As filed with the Securities and Exchange Commission on February 5,16, 2021
Registration No.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
AMMO, INC.
(Exact name of registrant as specified in its charter)
| Delaware | 83-1950534 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) |
7681 East Gray Road
Scottsdale, Arizona 85260
(480) 947-0001
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)
Fred W. Wagenhals
President and Chief Executive Officer
7681 East Gray Road
Scottsdale, Arizona 85260
(480) 947-0001
(Address, including zip code, and telephone number, including area code, of agent for service)
Copies to:
Joseph M. Lucosky, Esq.
Steven A. Lipstein, Esq.
Lucosky Brookman LLP
101 Wood Avenue South, 5th Floor
Woodbridge, NJ 08830
(732) 395-4400
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time to time after the effective date of this registration statement.
If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. [ ]
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, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. [X]
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 registration statement pursuant to General Instruction I.D. or a post-effective amendment thereto that shall become effective on filing with the Commission pursuant to Rule 462(e) under the Securities Act, check the following box. [ ]
If this Form is a post-effective amendment to a registration statement filed pursuant to General Instruction I.D. filed to register additional securities or additional classes of securities pursuant to Rule 413(b) under the Securities Act, check the following box. [ ]
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 Exchange Act. (Check one):
| Large accelerated filer | [ ] | Accelerated filer | [ ] | |
| Non-accelerated filer | [X] | Smaller reporting company | [X] | |
| Emerging growth company | [ ] |
CALCULATION OF REGISTRATION FEE
| Title of Each Class of Securities to be Registered | Amount of Shares to be Registered (1) | Proposed Maximum Offering Price per Share (2) | Proposed Maximum Aggregate Offering Price | Amount of Registration Fee | ||||||||||||
| Common Stock, par value $0.001 per share | 2,309,557 | $ | 5.32 | $ | 12,286,843.24 | $ | 1,340.49 | |||||||||
| Common Stock, $0.001 par value per share, issuable upon exercise of the January 2020 Investor Warrants | 282,671 | (3) | $ | 5.32 | $ | 1,503,809.72 | $ | 164.07 | ||||||||
| Total | 2,592,228 | - | $ | 13,790,652.96 | $ | 1,504.56 | ||||||||||
Title of Each Class of Securities to be Registered (1)(2) | Amount to be registered/proposed maximum offering price per unit/proposed maximum aggregate offering price (1) (2) | Amount of Registration Fee (3) | ||||||
| Offering: | ||||||||
| Common Stock | ||||||||
| Preferred Stock | ||||||||
| Debt Securities (which may be senior or subordinated, convertible or non-convertible, secured or unsecured) | ||||||||
| Warrants | ||||||||
| Rights | ||||||||
| Units (4) | ||||||||
| Total (5) | $ | 150,000,000 | $ | 16,365 | ||||
| (1) | Pursuant to Rule |
| (2) | The proposed maximum offering price per unit and aggregate offering prices per class of securities will be determined from time to time by the Registrant in connection with the issuance by the Registrant of the securities registered under this registration statement and is not specified as to each class of security pursuant to General Instruction II.D of Form S-3 under the Securities Act. |
| (3) | Calculated pursuant to Rule 457(o) under the Securities Act. |
| (4) | Consisting of some or all of |
| (5) | Any securities registered hereunder may be sold separately or as units with other securities registered hereunder. The proposed maximum offering price per unit will be determined by the |
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 Commission, acting pursuant to said Section 8(a), may determine.
The information in this 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 nor does it seek an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.
Subject to Completion, dated February 5,16, 2021.
PROSPECTUS
AMMO, INC.
2,592,228 $150,000,000
Shares of Common Stock
Preferred Stock
This prospectus relatesDebt Securities
Warrants
Rights
Units
We may offer and sell up to $150 million in the resale,aggregate of the securities identified above from time to time in one or more offerings. This prospectus provides you with a general description of upthe securities.
Each time we offer and sell securities, we will provide a supplement to 2,592,228 shares (the “Shares”)this prospectus that contains specific information about the offering and the amounts, prices and terms of our common stock, par value $0.001 per share (“Common Stock”), by the selling stockholders identifiedsecurities. The supplement may also add, update or change information contained in this prospectus under “Selling Stockholders” (the “Offering”) pursuantwith respect to the January 2020 Offering (as defined on page 2 of the prospectus) (282,671 shares underlying the January 2020 Investor Warrants (as defined on page 2 of the prospectus), 48,413 shares issued pursuant to the exercise of the January 2020 Investor Warrants, and 5,429 shares issued pursuant to the exercise of the Gunnar Affiliate Warrants (as defined on page 3 of the prospectus)), the Summer 2020 Subscriptions (1,605,715 shares), and the TE Shares (as defined on page 6 of the prospectus) (650,000 shares). We are not selling any shares of our Common Stock underthat offering. You should carefully read this prospectus and will not receivethe applicable prospectus supplement before you invest in any proceeds from the sale of the Shares. We will, however, receive proceeds from any January 2020 Investor Warrants that are exercised through the payment of the exercise price in cash. The Selling Stockholders will bear all commissions and discounts, if any, attributable to the sale of the Shares. We will bear all costs, expenses and fees in connection with the registration of the Shares.our securities.
The Selling StockholdersWe may offer and sell the Shares from time to time on terms to be determined at the time of sale through ordinary brokerage transactions or through any other meanssecurities described in this prospectus underand any prospectus supplement to or through one or more underwriters, dealers and agents, or directly to purchasers, or through a combination of these methods. If any underwriters, dealers or agents are involved in the sale of any of the securities, their names and any applicable purchase price, fee, commission or discount arrangement between or among them will be set forth, or will be calculable from the information set forth, in the applicable prospectus supplement. See the sections of this prospectus entitled “About this Prospectus” and “Plan of Distribution.” The prices at which the Selling Stockholders may sell the shares will be determined by the prevailing market priceDistribution” for the shares or in negotiated transactions.more information. No securities may be sold without delivery of this prospectus and the applicable prospectus supplement describing the method and terms of the offering of such securities.
INVESTING IN OUR SECURITIES INVOLVES RISKS. SEE THE “RISK FACTORS” ON PAGE 84 OF THIS PROSPECTUS AND ANY SIMILAR SECTION CONTAINED IN THE APPLICABLE PROSPECTUS SUPPLEMENT CONCERNING FACTORS YOU SHOULD CONSIDER BEFORE INVESTING IN OUR SECURITIES.
Our Common Stockcommon stock is listed on the NasdaqThe NASDAQ Capital Market under the symbol “POWW”. On February 4,12, 2021, the last reported sale price of our Common Stockcommon stock on the NasdaqThe NASDAQ Capital Market was $7.34$9.32 per share.
Investing in our securities involves a high degree of risk. See “Risk Factors” beginning on page 8 in this prospectus for a discussion of information that should be considered in connection with an investment in our securities.
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 date of this prospectus is February [__], 2021.
TABLE OF CONTENTS
This prospectus is part of a registration statement on Form S-3 that we filed with the U.S. Securities and Exchange Commission, (the “SEC”)or the SEC, using a “shelf” registration process. You should read this prospectus and the information and documents incorporated by reference carefully. Such documents contain important information you should consider when making your investment decision. See “Where You Can Find More Information” and “Incorporation of Certain Information by Reference” in this prospectus.
This prospectusBy using a shelf registration statement, we may be supplementedsell securities from time to time and in one or more offerings up to a total dollar amount of $150 million as described in this prospectus. Each time that we offer and sell securities, we will provide a prospectus supplement to this prospectus that contains specific information about the securities being offered and sold and the specific terms of that offering. The prospectus supplement may also add, to update or change information in this prospectus. Any statement contained in this prospectus will be deemed to be modified or superseded for purposes of this prospectus to the extent that a statement contained in a prospectus supplement modifies or supersedes such statement. Any statement so modified will be deemed to constitute a part of this prospectus only as so modified, and any statement so superseded will be deemed not to constitute a part of this prospectus. You may only rely on the information contained in this prospectus orwith respect to that we have referred you to. We have not authorized anyone to provide you with different information. This prospectus does not constitute an offer to sell or a solicitation of an offer to buy any securities other than the securities offered by this prospectus. This prospectus and any future prospectus supplement do not constitute an offer to sell or a solicitation of an offer to buy any securities in any circumstances in which such offer or solicitation is unlawful. Neither the delivery of this prospectus or any prospectus supplement nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in our affairs since the date of this prospectus or such prospectus supplement or that the information contained by reference to this prospectus or any prospectus supplement is correct as of any time after its date.
This prospectus contains summaries of certain provisions contained in some of the documents described herein, but reference is made to the actual documents for complete information. All of the summaries are qualified in their entirety by the actual documents. Copies of some of the documents referred to herein have been filed, will be filed or will be incorporated by reference as exhibits to the registration statement of which this prospectus is a part, and you may obtain copies of those documents as described below under “Where You Can Find More Information.”
The Selling Stockholders are offering the Shares only in jurisdictions where such offer is permitted. The distribution of this prospectus and the sale of the Shares in certain jurisdictions may be restricted by law. Persons outside the United States who come into possession of this prospectus must inform themselves about, and observe any restrictions relating to, the distribution of this prospectus and the sale of the Shares outside the United States. This prospectus does not constitute, and may not be used in connection with, an offer to sell, or a solicitation of an offer to buy, the Shares by any person in any jurisdiction in which it is unlawful for such person to make such an offer or solicitation.offering. If there is any inconsistency between the information in this prospectus and the applicable prospectus supplement, you should rely on the prospectus supplement. Before purchasing any securities, you should carefully read both this prospectus and the applicable prospectus supplement, together with the additional information described under the heading “Where You Can Find More Information; Incorporation by Reference.”
We have not authorized any other person to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. We will not make an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. You should assume that the information appearing in this prospectus and the applicable prospectus supplement to this prospectus is accurate as of the date on its respective cover, and that any information incorporated by reference is accurate only as of the date of the document incorporated by reference, unless we indicate otherwise. Our business, financial condition, results of operations and prospects may have changed since those dates.
When we refer to “Ammo,” “we,” “our,” “us” and the “Company” in this prospectus, we mean Ammo, Inc., unless otherwise specified. When we refer to “you,” we mean the holders of the applicable series of securities.
SPECIAL NOTICE REGARDING FORWARD-LOOKING STATEMENTSWHERE YOU CAN FIND MORE INFORMATION; INCORPORATION BY REFERENCE
is prospectusAvailable Information
We file reports, proxy statements and other information with the SEC. The SEC maintains a web site that contains forward-looking statements. These forward-lookingreports, proxy and information statements containand other information about our expectations, beliefs or intentions regarding our product development and commercialization efforts, business, financial condition, results of operations, strategies or prospects, and other similar matters. These forward-looking statements are based on management’s current expectations and assumptions about future events, which are inherently subject to uncertainties, risks and changes in circumstances that are difficult to predict. These statements may be identified by wordsissuers, such as “expects,” “plans,” “projects,” “will,” “may,” “anticipates,” “believes,” “should,” “intends,” “estimates,” and other wordsus, who file electronically with the SEC. The address of similar meaning.that website is http://www.sec.gov.
These statements relate to future events orOur website address is https://www.ammoinc.com. The information on our future operational or financial performance,website, however, is not, and involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievementsshould not be deemed to be, materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. Factors that may cause actual results to differ materially from current expectations include, among other things, those listed under the section titled “Risk Factors” and elsewhere ina part of this prospectus, in any related prospectus supplement and in any related free writing prospectus.
Any forward-looking statement in this prospectus, in any related prospectus supplement and in any related free writing prospectus reflects our current view with respect to future events and is subject to these and other risks, uncertainties and assumptions relating to our business, results of operations, industry and future growth. Given these uncertainties, you should not place undue reliance on these forward-looking statements. No forward-looking statement is a guarantee of future performance. You should read this prospectus, any related prospectus supplement and any related free writing prospectus and the documents that we reference herein and therein and have filed as exhibits hereto and thereto completely and with the understanding that our actual future results may be materially different from any future results expressed or implied by these forward-looking statements. Except as required by law, we assume no obligation to update or revise these forward-looking statements for any reason, even if new information becomes available in the future.
This prospectus and any related prospectus supplement are part of a registration statement that we filed with the SEC and any related free writing prospectus also contain or may contain estimates, projections and other information concerning our industry, our business and the markets for our products, including data regarding the estimated size of those markets and their projected growth rates. Information that is based on estimates, forecasts, projections or similar methodologies is inherently subject to uncertainties and actual events or circumstances may differ materially from events and circumstances reflected in this information. Unless otherwise expressly stated, we obtained these industry, business, market and other data from reports, research surveys, studies and similar data prepared by third parties, industry and general publications, government data and similar sources. In some cases, we do not expressly refer to the sources from which these data are derived.
This summary highlights certain information about us, this offering and information appearing elsewhere in this prospectus and in the documents we incorporate by reference. This summary is not complete and does not contain all of the information that you should consider before investing in our securities. To fully understand this offering and its consequencesthe registration statement. The full registration statement may be obtained from the SEC or us, as provided below. Forms of the documents establishing the terms of the offered securities are or may be filed as exhibits to you, you should read this entire prospectus carefully, including the information referred to under the heading “Risk Factors”registration statement. Statements in this prospectus beginning on page 8,or any prospectus supplement about these documents are summaries and each statement is qualified in all respects by reference to the financial statementsdocument to which it refers. You should refer to the actual documents for a more complete description of the relevant matters. You may view a copy of the registration statement through the SEC’s website, as provided above.
Incorporation by Reference
The SEC’s rules allow us to “incorporate by reference” information into this prospectus, which means that we can disclose important information to you by referring you to another document filed separately with the SEC. The information incorporated by reference is deemed to be part of this prospectus, and subsequent information that we file with the SEC will automatically update and supersede that information. Any statement contained in a previously filed document incorporated by reference will be deemed to be modified or superseded for purposes of this prospectus to the extent that a statement contained in this prospectus modifies or replaces that statement.
We incorporate by reference our documents listed below and any future filings made by us with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended, which we refer to as the “Exchange Act” in this prospectus, between the date of this prospectus and the termination of the offering of the securities described in this prospectus. We are not, however, incorporating by reference any documents or portions thereof, whether specifically listed below or filed in the future, that are not deemed “filed” with the SEC, including any information furnished pursuant to Items 2.02 or 7.01 of Form 8-K or related exhibits furnished pursuant to Item 9.01 of Form 8-K.
This prospectus and any accompanying prospectus supplement incorporate by reference the documents set forth below that have previously been filed with the SEC:
| ● | Our Annual Report on Form 10-K for the year ended March 31, 2020, filed with the SEC on August 19, 2020. | |
| ● | Our Quarterly Reports on Form 10-Q for the quarters ended June 30, 2020, September 30, 2020, and December 31, 2020, filed with the SEC on August 19, 2020, November 13, 2020, and February 12, 2021, respectively. | |
| ● | Our Current Reports on Form 8-K filed with the SEC on April 28, 2020, June 29, 2020, July 2, 2020, September 2, 2020, September 29, 2020, October 28, 2020, November 6, 2020, December 4, 2020, December 17, 2020, January 25, 2021, and February 16, 2021. | |
| ● | The description of our common stock contained in our Registration Statement on Form 8-A, filed with the SEC on November 24, 2020, and any amendment or report filed with the SEC for the purpose of updating such description. |
All reports and other documents we subsequently file pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the termination of this Offering, including all such documents we may file with the SEC after the date of the initial registration statement and prior to the effectiveness of the registration statement, but excluding any information furnished to, rather than filed with, the SEC, will also be incorporated by reference into this prospectus and deemed to be part of this prospectus from the date of the filing of such reports and documents.
You may request a free copy of any of the documents incorporated by reference in this prospectus when making an investment decision. This is only a summary and may not contain all the information that is important to you. You should carefully read this prospectus, including the information(other than exhibits, unless they are specifically incorporated by reference therein,in the documents) by writing or telephoning us at the following address:
Ammo, Inc.
7681 East Gray Road
Scottsdale, Arizona 85260
(480) 947-0001
Exhibits to the filings will not be sent, however, unless those exhibits have specifically been incorporated by reference in this prospectus and any other offering materials, together with the additional information described under the heading “Where You Can Find More Information.”accompanying prospectus supplement.
| 2 |
Our Business
We are a designer, producer, and marketer of performance-driven, high-quality ammunition and ammunition component products for sale to a variety of consumers, including sport and recreational shooters, hunters, individuals seeking home or personal protection, manufacturers, and law enforcement and military agencies. To enhance the strength of our brands and drive product demand, we emphasize product innovation and technology to improve the performance, quality, and affordability of our products while providing support to our distribution channel and consumers. We seek to sell products at competitive prices that compete with high-end, custom, hand-loaded ammunition. Additionally, through our acquisition of Jagemann Stamping Company’s ammunition casing manufacturing and sales operations (“Jagemann Casings”), we are now able to sell ammunition casings products of various types. We emphasize an American heritage by using predominantly American-made components and raw materials in our products that are produced, inspected, and packaged at our facilities in Payson, Arizona and Manitowoc, Wisconsin.
Our production processes focus on safety, consistency, precision, and cleanliness. Each round is developed for a specific purpose with a focus on a proper mix of consistency, velocity, accuracy, and recoil. Each round is chamber gauged and inspected with redundant seven-step quality control processes.
Competition
The ammunition and ammunition casing industry is dominated by a small number of companies, a number of which are divisions of large public companies. We compete primarily on the quality, reliability, features, performance, brand awareness, and price of our products. Our primary competitors include Federal Premium Ammunition, Remington Arms, the Winchester Ammunition division of Olin Corporation, and various smaller manufacturers and suppliers, including Black-Hills Ammunition, CBC Group, Fiocchi Ammunition, Hornady Manufacturing Company, PMC, Rio Ammunition, and Wolf.
Our Growth Strategy
Our goal is to enhance our position as a designer, producer, and marketer of ammunition products. Key elements of our strategy to achieve this goal are as follows:
Design, Produce, and Market Innovative, Distinctive, Performance-Driven, High-Quality Ammunition and Ammunition Components
We are focused on designing, producing, and marketing innovative, distinctive, performance-driven, high-quality products that appeal to retailers, manufacturers, and consumers that will enhance our users’users shooting experiences. Our ongoing research and development activities; our safe, consistent, precision, and clean production processes; and our multi-faceted marketing programs are critical to our success.
Continue to Strengthen Relationships with Channel Partners and Retailers
We continue to strive to strengthen our relationships with our current distributors, dealers, manufacturers and mass market and specialty retailers and to attract additional distributors, dealers, retailers. The success of our efforts depends on the innovation, distinctive features, quality, and performance of our products; the attractiveness of our packaging; the effectiveness of our marketing and merchandising programs; and the effectiveness of our customer support.
Emphasis on Customer Satisfaction and Loyalty
We plan to continue to emphasize customer satisfaction and loyalty by offering innovative, distinctive, high-quality products on a timely and cost-attractive basis and by offering effective 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.
Continuously Improving Operations
We plan to continue focusing on improving all aspects of our business, including research and development, component sourcing, production processes, marketing programs, and customer support. 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.
Enhance Market Share, Brand Recognition, and Customer Loyalty
We strive to enhance our market share, brand recognition, and customer loyalty. Industry sources estimate that 70 million to 80 million people in the United States own more than approximately 300 million firearms, creating a large installed base for our ammunition 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.
Pursue Synergetic Strategic Acquisitions and Relationships
We intend to pursue strategic acquisitions and develop strategic relationships designed to enable us to expand our technology and knowhow, expand our product offerings, strengthen and expand our supply chain, enhance our production process, expand our marketing and distribution, and attract new customers.
Strategic Acquisitions
Planned acquisition targets include sector specific technology companies with the objective of augmenting our current capabilities with feature-rich (third-party) solutions. The acquisition metric includes, but is not limited to, weighing time, effort and approximate cost to develop certain technologies in-house, versus acquiring or merging with one or more entities that we believe have a proven record of successfully developing a technology sub-component. Additional criteria include an extended national footprint of available manpower (predominantly technical and software engineering), and evaluating the potential acquisition target’s customer base, stage of technology and merger or acquisition cost as compared to market conditions.
Our OfficesHistory
We maintainwere formed under the name Retrospettiva, Inc. in November 1990 to manufacture and import textile products, including both finished garments and fabrics, but ceased operations in 2001. We were inactive from 2001 until December 2016. On December 15, 2016, our then principal executive offices at 7681 East Gray Road, Scottsdale, Arizona 85260. Our telephone numberstockholders sold their outstanding Common Stock to Fred W. Wagenhals, who is (480) 947-0001. Our website is www.ammoinc.com. The information contained on our websiteChairman of the Board, President, Chief Executive Officer, and largest stockholder. On the same date, Mr. Wagenhals became the sole officer and director of our company. As of December 30, 2016, we changed our trading symbol to POWW; we merged into a Delaware corporation, thereby changing our state of incorporation from California to Delaware; we engaged in a 1-for-25 reverse stock split; and we commenced our current business as that can be assessed through our website does not constitute part of this prospectus.AMMO, Inc.
Recent Developments
Bridge Loan
On January 15, 2020, the Company consummated the initial closing (the “Initial Closing”) of a private placement offering (the “January 2020 Offering”) whereby pursuant to the Subscription Agreements (the “Subscription Agreements”) entered into by the Company with five (5) accredited investors, the Company issued certain Convertible Promissory Notes (each a “January 2020 Note,” and, collectively, the “January 2020 Notes”) for an aggregate purchase price of $1,650,000 and five (5) year warrants (the “January 2020 Investor Warrants”) to purchase shares of the Common Stock.
On January 30, 2020, the Company consummated the second closing (the “Second Closing”) pursuant to the January 2020 Offering whereby the Company entered into those certain Subscription Agreements with five (5) accredited investors (the ten (10) investors are collectively referred to herein as the “Investors”). Pursuant to the Subscription Agreements, the Company the Company issued the January 2020 Notes for an aggregate purchase price of $850,000 and five (5) year January 2020 Investor Warrants.
Joseph Gunnar & Co., LLC (“Gunnar”) acted as placement agent for the January 2020 Offering. Gunnar received cash compensation of $200,000 and was to be issued five (5) year warrants to purchase a number of shares of Common Stock equal to five percent (5%) of the shares underlying the January 2020 Notes and the January 2020 Investor Warrants, at an exercise price equal to 125% of the conversion price of the January 2020 Notes (the “Gunnar Affiliate Warrants”).
The January 2020 Notes accrued interest at a rate of 8% per annum and maturedOur largest stockholder, Mr. Wagenhals, had organized another company on October 15, 2020 (for13, 2016, which immediately began to take steps to commence the January 2020 Notes issued on January 15, 2020) and October 30, 2020 (for the January 2020 Notes issued on January 30, 2020) (collectively, the “Maturity Date”). Additionally, the January 2020 Notes contained a mandatory conversion provision whereby any principal and accrued interest on the January 2020 Notes, upon the closingammunition business. We combined with that company in March 2017, resulting in our acquisition of a Qualified Financing (as defined in this paragraph), automatically converted into shares of the Common Stock or other units at a conversion price of 66.7% of the per share purchase price of shares or units in the Qualified Financing (the “Qualified Financing Conversion Price”). “Qualified Financing” meant the closing of a firm commitment underwritten public offering of shares of common stock or units consisting of shares of common stock and warrants to purchase shares of common stock which results in gross proceeds of not less than $7.5 million andall the shares of its common stock being traded on a national securities exchange. As a Qualified Financing did not occur on or before 10 days prior to the Maturity Date (the “Voluntary Conversion Date”), the January 2020 Notes were convertible, in whole or in part, into shares of Common Stock at the option of the holder, at any time and from time to time after the Voluntary Conversion Date (each, a “Voluntary Conversion”) at the Voluntary Conversion Price. “Voluntary Conversion Price” meant 50.0% of the arithmetic mean of the VWAP in either (i) the ten consecutive Trading Days immediately preceding the Voluntary Conversion Date, if a Voluntary Conversion occurs on or prior to the Maturity Date, or (ii) the ten consecutive Trading Days immediately preceding Maturity Date, if a Voluntary Conversion occurs after the Maturity Date.
Pursuant to the Subscription Agreements, each Investor was to receive the number of January 2020 Investor Warrants to purchase shares of Common Stock equal to the quotient obtained by dividing 50% of the principal amount of the January 2020 Note by the Maturity Date Conversion Price or the Qualified Financing Conversion Price of the January 2020 Note. The January 2020 Investor Warrants were to be exercisable at the per share purchase price of shares or other units in the Qualified Financing (the “Qualified Financing Exercise Price”). As a Qualified Financing did not occur on or before the Maturity Date, the January 2020 Investor Warrants became exercisable at a price per share that is equal to the arithmetic mean of the VWAP in the ten consecutive Trading Days immediately preceding the Maturity Date (the “Maturity Date Exercise Price”). The January 2020 Investor Warrants contain an anti-dilution protection feature, to adjust the exercise price if shares are sold or issued for a consideration per share less than the exercise price then in effect.
The Company agreed to use commercially reasonable best efforts to file a registration statement on Form S-1 within 30 days of the closing of the January 2020 Offering registering for resale the shares issuable upon conversion of the January 2020 Notes and upon exercise of the January 2020 Investor Warrants. The Company also agreed to use commercially reasonable efforts to cause such registration to become effective within 90 days following the closing date (or 120 days in the event of a “full review” by the SEC) and to keep such registration statement effective at all times until no purchaser owns any January 2020 Investor Warrants or warrant shares issuable upon exercise thereof. The shares of Common Stock issuable upon conversion of the January 2020 Notes and upon exercise of the January 2020 Investor Warrants and the Gunnar Affiliate Warrants were registered in a Resale Registration Statement, which was declared effective by the Securities and Exchange Commission in March 2020.
From October 8, 2020 to October 26, 2020, the Company received notices for voluntary conversion for the total outstanding principal ($2,500,000) and interest ($146,104) of the January 2020 Notes and issued 2,157,35817,285,800 shares of our Common Stock as a result of the conversion. The principal and interest relatedour succession to the Initial Closing and Second Closing were converted at a conversion prices of $1.21 and $1.26, respectively. Additionally, the Company issued a total of 1,019,121 January 2020 Investor Warrants at exercise prices ranging from $2.19 to $2.67. As of February 1, 2021, 736,450 January 2020 Investor Warrants have been exercised. Four of the Investors hold 282,671 January 2020 Investor Warrants and are Selling Stockholders in this Offering.
Additionally, pursuant to the Subscription Agreements, the Company issued a total of 152,868 Gunnar Affiliate Warrants with exercise prices ranging from $1.51 to $1.58.its business.
The form of the January 2020 Investor Warrants is incorporated as an exhibit to the registration statement of which this prospectus forms a part and is incorporated herein by reference. The summary of such January 2020 Investor Warrants contained in this prospectus is qualified in its entirety by reference to its text. We urge you to read the form of January 2020 Investor Warrants in full.
Summer 2020 Subscriptions
In June 2020 and in August 2020, the Company entered into Subscription Agreements (the “Summer 2020 Subscription Agreements”) with a total of nine (9) investors whereby the Company sold and the investors purchased 1,605,715 shares of Common Stock at a price per share of $1.75 for total gross proceeds to the Company of $2,809,996. The sale of the 1,605,715 shares of Common Stock is referred to herein as the “Summer 2020 Subscriptions.”
The form of the Summer 2020 Subscription Agreements is incorporated as an exhibit to the registration statement of which this prospectus forms a part and is incorporated herein by reference. The summary of such Summer 2020 Subscription Agreements contained in this prospectus is qualified in its entirety by reference to its text. We urge you to read the form of Summer 2020 Subscription Agreements in full.
Jagemann Settlement and Repayment
On March 15, 2019, Enlight Group II, LLC (“Enlight”), a wholly owned subsidiary of the Company, completed its acquisition of 100% of the assets of Jagemann Stamping Company’s (“JSC”) ammunition casing, projectile manufacturing and sales operations (“Jagemann Casings”) pursuant to the terms of the Amended and Restated Asset Purchase Agreement (“Amended APA”), dated March 14, 2019. In accordance with the terms of the Amended APA, Enlight paid to JSC a combination of $7,000,000 in cash, $10,400,000 delivered in the form of a Promissory Note (“Seller Note”), and 4,750,000 shares of the Common Stock. Pursuant to the Amended APA, Enlight acquired JSC’s munition and casing division assets (including equipment and intellectual property), and continued the operations at JSC’s Wisconsin facilities.
On June 26, 2020, the Company, Enlight and JSC entered into a Settlement Agreement pursuant to which the parties mutually agreed to settle all disputes and mutually release each other from liabilities related to the Amended APA occurring prior to June 26, 2020. Pursuant to the Settlement Agreement, the Company paid JSC $1,269,977 and provided JSC with: (i) two new promissory notes, a note of $5,803,800 related to the Seller Note and note of $2,635,797 for inventory and services, which was reclassified from accounts payable, both with a maturity date of August 15, 2021 (collectively, the “JSC Notes”) and (ii) general business security agreements granting JSC a security interest in all personal property of the Company. Pursuant to the JSC Notes, the Company is obligated to make monthly payments totaling $204,295 to JSC. In addition, the JSC Notes have a mandatory prepayment provision that comes into effect if the Company conducts a registered public offering. Pursuant to such provision, the Company: (a) upon the closing of an offering of less than $10,000,000 would be obligated to pay the lesser of ninety percent (90%) of the offering proceeds or seventy (70%) of the then aggregate outstanding balance of the JSC Notes; and (b) upon the closing of an offering of more than $10,000,000 would be obligated to pay one hundred percent (100%) of the then aggregate outstanding balance of the JSC Notes. The Company was granted an option to repurchase up to 1,000,000 of the shares of Common Stock issued to JSC under the Amended APA at a price of $1.50 per share through April 1, 2021 so long as there are no defaults under the Settlement Agreement. The total balance of the JSC Notes as of September 30, 2020 was $7,775,298.
On November 5, 2020, the Company paid $6,000,000 to JSC allocated as follows: (i) payment in full of Note A, representing the balance due from the Company to JSC relating to the acquisition of Jagemann Munition Components in March 2019 and (ii) $592,982 remitted in partial payment of Note B, resulting in the parties’ execution of Amended Note B which has a starting principal balance of $1,687,664 (“Amended Note B”). The Amended Note B principal balance carries a 9% per annum interest rate and is amortized equally over the thirty six (36) month term. As a result of the payment in full of Note A JSC released the accompanying security interest in Company assets which secured Note A. Concurrently, upon entry into Amended Note B, JSC and the Company entered into the First Amendment to General Business Security Agreement to reflect a revised list of collateral in which JSC has a security interest. On February 2, 2021 the Company completed the repurchase of 1,000,000 shares of Common stock issued to Jagemann Stamping for $1,500,000 or $1.50 per share. The Company subsequently retired the 1,000,000 of repurchased shares.
Forest Street Note
On September 23, 2020, the Company and Enlight entered into a promissory note (the “Forest Street Note”) with Forest Street, LLC (“Lender”), an Arizona limited liability company wholly owned by our current Chief Executive Officer, Fred Wagenhals, for the principal sum of Three Million Five Hundred Thousand & 00/100 Dollars ($3,500,000.00), which accrues interest at 12% per annum. The Note has a maturity date of September 23, 2022 (the “Maturity Date”).
Pursuant to the terms of the Forest Street Note, the Company and Enlight (collectively, the borrower pursuant to the note) shall pay Lender; (i) on a monthly basis, beginning October 23, 2020, all accrued interest (only), (ii) on a quarterly basis, a monitoring fee of 1% of the principal amount and then accrued interest; and (iii) on the maturity date, the remaining outstanding principal balance of the Loan, together with all unpaid accrued interest thereon.
The note is an unsecured obligation of the Company and is not convertible into equity securities of the Company.
On December 14, 2020, the Company entered into a Debt Conversion Agreement (the “Agreement”) with Forest Street, LLC, whereby the Company and Forest Street agreed to convert Two Million One Hundred Thousand & 00/100 Dollars ($2,100,000.00) of the Forest Street Note’s principal into one million (1,000,000) shares of the Company’s common stock (the “Share Issuance”). The Share Issuance occurred on December 15, 2020. As a result of the Agreement, the principal of the Forest Street Note is now One Million Four Hundred Thousand & 00/100 Dollars ($1,400,000.00) and the Maturity Date remains the same.
On January 14, 2021, the Company repaid the $1.4 million balance remaining on the Forest Street Note.
Lisa Kay Note
On November 5, 2020, the Company and Enlight (together, “Borrower”), entered into a promissory note (the “12% Note”) with Lisa Kay, an individual, for the principal sum of Four Million & 00/100 Dollars ($4,000,000.00) (“Principal”), which accrues interest at 12% per annum (“Interest”). The 12% Note has a maturity date of November 5, 2023 (“Maturity Date”).
Pursuant to the terms of the 12% Note, the Borrower shall pay Ms. Kay: (i) on a monthly basis, beginning December 10, 2020, all accrued interest (only), and (ii) on the Maturity Date, the remaining outstanding principal balance of the Loan, together with all unpaid accrued interest thereon.
The 12% Note is unsecured and is not convertible into equity securities of the Company. However, Borrower has agreed that it shall provide commercially reasonable collateral promptly upon the payment of that certain JSC Promissory Note and JSC’s contemporaneous release of security supporting that financial accommodation. The 12% Note contain terms and events of default customary for similar transactions. The Company used the net proceeds from the transaction to pay a portion of the outstanding balance owed to JSC.
8% Unsecured Convertible Promissory Notes
From November 5, 2020 to November 10, 2020, the Company entered into Convertible Promissory Notes with four (4) accredited investors (the “Investors”), for an aggregate purchase price of $1,989,000 (each a “8% Note,” collectively, the “8% Notes”). The 8% Notes accrue interest at a rate of 8% per annum and mature on November 5, 2022 (the “Maturity Date”). Additionally, the 8% Notes contain a voluntary conversion mechanism whereby any principal and accrued interest on the 8% Notes, may be converted in holder’s discretion into shares of the Company’s Common Stock at a conversion price of $2.00 per share (“Conversion Price”). If not previously paid in full or converted, on the 180th day following the Maturity Date, the principal and interest due under the 8% Notes shall automatically be converted to Common Stock shares at the Conversion Price The 8% Notes contain customary events of default (each an “Event of Default”). If an Event of Default occurs, the outstanding principal amount of the 8% Notes, plus accrued but unpaid interest, and other amounts owing with respect to the 8% Notes will become, at the 8% Note holder’s election, due and payable in cash.
Underwritten Offering
On November 30, 2020, the Company entered into an underwriting agreement (the “Underwriting Agreement”) with Alexander Capital, L.P. (“Alexander Capital”), as representative of the underwriters listed therein (the “Underwriters”), pursuant to which the Company agreed to sell to the Underwriters in a firm commitment underwritten public offering (the “Underwritten Offering”) an aggregate of 8,564,285 shares of the Common Stock, at a public offering price of $2.10 per share. In addition, the Underwriters were granted an over-allotment option (the “Over-allotment Option”) for a period of 45 days to purchase up to an additional 1,284,643 shares of Common Stock. The Underwritten Offering closed on December 3, 2020. The Over-allotment Option closed on December 11, 2020.
The Company conducted the Underwritten Offering pursuant to a Registration Statement on Form S-1 (File No. 333- 248800), as amended, which was declared effective by the United States Securities and Exchange Commission on November 30, 2020 (the “S-1 Registration Statement”).
The net proceeds to the Company from the Underwritten Offering, after deducting the underwriting discount, the underwriters’ fees and expenses and the Company’s estimated Underwritten Offering expenses, were approximately $15,876,000. The Company anticipates using the net proceeds from the Underwritten Offering as follows: (i) approximately $5,500,000 for capital expenditures; (ii) approximately $1,300,000 for research and development for new products and improvements to existing products including, but not limited to, hiring of key personnel, and material costs for research activities; (iii) approximately $1,800,000 to upgrade sales and marketing capabilities, including but not limited to professional relations, advertising, software implementation and adding additional staff; and (iv) the remainder for other general corporate purposes, and possibly acquisitions of other companies, products or technologies, though no such acquisitions are currently contemplated.
The net proceeds to the Company from the Over-allotment option, after deducting the underwriting discount, were approximately $2,468,000.
The Underwriting Agreement contains customary representations, warranties and agreements by the Company, customary conditions to closing, indemnification obligations of the Company and the Underwriters, including for liabilities under the Securities Act of 1933, as amended, other obligations of the parties and termination provisions. In addition, pursuant to the terms of the Underwriting Agreement and related “lock-up” agreements, the Company (for a period of one year after the date of the Underwriting Agreement), and each director and executive officer of the Company (for a period of six months after the date of the final prospectus relating to the Public Offering), have agreed, subject to customary exceptions, not to sell, transfer or otherwise dispose of securities of the Company, without the prior written consent of Alexander Capital.
On December 3, 2020, pursuant to the Underwriting Agreement, the Company entered into an Underwriter’s warrant agreement (the “Underwriters’ Warrant Agreement”) with the Underwriters and certain affiliates of the Underwriters. Pursuant to the Underwriters’ Warrant Agreement, the Company provided the Underwriters and certain affiliates of the Underwriters with a warrant to purchase 428,214 shares of Common Stock in the aggregate. Such warrant may be exercised beginning on May 29, 2021 (the date that is 180 days after the date on which the S-1 Registration Statement became effective) until November 30, 2025 (the date that is five years after the date on which the S-1 Registration Statement became effective). The initial exercise price of the Underwriters’ Warrant Agreement is $2.63 per share.
Nasdaq Listing
The Common Stock began trading on the Nasdaq Capital Market under the symbol POWW on December 1, 2020 following the pricing (and the entering into the Underwriting Agreement) of the Underwritten Offering.
Trending Equities
From November 2020 to January 2021, the Company entered agreements (“TE Agreements”) with Trending Equities (“TE”). Per the terms of the TE Agreements, the Company issued 650,000 shares to TE (the “TE Shares”) at $1.75 for a total value of $1,137,500. TE assisted the Company with developing a strategic timeline, and the organization and presentation of materials related to the Company’s most recent offering roadshow. TE served as a conduit between the Company and the investment community and provided corporate governance advisory services to help the Company implement best practices to meet Nasdaq’s corporate governance requirements. All of the 650,000 shares are being registered in the registration statement of which this prospectus forms a part with a total of 300,000 of these shares having been assigned to Mike Baron, RW Cabo LLC, and Lucid Technologies.
The TE Agreements are incorporated as an exhibit to the registration statement of which this prospectus forms a part and is incorporated herein by reference. The summary of TE Agreements contained in this prospectus is qualified in its entirety by reference to their text. We urge you to read the TE Agreements in full.
Investment in any securities offered pursuant to this prospectus and the applicable prospectus supplement involves risks. You should carefully consider the risk factors incorporated by reference to our Registration Statement on Form S-1, filed with the SEC on September 15, 2020, as amended, our most recent Annual Report on Form 10-K and any subsequent Quarterly Reports on Form 10-Q or Current Reports on Form 8-K we file after the date of this prospectus, and all other information contained or incorporated by reference into this prospectus, as updated by our subsequent filings under the Exchange Act, and the risk factors and other information contained in the applicable prospectus supplement before acquiring any of such securities. The occurrence of any of these risks might cause you to lose all or part of your investment in the offered securities.
SPECIAL NOTICE REGARDING FORWARD-LOOKING STATEMENTS
Risks Relating
This prospectus contains forward-looking statements that involve risks and uncertainties, principally in the sections entitled “Risk Factors.” All statements other than statements of historical fact contained in this prospectus, including statements regarding future events, our future financial performance, business strategy and plans and objectives of management for future operations, are forward-looking statements. We have attempted to identify forward-looking statements by terminology including “anticipates,” “believes,” “can,” “continue,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,” “should,” or “will” or the negative of these terms or other comparable terminology. Although we do not make forward looking statements unless we believe we have a reasonable basis for doing so, we cannot guarantee their accuracy. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks outlined under “Risk Factors” or elsewhere in this prospectus, which may cause our or our industry’s actual results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.
Forward-looking statements should not be read as a guarantee of future performance or results, and will not necessarily be accurate indications of the times at, or by which, that performance or those results will be achieved. Forward-looking statements are based on information available at the time they are made and/or management’s good faith belief as of that time with respect to future events, and are subject to risks and uncertainties that could cause actual performance or results to differ materially from what is expressed in or suggested by the forward-looking statements.
Forward-looking statements speak only as of the date they are made. You should not put undue reliance on any forward-looking statements. We assume no obligation to update forward-looking statements to reflect actual results, changes in assumptions or changes in other factors affecting forward-looking information, except to the Offeringextent required by applicable securities laws. If we do update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements.
You may lose all of your investment.USE OF PROCEEDS
InvestingWe intend to use the net proceeds from the sale of the securities as set forth in our Common Stock involves a high degree of risk. As an investor, you might never recoup all, or even part of, your investment and you may never realize any return on your investment. You must be prepared to lose all your investment.the applicable prospectus supplement.
The market pricefollowing description of our Common Stock may be highly volatile, youcapital stock is not complete and may not be ablecontain all the information you should consider before investing in our capital stock. This description is summarized from, and qualified in its entirety by reference to, resell yourour Certificate of Incorporation and Bylaws, which have been publicly filed with the SEC. See “Where You Can Find More Information; Incorporation by Reference.”
Our authorized capital stock consists of 200,000,000 shares at or above the public offering priceof common stock, par value of $0.001 per share, and you could lose all or part10,000,000 shares of your investment.
The trading pricepreferred stock, par value of $0.001 per share. As of February 11, 2021, there were 68,675,629 shares of our common stock issued and outstanding held by approximately 447 holders of record.
Common Stock
Each share of our common stock entitles its holder to one vote in the election of each director and on all other matters voted on generally by our stockholders. No share of our common stock affords any cumulative voting rights. This means that the holders of a majority of the voting power of the shares voting for the election of directors can elect all directors to be elected if they choose to do so.
Holders of our common stock will be entitled to dividends in such amounts and at such times as our Board of Directors in its discretion may declare out of funds legally available for the payment of dividends. We currently do not anticipate paying any cash dividends on the common stock in the foreseeable future. Any future dividends will be volatile. Our stock price could be subject to wide fluctuations in response to a varietypaid at the discretion of our Board of Directors after taking into account various factors, including the following:including:
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| ● | our cash needs and capital investment plans; | |
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If we liquidate or dissolve our business, the holders of our common stock will share ratably in all our assets that are available for distribution to our stockholders after our creditors are paid in full and the holders of all series of our outstanding preferred stock, if any, receive their liquidation preferences in full.
Our common stock has no preemptive rights and is not convertible or redeemable or entitled to the benefits of any sinking or repurchase fund.
Preferred Stock
The Company has 10,000,000 authorized shares of preferred stock par value $0.001 per share. As of February 11, 2021, no shares of preferred stock are outstanding.
Our Board has the authority, within the limitations and restrictions in our certificate of incorporation, to issue shares of preferred stock in one or more series and to fix the rights, preferences, privileges and restrictions thereof, including dividend rights, dividend rates, conversion rights, voting rights, terms of redemption, redemption prices, liquidation preferences and the number of shares constituting any series or the designation of any series, without further vote or action by the stockholders. The issuance of shares of preferred stock may have the effect of delaying, deferring or preventing a change in our control without further action by the stockholders. The issuance of shares of preferred stock with voting and conversion rights may adversely affect the voting power of the holders of our common stock. In some circumstances, this issuance could have the effect of decreasing the market price of our common stock.
Undesignated preferred stock may enable our Board to render more difficult or to discourage an attempt to obtain control of the Company by means of a tender offer, proxy contest, merger or otherwise, and thereby to protect the continuity of our management. The issuance of shares of preferred stock may adversely affect the rights of our common stockholders. For example, any shares of preferred stock issued may rank senior to the common stock as to dividend rights, liquidation preference or both, may have full or limited voting rights and may be convertible into shares of common stock. As a result, the issuance of shares of preferred stock, or the issuance of rights to purchase shares of preferred stock, may discourage an unsolicited acquisition proposal or bids for our common stock or may otherwise adversely affect the market price of our common stock or any existing preferred stock.
Options and Warrants
As of February 11, 2021, there are no outstanding options to purchase our securities.
As of February 11, 2021, we had 3,885,256 warrants outstanding. Each warrant provides the holder the right to purchase up to one share of our Common Stock at a predetermined exercise price. The outstanding warrants consist of (1) warrants to purchase 288,833 shares of Common Stock at an exercise price of $1.65 per share until April 2025; (2) warrants to purchase 2,016,287 shares of our Common Stock at an exercise price of $2.00 per share consisting of 56% of the warrants until April 2023, 6% until August 2024, and 38% until December 2025; (3) warrants to purchase 1,001,921 shares of Common Stock at an exercise price of $2.40 until September 2024; (4) warrants to purchase 428,215 shares of Common Stock at an exercise price of $2.63 per share until November 2025; and (5) warrants to purchase 150,000 shares of Common Stock at an exercise price of $6.72 per share until February 2024.
Delaware Anti-takeover Law
We are subject to Section 203 of Delaware Law, an anti-takeover law. In general, Section 203 prohibits a publicly held Delaware corporation from engaging in a “business combination” with an “interested stockholder” for a period of three years following the date the person became an interested stockholder, unless:
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Generally, a “business combination” includes a merger, asset or stock sale, or other transaction resulting in a financial benefit to the interested stockholder. Generally, an “interested stockholder” is a person who, together with affiliates and associates, owns, or is an affiliate or associate of the corporation and within three years prior to the determination of interested stockholder status did own, 15% or more of a corporation’s voting stock.
The existence of Section 203 of Delaware Law would be expected to have an anti-takeover effect with respect to transactions not approved in advance by our board of directors, including discouraging attempts that might result in a premium over the market price for the shares of our common stock.
The NASDAQ Capital Market Listing
Our common stock is listed on the NASDAQ Capital Market under the symbol “POWW”.
Transfer Agent
The transfer agent and registrar for our common stock is Action Stock Transfer Corporation (“AST”). The principal office of AST is located at 2469 E. Fort Union Blvd, Suite 214, Salt Lake City, UT 84121, and its telephone number is (801) 274-1088.
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DESCRIPTION OF DEBT SECURITIES
General
The debt securities that we may offer by this prospectus consist of notes, debentures, or other evidences of indebtedness. The debt securities may constitute either senior or subordinated debt securities, and in either case may be either secured or unsecured. Any debt securities that we offer and sell will be our direct obligations. Debt securities may be issued in one or more series. All debt securities of any one series need not be issued at the same time, and unless otherwise provided, a series of debt securities may be reopened, with the required consent of the holders of outstanding debt securities, for issuance of additional debt securities of that series or to establish additional terms of that series of debt securities (with such additional terms applicable only to unissued or additional debt securities of that series). The form of indenture has been filed as an exhibit to the registration statement of which this prospectus is a part and is subject to any amendments or supplements that we may enter into with the trustee(s), however, we may issue debt securities not subject to the indenture provided such terms of debt securities are not otherwise required to be set forth in the indenture. The material terms of the indenture are summarized below and we refer you to the indenture for a detailed description of these material terms. Additional or different provisions that are applicable to a particular series of debt securities will, if material, be described in a prospectus supplement relating to the offering of debt securities of that series. These provisions may include, among other things and to the extent applicable, the following:
| ● | the title of the debt securities, including, as applicable, whether the debt securities will be issued as senior debt securities, senior subordinated debt securities or subordinated debt securities, any subordination provisions particular to the series of debt securities; | |
| ● | any limit on the aggregate principal amount of the debt securities; | |
| ● | whether the debt securities are senior debt securities or subordinated debt securities and applicable subordination provisions, if any; | |
| ● | whether the debt securities will be secured or unsecured; | |
| ● | if other than 100% of the aggregate principal amount, the percentage of the aggregate principal amount at which we will sell the debt securities, such as an original issuance discount; | |
| ● | the date or dates, whether fixed or extendable, on which the principal of the debt securities will be payable; | |
| ● | the rate or rates, which may be fixed or variable, at which the debt securities will bear interest, if any, the date or dates from which any such interest will accrue, the interest payment dates on which we will pay any such interest, the basis upon which interest will be calculated if other than that of a 360-day year consisting of twelve 30-day months, and, in the case of registered securities, the record dates for the determination of holders to whom interest is payable; | |
| ● | the place or places where the principal of and any premium or interest on the debt securities will be payable and where the debt securities may be surrendered for conversion or exchange; | |
| ● | whether we may, at our option, redeem the debt securities, and if so, the price or prices at which, the period or periods within which, and the terms and conditions upon which, we may redeem the debt securities, in whole or in part, pursuant to any sinking fund or otherwise; | |
| ● | if other than 100% of the aggregate principal amount thereof, the portion of the principal amount of the debt securities which will be payable upon declaration of acceleration of the maturity date thereof or provable in bankruptcy, or, if applicable, which is convertible or exchangeable; | |
| ● | any obligation we may have to redeem, purchase or repay the debt securities pursuant to any sinking fund or analogous provisions or at the option of a holder of debt securities, and the price or prices at which, the currency in which and the period or periods within which, and the terms and conditions upon which, the debt securities will be redeemed, purchased or repaid, in whole or in part, pursuant to any such obligation, and any provision for the remarketing of the debt securities; | |
| ● | the issuance of debt securities as registered securities or unregistered securities or both, and the rights of the holders of the debt securities to exchange unregistered securities for registered securities, or vice versa, and the circumstances under which any such exchanges, if permitted, may be made; | |
| ● | the denominations, which may be in United States Dollars or in any foreign currency, in which the debt securities will be issued, if other than denominations of $1,000 and any integral multiple thereof; | |
| ● | whether the debt securities will be issued in the form of certificated debt securities, and if so, the form of the debt securities (or forms thereof if unregistered and registered securities are issuable in that series), including the legends required by law or as we deem necessary or appropriate, the form of any coupons or temporary global security which may be issued and the forms of any other certificates which may be required under the indenture or which we may require in connection with the offering, sale, delivery or exchange of the debt securities; |
| ● | if other than United States Dollars, the currency or currencies in which payments of principal, interest and other amounts payable with respect to the debt securities will be denominated, payable, redeemable or repurchasable, as the case may be; | |
| ● | whether the debt securities may be issuable in tranches; | |
| ● | the obligations, if any, we may have to permit the conversion or exchange of the debt securities into common stock, preferred stock or other capital stock or property, or a combination thereof, and the terms and conditions upon which such conversion or exchange will be effected (including conversion price or exchange ratio), and any limitations on the ownership or transferability of the securities or property into which the debt securities may be converted or exchanged; | |
| ● | if other than the trustee under the indenture, any trustees, authenticating or paying agents, transfer agents or registrars or any other agents with respect to the debt securities; | |
| ● | any deletions from, modifications of or additions to the events of default with respect to the debt securities or the right of the Trustee or the holders of the debt securities in connection with events of default; | |
| ● | any deletions from, modifications of or additions to the covenants with respect to the debt securities; | |
| ● | if the amount of payments of principal of, and make-whole amount, if any, and interest on the debt securities may be determined with reference to an index, the manner in which such amount will be determined; | |
| ● | whether the debt securities will be issued in whole or in part in the global form of one or more debt securities and, if so, the depositary for such debt securities, the circumstances under which any such debt security may be exchanged for debt securities registered in the name of, and under which any transfer of debt securities may be registered in the name of, any person other than such depositary or its nominee, and any other provisions regarding such debt securities; | |
| ● | whether, under what circumstances and the currency in which, we will pay additional amounts on the debt securities to any holder of the debt securities who is not a United States person in respect of any tax, assessment or governmental charge and, if so, whether we will have the option to redeem such debt securities rather than pay such additional amounts, and the terms of any such option; | |
| ● | whether the debt securities will be secured by any collateral and, if so, a general description of the collateral and the terms of any related security, pledge or other agreements; | |
| ● | the persons to whom any interest on the debt securities will be payable, if other than the registered holders thereof on the regular record date therefor; and | |
| ● | any other material terms or conditions upon which the debt securities will be issued. |
Unless otherwise indicated in the applicable prospectus supplement, we will issue debt securities in fully registered form without coupons and in denominations of $1,000 and in integral multiples of $1,000, and interest will be computed on the basis of a 360-day year of twelve 30-day months. If any interest payment date or the maturity date falls on a day that is not a business day, then the payment will be made on the next business day without additional interest and with the same effect as if it were made on the originally scheduled date. “Business day” means any calendar day that is not a Saturday, Sunday or legal holiday in New York, New York, and on which the trustee and commercial banks are open for business in New York, New York.
Unless we inform you otherwise in a prospectus supplement, each series of our senior debt securities will rank equally in right of payment with all of our other unsubordinated debt. The subordinated debt securities will rank junior in right of payment and be subordinate to all of our unsubordinated debt.
Unless otherwise indicated in the applicable prospectus supplement, the trustee will act as paying agent and registrar for the debt securities under the indenture. We may act as paying agent under the indenture.
The prospectus supplement will contain a description of United States federal income tax consequences relating to the debt securities, to the extent applicable.
Covenants
The applicable prospectus supplement will describe any covenants, such as restrictive covenants restricting us or our subsidiaries, if any, from incurring, issuing, assuming or guarantying any indebtedness or restricting us or our subsidiaries, if any, from paying dividends or acquiring any of our or its capital stock.
Consolidation, Merger and Transfer of Assets
The indenture permits a consolidation or merger between us and another entity and/or the sale, conveyance or lease by us of all or substantially all of our property and assets, provided that:
| ● | the resulting or acquiring entity, if other than us, is organized and existing under the laws of a United States jurisdiction and assumes all of our responsibilities and liabilities under the indenture, including the payment of all amounts due on the debt securities and performance of the covenants in the indenture; | |
| ● | immediately after the transaction, and giving effect to the transaction, no event of default under the indenture exists; and | |
| ● | we have delivered to the trustee an officers’ certificate stating that the transaction and, if a supplemental indenture is required in connection with the transaction, the supplemental indenture comply with the indenture and that all conditions precedent to the transaction contained in the indenture have been satisfied. |
If we consolidate or merge with or into any other entity, or sell or lease all or substantially all of our assets in compliance with the terms and conditions of the indenture, the resulting or acquiring entity will be substituted for us in the indenture and the debt securities with the same effect as if it had been an original party to the indenture and the debt securities. As a result, such successor entity may exercise our rights and powers under the indenture and the debt securities, in our name and, except in the case of a lease, we will be released from all our liabilities and obligations under the indenture and under the debt securities.
Notwithstanding the foregoing, we may transfer all of our property and assets to another entity if, immediately after giving effect to the transfer, such entity is our wholly owned subsidiary. The term “wholly owned subsidiary” means any subsidiary in which we and/or our other wholly owned subsidiaries, if any, own all of the outstanding capital stock.
Modification and Waiver
Under the indenture, some of our rights and obligations and some of the rights of the holders of the debt securities may be modified or amended with the consent of the holders of not less than a majority in aggregate principal amount of the outstanding debt securities affected by the modification or amendment. However, the following modifications and amendments will not be effective against any holder without its consent:
| ● | a change in the stated maturity date of any payment of principal or interest; | |
| ● | a reduction in the principal amount of or interest on any debt securities; | |
| ● | an alteration or impairment of any right to convert at the rate or upon the terms provided in the indenture; | |
| ● | a change in the currency in which any payment on the debt securities is payable; | |
| ● | an impairment of a holder’s right to sue us for the enforcement of payments due on the debt securities; or | |
| ● | a reduction in the percentage of outstanding debt securities required to consent to a modification or amendment of the indenture or required to consent to a waiver of compliance with certain provisions of the indenture or certain defaults under the indenture. |
Under the indenture, the holders of not less than a majority in aggregate principal amount of the outstanding debt securities may, on behalf of all holders of the debt securities:
| ● | waive compliance by us with certain restrictive provisions of the indenture; and | |
| ● | waive any past default under the indenture in accordance with the applicable provisions of the indenture, except a default in the payment of the principal of or interest on any series of debt securities. |
Events of Default
Unless we indicate otherwise in the applicable prospectus supplement, “event of default” under the indenture will mean, with respect to any series of debt securities, any of the following:
| ● | failure to pay interest on any debt security for 30 days after the payment is due; | |
| ● | failure to pay the principal of any debt security when due, either at maturity, upon redemption, by declaration or otherwise; | |
| ● | failure on our | |
| ● | certain events of bankruptcy, insolvency or |
Remedies Upon an Event of Default
If an event of default occurs and continues, the trustee or the holders of not less than 25% in aggregate principal amount of the outstanding debt securities of such series may declare the entire principal of all the debt securities to be due and payable immediately, except that, if the event of default is caused by certain events in bankruptcy, insolvency or reorganization, the entire principal of all of the debt securities of such series will become due and payable immediately without any act on the part of the trustee or holders of the debt securities. If such a declaration occurs, the holders of a majority of the aggregate principal amount of the outstanding debt securities of such series can, subject to conditions, rescind the declaration.
The indenture requires us to furnish to the trustee not less often than annually, a certificate from our principal executive officer, principal financial officer or principal accounting officer, as the case may be, as to such officer’s knowledge of our compliance with all conditions and covenants under the indenture. The trustee may withhold notice to the holders of debt securities of any default, except defaults in the payment of principal of or interest on any debt securities if the trustee in good faith determines that the withholding of notice is in the best interests of the holders. For purposes of this paragraph, “default” means any event which is, or after notice or lapse of time or both would become, an event of default under the indenture.
The trustee is not obligated to exercise any of its rights or powers under the indenture at the request, order or direction of any holders of debt securities, unless the holders offer the trustee satisfactory security or indemnity. If satisfactory security or indemnity is provided, then, subject to other rights of the trustee, the holders of a majority in aggregate principal amount of the outstanding debt securities may direct the time, method and place of:
strategic partnerships, joint ventures
| ● | conducting any proceeding for any remedy available to the trustee; or | |
| ● | exercising any trust or |
The holder of a debt security will have the right to begin any proceeding with respect to the indenture or for any remedy only if:
| ● | the holder has previously given the trustee written notice of a continuing event of default; | |
| ● | the holders of not less than a majority in aggregate principal amount of the outstanding debt securities have made a written request of, and offered reasonable indemnity to, the trustee to begin such proceeding; | |
| ● | the trustee has not started such proceeding within 60 days after receiving the request; and | |
| ● | no direction inconsistent with such written request has been given to the trustee under the indenture. |
However, the holder of any debt security will have an absolute right to receive payment of principal of and interest on the debt security when due and to institute suit to enforce this payment.
Satisfaction and Discharge; Defeasance
Satisfaction and Discharge of Indenture. Unless otherwise indicated in the applicable prospectus supplement, if at any time,
| ● | we have paid the principal of and interest on all the debt securities of any series, except for debt securities which have been destroyed, lost or stolen and which have been replaced or paid in accordance with the indenture, as and when the same shall have become due and payable, or | |
| ● | we have delivered to the trustee for cancellation all debt securities of any series theretofore authenticated, except for debt securities of such series which have been destroyed, lost or stolen and which have been replaced or paid as provided in the indenture, or | |
| ● | all the debt securities of such series not theretofore delivered to the trustee for cancellation have become due and payable, or are by their terms are to become due and payable within one year or are to be called for redemption within one year, and we have deposited with the trustee, in trust, sufficient money or government obligations, or a combination thereof, to pay the principal, any interest and any other sums due on the debt securities, on the dates the payments are due or become due under the indenture and the terms of the debt securities, |
then the indenture shall cease to be of further effect with respect to the debt securities of such series, except for:
| ● | rights of registration of transfer and exchange, and our right of optional redemption; | |
| ● | substitution of mutilated, defaced, destroyed, lost or stolen debt securities; | |
| ● | rights of holders to receive payments of principal thereof and interest thereon upon the original stated due dates therefor (but not upon acceleration) and remaining rights of the holders to receive mandatory sinking fund payments, if any; | |
| ● | the rights, obligations and immunities of the trustee under the indenture; and | |
| ● | the rights of the holders of such series of debt securities as beneficiaries thereof with respect to the property so deposited with the trustee payable to all or any of them. |
Defeasance and Covenant Defeasance. Unless otherwise indicated in the applicable prospectus supplement, we may elect with respect to any debt securities of any series either:
| ● | to defease and be discharged from all of our obligations with respect to such debt securities (“defeasance”), with certain exceptions described below; or | |
| ● | to be released from our obligations with respect to such debt securities under such covenants as may be specified in the applicable prospectus supplement, and any omission to comply with those obligations will not constitute a default or an event of default with respect to such debt securities (“covenant defeasance”). |
We must comply with the following conditions before the defeasance or covenant defeasance can be effected:
| ● | we must irrevocably deposit with the indenture trustee or other qualifying trustee, under the terms of an irrevocable trust agreement in form and substance satisfactory to the trustee, trust funds in trust solely for the benefit of the holders of such debt securities, sufficient money or government obligations, or a combination thereof, to pay the principal, any interest and any other sums on the due dates for those payments; and | |
| ● | we must deliver to the trustee an opinion of counsel to the effect that the holders of such debt securities will not recognize income, gain or loss for federal income tax purposes as a result of defeasance or covenant defeasance, as the case may be, to be effected with respect to such debt securities and will be subject to federal income tax on the same amount, in the same manner and at the same times as would be the case if such defeasance or covenant defeasance, as the case may be, had not occurred. |
In connection with defeasance, any irrevocable trust agreement contemplated by the indenture must include, among other things, provision for:
| ● | payment of the principal of and interest on such debt securities, if any, appertaining thereto when due (by redemption, sinking fund payments or otherwise), | |
| ● | the payment of the expenses of the trustee incurred or to be incurred in connection with carrying out such trust provisions, |
| ● | rights of registration, transfer, substitution and exchange of such debt securities in accordance with the terms stated in the indenture, and | |
| ● | continuation of the rights, obligations and immunities of the trustee as against the holders of such debt securities as stated in the indenture. |
The accompanying prospectus supplement may further describe any provisions permitting or restricting defeasance or covenant defeasance with respect to the debt securities of a particular series.
Global Securities
Unless otherwise indicated in the applicable prospectus supplement, each debt security offered by this prospectus will be issued in the form of one or more global debt securities representing all or part of that series of debt securities. This means that we will not issue certificates for that series of debt securities to the holders. Instead, a global debt security representing that series will be deposited with, or on behalf of, a securities depositary and registered in the name of the depositary or a nominee of the depositary. Any such depositary must be a clearing agency registered under the Exchange Act. We will describe the specific terms of the depositary arrangement with respect to a series of debt securities to be represented by a global security in the applicable prospectus supplement.
Notices
We will give notices to holders of the debt securities by mail at the addresses listed in the security register. In the case of notice in respect of unregistered securities or coupon securities, we may give notice by publication in a newspaper of general circulation in New York, New York.
Governing Law
The particular terms of a series of debt securities will be described in a prospectus supplement relating to such series of debt securities. Any indentures will be subject to and governed by the Trust Indenture Act of 1939, as amended, and may be supplemented or amended from time to time following their execution. Unless otherwise stated in the applicable prospectus supplement, we will not be limited in the amount of debt securities that we may issue, and neither the senior debt securities nor the subordinated debt securities will be secured by any of our property or assets. Thus, by owning debt securities, you are one of our unsecured creditors.
Regarding the Trustee
From time to time, we may maintain deposit accounts and conduct other banking transactions with the trustee to be appointed under the indenture or its affiliates in the ordinary course of business.
We may offer to sell warrants from time to time. If we do so, we will describe the specific terms of the warrants in a prospectus supplement. In particular, we may issue warrants for the purchase of common stock, preferred stock and/or debt securities in one or more series. We may also issue warrants independently or together with other securities and the warrants may be attached to or separate from those securities.
We will evidence each series of warrants by warrant certificates that we will issue under a separate agreement. We will enter into the warrant agreement with a warrant agent. We will indicate the name and address of the warrant agent in the applicable prospectus supplement relating to a particular series of warrants.
We will describe in the applicable prospectus supplement the terms of the series of warrants, including:
| ● | the offering price and aggregate number of warrants offered; | |
| ● | the currency for which the warrants may be purchased; |
| ● | if applicable, the designation and terms of the securities with which the warrants are issued and the number of warrants issued with each such security or each principal amount of such security; | |
| ● | if applicable, the date on and after which the warrants and the related securities will be separately transferable; | |
| ● | in the case of warrants to purchase debt securities, the principal amount of debt securities purchasable upon exercise of one warrant and the price at, and currency in which, this principal amount of debt securities may be purchased upon such exercise; | |
| ● | in the case of warrants to purchase common stock or preferred stock, the number of shares of common stock or preferred stock, as the case may be, purchasable upon the exercise of one warrant and the price at which these shares may be purchased upon such exercise; | |
| ● | the effect of any merger, consolidation, sale or other disposition of our business on the warrant agreement and the warrants; | |
| ● | the terms of any rights to redeem or call the warrants; | |
| ● | any provisions for changes to or adjustments in the exercise price or number of securities issuable upon exercise of the warrants; | |
| ● | the dates on which the right to exercise the warrants will commence and expire; | |
| ● | the manner in which the warrant agreement and warrants may be modified; | |
| ● | certain United States federal income tax consequences of holding or exercising the warrants; | |
| ● | the terms of the securities issuable upon exercise of the warrants; and | |
| ● | any other specific material terms, preferences, rights or limitations of or restrictions on the warrants. |
Holders may exercise the warrants by delivering the warrant certificate representing the warrants to be exercised together with other requested information, and paying the required amount to the warrant agent in immediately available funds, as provided in the applicable prospectus supplement. We will set forth in the applicable prospectus supplement the information that the holder of the warrant will be required to deliver to the warrant agent.
Upon receipt of the required payment and the warrant certificate properly completed and duly executed at the office of the warrant agent or any other office indicated in the applicable prospectus supplement, we will issue and deliver the securities purchasable upon such exercise. If a holder exercises fewer than all of the warrants represented by the warrant certificate, then we will issue a new warrant certificate for the remaining amount of warrants.
Holder will not have any of the rights of the holders of the securities purchasable upon the exercise of warrants until you exercise them. Accordingly, holder will not be entitled to, among other things, vote or receive dividend payments or similar distributions on the securities you can purchase upon exercise of the warrants.
The information provided above is only a summary of the terms under which we may offer warrants for sale. Accordingly, investors must carefully review the applicable warrant agreement for more information about the specific terms and conditions of these warrants before investing in us. In addition, please carefully review the information provided in the applicable prospectus supplement, which contains additional information that is important for you to consider in evaluating an investment in our securities.
We may issue rights to our stockholders to purchase shares of our common stock or preferred stock described in this prospectus. We may offer rights separately or together with one or more additional rights, preferred stock, common stock, warrants or any combination of those securities in the form of units, as described in the applicable prospectus supplement. Each series of rights will be issued under a separate rights agreement to be entered into between us and a bank or trust company, as rights agent. The rights agent for any rights we offer will be set forth in the applicable prospectus supplement. The rights agent will act solely as our agent in connection with the certificates relating to the rights of the series of certificates and will not assume any obligation or relationship of agency or trust for or with any holders of rights certificates or beneficial owners of rights. The following description sets forth certain general terms and provisions of the rights to which any prospectus supplement may relate. The particular terms of the rights to which any prospectus supplement may relate and the extent, if any, to which the general provisions may apply to the rights so offered will be described in the applicable prospectus supplement. To the extent that any particular terms of the rights, rights agreement or rights certificates described in a prospectus supplement differ from any of the terms described below, then the terms described below will be deemed to have been superseded by that prospectus supplement. We encourage you to read the applicable rights agreement and rights certificate for additional information before you decide whether to purchase any of our rights.
The prospectus supplement relating to any rights that we offer will include specific terms relating to the offering, including, among other matters:
| ● | the date of determining the stockholders entitled to the rights distribution; | |
| ● | ||
| ● | ||
| ● | ||
| ● | ||
| ● | the date on which the right to exercise the rights will commence, and the date on which the right to exercise the rights will expire; | |
| ● | the method by which holders of rights will be entitled to exercise; | |
| ● | the conditions to the completion of the offering; | |
| ● | the withdrawal, termination and cancellation rights; | |
| ● | whether there are any backstop or standby purchaser or purchasers and the terms of their commitment; | |
| ● | whether stockholders are entitled to oversubscription right; | |
| ● | any U.S. federal income tax considerations; and | |
| ● | any other
|
If less than all of the rights issued in any rights offering are exercised, we may offer any unsubscribed securities directly to persons other than stockholders, to or through agents, underwriters or dealers or through a combination of such methods, including pursuant to standby arrangements, as described in the applicable prospectus supplement. In addition, the stock market in general has experienced extreme price and volume fluctuations that have often been unrelatedconnection with any rights offering, we may enter into a standby underwriting or disproportionateother arrangement with one or more underwriters or other persons pursuant to the operating performance of these companies. Broad market and industry factors may negatively affect the market price of our Common Stock, regardless of our actual operating performance.
which such underwriters or other persons would purchase any offered securities remaining unsubscribed for after such rights offering.
We do not intend to pay dividends on our Common Stock so any returns will be limited to the value of our stock.DESCRIPTION OF UNITS
We have never declaredmay issue units consisting of any combination of the other types of securities offered under this prospectus in one or paid any cash dividend on our Common Stock.more series. We currently anticipatemay evidence each series of units by unit certificates that we will retain future earnings for the development, operation and expansion of our business and do not anticipate declaring or paying any cash dividends for the foreseeable future. Additionally, any credit and security agreement that weissue under a separate agreement. We may enter into unit agreements with a unit agent. We will indicate the name and address of the unit agent in the future will likely contain covenants that will restrict our abilityapplicable prospectus supplement relating to pay dividends. Any return to stockholders will therefore be limited to the appreciationa particular series of their stock.
Sales of a substantial number of shares of our Common Stock in the public market by certain of our stockholders could cause our stock price to fall.
Sales of a substantial number of shares of our Common Stock in the public market or the perception that these sales might occur, could depress the market price of our Common Stock and could impair our ability to raise capital through the sale of additional equity securities. We are unable to predict the effect that sales may have on the prevailing market price of our Common Stock.
An active trading market for our Common Stock may not be maintained.
Our Common Stock is currently traded on The Nasdaq Capital Market, but we can provide no assurance that we will be able to maintain an active trading market on this or any other exchange in the future. If an active market for our Common Stock is not maintained, it may be difficult for our stockholders to sell or purchase shares. An inactive market may also impair our ability to raise capital to continue to fund operations by selling shares and impair our ability to acquire other companies or technologies using our shares as consideration.
All proceeds from the resale of the Shares offered by this prospectus will belong to the Selling Stockholders. We will not receive any proceeds from the resale of the Shares by the Selling Stockholders.
We will receive proceeds from any cash exercise of the January 2020 Investor Warrants. If all such January 2020 Investor Warrants are fully exercised on a cash basis, we will receive gross cash proceeds of approximately $565,342. We expect to use the proceeds from the exercise of such January 2020 Investor Warrants, if any, for general corporate purposes. General corporate purposes may include providing working capital, funding capital expenditures, or paying for acquisitions. We currently do not have any arrangements or agreements for any acquisitions. We cannot precisely estimate the allocation of the net proceeds from any exercise of the warrants for cash. Accordingly, in the event the January 2020 Investor Warrants are exercised for cash, our management will have broad discretion in the application of the net proceeds of such exercises. There is no assurance that the January 2020 Investor Warrants will ever be exercised for cash.
This prospectus relates to the resale, from time to time, of up to 2,592,228 shares (the “Shares”) of our common stock, par value $0.001 per share (“Common Stock”), by the selling stockholders identified in this prospectus under “Selling Stockholders” (the “Offering”) pursuant to the January 2020 Offering (282,671 shares underlying the January 2020 Investor Warrants, 48,413 shares issued pursuant to the exercise of the January 2020 Investor Warrants, and 5,429 shares issued pursuant to the exercise of the Gunnar Affiliate Warrants), the Summer 2020 Subscriptions (1,605,715 shares), and the TE Shares (650,000 shares).
All expenses incurred with respect to the registration of the Common Stock will be borne by us, but we will not be obligated to pay any underwriting fees, discounts, commission or other expenses incurred by the Selling Stockholders in connection with the sale of such shares.
Except as indicated below, neither the Selling Stockholders nor any of their associates or affiliates has held any position, office, or other material relationship with us in the past three years.units.
The following table sets forthdescription, together with the namesadditional information included in any applicable prospectus supplement, summarizes the general features of the Selling Stockholders,units that we may offer under this prospectus. You should read any prospectus supplement and any free writing prospectus that we may authorize to be provided to you related to the numberseries of shares of Common Stock beneficially owned byunits being offered, as well as the Selling Stockholders ascomplete unit agreements that contain the terms of the date hereofunits. Specific unit agreements will contain additional important terms and provisions and we will file as an exhibit to the numberregistration statement of shareswhich this prospectus is a part, or will incorporate by reference from another report that we file with the SEC, the form of Common Stock beingeach unit agreement relating to units offered by the Selling Stockholders. The shares being offered hereby are being registered to permit public secondary trading, and the Selling Stockholders may offer all or part of the shares for resale from time to time. However, the Selling Stockholders are under no obligation to sell all or any portion of such shares. All information with respect to share ownership has been furnished by the Selling Stockholders. The “Number of Shares Beneficially Owned After the Offering” column assumes the sale of all shares offered.this prospectus.
The common stock being offered by the Selling Stockholders are those owned by the Selling Stockholders and those issuable to the Selling Stockholders, upon exerciseIf we offer any units, certain terms of the Warrants. We are registering the sharesthat series of common stock in order to permit the Selling Stockholders to offer these shares for resale from time to time. Except for the investmentunits will be described in the shares of Common Stockapplicable prospectus supplement, including, without limitation, the Selling Stockholders have not had any material relationship with us within the past three years.following, as applicable:
The table below lists the Selling Stockholders and other information regarding the beneficial ownership of the shares of common stock by each of the Selling Stockholders. The second column lists the number of shares of common stock beneficially owned by each Selling Stockholder, based on its ownership of the shares of common stock and warrants, as of the date hereof. The third column lists the shares of common stock being offered by this prospectus by the Selling Stockholders.
| Name of Investor | Number of Shares of Common Stock Owned Prior to Offering | % of Shares of Common Stock Owned Prior to Offering | Maximum Number of shares of Common Stock to be Sold Pursuant to this Prospectus | Maximum Number of shares of Common Stock underlying Warrants to be Sold Pursuant to this Prospectus (1) | Number of shares of Common Stock Owned After the Offering | |||||||||||||||
| Mill City Ventures III LTD | 1,000,000 | * | 1,000,000 | - | - | |||||||||||||||
| John Kresevic | 157,143 | * | 157,143 | - | - | |||||||||||||||
| Brandon Glickstein and Charles K Bortz | 42,858 | * | 42,858 | - | - | |||||||||||||||
| Justin Meek | 142,858 | * | 142,858 | - | - | |||||||||||||||
| Ron Wiley | 20,000 | * | 20,000 | - | - | |||||||||||||||
| Evan Williams | 57,140 | * | 57,140 | - | - | |||||||||||||||
| Shane Haglin | 42,858 | * | 42,858 | - | - | |||||||||||||||
| Michael Atkinson | 57,143 | * | 57,143 | - | - | |||||||||||||||
| Jason Mitchell | 85,715 | * | 85,715 | - | - | |||||||||||||||
| Trending Equities | 350,000 | * | 350,000 | - | (2) | - | ||||||||||||||
| Mike Baron | 50,000 | * | 50,000 | - | - | |||||||||||||||
| RW Cabo LLC | 200,000 | * | 200,000 | - | (3) | - | ||||||||||||||
Lucid Technologies | 50,000 | * | 50,000 | - | - | |||||||||||||||
| Stephen A. Stein | 5,429 | * | 5,429 | - | - | |||||||||||||||
| Richard W. Baskerville Lvg Trust | - | * | - | 103,306 | (4) | - | ||||||||||||||
| Dean Britting | - | * | - | 19,841 | (4) | - | ||||||||||||||
| Pinnacle Family Office Investment L.P. | 48,413 | * | 48,413 | 100,000 | (4)(5) | - | ||||||||||||||
| Porter Partners, L.P. | - | * | - | 59,524 | (4) | - | ||||||||||||||
| Total | 2,309,557 | 2,309,557 | 282,671 | |||||||||||||||||
| ● | the title of the series of units; | |
| ● | identification and description of the separate constituent securities comprising the units; | |
| ● | the price or prices at which the units will be issued; | |
| ● | the date, if any, on and after which the constituent securities comprising the units will be separately transferable; | |
| ● | a discussion of certain United States federal income tax considerations applicable to the units; and | |
| ● | any other terms of the units and their constituent securities. |
(1) Assumes that the Selling Stockholders sells all of the common stock underlying the January 2020 Investor Warrants.
(2) Mike Baron has voting and investment power over the shares held by Trending Equities.
(3) Roger Agudelo has voting and investment power over the shares held by RW Cabo LLC.
(4) Consists of the Common Stock underlying the January 2020 Investor Warrants.
(5) Barry M. Kitt is the manager of Pinnacle Family Office L.L.C., the general partner of Pinnacle Family Office Investments, L.P., and has voting and investment power over the shares held by Pinnacle Family Office Investments, L.P.
* Less than 1%
The Selling StockholdersWe may sell the securities from time to time sell, transfer,pursuant to underwritten public offerings, negotiated transactions, block trades or otherwise disposea combination of anythese methods or all of their shares of common stock on any stock exchange, market,through underwriters or trading facility on which the shares are traded dealers, through agents and/or in private transactions. These dispositions may be at fixed prices, at prevailing market prices at the time of sale, at prices relateddirectly to the prevailing market price, at varying prices determined at the time of sale, or at negotiated prices. The Seller Stockholders may use any one or more of the following methods when disposing of shares:purchasers. The securities may be distributed from time to time in one or more transactions:
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| ● | at market prices prevailing at the time of sale; | |
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The Selling StockholdersEach time that we sell securities covered by this prospectus, we will provide a prospectus supplement or supplements that will describe the method of distribution and set forth the terms and conditions of the offering of such securities, including the offering price of the securities and the proceeds to us, if applicable.
Offers to purchase the securities being offered by this prospectus may be solicited directly. Agents may also sell shares under Rule 144 underbe designated to solicit offers to purchase the Securities Act, if available, rather than under this prospectus.securities from time to time. Any agent involved in the offer or sale of our securities will be identified in a prospectus supplement.
If a dealer is utilized in the Selling Stockholders effect such transactionssale of the securities being offered by selling sharesthis prospectus, the securities will be sold to the dealer, as principal. The dealer may then resell the securities to the public at varying prices to be determined by the dealer at the time of Common Stockresale.
If an underwriter is utilized in the sale of the securities being offered by this prospectus, an underwriting agreement will be executed with the underwriter at the time of sale and the name of any underwriter will be provided in the prospectus supplement that the underwriter will use to make resales of the securities to the public. In connection with the sale of the securities, we or the purchasers of securities for whom the underwriter may act as agent, may compensate the underwriter in the form of underwriting discounts or commissions. The underwriter may sell the securities to or through underwriters, broker-dealers or agents, such underwriters, broker-dealers or agentsdealers, and those dealers may receive commissionscompensation in the form of discounts, concessions or commissions from the Seller Stockholders underwriters and/or commissions from the purchasers of the shares of Common Stock for whomwhich they may act as agent. Unless otherwise indicated in a prospectus supplement, an agent will be acting on a best efforts basis and a dealer will purchase securities as a principal, and may then resell the securities at varying prices to be determined by the dealer.
Any compensation paid to underwriters, dealers or to whom they may sell as principal (whichagents in connection with the offering of the securities, and any discounts, concessions or commissions asallowed by underwriters to particular underwriters, broker-dealers orparticipating dealers will be provided in the applicable prospectus supplement. Underwriters, dealers and agents participating in the distribution of the securities may be in excess of those customary indeemed to be underwriters within the types of transactions involved). In connection with salesmeaning of the sharesSecurities Act of Common Stock or otherwise,1933, as amended, and any discounts and commissions received by them and any profit realized by them on resale of the Selling Stockholderssecurities may be deemed to be underwriting discounts and commissions. We may enter into hedgingagreements to indemnify underwriters, dealers and agents against civil liabilities, including liabilities under the Securities Act, or to contribute to payments they may be required to make in respect thereof and to reimburse those persons for certain expenses.
Any common stock will be listed on the Nasdaq Capital Market, but any other securities may or may not be listed on a national securities exchange. To facilitate the offering of securities, certain persons participating in the offering may engage in transactions with broker-dealers, whichthat stabilize, maintain or otherwise affect the price of the securities. This may in turn engage ininclude over-allotments or short sales of the shares of Common Stocksecurities, which involve the sale by persons participating in the courseoffering of hedgingmore securities than were sold to them. In these circumstances, these persons would cover such over-allotments or short positions by making purchases in positions they assume.the open market or by exercising their over-allotment option, if any. In addition, these persons may stabilize or maintain the price of the securities by bidding for or purchasing securities in the open market or by imposing penalty bids, whereby selling concessions allowed to dealers participating in the offering may be reclaimed if securities sold by them are repurchased in connection with stabilization transactions. The Selling Stockholderseffect of these transactions may alsobe to stabilize or maintain the market price of the securities at a level above that which might otherwise prevail in the open market. These transactions may be discontinued at any time.
We may engage in at the market offerings into an existing trading market in accordance with Rule 415(a)(4) under the Securities Act.
In addition, we may enter into derivative transactions with third parties, or sell shares of Common Stock short and deliver shares of Common Stocksecurities not covered by this prospectus to close out short positions and to return borrowed sharesthird parties in privately negotiated transactions. If the applicable prospectus supplement so indicates, in connection with those derivatives, the third parties may sell securities covered by this prospectus and the applicable prospectus supplement, including in short sale transactions. If so, the third party may use securities pledged by us or borrowed from us or others to settle those sales or to close out any related open borrowings of stock, and may use securities received from us in settlement of those derivatives to close out any related open borrowings of stock. The third party in such short sales. The Selling Stockholderssale transactions will be an underwriter and, if not identified in this prospectus, will be named in the applicable prospectus supplement (or a post-effective amendment). In addition, we may alsootherwise loan or pledge shares of Common Stocksecurities to broker-dealersa financial institution or other third party that in turn may sell the securities short using this prospectus and an applicable prospectus supplement. Such financial institution or other third party may transfer its economic short position to investors in our securities or in connection with a concurrent offering of other securities.
We do not make any representation or prediction as to the direction or magnitude of any effect that the transactions described above might have on the price of the securities. In addition, we do not make any representation that underwriters will engage in such shares.transactions or that such transactions, once commenced, will not be discontinued without notice.
The Selling Stockholders may from time to time pledge or grant a security interestspecific terms of any lock-up provisions in some or allrespect of the shares of Common Stock owned by them and, if they defaultany given offering will be described in the performance of their secured obligations,applicable prospectus supplement.
To comply with applicable state securities laws, the pledgees or secured parties may offer and sell the shares of Common Stock from time to time undersecurities offered by this prospectus after we have filed a supplement to this prospectus under Rule 424(b)(3) or other applicable provision of the Securities Act supplementing or amending the list of Selling Stockholders to include the pledgee, transferee or other successors in interest as Selling Stockholders under this prospectus. The Selling Stockholders also may transfer or donate the shares of Common Stock in other circumstances, in which case the transferees, donees, pledgees, or other successors in interest will be the selling beneficial owners for purposes of this prospectus.
Under the securities laws of some states, the shares of Common Stock may be sold, if necessary, in such statesjurisdictions only through registered or licensed brokers or dealers. In addition, in some states the shares of Common Stocksecurities may not be sold in some states unless such sharesthey have been registered or qualified for sale in suchthe applicable state or an exemption from the registration or qualification requirement is available and is complied with.
There can be no assurance that any Selling Stockholder will sell anyThe underwriters, dealers and agents may engage in transactions with us, or allperform services for us, in the ordinary course of the shares of Common Stock registered pursuant to the registration statement ofbusiness for which this prospectus forms a part.they receive compensation.
The Selling Stockholders and any other person participating in such distribution will be subject to applicable provisions of the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder, including, without limitation, the anti-manipulation rules of Regulation M of the Exchange Act, which may limit the timing of purchases and sales of any of the Common Stock by the Selling Stockholders and any other participating person. Regulation M may also restrict the ability of any person engaged in the distribution of the shares of Common Stock to engage in market-making activities with respect to the shares of common stock.
In addition, to the extent applicable we will make copies of this prospectus (as it may be supplemented or amended from time to time) available to the Selling Stockholders for the purpose of satisfying the prospectus delivery requirements of the Securities Act. The Seller Stockholders may indemnify any broker-dealer that participates in transactions involving the sale of the shares against certain liabilities, including liabilities arising under the Securities Act.
We are required to pay all expenses of the registration of the shares of Common Stock, including SEC filing fees and expenses of compliance with state securities or “blue sky” laws; provided, however, that the Selling Stockholders will pay all underwriting discounts and selling commissions, if any, and all fees and expenses of their respective legal counsel. We have agreed to indemnify the Selling Stockholders against liabilities, including liabilities under the Securities Act and state securities laws, relating to the registration of the shares offered by this prospectus. We may be indemnified by the Selling Stockholders against liabilities, including liabilities under the Securities Act, and state security laws, that may arise from any written information furnished to us by the Selling Stockholders specifically for use in this prospectus.
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Lucosky Brookman LLP will pass upon certain legal matters relating to the issuance and sale of the securities offered hereby.hereby on behalf of Ammo, Inc. Additional legal matters may be passed upon for us or any underwriters, dealers or agents, by counsel that we will name in the applicable prospectus supplement.
The consolidated balance sheetssheet as of March 31, 2020 and the related consolidated statements of operations, stockholders’ equity, and cash flows included in this prospectus and in the registration statement have been so included in reliance on the reportreports of Marcum LLP, independent registered public accounting firm,firms, included herein, (thegiven on the authority of said firm as experts in accounting and auditing. The report thereon contains an explanatory paragraph which describe the conditions that raise substantial doubt about the Company’s ability to continue as a going concern and are contained in Note 2 to the consolidated financial statements), given on the authority of said firm as experts in accounting and auditing.statements.
The consolidated balance sheets as of March 31, 2019 and the related consolidated statements of operations, stockholders’ equity, and cash flows included in this prospectus and in the registration statement have been so included in reliance on the reports of KWCO, PC, independent registered public accounting firms, included herein, given on the authority of said firm as experts in accounting and auditingauditing.
WHERE YOU CAN FIND MORE INFORMATION
Available Information
We file reports, proxy statements and other information with the SEC. The SEC maintains a web site that contains reports, proxy and information statements and other information about issuers, such as us, who file electronically with the SEC. The address of that website is http://www.sec.gov.
Our website address is https://ammoinc.com. The information on our website, however, is not, and should not be deemed to be, a part of this prospectus.
This prospectus and any prospectus supplement are part of a registration statement that we filed with the SEC and do not contain all of the information in the registration statement. The full registration statement may be obtained from the SEC or us, as provided below. Forms of the documents establishing the terms of the offered securities are or may be filed as exhibits to the registration statement. Statements in this prospectus or any prospectus supplement about these documents are summaries and each statement is qualified in all respects by reference to the document to which it refers. You should refer to the actual documents for a more complete description of the relevant matters. You may inspect a copy of the registration statement through the SEC’s website, as provided above.
The SEC’s rules allow us to “incorporate by reference” information into this prospectus, which means that we can disclose important information to you by referring you to another document filed separately with the SEC. The information incorporated by reference is deemed to be part of this prospectus, and subsequent information that we file with the SEC will automatically update and supersede that information. Any statement contained in a previously filed document incorporated by reference will be deemed to be modified or superseded for purposes of this prospectus to the extent that a statement contained in this prospectus modifies or replaces that statement.
We incorporate by reference our documents listed below and any future filings made by us with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended, which we refer to as the “Exchange Act” in this prospectus, between the date of this prospectus and the termination of the offering of the securities described in this prospectus. We are not, however, incorporating by reference any documents or portions thereof, whether specifically listed below or filed in the future, that are not deemed “filed” with the SEC, including any information furnished pursuant to Items 2.02 or 7.01 of Form 8-K or related exhibits furnished pursuant to Item 9.01 of Form 8-K.
This prospectus and any accompanying prospectus supplement incorporate by reference the documents set forth below that have previously been filed with the SEC:
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All reports and other documents we subsequently file pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the termination of this Offering, including all such documents we may file with the SEC after the date of the initial registration statement and prior to the effectiveness of the registration statement, but excluding any information furnished to, rather than filed with, the SEC, will also be incorporated by reference into this prospectus and deemed to be part of this prospectus from the date of the filing of such reports and documents.
You may request a free copy of any of the documents incorporated by reference in this prospectus (other than exhibits, unless they are specifically incorporated by reference in the documents) by writing or telephoning us at the following address:
Ammo, Inc.
7681 East Gray Road
Scottsdale, Arizona 85260
(480) 947-0001
Exhibits to the filings will not be sent, however, unless those exhibits have specifically been incorporated by reference in this prospectus and any accompanying prospectus supplement.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following is an estimate of the expenses (all of which are to be paid by the registrant) that we may incur in connection with the securities being registered hereby.
| SEC registration fee | $ | 1,504.56 | ||
| Legal fees and expenses | 10,000.00 | * | ||
| Accounting fees and expenses | 10,000.00 | * | ||
| Total | $ | 21,504.56 | * |
| SEC registration fee | $ | 16,365.00 | ||
| FINRA filing fee | * | |||
| Printing expenses | * | |||
| Legal fees and expenses | * | |||
| Accounting fees and expenses | * | |||
| Blue Sky, qualification fees and expenses | * | |||
| Transfer agent fees and expenses | * | |||
| Trustee fees and expenses | * | |||
| Warrant agent fees and expenses | * | |||
| Miscellaneous | * | |||
| Total | $ | * |
| * |
Item 15. Indemnification of Directors and Officers
Our certificate of incorporation and bylaws provide that we will indemnify and advance expenses, to the fullest extent permitted by the Delaware General Corporation Law, to each person who is or was a director or officer of our company, or who serves or served any other enterprise or organization at the request of our company (an “indemnitee”).
Under Delaware law, to the extent that an indemnitee is successful on the merits in defense of a suit or proceeding brought against him or her by reason of the fact that he or she is or was a director, officer, or agent of our company, or serves or served any other enterprise or organization at the request of our company, we shall indemnify him or her against expenses (including attorneys’ fees) actually and reasonably incurred in connection with such action.
If unsuccessful in defense of a third-party civil suit or a criminal suit, or if such a suit is settled, an indemnitee may be indemnified under Delaware law against both (1) expenses, including attorney’s fees, and (2) judgments, fines, and amounts paid in settlement if he or she acted in good faith and in a manner he or she reasonably believed to be in, or not opposed to, the best interests of our company, and, with respect to any criminal action, had no reasonable cause to believe his or her conduct was unlawful.
If unsuccessful in defense of a suit brought by or in the right of our company, where the suit is settled, an indemnitee may be indemnified under Delaware law only against expenses (including attorneys’ fees) actually and reasonably incurred in the defense or settlement of the suit if he or she acted in good faith and in a manner he or she reasonably believed to be in, or not opposed to, the best interests of our company except that if the indemnitee is adjudged to be liable for negligence or misconduct in the performance of his or her duty to our company, he or she cannot be made whole even for expenses unless a court determines that he or she is fully and reasonably entitled to indemnification for such expenses.
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Also under Delaware law, expenses incurred by an officer or director in defending a civil or criminal action, suit, or proceeding may be paid by the registrant in advance of the final disposition of the suit, action, or proceeding upon receipt of an undertaking by or on behalf of the officer or director to repay such amount if it is ultimately determined that he or she is not entitled to be indemnified by our company. We may also advance expenses incurred by other employees and agents of our company upon such terms and conditions, if any, that the Board of Directors of the registrant deems appropriate.
Our articles of incorporation and bylaws provide that we may indemnify to the full extent of our power to do so, all directors, officers, employees, and/or agents.
Item 16. Exhibits
(a) Exhibits
A list of exhibits filed with this registration statement on Form S-3 is set forth on the Exhibit Index and is incorporated herein by reference.Item 16. Exhibits.
| Incorporated by | ||||||||||
| Reference | Filed or Furnished | |||||||||
| Exhibit Number | Exhibit Description | Form | Exhibit | Filing Date | Herewith | |||||
| 1.1* | Form of Underwriting Agreement | |||||||||
| 3.1 | Certificate of Incorporation (Amended and Restated) filed with the Delaware Secretary of State on October 24, 2018 | 8-K | 3.1 | 10/26/2018 | ||||||
| 3.2 | Bylaws | 8-K | 3.03 | 02/09/2017 | ||||||
| 4.1 | Form of Certificate of Common Stock | S-1/A | 4.4 | 10/16/2018 | ||||||
| 4.2 | Form of Indenture | X | ||||||||
| 4.3* | Form of Note | |||||||||
| 4.4* | Form of Warrant | |||||||||
| 4.5* | Form of Warrant Agreement | |||||||||
| 4.6* | Form of Rights Agreement | |||||||||
| 4.7* | Form of Unit Agreement | |||||||||
| 5.1 | Opinion of Lucosky Brookman LLP | X | ||||||||
| 23.1 | Consent of Marcum LLP, independent registered public accounting firm | X | ||||||||
| 23.2 | Consent of KWCO, PC, independent registered public accounting firm | X | ||||||||
| 23.3 | Consent of Lucosky Brookman LLP (Included in Exhibit 5.1) | X | ||||||||
| 24.1 | Power of Attorney (incorporated by reference to the signature page hereto) | X | ||||||||
| 25.1** | Statement of Eligibility of Trustee on Form T-1 under the Trust Indenture Act of 1939, as amended | |||||||||
* | To be filed by amendment or incorporated by reference in connection with the offering of the securities. | |
| ** | To be filed, if applicable, pursuant to Section 305(b)(2) of the Trust Indenture Act of 1939. |
Item 17. Undertakings
(a) The undersigned registrant hereby undertakes:
| (1) | To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: |
| (i) | To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; |
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| (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 Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and |
| (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 provided, however, that paragraphs (a)(1)(i), (a)(1)(ii), and (a)(1)(iii) above do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the SEC by the registrant pursuant to Section 13 or Section 15(d) of the Exchange Act 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 a part of the registration statement. |
| (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. |
| (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. |
(5) | That, for the purpose of determining liability under the Securities Act (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 |
| (6) | 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:
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) | Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424; |
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| (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) | 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 |
| (iv) | Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser. |
(b) The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of the registrant’s annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference in the registration statement 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.
(h) Insofar as indemnification for liabilities arising under the Securities Act 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 SEC 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.
(j) The undersigned registrant hereby undertakes to file an application for the purpose of determining the eligibility of the trustee to act under subsection (a) of Section 310 of the Trust Indenture Act (the “Act”) in accordance with the rules and regulations prescribed by the SEC under section 305(b)(2) of the Act.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Scottsdale, State of Arizona, on February 5,16, 2021.
| Ammo, Inc. | |||
| By: | /s/ Fred W. Wagenhals | ||
Name: | Fred W. | ||
| Wagenals Title: | Chief Executive Officer | ||
(Principal Executive Officer) | |||
POWER OF ATTORNEY: KNOW ALL PERSONS BY THESE PRESENTS that each individual whose signature appears below constitutes and appoints Robert D. Wiley, his true and lawful attorneys-in-fact and agents with full power of substitution, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) to this Registration Statement, and to sign any registration statement for the same offering covered by the Registration Statement that is to be effective upon filing pursuant to Rule 462(b) promulgated under the Securities Act, and all post-effective amendments thereto, and to file the same, with all exhibits thereto and all documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or his, her or their substitute or substitutes, may lawfully do or cause to be done or by virtue hereof.
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:
| Signature | Title | Date | ||
| /s/ Fred Wagenhals | Chairman of the Board, Chief Executive Officer, and President | February | ||
| Fred Wagenhals | (Principal Executive Officer) | |||
| /s/ Robert D. Wiley | Chief Financial Officer | February | ||
| Robert D. Wiley | (Principal Financial and Principal Accounting Officer), | |||
| /s/ Robert J. Goodmanson |
| February | ||
| Robert J. Goodmanson | ||||
| /s/ Richard Childress | Director | February | ||
| Richard Childress | ||||
| /s/ Harry S. Markley | Director | February | ||
| Harry S. Markley | ||||
| /s/ Russell W. Wallace, Jr. | Director | February | ||
| Russell W. Wallace, Jr. | ||||
| /s/ Jessica M. Lockett | Director | February | ||
| Jessica M. Lockett |
EXHIBIT INDEX
| Incorporated by | ||||||||||
| Reference | Filed or Furnished | |||||||||
| Exhibit Number | Exhibit Description | Form | Exhibit | Filing Date | Herewith | |||||
| 4.1 | Form of January 2020 Investor Warrant, issued January 2020 | 10-Q | 10.3 | 02/13/2020 | ||||||
| 5.1 | Opinion of Lucosky Brookman LLP | X | ||||||||
| 10.1 | Form of Subscription Agreement for January 2020 Offering | 10-Q | 10.1 | 02/13/2020 | ||||||
| 10.2# | Form of Summer 2020 Subscription Agreement | X | ||||||||
| 10.3 | Compilation of TE Agreements | X | ||||||||
| 23.1 | Consent of Lucosky Brookman LLP (reference is made to Exhibit 5.1) | X | ||||||||
| 23.2 | Consent of Marcum LLP, independent registered public accounting firm | X | ||||||||
| 23.3 | Consent of KWCO, PC, independent registered public accounting firm | X | ||||||||
| 24.1 | Power of Attorney (incorporated by reference to the signature page hereto). | X | ||||||||
# Certain schedules and exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company will furnish supplementally copies of omitted schedules and exhibits to the Securities and Exchange Commission or its staff upon its request.
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