rebellion.

Proven Management Team - our founder and Chief Executive Officer, Charles A. Ross, Jr., has led the expansion and focus on the select product line we offer today. We believe that Mr. Ross had an immediate and positive impact on our brand, products, team members, and customers. Under Mr. Ross’s leadership, we believe that we have built a strong brand and strengthened the management team. We are refocusing on the profitability of our products, reinforcing the quality of safes and engaging customers and drive sales. We believe our management team possess an appropriate mix of skills, broad range of professional experience, and leadership designed to drive board performance and properly oversee the interests of the Company, including our long-term corporate strategy. Our management team also reflects a balanced approach to tenure that will allow the Board to benefit from a mix of newer directors who bring fresh perspectives and seasoned directors who bring continuity and a deep understanding of our complex business.

Our Growth Strategy

Our goal is to enhance our position as a designer, producer and marketer of premium safes and personal security products. We have established plans to grow our business by focusing on three key areas: (1) organic growth and expansion in existing markets; (2) strategic acquisitions, and (3) expanding the scope of our operation activities to the dispensaries U.S. community.

We have developed what we believe is a multi-pronged growth strategy, as described below, to help us capitalize on a sizable opportunity. Through methodical sales and marketing efforts, we believe we have implemented several key initiatives we can use to grow our business more effectively. We believe we have made significant progress in 2021 in the form of nearly $200,000 in sales to first-time buyers. We also intend to opportunistically pursue the strategies described below to continue our upward trajectory and enhance stockholder value. Key elements of our strategy to achieve this goal are as follows:

Organic Growth and Expansion in Existing Markets - Build our Core Business

The cornerstone of our business has historically been our safes product offering. We are focused on continuing to develop our home, office and personal safes product lines. We are investing in adding what we believe are distinctive technology solutions to our safes.

We are also working to increase floor space dedicated to our safes and strengthen our online presence in order to expand our reach to new enthusiasts and build our devoted American Rebel community. We intend to continue to endeavor to create and provide retailers and customers with what we believe are responsible, safe, reliable and stylish products, and we expect to concentrate on tailoring our supply and distribution logistics in response to the specific demands of our customers.

We are currently developing a new model of our home and office safes. Our new safe model, which we expect to introduce at industry trade shows in early 2022, is to be built in the U.S. We expect the new planned model to include additional features, such as a reinforced door and upgraded locking mechanism, among others. We are focused on developing best in class, compelling combination of functionality, convenience and style without compromising performance of our safes. We intend to use our designing and developing processes to enhance technological and time to market advantages over incumbent safes manufacturers.

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While we currently rely on third-party manufactures for the production of our current line of safes, apparel and accessories, we believe that the expected addition of manufacturing capabilities following the signing of the contract with the aforementioned manufacturer, which we anticipate to work exclusively with us, would allow us, among other benefits, to ramp up our production levels to meet expected demand for our products, provide us greater autonomy over the manufacturing process, and add what we believe are distinctive features.

Additionally, our Concealed Carry Product line and Safe line serve a large and growing market segment. We believe that interest in safes increase, as well as in our complimentary concealed carry backpacks and apparel as a byproduct, when interest of the general population in firearms increase. To this extent, the FBI’s National Instant Criminal Background Check System (NICS), which we believe serves as a proxy for gun sales since a background check is generally needed to purchase a firearm, reported a record number of background checks in 2020, 39,695,315. The prior annual record for background checks was 2019’s 28,369,750. In 2021, there were 38,876,673 background checks conducted, similar to that of 2020’s annual record which was 40% higher than the previous annual record in 2019. While we do not expect this increase in background checks to necessarily translate to an equivalent number of additional safes purchased, we do believe it might be an indicator of the increased demand in the safe market. In addition, certain states (such as Massachusetts, California, New York and Connecticut) are starting to legislate new storage requirements in respect of firearms, which is expected to have positive impact on the sale of safes.

We continue to strive to strengthen our relationships with our current distributors, dealers, manufacturers and specialty retailers and to attract other distributors, dealers, and retailers. We believe that the success of our efforts depends on the distinctive features, quality, and performance of our products; continued manufacturing capabilities and meeting demand for our safes; the effectiveness of our marketing and merchandising programs; and the dedicated customer support.

In addition, we seek to improve customer satisfaction and loyalty by offering distinctive, high-quality products on a timely and cost-attractive basis and by offering efficient customer service. We regard the features, quality, and performance of our products as the most important components of our customer satisfaction and loyalty efforts, but we also rely on customer service and support.

Furthermore, we intend to continue improving our business operations, including research and development, component sourcing, production processes, marketing programs, and customer support. Thus, we are continuing our efforts to enhance our production by increasing daily production quantities through equipment acquisitions, expanded shifts and process improvements, increased operational availability of our equipment, reduced equipment down times, and increased overall efficiency.

We believe that by enhancing our brand recognition, our market share might grow correspondingly. Industry sources estimate that 70 million to 80 million people in the United States own an aggregate of more than 400 million firearms, creating a large potential market for our safes and personal security products. We are focusing on the premium segment of the market through the quality, distinctiveness, and performance of our products; the effectiveness of our marketing and merchandising efforts; and the attractiveness of our competitive pricing strategies.

Strategic Corporate Reorganization for Long-term Growth

We are consistently evaluating and considering acquisitions opportunities that fit our overall growth strategy as part of our overall mission to accelerate long-term value for our stockholders and create integrated value chains.

Expanding Scope of Operations Activities 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 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. With the legal cannabis hyper-growth market expected to exceed $43 billion by 2025, and an increasing number of states where the growth and cultivation of cannabis is legal (California, Colorado, Hawaii, Maine, Maryland, Michigan, Montana, New Mexico, Oregon, Rhode Island, Vermont and Washington), we believe we are well positioned to address the need of dispensaries. 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 to generate additional revenue from licensing fees earned from third parties who wish to engage the American Rebel community. While the Company does not generate material revenues from licensing fees, our management 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 the line of tools under their brand. Conversely, American Rebel could potentially also 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.

Competition

The safe industry is dominated by a small number of companies. We compete primarily on the quality, safety, reliability, features, performance, brand awareness, and price of our products. Our primary competitors Superior Safe, Champion Safe as well as certain other domestic manufacturers, as well as certain China-based manufactured safes. Safes manufactured in China, including Steelwater and Alpha-Guardian, have struggled under the import tariffs initiated under the administration of former U.S President Donald Trump and continued by the current administration. We believe that given the current substantial uncertainty related to the supply chain and delivery of international goods, we have a competitive advantage because our safes are not manufactured overseas.

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Intellectual Property

Our commercial success depends in part on our ability to obtain and maintain intellectual property protection for our brand and technology, defend and enforce our intellectual property rights, preserve the confidentiality of our trade secrets, operate our business without infringing, misappropriating or otherwise violating the intellectual property or proprietary rights of third parties and prevent third parties from infringing, misappropriating or otherwise violating our intellectual property rights. We rely on a combination of patent, copyright and trade secret laws in the United States to protect our proprietary technology. We also rely on a number of United States registered, pending and common law trademarks to protect our brand “American Rebel”.

On May 29, 2018, US Patent No. 9,984,552, Firearm Detecting Luggage, was issued to us. The term of the patent is 20 years from the issuance date. In addition to our patent, we rely upon unpatented trade secrets and know-how and continuing technological development and maintain our competitive position. Trade secrets and know-how, however, can be difficult to protect. We seek to protect our proprietary information, in part, by entering into confidentiality and proprietary rights agreements with our employees and independent contractors.

Regulation

The storage of firearms and ammunition is subject to increasing federal, state and local governmental laws. While the current legislative climate does not appear to seek to limit possession of firearms, there is apparent momentum to require safe storage of firearms and ammunition. Although our safes, which are the primary driver of our sales and revenues, are designed to protect any valuables, a significant number of our safes’ end users have traditionally been gun enthusiasts, collectors, hunters, sportsmen and competitive shooters. Therefore, we expect the increasing federal, state and local governmental regulation of gun storage to have a materially positive effect on our business.

Our Customers

We primarily market and sell our products to safe only specialty stores and independent gun stores nationwide. We also sell our products online to individuals desiring home, personal and office protection, as well as to recreational shooters and hunters. Our customers choose us for a number of reasons, including the breadth and availability of the products we offer, our extensive expertise, and the quality of our customer service.

We believe the nature of our solutions and our high-touch customer service model strengthens relationships, builds loyalty and drives repeat business as our customers’ businesses expand. In addition, we feel as if our premium product lines and comprehensive product portfolio position us well to meet our customers’ needs. Furthermore, we fully anticipate that we will be able to leverage all of the data that we are collecting from our existing customer base to make continuous improvements to our offerings and better serve our current and new customers in the future.

We intend to expand our distribution to sporting goods stores, farm and home stores, other independent retailers as well as our online customer base upon securing additional funding and setting up our first manufacturing facility.

Suppliers

We are dependent on the continued supply and manufacturing of our safes, backpacks and apparel at third-party facilities locations, which are critical to our success. Any event that causes a disruption of the operation of these facilities for even a relatively short period of time would adversely affect our ability to ship and deliver our safes and other products and to provide service to our customers. We have previously experienced, including during the first months after the spread of COVID-19 pandemic, and may in the future experience, launch and production ramp up delays for our products as a result of disruption at our suppliers manufacturing partners. Additionally, we have to date fully qualified only a very limited number of such suppliers and have limited flexibility in changing suppliers. Any disruption in the supply of our branded safes from our suppliers could limit our sales. In the long term, we intend to supplement safes manufactured by our suppliers with safes manufactured by us, which we believe will be more efficient and result in a greater manufacturing volume and under our control. Our efforts to develop and manufacture such safes, however, have required and may require significant investments, and there can be no assurance that we will be able to achieve these targets in the timeframes that we have planned or at all. If we are unable to do so, we may have to curtail our planned safes or procure additional safes from different suppliers at potentially greater costs, either of which may harm our business and operating results.

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Furthermore, the cost of safes, whether manufactured by our suppliers or by us, depends in part upon the prices and availability of raw manufacturing materials such as steel, locks, fireboard, hinges, pins and other metals. The prices for these materials fluctuate and their available supply may be unstable, depending on market conditions and global demand for these materials, including as a result of increased global production of electric vehicles and energy storage products. Any reduced availability of these materials may impact our access to these parts and any increases in their prices may reduce our profitability if we cannot recoup the increased costs through increased safe prices. Moreover, any such attempts to increase product prices may harm our brand, prospects and operating results.

We currently rely on third-party suppliers to ship our products to our customers. We have found that dedicated truckloads from our warehouse to our dealers reduce freight damage and provide the overall best shipping solution. Several companies offer dedicated truckload shipping. Increased sales will offer the opportunity to establish regional distribution centers.

Sales and Marketing

We market our products to consumers through independent safe specialty stores, select national and regional retailers, local specialty firearms stores, as well as via e-commerce. We maintain consumer-focused product marketing and promotional campaigns, which include print and digital advertising campaigns; social and electronic media; product demonstrations; point-of-sales materials; in-store training; and in-store retail merchandising. Our use of social media includes Facebook, and YouTube.

Marketing Team Aligned with Sales Force to Maximize Our Industry Visibility to Drive Revenue

Our Chief Executive Officer, Charles A. Ross, is familiar to many in the industry due to his twelve years on television as the host of Maximum Archery and later American Rebel, that was broadcast on The Outdoor Channel, Sportsman Channel and the Pursuit Channel. Our Marketing and Sales teams have established American Rebel as a brand that our customers want and a brand that they are proud to embrace and bring into their homes.

Direct Marketing

In light of the expertise required to deliver and install safes that weigh 500-1000 pounds, direct marketing is utilized to create awareness and provide information. Our website, AmericanRebel.com, has proven to be a very valuable tool in introducing potential customers to our products. Infomercials and direct-to-consumer campaigns are vehicles to expand our reach at the appropriate time. Currently the demand from our current customers and future customer pool of independent safe specialty stores is high. As the Company grows and seeks out new customers to expand its customer base, direct marketing will be an asset for American Rebel. Chief Executive Officer, Charles A. Ross, was basically making infomercials to promote his Ross Archery products when he was filming Maximum Archery during the mid-2000s.

Social Media and Thought Leadership

A portion of marketing dollars from the equity raise will be directed to social media. American Rebel and Chief Executive Officer, Charles A. Ross, have large followings on social media and a dedicated social media campaign will efficiently reach large numbers of potential customers and brand adopters. We will leverage our social media assets to cross-promote locally with independent safe specialty store customers to pull out product through the sales channel. Driving demand and awareness of our products to our customers will expand their loyalty to American Rebel and increase each stores’ commitment to our brand.

Trade Shows

Trade shows have been an important medium to introducing our brand and our products. The NRA Annual Meeting, a consumer trade show, is a valuable opportunity to meet and greet our final customers. When we launched our Concealed Carry line of products at the NRA Annual Meeting in Atlanta, GA, in the Spring of 2017, the response from the meeting attendees was overwhelming. We immediately knew the product line resonated with consumers. Similarly, when we introduced our line of safes at the 2019 NRA Annual Meeting in the Spring of 2019, we knew we were on to something significant. The USCCA (United States Concealed Carry Association) has an annual Concealed Carry and Home Defense Expo. This is also an excellent opportunity to meet, greet and sell product to our final customers, the buying public. The Iowa Deer Classic and Illinois Deer Classic are carryovers from our Chief Executive Officer, Charles A. Ross’ hosting duties on Maximum Archery, but we have found that many potential safe buyers attend these shows.

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Two industry-only trade shows we attend are the SHOT Show and Nation’s Best Sports (NBS) Spring and Fall Buying Markets. The SHOT Show is very high profile and a show that most movers and shakers in the firearms industry attend. Operated by the National Shooting Sports Foundation, the SHOT Show is the first trade show of the calendar year and is a great opportunity to introduce the year’s new products. NBS operates buying group shows where retailers who are members of NBS attend the Spring and Fall Market Buying shows to place orders. NBS provides an excellent base of customers for us to introduce our products to.

Paid Advertising

We will occasionally purchase paid print advertising to support editorial and events. The American Shooting Journal has been very supportive of our business has featured an interview with our Chief Executive Officer on one of past issues of the magazine.

Effects of COVID-19

Coronavirus (“COVID-19”) and Related Market Impact. The COVID-19 outbreak has presented evolving risks and developments domestically and internationally, as well as new opportunities for our business. Although the pandemic has not materially impacted our results and operations adversely, our ability to satisfy demand for our products could be negatively impacted by mandatory forced production disruptions of our safes’ sole third-party manufacturer and strategic partners. Any significant disruption to communications and travel, including travel restrictions and other potential protective quarantine measures against COVID-19 by governmental agencies, could make it difficult for us to deliver goods and services to our customers. Further, travel restrictions and protective measures against COVID-19 could cause the Company to incur additional unexpected labor costs and expenses or could restrain the Company’s ability to retain the highly skilled personnel the Company needs for its operations. The extent to which COVID-19 impacts the Company’s business, sales and results of operations will depend on future developments, which are uncertain and cannot be currently predicted.

Additionally, as a result of COVID-19, at any time we may be subject to increased operating costs, supply interruptions, and difficulties in obtaining raw materials and components. To address these challenges, we continue to monitor our supply chain. We have recently entered into a contract with a third-party manufacturer to exclusively assemble our upcoming new line of safes. We believe that this vertical integration would allow us, among other benefits, to ramp up our production levels to meet expected demand for our products, provide us greater autonomy over the manufacturing process, and add what we believe are distinctive features to our safes.

We expect that the demand for home, office and personal safety and security products would remain stable, in part due to customers spending more time working remotely, increasing regulation mandating safe storage, and substantial uncertainty related to the supply chain and delivery of international goods, which in turn translate into, we believe, growth in demand for our home and personal safes as a U.S. company. We, however, cannot guarantee, that demand for our safes and personal security products will keep growing through the end of the 2021 calendar year and beyond.

Further, due to the effects of COVID-19, our management have reduced unnecessary marketing expenditures as part of continued efforts to adjust the Company’s operations to address changes in the asset or liability for each period. If available evidence suggests that it is more likely than not that some portion or allsafes and vault industry, and particularly to improve staff and human capital expenditures, while maintaining overall workforce levels.

Due to the substantial uncertainty related to the effects of the deferred tax asset will not be realized, a valuation allowance is requiredpandemic, its duration and the related market impacts, including the economic stimulus activity, we are unable to reducepredict the deferred tax assetspecific impact the pandemic and related restrictions (including the lifting or re-imposing of restrictions due 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 asany 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 December 31, 2014 the Company reviewed its tax positions and determined there were no outstanding, or retroactive tax positions with less than a 50% likelihood of being sustained upon examination by the taxing authorities, therefore this standard has not had a material effect on the Company.

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


The Company classifies tax-related penalties and net interest as income tax expense. As of December 31, 2014 no income tax expense has been recorded.


Use of estimates

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






Recent pronouncements

The Company evaluated recent accounting pronouncements through December 31, 2014 and believe that noneCOVID-19 virus or otherwise) will have a material effect on the Company’s financial statements except for the following:


In June of 2014 the Financial Accounting Standards Board issued Accounting Standards Update ASU 2014-10, “Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation” (“ASU 2014-10”). Amendments in ASU 2014-10 remove the definition of a development stage entity from the master glossary of the Accounting Standards Codification, thereby removing the financial reporting distinction between development stage entities and other reporting entities from U.S. GAAP. In addition, the amendments eliminate the requirements for development stage entities to (1) present inception-to-date information in the statements of income, cash flows, and shareholder equity, (2) label the financial statements as those of a development stage entity, (3) disclose a description of the development stage activities in which the entity is engaged, and (4) disclose in the first year in which the entity is no longer a development stage entity that in prior years it had been in the development stage.


In August, 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements - Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entities Ability to continue as a Going Concern. The standard is intended to define management's responsibility to decide whether there is substantial doubt about an organization's ability to continue as a going concern and to provide related footnote disclosures. The standard requires management to decide whether there are conditions or events that raise substantial doubt about the entity's ability to continue as a going concern within one year after the date that the financial statements are issued. The standard provides guidance to an organization's management, with principles and definitions that are intended to reduce diversity in the timing and content of disclosures that are commonly provided by organizations in the footnotes. The standard becomes effective for the annual period ending after December 15, 2016, with early application permitted. The adoption of this pronouncement is not expected to have a material impact on our financial statements. Management's evaluations regarding the events and conditions that raise substantial doubt regarding the Company's ability to continue as a going concern have been disclosed in Note 2 below.


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


The Company has not elected to adopt the provisions of ASU 2014-10 for the year ending December 31, 2014. The adoption of ASU 2014-10 would not have a significant impact on our results of operations, liquidity or long-term financial conditionresults.

Legal Proceedings

There are no proceedings to which any director or cash flow.officer, or any associate of any such director or officer, is a party that is adverse to our Company or any of our subsidiaries or has a material interest adverse to our Company or any of our subsidiaries. No director or executive officer has been a director or executive officer of any business which has filed a bankruptcy petition or had a bankruptcy petition filed against it during the past ten years. No current director or executive officer has been convicted of a criminal offense or is the subject of a pending criminal proceeding during the past ten years. No current director or executive officer has been the subject of any order, judgment or decree of any court permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities during the past ten years. No current director or officer has been found by a court to have violated a federal or state securities or commodities law during the past ten years.


NOTE 2 – GOING CONCERNFrom time to time, however, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. Litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business.

Corporate History

The Company was incorporated on December 15, 2014, under the laws of the State of Nevada, as CubeScape, Inc. Effective January 5, 2017, the Company amended its articles of incorporation and changed its name to American Rebel Holdings, Inc. The Company completed a business combination with its majority stockholder, American Rebel, Inc. on June 19, 2017. As a result, American Rebel, Inc. became a wholly owned subsidiary of the Company.

The acquisition of American Rebel, Inc. was accounted for as a reverse merger. The Company issued 215,512 shares of its Common Stock and 6,250 warrants to purchase shares of Common Stock to shareholders of American Rebel, Inc. and cancelled 112,500 shares of Common Stock owned by American Rebel, Inc.

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MANAGEMENT

Executive Officers and Directors

The following table provides information regarding our executive officers and directors as of February 3, 2022:

NameAgePosition
Executive Officers

Charles A. Ross, Jr.**

55Chief Executive Officer, Chief Financial Officer, Chairman of the Board, principal executive officer and treasurer
Doug E. Grau58President and Director
Ronald A. Smith60Chief Operating Officer
John Garrison*70Chief Financial Officer
Non-Employee Director

Corey Lambrecht

52Director
Director Nominees

Michael Dean Smith *

52Director Nominee
Ken Yonika*60Director Nominee

* To be appointed upon completion of this offering.

** To step down as Chief Financial Officer upon completion of this offering.

Executive Officers

Charles A. Ross, Jr. has served as our Chief Executive Officer and Chairman of the Board of Directors since December 2014. Previously, Mr. Ross founded Digital Ally, Inc. (NASDAQ: DGLY). Mr. Ross’ business career includes success in broadcasting, endorsements, music, and television. A music artist and songwriter, Mr. Ross has released three CDs and his song “American Rebel” has become the theme song for American Rebel. His song “Cold Dead Hand” caught the attention of Danny “the Count” Koker and landed him on the hit TV show Counting Cars. Mr. Ross’ television and performing experience provide opportunities for him to speak about American Rebel in media interviews on radio and TV and in print and online. Our board of directors believes that Mr. Ross’ entrepreneurial background and creative marketing skills qualifies him to serve on our board of directors. Mr. Ross’ father, Bud Ross, founded Kustom Electronics and Birdview Satellites and served as a mentor and guiding force behind the founding of American Rebel.

Ronald A. Smith has served as our Chief Operating Officer since April 2021. Previously, Mr. Smith served as the Chief Executive Officer and President of LADS Pets Supplies, a pet supplies wholesale distributor in the Northeastern U.S.

Doug E. Grau has served as our President from January 2021, and as a director since February 2020. Prior to that, Mr. Grau served as our Business Operations Director. Mr. Grau currently serves as a financial advisor to Infinity Securities, a national wealth management and brokerage firm. Mr. Grau holds B.B.A. in Music Business from Belmont University.

John Garrison, who will become Chief Financial Officer of the Company on completion of this offering, has been providing accounting consulting services to the Company since 2016. From 2016 to the present, Mr. Garrison has been the sole owner of JC Garrison CPA, a business consulting firm. Mr. Garrison holds B.S. in business and accounting from Kansas State University.

Non-Employee Directors

Corey Lambrecht has had over 20 years’ experience as a public company executive and he brings broad experience in strategic acquisitions, corporate turnarounds, new business development, pioneering consumer products, corporate licensing, interactive technology services in addition to holding public company executive roles with responsibilities including day-to-day business operations, management, raising capital, board communication and investor relations. He is a Certified Director from the UCLA Anderson Graduate School of Management accredited Directors program. Since 2007 he has been a Director of CUI Global, Inc. (NASDAQ: CUI) and has served multiple terms on the Audit Committee and currently serves as the Compensation Committee Chairman. Corey Lambrecht has served on the Board of ORHub, Inc. (OTC: ORHB) since July 2016 and finished his term in December 2019. On January 17, 2020, he was appointed to serve as the Chief Financial Officer for Singlepoint, Inc. (OTC: SING) and he previously served as a Board member for Lifestyle Wireless, Inc., which, in 2012 merged into Singlepoint, Inc. In December 2011 he joined the Board of Guardian 8 Holdings, a leading non-lethal security product company, serving until early 2016. He most recently served as the President and Chief Operating Officer at Earth911 Inc., a subsidiary of Infinity Resources Holdings Company (OTC: IRHC) from January 2010 to July 2013.

Director Nominees

Michael Dean Smith, who will become an independent Director on completion of this offering, has, since 2017, been Vice President of Industrial Maintenance, Inc. From 1997-2017, Mr. Smith served in various positions with Payless Shoe Source. Mr. Smith holds B.S. in Business Administration and Accounting from the University of Kansas, and MBA from Washburn University.

 

KenYonika, who will become an independent Director on completion of this offering, has served as Chief Executive Officer and President at Pacific Crest Equity Partners, Inc. since 2000. Mr. Yonika earned a B.B.A. from Western Connecticut State University in 1988 with a major in Accounting and a minor in Finance.

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CORPORATE GOVERNANCE

Director Independence

The board of directors has reviewed the independence of our directors based on the listing standards of the Nasdaq Capital Market. Based on this review, the board of directors has determined that each of Corey Lambrecht, Michael Dean Smith and Ken Yonika are independent within the meaning of the Nasdaq Capital Market rules. In making this determination, our board of directors considered the relationships that each of these non-employee directors has with us and all other facts and circumstances our board of directors deemed relevant in determining their independence. As required under applicable Nasdaq Capital Market rules, we anticipate that our independent directors will meet in regularly scheduled executive sessions at which only independent directors are present.

Board Committees

Our Board has established the following three standing committees: audit committee; compensation committee; and nominating and governance committee, or nominating committee. Our board of directors has adopted written charters for each of these committees. Copies of the charters will be available on our website. Our board of directors may establish other committees as it deems necessary or appropriate from time to time.

The following table identifies the independent and non-independent current Board and committee members through the date of this filing:

NameAuditCompensation

Nominating

and Corporate Governance

Independent
Charles A. Ross, Jr.
Doug E. Grau
Corey LambrechtXXXX
Michael Dean SmithX X

X

X
Ken YonikaX XXX

Audit Committee

Our board of directors established the audit committee for the purpose of overseeing the accounting and financial reporting process and audits of our financial statements. The audit committee is responsible for, among other matters:

appointing, compensating, retaining, evaluating, terminating, and overseeing our independent registered public accounting firm;

discussing with our independent registered public accounting firm the independence of its members from its management;

reviewing with our independent registered public accounting firm the scope and results of their audit;

approving all audit and permissible non-audit services to be performed by our independent registered public accounting firm;

overseeing the financial reporting process and discussing with management and our independent registered public accounting firm the interim and annual financial statements that we file with the SEC;

reviewing and monitoring our accounting principles, accounting policies, financial and accounting controls, and compliance with legal and regulatory requirements;

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coordinating the oversight by our board of directors of our code of business conduct and our disclosure controls and procedures

establishing procedures for the confidential and/or anonymous submission of concerns regarding accounting, internal controls or auditing matters; and

reviewing and approving related-person transactions.

Our audit committee consists of Corey Lambrecht, Michael Dean Smith and Ken Yonika. Ken Yonika serves as the chairman. Our board of directors has affirmatively determined that each of Corey Lambrecht, Michael Dean Smith and Ken Yonika qualify as an “audit committee financial expert,” as defined by Item 407(d)(5) of Regulation S-K.

The Nasdaq Capital Market rules require us to have one independent audit committee member upon the listing of our Common Stock, a majority of independent directors within 90 days of the date of this prospectus and all independent audit committee members within one year of the date of this prospectus. Our board of directors has affirmatively determined that each of Corey Lambrecht, Michael Dean Smith and Ken Yonika meet the definition of “independent director” for purposes of serving on an audit committee under Rule 10A-3 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and Nasdaq Capital Market rules.

Compensation Committee

Our board of directors has established the compensation committee for the purpose of reviewing, recommending and approving our compensation policies and benefits, including the compensation of all of our executive officers and directors. The compensation committee is responsible for, among other matters:

reviewing key employee compensation goals, policies, plans and programs;

reviewing and approving the compensation of our directors and executive officers;

reviewing and approving employment agreements and other similar arrangements between us and our executive officers; and

appointing and overseeing any compensation consultants or advisors.

Our compensation committee consists of Ken Yonika, Corey Lambrecht, and Michael Dean Smith. Corey Lambrecht serves as the chairman. In determining that each of Corey Lambrecht, Michael Dean Smith and Ken Yonika qualify as an “independent director” pursuant to Rule 10A-3 of the Exchange Act, the board of directors also considered all factors required by Rule 5605(d)(2)(A) and any other applicable regulations or rules promulgated by the SEC and the Nasdaq Capital Market rules relating to compensation committee composition.

Nominating and Corporate Governance Committee

Our board of directors has established the nominating and corporate governance committee for the purpose of assisting the board in identifying qualified individuals to become board members, in determining the composition of the board and in monitoring the process to assess board effectiveness. Our nominating committee consists of Michael Dean Smith, Ken Yonika, and Corey Lambrecht. Michael Dean Smith serves as the chairman.

Board Leadership Structure

Our Board has not adopted a formal policy regarding the separation of the offices of Chief Executive Officer and Chairman of the Board. Rather, the Board believes that different leadership structures may be appropriate for the Company at different times and under different circumstances, and it prefers flexibility in making this decision based on its evaluation of the relevant facts at any given time.

In December 2014, Mr. Ross was appointed as Chief Executive Officer and became Executive Chairman. Under our current Board leadership structure, the Chief Executive Officer is responsible for the day-to-day leadership and performance of the Company. Mr. Grau, our President, focuses on allocation of resources.

Risk Oversight

Our board of directors will oversee a company-wide approach to risk management. Our board of directors will determine the appropriate risk level for us generally, assess the specific risks faced by us and review the steps taken by management to manage those risks. While our board of directors will have ultimate oversight responsibility for the risk management process, its committees will oversee risk in certain specified areas.

Specifically, our compensation committee is responsible for overseeing the management of risks relating to our executive compensation plans and arrangements, and the incentives created by the compensation awards it administers. Our audit committee oversees management of enterprise risks and financial risks, as well as potential conflicts of interests. Our board of directors is responsible for overseeing the management of risks associated with the independence of our board of directors.

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Code of Business Conduct and Ethics

Our board of directors adopted a Code of Business Conduct and Ethics that applies to our directors, officers and employees. A copy of this code will be available on our website. We intend to disclose on our website any amendments to the Code of Business Conduct and Ethics and any waivers of the Code of Business Conduct and Ethics that apply to our principal executive officer, principal financial officer, principal accounting officer, controller, or persons performing similar functions.

Family Relationships

There are no family relationships among our directors and/or executive officers.

Involvement in Certain Legal Proceedings

To the best of our knowledge, none of our directors or executive officers has, during the past 10 years, been involved in any legal proceedings described in subparagraph (f) of Item 401 of Regulation S-K.

Board Diversity

While we do not have a formal policy on diversity, our Board considers diversity to include the skill set, background, reputation, type and length of business experience of our Board members as well as a particular nominee’s contributions to that mix. Our Board believes that diversity promotes a variety of ideas, judgments and considerations to the benefit of our Company and stockholders. Although there are many other factors, the Board primarily focuses on public company board experience, knowledge of the safes and concealed self-defense products industry, or background in finance or technology, and experience operating growing businesses.

Communication with our Board

Although the Company does not have a formal policy regarding communications with the Board, stockholders may communicate with the Board by writing to us at American Rebel Holdings, Inc., at 718 Thompson Lane, Suite 108-199, Nashville, TN, 37204, Attention: Corporate Secretary. Stockholders who would like their submission directed to a member of the Board may so specify, and the communication will be forwarded, as appropriate.

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EXECUTIVE AND DIRECTOR COMPENSATION

Our named executive officers, who consist of our principal executive officer and our next two most highly compensated executive officers, for the year ended December 31, 2020 were:

Charles A. Ross, Jr., our Chief Executive Officer;

Doug E. Grau, our President, and

The following table sets forth the salaries and director fees we paid to our current executive officer(s) during the fiscal year ended December 31, 2020 and 2019, respectively:

SUMMARY COMPENSATION TABLE
Name and principal    Salary Bonus  

Stock

Awards

  

Option

Awards

  

Non-Equity

Incentive Plan

Compensation

  

Nonqualified

Deferred

Compensation

Earnings

  

All Other

Compensation

  Total 
position  Year   ($)  ($)   ($)   ($)   ($)   ($)   ($)   ($) 
(a)  (b)   (c)  (d)   (e)   (f)   (g)   (h)   (i)   (j) 
Charles A. Ross, Jr. (1)  2020   -  -   -   -   -   -   180,250(2)  180,250 
Chief Executive Officer and Director  2019   -  -   20,438(3)  -   -   -   200,000(2)  1,017,500 
                                    
Doug E. Grau(4)  2020   -  -   -   -   -   -   120,000(2)  120,000 
President and Director  2019   -  -   22,500(5)  -   -       120,000(2)  1,020,000 

(1)During the years ended December 31, 2020 and 2019, the Company had no formal employment arrangement with Mr. Ross for services. Mr. Ross’ compensation was not based on any percentage calculations. The board made all decisions determining the amount and timing of payment for his compensation.

(2)Represents cash compensation paid to the named executive officer.

(3)In September 2019, Mr. Ross received a grant of 34,063 shares of Common Stock.

(4)Mr. Grau was appointed as an officer on February 12, 2020. Prior to such appointment, Mr. Grau worked for the Company as a non-executive officer.

(5)In September 2019, Mr. Grau received a grant of 37,500 shares of Common Stock.

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Named Executive Officer Employment Agreements

Charles A. Ross, Jr. Employment Agreement and Amendment

In general, Mr. Ross’ employment agreement contains provisions concerning terms of employment, voluntary and involuntary termination, indemnification, severance payments, and other termination benefits, in addition to a non-compete clause and certain other perquisites.

The original term of Mr. Ross’ employment agreement runs from January 1, 2021, until December 31, 2025.

Mr. Ross’ employment agreement provides for an initial annual base salary of $180,000, which may be adjusted by the board of directors of the Registrant. Pursuant to the amendment to his employment agreement, dated April 9, 2021, Mr. Ross agreed to reduce his salary to $6,667 per month for a six-month period.

In addition, Mr. Ross is eligible to receive annual short-term incentive bonuses as determined by a review at the discretion of the Registrant’s board of directors.

Further, the Registrant granted and issued Mr. Ross 50,000 shares of Series A Preferred Stock. Pursuant to the amendment to his employment agreement, the Registrant authorized for issuance 50,000 shares of Common Stock to Mr. Ross.

In the event of a termination of employment with the Registrant by the Registrant without “cause” or by Mr. Ross for “Good Reason” (as defined in the employment agreement), Mr. Ross would receive: (i) a lump sum payment equal to all earned but unpaid base salary through the date of termination of employment; (ii) a lump sum payment equal to 12-months base salary; and (iii) immediate vesting of all equity awards (including but not limited to stock options and restricted shares).

In the event of a termination of employment with the Registrant by the Registrant for “cause” (as defined in the employment agreement), by reason of incapacity, disability or death, Mr. Ross, or his estate, would receive a lump sum payment equal to all earned but unpaid base salary through the date of termination of employment, disability or death.

In the event of a termination of Mr. Ross’ employment with the Registrant by reason of change in control (as defined in the employment agreement), Mr. Ross, would receive: (i) a lump sum payment equal to all earned but unpaid base salary through the date of termination of employment; (ii) a lump sum payment equal 12- months’ salary plus 100% of his prior year’s Bonus; and (iii) and immediate vesting of all equity awards (including but not limited to stock options and restricted shares).

The above description of Mr. Ross’ employment agreement is qualified in its entirety by reference to the full text of that agreement, a copy of which was attached as Exhibit 10.2 to the Form 8-K filed on March 2, 2021. A copy of the amendment to Mr. Ross’ employment agreement is attached hereto as Exhibit 10.36.

Doug E. Grau Employment Agreement and Amendment

In general, Mr. Grau’s employment agreement contains provisions concerning terms of employment, voluntary and involuntary termination, indemnification, severance payments, and other termination benefits, in addition to a non-compete clause and certain other perquisites.

The original term of Mr. Grau’s employment agreement runs from January 1, 2021, until December 31, 2025.

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Mr. Grau’s employment agreement provides for an initial annual base salary of $120,000, which may be adjusted by the board of directors of the Registrant. Pursuant to the amendment to his employment agreement, dated April 9, 2021, Mr. Grau agreed to reduce his salary to $6,667 per month for a six-month period.

In addition, Mr. Grau is eligible to receive annual short-term incentive bonuses as determined by a review at the discretion of the Registrant’s board of directors.

Further, the Registrant granted and issued Mr. Grau 50,000 shares of Series A Preferred Stock. Pursuant to the amendment to his employment agreement, the Registrant authorized for issuance 50,000 shares of Common Stock to Mr. Grau.

In the event of a termination of employment with the Registrant by the Registrant without “cause” or by Mr. Grau for “Good Reason” (as defined in the employment agreement), Mr. Grau would receive: (i) a lump sum payment equal to all earned but unpaid base salary through the date of termination of employment; (ii) a lump sum payment equal to 12-months base salary; and (iii) immediate vesting of all equity awards (including but not limited to stock options and restricted shares).

In the event of a termination of employment with the Registrant by the Registrant for “cause” (as defined in the employment agreement), by reason of incapacity, disability or death, Mr. Grau, or his estate, would receive a lump sum payment equal to all earned but unpaid base salary through the date of termination of employment, disability or death.

In the event of a termination of Mr. Grau’s employment with the Registrant by reason of change in control (as defined in the employment agreement), Mr. Grau, would receive: (i) a lump sum payment equal to all earned but unpaid base salary through the date of termination of employment; (ii) a lump sum payment equal 12- months’ salary plus 100% of his prior year’s Bonus; and (iii) and immediate vesting of all equity awards (including but not limited to stock options and restricted shares).

The above description of Mr. Grau’s employment agreement is qualified in its entirety by reference to the full text of that agreement, a copy of which was attached as Exhibit 10.2 to the Form 8-K filed on March 2, 2021. A copy of the amendment to Mr. Grau’s employment agreement is attached hereto as Exhibit 10.37.

Ronald A. Smith Employment Agreement

In general, Mr. Smith’s employment agreement contains provisions concerning terms of employment, voluntary and involuntary termination, indemnification, severance payments, and other termination benefits, in addition to a non-compete clause and certain other perquisites.

The original term of Mr. Smith’s employment agreement runs from April 9, 2021, until June 30, 2023.

Mr. Smith will not be paid a salary for his services.

In addition, Mr. Smith is eligible to receive annual short-term incentive bonuses as determined by a review at the discretion of the Registrant’s board of directors.

Further, the Registrant authorized for issuance 59,375 shares of Common Stock to Mr. Smith.

In the event of a termination of employment with the Registrant by the Registrant without “cause” or by Mr. Smith for “Good Reason” (as defined in the employment agreement), Mr. Smith would receive immediate vesting of all equity awards (including but not limited to stock options and restricted shares).

In the event of a termination of Mr. Smith’s employment with the Registrant by reason of change in control (as defined in the employment agreement), Mr. Smith, would receive: (i) a lump sum payment equal to 100% of his prior year’s Bonus; and (ii) and immediate vesting of all equity awards (including but not limited to stock options and restricted shares).

The above description of Mr. Smith’s employment agreement is qualified in its entirety by reference to the full text of that agreement, a copy of which is attached as Exhibit 10.34 hereto.

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Executive Incentive Program

On January 1, 2021, our board of directors approved the establishment of the 2021 Long-Term Equity Incentive Plan (“LTIP”). The LTIP is intended to enable us to continue to attract able directors, employees, and consultants and to provide a means whereby those individuals upon whom the responsibilities rest for successful administration and management of the Company, and whose present and potential contributions are of importance, can acquire and maintain Common Stock ownership, thereby strengthening their concern for our welfare. The aggregate maximum number of shares of Common Stock (including shares underlying options) that may be issued under the LTIP, pursuant to awards of Restricted Shares or Options, will be limited to 10% of the outstanding shares of Common Stock, which calculation shall be made on the first trading day of each new fiscal year. For fiscal year 2021, up to 94,372 shares of Common Stock are available for participants under the LTIP. The number of shares of Common Stock that are the subject of awards under the LTIP which are forfeited or terminated, are settled in cash in lieu of shares of Common Stock or in a manner such that all or some of the shares covered by an award are not issued to a participant or are exchanged for awards that do not involve shares will again immediately become available to be issued pursuant to awards granted under the LTIP. If shares of Common Stock are withheld from payment of an award to satisfy tax obligations with respect to the award, those shares of Common Stock will be treated as shares that have been issued under the LTIP and will not again be available for issuance under the LTIP. In March of 2021, we authorized the grant and issuance of 53,625 shares of Common Stock under the LTIP to On January 1, 2021, we adopted a long-term incentive plan and in March of 2021 made two grants totaling 53,625 shares of Common Stock under such plan.

Options Exercised and Stock Vested Table

None of the named executive officers exercised any stock options, nor were there any restricted stock units held by our named executive officers vested, during the fiscal years ended December 31, 2020, and December 31, 2019.

Outstanding Equity Awards at Fiscal Year-end Table

None of the named executive officers held any unexercised options and unvested stock awards previously awarded as of December 31, 2020.

Potential Payments upon Termination or Change-in-Control

SEC regulations state that we must disclose information regarding agreements, plans or arrangements that provide for payments or benefits to our executive officers in connection with any termination of employment or change in control of the company. During the year ended December 31, 2020, we did not have any employment agreements with any of our executive officers, nor any compensatory plans or arrangements resulting from the resignation, retirement or any other termination of any of our executive officers, from a change-in-control, or from a change in any executive officer’s responsibilities following a change-in-control. However, on January 1, 2021, we entered into employment agreements with Charles A. Ross, Jr. and Doug E. Grau and on April 9, 2021, we entered into an employment agreement with Ronald A. Smith. All of these agreements provide for certain payments to be made in the event of a termination of their employment agreements by reason of change in control (as defined in the employment agreements). Each of them would receive: (i) a lump sum payment equal to all earned but unpaid base salary through the date of termination of employment (not applicable to Smith and LaVista as they receive no salary); (ii) a lump sum payment equal 12- months’ salary (not applicable to Smith and LaVista as they receive no salary) plus 100% of his prior year’s bonus; and (iii) and immediate vesting of all equity awards (including but not limited to stock options and restricted shares).

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Rule 10b5-1 Sales Plans

Our directors and executive officers may adopt written plans, known as Rule 10b5-1 plans, in which they will contract with a broker to buy or sell our common shares on a periodic basis. Under a Rule 10b5-1 plan, a broker executes trades pursuant to parameters established by the director or officer when entering into the plan, without further direction from them. The director or officer may amend a Rule 10b5-1 plan in some circumstances and may terminate a plan at any time. Our directors and executive officers also may buy or sell additional shares outside of a Rule 10b5-1 plan when they are not in possession of material nonpublic information subject to compliance with the terms of our insider trading policy. Prior to the expiration of the restricted period (as defined in the section titled “Shares Eligible for Future Sales”), subject to early termination, the sale of any shares under such plan is prohibited by the lock-up agreement that the director or officer has entered into with the underwriters. See “Underwriters” for more information.

Compensation of Directors

We do not have any standard arrangement for compensation of our directors for any services provided as director, including services for committee participation or for special assignments. We did not compensate any of our directors for their services.

Retirement Plans

We do not offer any annuity, pension, or retirement benefits to be paid to any of our officers, directors, or employees in the event of retirement.

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PRINCIPAL STOCKHOLDERS

Except as specifically noted, the following table sets forth information with respect to the beneficial ownership of our Common Stock of:

each of our directors and executive officers; and
each person known to us to beneficially own more than 5% of our Common Stock on an as-converted basis.

The pre-offering calculations in the table below are based on 1,849,069 shares of fully diluted Common Stock issued and outstanding as of February 3, 2022.

The post-offering calculations in the table below are based on 4,629,443 shares of Common Stock to be outstanding following the offering.

Beneficial ownership is determined in accordance with the rules and regulations of the SEC. In computing the number of shares beneficially owned by a person and the percentage ownership of that person, we have included shares that the person has the right to acquire within 60 days, including through the exercise of any option, warrant or other right or the conversion of any other security. These shares, however, are not included in the computation of the percentage ownership of any other person.

Unless otherwise indicated, the address for each beneficial owner listed in the table below is c/o American Rebel Holdings, Inc., 718 Thompson Lane, Suite 108-199, Nashville, Tennessee 37204.

Title of Class (1) Beneficial
Owner
 Amount of
Beneficial
Ownership
Before the
Offering
  Percent
Beneficially
Owned
Before the
Offering
  Amount of
Beneficial
Ownership
After the
Offering
  Percent
Beneficially
Owned
After the
Offering
 
Named Executive Officers:                  
Common Stock Charles A. Ross, Jr.  176,916   9.57%  176,916   3.82%
Common Stock Doug E. Grau  148,729   8.04%  148,729   3.21%
Common Stock Ronald A. Smith  218,125   11.80%  218,125   4.71%
Common Stock John Garrison*  13,613   * %   13,613   * 
Directors:                  
Common Stock Corey Lambrecht *  12,500   * %   12,500   * 
Common Stock Michael Dean Smith * (5)  0   0%        
Common Stock Kenneth Yonika * (5)  2,500   * %   2,500   * 
Officers and Directors as a group (7 persons)    572,382   30.96%  572,382   12.36%

5% Stockholders: (number)

Common Stock
Common Stock
Common Stock
Common Stock
Common Stock

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*Less than 1%.

(1)Unless otherwise noted above, the address of the persons and entities listed in the table is c/o American Rebel Holdings, Inc., 718 Thompson Lane, Suite 108-199, Nashville, Tennessee 37204.
(2)Percentage is based upon 1,849,069 fully diluted shares of Common Stock issued and outstanding and figures are rounded to the nearest hundredth of a percent.
(3)Does not include 50,000 shares of Series A Preferred Stock, whereby each share is entitled to cast one thousand (1,000) votes for each share held of the Series A Preferred Stock on all matters presented to the stockholders of the Company for stockholder vote.
(4)Includes 25,000 five-year warrants to purchase shares of Common Stock at $8.00 per share. Does not include 25,000 shares of Common Stock pledged as security for a bridge loan agreement dated April 9, 2021.
(5)Director Nominee.

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CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS

The following includes a summary of transactions since January 1, 2019 to which we have been a party in which the amount involved exceeded or will exceed $120,000, and in which any of our directors, executive officers or, to our knowledge, beneficial owners of more than 5% of our capital stock or any member of the immediate family of any of the foregoing persons had or will have a direct or indirect material interest, other than equity and other compensation, termination, change in control and other arrangements, which are described under “Executive and Director Compensation.” We also describe below certain other transactions with our directors, executive officers and stockholders.

Charles A. Ross, Jr. serves as the Company’s Chief Executive Officer and a director. In September 2019, Mr. Ross received a grant of 34,063 shares of Common Stock. On March 24, 2021, pursuant to the Company’s Long-Term Incentive Plan, Mr. Ross received 26,813 shares of Common Stock. On April 9, 2021, the Company entered into an amendment to the employment agreement with Charles A. Ross, Jr. and authorized the issuance of 50,000 shares of Common Stock to Mr. Ross. On August 3, 2021, pursuant to the Company’s Long-Term Incentive Plan, Mr. Ross received 9,416 shares of Common Stock.

Ronald Smith serves as the Company’s COO and on April 9, 2021, the Company entered into an employment agreement with Mr. Smith and authorized the issuance of 59,375 shares of Common Stock. On April 9, 2021, the Company entered into a Bridge Loan agreement with Mr. Smith and issued 25,000 warrants to purchase shares of the Company’s Common Stock at an exercise price of $8.00 per share with a five-year term. Prior to joining the Company as COO on April 9, 2021, Mr. Smith was issued 12,500 shares of Common Stock as a component of a six-month Promissory Note dated July 15, 2019. Mr. Smith was issued 12,500 shares of Common Stock as a component of a six-month Promissory Note dated August 29, 2019. Mr. Smith was issued 25,000 shares of Common Stock as a component of a six-month Promissory Note dated September 5, 2019. On February 17, 2020, the Company issued 1,250 shares of Common Stock to Mr. Smith as a component of a new note dated February 17, 2020. On March 6, 2020, Mr. Smith received 75,000 shares of Common Stock as a conversion of outstanding principal and interest of Promissory Notes dated February 17, 2020, August 29, 2019, and September 5, 2019. Also on March 6, 2020, Mr. Smith was issued 12,500 shares of Common Stock as a component of a Promissory Note. Mr. Smith was issued 37,500 shares of Common Stock as a component of a Promissory Note dated March 26, 2020.

Doug Grau is the Company’s President. In September 2019, Mr. Grau received a grant of 37,500 shares of Common Stock. On March 24, 2021, pursuant to the Company’s Long-Term Incentive Plan, Mr. Grau received 26,813 shares of Common Stock. On April 9, 2021, the Company entered into an amendment to the employment agreement with Doug Grau and authorized the issuance of 50,000 shares of Common Stock to Mr. Grau. On August 3, 2021, pursuant to the Company’s Long-Term Incentive Plan, Mr. Grau received 9,416 shares of Common Stock.

Corey Lambrecht is an independent director of the Company’s Board of Directors. On March 24, 2021, the Company authorized 6,250 shares of Common Stock to Mr. Lambrecht for services.

Kenneth Yonika will join the board as an independent director of the Company’s Board of Directors upon the closing of the Offering. In March 2019, Mr. Yonika received 1,250 shares of Common Stock for services.

John Garrison will assume the role of the Company’s Chief Financial Officer upon the closing of the Offering. In September 2019, Mr. Garrison received a grant of 2,500 shares of Common Stock. On October 1, 2021, pursuant to the Company’s Long-Term Incentive Plan, Mr. Garrison received 6,250 shares of Common Stock.

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DESCRIPTION OF OUR SECURITIES

General

The following description summarizes the most important terms of our securities. This summary does not purport to be complete and is qualified in its entirety by the provisions of our Second Amended and Restated Articles of Incorporation, Certificate of Designation of the Series A Preferred Stock (the “Series A COD”), Certificate of Designation of the Series B Preferred Stock (the “Series B COD”), and our Amended and Restated Bylaws, copies of which have been filed as exhibits to the registration statement of which this prospectus is a part. You should refer to our Second Amended and Restated Articles of Incorporation, including the Series A COD and the Series B COD, our Amended and Restated Bylaws, and the applicable provisions of the Nevada Revised Statutes for a complete description of our capital stock. Our authorized capital stock consists of (i) 600,000,000 shares of Common Stock, par value $0.001 per share, and (ii) 10,000,000 shares of preferred stock, par value $0.001 per share.

As of February 3, 2022 there were 1,849,069 shares of our Common Stock outstanding. Our Board is authorized, without stockholder approval, except as otherwise may be required by the applicable listing standards of a national securities exchange or any applicable laws, to issue additional shares of our authorized capital stock.

Common Stock

Dividend Rights

Subject to preferences that may apply to any shares of preferred stock outstanding at the time, the holders of our Common Stock are entitled to receive dividends out of funds legally available if our Board, in its discretion, determines to declare and pay dividends and then only at the times and in the amounts that our Board may determine.

Voting Rights

Holders of our Common Stock are entitled to one vote for each share held on all matters properly submitted to a vote of stockholders on which holders of Common Stock are entitled to vote. We have not provided for cumulative voting for the election of directors in our Certificate of Incorporation. The directors are elected by a plurality of the outstanding shares entitled to vote on the election of directors.

No Preemptive or Similar Rights

Our Common Stock is not entitled to preemptive rights, and is not subject to conversion, redemption or sinking fund provisions.

Right to Receive Liquidation Distributions

If we become subject to a liquidation, dissolution or winding-up, the assets legally available for distribution to our stockholders would be distributable ratably among the holders of our Common Stock and any participating preferred stock outstanding at that time, subject to prior satisfaction of all outstanding debt and liabilities and the preferential rights of and the payment of liquidation preferences, if any, on any outstanding shares of preferred stock.

Preferred Stock

Our Board is authorized, subject to limitations prescribed by Nevada law, to issue preferred stock in one or more series, to establish from time-to-time the number of shares to be included in each series, and to fix the designation, powers, preferences and rights of the shares of each series and any of its qualifications, limitations or restrictions, in each case without further vote or action by our stockholders. Our Board can also increase (but not above the total number of authorized shares of the class) or decrease (but not below the number of shares then outstanding) the number of shares of any series of preferred stock, without any further vote or action by our stockholders. Our Board may authorize the issuance of preferred stock with voting or conversion rights that could adversely affect the voting power or other rights of the holders of our Common Stock or other series of preferred stock. The issuance of preferred stock, while providing flexibility in connection with possible financings, acquisitions and other corporate purposes, could, among other things, have the effect of delaying, deferring or preventing a change in our control of our company and might adversely affect the market price of our Common Stock and the voting and other rights of the holders of our Common Stock.

As of the date of this prospectus, the shares of our designated preferred stock that will be outstanding will be 100,000 shares of Series A Preferred Stock and 75,143 of Series B Preferred Stock.

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Series A Preferred Stock

No Maturity, Sinking Fund or Mandatory Redemption

The Series A Preferred Stock (the “Existing Series A Preferred Stock”) has no stated maturity and will not be subject to any sinking fund or mandatory redemption. Shares of the Existing Series A Preferred Stock will remain outstanding indefinitely unless we decide to redeem or otherwise repurchase them.

Dividend Rights

Holders of shares of the Existing Series A Preferred Stock are not entitled to receive any dividends.

Voting Rights

Holders of the Existing Series A Preferred Stock are entitled to vote together with the holders of our Common Stock on an as-converted basis. Each Existing Series A Preferred Stock is entitled to cast one thousand (1,000) votes for each share held of the Existing Series A Preferred stock.

Conversion Rights

While the Certificate of Designation is named “Certificate of Designation of Series A Convertible Preferred Stock”, the Company’s Existing Series A Preferred Stock is not convertible into shares of Common Stock of the Company or redeemable by either the Company or another person.

Series B Preferred Stock

No Maturity, Sinking Fund or Pre-Determined Mandatory Redemption

The Series B (the “Existing Series B Preferred Stock”) has no stated maturity and will not be subject to any sinking fund or pre-determined mandatory redemption. Shares of the Existing Series B Preferred Stock will remain outstanding indefinitely unless we decide to redeem or otherwise repurchase them, or the holders decide to convert them.

Dividend Rights

Holders of shares of the Existing Series B Preferred Stock are not entitled to receive any dividends.

Voting Rights

Holders of the Existing Series B Preferred Stock shall not have any voting rights, except in the case of voting on a change in the preferences of the Existing Series B Preferred Stock shares.

Conversion Rights

Each holder of the Existing Series B Preferred Stock is entitled to convert any portion of the outstanding shares of Existing Series B Preferred Stock held by such holder into validly issued, fully paid and non-assessable shares of our Common Stock Each share of the Existing Series B Preferred Stock is convertible into our Common Stock at the conversion rate of 1 share of Existing Series B Preferred Stock to 1.25 shares of Common Stock, subject to adjustment in the event of certain stock dividends and distributions, stock splits, stock combinations, reclassifications or similar events affecting our Common Stock. Should the Company issue a redemption notice the conversion shall occur on or prior to the fifth (5th) day prior to the redemption date, as may have been fixed in any redemption notice with respect to the Existing Series B Preferred Stock shares, at the office of the Company or any transfer agent for such stock.

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Liquidation Preference

The Existing Series B Preferred Stock has senior liquidation preference rights compared to the Common Stock. Upon a liquidation, the Existing Series B Preferred Stock shares are entitled to receive cash based upon a stated value per share of $7.00.

Fractional Shares

No fractional shares of our Common Stock will be issued upon any conversion of the Existing Series B Preferred Stock. If the conversion would result in the issuance of a fraction of a share of Common Stock, the number of shares of Common Stock issuable upon such conversion will be rounded up to the nearest whole share.

Anti-Takeover Effects of Various Provisions of Nevada Law

Provisions of the Nevada Revised Statutes, and our articles of incorporation and bylaws, as amended, could make it more difficult to acquire us by means of a tender offer, a proxy contest or otherwise, or to remove incumbent officers and directors. These provisions, summarized below, would be expected to discourage certain types of takeover practices and takeover bids our Board may consider inadequate and to encourage persons seeking to acquire control of us to first negotiate with us. We believe that the benefits of increased protection of our ability to negotiate with the proponent of an unfriendly or unsolicited proposal to acquire or restructure us will outweigh the disadvantages of discouraging takeover or acquisition proposals because, among other things, negotiation of these proposals could result in an improvement of their terms.

Warrants

Overview. The following summary of certain terms and provisions of the Warrants offered hereby is not complete and is subject to, and qualified in its entirety by, the provisions of the warrant agency agreement between us and Action Stock Transfer, as the Warrant Agent, and the form of warrant, both of which are filed as exhibits to the registration statement of which this prospectus is a part. Prospective investors should carefully review the terms and provisions set forth in the warrant agency agreement, including the annexes thereto, and form of warrant.

The Warrants issued in this offering entitle the registered holder to purchase shares of Common Stock at a price equal to $5.81 per share, subject to adjustment as discussed below, immediately following the issuance of such warrant and terminating at 5:00 p.m., New York City time, five years after their original issuance.

The exercise price and number of shares of Common Stock issuable upon exercise of the Warrants may be adjusted in certain circumstances, including in the event of a stock dividend or recapitalization, reorganization, merger or consolidation. However, the Warrants will not be adjusted for issuances of Common Stock at prices below its exercise price.

Exercisability. The Warrants are exercisable at any time after their original issuance and at any time up to the date that is five (5) years after their original issuance. The Warrants may be exercised upon surrender of the Warrant certificate on or prior to the expiration date at the offices of the Warrant Agent, with the exercise form on the reverse side of the Warrant certificate completed and executed as indicated, accompanied by full payment of the exercise price, by certified or official bank check payable to us, for the number of Warrants being exercised. Under the terms of the Warrant Agreement, we must use our best efforts to maintain the effectiveness of the registration statement and current prospectus relating to Common Stock issuable upon exercise of the Warrants until the expiration of the Warrants. If we fail to maintain the effectiveness of the registration statement and current prospectus relating to the shares of Common Stock issuable upon exercise of the Warrants, the holders of the Warrants shall have the right to exercise the Warrants solely via a cashless exercise feature provided for in the Warrants, until such time as there is an effective registration statement and current prospectus.

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Exercise Limitation. A holder may not exercise any portion of a Warrant to the extent that the holder, together with its affiliates and any other person or entity acting as a group, would own more than 4.99% of the outstanding shares of Common Stock after exercise, as such percentage ownership is determined in accordance with the terms of the Warrant, except that upon prior notice from the holder to us, the holder may waive such limitation up to a percentage not in excess of 9.99%.

Exercise Price. The exercise price per whole share of shares of Common Stock purchasable upon exercise of the Warrants is $5.81. The exercise price is subject to appropriate adjustment in the event of certain stock dividends and distributions, stock splits, stock combinations, reclassifications or similar events affecting our shares of Common Stock and also upon any distributions of assets, including cash, stock or other property to our stockholders.

Fractional Shares. No fractional shares of Common Stock will be issued upon exercise of the Warrants. As to any fraction of a share which the holder would otherwise be entitled to purchase upon such exercise, the Company will round up or down, as applicable, to the nearest whole share.

Transferability. Subject to applicable laws, the Warrants may be offered for sale, sold, transferred or assigned without our consent.

Warrant Agent; Global Certificate. The Warrants will be issued in registered form under a warrant agency agreement between the Warrant Agent and us. The Warrants shall initially be represented only by one or more global warrants deposited with the Warrant Agent, as custodian on behalf of The Depository Trust Company (DTC) and registered in the name of Cede & Co., a nominee of DTC, or as otherwise directed by DTC.

Fundamental Transactions. In the event of a fundamental transaction, as described in the Warrants and generally including any reorganization, recapitalization or reclassification of our shares of Common Stock, the sale, transfer or other disposition of all or substantially all of our properties or assets, our consolidation or merger with or into another person, the acquisition of more than 51% of our outstanding shares of Common Stock, or any person or group becoming the beneficial owner of 51% of the voting power represented by our outstanding Common Stock, the holders of the Warrants will be entitled to receive the kind and amount of securities, cash or other property that the holders would have received had they exercised the Warrants immediately prior to such fundamental transaction.

Rights as a Stockholder. The Warrant holders do not have the rights or privileges of holders of shares of Common Stock or any voting rights until they exercise their Warrants and receive shares of Common Stock. After the issuance of shares of Common Stock upon exercise of the Warrants, each holder will be entitled to one vote for each share held of record on all matters to be voted on by stockholders.

Governing Law. The Warrants and the warrant agency agreement are governed by Nevada law.

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Pre-funded Warrants

Overview. The following summary of certain terms and provisions of the Pre-funded Warrants included in the Pre-funded Units that are being offered hereby is not complete and is subject to, and qualified in its entirety by, the provisions of the Pre-funded Warrants, the form of which is filed as an exhibit to the registration statement of which this prospectus forms a part. Prospective investors should carefully review the terms and provisions of the form of Pre-funded Warrant for a complete description of the terms and conditions of the Pre-funded Warrants.

Exercisability. The Pre-funded Warrants will be exercisable, at the option of each holder, in whole or in part, by delivering to us a duly executed exercise notice accompanied by payment in full for the number of shares of our Common Stock purchased upon such exercise. A holder (together with its affiliates) may not exercise any portion of a Pre-funded Warrant to the extent that the holder would own more than 4.99% of the outstanding Common Stock immediately after exercise, except that upon at least 61 days’ prior notice from the holder to us, the holder may increase the amount of ownership of outstanding stock after exercising the holder’s Pre-funded Warrants up to 9.99% of the number of shares of our Common Stock outstanding immediately after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of the Pre-funded Warrants. Purchasers of Pre-funded Units in this offering may also elect prior to the issuance of the Pre-funded Units to have the initial exercise limitation set at 9.99% of our outstanding Common Stock.

Exercise Limitation. A holder may not exercise any portion of a Pre-funded Warrant to the extent that the holder, together with its affiliates and any other person or entity acting as a group, would own more than 4.99% of the outstanding shares of Common Stock after exercise, as such percentage ownership is determined in accordance with the terms of the Pre-funded Warrant, except that upon prior notice from the holder to us, the holder may waive such limitation up to a percentage not in excess of 9.99%.

Exercise Price. The exercise price per whole share of shares of Common Stock purchasable upon exercise of the Pre-funded Warrants is $0.01. The exercise price is subject to appropriate adjustment in the event of certain stock dividends and distributions, stock splits, stock combinations, reclassifications or similar events affecting our shares of Common Stock and also upon any distributions of assets, including cash, stock or other property to our stockholders.

Fractional Shares. No fractional shares of Common Stock will be issued upon exercise of the Pre-funded Warrants. As to any fraction of a share which the holder would otherwise be entitled to purchase upon such exercise, the Company will round up or down, as applicable, to the nearest whole share.

Transferability. Subject to applicable laws, the Pre-funded Warrants may be offered for sale, sold, transferred or assigned without our consent.

Warrant Agent; Global Certificate. The Pre-funded Warrants will be issued in registered form under a warrant agency agreement between the Warrant Agent and us. The Pre-funded Warrants shall initially be represented only by one or more global warrants deposited with the Warrant Agent, as custodian on behalf of The Depository Trust Company (DTC) and registered in the name of Cede & Co., a nominee of DTC, or as otherwise directed by DTC.

Fundamental Transactions. In the event of a fundamental transaction, as described in the Pre-funded Warrants and generally including any reorganization, recapitalization or reclassification of our shares of Common Stock, the sale, transfer or other disposition of all or substantially all of our properties or assets, our consolidation or merger with or into another person, the acquisition of more than 51% of our outstanding shares of Common Stock, or any person or group becoming the beneficial owner of 51% of the voting power represented by our outstanding Common Stock, the holders of the Warrants will be entitled to receive the kind and amount of securities, cash or other property that the holders would have received had they exercised the Pre-funded Warrants immediately prior to such fundamental transaction.

Rights as a Stockholder. The Pre-funded Warrant holders do not have the rights or privileges of holders of shares of Common Stock or any voting rights until they exercise their Pre-funded Warrants and receive shares of Common Stock. After the issuance of shares of Common Stock upon exercise of the Pre-funded Warrants, each holder will be entitled to one vote for each share held of record on all matters to be voted on by stockholders.

Governing Law. The Pre-funded Warrants and the warrant agency agreement are governed by Nevada law.

Transfer Agent, Warrant Agent and Registrar

Action Stock Transfer will act as the registrar, transfer agent, warrant agent and dividend and redemption price disbursing agent in respect of the Warrants. The principal business address of 2469 E. Fort Union Blvd., Suite 214, Salt Lake City, UT 84121.

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SHARES ELIGIBLE FOR FUTURE SALE

Future sales of substantial amounts of our Common Stock in the public market, including shares issued upon the exercise of outstanding options or warrants, or upon debt conversion, or the anticipation of these sales, could adversely affect market prices prevailing from time to time and could impair our ability to raise capital through sales of equity securities.

Upon completion of this offering, we estimate that we will have 4,629,443 outstanding shares of our Common Stock, assuming no further conversions of preferred stock, no exercise of outstanding options or warrants, and no sale of shares reserved for the underwriter.

Sale of Restricted Securities

The shares of our Common Stock sold pursuant to this offering will be registered under the Securities Act or 1933, as amended, and therefore freely transferable, except for our affiliates. Our affiliates will be deemed to own “control” securities that are not registered for resale under the registration statement covering this prospectus. Individuals who may be considered our affiliates after this offering include individuals who control, are controlled by or are under common control with us, as those terms generally are interpreted for federal securities law purposes. These individuals may include some or all of our directors and executive officers. Individuals who are our affiliates are not permitted to resell their shares of our Common Stock unless such shares are separately registered under an effective registration statement under the Securities Act or an exemption from the registration requirements of the Securities Act is available, such as Rule 144.

Rule 144

In general, under Rule 144 as currently in effect, a person (or persons whose shares are aggregated), including an affiliate, who beneficially owns “restricted securities” (i.e., securities that are not registered by an effective registration statement) of a “reporting company” may not sell these securities until the person has beneficially owned them for at least six months. Thereafter, affiliates may not sell within any three-month period a number of shares in excess of the greater of: (i) 1% of the then outstanding shares of Common Stock as shown by the most recent report or statement published by the issuer; and (ii) the average weekly reported trading volume in such securities during the four preceding calendar weeks.

Sales under Rule 144 by our affiliates will also be subject to restrictions relating to manner of sale, notice and the availability of current public information about us and may be affected only through unsolicited brokers’ transactions.

Persons not deemed to be affiliates who have beneficially owned “restricted securities” for at least six months but for less than one year may sell these securities, provided that current public information about the Company is “available,” which means that, on the date of sale, we have been subject to the reporting requirements of the Exchange Act for at least 90 days and are current in our Exchange Act filings. After beneficially owning “restricted securities” for one year, our non-affiliates may engage in unlimited re-sales of such securities.

Shares received by our affiliates in this offering or upon exercise of stock options or upon vesting of other equity-linked awards may be “control securities” rather than “restricted securities.” “Control securities” are subject to the same volume limitations as “restricted securities” but are not subject to holding period requirements.

Rule 701

Rule 701 generally allows a stockholder who purchased shares of the Company’s Common Stock pursuant to a written compensatory plan or contract and who is not deemed to have been an affiliate of the Company during the immediately preceding 90 days to sell these shares in reliance upon Rule 144, but without being required to comply with the public information, holding period, volume limitation, or notice provisions of Rule 144. Rule 701 also permits affiliates of the Company to sell their Rule 701 shares under Rule 144 without complying with the holding period requirements of Rule 144. All holders of Rule 701 shares, however, are required to wait until 90 days after the date of this prospectus before selling such shares pursuant to Rule 701 and until expiration of the lock-up period described below.

Lock-Up Agreements

In connection with this offering, the Company, and its officers, directors and certain stockholders have agreed to a “lock-up” period from the closing of this offering, with respect to the shares that they beneficially own, including shares issuable upon the exercise of convertible securities and options that are currently outstanding or which may be issued. This means that, for a period of one hundred eighty (180) days (in the case of our executive officers and directors) and three hundred sixty (360) days (in the case of us, our 5% stockholders, and our stockholders receiving shares pursuant to automatic conversions or exchange agreements) following the closing of this offering, such persons may not offer, sell, pledge or otherwise dispose of these securities without the prior written consent of the underwriters. The 180-day or 360-day, as the case may be, restricted period is subject to extension upon certain events and the terms of the lock-up agreements may be waived at the underwriters’ discretion. The lock-up restrictions, specified exceptions and the circumstances under which the 180-day or 360-day, as the case may be, lock-up period may be extended are described in more detail under “Underwriting.”

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U.S. FEDERAL INCOME TAX CONSIDERATIONS

The following is a summary of some of the possible U.S. tax consequences that should be anticipated in connection with an investment in the Units, Pre-funded Units, Common Stock and Warrants, which might also be referred to generically as securities. This discussion is based on the U.S. Internal Revenue Code of 1986, as amended (the “Code”), the U.S. Treasury regulations promulgated thereunder and administrative and judicial interpretations thereof, all as in effect on the date hereof and all of which are subject to change, possibly with retroactive effect. There can be no assurance that the Internal Revenue Service (the “IRS”) will not challenge one or more of the tax consequences described herein, and we have not obtained, and do not intend to obtain, an opinion of counsel or ruling from the IRS with respect to the U.S. federal income tax considerations relating to the purchase, ownership or disposition of our Common Stock and Warrants. EACH PROSPECTIVE INVESTOR IS URGED TO CONSULT THEIR OWN TAX ADVISOR ABOUT THE TAX CONSEQUENCES TO IT OF AN INVESTMENT IN OUR UNITS IN LIGHT OF THE INVESTOR’S OWN CIRCUMSTANCES.

For United States federal income and other applicable tax purposes, a purchaser of Units must allocate their purchase price between each component (i.e., the Common Stock and Warrants) based on the relative fair market value of each at the time of issuance. These allocated amounts will be the holder’s tax basis in each component. Because each investor must make their own determination of the relative value of each component, we urge investors to consult their tax advisors in connection with this analysis.

Consequences For U.S. Holders

The following discussion describes the material U.S. federal income tax consequences relating to the ownership and disposition of Common Stock and Warrants or Pre-funded Warrants by U.S. Holders. As used in this discussion, the term “U.S. Holder” means a beneficial owner of our Common Stock and Warrants that is, for U.S. federal income tax purposes, (1) an individual who is a citizen or resident of the United States, (2) a corporation (or entity treated as a corporation for U.S. federal income tax purposes) created or organized in or under the laws of the United States, any state thereof, or the District of Columbia, (3) an estate the income of which is subject to U.S. federal income tax regardless of its source or (4) a trust (i) with respect to which a court within the United States is able to exercise primary supervision over its administration and one or more United States persons have the authority to control all of its substantial decisions, or (ii) that has elected to be treated as a domestic trust for U.S. federal income tax purposes.

This discussion applies to U.S. Holders that purchase our Common Stock and Warrants or Pre-funded Warrants pursuant to this prospectus and hold such Common Stock and Warrants or Pre-funded Warrants as capital assets. This discussion does not address all of the U.S. federal income tax consequences that may be relevant to specific U.S. Holders in light of their particular circumstances or to U.S. Holders subject to special treatment under U.S. federal income tax law (such as certain financial institutions, insurance companies, broker-dealers and traders in securities or other persons that generally mark their securities to market for U.S. federal income tax purposes, tax-exempt entities, retirement plans, regulated investment companies, real estate investment trusts, certain former citizens or residents of the United States, persons who hold our Common Stock and Warrants as part of a “straddle”, “hedge”, “conversion transaction”, “synthetic security” or integrated investment, persons that have a “functional currency” other than the U.S. dollar, persons that own directly, indirectly or through attribution 10% or more of the voting power of our Common Stock, corporations that accumulate earnings to avoid U.S. federal income tax, persons subject to special tax accounting rules under Section 451(b) of the Code, partnerships and other pass-through entities, and investors in such pass-through entities). This discussion does not address any U.S. state or local or non-U.S. tax consequences or any U.S. federal estate, gift or alternative minimum tax consequences. If an entity treated as a partnership for U.S. federal income tax purposes holds our Common Stock and Warrants or Pre-funded Warrants, the U.S. federal income tax consequences relating to an investment in our Common Stock and Warrants will depend in part upon the status and activities of such entity and the particular partner. Any such entity should consult its own tax advisor regarding the U.S. federal income tax consequences applicable to it and its partners of the purchase, ownership and disposition of our Common Stock and Warrants.

Basis Allocation

No statutory, administrative or judicial authority directly addresses the treatment of a unit or instruments similar to a unit for U.S. federal income tax purposes and, therefore, that treatment is not entirely clear. The acquisition of a Unit or a Pre-funded Unit will be treated as the acquisition of the component securities, for U.S. federal income tax purposes. A U.S. Holder that is required to allocate basis in a Unit or a Pre-funded Unit among the Common Stock or Pre-Funded Warrant, as the case may be, and the Warrant, in accordance with each component’s relative fair market value. Therefore, we strongly urge each investor to consult his or her tax adviser regarding the determination of value for these purposes. The separation of the common share or pre-funded warrant and the Class A Warrant comprising a unit should not be a taxable event for U.S. federal income tax purposes.

The foregoing treatment of the Common Shares, Pre-funded Warrants and Warrants and a U.S. Holder’s purchase price allocation are not binding on the IRS or the courts. Because there are no authorities that directly address instruments that are similar to the Units or Pre-funded Units, no assurance can be given that the IRS or the courts will agree with the characterization described above or the discussion below. Accordingly, each prospective investor is urged to consult its own tax advisors regarding the tax consequences of an investment in a unit (including alternative characterizations of a Unit or Pre-funded Unit). The balance of this discussion assumes that the characterization of the Units or Pre-funded Units described above is respected for U.S. federal income tax purposes.

Tax Treatment of the Pre-Funded Warrants

We believe that our Pre-funded Warrants should be treated as our common shares for U.S. federal income tax purposes, rather than as warrants. Assuming this position is upheld, upon the exercise of a Pre-funded Warrant, the holding period of a Pre-funded Warrant should carry over to the common share received. Similarly, no gain or loss should be recognized upon the exercise of a Pre-funded Warrant and the tax basis of a Pre-funded Warrant should carry over to the common share received upon exercise, increased by the exercise price of $0.01 per share. In the event that the exercise price or conversion ratio of Pre-funded Warrants is adjusted as a result of an action affecting the common shares, such as a dividend being paid on the common shares, a U.S. Holder may be treated as receiving a distribution from the Company. Such deemed distributions may be treated as a dividend and may be eligible for preferential tax rates, as described in the next section below. However, our position is not binding on the IRS and the IRS may treat the Pre-funded Warrants as warrants to acquire our common shares. You should consult your tax advisor regarding the U.S. federal tax consequences of an investment in the Pre-funded Warrants. The following discussion assumes our Pre-funded Warrants are properly treated as our common shares.

Distributions in respect of our Common Stock

A U.S. Holder that receives a distribution with respect to our Common Stock generally will be required to include the gross amount of such distribution in income as a dividend when actually or constructively received, to the extent of the U.S. Holder’s pro rata share of our current and/or accumulated earnings and profits (as determined under U.S. federal income tax principles). To the extent a distribution received by a U.S. Holder is not a dividend because it exceeds the U.S. Holder’s pro rata share of our current and accumulated earnings and profits, it will be treated first as a tax-free return of capital and reduce (but not below zero) the adjusted tax basis of the U.S. Holder’s Common Stock. To the extent the distribution exceeds the adjusted tax basis of the U.S. Holder’s Common Stock, the remainder will be taxed as capital gain.

Sale, Exchange or Other Disposition of our Common Stock, Warrants or Pre-funded Warrants

A U.S. Holder generally will recognize capital gain or loss for U.S. federal income tax purposes upon the sale, exchange or other disposition of our Common Stock, Warrants or Pre-funded Warrants in an amount equal to the difference, if any, between the amount realized (i.e., the amount of cash plus the fair market value of any property received) on the sale, exchange or other disposition, and such U.S. Holder’s adjusted tax basis in the securities that were transferred. Such capital gain or loss generally will be long-term capital gain or long-term capital loss if, on the date of sale, exchange or other disposition, the transferred securities were held by the U.S. Holder for more than one year. Long-term capital gains of individual investors are generally subject to lower tax rates than those imposed on ordinary income. Any capital gain of a non-corporate U.S. Holder that is not long-term capital gain is taxed at ordinary income rates. Capital losses might not be permitted to offset the full amount of an individual’s ordinary income.

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Exercise or Lapse of a Warrant

Except as discussed below with respect to the cashless exercise of a warrant, a U.S. Holder generally will not recognize gain or loss on the exercise of a warrant and related receipt of a common share, except to the extent cash is received in lieu of the issuance of a fractional common share. A U.S. Holder’s initial tax basis in the common share received on the exercise of a warrant should be equal to the sum of (i) the U.S. Holder’s tax basis in the warrant plus (ii) the exercise price paid by the U.S. Holder on the exercise of the warrant. A U.S. Holder’s holding period for common shares received on exercise of a warrant will commence on the date following the date of exercise of the warrant and will not include the period during which the U.S. Holder held the warrant.

The U.S. federal income tax treatment of a cashless exercise of warrants into common shares is unclear, and the tax consequences of a cashless exercise could differ from the consequences upon the exercise of a warrant described in the preceding paragraph. Due to the absence of clear authority on the U.S. federal income tax treatment of a cashless exercise, there can be no assurance as to the tax treatment that would be adopted by the IRS or a court of law. Accordingly, U.S. Holders should consult their own tax advisors regarding the U.S. federal income tax consequences of a cashless exercise of our Warrants.

Medicare Tax on Net Investment Income

Certain U.S. Holders who are individuals, estates or trusts are subject to an additional 3.8% U.S. federal income tax on all or a portion of their “net investment income,” which generally includes dividends (and constructive dividends) on the securities and net gains from the disposition of common shares or warrants. U.S. Holders that are individuals, estates or trusts should consult their tax advisors regarding the applicability of the Medicare tax to them.

Information Reporting and Backup Withholding

Dividends on and proceeds from the sale or other disposition of our Common Stock and Warrants may be reported to the IRS unless the U.S. Holder establishes a basis for exemption. Backup withholding may apply to amounts subject to reporting if the holder (1) fails to provide an accurate United States taxpayer identification number or otherwise establish a basis for exemption, or (2) is described in certain other categories of persons. However, U.S. Holders that are corporations generally are excluded from these information reporting and backup withholding tax rules. Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules generally will be allowed as a refund or a credit against a U.S. Holder’s U.S. federal income tax liability if the required information is furnished by the U.S. Holder on a timely basis to the IRS.

Foreign Account Tax Compliance Act

The Foreign Account Tax Compliance Act (“FATCA”) generally imposes withholding tax at a rate of 30% on dividends on and gross proceeds from the sale or other disposition of our securities that are beneficially owned by certain U.S. persons where held in a “foreign financial institution” (as specially defined under those rules), unless such institution enters into an agreement with the U.S. government to, among other things, withhold on certain payments and to collect and provide to the U.S. tax authorities substantial information regarding the U.S. account holders of such institution (which includes certain equity and debt holders of such institution, as well as certain account holders that are foreign entities with U.S. owners), or otherwise establishes an exemption.  If a U.S. Holder holds Common Stock or Warrants in a foreign financial institution, they should obtain specific advice from an expert on the implications of FATCA.

Consequences to Non-U.S. Holders

The following is a summary of the material U.S. federal income tax considerations for non-U.S. holders relating to the purchase, ownership and disposition of the Common Stock, Pre-funded Warrants and Warrants comprising the Units or Pre-Funded Units purchased in this offering. A “non-U.S. holder” is a beneficial owner of our securities (other than a partnership or an entity or arrangement treated as a partnership for U.S. federal income tax purposes) that, for U.S. federal income tax purposes, is not a U.S. holder. This summary is for general information purposes only and does not purport to be a complete analysis of all the potential tax considerations.

Treatment of the Pre-funded Warrants

As discussed above, the Pre-funded Warrants will be treated as if these were common shares, for U.S. federal income tax purposes.

Distributions

Subject to the discussion below regarding effectively connected income, any dividend (including any taxable constructive stock dividend) paid (or deemed paid) to a non-U.S. holder generally will be subject to U.S. withholding tax either at a rate of 30% of the gross amount of the dividend, or such lower rate as may be specified by an applicable income tax treaty. In order to receive a reduced treaty rate, a non-U.S. holder must provide us with an IRS Form W-8BEN, IRS Form W-8BEN-E or other applicable IRS Form W-8 properly certifying qualification for the reduced rate. These forms must be updated periodically. A non-U.S. holder eligible for a reduced rate of U.S. withholding tax pursuant to an income tax treaty may obtain a refund of any excess amounts withheld by timely filing an appropriate claim for refund with the IRS. If a non-U.S. holder holds our securities through a financial institution or other agent acting on the non-U.S. holder’s behalf, the non-U.S. holder will be required to provide appropriate documentation to the agent, which then may be required to provide certification to us or our paying agent, either directly or through other intermediaries.

Dividends received (or deemed received) by a non-U.S. holder that are effectively connected with its conduct of a U.S. trade or business (and, if required by an applicable income tax treaty, attributable to a permanent establishment or fixed base maintained by the non-U.S. holder in the United States) are generally exempt from such withholding tax if the non-U.S. holder satisfies certain certification and disclosure requirements. In order to obtain this exemption, the non-U.S. holder must provide us with an IRS Form W-8ECI or other applicable IRS Form W-8 properly certifying such exemption. Such effectively connected dividends, although not subject to withholding tax, are taxed at the same graduated U.S. federal income tax rates applicable to U.S. holders, net of certain deductions and credits. In addition, dividends received by a corporate non-U.S. holder that are effectively connected with its conduct of a U.S. trade or business may also be subject to a branch profits tax at a rate of 30% or such lower rate as may be specified by an applicable income tax treaty. Non-U.S. holders should consult their own tax advisors regarding any applicable tax treaties that may provide for different rules.

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Gain on Sale, Exchange or Other Taxable Disposition of Common Stock. Warrants or Pre-funded Warrants

Subject to the discussion below regarding backup withholding and foreign accounts, a non-U.S. holder generally will not be required to pay U.S. federal income tax on any gain realized upon the sale, exchange or other taxable disposition of our Common Stock, Warrants or Pre-funded Warrants unless:

the gain is effectively connected with the non-U.S. holder’s conduct of a U.S. trade or business (and, if required by an applicable income tax treaty, the gain is attributable to a permanent establishment or fixed base maintained by the non-U.S. holder in the United States);
the non-U.S. holder is a non-resident alien individual who is present in the United States for a period or periods aggregating 183 days or more during the calendar year in which the sale or disposition occurs, and certain other conditions are met; or
shares of our Common Stock or our Warrants, as applicable, constitute U.S. real property interests by reason of our status as a “United States real property holding corporation” (a USRPHC) for U.S. federal income tax purposes at any time within the shorter of the five-year period preceding the non-U.S. holder’s disposition of, or the non- U.S. holder’s holding period for, our Common Stock or Warrants, as applicable.

We believe that we are not currently and will not become a USRPHC for U.S. federal income tax purposes, and the remainder of this discussion so assumes. However, because the determination of whether we are a USRPHC depends on the fair market value of our U.S. real property relative to the fair market value of our other business assets, there can be no assurance that we will not become a USRPHC in the future. Even if we become a USRPHC, however, as long as our Common Stock is regularly traded on an established securities market, such Common Stock will be treated as U.S. real property interests only if the non-U.S. holder actually or constructively holds more than five percent of such regularly traded Common Stock at any time during the shorter of the five-year period preceding the non-U.S. holder’s disposition of, or the non-U.S. holder’s holding period for, our Common Stock. It is unclear whether non-U.S. holders of Pre-funded Warrants will be eligible for the foregoing treatment and may be subject to U.S. federal income tax upon a sale or disposition of the Pre-funded Warrant if we are or become a USRPHC. In addition, provided that our Common Stock is regularly traded on an established securities market, a warrant will not be treated as a U.S. real property interest with respect to a non-U.S. holder if such holder did not own, actually or constructively, Warrants whose total fair market value on the date they were acquired (and on the date or dates any additional warrants were acquired) exceeded the fair market value on that date (and on the date or dates any additional warrants were acquired) of 5% of all our Common Stock.

If the non-U.S. holder is described in the first bullet above, they will be required to pay tax on the net gain derived from the sale, exchange or other taxable disposition under regular graduated U.S. federal income tax rates, and a corporate non-U.S. holder described in the first bullet above also may be subject to the branch profits tax at a rate of 30%, or such lower rate as may be specified by an applicable income tax treaty. An individual non-U.S. holder described in the second bullet above will be required to pay a flat 30% tax (or such lower rate specified by an applicable income tax treaty) on the gain derived from the sale, exchange or other taxable disposition, which gain may be offset by U.S. source capital losses for the year (provided the non-U.S. holder has timely filed U.S. federal income tax returns with respect to such losses). Non-U.S. holders should consult their own tax advisors regarding any applicable income tax or other treaties that may provide for different rules.

Backup Withholding and Information Reporting

Generally, we must report annually to the IRS the amount of dividends paid to you, your name and address, and the amount of tax withheld, if any. A similar report will be sent to you. Pursuant to applicable income tax treaties or other agreements, the IRS may make these reports available to tax authorities in your country of residence.

Payments of dividends on or of proceeds from the disposition of our securities made to you may be subject to backup withholding unless you establish an exemption, for example, by properly certifying your non-U.S. status on an IRS Form W-8BEN or IRS Form W-8BEN-E or other applicable IRS Form W-8. Notwithstanding the foregoing, backup withholding may apply if either we or our paying agent has actual knowledge, or reason to know, that you are a U.S. person. Backup withholding is not an additional tax; rather, the U.S. federal income tax liability of persons subject to backup withholding will be reduced by the amount of tax withheld. If withholding results in an overpayment of taxes, a refund or credit may generally be obtained from the IRS, provided that the required information is furnished to the IRS in a timely manner.

78

UNDERWRITING

EF Hutton, division of Benchmark LLC (“EF Hutton”) is acting as representative of the underwriters (the “Representative”). Subject to the terms and conditions of an underwriting agreement between us and the Representative, we have agreed to sell to each underwriter named below, and each underwriter named below has severally agreed to purchase, at the public offering price less the underwriting discounts set forth on the cover page of this prospectus, the number of Units and Pre-funded Units listed next to its name in the following table:

Name of RepresentativeNumber of UnitsNumber of
Pre-Funded Units
EF Hutton

The underwriters are committed to purchase all the Units offered by us other than those covered by the option described below, if any, are purchased. The underwriting agreement also provides that if an underwriter defaults, the purchase commitments of non-defaulting underwriters may be increased or the offering may be terminated. The underwriters are not obligated to purchase the Units covered by the underwriters’ option described below. The underwriters are offering the Units, subject to prior sale, when, as and if issued to and accepted by them, subject to approval of legal matters by their counsel, and other conditions contained in the underwriting agreement, such as the receipt by the underwriters of officer’s certificates and legal opinions. The underwriters reserve the right to withdraw, cancel or modify offers to the public and to reject orders in whole or in part.

Discounts and Commissions

The underwriters propose initially to offer the Units to the public at the public offering price set forth on the cover page of this prospectus and to dealers at those prices less a concession not in excess of $____ per Unit. If all of the Units offered by us are not sold at the public offering price, the underwriters may change the offering price and other selling terms by means of a supplement to this prospectus.

The following table shows the public offering price, underwriting discounts and commissions and proceeds before expenses to us. The information assumes either no exercise or full exercise of the option we granted to the Representative.

Per UnitPer Pre-funded
Unit

Total Without

Exercise of
Representative’s
Option

Total With Full
Exercise of
Representative’s
Option
Public offering price$$$$
Underwriting discount$$$$
Non-accountable expense allowance$$$$
Proceeds, before expenses, to us$$$$

We have agreed to pay a non-accountable expense allowance to the Representative equal to 1% of the gross proceeds received at the closing of the offering (excluding any proceeds received upon any subsequent exercise of the option).

79

We have also agreed to pay the Representative’s expenses relating to the offering, (a) all filing fees and expenses relating to the registration of the securities with the Commission; (b) all fees and expenses relating to the listing of the our shares Common Stock on a national exchange, if applicable; (c) all fees, expenses and disbursements relating to the registration or qualification of the securities under the “blue sky” securities laws of such states and other jurisdictions as the Representative may reasonably designate (including, without limitation, all filing and registration fees, and the reasonable fees and disbursements of the our “blue sky” counsel, which will be Representative’s counsel) unless such filings are not required in connection with the Company’s proposed listing on a national exchange, if applicable; (d) all fees, expenses and disbursements relating to the registration, qualification or exemption of the securities under the securities laws of such foreign jurisdictions as the Representative may reasonably designate; (e) the costs of all mailing and printing of the Offering documents; (f) transfer and/or stamp taxes, if any, payable upon the transfer of securities from the Company to the Representative; and (g) the fees and expenses of the our accountants; and (h) a maximum of $150,000 for fees and expenses including “road show”, diligence, and reasonable legal fees and disbursements for Representative’s counsel. We shall be responsible for Representative’s external counsel legal costs irrespective of whether the Offering is consummated or not, subject to $50,000 cap in the event that there is not a Closing. Additionally, we will provide an expense advance to the Representative of $25,000 upon execution of this Agreement and $25,000 upon filing of the Registration Statement. The advance shall be applied towards out-of-pocket accountable expense set forth herein and any portion of the advance shall be returned back to us to the extent not actually incurred in compliance with FINRA Rule 5110(f)(2)(C).

We estimate that the total expenses of the offering payable by us, excluding the total underwriting discount and non-accountable expense allowance, will be approximately $215,000.

Option

We have granted the underwriters an option. This option, which is exercisable for up to 45 days after the date of this prospectus, permits the underwriters to purchase up to an additional 338,710 shares of Common Stock, or Pre-funded Warrants and/or Warrants to purchase up to 338,710 shares of Common Stock based on a public offering price of $4.65 (equal to 15% of the number of shares of Common Stock and Warrants underlying the Units sold in the offering). If the underwriters exercise all or part of this option, they will purchase shares and/or Warrants included in the Units covered by the option at the public offering price per share or Warrant that appears on the cover page of this prospectus, less the underwriting discount. If this option is exercised in full, the total price to the public will be $1,575,002 and the total net proceeds, less the underwriting discount but before expenses, to us will be $1,417,502.

Representative’s Warrants

We have agreed to issue to the Representative (or its permitted assignees) warrants (“Representative Warrants”) to purchase up to 67,742 shares of Common Stock (and up to 77,937 shares of Common Stock assuming the Representative’s option is exercised in full) which is equal to 3% of the Units offered hereby (based on the assumed public offering price of $4.65 per Unit, the mid-point of the estimated offering price range described on the cover page of this prospectus). We are registering hereby the issuance of the Representative’s Warrants and the shares of Common Stock issuable upon exercise of such warrants. The Representative Warrants will be exercisable at any time, and from time to time, in whole or in part, during the four and one half year period commencing 180 days from the effective date of the registration statement of which this prospectus is a part, which period is in compliance with FINRA Rule 5110(e)(1). The Representative Warrants are exercisable for cash or on a cashless basis at a per share price equal to $5.81 per share, or 125% of the public offering price per Unit in the offering. The Representative Warrants have been deemed compensation by FINRA and are therefore subject to a 180-day lock-up pursuant to Rule 5110(e)(1) of FINRA. The Representative (or permitted assignees) will not sell, transfer, assign, pledge, or hypothecate these warrants or the securities underlying these warrants, nor will they engage in any hedging, short sale, derivative, put, or call transaction that would result in the effective economic disposition of the warrants or the underlying securities for a period of 180 days from the effective date of the registration statement of which this prospectus is a part. In addition, the Representative Warrants provide for certain demand and piggyback registration rights. The warrants provide for one demand registration right in accordance with Rule 5110(g)(8)(b) and unlimited piggyback registration rights. The demand registration rights and piggyback registration rights provided will terminate 5 years from the effective date of the registration statement of which this prospectus is a part in compliance with FINRA Rule 5110(g)(8(c), (d) and (e), respectively. We will bear all fees and expenses attendant to registering the securities issuable on exercise of the Representative Warrants other than underwriting commissions incurred and payable by the holders. The exercise price and number of shares issuable upon exercise of the Representative Warrants may be adjusted in certain circumstances including in the event of a stock dividend, extraordinary cash dividend or our recapitalization, reorganization, merger or consolidation.

Discretionary Accounts

The underwriters do not intend to confirm sales of the securities offered hereby to any accounts over which they have discretionary authority.

80

Lock-Up Agreements

Pursuant to “lock-up” agreements, we, our executive officers and directors, and certain of our stockholders, have agreed, without the prior written consent of the Representative not to directly or indirectly, offer to sell, sell, pledge or otherwise transfer or dispose of any of shares of (or enter into any transaction or device that is designed to, or could be expected to, result in the transfer or disposition by any person at any time in the future of) our Common Stock, enter into any swap or other derivatives transaction that transfers to another, in whole or in part, any of the economic benefits or risks of ownership of shares of our Common Stock, make any demand for or exercise any right or cause to be filed a registration statement, including any amendments thereto, with respect to the registration of any shares of Common Stock or securities convertible into or exercisable or exchangeable for Common Stock or any other securities of the Company or publicly disclose the intention to do any of the foregoing, subject to customary exceptions, for a period of 180 days from the date of this prospectus in the case of our executive officers and directors and 360 days in the case of us, our 5% stockholders, and our stockholders receiving shares pursuant to automatic conversions or exchange agreements.

In addition to the above and in connection with their purchase of Debentures, holders have agreed to certain market stand-off provisions pursuant to which they have agreed not to sell or otherwise transfer Common Stock of the Company or securities convertible or exercisable into Common Stock of the Company, without the consent of the underwriters, for a period of 180 days following the date of this prospectus.

Certain Post Offering Investments

The Company has agreed to pay EF Hutton an aggregate cash fee of 8% in the event investors previously directly introduced to the Company by such parties provide capital to the Company during the period commencing following the closing of the offering and continuing for a period of 12 months thereafter.

Indemnification

We have agreed to indemnify the underwriters against certain liabilities, including liabilities under the Securities Act, and to contribute to payments that the underwriters may be required to make for these liabilities.

Stabilization

In connection with this offering, the underwriters may engage in stabilizing transactions, syndicate-covering transactions, penalty bids and purchases to cover positions created by short sales.

Stabilizing transactions permit bids to purchase securities so long as the stabilizing bids do not exceed a specified maximum and are engaged in for the purpose of preventing or retarding a decline in the market price of the securities while the offering is in progress.
Syndicate covering transactions involve purchases of securities in the open market after the distribution has been completed in order to cover syndicate short positions. In determining the source of securities to close out the short position, the underwriters will consider, among other things, the price of securities available for purchase in the open market as compared with the price at which they may purchase securities through exercise of the option. If the underwriters sell more securities than could be covered by exercise of the option and, therefore, have a naked short position, the position can be closed out only by buying securities in the open market. A naked short position is more likely to be created if the underwriters are concerned that after pricing there could be downward pressure on the price of the securities in the open market that could adversely affect investors who purchase in the offering.
Penalty bids permit the Representative to reclaim a selling concession from a syndicate member when the securities originally sold by that syndicate member are purchased in stabilizing or syndicate covering transactions to cover syndicate short positions.

81

These stabilizing transactions, syndicate covering transactions and penalty bids may have the effect of raising or maintaining the market price of our securities or preventing or retarding a decline in the market price of our securities. As a result, the price of our securities in the open market may be higher than it would otherwise be in the absence of these transactions. Neither we nor the underwriters make any representation or prediction as to the effect that the transactions described above may have on the price of our securities. These transactions may be effected on The Nasdaq Capital Market, in the over-the-counter market or otherwise and, if commenced, may be discontinued at any time.

Passive Market Making

In connection with this offering, the underwriters and selling group members may also engage in passive market making transactions in our Common Stock. Passive market making consists of displaying bids limited by the prices of independent market makers and effecting purchases limited by those prices in response to order flow. Rule 103 of Regulation M promulgated by the SEC limits the amount of net purchases that each passive market maker may make and the displayed size of each bid. Passive market making may stabilize the market price of the shares of Common Stock at a level above that which might otherwise prevail in the open market and, if commenced, may be discontinued at any time.

Electronic Offer, Sale and Distribution of Shares

A prospectus in electronic format may be made available on the websites maintained by one or more underwriters or selling group members, if any, participating in the offering. The underwriters may agree to allocate a number of shares of securities to underwriters and selling group members for sale to their online brokerage account holders. Internet distributions will be allocated by the Representative to underwriters and selling group members that may make internet distributions on the same basis as other allocations. Other than the prospectus in electronic format, the information on the underwriters’ websites and any information contained in any other website maintained by the underwriters is not part of this prospectus or the registration statement of which this prospectus forms a part.

Other Relationships

From time to time, certain of the underwriters and their affiliates have provided, and may provide in the future, various advisory, investment and commercial banking and other services to us in the ordinary course of business, for which they have received and may continue to receive customary fees and commissions. However, except as disclosed in this prospectus, we have no present arrangements with any of the underwriters for any further services.

Market Information

The public offering price will be determined by discussions between us and the Representative. In addition to prevailing market conditions, the factors to be considered in these discussions will include:

an assessment of our management and the underwriters as to the price at which investors might be willing to participate in this offering;
the history of, and prospects for, our company and the industry in which we compete;
our past and present financial information;
our past and present operations, and the prospects for, and timing of, our future revenues;
the present state of our development; and
the above factors in relation to market values and various valuation measures of other companies engaged in activities similar to ours.

An active trading market for the shares may not develop. It is also possible that after the offering the shares will not trade in the public market at or above the public offering price.

Offer and Sale Restrictions Outside the United States

Other than in the United States, no action has been taken by us or the underwriters that would permit a public offering of the securities offered by this prospectus in any jurisdiction where action for that purpose is required. The securities offered by this prospectus may not be offered or sold, directly or indirectly, nor may this prospectus or any other offering material or advertisements in connection with the offer and sale of any such securities be distributed or published in any jurisdiction, except under circumstances that will result in compliance with the applicable rules and regulations of that jurisdiction. Persons into whose possession this prospectus comes are advised to inform themselves about and to observe any restrictions relating to the offering and the distribution of this prospectus. This prospectus does not constitute an offer to sell or a solicitation of an offer to buy any securities offered by this prospectus in any jurisdiction in which such an offer or a solicitation is unlawful.

82

LEGAL MATTERS

The validity of the Securities offered hereby, and other certain legal matters, will be passed upon for us by Lucosky Brookman, LLP. We have filed a copy of this opinion as an exhibit to the registration statement in which this prospectus is included. Seward & Kissel LLP, One Battery Park Plaza New York, New York 10004 is acting as counsel to the underwriters.

EXPERTS

The audited consolidated financial statements of the Company and its subsidiaries as of and for the years ended December 31, 2020 and 2019, included in this prospectus have been so included in reliance on the report of BF Borgers CPA, P.C., independent registered public accounting firm, upon the authority of said firm as experts in accounting and auditing.

WHERE YOU CAN FIND MORE INFORMATION

We have filed with the SEC a registration statement on Form S-1 under the Securities Act with respect to the Units and the shares of Common Stock and Warrants offered by this prospectus as part of the Units. This prospectus, which constitutes a part of the registration statement, does not contain all the information set forth in the registration statement, some of which is contained in exhibits to the registration statement as permitted by the rules and regulations of the SEC. For further information with respect to us, the Common Stock and the Warrants, we refer you to the registration statement, including the exhibits filed as a part of the registration statement. Statements contained in this prospectus concerning the contents of any contract or any other documents are summaries only of the material provisions of such documents, and each statement is qualified in its entirety by reference to the full text of the applicable document filed with the SEC.

We file annual reports, quarterly and current reports, proxy statements and other information with the SEC. The SEC maintains a website that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at www.sec.gov.

We also maintain a website at www.americanrebel.com. All of our reports filed with the SEC (including Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and proxy statements) are accessible through the Investor Relations section of our website, free of charge, as soon as reasonably practicable after electronic filing. The reference to our website in this prospectus is an inactive textual reference only and is not a hyperlink. The contents of our website are not part of this prospectus, and you should not consider the contents of our website in making an investment decision with respect to our securities.

83

AMERICAN REBEL HOLDINGS, INC.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

2020 Audited Financial Statements

Report of Independent Registered Public Accounting FirmF-2
Consolidated Balance Sheets as of December 31, 2020 and 2019F-3
Consolidated Statements of Operations for the years ended December 31, 2020 and 2019F-4
Consolidated Statement of Changes in Stockholders’ Equity (Deficit) for the years ended December 31, 2020 and 2019F-5
Consolidated Statements of Cash Flows for the years ended December 31, 2020 and 2019F-6
Notes to Consolidated Financial StatementsF-7

Interim Financial Statements for the nine months ended September 30, 2021 (unaudited):
Condensed Consolidated Balance Sheets as of September 30, 2021 (unaudited) and December 31, 2020F-25
Condensed Consolidated Statements of Operations (unaudited) for the nine months ended September 30, 2021 and 2020F-26
Condensed Consolidated Statements of Changes in Stockholders’ Deficit (unaudited) for the nine months ended September 30, 2021 and 2020F-28
Condensed Consolidated Statements of Cash Flows (unaudited) for the nine months ended September 30, 2021 and 2020F-29
Notes to Condensed Consolidated Financial Statements (unaudited)F-30

The following section does not reflect the 1-for-80 reverse split of the common stock in the share totals or in the per share data.

F-1

Report of Independent Registered Public Accounting Firm

To the shareholders and the board of directors of American Rebel Holdings, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of American Rebel Holdings, Inc. as of December 31, 2020 and 2019, the related statements of operations, stockholders’ equity (deficit), and cash flows for the years then ended, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States.

Substantial Doubt about the Company’s Ability to Continue as a Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplatesconcern. As discussed in Note 2 to the recoverability of assets and the satisfaction of liabilities in the normal course of business. As noted above, the Company is in the development stage and, accordingly, has not yet generated revenues from operations. Since inception,financial statements, the Company has been engaged in financing activities and executing its business plan ofsuffered recurring losses from operations and incurring costs and expenses related to its planned direct public offering. Ashas a result,significant accumulated deficit. In addition, the Company incurred accumulated net losscontinues to experience negative cash flows from Inception (December 15, 2014) through December 31, 2014 of ($6,610). Theoperations. These factors raise substantial doubt about the Company’s development activities since inception have been sustained through debt financing and the deferral of payments on accounts payable and other expenses.


The ability of the Company to continue as a going concern is dependent upon its abilityconcern. Management’s plans in regard to raise capital from the sale of its common stock and, ultimately, the achievement of significant operating revenues. Thesethese matters are also described in Note 2. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might result from the outcome of this uncertainty.


NOTE 3 – RELATED PARTY TRANSACTIONSBasis for Opinion


TheThese financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the Public Company recorded compensation expense of $6,000 recognized through the issuance of shares of common stockAccounting Oversight Board (United States) (“PCAOB”) and are required to our founder for organizational services. This was recorded for the period Inception (December 31, 2014) through December 31, 2014. The Company recorded $24,000 of intangible and tangible assets purchased from our founder on January 15, 2015 (see Note 8 – Subsequent Events).


NOTE 4 –NONRELATED PARTY NOTE PAYABLE


For the period ended December 31, 2014,be independent with respect to the Company executed a promissory notein accordance with a nonrelated party in the amount of $610. The unsecured note payable bear interest at 0% per annumU.S. federal securities laws and is due upon demand.






NOTE 5 – INCOME TAXES


At December 31, 2014, the Company had a net operating loss carryforward of $6,610 which begins to expire in 2034.


Components of net deferred tax asset, including a valuation allowance, are as follows at December 31, 2014:


  

 

2014

Deferred tax asset:

 

 

     Net operating loss carryforward

 

$

2,314

          Total deferred tax asset

 

 

2,314

Less: Valuation allowance

 

 

(2,314)

     Net deferred tax asset

 

$

-


Valuation allowance for deferred tax assets as of December 31, 2014 was $2,314. In assessing the recoveryapplicable rules and regulations of the deferred tax asset, management considers whether it is more likely than not that some portion or allSecurities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the deferred tax asset will not be realized. The ultimate realizationPCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of the deferred tax asset is dependent upon the generation of future taxable income in the periods in which those temporary differences become deductible. Management considers the scheduled reversals of future deferred tax assets, projected future taxable income, and tax planning strategies in making this assessment. As a result, management determined it was more likely than not deferred tax assets will not be realized as of December 31, 2014 and recognized a full valuation allowance for the period.


Reconciliation between statutory rate and the effective tax rate for both periods and as of December 31, 2014:


Federal statutory rate

(35.0)

%

State taxes, net of federal benefit

(0.00)

%

Change in valuation allowance

35.0

%

Effective tax rate

0.0

%


NOTE 6 – SHARE CAPITAL

material misstatement, whether due to error or fraud. The Company is authorizednot required to issue 100,000,000 shareshave, nor were we engaged to perform, an audit of its $0.001 par value common stock and 1,000,000 sharesinternal control over financial reporting. As part of its $0.001 par value preferred stock.


Common stock

On December 15, 2014,our audits we are required to obtain an understanding of internal control over financial reporting but not for the Company issued to its founder,purpose of expressing an officer and directoropinion on the effectiveness of the Company, 6,000,000 sharesCompany’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of its $0.001 par value common stock atmaterial misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a pricetest basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of $0.001 per share for services provided upon organization. The services were valued at $6,000.


On January 15, 2015, the Company issued to its founder 3,000,000 shares of its $0.001 par value common stock atfinancial statements. We believe that our audit provides a price of $0.008 per share for certain intangible assets and tangible assets. Mr. David Estus, our sole officer and director, incurred far more than $50,000 in developing or acquiring the intangible and tangible assets for which the Company valued at $24,000 (see Note 9 – Subsequent Events)


At December 31, 2014, there were 6,000,000 shares of common stock issued and outstanding.


For the period from Inception (December 15, 2014) through December 31, 2014 there were no other issuances of common stock by the Company.


NOTE 7 – WARRANTS AND OPTIONS


As of December 31, 2014, there were no warrants or options outstanding to acquire any additional shares of common stock.






NOTE 8 – SUBSEQUENT EVENTS


During January 2015 the Company acquired certain intangible assets from our founder which consisted of a business plan, artistic designs, stock photography to be used in its cubicle design business, along with various costs related to the development of internal-use software to be used in its operations. In addition the Company acquired certain tangible assets from our founder which consisted of network servers, computers and other computer components, a graphic designer’s workstation and other office furniture which both our founder and as-needed software developers and designers will use in creating product and servicesreasonable basis for our operations. Total value attributable to the tangible and intangible assets purchased by the Company was $24,000. Total value represents an amount less than actual costs paid for by our founder. Our founder has incurred or spent more than $50,000 over a period of time dating back to 2007 to further develop and refineopinion.

/S/ BF Borgers CPA PC

BF Borgers CPA PC

We have served as the Company’s business plan and operations.auditor since 2020


Lakewood, CO

On April 7, 2015, the Company executed two notes payable with nonrelated parties in the amount of $5,000 each for a total of $10,000. The loans bear interest at 0% per annum and are due and payable upon demand. On May 28, 2015, the Company modified one of these notes payable for an additional $1,000 in funding. The funds were used for general working capital purposes.17, 2021






F-2



AMERICAN REBEL HOLDINGS, INC.

CUBESCAPE, INC.

AUDITED CONSOLIDATED BALANCE SHEETS


  

December 31,

2020

  

December 31,

2019

 
ASSETS        
         
CURRENT ASSETS:        
Cash and cash equivalents $60,899  $131,656 
Accounts Receivable  176,844   228,890 
Prepaid expense  48,640   542,800 
Inventory  681,709   805,845 
Inventory deposits  141,164   91,641 
Total Current Assets  1,109,256   1,800,832 
         
Property and Equipment, net  5,266   66,990 
         
OTHER ASSETS:        
Lease Deposit  6,841   6,841 
Investment  -   - 
Total Other Assets  6,841   6,841 
         
TOTAL ASSETS $1,121,363  $1,874,663 
         
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)        
         
CURRENT LIABILITIES:        
Accounts payable and accrued expense $540,168  $684,126 
Accrued Interest – Convertible Debenture – Related Party  603,471   303,860 
Loan – Officer - Related party  4,526   4,496 
Loan – Working Capital  4,672,096   3,595,561 
Loan – Working Capital, net of discounts of $777,610 and $ -  4,672,096   3,595,561 
Loans - Nonrelated parties  15,649   25,746 
Total Current Liabilities  5,835,910   4,613,789 
         
Convertible Debenture –Related party  297,890   207,890 
Convertible Debenture –Related party, net of discounts of $47,110 and $ -  297,890   207,890 
TOTAL LIABILITIES  6,133,800   4,821,679 
         
STOCKHOLDERS’ EQUITY (DEFICIT):        
Preferred stock, $0.001 par value; 1,000,000 shares authorized; NaN issued or outstanding  -   - 
Common Stock, $0.001 par value; 100,000,000 shares authorized; 72,807,929 and 43,062,058 issued and outstanding, respectively at December 31, 2020 and December 31, 2019  72,808   43,062 
Additional paid in capital  15,785,468   11,899,553 
Accumulated deficit  (20,870,713)  (14,889,631)
TOTAL STOCKHOLDERS’ EQUITY (DEFICIT)  (5,012,437)  (2,947,016)
         
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) $1,121,363  $1,874,663 


 

 

 

 

June 30,

2015

(unaudited)

 

December 31,2014

(audited)

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

CURRENT ASSETS:

 

 

 

 

 

 

Prepaid expense

 

 

$

1,000

$

-

 Total Current Assets

 

 

 

1,000

 

-

 

 

 

 

 

 

 

Property and Equipment, net

 

 

 

2,852

 

-

 

 

 

 

 

 

 

Intangible Assets, net

 

 

 

15,648

 

-

 

 

 

 

 

 

 

OTHER ASSETS:

 

 

 

 

 

 

Deferred offering costs

 

 

 

10,000

 

-

 Total Other Assets

 

 

 

10,000

 

-

 

 

 

 

 

 

 

TOTAL ASSETS

 

 

$

29,500

$

-

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)

 

 

 

 

 

 

 

 

 

 

 

 

 

CURRENT LIABILITIES:

 

 

 

 

 

 

Accounts payable and accrued expense

 

 

$

27,800

$

-

Related party loan

 

 

 

3,000

 

-

Nonrelated party loans

 

 

 

11,610

 

610

TOTAL LIABILITIES

 

 

 

42,410

 

610

 

 

 

 

 

 

 

STOCKHOLDERS’ EQUITY (DEFICIT):

 

 

 

 

 

 

Preferred stock, $0.001 par value; 1,000,000 shares authorized; none issued or outstanding

 

 

 

-

 

-

Common stock, $0.001 par value; 100,000,000 shares authorized; 9,000,000 and 6,000,000 shares issued and outstanding as of June 30, 2015 and December 31, 2014, respectively

 

 

 

9,000

 

6,000

 Additional paid in capital

 

 

 

21,000

 

-

  Accumulated deficit

 

 

 

(42,910)

 

(6,610)

TOTAL STOCKHOLDERS’ EQUITY (DEFICIT)

 

 

 

(12,910)

 

(610)

 

 

 

 

 

 

 

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)

 

 

$

29,500

$

-




See Notes to Financial Statements.




F-3



AMERICAN REBEL HOLDINGS, INC.

CUBESCAPE, INC.

AUDITED CONSOLIDATED STATEMENTS OF OPERATIONS


  

For the year ended

December 31, 2020

  

For the year ended

December 31, 2019

 
Revenue $1,255,703  $535,109 
Cost of goods sold  952,511   379,076 
Gross margin  303,192   156,033 
         
Expenses:        
Consulting – business development  529,094   3,809,291 
Product development costs  320,472   309,061 
Marketing and brand development costs  390,294   632,522 
Administrative and other  1,773,529   1,343,352 
Depreciation expense  61,724   62,028 
Total  3,075,113   6,156,254 
Operating income (loss)  (2,771,921)  (6,000,221)
         
Other Income (Expense)        
Interest expense  (2,292,957)  (1,601,851)
Loss on Extinguishment of Debt  (916,204)  - 
Net income (loss) before income tax provision  (5,981,082)  (7,602,072)
Provision for income tax  -   - 
Net income (loss) $(5,981,082) $(7,602,072)
Basic and diluted income (loss) per share $(0.10) $(0.25)
Weighted average common shares outstanding - basic and diluted  61,109,000   33,541,000 


 

 

For the three months

ended

June 30, 2015

(unaudited)

 

For the six months

ended

June 30, 2015

(unaudited)

Revenue

$

-

$

-

Cost of revenue

 

-

 

-

Gross margin

 

-

 

-

 

 

 

 

 

Expenses:

 

 

 

 

Officer compensation

 

-

 

-

Development costs – internal use software

 

13,000

 

19,200

Administrative and other costs

 

8,800

 

11,600

Amortization and depreciation expense

 

4,000

 

5,500

Organization expense

 

-

 

-

Loss before income tax

 

25,800

 

36,300

 

 

 

 

 

Provision for income tax

 

-

 

-

Net loss

$

(25,800)

$

(36,300)

Basic and diluted loss per share

$

(0.00)

$

(0.00)

Weighted average common shares outstanding - basic and diluted

 

9,000,000

 

8,750,000



See Notes to Financial Statements.




F-4



AMERICAN REBEL HOLDINGS, INC.


CUBESCAPE, INC.

AUDITED CONSOLIDATED STATEMENT OF STOCKHOLDERS'STOCKHOLDERS’ DEFICIT


  Common
Stock
  Common
Stock
Amount
 -Additional
Paid-in
Capital
  Accumulated
Deficit
  Total 
                
Balance – December 31, 2015  13,455,000  $13,455 -$1,100,295  $(979,511) $134,239 
                     
Sale of Common Stock  1,166,000   1,166   581,834   -   583,000 
Common Stock issued as compensation.                    
Common Stock issued as compensation., shares                    
Reverse Acquisition of American Rebel, Inc.                    
Reverse Acquisition of American Rebel, Inc., shares                    
Convertible Debenture Discount                    
Conversion of Convertible Debentures                    
Conversion of Convertible Debentures, shares                    
Exercise of Warrants.                   
Exercise of Warrants., shares                   
Common Stock issued to pay expense                    
Common Stock issued to pay expense, shares                    
Preferred Stock issued to pay expense                    
Preferred Stock issued to pay expense, shares                    
Sale of Preferred Stock.                    
Sale of Preferred Stock, shares                    
Common Stock Warrants Issued                    
Preferred Stock converted to Common stock                    
Preferred Stock converted to Common stock, shares                    
Common stock issued to reduce Debt                    
Common stock issued to reduce Debt, shares                    
Preferred A  shares issued                    
                     
Net loss  -   - - -   (1,363,506)  (1,363,506)
                     
Balance – December 31, 2016  14,621,000  $14,621 -$1,682,129  $(2,343,017) $(646,267)
                     
Common Stock issued as compensation.  3,150,000   3,150   1,571,850   -   1,575,000 
                     
Reverse Acquisition of American Rebel, Inc.  6,000,000   6,000   (231,032)  -   (225,032)
                     
Net loss  -   - - -   (2,942,838)  (2,942,838)
                     
Balance – December 31, 2017  23,771,000  $23,771 -$3,022,947  $(5,285,855) $(2,239,137)
                     
Common Stock issued as compensation.  800,000   800   429,200   -   430,000 
                     
Convertible Debenture Discount          270,000   -   270,000 
                     
Conversion of Convertible Debentures  4,681,058   4,681   2,335,848   -   2,340,529 
                     
Exercise of Warrants.  660,000   660   329,340   -   330,000 
                     
Net loss  -   - - -   (2,001,704)  (2,001,704)
                     
Balance – December 31, 2018-  29,912,058  $29,912 -$6,387,336  $(7,287,559) $(870,312)
                     
Common Stock issued as compensation.  13,050,000   13,050   5,344,950   -   5,358,000 
                     
Convertible Debenture Discount          166,368   -   166,368 
                     
Sale of Common Stock  100,000   100   900   -   1,000 
                     
Net loss  -  ��- - -   (7,602,072)  (7,602,072)
                     
Balance – December 31, 2019-  43,062,058  $43,062 -$11,899,553  $(14,889,631) $(2,947,016)
Balance  43,062,058  $43,062 -$11,899,553  $(14,889,631) $(2,947,016)
                     
Common Stock issued as compensation.  29,745,871   29,746   3,885,915   -   3,915,661 
                     
Net loss  -   - - -   (5,981,082)  (5,981,082)
                     
Balance – December 31, 2020-  72,807,929  $72,808 -$15,785,468  $(20,870,713) $(5,012,437)
Balance  72,807,979  $72,808 -$15,785,468  $(20,870,713) $(5,012,437)




 

Common

Stock

 

Common

Stock

Amount

 

Additional

Paid-in

Capital

 

Accumulated

Deficit

 

Total

Balance – December 15, 2014 (inception) shares issued for organization services – officers compensation

6,000,000

$

6,000

$

-

$

-

$

6,000

 

 

 

 

 

 

 

 

 

 

Net loss

-

 

-

 

-

 

(6,610)

 

(6,610)

Balance – December 31, 2014 (audited)

6,000,000

 

6,000

 

-

 

(6,610)

 

(610)

 

 

 

 

 

 

 

 

 

 

Shares issued for intangible and tangible assets – January 15, 2015

3,000,000

 

3,000

 

21,000

 

-

 

24,000

 

 

 

 

 

 

 

 

 

 

Net loss

-

 

-

 

-

 

(36,300)

 

(36,300)

 

 

 

 

 

 

 

 

 

 

Balance – June 30, 2015 (unaudited)

9,000,000

$

9,000

$

21,000

$

(42,910)

$

(12,910)



See Notes to Financial Statements.


F-5





AMERICAN REBEL HOLDINGS, INC.


CUBESCAPE, INC.

AUDITED CONSOLIDATED STATEMENT OF CASH FLOWS


  

For the year ended

December 31, 2020

  

For the year ended

December 31, 2019

 
       
CASH FLOW FROM OPERATING ACTIVITIES:        
Net income (loss) $(5,981,082) $(7,602,072)
Depreciation  61,724   62,028 
Compensation paid through issuance of Common Stock  2,786,931   3,486,500 
Amortization of loan discount  708,975   2,014,784 
Adjustments to reconcile net loss to cash (used in) operating activities:        
Change in Accounts Receivable  54,938   (229,166)
Change in prepaid expenses  254,160   (425,500)
Change in inventory  124,137   (36,961)
Change in inventory deposits  (49,524)  (91,640)
Change in accounts payable and accrued expense  65,102   643,413 
Net Cash (Used in) Operating Activities  (1,974,639)  (2,178,614)
         
CASH FLOW FROM INVESTING ACTIVITIES:        
Property and equipment purchased  -   - 
 Investing activities  -   - 
Net Cash (Used in) Investing Activities  -   - 
         
CASH FLOW FROM FINANCING ACTIVITIES:        
Proceeds from sale of Common Stock  -   3,500 
Proceeds (repayments) of loans – officer - related party  51,083   (12,092)
Proceeds of working capital loan  2,869,171   2,474,560 
Repayment of loans – nonrelated party  (1,016,372)  (175,329)
Proceeds of exercise of Warrants  -   - 
Net Cash Provided by Financing Activities  1,903,882   2,290,639 
         
CHANGE IN CASH  (70,757)  112,025 
         
CASH AT BEGINNING OF PERIOD  131,656   19,631 
         
CASH AT END OF PERIOD $60,899  $131,656 
         
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION        
Cash paid for:        
Interest $168,834  $45,565 
Income taxes $-  $- 
         
Non-cash investing and financing activities:        
Conversion of Debentures to Common Stock $-  $- 


 

 

For the six months

ended

June 30, 2015

(unaudited)

 

 

 

CASH FLOW FROM OPERATING ACTIVITIES:

 

 

Net loss

$

(36,300)

Amortization

 

5,500

Shares issued for compensation

 

-

Adjustments to reconcile net loss to cash (used in) operating activities:

 

 

Change in prepaid expense

 

(1,000)

Change in deferred offering expense

 

(10,000)

Change in accounts payable

 

27,800

Net Cash (Used in) Operating Activities

 

(14,000)

CASH FLOW FROM INVESTING ACTIVITIES

 

-

CASH FLOW FROM FINANCING ACTIVITIES:

 

 

Loans from nonrelated parties

 

11,000

Loan from related party

 

3,000

Net Cash Provided by Financing Activities

 

14,000

CHANGE IN CASH

 

-

CASH AT BEGINNING OF PERIOD

 

-

CASH AT END OF PERIOD

$

-

 

 

 

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

 

 

Cash paid for:

 

 

Interest

$

-

Income taxes

$

-

 

 

 

Non-cash investing and financing activities:

 

 

Stock issued for acquisition of tangible and intangible assets

$

24,000

 

 

 






See Notes to Financial Statements.




F-6



AMERICAN REBEL HOLDINGS, INC.

CUBESCAPE, INC.

NOTES TO THE AUDITED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2015 (UNAUDITED)DECEMBER 31, 2020


NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES


ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization

The Company“Company” was incorporated on December 15, 2014 (date of inception) under the laws of the State of Nevada, as CubeScape, Inc. Effective January 5, 2017, the Company amended its articles of incorporation and changed its name to American Rebel Holdings, Inc. The Company completed a business combination with its majority stockholder, American Rebel, Inc. on June 19, 2017. As a result, American Rebel, Inc. became a wholly owned subsidiary of the Company.

The acquisition of American Rebel, Inc. was accounted for as a reverse merger. The Company issued 17,421,000 shares of its Common Stock and issued warrants to purchase 500,000 shares of Common Stock to shareholders of American Rebel, Inc. and cancelled 9,000,000 shares of Common Stock owned by American Rebel, Inc.

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

Nature of operations

The Company is developing a branded products in the self-defense, safe storage and patriotic product areas that utilizes panoramic vinyl wall graphics generated on a proprietary interactive design portal. The proprietary interactive portal is designed to assist the consumer or end-user in creating wall or cubicle panel art, upgrading and/or enhancing plain home, officeare promoted and cubicle work space with a new approach to workplace aesthetics.sold using personal appearance, music, internet and television avenues. The Company’s product will consist of high resolution wall graphics made from professional art, designs, stock-photos and/or user (consumer) provided images that are integrated into unique backdrop. Graphicsproducts will be constructedunder the American Rebel Brand and imprinted.

Principles of quality vinyl and low-tack adhesive for ease of application and replacement but durable.Consolidation


Interim financial statements (June 30, 2015 (unaudited)) and basis of presentation

The accompanying unaudited interim financial statements and related notes have been prepared in accordance with accounting principles generally accepted inConsolidated Financial Statements include the United States of America (“U.S. GAAP”) for interim financial information, and with the rules and regulations of the United States Securities and Exchange Commission (the “SEC”) set forth in Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by 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 in conjunction with the financial statementsaccounts of the Company for the period ended December 31, 2014 and notes thereto contained elsewhere.its majority-owned subsidiary. All significant intercompany accounts and transactions have been eliminated.


Year end

The Company’s year-end is December 31.


F-7

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.


Revenue recognitionInventory and Inventory Deposits

We recognize revenue when all

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

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 by the straight-line method over the estimated useful life of the following conditionsasset, which ranges from five to seven years.

Revenue recognition

In accordance with ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”), revenues are satisfied: (1) thererecognized when control of the promised goods or services is persuasive evidence oftransferred to our clients, in an arrangement; (2)amount that reflects the product or service has been providedconsideration to which the consumer; (3) the amount of feesCompany expects to be paid byentitled in exchange for those goods and services. To achieve this core principle, the consumer is fixedCompany applies 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 determinable; and (4)as the collection of our fees or product revenue is probable.company satisfies a performance obligation.


The Company will recordadopted this ASC on January 1, 2018. Although the new revenue when itstandard is realizableexpected to have an immaterial impact, if any, on the Company’s ongoing net income, the Company did implement changes to our processes related to revenue recognition and earned and product have been shipped to the consumers or that our service has been rendered to the consumer.control activities within them.

Advertising costs

Advertising costs are anticipated to be expensed as incurred; however thereMarketing costs incurred were no advertising costs$390,294 and $632,522 for the three months or six monthsyears ended June 30, 2015,December 31, 2020 and 2019, respectively.





Fair value of financial instruments

Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of December 31, 20142020 and June 30, 2015 (unaudited),December 31, 2019, respectively. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values. These financial instruments include cash, deferred offering costs and accounts payable. Fair values were assumed to approximate carrying values for cash and payables because they are short termshort-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.


F-8

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


Stock-based compensation

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

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


In January 2018, the Company agreed to issue and subsequently issued a total of 500,000 shares of Common Stock as compensation for professional services to be performed during 2018. The Common Stock was valued at a price of $0.50 per share consistent with earlier sales of Common Stock by American Rebel, Inc. as well as the present conversion price of the Company’s convertible debentures. In January 2018, the Company issued 300,000 shares of Common Stock as compensation in settlement of professional services billed at $180,000.

During January 2018, the Company recorded $157,483 in compensation expense, increased prepaid expense $31,251, and reduced Accrued expense $74,600with the issuance of 466,667 shares of Common Stock. The Common Stock was valued at prices of $0.50and $0.60 per share consistent with earlier sales of Common Stock by American Rebel, Inc. as well as the present conversion price of the Company’s convertible debentures and negotiation with a vendor.

During January 2019, the Company recorded $178,505 in compensation expense, increased prepaid expense $160,000, and increased Discount on debt $57,467with the issuance of 400,000 shares of Common Stock and 175,000 warrants to purchase Common Stock. The Common Stock was valued at prices of $0.65 to $0.76 per share consistent with market prices at the date of the transaction.

During September 2019, the Company recorded $3,432,000 in compensation expense and increased Discount on debt $819,500with the issuance of 11,000,000shares of Common Stock and 50,000 warrants to purchase Common Stock. The Common Stock was valued at prices of $0.70 to $0.30 per share consistent with market prices at the dates of the transactions.

During October and November 2019, the Company recorded $330,000 in compensation expense and increased Discount on debt $86,000with the issuance of 1,650,000shares of Common Stock. The Common Stock was valued at prices of $0.22 to $0.30 per share consistent with market prices at the dates of the transactions.

In February 2020, the Company issued 1,200,000 shares of its Common Stock to pay professional and consulting fees. Total fair value of $240,000 was recorded as an expense. In June 2020, the Company issued 810,000 shares of its Common Stock to pay consulting fees and interest expense. Total fair value of $95,000 was recorded as an expense. In August 2020, the Company issued 4,839,871 shares of its Common Stock to pay consulting fees and interest expense. Total fair value of $489,462 was recorded as an expense. In October 2020, the Company issued 6,410,000 shares of its Common Stock to pay consulting fees and interest expense. Total fair value of $553,820 was recorded as an expense. During May 2020, the Company issued 70,000 shares of its Common Stock in exchange for a debt reduction of $7,000.

F-9

Earnings per share

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


Income taxes

The Company follows ASC Topic 740 for recording provision for income taxes. Deferred tax assets and liabilities are computed based upon the difference between the financial statement and income tax basis of assets and liabilities using the enacted marginal tax rate applicable when the related asset or liability is expected to be realized or settled. Deferred income tax expense or benefit is based on the changes in the asset or liability for each period. If available evidence suggests that it is more likely than not that some portion or all of 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 December 31, 20142020 and June 30, 2015 (unaudited),December 31, 2019, the Company reviewed its tax positions and determined there were no outstanding, or retroactive tax positions with less than a 50% likelihood of being sustained upon examination by the taxing authorities, therefore this standard has not had a material effect on the Company.

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


The Company classifies tax-related penalties and net interest as income tax expense. For the three monthyears ended December 31, 2020 and six month periods ended June 30, 2015,2019, respectively, no income tax expense has been recorded.


Use of estimates

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


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.

F-10

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’ lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise such options.

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

Recent pronouncements

The Company evaluated recent accounting pronouncements through June 30, 2015December 31, 2020 and believes that none have a material effect on the Company’s financial statements except forstatements.

Concentration Risk

In 2020, the following.


Company purchased a substantial portion (over 20%) of inventory from two third-party vendors. As of December 31, 2020, the net amount due to the vendors (accounts payable and accrued expense) was $0. In June2019, the Company purchased substantially all of 2014inventory from one third-party vendor. As of December 31, 2019, the Financial Accounting Standards Board issued Accounting Standards Update ASU 2014-10, “Eliminationnet amount due to the vendor (accounts payable and accrued expense) was $221,920. The loss of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation” (“ASU 2014-10”). Amendments in ASU 2014-10 remove the definition of a development stage entity from the master glossary of the Accounting Standards Codification, thereby removing the financial reporting distinction between development stage entities and other reporting entities from U.S. GAAP. In addition, the amendments eliminate the requirements for development stage entities to (1) present inception-to-date information in the statements of income, cash flows, and shareholder equity, (2) label the financial statements as those of a development stage entity, (3) disclose a description of the development stage activities in which the entity is engaged, and (4) disclose in the first year in which the entity is no longer a development stage entity that in prior years it had been in the development stage. The Company has adopted the provisions of ASU 2014-10 for the period ending June 30, 2015. The adoption of ASU 2014-10 did not have a significant impact on our results of operations, financial condition or cash flow.


In August, 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements - Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entities Ability to continue as a Going Concern. The standard is intended to define management's responsibility to decide whether there is substantial doubt about an organization's ability to continue as a going concern and to provide related footnote disclosures. The standard requires management to decide whether there are conditions or events that raise substantial doubt about the entity's ability to continue as a going concern within one year after the date that the financial statements are issued. The standard provides guidance to an organization's management, with principles and definitions that are intended to reduce diversity in the timing and content of disclosures that are commonly provided by organizations in the footnotes. The standard becomes effective for the annual period ending after December 15, 2016, with early application permitted. The adoption of this pronouncement is not expected tothese manufacturing vendor relationships could have a material impacteffect on our financial statements. Management's evaluations regarding the events and conditionsCompany, but the Company believes there are numerous other suppliers that raise substantial doubt regarding the Company's ability to continue as a going concern have been disclosed in Note 2 below.could be substituted should these suppliers become unavailable or non-competitive.


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


NOTE 2 – GOING CONCERN

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the recoverability of assets and the satisfaction of liabilities in the normal course of business. As noted above, the Company is in the development stage and, accordingly, has not yet generated significant revenues from 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 its planned directdeveloping products and market identity, obtaining inventory and preparing for public offering.product launch. As a result, the Company incurred accumulated net lossesincome (losses) for the six month periodyears ended June 30 2015 (unaudited) and from Inception (December 15, 2014) through December 31, 20142020 and 2019 of ($36,300)5,981,082) and ($6,610)7,602,072), respectively. The Company’s accumulated deficit was ($20,870,713) as of December 31, 2020 and ($14,889,631) as of December 31, 2019. The Company’s working capital deficit was ($4,726,654) as of December 31, 2020 and a deficit of ($2,812,957) as of December 31, 2019. In addition, the Company’s development activities since inception have been sustained through equity and debt financing and the deferral of payments on accounts payable and other expenses.






The ability of the Company to continue as a going concern is dependent upon its ability to raise capital from the sale of its common stockequity and, ultimately, the achievement of significant operating revenues. Management believes holders of its warrants will execute their outstanding warrants generating investment capital for the Company. Management is also in discussion with several investment banks and broker dealers regarding the initiation of a capital campaign.

Management believes sufficient funding can be secured through the obtaining of loans, as well as future offerings of its preferred and Common Stock to institutional and other financial sources. 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 its stockholders. If the Company is unable to secure such additional funds from these sources, it may be forced to change or delay its business plan rollout.

F-11

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


NOTE 3 – INTANGIBLE ASSETSNote 3- INVENTORY AND DEPOSITS


Intangible assets with finite lives are amortized over their estimated useful life. The Company monitors conditions related to these assets to determine whether eventsInventory and circumstances warrant a revision to the remaining amortization period. The Company tests its intangible assets with finite lives for potential impairment whenever management concludes events or changes in circumstances indicate that the carrying amount may not be recoverable. The original estimate of an asset's useful life and the impact of an event or circumstance on either an asset's useful life or carrying value involve significant judgment.


During January 2015 the Company acquired certain intangible assets from our founder which consisted of a business plan, artistic designs, stock photography to be used in its cubicle design business, along with various costs related to the development of internal-use software to be used in its operations. In addition the Company acquired certain tangible assets from our founder which consisted of network servers, computers and other computer components, a graphic designer’s workstation and other office furniture which both our founder and as-needed software developers and designers will use in creating product and services for our operations. Total value attributable to the tangible and intangible assets purchased by the Company was $24,000. Total value represents an amount less than actual costs paid for by our founder. Our founder has incurred or spent more than $50,000 over a period of time dating back to 2007 to further develop and refine the Company’s business plan and operations.


Intangible assets includesdeposits include the following:


SCHEDULE OF INVENTORY AND DEPOSITS

 

 

June 30,

2015

 

December 31,

2014

 

 

 

 (unaudited)

 

 

 (audited)

Intangible assets consisting of certain development costs and purchased software for design and graphics

 

$


20,300

 

$

-

Less: Accumulated amortization

 

 

(4,652)

 

 

(-)

Net intangible assets

 

$

15,648

 

$

-

  

December 31,

2020

  

December 31,

2019

 
       
Inventory - Finished goods $681,709  $805,845 
Inventory deposits  141,164   91,641 
Total Inventories  822,873   897,486 
Less: Reserve for excess and obsolete  -   - 
Net inventory and deposits $822,873  $897,486 


NOTE 4 – PROPERTY AND EQUIPMENT

SCHEDULE OF PROPERTY AND EQUIPMENT

  2020  2019 
Property and equipment include the following:      
       
  

December 31,

2020

  

December 31,

2019

 
       
Marketing equipment $32,261  $32,261 
Vehicles  277,886   277,886 
Property, Plant and Equipment, Gross  310,147   310,147 
Less: Accumulated depreciation  (304,881)  (243,157)
Net property and equipment $5,266  $66,990 

For the three monthyears ended December 31, 2020 and six month periods ended June 30, 2015 (unaudited)2019 we recognized $2,538$61,724 and $4,652$62,028 in amortizationdepreciation expense, respectively. The acquired intangible assets were placed in service on January 15th, 2015. We amortizedepreciate these assets over a period of twenty-four (24)sixty (60) months which has been deemed itstheir useful life. In January 2016 we acquired three vehicles from related parties and assumed the debt secured by the vehicles as described at Note 7 – Notes Payable. Accordingly, the recorded cost of each vehicle is the amount of debt assumed under each related loan, or a total of $277,886.


NOTE 4 – PROPERTY AND EQUIPMENT


Property and equipment includes the following:


 

 

June 30,

2015

 

December 31,

2014

 

 

 

 (unaudited)

 

 

 (audited)

Computers and equipment

 

$

2,000

 

$

-

Furniture and workstations

 

 

1,700

 

 

-

 

 

 

3,700

 

 

-

Less: Accumulated depreciation

 

 

(848)

 

 

(-)

Net property and equipment

 

$

2,852

 

$

-


For the three month and six month periods ended June 30, 2015 (unaudited) we recognized $462 and $848 in depreciation expense, respectively. The acquired assets were placed in service on January 15th, 2015 (see Note 3 - Intangible Assets and Asset Purchase). We amortize these assets over a period of twenty-four (24) months which has been deemed its useful life.






NOTE 5 –RELATEDRELATED PARTY NOTE PAYABLE AND RELATED PARTY TRANSACTIONS


For the periodyear ended June 30, 2015 (unaudited),December 31, 2016, the Company executedreceived loans from its sole officer and director at the time totaling $221,155. The balance at December 31, 2019 was $4,496. During the year ended December 31, 2020, the Company repaid $0 of these loans resulting in a promissory notebalance at December 31, 2020 of $4,526. These loans are due on demand and carry no interest.

During the year ended December 31, 2018, the Company entered into several convertible debt instruments with a related partystockholders in the amount of $1,500. The unsecured note payable bears interest at 0% per annum and is due upon demand. 


$270,000, for a total of $345,000. The Company accrued interest expense on this convertible debt of $41,288, for a total of $113,178 at December 31, 2020. Since public trading of the Company’s Common Stock began in 2018, the Company determined a Beneficial Conversion Discount of $270,000 applied to the 2018 sales the convertible debentures. The discount reduced the liability balance of the debentures to $0 when the debentures were issued and recorded rent expensethe proceeds of $1,500the sale as Additional paid in Capital. The discount will be amortized over the three year term of the debentures. The discounted balance of the convertible debentures at December 31, 2020 was $297,890.

During the year ended December 31, 2016, the Company acquired three vehicles from various related parties and $3,000 (included in Administrativeassumed the debt secured by each one of the vehicles. Accordingly, the recorded value for each vehicle is the total debt assumed under each related loan, or a total of $277,886. (See Note 7 – Notes Payable.)

F-12

Charles A. Ross, Jr. serves as the Company’s Chief Executive Officer and other costs)director. Compensation for Mr. Ross was $180,250 and $200,000, respectively for the three monthyears ended December 31, 2020 and six month periods2019. Mr. Ross received a grant of 1,000,000 shares of American Rebel, Inc. Common Stock, valued at $0.50 per share in June 2017, prior to the acquisition. These shares were part of the 6,500,000 shares that Mr. Ross exchanged for Company Common Stock in the acquisition of American Rebel, Inc. completed on June 19, 2017. In September 2019, Mr. Ross received a grant of 2,725,000 shares of Common Stock, valued at $0.30 per share. 

During the year ended June 30, 2015 (unaudited), respectively. The Company rents office space from its founder on a month-to-month lease for $500 per month. This includes all utilitiesDecember 31, 2018, holders of convertible debentures exercised their rights to convert the debt of $2,060,000 and other incidental costs associated with operating the office space in whichaccrued interest of $280,529 to house the Company’s computing equipment and its headquarters.


The Company recorded compensation expense of $6,000 recognized through the issuance of4,681,058 shares of common stockstock. Of the total amount borrowed under the convertible debt and exercise of warrants, $2,664,787 was loaned to our founderAmerican Rebel, Inc., the Company’s former majority stockholder and now the Company’s wholly owned subsidiary, as a working capital loan to pay its operating expenses including legal, accounting, product development, brand expansion, and marketing costs. This loan is eliminated in consolidation.

During the three months ended September 30, 2021, debentures with a face amount of $205,000 plus accrued interest was converted to equity. The discounted balance of Convertible Debentures as of September 30, 2021 was $0.

NOTE 6 – NOTES PAYABLE – NON-RELATED PARTIES

Effective January 1, 2016, the Company acquired three vehicles from various related parties in exchange for organizational services. We recorded this expense during the period Inception (December 31, 2014) throughassumption of the liabilities related to those vehicles. The liabilities assumed are as follows at December 31, 2014. During the six months ended June 30, 2015 the Company recorded $24,000 of intangible2019 and tangible assets purchased from our founder on January 15, 2015 (see Note 3 - Intangible AssetsDecember 31, 2018.

SCHEDULE OF NOTES PAYABLE TO NON-RELATED PARTIES

  December 31,  December 31, 
  2020  2019 
       
Loan secured by a tour bus, payable in monthly payments of $2,710 including interest at 12% per annum through July 2020 when the remaining balance is payable. $15,649  $25,746 
         
Total recorded as current liability $15,649  $25,746 

Current and Asset Purchase).long-term portion. Total loan balance is reported as current because loans are past due, become due within one year or are expected to be repaid within one year.


NOTE 6 –NONRELATED PARTY NOTES PAYABLE


For the period ended June 30, 2015 (unaudited), the Company executed promissory notes with three nonrelated parties in the amounts $5,000, $5,000 and $1,610, respectively. The unsecured notes payable bear interest at 0% per annum and are due and payable upon demand.


NOTE 7 – DEFERRED OFFERING COSTSNOTES PAYABLE – WORKING CAPITAL


Deferred offering costs consist principallyOn July 6, 2017, the Company’s wholly-owned operating subsidiary completed the sale of a secured promissory note in the principal amount of $250,000 with an interest rate of 12% per annum to a private investor, and current stockholder. In April, 2018 the Company’s wholly-owned operating subsidiarycompleted the sale of additional notes under similar terms in the additional principal amount totaling $250,000. In July, 2018 the Company’s wholly-owned operating subsidiary completed the sale of additional notes under similar terms in the additional principal amount totaling $300,000. In October and December of 2018 the Company’s wholly-owned operating subsidiarycompleted the sale of additional notes under similar terms in the additional principal amount totaling $425,000. The notes are secured by a pledge of certain of the Company’s current inventory and the Chief Executive Officer’s personal guaranty. These working capital notes require payments equal to 75-100% of current salesof that specific secured inventory and mature in 180 days. In connection with the original note, the Company issued 250,000 shares of its Common Stock to the noteholder valued at $0.50 per share for a total of $125,000. The fair value of the Common Stock issued was recorded as a discount to the note payable and the discount was amortized over the term of that agreement to interest expense using the straight-line method that approximates the effective interest method.

During the year ending December 31, 2019, the Company and the Company’s wholly-owned operating subsidiary completed the sale of additional short term notes under similar terms in the additional principal amount totaling $3,104,441. The notes are secured by a pledge of certain of the Company’s current inventory and Chief Executive Officer’s personal guaranty.These short-term working capital notes mature in 30-180 days.In connection with these notes, the Company issued 1,550,000 shares of its Common Stock, warrants to purchase 125,000 shares of its Common Stock and a conversion feature for 300,000 shares at $0.50 per share. The fair value of these share incentives was calculated to be $1,134,368. The fair value of the share incentives was recorded as a discount to the note payable and the discount was amortized over the term of those agreements to interest expense using the straight-line method that approximates the effective interest method. Interest expense recorded as a result of amortization of discount for the year ended December 31, 2019 is $1,068,784.

F-13

During the year ending December 31, 2020, the Company and the Company’s wholly-owned operating subsidiary completed the sale of additional short term notes and extensions of short term notes under similar terms in the additional principal amount totaling $2,869,171. The notes are secured by a pledge of certain of the Company’s current inventory and the Chief Executive Officer’s personal guaranty.These short term working capital notes mature in 30-180 days.In connection with these notes, the Company issued 17,275,871 shares of its Common Stock, warrants to purchase 2,550,000 shares of its Common Stock. The fair value of these share incentives was calculated to be $1,660,112. The fair value of the share incentives was recorded as a discount to the note payable and the discount was amortized over the term of those agreements to interest expense using the straight-line method that approximates the effective interest method. Interest expense recorded as a result of amortization of discount for the year ended December 31, 2020 is $1,411,203.

During the year ended December 31, 2020, the Company and the Company’s wholly-owned operating subsidiary completed the conversion of short term notes with a face value of $1,080,000 and accrued interest to 9,700,000 shares of Common Stock with a fair value of $1,651,900, resulting in a Loss on Extinguishment of Debt of $916,204.

As of December 31, 2020, and 2019, the outstanding balance due on the working capital notes was $4,672,096 and $3,595,561, respectively.

NOTE PAYABLE SCHEDULE

SCHEDULE OF NOTE PAYABLE

Type Original Amount  Origination Date Maturity Date Effective Annual Interest Rate  Balance at December 31, 2020  Balance at December 31, 2019 
Note Payable (a) $200,000  3/4/2018 12/31/2018  12% $200,000  $200,000 
Note Payable (b) $7,000  1/9/2019       $9,073  $8,689 
Note Payable (c) $400,000  11/1/2018 5/1/2019  12% $400,000  $400,000 
Note Payable (d) $300,000  12/31/2018 12/31/2020         $300,000 
Note Payable (e) $55,000  1/14/2019 3/15/2019  15% $30,000  $30,000 
Note Payable (f) $150,000  3/1/2019 9/30/2019  20% $0  $0 
Note Payable (g) $450,000  5/1/2019 5/1/2020  18% $0  $450,000 
Note Payable (h) $180,000  7/5/2019 1/1/2020  18% $0  $180,000 
Note Payable (i) $180,000  7/15/2019 1/11/2020  18% $0  $180,000 
Note Payable (j) $225,000  8/22/2019 3/31/2020     $225,000  $165,000 
Note Payable (k) $180,000  8/26/2019 2/22/2020  18% $0  $180,000 
Note Payable (l) $180,000  9/5/2019 3/3/2020  18% $0  $180,000 
Note Payable (m) $90,000  9/13/2019 3/11/2020  18% $0  $90,000 
Note Payable (n) $180,000  9/13/2019 3/11/2020  18% $0  $180,000 
Note Payable (o) $90,000  9/23/2019 3/21/2020  18% $0  $90,000 
Note Payable (p) $150,000  9/30/2019 3/31/2020  20% $0  $150,000 
Note Payable (q) $180,000  10/15/2019 4/12/2020  18% $95,000  $180,000 
Note Payable (r) $180,000  11/5/2019 5/3/2020  18% $0  $180,000 
Note Payable (s) $90,000  11/12/2019 5/10/2020  18% $0  $90,000 
Note Payable (t) $100,000  11/19/2019 11/19/2020  18% $0  $50,000 
Note Payable (u) $75,000  11/20/2019 5/20/2020  16% $0  $75,000 
Note Payable (v) $455,670  12/17/2019 6/4/2022  12% $408,875  $455,670 
Note Payable (w) $134,386  12/20/2019           $134,386 
Note Payable (x)     12/31/2019       $12,219  $17,400 
Note Payable (y) $201,000  1/30/2020 6/1/2020  12% $183,000     
Note Payable (z) $125,000  1/31/2020 1/31/2021  7.5% $0     
Note Payable (aa) $225,000  2/14/2020 1/14/2021  25% $18,750     
Note Payable (ab) $90,000  2/18/2020 2/18/2021  18% $0     
Note Payable (ac) $180,000  2/20/2020 2/20/2021  18% $0     
Note Payable (ad) $200,000  3/6/2020 7/6/2021  12% $200,000     
Note Payable (ae) $722,422  3/10/2020 2/8/2024  11.5% $679,609     
Note Payable (af) $90,000  3/11/2020 9/11/2020  18% $0     
Note Payable (ag) $300,000  3/26/2020 3/26/2021  6% $300,000     
Note Payable (ah) $150,000  4/1/2020 10/1/2020  20% $0     
Note Payable (ai) $8,000  4/15/2020 5/15/2021     $8,000     
Note Payable (aj) $18,343  4/15/2020 5/15/2021     $18,343     
Note Payable (ak) $180,000  4/25/2020 10/25/2020  18% $0     
Note Payable (al) $450,000  5/1/2020 10/31/2020  18% $0     
Note Payable (bn) $100,000  5/20/2020 11/20/2020  18% $0     
Note Payable (am) $100,000  6/10/2020 12/10/2020     $100,000     
Note Payable (an) $75,000  6/15/2020 6/15/2021  18% $75,000     
Note Payable (ao) $101,000  6/18/2020 12/18/2020     $101,000     
Note Payable (ap) $50,000  6/29/2020 9/29/2020     $0     
Note Payable (aq) $102,000  7/3/2020 10/3/2020     $72,188     
Note Payable (ar) $150,000  7/31/2020 7/31/2021  12% $0     
Note Payable (as) $150,000  8/5/2020 8/5/2021  12% $134,400     
Note Payable (at) $350,000  9/3/2020 9/3/2021  12% $392,000     
Note Payable (au) $100,000  9/10/2020 9/10/2021  12% $100,000     
Note Payable (av) $250,000  10/1/2020 1/2/2021  8% $250,000     
Note Payable (aw) $100,000  10/6/2020 10/6/2021  12% $100,000     
Note Payable (ax) $200,000  10/13/2020 10/13/2021  12% $200,000     
Note Payable (ay) $250,000  10/21/2020 4/21/2021  8% $250,000     
Note Payable (az) $450,000  11/1/2020 4/30/2021  20% $450,000     
Note Payable (ba) $150,000  11/1/2020 4/30/2021  20% $150,000     
Note Payable (bb) $118,049  11/19/2020 11/19/2021  18% $118,049     
Note Payable (bc) $109,200  11/20/2020 5/21/2021  18% $109,200     
Note Payable (bd) $60,000  12/16/2020 12/16/2021  18% $60,000     
Note Payable (be) $40,000  1/6/2021 1/7/2022  18%        
Note Payable (bf) $117,600  3/1/2021 4/21/2021  8%        
Note Payable (bg) $50,000  3/4/2021 3/4/2022  12%        
Note Payable (bh) $273,187  3/31/2021 12/1/2021            
Note Payable (bi) $1,000,000  4/9/2021 10/6/2021  8%        
Note Payable (bj) $591,000  4/18/2021 9/1/2023            
Note Payable (bk) $639,956  4/21/2021 4/22/2021  8%        
Note Payable (bl) $151,688  4/22/2021 5/1/2021            
Note Payable (bm) $190,000  4/30/2021 10/30/2021            
Unamortized Discount             $(777,610) $(370,584)
Total             $4,672,096  $3,595,561 

F-14

a)On March 4, 2018, the Company entered into a promissory note with an unrelated party to develop a new product. The new product has yet to be produced. The Company and the unrelated party are in discussions to consolidate this note which is in default into a new current note or convert the note balance into equity.
b)On January 9, 2019, the Company accepted a loan from Amazon Lending for $7,000 that was extended to $11,000 on July 11, 2019 and to $26,000 on January 10, 2020. This loan is paid in full.
c)On November 1, 2018, the Company entered into a promissory note with an unrelated party for working capital. The Company and the unrelated party are in discussions to consolidate this note which is in default into a new current note or convert the note balance into equity.
d)On December 31, 2018, the Company entered into a promissory note with an unrelated party for working capital. The balance of the note was consolidated into a new note dated March 10, 2020, with the unrelated party.
e)On January 14, 2019, the Company entered into a promissory note with an unrelated party for working capital. The Company and the unrelated party are in discussions to consolidate this note which is in default into a new current note, pay the balance on the note, or convert the note balance into equity.
f)On March 1, 2019, the Company entered into a promissory note with an unrelated party for working capital. The balance of the note was consolidated into a new note dated September 30, 2019.
g)On May 1, 2019, the Company entered into a promissory note with an unrelated party for working capital. The balance of the note was consolidated into a new note dated May 1, 2020.
h)On July 5, 2019, the Company entered into a secured promissory note with an unrelated party to manufacture inventory. The balance of the note was consolidated into a new note dated February 14, 2020.
i)On July 15, 2019, the Company entered into a secured promissory note with an unrelated party to manufacture inventory. The balance of the note was converted into shares of the Company’s Common Stock at $0.10 per share.
j)On August 22, 2019, the Company entered into a promissory note with an unrelated party. The note, which is in default, requires the Company to issue 10,000 shares of Common Stock to the unrelated party each day the note is in default.
k)On August 26, 2019, the Company entered into a secured promissory note with an unrelated party to manufacture inventory. The balance of the note was consolidated into a new note dated February 20, 2020.
l)On September 5, 2019, the Company entered into a secured promissory note with an unrelated party to manufacture inventory. The balance of the note was consolidated into shares of the Company’s Common Stock at $0.10 per share.
m)On September 13, 2019, the Company entered into a secured promissory note with an unrelated party to manufacture inventory. The balance of the note was consolidated into shares of the Company’s Common Stock at $0.10 per share.
n)On September 13, 2019, the Company entered into a secured promissory note with an unrelated party to manufacture inventory. The balance of the note was consolidated into shares of the Company’s Common Stock at $0.10 per share.
o)On September 23, 2019, the Company entered into a secured promissory note with an unrelated party to manufacture inventory. The balance of the note was consolidated into a new note dated March 11, 2020.
p)On September 30, 2019, the Company entered into a promissory note. The balance of the note was consolidated into a new note dated April 1, 2020.
q)On October 15, 2019, the Company entered into a secured promissory note with an unrelated party to manufacture inventory. The balance of the note was consolidated into a new note dated April 22, 2021.
r)On November 5, 2019, the Company entered into a secured promissory note with an unrelated party to manufacture inventory. The balance of the note was consolidated into a new note dated April 25, 2021.
s)On November 12, 2019, the Company entered into a secured promissory note with an unrelated party to manufacture inventory. The balance of the note was consolidated into shares of the Company’s Common Stock at $0.067 per share.
t)On November 19, 2019, the Company entered into a promissory note with an unrelated party. The balance of the note was consolidated into a new note dated November 19, 2020.

F-15

u)On November 20, 2019, the Company entered into a promissory note with an unrelated party. The balance of the note was consolidated into a new note dated November 20, 2020.
v)On December 17, 2019, the Company entered into a secured promissory note with an unrelated party. The balance of the note was consolidated into a new note dated April 18, 2021.
w)On December 20, 2019, the Company entered into a secured promissory note with an unrelated party to manufacture inventory. The balance of the note was consolidated into a new note dated March 10, 2020.
x)On December 20, 2018, the Company entered into a loan agreement with American Express. The Company makes monthly payments to satisfy the loan agreement.
y)On January 30, 2020, the Company entered into a secured promissory note with an unrelated party to manufacture inventory. The balance of the note was consolidated into a new note dated April 18, 2021.
z)On January 31, 2020, the Company entered into a promissory note with an unrelated party. The note was paid in full.
aa)On February 14, 2020, the Company entered into a promissory note with an unrelated party. The note was paid in full.
ab)On February 18, 2020, the Company entered into a secured promissory note with an unrelated party. The balance of the note was converted into shares of the Company’s Common Stock at $0.10 per share.
ac)On February 20, 2020, the Company entered into a secured promissory note with an unrelated party. The balance of the note was converted into shares of the Company’s Common Stock at $0.10 per share.
ad)On March 6, 2020, the Company entered into a promissory note with an unrelated party. The Company and the unrelated party are in discussions regarding the note, which is in default.
ae)On March 10, 2020, the Company entered into a promissory note with an unrelated party. The Company and the unrelated party are in discussions regarding the note, which is in default.
af)On March 11, 2020, the Company entered into a secured promissory note with an unrelated party to manufacture inventory. The balance of the note was consolidated into a new note dated September 10, 2020.
ag)On March 26, 2020, the Company entered into a promissory note with an unrelated party.
ah)On April 1, 2020, the Company entered into a promissory note with an unrelated party. The balance of the note was consolidated into a new note dated November 1, 2020.
ai)On April 15, 2020, the Company received an Economic Injury Disaster Loan (EIDL). The loan has been forgiven.
aj)On April 15, 2020, the Company received a Paycheck Protection Program Loan. The loan has been forgiven.
ak)On April 25, 2020, the Company entered into a secured promissory note with an unrelated party to manufacture inventory. The balance of the note was consolidated into a new note dated October 13, 2020.
al)On May 1, 2020, the Company entered into a promissory note with an unrelated party. The balance of the note was consolidated into a new note dated October 31, 2020.
am)On June 10, 2020, the Company entered into a promissory note with an unrelated party. The balance of the note was consolidated into a new note dated March 31, 2021.
an)On June 15, 2020, the Company entered into a promissory note with an unrelated party.
ao)On June 18, 2020, the Company entered into a promissory note with an unrelated party. The balance of the note was consolidated into a new note dated March 31, 2021.
ap)On June 29, 2020, the Company entered into a promissory note with an unrelated party. The balance of the note was consolidated into a new note dated March 31, 2021.
aq)On July 3, 2020, the Company entered into a promissory note with an unrelated party. The balance of the note was consolidated into a new note dated March 31, 2021.
ar)On July 31, 2020, the Company entered into a promissory note with an unrelated party. The note was paid in full.
as)On August 5, 2020, the Company entered into a promissory note with an unrelated party. The Company and the unrelated party are in discussions regarding the note, which is in default.
at)On September 3, 2020, the Company entered into a promissory note with an unrelated party. The Company and the unrelated party are in discussions regarding the note, which is in default.
au)On September 10, 2020, the Company entered into a promissory note with an unrelated party. The Company and the unrelated party are in discussions regarding the note, which is in default.
av)On October 1, 2020, the Company entered into a secured promissory note with a related party. The balance of the note was consolidated into a new note dated April 21, 2021.

F-16

aw)On October 6, 2020, the Company entered into a promissory note with an unrelated party. The Company and the unrelated party are in discussions regarding the note, which is in default.
ax)On October 13, 2020, the Company entered into a promissory note with an unrelated party. The Company and the unrelated party are in discussions regarding the note, which is in default.
ay)On October 21, 2020, the Company entered into a secured promissory note with a related party. The balance of the note was consolidated into a new note dated April 21, 2021.
az)On November 1, 2020, the Company entered into a promissory note with an unrelated party.
ba)On November 1, 2020, the Company entered into a promissory note with an unrelated party.
bb)On November 19, 2020, the Company entered into a promissory note with an unrelated party.
bc)On November 20, 2020, the Company entered into a promissory note with an unrelated party.
bd)On December 16, 2020, the Company entered into a promissory note with an unrelated party.
be)On January 6, 2021, the Company entered into a promissory note with an unrelated party.
bf)On March 1, 2021, a related party advanced money that was consolidated into a new note dated April 21, 2021.
bg)On March 4, 2021, the Company entered into a promissory note with an unrelated party. The Company and unrelated party are in discussions regarding the note, which is in default.
bh)On March 31, 2021, the Company entered into a forbearance agreement with an unrelated party to refinance existing loan amounts of $273,187.
bi)On April 9, 2021, the Company entered into a bridge loan agreement with an related party.
bj)On April 18, 2021, the Company entered into a secured promissory note with an unrelated party to refinance existing loan amounts of $408,875 and $183,000.
bk)On April 21, 2021, the Company entered into a settlement agreement with a related party and paid off $617,600 of principal plus interest.
bl)On April 22, 2021, the Company entered into a settlement agreement with an unrelated party and paid off $95,000 of principal plus interest.
bm)On April 30, 2021, an officer of the Company loaned $190,000 to the Company.
bn)On May 20, 2020, the Company entered into a promissory note with an unrelated party. The balance of the note and the earned interest was rolled into a new note dated November 20, 2020.

During the nine months ending September 30, 2021, the Company and the Company’s wholly owned operating subsidiarycompleted the sale of additional short-term notesunder similar terms in the additional principal amount totaling $2,169,100. The notes are secured by a pledge of the Company’s assets. These short-term working capital notes mature in 30-360 days. In connection with these notes, the Company issued 600,000 shares of its common stock and 17,333,333 warrants to purchase common stock. The fair value of these share incentives was calculated to be $1,090,696. The fair value of the share incentives was recorded as a discount to the notes payable and the discount was amortized over the term of those agreements to interest expense using the straight-line method that approximates the effective interest method. Interest expense recorded as a result of amortization of discount for the nine months ended September 30, 2021, is $839,434.

During the nine months ending September 30, 2021, the Company and the Company’s wholly owned operating subsidiary completed the conversion of short-term notes with a face value of $3,166,973 and accrued interest to 248,944 Preferred B Units with a fair value of $2,690,069, resulting in a Loss on Extinguishment of Debt of $725,723.

As of September 30, 2021, and December 31, 2020, the outstanding balance due on the working capital notes was $4,988,633 and $4,672,096, respectively.

NOTE 8- CONVERTIBLE DEBENTURE – RELATED PARTY

Since September 16, 2016, the Company sold convertible debenturesin the amount of $2,405,000 in the form of 12% three-year convertible term notes. Interest is accrued at an annual rate of 12% and is payable in Common Stock at maturity. Both principal and interest may be converted into Common Stock at a price of $0.50 per share after the passage of 181 days. The Company may redeem the debenture at its option or force conversion after Common Stock trades at a price in excess of $1.00 per share for five days. The Holder may force redemption after the Company raises $3 million dollars in equity. The holders of the convertible debentures were issued three-year warrants to purchase 2,405,000 shares of the Company’s Common Stock at $1.00 per share. As of December 31, 2018, the Company received $2,405,000 under this convertible debenture. In April and November 2018, debentures with face value of $2,060,000 plus accrued interest of $280,529 were converted into 4,681,058 shares of Common Stock. As of December 31, 2019, the Company had a face value of $345,000 due under this convertible debenture.

The convertible debenture holder, based on its agreement, with maturities beginning September 16, 2019 has the option to convert their principal and interest into 690,000(plus 60,980 for accrued interest) shares of Common Stock. The fair value of the embedded beneficial conversion feature resulted in a discount of $227,110 to the convertible debenture – related party at December 31, 2019 and a discount of $137,110 at December 31, 2020.

During the year ended December 31, 2018, the Company sold convertible debt instruments in the amount of $270,000. Since public trading of the Company’s Common Stock began in 2018, the Company determined a beneficial conversion discount of $270,000 applied to the 2018 sales the convertible debt instruments. The discount reduced the liability balance of the debentures to $0 when the debentures were issued and recorded the proceeds of the sale as Additional paid in Capital. The discount will be amortized over the three-year term of the debentures. The discounted balance of the convertible debentures at December 31, 2020 was $297,890.

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

F-17

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

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

Fair value was determined by the market price of the Company’s publicly traded stock with no discount allowed. This was determined as of the effective date of the agreement entered convertible debenture - related party. The conversion price was then compared to fair value, determined by market price and the difference between the two multiplied by the number of shares that would be issued upon conversion. The Company has not had any market activity within its public market. Private transactions between willing buyers and willing sellers have ranged from $0.02to $0.50 per share. These transactions were not conducted through a broker-dealer network. Since public trading of the Common Stock began in 2018, market price of the Company’s traded stock has ranged from $0.05 to $2.50 per share.

As of September 30, 2021, the outstanding balance due the Convertible Debentures holders was $0, including $0in original issue discount or interest. All debentures had been converted.

NOTE 9 – EMBEDDED DERIVATIVES – FINANCIAL INSTRUMENTS

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

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

The fair value of the conversion feature of the financial instrument as equity ifof December 31, 2018 was $0. The Company did not record any expense associated with the transactionembedded derivatives at December 31, 2018. NaNembedded derivative expense was realized as there was no change in the conversion price. The conversion price for this financial instrument was $0.50 per share which is completed or charged to expense ifhigher than market as there have been no sales of the common stock offering is not completed. As of June 30, 2015 (unaudited), deferred offering costs were $10,000.Company’s Common Stock.


F-18

NOTE 810INCOME TAXES


At June 30, 2015 (unaudited),December 31, 2020 and December 31, 2019, the Company had a net operating loss carryforward of $42,910,$20,870,713 and $14,889,631, respectively, which begins to expire in 2034.


Components of net deferred tax asset, including a valuation allowance, are as follows at June 30, 2015 (unaudited):follows:


SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES

 

2015

 

December 31,

2020

 

December 31,

2019

 

Deferred tax asset:

 

 

     

Net operating loss carryforward

 

$

15,018

 $4,382,850  $3,126,823 

Total deferred tax asset

 

 

15,018

 4,382,850 3,126,823 

Less: Valuation allowance

 

 

(15,018)

  (4,382,850)  (3,126,823)

Net deferred tax asset

 

$

-

 $-  $- 


Valuation allowance for deferred tax assets as of June 30, 2015December 31, 2020 and December 31, 20142019 was $15,018$4,382,850 and $2,314,$3,126,823, respectively. In assessing the recovery of the deferred tax asset, management considers whether it is more likely than not that some portion or all of the entire deferred tax asset will not be realized. The ultimate realization of the deferred tax asset is dependent upon the generation of future taxable income in the periods in which those temporary differences become deductible. Management considers the scheduled reversals of future deferred tax assets, projected future taxable income, and tax planning strategies in making this assessment. As a result, management determined it was more likely than not deferred tax assets will not be realized as of June 30, 2015December 31, 2020 and December 31, 20142019 and recognized a full100% valuation allowance for each period.


Reconciliation between statutory rate and the effective tax rate for both periods and as of June 30, 2015 (unaudited) and December 31, 2014:2020 and 2019:


SCHEDULE OF EFFECTIVE INCOME TAX RATE RECONCILIATION

Federal statutory rate

(35.0)

(21.0

)%

State taxes, net of federal benefit

(0.00)

(0.00

)%

Change in valuation allowance

35.0

21.0

%

Effective tax rate

0.0

%







NOTE 911SHARE CAPITAL

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


Common stockStock

On December 15, 2014, the Company issued to its founder, then an officer and director of the Company, 6,000,000 shares of its $0.001 $0.001 par value common stockCommon Stock at a price of $0.001 $0.001 per share for services provided upon organization. The services were valued at $6,000.$6,000.


On January 15, 2015, the Company issued to its founder 3,000,000 shares of its $0.001 $0.001 par value common stockCommon Stock at a price of $0.008 $0.008 per share for certain intangible assets and tangible assets (see Note 3 - Intangible Assets and Asset Purchase)Assets). Mr. David Estus, then our sole officer and director, incurred more than $50,000 $50,000 in developing or acquiring the intangible and tangible assets for which the Company valued at $24,000.$24,000.


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

The Company issued 17,421,000 shares of its Common Stock and issued warrants to purchase 500,000 shares of Common Stock to shareholders of American Rebel, Inc. and cancelled 9,000,000 shares of Common Stock owned by American Rebel, Inc. to complete the acquisition of American Rebel, Inc. which was accounted for as a reverse merger.

F-19

During June 2017, prior to the merger, American Rebel, Inc issued 2,800,000 shares of Common Stock as compensation and recorded an expense based on fair market value of $0.50 per share for a total expense of $1,400,000. On June 19, 2017, in connection with the merger and acquisition of the subsidiary, the Company exchanged 17,421,000 shares of Common Stock with stockholders of American Rebel, Inc. and cancelled 9,000,000 shares of Common Stock held by American Rebel, Inc. American Rebel, Inc. became a wholly owned subsidiary of the Company upon completion of the exchange.

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

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

In January 2018, the Company’s wholly owned subsidiary completed an agreement to acquire professional services during 2018 in exchange for 500,000 shares of the Company’s Common Stock. The Common Stock is to be issued in three stages, 166,667 shares in January 2018, 166,667 shares in May 2018 and the remainder in September 2018. The shares were valued at $.50 per share consistent with valuation of other share issues.

In January 2018, the Company issued 300,000 shares of Common Stock to settle a liability for professional services billed in the amount of $180,000.

In January 2019, the Company issued a 30-day warrant to purchase 250,000 shares of its Common Stock at a price of $0.01 per share to pay consulting fees. Total fair value of $160,000 was recorded as an expense of $160,000 at June 30, 2015 (unaudited)2019. The warrants were exercised and 250,000 shares of Common Stock were issued.

In January 2019, the Company’s wholly-owned operating subsidiary completed the sale of a secured promissory note in the principal amount of $300,000 with an interest rate of 16.66% per annum to a private investor. The note is secured by a pledge of all of the Company’s current inventory and the Chief Executive Officer’s personal guaranty. This working capital note matures in 120 days. In connection with this note, the Company issued 100,000 shares of its Common Stock to the note holder.

In September 2019, the Company issued 1,400,000 shares of its Common Stock in conjunction with notes payable and recorded loan discount of $812,000 based on fair market value of $0.30 and $0.95 per share. Of the loan discount recorded, the amount that had been amortized to interest expense at September 30, 2019 was $228,460.

In September 2019, the Company issued 9,700,000 shares of its Common Stock to pay professional and consulting fees and recorded an expense based on fair market value of $0.30 and $0.95 per share for a total expense of $3,432,000, there were 9,000,000 and recorded prepaid expense of $675,750.

In November 2019, the Company issued 150,000 shares of its Common Stock in conjunction with notes payable and recorded loan discount of $86,000 based on fair market value of $0.30 and $0.22 per share. Of the loan discount recorded, the amount that had been amortized to interest expense on December 31, 2019 was $25,744.

In December 2019, the Company issued 1,500,000 shares of its Common Stock to pay professional and consulting fees and recorded an expense based on fair market value of $0.22 per share for a total expense of $330,000.

F-20

During the year ended December 31, 2020, the Company issued 17,275,871 shares of its Common Stock and issued five yearwarrants to sell 2,500,000 shares of Common Stock in connection with issue of short-term loans. The fair value of these share incentives was calculated to be $1,881,761 which was recorded as a discount to the notes payable and amortized to interest expense over the term of those loan agreements. Interest expense recorded as a result of amortization of discount for the year ended December 31, 2020 is $1,411,203.

During the year ended December 31, 2020, the Company issued 9,700,000 shares of its Common Stock and completed the conversion of short-term notes with a face value of $1,080,000 and accrued interest. The fair value of these shares was calculated to be $1,651,900, resulting in a Loss on Extinguishment of Debt of $916,242.

During the year ended December 31, 2020, the Company issued 2,700,000 shares of its Common Stock to pay professional and consulting fees. Total fair value of $375,000 was recorded as an expense.

On July 30, 2021, pursuant to its 2021 Long-Term Incentive Plan, the Company issued 753,242 shares of common stock to Rocco LaVista, our VP of Business Development, for services.

On August 3, 2021, pursuant to its 2021 Long-Term Incentive Plan, the Company issued and outstanding.


During the period from Inception (December 15, 2014) through December 31, 2014 and for the six months ended June 30, 2015, there have been no other issuances753,242 shares of common stock byto Charles A. Ross, Jr., our CEO, for services.

On August 4, 2021, pursuant to its 2021 Long-Term Incentive Plan, the Company.Company issued 753,241 shares of common stock to Doug E. Grau, our President, for services.


NOTE 10 – WARRANTS AND OPTIONSOn April 9, 2021, in connection with a $1,000,000 bridge loan, the Company issued Ronald A. Smith, our COO and chairman, a warrant to purchase 2,000,000 shares of the Company’s Common Stock at an exercise price of $0.10 per share with a five-year term.


 On April 9, 2021, the Company entered into two employment agreements with recently appointed officers, whereby it agreed to issue 8,750,000 shares of Common Stock to such officers. In addition, the Company entered into amendments to the current employment agreements with its Chief Executive Officer and President, whereby it agreed to issue 8,000,000 shares of Common Stock.

As On April 20, 2021, the Company issued 150,000 shares of Common Stock in return for services rendered.

On April 22, 2021, the Company entered into a settlement agreement with a current debt holder, whereby the Company agreed to repay the $151,688 balance owing on the note owed to such holder with a cash payment of $50,000 and the issuance of 2,000,000 shares of Common Stock, with a stated value of $100,688.

 On June 11, 2021, the Company sold 10,000 units at $7 per unit consisting of 10,000 shares of Series B Preferred Stock and 1,000,000 three-year warrants to purchase 1 share of Common Stock per warrant at $0.10 to an accredited investor.

 On June 11, 2021, the Company sold 5,000 units at $7 per unit consisting of 5,000 shares of Series B Preferred Stock and 500,000 three-year warrants to purchase 1 share of Common Stock per warrant at $0.10 to an accredited investor.

 On June 14, 2021, a holder of various outstanding notes converted outstanding principal and interest to 42,658 units at $7 per unit consisting of 42,658 shares of Series B Preferred Stock and 4,265,800 three-year warrants to purchase 1 share of Common Stock per warrant at $0.10.

 On June 15, 2021, a holder of various outstanding notes converted outstanding principal and interest to 57,143 units at $7 per unit consisting of 57,143 shares of Series B Preferred Stock and 5,714,300 three-year warrants to purchase 1 share of Common Stock per warrant at $0.10.

 On June 15, 2021, a holder of an outstanding note converted outstanding principal and interest to 75,143 units at $7 per unit consisting of 75,143 shares of Series B Preferred Stock and 7,514,300 three-year warrants to purchase 1 share of Common Stock per warrant at $0.10.

 On June 18, 2021, the Company sold 28,572 units at $7 per unit consisting of 28,572 shares of Series B Preferred Stock and 2,857,200 three-year warrants to purchase 1 share of Common Stock per warrant at $0.10 to an accredited investor.

On June 21, 2021, a holder of an outstanding note converted a portion of outstanding principal to 50,000 units at $7 per unit consisting of 50,000 shares of Series B Preferred Stock and 5,000,000three-year warrants to purchase 1 share of Common Stock per warrant at $0.10.

 On June 28, 2021, the Company sold 5,000 units at $7 per unit consisting of 5,000 shares of Series B Preferred Stock and 500,000 three-year warrants to purchase 1 share of Common Stock per warrant at $0.10 to an accredited investor.

 On June 29, 2021, a holder of an outstanding note converted outstanding principal and interest to 16,000 units at $7 per unit consisting of 16,000 shares of Series B Preferred Stock and 1,600,000 three-year warrants to purchase 1 share of Common Stock per warrant at $0.10.

 On June 29, 2021, a holder of an outstanding note converted outstanding principal and interest to 8,000 units at $7 per unit consisting of 8,000 shares of Series B Preferred Stock and 800,000 three-year warrants to purchase 1 share of Common Stock per warrant at $0.10.

 On June 30, 20152021, the Company sold 15,000 units at $7 per unit consisting of 15,000 shares of Series B Preferred Stock and 1,500,000 three-year warrants to purchase 1 share of Common Stock per warrant at $0.10 to an accredited investor.

 On June 30, 2021, the Company sold 7,143 units at $7 per unit consisting of 7,143 shares of Series B Preferred Stock and 714,300 three-year warrants to purchase 1 share of Common Stock per warrant at $0.10 to an accredited investor.

 On June 30, 2021 and December 31, 2014,2020, there were no96,027,242 and 72,807,929 shares of Common Stock issued and outstanding, respectively; and 319,659 and 0 shares of Series B preferred stock issued and outstanding, respectively.

On December 31, 2020 and December 31, 2019, there were 72,808,058 and 43,062,058 shares of Common Stock issued and outstanding, respectively.

NOTE 12 – WARRANTS AND OPTIONS

Since September 16, 2016, in connection with the convertible debenture –related party (see Note 8 – Convertible Debenture – Related Party) the Company issued three-year warrants or optionsto purchase 2,405,000 shares of the Company’s Common Stock at $1.00per share. In conjunction with the conversion of convertible debt at April 30, 2018, the Company agreed to reduce the exercise price of the Warrants to $.50 per share.

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

In October 2020, the Company issued five-year warrants to purchase 2.500,000 shares of the Company’s Common Stock at $0.10per share in connection with short term financing. In November 2020, the Company issued two-year warrants to purchase 50,000 shares of the Company’s Common Stock at $1.00per share in connection with short term financing.

As of December 31, 2018, there were 2,245,000warrants issued and outstanding. As of December 31, 2020, there were 3,395,000warrants outstanding to acquire any additional shares of common stock.Common Stock.


The Company evaluates outstanding warrants as derivative liabilities and will recognize any changes in the fair value through earnings. The Company determined that the Warrants have an immaterial fair value at December 31, 2020. The warrants do not trade in a highly active securities market, and as such, the Company estimated the fair value of these Common Stock equivalents using Black-Scholes and the following assumptions:

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

F-21

SCHEDULE OF FAIR VALUE MEASUREMENT

  

December 31,

2020

  

December 31,

2019

 
Warrants outstanding, measurement input      
Stock Price $0.104  $0.285 
Exercise Price $0.26  $1.00 
Term (expected in years)  4.73   3.00 
Volatility  259.2%  262.4%
Annual Rate of Dividends  0.0%  0.0%
Risk-Free Rate  0.18%  1.92%

Stock Purchase Warrant

The following table summarizes all warrant activity for the years ended December 31, 2020 and 2019.

SCHEDULE OF WARRANT ACTIVITY

  Shares  

Weighted-Average

Exercise Price Per

Share

  

Remaining

term

  

Intrinsic

value

 
Outstanding, December 31, 2018  2,245,000  $0.57   1.05 years   - 
Granted  425,000  $.41   1.34 years   - 
Exercised  250,000  $0.01   -   - 
Expired  -   -   -   - 
Outstanding and Exercisable at December 31, 2019  2,420,000  $0.61   .73 years   - 
Granted  2,550,000  $0.12   4.75 years   - 
Exercised          -   - 
Expired  (1,475,000)  -   -   - 
Outstanding and Exercisable at December 31, 2020  3,495,000  $0.26   4.73 years   - 

NOTE 1113COMMITMENTS AND CONTINGENCIES

Rental Payments under Non-cancelable Operating Leases

The Company has a lease for warehouse and shipping space in Lenexa, Kansas which expires in January 2026. And an annually renewable lease for manufacturing and warehouse space in Chanute, Kansas. The following is a schedule, by year, of the future minimum rental payments under the lease:

SCHEDULE OF FUTURE MINIMUM RENTAL PAYMENTS FOR OPERATING LEASE

Year ended December 31,   
    
2021  158,029 
2022  72,638 
2023  74,112 
2024  75,362 
2025  76,390 
Subsequent   19,162 
Total $475,693 

Rent costs totaled approximately $159,120 and $121,992 for years ended December 31, 2020 and 2019, respectively.

NOTE 14 – SUBSEQUENT EVENTS


The Company evaluated all events that occurred after the balance sheet date of June 30, 2015December 31, 2020 through July 10, 2015 the date the financial statements were availableissued and determined that there were the following subsequent events.

Subsequent to December 31, 2020, the Company entered into a one-year promissory note dated January 6, 2021, in the amount of $40,000 paying 18% interest. Interest and principal are due at maturity.

F-22

Subsequent to December 31, 2020, the Company received an equity investment of $50,000 on January 12, 2021, to purchase 833,333 shares of the Company’s Common Stock by Subscription Agreement at $0.06 per share.

Subsequent to December 31, 2020, the Company entered into a one-year promissory note dated March 4, 2021 in the amount of $50,000. The Company will pay monthly interest payments at 12% per annum to the holder of the note. A component of the note issued 600,000 shares of Common Stock to the note holder.

Subsequent to December 31, 2020, the Company received an equity investment of $100,000 on March 5, 2021, to purchase 1,666,667 shares of the Company’s Common Stock by Subscription Agreement at $0.06 per share.

On March 1, 2021, a related party advanced the Company $117,600 to make outstanding note payments.

On March 10, 2021, the Company issued 280,000 shares of Common Stock to pay interest on an outstanding note.

On March 10, 2021, the Company issued 310,000 shares of Common Stock to pay interest on an outstanding note.

On March 24, 2021, the Company authorized the issuance of 2,500,000 shares of Common Stock to a consulting company controlled by an officer, as consideration of the termination of such consultant’s services and to relieve the Company from certain ongoing compensation commitments. Such shares will be issued.issued only upon the amendment to the Company’s articles of incorporation to increase its authorized shares of Common Stock.



On March 24, 2021, the Company authorized the issuance of 2,145,000 shares of Common Stock to its Chief Executive Officer and 2,145,000 shares of Common Stock to its President. 4,190,000 of such shares will be issued only upon the amendment to the Company’s articles of incorporation to increase its authorized shares of Common Stock





Effective March 31, 2021, the Company entered into a forbearance agreement with a current debt holder, whereby the Company agreed to repay four notes owed to such holder with an initial payment of $100,000 and eight monthly installment payments totaling $173,187.50.

This prospectus is

On April 9, 2021, the Company received a $1,000,000 bridge loan from a current officer/director. As part of the bridge loan, the Company issued the officer/director a registration statementfive-year warrant to purchase 2,000,000 shares of Common Stock at $0.10 per share and pledged 2,000,000 shares of Common Stock as security for the bridge loan.

On April 9, 2021, the Company entered into two employment agreements with recently appointed officers, whereby it agreed to issue 8,750,000 shares of Common Stock to such officers. In addition, the Company entered into amendments to the current employment agreements with its Chief Executive Officer and President, whereby it agreed to issue 8,000,000 shares of Common Stock. All of these shares will be issued only upon the amendment to the Company’s articles of incorporation to increase its authorized shares of Common Stock.

On April 18, 2021, the Company executed a $591,000 secured replacement promissory note with a current debt holder, whereby the Company agreed to consolidate and repay two notes owed to such holder with an initial payment of $100,000 and monthly installment payments for the balance of the note.

On April 20, 2021, the Company issued 50,000 shares of Common Stock in return for services rendered.

On April 21, 2021, the Company entered into a settlement agreement with a current debt holder, whereby the Company agreed to repay two notes and an advancement from such holder, including accrued interest at 8% per annum, with a payment of $639,955.64.

On April 22, 2021, the Company entered into a settlement agreement with a current debt holder, whereby the Company agreed to repay the $151,687.97 balance owing on the note owed to such holder with a cash payment of $50,000 and the issuance of 2,000,000 shares of Common Stock, with a stated value of $100,687.97.

On April 30, 2021, the Company received a $190,000 six-month loan from a current officer/director.

On July 26, 2021, the Company filed a Certificate of Designation and Amendment with the SEC. You should rely only onNevada Secretary of State to increase the information or representations provided in this prospectus. We have authorized no onenumber of shares constituting the Series B Convertible Preferred Stock from 250,000 to provide you with different information. We are not making350,000.

On July 26, 2021, the Company sold 7,500 units at $7 per unit consisting of 7,500 shares of Series B Preferred Stock and 750,000 three-year warrants to purchase 1 share of common stock per warrant at $0.10 to an offer of these securities in any state where the offer is not permitted. You should not assume that the information in this prospectus is accurate as of any date other than the date on the front of this document.accredited investor by subscription agreement.


F-24

No one (including any salesman or broker) is authorizedAMERICAN REBEL HOLDINGS, INC.

UNAUDITED CONSOLIDATED BALANCE SHEETS

  September 30, 2021  December 31, 2020 
ASSETS        
         
CURRENT ASSETS:        
Cash and cash equivalents $218,332  $60,899 
Accounts Receivable  179,233   176,844 
Prepaid expense  163,492   48,640 
Inventory  687,830   681,709 
Inventory deposits  76,685   141,164 
Total Current Assets  1,325,572   1,109,256 
         
Property and Equipment, net  1,799   5,266 
         
OTHER ASSETS:        
Lease Deposit  -   6,841 
Total Other Assets  -   6,841 
         
TOTAL ASSETS $1,327,371  $1,121,363 
         
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)        
         
CURRENT LIABILITIES:        
Accounts payable and accrued expense  739,793   540,168 
Accrued Interest – Convertible Debenture – Related Party  287,620   603,471 
Loan – Officer - Related party  6,526   4,526 
Loan – Working Capital, net of discounts of $1,375,608 and $777,610  3,617,514   4,672,096 
Loans - Nonrelated parties  12,939   15,649 
Total Current Liabilities  4,664,392   5,835,910 
         
Convertible Debenture –Related party, net of discounts of $2,110 and $47,110  -   297,890 
TOTAL LIABILITIES  4,664,392   6,133,800 
         
STOCKHOLDERS’ EQUITY (DEFICIT):        
Preferred stock, $0.001 par value; 10,000,000 shares authorized; 100,000, and 0 issued and outstanding, respectively at September 30, 2021 and December 31, 2020 Preferred shares Class A  

100

   - 
Preferred stock, $0.001 par value; 10,000,000 shares authorized; 276,501, and 0 issued and outstanding, respectively at September 30, 2021 and December 31, 2020 Preferred shares Class B  277   - 
Preferred stock, value        
Common stock, $0.001 par value; 600,000,000 shares authorized; 120,508,194 and 72,807,929 issued and outstanding, respectively at September 30, 2021 and December 31, 2020  120,508   72,808 
Common stock, value  120,508   72,808 
Additional paid in capital  22,302,897   15,785,468 
Accumulated deficit  25,760,803  (20,870,713)
TOTAL STOCKHOLDERS’ EQUITY (DEFICIT)  (3,337,021))  (5,012,437)
         
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) $1,327,371  $1,121,363 

See Notes to provide oral or written information about the Offering that is not included in this prospectus.Financial Statements.


F-25

The information contained in this prospectus is correct only as of the date set forth on the cover page, regardless of the time of the delivery of this prospectus.AMERICAN REBEL HOLDINGS, INC.


UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

Until ________, 2015 (90 days after the commencement of the Offering), all dealers that effect transactions in these securities, whether or not participating in this Offering, may be required

       
  

For the three

months ended
September 30, 2021

  For the three
months ended
September 30, 2020
 
Revenue $295,490  $279,308 
Cost of goods sold  280,212   228,584 
Gross margin  15,278   50,724 
         
Expenses:        
Consulting – business development  656,784   136,877 
Product development costs  42,720   89,578 
Marketing and brand development costs  34,669   90,305 
Administrative and other  236,763   286,541 
Depreciation expense  946   15,507 
Total  971,882   618,808 
Operating income (loss)  (956,604)  (568,084)
         
Other Income (Expense)        
Interest expense  (382,601)  (681,076)
Gain (Loss) on extinguishment of debt  (87,575)  (68,925)
Net income (loss) before income tax provision  (1,426,780)  (1,318,085)
Provision for income tax  -   - 
Net income (loss) $(1,426,780) $(1,318,085)
Basic and diluted income (loss) per share $(0.01) $(0.02)
Weighted average common shares outstanding - basic and diluted  108,376,000   64,346,000 

See Notes to deliver a prospectus. This is in additionFinancial Statements.

F-26

AMERICAN REBEL HOLDINGS, INC.

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

       
  For the nine
months ended
September 30, 2021
  For the nine
months ended
September 30, 2020
 
Revenue $848,357  $899,238 
Cost of goods sold  716,943   659,006 
Gross margin  131,414   240,232 
         
Expenses:        
Consulting – business development  1,774,003   404,700 
Product development costs  275,780   275,565 
Marketing and brand development costs  138,783   331,775 
Administrative and other  603,727   1,356,430 
Depreciation expense  2,744   46,521 
Total  2,795,037   2,414,991 
Operating income (loss)  (2,663,623)  (2,174,759)
         
Other Income (Expense)        
Interest expense  (1,500,744)  (1,507,662)
Loss on extinguishment of debt  (725,723)  (919,242)
Net income (loss) before income tax provision  (4,890,090)  (4,601,663)
Provision for income tax  -   - 
Net income (loss) $(4,890,090) $(4,601,663)
Basic and diluted income (loss) per share $(0.05) $(0.08)
Weighted average common shares outstanding - basic and diluted  92,441,000   57,492,000 

See Notes to the dealers' obligation to deliver a prospectus when acting as an underwriter and with respect to unsold allotments or subscriptions.Financial Statements.


F-27

6,000,000 SharesAMERICAN REBEL HOLDINGS, INC.

CubeScape, Inc.UNAUDITED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ DEFICIT

                             
  Common
Stock
  Preferred
Stock
  Common
Stock
Amount
  Preferred
Stock Amount
  Additional
Paid-in
Capital
  Accumulated
Deficit
  Total 
                      
Balance – December 31, 2019  43,062,058   -  $43,062  $-  $11,899,553  $(14,889,631) $(2,947,016)
                             
Common Stock issued as compensation.  17,616,000       17,616       2,531,124   -   2,548,740 
Net loss  -   -   -   -   -   (2,172,180)  (2,172,180)
Balance – March 31, 2020 (Unaudited)-  60,678,058   -  $60,678  $-  $14,430,677  $(17,061,811) $(2,570,456)
Sale of Common Stock  70,000   -   70   -   6,930   -   7,000 
Sale of Preferred Stock.                            
Sale of Preferred Stock., shares                            
Common Stock issued to pay expense                            
Common Stock issued to pay expense, shares                            
Preferred Stock converted to Common Stock                            
Preferred Stock converted to Common Stock, shares                            
Preferred Stock issued to pay expense                            
Preferred Stock issued to pay expense, shares                            
Common Stock issued to reduce Debt                            
Common Stock issued to reduce Debt, shares                            
Preferred A shares issued                            
Common Stock Warrants Issued                            

Common Stock


PROSPECTUS

_______________, 2015







issued as compensation

810,000-810-94,190-95,000
Net loss-----(1,111,398)(1,111,398)
Balance – June 30, 2020 (Unaudited)-61,558,058-$61,558$-$14,531,797$(18,173,209)$(3,579,854)
Common stock issued as
compensation.
4,839,871-4,840-484,622-489,462
Net loss-----(1,318,085)(1,318,085)
Balance – September 30, 2020 (Unaudited)-66,397,929-$66,398$-$15,016,419$(19,491,294)$(4,408,477)

  Common
Stock
  Preferred
Stock
  Common
Stock
Amount
  Preferred
Stock Amount
  Additional
Paid-in
Capital
  Accumulated
Deficit
  Total 
                      
Balance – December 31, 2020-  72,807,929   -  $72,808  $-  $15,785,468  $(20,870,713) $(5,012,437)
                             
Sale of common stock.  2,500,000   -   2,500   -   147,500   -   150,000 
                             
Common Stock issued to pay expense  1,819,313   -   1,819   -   103,647   -   105,466 
                             
Net Loss  -   -   -   -   -   (927,615)  (927,615)
                             
Balance – March 31, 2021-  77,127,242   -  $77,127  $-  $16,036,615  $(21,798,328) $(5,684,586)
                             
Sale of Preferred Stock.  -   70,715   -   71   494,934   -   495,005 
                             

common stock

issued to pay expense
  18,900,000   -   18,900   -   981,100   -   1,000,000 
                             
Preferred Stock issued to pay expense  -   248,944   -   249   2,481,489   -   2,481,738 
                             
Common stock Warrants Issued  -   -   -   -   102,613   -   102,613 
                             
Net Loss  -   -   -   -   -   (2,535,695)  (2,535,695)
Balance – June 30, 2021-  96,027,242   319,659  $96,027  $320   20,096,751  $(24,334,023) $(4,140,925)
Beginning balance, value  96,027,242   319,659  $96,027  $320   20,096,751  $(24,334,023) $(4,140,925)
                             
Sale of Preferred Stock.  -   7,500   -   7   52,493   -   52,500 
                             
Common stock issued to pay expense  16,808,535   -   16,809   -   1,081,544   -   1,098,353 
                             
Preferred Stock converted to Common stock  4,965,800   (49,658)  4,966   (50)  (4,916)  -   0 
                             
Common stock issued to reduce Debt  2.706,617   -   2,707   -   204,924   -   208,331 
                             
Preferred A shares issued              100   (100)        
                             

Common stock Warrants Issued

  -   -   -   -   871,500   -   871,500 
                             
Net Loss  -   -   -   -   -   (1,426,780)  (1,426,780)
Balance – September 30, 2021-  120,508,194   277,501  $120,508  $377   22,302,897160  $(25,760,803) $(3,337,021)
Ending balance, value  120,508,194   277,501  $120,508  $377   22,302,897160  $(25,760,803) $(3,337,021)

See Notes to Financial Statements.



TABLE OF CONTENTS




F-28

SUMMARY FINANCIAL DATA

8

RISK FACTORS

9

AMERICAN REBEL HOLDINGS, INC.

UNAUDITED CONSOLIDATED STATEMENT OF CASH FLOWS

         
  2021  2020 
  For the nine
months ended
September 30, 2021
  For the nine
months ended
September 30, 2020
 
       
CASH FLOW FROM OPERATING ACTIVITIES:        
Net income (loss) $(4,890,090) $(4,601,663)
Depreciation  3,158   46,521 
Expense paid through issuance of stock  2,806,826   2,142,868 
Amortization of loan discount  839,434   735,664 
Adjustments to reconcile net loss to cash (used in) operating activities:        
Change in accounts receivable  (6,830)  (48,071)
Change in prepaid expenses  (8,010)  201,552 
Change in inventory  (6,120)  (18,098)
Change in inventory deposits  64,479   85,153 
Change in accounts payable and accrued expense  201,915   244,054 
Net Cash (Used in) Operating Activities  (995,238)  (1,212,020)
         
CASH FLOW FROM INVESTING ACTIVITIES:        
   -   - 
Net Cash (Used in) Investing Activities  -   - 
         
CASH FLOW FROM FINANCING ACTIVITIES:        
Proceeds (repayments) of loans – officer - related party  14,658   101,055 
Proceeds of Sale of Stock  697,505   7,000 
Proceeds of exercise of Warrants  -   - 
Proceeds of working capital loan  2,169,100   2,208,671 
Repayment of loans – nonrelated party  (1,736,000)  (1,070,481)
Net Cash Provided by Financing Activities  1,145,263   1,246,245 
         
CHANGE IN CASH  150,025   34,225 
         
CASH AT BEGINNING OF PERIOD  68,307   131,656 
         
CASH AT END OF PERIOD $218,332  $165,881 
         
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION        
Cash paid for:        
Interest $176,910  $119,199 
Income taxes $-  $- 
         
Non-cash investing and financing activities:        
Debt eliminated through issue of Stock $1,713,924  $1,517,407 

See Notes to Financial Statements.

F-29

USE OF PROCEEDS

19

THIS OFFERING

20

DETERMINATION OF OFFERING PRICE

21

DILUTION

21

DIVIDEND POLICY

22

MARKET FOR SECURITIES

23

NOTE REGARDING FORWARD-LOOKING STATEMENTS

24

MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

25

BUSINESS

32

DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS

39

PRINCIPAL SHAREHOLDERS

42

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

42

DESCRIPTION OF CAPITAL STOCK

43

PLAN OF DISTRIBUTION

46

LEGAL MATTERS

50

EXPERTS

50

WHERE YOU CAN FIND MORE INFORMATION

51










Part II


INFORMATION NOT REQUIRED IN PROSPECTUS


ITEM 13

OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION


The Company is bearing all expenses in connection with this registration statement other than sales commissions, underwriting discounts and underwriter's expense allowances designated as such. Estimated expenses payable by the Company in connection with the registration and distribution of the Common Stock registered hereby

AMERICAN REBEL HOLDINGS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2021

(unaudited)

NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization

The Company was incorporated on December 15, 2014,under the laws of the State of Nevada, as CubeScape, Inc. The Company filed a registration statement on Form S-1, which was declared effective by the U.S. Securities and Exchange Commission on October 14, 2015. Twenty-six (26) investors invested at a price of $0.01 per share for a total of $60,000. The direct public offering closed on December 11, 2015.

On January 5, 2017, the Company amended its articles of incorporation and changed its name to American Rebel Holdings, Inc. The Company completed a business combination with its majority stockholder, American Rebel, Inc. on June 19, 2017. As a result, American Rebel, Inc. became a wholly owned subsidiary of the Company.

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

Nature of operations

The Company focuses primarily on designing and marketing branded safes and personal security products, including concealed carry/self-defense products. Additionally, the Company designs and produces branded apparel and other accessories. The Company promotes and sells its products primarily through retailers using a dealer network, various leading national and regional retailers, local specialty firearms stores, and through the Company’s website and other websites including Amazon.com. The Company’s products have the American Rebel Brand imprint.

Interim Financial Statements and Basis of Presentation

The accompanying unaudited interim financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information, and with the rules and regulations of the United States Securities and Exchange Commission (the “SEC”) 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, as follows:


SEC Registration fee

$

6.97

NASD filing fee

 

100.00

Accounting fees and expenses*

 

7,000.00

Transfer agent fees*

 

1,500.00

Blue Sky fees and expenses*

 

2,500.00

Miscellaneous expenses*

 

1,893.03

Legal fees and expenses*

 

15,000.00

Total

$

28,000.00


*Indicates expenses that have been estimated for filing purposes.


ITEM 14

INDEMNIFICATION OF DIRECTORS AND OFFICERS


The Company has a provision in its Certificate of Incorporation at Article XI thereof providing for indemnification of its officers and directors as follows.


Our Articles of Incorporation at Article XI provide for indemnification as follows: “No director or officer of the Corporation shall be personally liable to the Corporation or any of its stockholders for damages for breach of fiduciary duty as a director or officer; provided, however, that the foregoing provision shall not eliminate or limit the liability of a director or officer: (i) for acts or omissions which involve intentional misconduct, fraud or knowing violation of law; or (ii) the payment of dividends in violation of Section 78.300 of the Nevada Revised Statutes. Any repeal or modification of an Article by the stockholders of the Corporation shall be prospective only, and shall not adversely affect any limitation of the personal liability of a director or officer of the Corporation for acts or omissions prior to such repeal or modification”.


Insofar as indemnification for liabilities arising under the Securities Act of 1933, as amended, may be permitted to directors officers and controlling persons of the Company pursuant to the foregoing provisions, or otherwise, the registrant has been advised that 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, 2020 and notes thereto contained.

Principles of Consolidation

The Consolidated Financial Statements include the accounts of the Company and its majority-owned subsidiary. All significant intercompany accounts and transactions have been eliminated.

Year end

The Company’s year-end is December 31.

F-30

Cash and cash equivalents

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

Inventory and Inventory Deposits

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

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 by the straight-line method over the estimated useful life of the asset, which ranges from five to seven years.

Revenue recognition

In accordance with ASC 606, revenues are recognized when control of the promised goods or services is transferred to our clients, in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods and services. To achieve this core principle, the Company applies 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.

The Company adopted this ASC on January 1, 2018. Although the new revenue standard is expected to have an immaterial impact, if any, on the Company’s ongoing net income, the Company did implement changes to our processes related to revenue recognition and the control activities within them.

Advertising costs

Advertising costs are expensed as incurred; Marketing costs incurred were $34,669 and $90,305 for the three-month periods ended September 30, 2021, and 2020, respectively and $138,783 and $331,775, respectively, for the nine-month periods then ended.

Fair Value of Financial Instruments

Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of September 30, 2021, and December 31, 2020, 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.

F-31

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

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

Stock-based compensation

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

During the three months ended September 30, 2021, the Company issued 9,849,725 shares of its common stock to pay professional and consulting fees. Total fair value of $617,068 was recorded as an expense.

Earnings per share

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

Income taxes

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

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

F-32

The Company applies a more-likely-than-not recognition threshold for all tax uncertainties. ASC Topic 740 only allows the recognition of tax benefits that have a greater than fifty percent likelihood of being sustained upon examination by taxing authorities. As of September 30, 2021 and December 31, 2020, the Company reviewed its tax positions and determined there were no outstanding, or retroactive tax positions with less than a 50% likelihood of being sustained upon examination by the taxing authorities, therefore this standard has not had a material effect on the Company.

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

The Company classifies tax-related penalties and net interest as income tax expense. For the nine-month period ended September 30, 2021, and 2020, respectively, no income tax expense has been recorded.

Use of estimates

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

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 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’ lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise such options.

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

Recent pronouncements

The Company has implemented all new accounting pronouncements that are in effect and is evaluating any that may impact its financial statements. The Company does not believe that there are any new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

F-33

NOTE 2 – GOING CONCERN

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the recoverability of assets and the satisfaction of liabilities in the normal course of business. As noted above, the Company is in the development stage and, accordingly, its revenue from its planned operations does not cover its operating expenses. Since inception, the Company has been engaged in financing activities and executing its business plan of operations and incurring costs and expenses related to developing products and market identity, obtaining inventory, preparing for public product launch and ultimately selling products. As a result, the Company incurred net income (losses) for the nine months ended September 30, 2021, and 2020 of ($4,890,090) and ($3,283,578), respectively. The Company’s accumulated deficit was ($25,760,803) as of September 30, 2021, and ($20,870,713) as of December 31, 2020. The Company’s working capital deficit was ($3,338,820)as of September 30, 2021, and a deficit of ($4,726,654)as of December 31, 2020. In addition, the Company’s development activities since inception have been sustained through equity and debt financing and the deferral of payments on accounts payable and other expenses.

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 operating revenues. Management believes holders of its warrants will execute their outstanding warrants generating investment capital for the Company. As of September 30, 2021, there are 54,445,663 warrants with an exercise price of $0.10 per share, 500,000 warrants with an exercise price of $0.50 per share and 275,000 warrants with an exercise price of $1.00 per share. Management is also in discussion with several investment banks and broker dealers regarding the initiation of a capital campaign.

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

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

NOTE 3 - INVENTORY AND DEPOSITS

Inventory and deposits include the following:

SCHEDULE OF INVENTORY AND DEPOSITS

  

September 30,

2021

(unaudited)

  

December 31,

2020

(audited)

 
       
Inventory - Finished goods $687,830  $681,709 
Inventory deposits  76,685   141,164 
Total Inventories  764,515   822,873 
Less: Reserve for excess and obsolete  -   - 
Net inventory and deposits $764,515  $822,873 

NOTE 4 – PROPERTY AND EQUIPMENT

Property and equipment include the following:

SCHEDULE OF PROPERTY AND EQUIPMENT

  

September 30,

2021

(unaudited)

  

December 31,

2020

(audited)

 
       
Marketing equipment $32,261  $32,261 
Vehicles  277,886   277,886 
   310,147   310,147 
Less: Accumulated depreciation  (308,348)  (304,881)
Net property and equipment $1,799  $5,266 

F-34

For the nine months ended September 30, 2021, and 2020 the Company recognized $2,744 and $31,014 in depreciation expense, respectively. The Company depreciated these assets over a period of sixty (60) months which has been deemed their useful life. In January 2016, the Company acquired three vehicles from related parties and assumed the debt secured by the vehicles as described at Note 7 – Notes Payable. Accordingly, the recorded cost of each vehicle is the amount of debt assumed under each related loan, or a total of $277,886.

NOTE 5 – RELATED PARTY NOTE PAYABLE AND RELATED PARTY TRANSACTIONS

For the year ended December 31, 2016, the Company received loans from Charles A. Ross, the Company’s Chief Executive Officer (“CEO”), totaling $221,155. The balance on December 31, 2020 was $4,526. During the nine months ended September 30, 2021, the company received an additional $2,000 and repaid $0 of these loans resulting in a balance on September 30, 2021 of $6,526. These loans are due on demand and carry no interest.

During the year ended December 31, 2018, the Company entered into several convertible debt instruments with stockholdersin the amount of $270,000, for a total of $345,000. Since public trading of the Company’s common stock began in 2018, the Company determined a Beneficial Conversion Discount, which is when the conversion price of a convertible instrument is below the per share fair value of the underlying stock into which it is convertible, of $270,000 applied to the 2018 sales the Convertible Debentures (as defined in Note 8 below). The discount reduced the liability balance of the debentures to $0 when the debentures were issued and recorded the proceeds of the sale as Additional paid in Capital. The discount was amortized over the three-year term of the debentures. During the three months ended September 30, 2021, debentures with a face amount of $205,000 plus accrued interest was converted to equity. The discounted balance of Convertible Debentures as of September 30, 2021 was $0.

During the year ended December 31, 2018, holders of convertible debentures exercised their rights to convert the debt of $2,060,000 and accrued interest of $280,529 to 4,681,058 shares of Common Stock. Of the total amount borrowed under the convertible debt and exercise of warrants, $2,664,787 was loaned to American Rebel, Inc., the Company’s former majority stockholder and now the Company’s wholly owned subsidiary, as a working capital loan to pay its operating expenses including legal, accounting, product development, brand expansion, and marketing costs. This loan is eliminated in consolidation.

During the current year through September 30, 2021, the Company entered into a Bridge Loan Agreement dated April 9, 2021, with Ronald Smith, our Chief Operating Officer. The Bridge Loan Agreement bears 8% interest per annum and matures in 180 days. If the Company fails to raise at least $2,000,000 of additional capital through a capital campaign, then the maturity date shall be extended by thirty-six (36) months. Mr. Smith received 2,000,000 warrants to purchase the same number of shares of common stock of the Company at $0.10 per share with an exercise period of five years.

During the current year through September 30, 2021, our COO, Mr. Smith, advanced $100,000 to our primary manufacturer to purchase raw materials for our products that are being manufactured. $50,000 has been repaid to Mr. Smith with an outstanding balance remaining of $50,000.

During the current year through September 30, 2021, a greater than 5% shareholder of the Company has received 2,740,000 shares of common stock of the Company as interest due on an outstanding note.

Charles A. Ross, Jr. serves as the Company’s CEO. Compensation for Mr. Ross was $61,332 and $110,750, respectively for the nine months ended September 30, 2021, and 2020. Mr. Ross received 6,898,242 shares of common stock of the Company during the current year through September 30, 2021.

Doug Grau serves as the Company’s President. Compensation for Mr. Grau was $70,000 and $70,000, respectively for the nine months ended September 30, 2021, and 2020. Mr. Grau received 6,898,241 shares of common stock of the Company during the current year through September 30, 2021. $43,211 is owed to Mr. Grau by the Company as unpaid expense reimbursements and $132,000 is owed to Mr. Grau in unpaid compensation.

NOTE 6 – NOTES PAYABLE – NON-RELATED PARTIES

Effective January 1, 2016, the Company acquired three vehicles from various related parties in exchange for the assumption of the liabilities related to those vehicles. The liabilities assumed are as follows on September 30, 2021 and December 31, 2020.

SCHEDULE OF NOTES PAYABLE TO NON-RELATED PARTIES

  September 30,  December 31, 
  2021  2020 
  (unaudited)  (audited) 
Loan secured by a tour bus, payable in monthly payments of $2,710 including interest at 12% per annum through September 2020. $12,939  $15,649 
         
Total recorded as current liability $12,939  $15,649 

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

NOTE 7 – NOTES PAYABLE – WORKING CAPITAL

During the nine months ending September 30, 2021, the Company and the Company’s wholly owned operating subsidiarycompleted the sale of additional short-term notesunder similar terms in the additional principal amount totaling $2,169,100. The notes are secured by a pledge of the Company’s assets.These short-term working capital notes mature in 30-360 days. In connection with these notes, the Company issued 600,000 shares of its common stock and 17,333,333 warrants to purchase common stock. The fair value of these share incentives was calculated to be $1,090,696. The fair value of the share incentives was recorded as a discount to the notes payable and the discount was amortized over the term of those agreements to interest expense using the straight-line method that approximates the effective interest method. Interest expense recorded as a result of amortization of discount for the nine months ended September 30, 2021, is $839,434.

F-35

During the nine months ending September 30, 2021, the Company and the Company’s wholly owned operating subsidiary completed the conversion of short-term notes with a face value of $3,166,973 and accrued interest to 248,944 Preferred B Units with a fair value of $2,690,069, resulting in a Loss on Extinguishment of Debt of $725,723.

As of September 30, 2021, and December 31, 2020, the outstanding balance due on the working capital notes was $4,988,633 and $4,672,096, respectively.

NOTE 8 - CONVERTIBLE DEBENTURE – RELATED PARTY

Since September 16, 2016, the Company sold convertible debentures in the amount of $2,405,000 in the form of 12% three-year convertible term notes. Interest is accrued at an annual rate of 12% and is payable in Common Stock at maturity. Both principal and interest may be converted into Common Stock at a price of $0.50 per share after the passage of 181 days. The Company may redeem the debenture at its option or force conversion after Common Stock trades at a price in excess of $1.00 per share for five days. The Holder may force redemption after the Company raises $3 million dollars in equity. The holders of the convertible debentures were issued three-year warrants to purchase 2,405,000 shares of the Company’s Common Stock at $1.00 per share. As of December 31, 2020, the Company received $2,405,000 under this convertible debenture. In April and November 2018, debentures with face value of $2,060,000 plus accrued interest of $280,529 were converted into 4,681,058 shares of Common Stock. As of December 31, 2020, the Company had a face value of $345,000 due under this convertible debenture.

The convertible debenture holder, based on its agreement, with maturities beginning September 16, 2019, has the option to convert their principal and interest into 690,000 (plus 164,424 for accrued interest) shares of Common Stock. The fair value of the embedded beneficial conversion feature resulted in a discount to the convertible debenture – related party of $47,110 at December 31, 2020 and a discount of $2,110 at June 30, 2021.

During the year ended December 31, 2018, the Company sold Convertible Debentures in the amount of $270,000. Since public trading of the Company’s common stock began in 2018, the Company determined a beneficial conversion discount of $270,000 applied to the 2018 sales the Convertible Debentures. The discount reduced the liability balance of the Convertible Debentures to $0 when the Convertible Debentures were issued and recorded the proceeds of the sale as Additional paid in Capital. The discount was amortized over the three-year term of the Convertible Debentures. The discounted balance of the Convertible Debentureson September 30, 2021 was $0.

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

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

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

Fair value was determined by the market price of the Company’s publicly traded stock with no discount allowed. This was determined as of the effective date of the agreement entered convertible debenture - related party. The conversion price was then compared to fair value, determined by market price and the difference between the two multiplied by the number of shares that would be issued upon conversion. Since public trading of the Common Stock began in 2018, market price of the Company’s traded stock has ranged from $0.035 to $2.50 per share.

F-36

As of September 30, 2021, the outstanding balance due the Convertible Debentures holders was $0, including $0in original issue discount or interest. All debentures had been converted.

NOTE 9 – EMBEDDED DERIVATIVES – FINANCIAL INSTRUMENTS

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

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

The fair value of the conversion feature of the financial instrument as of September 30, 2021, was $0. The Company did not record any expense associated with the embedded derivatives at September 30, 2021. NaN embedded derivative expense was realized as there was no change in the conversion price.

NOTE 10 – INCOME TAXES

On September 30, 2021 and December 31, 2020, the Company had a net operating loss carryforward of $25,760,803 and $20,870,713, respectively, which begins to expire in 2034.

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

SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES

  

September 30,

2021
(unaudited)

  

December 31,

2020
(audited)

 
Deferred tax asset:        
Net operating loss carryforward $5,409,769  $4,382,850 
Total deferred tax asset  5,409,769   4,382,850 
Less: Valuation allowance  (5,409,769)  (4,382,850)
Net deferred tax asset $-  $- 

Valuation allowance for deferred tax assets as of September 30, 2021, and December 31, 2020 was $5,409,769 and $4,382,850, respectively. In assessing the recovery of the deferred tax asset, management considers whether it is more likely than not that some portion or the entire deferred tax asset will not be realized. The ultimate realization of the deferred tax asset is dependent upon the generation of future taxable income in the periods in which those temporary differences become deductible. Management considers the scheduled reversals of future deferred tax assets, projected future taxable income, and tax planning strategies in making this assessment. As a result, management determined it was more likely than not deferred tax assets will not be realized as of September 30, 2021, and December 31, 2020, and recognized 100% valuation allowance for each period.

F-37

Reconciliation between the statutory rate and the effective tax rate for both periods and as of December 31, 2020:

SCHEDULE OF EFFECTIVE INCOME TAX RATE RECONCILIATION

Federal statutory rate(21.0)%
State taxes, net of federal benefit(0.0)%
Change in valuation allowance21.0%
Effective tax rate0.0%

NOTE 11 – SHARE CAPITAL

The Company is authorized to issue 600,000,000 shares of its $0.001 par value Common Stock and 10,000,000 shares of its $0.001 par value preferred stock.

Common Stock

On April 9, 2021, in connection with a $1,000,000 bridge loan, the Company issued Ronald A. Smith, our COO and chairman, a warrant to purchase 2,000,000 shares of the Company’s Common Stock at an exercise price of $0.10 per share with a five-year term.

On April 9, 2021, the Company entered into two employment agreements with recently appointed officers, whereby it agreed to issue 8,750,000 shares of Common Stock to such officers. In addition, the Company entered into amendments to the current employment agreements with its Chief Executive Officer and President, whereby it agreed to issue 8,000,000 shares of Common Stock.

On April 20, 2021, the Company issued 150,000 shares of Common Stock in return for services rendered.

On April 22, 2021, the Company entered into a settlement agreement with a current debt holder, whereby the Company agreed to repay the $151,688 balance owing on the note owed to such holder with a cash payment of $50,000 and the issuance of 2,000,000 shares of Common Stock, with a stated value of $100,688.

On June 11, 2021, the Company sold 10,000 units at $7 per unit consisting of 10,000 shares of Series B Preferred Stock and 1,000,000three-year warrants to purchase 1 share of Common Stock per warrant at $0.10 to an accredited investor.

On June 14, 2021, the Company sold 5,000 units at $7 per unit consisting of 5,000 shares of Series B Preferred Stock and 500,000three-year warrants to purchase 1 share of Common Stock per warrant at $0.10 to an accredited investor.

On June 14, 2021, a holder of various outstanding notes converted outstanding principal and interest to 42,658 units at $7 per unit consisting of 42,658 shares of Series B Preferred Stock and 4,265,800three-year warrants to purchase 1 share of Common Stock per warrant at $0.10.

On June 15, 2021, a holder of various outstanding notes converted outstanding principal and interest to 57,143 units at $7 per unit consisting of 57,143 shares of Series B Preferred Stock and 5,714,300three-year warrants to purchase 1 share of Common Stock per warrant at $0.10.

On June 15, 2021, a holder of an outstanding note converted outstanding principal and interest to 75,143 units at $7 per unit consisting of 75,143 shares of Series B Preferred Stock and 7,514,300three-year warrants to purchase 1 share of Common Stock per warrant at $0.10.

On June 18, 2021, the Company sold 28,572 units at $7 per unit consisting of 28,572 shares of Series B Preferred Stock and 2,857,200three-year warrants to purchase 1 share of Common Stock per warrant at $0.10 to an accredited investor.

F-38

On June 21, 2021, a holder of an outstanding note converted a portion of outstanding principal to 50,000 units at $7 per unit consisting of 50,000 shares of Series B Preferred Stock and 5,000,000three-year warrants to purchase 1 share of Common Stock per warrant at $0.10.

On June 28, 2021, the Company sold 5,000 units at $7 per unit consisting of 5,000 shares of Series B Preferred Stock and 500,000three-year warrants to purchase 1 share of Common Stock per warrant at $0.10 to an accredited investor.

On June 29, 2021, a holder of an outstanding note converted outstanding principal and interest to 16,000 units at $7 per unit consisting of 16,000 shares of Series B Preferred Stock and 1,600,000three-year warrants to purchase 1 share of Common Stock per warrant at $0.10.

On June 29, 2021, a holder of an outstanding note converted outstanding principal and interest to 8,000 units at $7 per unit consisting of 8,000 shares of Series B Preferred Stock and 800,000three-year warrants to purchase 1 share of Common Stock per warrant at $0.10.

On June 30, 2021, the Company sold 15,000 units at $7 per unit consisting of 15,000 shares of Series B Preferred Stock and 1,500,000three-year warrants to purchase 1 share of Common Stock per warrant at $0.10 to an accredited investor.

On June 30, 2021, the Company sold 7,143 units at $7 per unit consisting of 7,143 shares of Series B Preferred Stock and 714,300three-year warrants to purchase 1 share of Common Stock per warrant at $0.10 to an accredited investor.

On June 30, 2021 and December 31, 2020, there were 96,027,242 and 72,807,929 shares of Common Stock issued and outstanding, respectively; and 319,659 and 0 shares of Series B preferred stock issued and outstanding, respectively.

On July 21, 2021, the Company issued 1,220,000 shares of common stock as interest payments on an outstanding note.

On July 22, 2021, the Company issued 1,300,000 shares of common stock as a component of a note payable.

On July 26, 2021, the Company filed a Certificate of Designation and Amendment with the Nevada Secretary of State to increase the number of shares constituting the Series B Convertible Preferred Stock from 250,000 to 350,000.

On July 26, 2021, the Company sold 7,500 units at $7 per unit consisting of 7,500 shares of Series B Preferred Stock and 750,000 three-year warrants to purchase 1 share of common stock per warrant at $0.10 to an accredited investor by subscription agreement.

On July 29, 2021, the Company issued 800,000 shares of common stock as a conversion of Series B Preferred Stock.

On July 30, 2021, pursuant to its 2021 Long-Term Incentive Plan, the Company issued 753,242 shares of common stock to Rocco LaVista, our VP of Business Development, for services.

On August 3, 2021, pursuant to its 2021 Long-Term Incentive Plan, the Company issued 753,242 shares of common stock to Charles A. Ross, Jr., our CEO, for services.

On August 4, 2021, pursuant to its 2021 Long-Term Incentive Plan, the Company issued 753,241 shares of common stock to Doug E. Grau, our President, for services.

On August 12, 2021, the Company issued 310,000 shares of common stock as an interest payment on an outstanding note.

On August 18, 2021, the Company issued 4,265,800 shares of common stock as a conversion of Series B Preferred Stock.

On September 3, 2021, the Company issued 34,489 shares of Common Stock as a component of a note.

On September 8, 2021, the Company issued 310,000 shares of common stock as an interest payment on an outstanding note.

On September 21, 2021, the Company issued 100,000 shares of common stock as a component of a note.

On September 21, 2021, the Company issued 500,000 shares of common stock as a component of a note.

On September 30, 2021, the Company issued 125,000 shares of common stock as a component of a note extension.

On September 30, 2021, the Company issued 300,000 shares of common stock as an interest payment on an outstanding note.

On September 30, 2021, the Company issued 2,759,321 shares of common stock as an interest payment on outstanding notes.

On September 30, 2021 and December 31, 2020, there were 120,508,194 and 72,807,929 shares of common stock issued and outstanding, respectively; and 276,501 and 0 shares of Series B preferred stock issued and outstanding, respectively.

NOTE 12 – WARRANTS AND OPTIONS

As of September 30, 2021, there were 55,220,633 warrants issued and outstanding. As of December 31, 2020, there were 3,395,000 warrants outstanding to acquire additional shares of Common Stock.

The Company evaluates outstanding warrants as derivative liabilities and will recognize any changes in the fair value through earnings. The Company determined that the Warrants have an immaterial fair value on September 30, 2021. 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

  September 30, 2021
(unaudited)
  December 31, 2020
(audited)
 
       
Stock Price $.06345  $0.104 
Exercise Price $0.10  $0.26 
Term (expected in years)  3.0   4.73 
Volatility  203.44%  259.2%
Annual Rate of Dividends  0.0%  0.0%
Risk Free Rate  1.55%  0.18%

F-39

Stock Purchase Warrant

The following table summarizes all warrant activity for the year ended December 31, 2020, and the nine months ended September 30, 2021.

SCHEDULE OF WARRANT ACTIVITY

  Shares  Weighted-Average Exercise Price Per Share  Remaining term  Intrinsic value 
             
Outstanding and Exercisable at December 31, 2019  2,420,000  $0.61   

 

.23 years

   - 
Granted  2,550,000  $0.12   4.23 years   - 
Exercised          -   - 
Expired  (1,575,000)  -   -   - 
Outstanding and Exercisable at December 31, 2020  3,395,000  $0.26   

 

4.00 years

   - 
Granted  51,945,633  $0.10   2.04 years-   - 
Exercised  -   -   -   - 
Expired  (120,000)  -   -   - 
Outstanding and Exercisable on September 30, 2021  55,220,633   

 

$0.11

   

 

1.92 years

   - 

NOTE 13 – COMMITMENTS AND CONTINGENCIES

Rental Payments under Non-cancellable Operating Leases

The Company has a lease for a sales office and showroom in Lenexa, Kansas which expires in January 2026, and an annually renewable lease for manufacturing and warehouse space in Chanute, Kansas. The following is a schedule, by year, of the future minimum rental payments under the lease:

SCHEDULE OF FUTURE MINIMUM RENTAL PAYMENTS FOR OPERATING LEASE

Year ended December 31,   
    
2021  158,029 
2022  72,638 
2023  74,112 
2024  75,362 
2025  76,390 
Subsequent  19,162 
Total $475,693 

Rent costs totaled approximately $138,271 and $106,086 for nine-month periods ended September 30, 2021, and 2020, respectively.

F-40

NOTE 14 – SUBSEQUENT EVENTS

The Company evaluated all events that occurred after the balance sheet date of September 30, 2021, through the date the financial statements were issued and determined that there were the following subsequent events:

On October 25, 2021, the Company issued 1,071,429 shares of Common stock and 1,071,429 three-year warrants to purchase Common stock for $0.10 for an investment of $75,000 to an accredited investor.

On October 29, 2021, the Company issued 1,180,000 shares of common stock as an interest payment on an outstanding note.

On October 29, 2021, pursuant to its 2021 Long-Term Incentive Plan, the Company issued 500,000 shares of common stock to a financial consultant of the Company for services.

On October 29, 2021, pursuant to its 2021 Long-Term Incentive Plan, the Company issued 500,000 shares of common stock to a legal consultant of the Company for services.

On October 29, 2021, pursuant to its 2021 Long-Term Incentive Plan, the Company issued 500,000 shares of common stock to a consultant of the Company for services.

On February 3, 2022, multiple Series B Convertible Preferred shareholders converted 201,358 shares of Series B Convertible Preferred Stock to 20,135,800 shares of Common Stock of the Company.

On February 3, 2022, the Company converted two outstanding notes into 522,309 shares of Common Stock of the Company to be issued after the effective date of the registration statement of which this prospectus forms a part but prior to the closing of the offering.

F-41

_______ Units

Each Unit Consisting of One Share of Common Stock and

One Warrant to Purchase Common Stock

PROSPECTUS

Sole Book-Running Manager

EF HUTTON

division of Benchmark Investments, LLC

____, 2022

Until ____, 2022 (25 days after the date of this prospectus), all dealers that buy, sell or trade our Class A Common Stock, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers’ obligation to deliver a prospectus when acting as underwriters and with respect to its unsold allotments or subscriptions.

You should rely only on the information contained in this prospectus. We have not, and the underwriters have not, authorized anyone to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. We are not, and the underwriters are not, making an offer to sell securities in any jurisdiction where the offer or sale is not permitted. You should not assume that the information contained in this prospectus is accurate as of any date other than the date on the front of this prospectus.

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 13. Other Expenses of Issuance and Distribution.

The following is an estimate of the expenses (all of which are to be paid by the Company) that we may incur in connection with the securities being registered hereby.

Offering Expenses    
SEC registration fee $

2,215

 
FINRA filing fee $

3,500

 
Legal fees and expenses $350,000 
Accounting fees and expenses $35,000 
Total $392,044 

Item 14. Indemnification of Directors and Officers.

The Nevada Revised Statutes limits or eliminates the personal liability of directors to corporations and their stockholders for monetary damages for breaches of directors’ fiduciary duties as directors. Our Amended and Restated Bylaws include provisions that require the company to indemnify our directors or officers against monetary damages for actions taken as a director or officer of our Company. We are also expressly authorized to carry directors’ and officers’ insurance to protect our directors, officers, employees and agents for certain liabilities. Our Second Amended and Restated Articles of Incorporation do not contain any limiting language regarding director immunity from liability.

The limitation of liability and indemnification provisions under the Nevada Revise Statutes and our Amended and Restated Bylaws may discourage stockholders from bringing a lawsuit against directors for breach of their fiduciary duties. These provisions may also have the effect of reducing the likelihood of derivative litigation against directors and officers, even though such an action, if successful, might otherwise benefit us and our stockholders. However, these provisions do not limit or eliminate our rights, or those of any stockholder, to seek non-monetary relief such as injunction or rescission in the event of a breach of a director’s fiduciary duties. Moreover, the provisions do not alter the liability of directors under the federal securities laws. In addition, your investment may be adversely affected to the extent that, in a class action or direct suit, we pay the costs of settlement and damage awards against directors and officers pursuant to these indemnification provisions.

Item 15. Recent Sales of Unregistered Securities.

The following information relates to all securities issued or sold by us within the past three years and not registered under the Securities Act of 1933, as amended (the “Securities Act”) These issuances do not reflect the 1-for-80 reverse stock split we expect to effect immediately following the effective date but prior to the closing of the offering.

II-1

In July, 2019, the Company issued a three-year warrant to purchase 250,000 shares of common stock at a price of $0.01 per share in conjunction with working capital loans. 

On July 11, 2019, the Company issued 200,000 shares of common stock to two consultants in payment of consulting fees.

On August 27, 2019, the Company issued 500,000 shares of common stock as interest on an outstanding promissory note.

In September, 2019, the Company issued three-year warrants to purchase 50,000 shares of the Company’s common stock at $1.00 per share in conjunction with working capital loans totaling $51,875.

On September 4, 2019, the Company issued 500,000 shares of common stock in conjunction with a note payable.

On October 3, 2019, the Company issued 850,000 shares of common stock to two consultants in payment of consulting fees.

On October 10, 2019, the Company issued 500,000 shares of common stock in payment of consulting fees.

On October 10, 2019, the Company issued 800,000 shares of common stock in connection with five promissory notes.

On October 11, 2019, the Company issued 6,625,000 shares of common stock as compensation to key personnel including officers, directors and service providers.

On October 17, 2019, the Company issued 1,125,000 shares of common stock for professional and consulting services and as consideration for an outstanding promissory note.

On November 12, 2019, the Company issued 150,000 shares of common stock in connection with two promissory notes.

On November 12, 2019, the Company sold 1,500,000 shares of common stock for $450,000 to an accredited investor.

On February 12, 2020, the Company issued 1,200,000 shares of its common stock to two consultants in payment of consulting fees.

On February 18, 2020, the Company issued a one-year convertible promissory note to a lender at an annual interest rate of 7.5%. A component of the note included the issuance of 125,000 shares of common stock, valued at $0.10 per share.

On March 18, 2020, the Company issued 42,000 shares of common stock in connection with a promissory note.

On April 10, 2020, the Company issued 199,000 shares of common stock in connection with a promissory note.

On May 7, 2020, the Company issued 300,000 shares of common stock in connection with a promissory note.

On May 26, 2020, the Company issued 200,000 shares of common stock as a component of a consulting agreement.

On June 4, 2020, the Company issued 300,000 shares of common stock in connection with a promissory note.

On June 10, 2020, the Company issued 10,000 shares of common stock in connection with a promissory note.

On July 1, 2020, the Company sold 1,500,000 shares of common stock for $100,000 to an accredited investor.

On July 6, 2020, the Company issued 300,000 shares of common stock in connection with a promissory note.

On July 6, 2020, the Company issued 600,000 shares of common stock as a component of a promissory note.

II-2

On July 9, 2020, the Company issued 4,000,000 shares of common stock upon the conversion of two promissory notes totaling $400,000 including accrued interest.

On July 10, 2020, the Company sold 3,000,000 shares of common stock for $225,000 to two accredited investors.

On July 27, 2020, the Company sold 1,050,000 shares of common stock for $105,000 to two accredited investors.

On July 27, 2020, the Company issued 250,000 shares of common stock in connection with a promissory note.

On July 29, 2020, the Company sold 2,000,000 shares of common stock for $100,000 to an accredited investor.

On July 29, 2020, the Company issued 5,750,000 shares of common stock in connection with four promissory note holders.

On July 29, 2020, the Company entered into an amortized one-year promissory note with Labrys Fund for $150,000 at 12% interest. A component of the note included the issuance of 230,769 shares of common stock valued at $0.065. Additionally, the Company issued 1,153,846 shares of common stock to Labrys, valued at $0.065. On September 29, 2020, 1,153,846 shares of common stock were returned to the Company for cancellation.

On August 3, 2020, the Company entered into an amortized one-year promissory note with EMA Financial for $150,000 at 12% interest. A component of the note included the issuance of 230,769 shares of common stock valued at $0.065. Additionally, the Company issued 1,153,846 shares of common stock to EMA, valued at $0.065. Upon full repayment of the loan, 1,153,846 shares of common stock will be returned to the Company.

On August 5, 2020, the Company issued 310,000 shares of common stock in connection with a promissory note.

On September 8, 2020, the Company issued 310,000 shares of common stock in connection with a promissory note.

On September 29, 2020, the Company entered into an amortized one-year promissory note with Labrys Fund for $350,000 at 12% interest. A stipulation of this promissory note was that the Company repay the July 31, 2020, $150,000 promissory note. A component of the note included 1,458,333 shares of common stock valued at $0.035. Additionally, the Company issued 1,605,475 shares of common stock to Labrys, valued at $0.035. Upon full repayment of the loan, 1,605,475 shares will be returned to the Company.

On October 13, 2020, the Company issued 300,000 shares of common stock in connection with a promissory note.

On November 5, 2020, the Company issued 310,000 shares of common stock in connection with a promissory note.

On November 25, 2020, the Company issued 4,000,000 shares of common stock as components of three promissory notes.

On November 25, 2020, the Company issued 1,500,000 shares of common stock for consulting services.

On December 4, 2020, the Company issued 300,000 shares of common stock in connection with a promissory note.

On January 1, 2021, under the terms of an employment agreement, the Company issued Charles A. Ross, Jr., its chief executive officer, 50,000 shares of Series A - Super Voting Convertible Preferred Stock, which contain voting rights of 1,000-to-1.

On January 1, 2021, under the terms of an employment agreement, the Company issued Doug Grau, its president, 50,000 shares of Series A - Super Voting Convertible Preferred Stock, which contain voting rights of 1,000-to-1.

On January 5, 2021, the Company issued 310,000 shares of common stock valued at $0.06 per share as an interest payment on an outstanding note.

On March 10, 2021, the Company issued 319,313 shares of common stock valued at $0.06 per share as payment for services rendered.

II-3

On March 10, 2021, the Company issued 280,000 shares of common stock valued at $0.06 per share as an interest payment on an outstanding note.

On March 10, 2021, the Company issued 310,000 shares of common stock valued at $0.06 per share as an interest payment on an outstanding note.

On April 6, 2021, the Company sold 600,000 shares of common stock for $50,000 to Rocco LaVista, a newly appointed officer.

On April 6, 2021, the Company issued 2,500,000 shares of common stock on behalf of Gurkha Consulting, to Rocco LaVista, its controlling member and the Company’s newly appointed VP of Business Development, as consideration of the termination of such consultant’s services and to relieve the Company from certain ongoing compensation commitments.

On April 6, 2021, the Company issued 500,000 shares of common stock for consulting services.

On April 9, 2021, in connection with a $1,000,000 bridge loan, the Company issued Ronald A. Smith, its COO, a warrant to purchase 2,000,000 shares of the Company’s common stock at an exercise price of $0.10 per share with a five-year term.

On April 19, 2021, the Company issued 150,000 shares of common stock valued at $0.06 per share as payment for services rendered.

On April 26, 2021, the Company issued 2,000,000 shares of common stock, with a stated value of $100,687.97, as part of the settlement of a secured note.

On June 11, 2021, the Company sold 10,000 units at $7 per unit consisting of 10,000 shares of Series B Preferred Stock and 1,000,000 three-year warrants to purchase 1 share of common stock per warrant at $0.10 to an accredited investor.

On June 11, 2021, the Company sold 5,000 units at $7 per unit consisting of 5,000 shares of Series B Preferred Stock and 500,000 three-year warrants to purchase 1 share of common stock per warrant at $0.10 to an accredited investor.

On June 14, 2021, a holder of various outstanding notes converted outstanding principal and interest to 42,658 units at $7 per unit consisting of 42,658 shares of Series B Preferred Stock and 4,265,800 three-year warrants to purchase 1 share of common stock per warrant at $0.10.

On June 15, 2021, a holder of various outstanding notes converted outstanding principal and interest to 57,143 units at $7 per unit consisting of 57,143 shares of Series B Preferred Stock and 5,714,300 three-year warrants to purchase 1 share of common stock per warrant at $0.10.

On June 15, 2021, a holder of an outstanding note converted outstanding principal and interest to 75,143 units at $7 per unit consisting of 75,143 shares of Series B Preferred Stock and 7,514,300 three-year warrants to purchase 1 share of common stock per warrant at $0.10.

On June 18, 2021, the Company sold 28,572 units at $7 per unit consisting of 28,572 shares of Series B Preferred Stock and 2,857,200 three-year warrants to purchase 1 share of common stock per warrant at $0.10 to an accredited investor.

On June 21, 2021, the Company sold 15,000 units at $7 per unit consisting of 15,000 shares of Series B Preferred Stock and 1,500,000 three-year warrants to purchase 1 share of common stock per warrant at $0.10 to an accredited investor.

On June 21, 2021, a holder of an outstanding note converted a portion of outstanding principal to 50,000 units at $7 per unit consisting of 50,000 shares of Series B Preferred Stock and 5,000,000 three-year warrants to purchase 1 share of common stock per warrant at $0.10.

On June 25, 2021, the Company sold 5,000 units at $7 per unit consisting of 5,000 shares of Series B Preferred Stock and 500,000 three-year warrants to purchase 1 share of common stock per warrant at $0.10 to an accredited investor.

II-4

On June 29, 2021, a holder of an outstanding note converted outstanding principal and interest to 16,000 units at $7 per unit consisting of 16,000 shares of Series B Preferred Stock and 1,600,000 three-year warrants to purchase 1 share of common stock per warrant at $0.10.

On June 29, 2021, a holder of an outstanding note converted outstanding principal and interest to 8,000 units at $7 per unit consisting of 8,000 shares of Series B Preferred Stock and 800,000 three-year warrants to purchase 1 share of common stock per warrant at $0.10.

On June 30, 2021, the Company sold 7,143 units at $7 per unit consisting of 7,143 shares of Series B Preferred Stock and 714,300 three-year warrants to purchase 1 share of common stock per warrant at $0.10 to an accredited investor.

On July 18, 2021, the Company sold 7,500 units at $7 per unit consisting of 7,500 shares of Series B Preferred Stock and 750,000 three-year warrants to purchase 1 share of common stock per warrant at $0.10 to an accredited investor by subscription agreement.

On July 21, 2021, the Company issued 1,220,000 shares of common stock valued at $0.06 per share as an interest payment on outstanding notes.

On July 22, 2021, the Company issued 1,300,000 shares of common stock valued at $0.06 per share as a component of a note payable.

On July 26, 2021, the Company filed a Certificate of Designation and Amendment with the Nevada Secretary of State to increase the number of shares constituting the Series B Convertible Preferred Stock from 250,000 to 350,000.

On July 29, 2021, the Company issued 4,000,000 shares of common stock to Rocco LaVista, its VP of Business Development, pursuant to his April 9, 2021 employment agreement.

On July 29, 2021, the Company issued 800,000 shares of common stock for consulting services.

On July 29, 2021, the Company issued 4,750,000 shares of common stock to Ronald A. Smith, its COO, pursuant to his April 9, 2021 employment agreement.

On July 30, 2021, pursuant to the Company’s 2021 Long-Term Incentive Plan, the Company issued 753,242 shares of common stock to Rocco LaVista, its VP of Business Development, for services.

On August 3, 2021, the Company issued 4,000,000 shares of common stock to Charles A. Ross, Jr., the Company’s Chief Executive Officer, pursuant to his amended employment agreement dated April 9, 2021.

On August 3, 2021, pursuant to the Company’s 2021 Long-Term Incentive Plan, the Company issued 2,298,242 shares of common stock to Charles A. Ross, Jr., the Company’s Chief Executive Officer, for services.

On August 4, 2021, the Company issued 6,898,241 shares of common stock to Doug Grau, the Company’s President. 4,000,000 shares of common stock were issued pursuant to his amended employment agreement dated April 9, 2021, with the remaining 2,898,241 shares of common stock issued pursuant to the Company’s 2021 Long-Term Incentive Plan.

On August 12, 2021, the Company issued 310,000 shares of common stock valued at $0.06 per share as an interest payment on an outstanding note. 

On August 18, 2021, the Company issued 4,265,800 shares of common stock pursuant to the conversion of 42,658 shares of Series B Preferred Stock.

II-5

On September 8, 2021, the Company issued 310,000 shares of common stock as an interest payment on an outstanding note.

On September 21, 2021, the Company issued 600,000 shares of common stock as a component of two notes.

On October 8, 2021, the Company issued 425,000 shares of common stock as a component of two notes.

On October 25, 2021, the Company sold 1,071,429 units at $0.07 per unit to an accredited investor by subscription agreement. The units consisted of 1,071,429 shares of common stock and 1,071,429 three-year warrants to purchase 1 share of common stock per warrant at $0.10.

On October 29, 2021, the Company issued 1,180,000 shares of common stock as an interest payment on an outstanding note.

On October 29, 2021, pursuant to the Company’s 2021 Long-Term Incentive Plan, the Company issued 500,000 shares of common stock to DeMint Law, PLLC for professional services.

On October 29, 2021, pursuant to the Company’s 2021 Long-Term Incentive Plan, the Company issued 500,000 shares of common stock to John Garrison, the Company’s proposed chief financial officer and current financial consultant, for services.

On December 2, 2021, pursuant to the Company’s 2021 Long-Term Incentive Plan, the Company issued 500,000 shares of common stock to Corey Lambrecht, a director of the Company, for services.

On December 2, 2021, the Company issued 3,406,617 shares of common stock upon the conversion of certain outstanding promissory notes.

On December 2, 2021, the Company issued 3,530,000 shares of common stock as an interest payment on four promissory notes.

On December 2, 2021, the Company issued 2,500,000 shares of common stock sold to an accredited investor at $0.06 per share.

On December 2, 2021, the Company issued 100,000 shares of common stock to a consultant for services.

On December 2, 2021, the Company issued 34,489 shares of common stock as a component of a promissory note.

On December 2, 2021, the Company issued 70,000 shares of common stock sold to an accredited investor at $0.10 per share.

All of the above-described issuances were exempt from registration pursuant to Section 4(a)(2) and/or Regulation D of the Securities Act as transactions not involving a public offering. With respect to each transaction listed above, no general solicitation was made by either the Company or any person acting on its behalf. All such securities issued pursuant to such exemptions are restricted securities as defined in Rule 144(a)(3) promulgated under the Securities Act, appropriate legends have been placed on the documents evidencing the securities, and may not be offered or sold absent registration or pursuant to an exemption there from.

Item 16. Exhibits and Financial Statements.

The list of exhibits in the Index to Exhibits to this registration statement is incorporated herein by reference.

II-6

EXHIBIT INDEX

Exhibit   Incorporated by Reference 

Filed or

Furnished

No.

 Exhibit Description 

Form

 Date Number Herewith
           
1.1 Underwriting Agreement S-1/A 1/27/22 1.1 
2.1 Stock Purchase Agreement, dated June 8, 2016, by and among CubeScape, Inc., American Rebel, Inc., and certain individual named therein. 8-K 6/9/16 2.1 
3.1 Articles of Incorporation, as amended  S-1/A  1/18/22  3.1 
3.3 Certificate of Designation of Series B Convertible Preferred Stock 8-K 6/3/21 4.1 
3.4 Certificate of Designation of Series A Convertible Preferred Stock 8-K 2/24/20 4.1 
3.5 Bylaws, as amended        
3.6 

Amended Certificate of Designation of Series B Preferred Stock

 

8-K

 

7/28/21

 

4.1

  
4.1 Form of Warrant Agency Agreement with Action Stock Transfer S-1/A 1/27/22 4.1 
4.2 Form of Representative’s Warrant S-1/A   1/18/22  4.2 
4.3 Conversion of 18,964 shares of Series B Preferred Stock to 1,896,400 shares of common stock dated August 5, 2021. 10-Q 11/15/21 4.4  
4.4 Conversion of 42,658 shares of Series B Preferred Stock to 4,265,800 shares of Common Stock dated August 18, 2021. 10-Q 11/15/21 4.5  
4.5 6% Original Issued Discount Senior Secured Convertible Promissory Note, dated September 29, 2021, issued to Cavalry Fund I, L.P. (Incorporated by reference to Exhibit 4.1 to Form 8-K filed on October 5, 2021) 10-Q 11/15/21 4.10  
4.6 Conversion of $25,000 Convertible Debenture to 503,797 shares of common stock dated September 30, 2021. 10-Q 11/15/21 4.11  
4.7 Conversion of $25,000 Convertible Debenture to 503,797 shares of common stock dated September 30, 2021. 10-Q 11/15/21 4.12  
4.8 Conversion of $25,000 Convertible Debenture to 502,623 shares of common stock dated September 30, 2021. 10-Q 11/15/21 4.13  
5.1 Opinion of Lucosky Brookman LLP  S-1/A  1/18/22  5.1 
10.1 Securities Purchase Agreement by and among American Rebel Holdings, Inc., and Cavalry Fund I, L.P. 8-K  10/05/21   10.1  
10.2 Promissory Note, dated September 13, 2021, by and between the Company and Ronald Smith (substituting Convertible Promissory Note, dated March 26, 2020, and Promissory Note, dated March 26, 2020, by and between the Company and Ronald Smith) S-1 

11/01/21

 10.2  
10.3 Secured Loan, dated April 9, 2021, by and between the Company and Ronald Smith. 10-K 5/17/2021 10.39  
10.4 Secured Term Loan Agreement, dated October 13, 2020, by and between the Company and Millennium Trust Co., LLC Custodian FBO Anthony Bombacie Jr. Traditional IRA. 10-Q 11/16/2020 4.12  
10.5 Forbearance Agreement, dated March 31, 2021, by and between the Company and Corey Royer. 10-K 5/17/2021 10.38 
10.6 Convertible Promissory Note, dated August 3, 2020, by and between the Company and EMA Financial, LLC 10-Q 08/14/2020 10.26 
10.7 Promissory Note, dated September 13, 2021, by and between the Company and Erick Thompson (substituting Term Loan Agreement, dated September 10, 2020, by and between the Company and Erick Thompson). 

S-1

 

11/01/21

 

10.7

  
10.8 Settlement Agreement of Secured Promissory Note dated March 10, 2020, dated June 22, 2021, by and between the Company and Greg Burbelo. 

S-1

 

11/01/21

 

10.8

  
10.9 Amendment to Promissory Note dated August 22, 2019, dated October 27, 2021, by and between the Company and Horberg Enterprises, L.P. S-1 11/01/21 10.9  
10.10 Secured Promissory Note, dated April 18, 2021, by and between the Company and Harvey M. Burnstein. 10-K 5/17/21 10.44  

10.11

 

Promissory Note, dated September 3, 2021, by and between the Company and Tomahawk Road, LLC.

 S-1 11/01/21 10.11  
10.12 Promissory Note, dated September 17, 2021, by and between the Company and Christopher Zabel. S-1 11/01/21 10.12  
10.13 Secured Promissory Note, dated January 6, 2021, by and between the Company and Kylie Zabel. 10-K 5/17/21 10.36  
10.14 2021 Long-Term Stock Incentive Plan. 8-K 1/1/2021 10.3  
10.15 Employment Agreement between the Company and Charles A. Ross, dated January 1, 2021. 8-K 

1/1/2021

 10.1  
10.16 Employment Agreement between the Company and Doug E. Grau, dated January 1, 2021. 8-K 

1/1/2021

 10.2  
10.17 Memorandum of Understanding, dated December 6, 2021, by and between the Company and Ronald A. Smith. 

S-1/A

 

12/15/2021

 10.17 
14.1 Code of Ethics  S-1/A  1/18/22 14.1 
21.1 List of Subsidiaries  S-1/A  1/18/22 

21.1

 
23.1 Consent of BF Borgers CPA, P.C.   

 Filed

24 Power of Attorney S-1/A 11/15/2021 24.1 
99.1 Consent of Director Nominee of American Rebel Holdings, Inc. S-1/A 12/15/2021 99.1 
99.2 Consent of Director Nominee of American Rebel Holdings, Inc. S-1/A 12/15/2021 99.2 

101.INS

 XBRL Instance Document       

Filed

101.SCH

 XBRL Taxonomy Extension Schema Document       

Filed

101.CAL

 XBRL Taxonomy Extension Calculation Linkbase Document       

Filed

101.DEF XBRL Taxonomy Extension Definition Linkbase Document       

Filed

101.LAB XBRL Taxonomy Extension Label Linkbase Document       

Filed

101.PRE XBRL Taxonomy Extension Presentation Linkbase Document       

Filed

107 Filing Fee Table       Filed

*Management contract or compensatory plan or arrangement.

+Certain schedules, appendices and exhibits to this agreement have been omitted in accordance with Item 601(a)(5) of Regulation S-K. A copy of any omitted schedule and/or exhibit will be furnished supplemental to the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Company of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any such action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.


ITEM 15

RECENT SALES OF UNREGISTERED SECURITIES


During the three years preceding the filing of this Form S-1, the Company issued the following securities without registration under the Securities Act on the terms and circumstances described below.


Of the 9,000,000 outstanding shares, 6,000,000 were issued to Mr. Estus, the Company’s founder, and CEOstaff upon our incorporation in Nevada in December 2014 in exchange for organizational services rendered upon incorporation. On January 15, 2015, the Company issued 3,000,000 shares of its common stock to Mr. Estus, as consideration for certain tangible and intangible assets.


The foregoing issuances of securities were affected in reliance upon the exemption from registration provided by section 4(2) under the Securities Act of 1933, (the “Act”) as amended on the basis that the securities were offered and sold in a non-public offering to a "sophisticated investor" who had access to registration-type information about the Company. No commission was paid in connection with the sale of any securities and no general solicitations were made to any person.



II-1






Notwithstanding being accredited all of our security holders were provided with a final pre-filing copy of the Company’s Registration Statement and acknowledged having read and reviewed same and having no further questions with respect to their respective investments.


ITEM 16

EXHIBITS


request.

3.1 *

Articles of Incorporation

3.2 *

Bylaws – CubeScape, Inc.

5.1

Opinion of Krueger LLP

14.1 *

Code of Ethics

23.1

Consent of PLS CPA, a professional corp.

23.2

Consent of Krueger LLP (included in Exhibit 5.1a)

99.1 *

Copy of Subscription Agreement

99.2 *

Escrow Agreement


* Filed with initial filing on Form S-1, August 4, 2015.


Exhibits are not part of the prospectus and will not be distributed with the prospectus.


ITEM 17

UNDERTAKINGS


Item 17. Undertakings.

(a)The undersigned registrant hereby undertakes:


1.
(1)To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:


 i.
(i)To include any prospectus required by section 10(a)(3) of the Securities Act of 1933;Act.

II-7


 ii.
(ii)To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the CommissionSEC pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering price set forth in the "Calculation“Calculation of Registration Fee"Fee” table in the effective registration statement.


 iii.
(iii)To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;statement.


(iv)Provided, however, that:


 A. Paragraphsthat paragraphs (a)(1)(i), (ii), and (a)(1)(ii)(iii) of this section do not apply if the registration statement is on Form S-8, and the information required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the CommissionSEC by the registrant pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement; andstatement.


 B. Paragraphs (a)(1)(i), (a)(1)(ii) and (a)(1)(iii) of this section do not apply if the registration statement is on Form S-3 or Form F-3 and the information required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the Commission by the registrant pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement, or is contained in a form of prospectus filed pursuant to Rule 424(b) that is part of the registration statement.


2.
(2)That, for the purpose of determining any liability under the Securities Act, of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.



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3.
(3)To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.


4. If the registrant is a foreign private issuer, to file a post-effective amendment to the registration statement to include any financial statements required by Item 8.A. of Form 20-F at the start of any delayed offering or throughout a continuous offering. Financial statements and information otherwise required by Section 10(a)(3) of the Act need not be furnished, PROVIDED that the registrant includes in the prospectus, by means of a post-effective amendment, financial statements required pursuant to this paragraph (a)
(4) and other information necessary to ensure that all other information in the prospectus is at least as current as the date of those financial statements. Notwithstanding the foregoing, with respect to registration statements on Form F-3, a post-effective amendment need not be filed to include financial statements and information required by Section 10(a)(3) of the Act or Rule 3-19 of this chapter if such financial statements and information are contained in periodic reports filed with or furnished to the Commission by the registrant pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the Form F-3.


5.

That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser:


 i. If the registrant is relying on Rule 430B (§230.430B of this chapter):


 A. Each prospectus filed by the registrant pursuant to Rule 424(b)(3)shall be deemed to be part of the registration statement as of the date the filed prospectus was deemed part of and included in the registration statement; and


 B. Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of providing the information required by section 10(a) of the Securities Act of 1933 shall be deemed to be part of and included in the registration statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement to which that prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser, with a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date; or


 ii. If the registrant is subject to Rule 430C, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.


6.
(5)That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities: Thesecurities the undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:


 i.
(i)Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;


 ii.
(ii)Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;


 iii.
(iii)The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and

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 iv.
(iv)Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.



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Insofar
(b)That, insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange CommissionSEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.


(c)The undersigned registrant hereby undertakes:



SIGNATURES


Pursuant to
(1)That, for the requirementspurpose of determining any liability under the Securities Act, each post-effective amendment that contains a form of 1933,prospectus shall be deemed to be a new registration statement relating to the registrant has duly causedsecurities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(2)That, for purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part of this registration statement to be signed on its behalfin reliance upon Rule 430A and contained in a form of prospectus filed by the undersigned, thereunto duly authorized, in the city of Encinitas (of which Cardiff-by-the-Sea is a part of), State of California on the 25th day of September, 2015.


CUBESCAPE, INC.


/s/ David Estus

By: David Estus, President, CEO, Principal Executive Officer, Treasurer, Chairman, CFO, Principal Financial Officer and Principal Accounting Officer



Pursuantregistrant pursuant to the requirements ofRule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of 1933, this Registration Statement has been signed below byregistration statement as of the time it was declared effective.

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Nashville, Tennessee on February 3, 2022.

American Rebel Holdings, Inc.
By:/s/ Charles A. Ross, Jr.
Charles A. Ross, Jr.
Chief Executive Officer

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.

SignatureTitleDate
/s/ Charles A. Ross, Jr.Chief Executive Officer, Chief Financial Officer, Chief Accounting Officer and on the date indicated.

Director



Signature(s)

Title(s)

Date


/s/ David Estus


September 25, 2015

By: David Estus

CEO

President, CEO, Principal Executive Officer, Treasurer, Chairman, CFO, Principal Financial Officer and Principal Accounting Officer

February 3, 2022

Charles A. Ross, Jr.(Principal Executive Officer and Principal Financial Officer)
/s/ Doug E. GrauPresident and Director


February 3, 2022


Doug E. Grau(Principal Accounting Officer)
*Chief Operating OfficerFebruary 3, 2022
Ronald A. Smith
*DirectorFebruary 3, 2022
Corey Lambrecht


* By:/s/ Charles A. Ross, Jr.
Charles A. Ross, Jr., Attorney-In-Fact

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