American Rebel Holdings Inc. (NASDAQ:AREB), a manufacturer of safes and security products, disclosed today that it has been named in a lawsuit filed by competitor Liberty Safe and Security Products, Inc. The lawsuit, which was filed on Monday, July 23, 2024, in the U.S. District Court for the District of Utah, alleges that American Rebel and its subsidiary, Champion Safe Company, Inc., have infringed upon Liberty's trademarks.
The complaint specifically accuses American Rebel of trademark infringement through the use of the term "Freedom" in the marketing and sales of their safe products. Additional allegations include federal false designation of origin and unfair competition, violation of Utah deceptive trade practices, and Utah unfair competition. Liberty is seeking damages for the alleged infringement and unfair business practices.
However, the company acknowledged that the costs associated with defending the lawsuit and any potential liability arising from the claims could materially impact its business, financial condition, or operational results.
American Rebel's stock, which is listed on The Nasdaq Stock Market under the ticker AREB, and its common stock purchase warrants, listed as AREBW, could potentially be affected by the outcome of this legal matter. The company, headquartered in Brentwood, Tennessee, was previously known as Cubescape Inc. until a name change in 2015.
In other recent news, American Rebel Holdings Inc. has been making significant strides in the beverage industry. The company secured a $400,000 loan from board director Lawrence Sinks to support the operations of its subsidiary, American Rebel Beverages, LLC. This funding is expected to contribute to the company's ongoing expansion efforts.
American Rebel also held its annual meeting of stockholders, during which they elected five directors and confirmed the appointment of GBQ Partners LLC as the company's independent auditors. The company has also seen internal changes with the appointment of Thomas Mihalek as the CEO of its subsidiary, Champion Safe Co.
Another recent development includes the company securing distribution licenses for its American Rebel Beer in Connecticut, Kansas, and Tennessee. The partnerships with Dichello Distributors, Standard Beverage Corporation, and Best Brands, Inc. respectively, are expected to increase the availability of the beer in these states.
The company also initiated a Reg A+ offering, inviting investors to participate in the company's growth. However, the company has cautioned that such investment carries significant risks and potential illiquidity. As always, these recent developments are based on press release statements from American Rebel Holdings Inc.
InvestingPro Insights
In light of the recent lawsuit filed against American Rebel Holdings Inc. (NASDAQ:AREB), investors may be weighing the potential impact on the company's financial health and stock performance. According to real-time data from InvestingPro, American Rebel has a market capitalization of just $4.23 million, highlighting its status as a micro-cap company, which often faces higher volatility and risk. Additionally, the company's revenue growth over the last twelve months stands at 24.98%, suggesting some level of business expansion despite the legal challenges.
However, the financial metrics also reveal some concerns. The company's gross profit margin is relatively low at 14.28%, and it has been operating at a significant loss, with an operating income margin of -62.99% for the same period. This is in line with the InvestingPro Tips that point out the company's significant debt burden and the difficulty in making interest payments on that debt. Moreover, the company has been quickly burning through cash and has not been profitable over the last twelve months. These factors may give investors pause, considering the additional financial strain that a lawsuit could represent.
On a more positive note, the stock has experienced a strong return over the last three months, with a 103.61% increase, and analysts predict that the company will be profitable this year, which could signal a turnaround if the legal issues are resolved favorably. For those considering investing in American Rebel, it's worth noting that there are 16 additional InvestingPro Tips available, which can provide further insights into the company's performance and outlook. Interested investors can access these tips and more detailed metrics by visiting InvestingPro and can take advantage of a special offer using the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription.
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