Document:

Exhibit
4.2

 

PURCHASE
WARRANT

 

Issued
to:

 

Eugene
Webb

 

Exercisable
to Purchase

 

675,000
Shares of Common Stock

 

of

 

AMMO,
Inc.

 

Issue
Date: February 17, 2021

Expiration
Date: February 17, 2026

 

THE
WARRANT REPRESENTED BY THIS WARRANT AND THE SHARES ISSUABLE UPON EXERCISE THEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. THE SECURITIES MAY NOT
BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED, EXCEPT (1) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OR
(2) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ALL APPLICABLE STATE SECURITIES
LAWS AND THE SECURITIES LAWS OF OTHER JURISDICTIONS, AND, IN THE CASE OF A TRANSACTION EXEMPT FROM REGISTRATION, UNLESS THE COMPANY HAS
RECEIVED AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO IT THAT SUCH TRANSACTION DOES NOT REQUIRE REGISTRATION UNDER THE SECURITIES
ACT AND SUCH OTHER APPLICABLE LAWS.

 

    	 

    	 

    

 

This
is to certify that, as of February 17, 2021, for value received and subject to the terms and conditions set forth below, the Warrantholder
is entitled to purchase, and the Company promises and agrees to sell and issue to the Warrantholder, at any time on or after the Initial
Exercise Date and on or before the Expiration Date, up to 675,000 shares of Common Stock at the per share Exercise Price pursuant to
this Warrant (the “Warrant”).

 

This
Warrant is issued by the Company pursuant to Section 2(b) of the Soliciting Agent Agreement, subject to the following terms and conditions:

 

1.
Definitions of Certain Terms. Except as may be otherwise clearly required by the context, the following terms have the following
meanings:

 

(a)
“Cashless Exercise” means an exercise of a Warrant in which the Warrantholder elects to pay the Exercise Price with
Warrant Shares in lieu of payment in cash.

 

(b)
“Common Stock” means the common stock, par value $0.001 per share, of the Company.

 

(c)
“Company” means AMMO, Inc..

 

(d)
“Exercise Price” means $2.00 per share of Common Stock.

 

(e)
“Offering” means the offering of securities made pursuant to the Soliciting Agent Agreement.

 

(f)
“Offering Materials” means the transaction documents and related investment materials described in the Soliciting
Agent Agreement.

 

(g)
“Soliciting Agent Agreement” means that certain Soliciting Agent Agreement, dated as of December 21, 2020, between
the Company and Paulson Investment Company, LLC.

 

(h)
“Securities Act” means the Securities Act of 1933, as amended.

 

(i)
“Warrant Shares” means the shares of Common Stock for which this Warrant is exercisable.

 

(j)
“Warrantholder” means the record holder of the Warrant.

 

2.
Exercise of Warrant.

 

(a)
All or any part of the Warrant may be exercised commencing on the Issue Date (the “Initial Exercise Date”) and ending
at 5:00 p.m. Pacific Time on the five-year anniversary of the Issue Date (the “Expiration Date”) by surrendering this
Warrant, together with the aggregate Exercise Price and appropriate instructions included on the Exercise Form attached hereto as Exhibit
A (“Notice of Exercise”), duly executed by the Warrantholder or by its duly authorized attorney, at the office of
the Company, 7681 East Gray Road Scottsdale, Arizona 85260; or at such other office or agency as the Company may designate. The date
on which the Company receives the Notice of Exercise shall be the date of exercise.

 

    	1

    	 

    

 

(b)
If the Warrantholder elects a Cashless Exercise, the Warrantholder shall surrender shares of Common Stock equal in value to the Exercise
Price as payment of the Exercise Price with its Notice of Exercise as provided in Section 2(b), and the Company shall issue to the Warrantholder
a number of shares of Common Stock computed using the following formula:

 

	 	 	X
    =	

 

	 	Where:	X
    =	The
    number of shares of Common Stock to be issued to the Warrantholder pursuant to a Cashless Exercise
	 	 	 	 
	 	 	Y
    =	The
    number of shares of Common Stock in respect of which the Cashless Exercise election is made
	 	 	 	 
	 	 	A
    =	The
    fair market value of one share of Common Stock at the time the Cashless Exercise election is made
	 	 	 	 
	 	 	B
    =	The
    Exercise Price (as adjusted to the date of the Cashless Exercise)

 

For
purposes of this Section 2(b), the fair market value of one share of Common Stock as of a particular date shall be determined as follows:
(i) if traded on a national securities exchange, the value shall be deemed to be the closing price of the Common Stock on such exchange
on the day prior to the Cashless Exercise; (ii) if traded over-the-counter, the value shall be deemed to be the mean of the closing bid
and ask price of the Common Stock on the day prior to the Cashless Exercise; and (iii) if there is no active public market, the value
shall be equal to the lower of (1) the most recent value of the Company’s Common Stock or Common Stock equivalent granted to an
employee or consultant and (2) the most recent issue or sale price of the Company’s Common Stock.

 

(c)
Subject to the provisions below, upon receipt of the Notice of Exercise, this Warrant and payment in full in cash or in surrender of
Warrant Shares, the Company shall promptly issue the Warrant Shares to the Warrantholder pursuant to the instructions in the Notice of
Exercise. If the Warrantholder requests book-entry shares, the Company shall cause the Warrant Shares to be transmitted by its transfer
agent to the Warrantholder by crediting the account of the Warrantholder or its designee with The Depository Trust Company through its
Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant in that system and either
(i) there is an effective registration statement or applicable exemption permitting the issuance of the Warrant Shares to or resale of
the Warrant Shares by the Warrantholder or (ii) this Warrant is being exercised by Cashless Exercise. The Company agrees to maintain
a transfer agent that is a participant in the FAST program so long as this Warrant remains outstanding and exercisable. If the Company
is not a DWAC participant or the Warrantholder requests a physical certificate representing the Warrant Shares, the Company shall issue
and deliver a physical certificate representing the Warrant Shares to the Warrantholder. The Warrant Shares to be obtained on exercise
of the Warrant will be deemed to have been issued, and any person exercising the Warrant will be deemed to have become a holder of record
of those Warrant Shares, as of the later of (i) the date the Company receives the Notice of Exercise and (ii) the date the Company receives
available funds in cash in payment of the Exercise Price (the “Notice Date”). If the Warrant Shares are delivered
via DWAC or by physical delivery, the Company must deliver the Warrant Shares within three business days of the Notice Date (the “Warrant
Share Delivery Date”).

 

    	2

    	 

    

 

(d)
If the Company does not deliver the Warrant Shares by the Warrant Share Delivery Date, the Company shall pay to the Warrantholder, in
cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant Shares subject to such exercise (based on the value of the
Common Stock on the date of the applicable Notice of Exercise), $10 per business day (increasing to $20 per business day on the fifth
business day after such liquidated damages begin to accrue) for each business day after the Warrant Share Delivery Date until the Warrant
Shares are delivered or Warrantholder rescinds its Notice of Exercise.

 

(e)
No fractional shares of Common Stock will be issued in connection with the exercise of the Warrant. If an exercise of the Warrant would
result in a fractional Warrant Share, the number of Warrant Shares to be issued shall be rounded to the nearest whole number.

 

(f)
Upon the exercise of the Warrant and at the request of the Warrantholder, the Company shall engage counsel to issue any legal opinion
required to sell or otherwise transfer the Warrant Shares and pay for the provision of the legal opinion and any associated costs.

 

(g)
If fewer than all the Warrant Shares purchasable under the Warrant are purchased, the Company will, upon such partial exercise, execute
and deliver to the Warrantholder a new Warrant (dated the date hereof), in form and tenor similar to this Warrant, evidencing that portion
of the Warrant not exercised.

 

(h)
Notwithstanding the foregoing, in no event shall Warrant Shares be issued, and the Company is authorized to refuse to honor the exercise
of the Warrant, if exercise of the Warrant would result in the opinion of the Company’s Board of Directors, upon advice of counsel,
in the violation of any law.

 

3.
Adjustments in Certain Events. The number, class, and price of Warrant Shares for which this Warrant may be exercised are subject
to adjustment from time to time as follows:

 

(a)
Adjustment for Stock Splits and Combinations. If the outstanding shares of the Company’s Common Stock are divided into a
greater number of shares or a dividend in stock is paid on the Common Stock, the number of shares of Common Stock for which the Warrant
is then exercisable will be proportionately increased and the Exercise Price will be proportionately reduced; and, conversely, if the
outstanding shares of Common Stock are combined into a smaller number of shares of Common Stock, the number of shares of Common Stock
for which the Warrant is then exercisable will be proportionately reduced and the Exercise Price will be proportionately increased. The
increases and reductions provided for in this Section 3(a) will be made with the intent and, as nearly as practicable, the effect that
neither the percentage of the total equity of the Company obtainable on exercise of the Warrant nor the price payable for such percentage
upon such exercise will be affected by any event described in this Section 3(a). Any adjustment made pursuant to this Section 3(a) shall
become effective immediately after the record date for the determination of shareholders entitled to receive such dividend or distribution
and shall become effective immediately after the effective date in the case of a subdivision or combination.

 

    	3

    	 

    

 

(b)
Adjustment for Merger or Reorganization. In case of any change in the Common Stock through merger, consolidation, reclassification,
reorganization, partial or complete liquidation, purchase of substantially all the assets of the Company, or other change in the capital
structure of the Company, then, as a condition of such change, lawful and adequate provision will be made so that the Warrantholder will
have the right thereafter to receive upon the exercise of the Warrant the kind and amount of shares of stock or other securities or property
to which the Warrantholder would have been entitled if, immediately prior to such event, the Warrantholder had held the number of shares
of Common Stock obtainable upon the exercise of the Warrant. In any such case, appropriate adjustment will be made in the application
of the provisions set forth herein with respect to the rights and interest thereafter of the Warrantholder, to the end that the provisions
set forth herein will thereafter be applicable, as nearly as reasonably may be, in relation to any shares of stock or other securities
or property thereafter deliverable upon the exercise of the Warrant. The Company will not permit any change in its capital structure
to occur unless the issuer of the shares of stock or other securities to be received by the holder of this Warrant, if not the Company,
agrees to be bound by and comply with the provisions of this Warrant.

 

(c)
Right to Distributions. If securities of the Company or securities of any subsidiary of the Company are distributed pro rata to
holders of Common Stock, such number of securities will be distributed to the Warrantholder or its assignee upon exercise of its rights
hereunder as such Warrantholder or assignee would have been entitled to if this Warrant had been exercised prior to the record date for
such distribution. The provisions with respect to adjustment of the Common Stock provided in this Section 3 will also apply to the securities
to which the Warrantholder or its assignee is entitled under this Section 3(d).

 

(d)
Certificate of Adjustments. When any adjustment is required to be made in the number of Warrant Shares issuable upon exercise
of the Warrant, the Company will promptly determine the new number of Warrant Shares and shall (i) prepare and retain on file a statement
in its corporate records describing in reasonable detail the method used in arriving at the new number of Warrant Shares and (ii) cause
a copy of such statement to be mailed to the Warrantholder within 30 days after the date of the event giving rise to the adjustment.

 

(e)
Special Definitions. For the purposes of this Section 3, the following definitions shall apply:

 

(i)
“Option” shall mean rights, options or warrants to subscribe for, purchase or otherwise acquire Common Stock or Convertible
Securities.

 

(ii)
“Convertible Securities” shall mean any evidences of indebtedness, shares or other securities directly or indirectly
convertible into or exchangeable for Common Stock, but excluding Options.

 

(iii)
“Additional Shares of Common Stock” shall mean all shares of Common Stock issued or deemed to be issued by the Company
after the date hereof, other than (1) shares of Common Stock, Options or Convertible Securities issued by reason of a dividend, stock
split, split-up or other distribution on shares of Common Stock that is covered by this Section 3; (2) shares of Common Stock or Convertible
Securities actually issued upon the exercise of Options or shares of Common Stock actually issued upon the conversion or exchange of
Convertible Securities, in each case provided such issuance is pursuant to the terms of such Option or Convertible Security; and (3)
shares of Common Stock deemed issued pursuant to the following Options and Convertible Securities (clauses (1) through (3), collectively,
“Exempted Securities”).

 

    	4

    	 

    

 

4.
Reservation of Shares. The Company agrees that the number of shares of Common Stock sufficient to provide for the exercise of
the Warrant upon the basis set forth above will, at all times during the term of the Warrant, be reserved for issuance.

 

5.
Validity of Shares. All Warrant Shares delivered upon the exercise of the Warrant will be duly and validly issued in accordance
with their terms and, upon payment of the Exercise Price, will be fully paid and non-assessable. The Company will pay all documentary
and transfer taxes, if any, in respect of the original issuance thereof upon exercise of the Warrant.

 

6.
Transferability.

 

(a)
Subject to compliance with any applicable securities laws, the Warrant may be transferred to individuals who are members, a partner,
officer or other representative, affiliate or stakeholder of Paulson Investment Company, LLC. The Warrant may be divided or combined,
upon request to the Company by the Warrantholder, into additional Warrants evidencing the same aggregate number of Warrant Shares. Any
such transfer shall be effected upon surrender of this Warrant at the principal office of the Company or its designated agent, together
with a written assignment of the Warrant substantially in the form attached hereto as Exhibit B duly executed by the Warrantholder or
its agent or attorney and funds sufficient to pay any transfer taxes payable upon the making of such transfer. Upon such surrender and,
if required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees,
as applicable, and in the denomination or denominations specified in such instrument of assignment, and shall issue to the assignor a
new Warrant evidencing the portion of the Warrant not so assigned, and this Warrant shall promptly be cancelled.

 

7.
Securities Act Compliance. The Warrantholder hereby represents: (a) that this Warrant and any Warrant Shares will be acquired
for investment for the Warrantholder’s own account and not with a view to the resale or distribution of any part thereof, and (b)
that the Warrantholder is an accredited investor as defined in Rule 501(a) of Regulation D promulgated under the Securities Act. The
Company may place conspicuously upon each certificate representing the Warrant Shares a legend substantially in the following form, the
terms of which are agreed to by the Warrantholder:

 

“THE
SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. THE SECURITIES MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED EXCEPT (1) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OR (2) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ALL APPLICABLE STATE SECURITIES LAWS AND THE SECURITIES LAWS OF OTHER
JURISDICTIONS AND, IN THE CASE OF A TRANSACTION EXEMPT FROM REGISTRATION, UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO IT THAT SUCH TRANSACTION DOES NOT REQUIRE REGISTRATION UNDER THE SECURITIES ACT AND SUCH OTHER APPLICABLE LAWS.”

 

    	5

    	 

    

 

8.
No Rights as a Shareholder. Except as otherwise provided herein, the Warrantholder will not, by virtue of ownership of the Warrant,
be entitled to any rights of a shareholder of the Company but will, upon written request to the Company, be entitled to receive such
quarterly or annual reports as the Company distributes to its shareholders.

 

9.
Notice. Any notices required or permitted to be given hereunder will be in writing and may be served personally or by mail, including
by e-mail; and if served will be addressed as follows:

 

	If
    to the Company:	AMMO,
    Inc.

    Attn:
    Robert Wiley

    7681
    East Gray Road

    Scottsdale,
    AZ 85260

    Email:
    rob@ammo-inc.com

     

    

	If
    to the Warrantholder:

     

     

     

     

    With
    a copy (which shall not constitute notice) to:

    
	Attention:
    [____]

     

    Harter
    Secrest & Emery LLP

    1600
    Bausch & Lomb Place

    Rochester,
    NY 14604

    Attention:
    James M. Jenkins, Esq.

 

Any
notice so given by mail will be deemed effectively given 48 hours after mailing when deposited in the United States mail, registered
or certified mail, return receipt requested, postage prepaid and addressed as specified above. Any notice given by e-mail must be accompanied
by confirmation of receipt, and will be deemed effectively given upon confirmation of such receipt. Any party may by written notice to
the other specify a different address for notice purposes.

 

10.
Miscellaneous.

 

(a)
Applicable Law and Jurisdiction. Any disputes arising under or relating to this Warrant shall be submitted to binding arbitration
in New York, New York under the auspices of FINRA Dispute Resolution. The decision of the arbitrator will be final, conclusive and binding
on the parties to the arbitration. Judgment may be entered on the arbitrator’s decision in any court having jurisdiction. The Company
and Warrantholder shall each pay one-half of the costs and expenses of such arbitration, and each shall separately pay its counsel fees
and expenses. Notwithstanding the foregoing, the Warrantholder may bring an action solely for equitable, declaratory, or injunctive relief
relating to its rights and the Company’s obligations under this Warrant in the federal or state courts of New York County, and
the Company hereby waives any objection to the laying of venue or jurisdiction in those courts.

 

    	6

    	 

    

 

(b)
Remedies. The Warrantholder, in addition to being entitled to exercise all rights granted by law, including recovery of damages,
is entitled to specific performance of its rights and the Company’s duties under this Warrant. The Company agrees that monetary
damages would not be adequate compensation for any loss incurred by reason of the Company’s breach of the provisions of this Warrant
and the Company hereby agrees to waive and not to assert the defense that a remedy at law would be adequate in any action for specific
performance relating to this Warrant.

 

(c)
Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant Shares,
and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of the Warrant,
shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate, if mutilated, the
Company will make and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation, in lieu of such Warrant
or stock certificate.

 

(d)
Non-Waiver and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of the Warrantholder
shall operate as a waiver of such right or otherwise prejudice the Warrantholder’s rights, powers or remedies. Without limiting
any other provision of this Warrant, if the Company willfully and knowingly fails to comply with any provision of this Warrant, which
results in any material damages to the Warrantholder, the Company shall pay to the Warrantholder such amounts as shall be sufficient
to cover any reasonable costs and expenses including, but not limited to, reasonable attorneys’ fees, including those of appellate
proceedings, incurred by the Warrantholder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights,
powers or remedies hereunder.

 

(e)
Limitation of Liability. No provision hereof, in the absence of any affirmative action by the Warrantholder to exercise this Warrant
to purchase Warrant Shares, and no enumeration herein of the rights or privileges of the Warrantholder, shall give rise to any liability
of the Warrantholder for the purchase price of any Common Stock or as a stockholder of the Company, whether such liability is asserted
by the Company or by creditors of the Company.

 

(f)
Successors and Assigns. This Warrant may be assigned by the Warrantholder in accordance with applicable securities laws, this
Warrant and the rights and obligations evidenced hereby shall inure to the benefit of and be binding upon the successors and permitted
assigns of the Company and the successors and permitted assigns of Warrantholder. The provisions of this Warrant are intended to be for
the benefit of any Warrantholder from time to time of this Warrant and shall be enforceable by the Warrantholder or holder of Warrant
Shares.

 

(g)
Amendment. This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company and
the Warrantholder.

 

(h)
Severability. Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall
be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining
provisions of this Warrant.

 

(i)
Headings. The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed
a part of this Warrant.

 

[Signature
page follows.]

 

    	7

    	 

    

 

IN
WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first above
indicated.

 

	 	AMMO,
    Inc.
	 	 	 
	 	By:	
	 	Name:
    	Robert
    Wiley
	 	Title:
    	Chief
    Financial Officer

 

[Soliciting
Agent Warrant]

 

    	 

    	 

    

 

Exhibit
A

 

EXERCISE
FORM

 

(To
Be Executed by the Warrantholder to Exercise the Warrant)

 

	TO:	AMMO,
    Inc.
	 	 
	(1)	The
    undersigned hereby irrevocably elects to exercise the right to purchase _________ shares of Common Stock, represented by the enclosed
    Warrant as follows:

 

	 	[  ]	Exercise
    for Cash. Pursuant to Section 2(a) of the Warrant, the Warrantholder hereby elects to exercise the Warrant for cash and tenders
    payment herewith (or has made a wire transfer) to the order of [Company Name] in the amount of $____________.
	 	 	 
	 	[  ]	Cashless
    Exercise. Pursuant to Section 2(b) of the Warrant, the Warrantholder hereby elects to exercise _______ of the Warrant on a cashless
    basis resulting in ______ common stock shares to be issued.

 

	(2)	The
    undersigned requests that the applicable number of shares of Common Stock be issued as follows pursuant to Section 2(c) of the Warrant:

 

	 	[  ]	Book-Entry
    Shares to be delivered via DWAC. 
	 	 	 
	 	[  ]	Certificated
    Shares to be delivered to the address below. 

 

	(3)	The
    undersigned requests that the applicable number of shares of Common Stock be issued and delivered to the following address:

 

	 	Name:		 
	 	DWAC
    Account Number: 		(if
    applicable)
	 	Address:		 
	 	 		 
	 	Email:		 

 

	(4)	The
    undersigned understands, agrees and recognizes that:

 

	 	a.	No
    federal or state agency has made any finding or determination as to the fairness of the investment or any recommendation or endorsement
    of the securities.

 

    	A-i

    	 

    

 

	 	b.	All
    certificates evidencing the shares of Common Stock, if any, may bear a legend substantially similar to the legend set forth in Section
    7 of the Warrant regarding resale restrictions.

 

	(5)	The
    undersigned acknowledges that the undersigned has received, read and understood the Warrant and agrees to abide by and be bound by
    its terms and conditions.

 

	Dated:
    _____________, 20___.	 	 
	 	 	 
	 	By:	
	 	Name:	
	 	Title:	

 

	 	Note:
    Signature must correspond with the name as written upon the face of the Warrant in all respects, without alteration or enlargement
    or any change whatsoever.

 

[Soliciting
Agent Warrant Exercise Form]

 

    	A-ii

    	 

    

 

Exhibit
B

 

ASSIGNMENT
FORM

 

(To
assign the foregoing Warrant, execute this form and supply required information. Do not use this form to purchase shares.)

 

	TO:	AMMO,
    Inc.

 

FOR
VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby assigned to:

 

	Name:	 	 
	 	 	(Please
    Print)
	 	 	 
	Address:	 	 
	 	 	 
	 	 	 
	 	 	 
	Phone
    Number:	 	 
	 	 	 
	Email
    Address:	 	 
	 	 	 
	Date:
    	 	 
	 	 	 
	Warrantholder’s

    Signature: 	 	 
	 	 	 
	Warrantholder’s
    Name:	 	 
	 	 	(Please
    Print)

 

[Soliciting
Agent Warrant Assignment Form]

 

    	B-iExhibit
10.1

  

AMMO,
INC.

 

U.S.
SHARE PRIVATE PLACEMENT

 

SUBSCRIPTION
AGREEMENT

 

    	 

     

    

 

AMMO,
INC.

SUBSCRIPTION
AGREEMENT

 

This
SUBSCRIPTION AGREEMENT (this “Agreement”), dated as of _______________________________________, 2017, is made and
entered into by and between AMMO, Inc., a Delaware corporation (the “Company”), with its principal executive offices located
at 6401 East Thomas Rd, Scottsdale, AZ 85251, and each Subscriber identified on the signature pages hereto (each, including its successors
and assigns, a “Subscriber” and collectively the “Subscribers”).

 

WHEREAS,
subject to the terms and conditions set forth in this Agreement and pursuant to Section 4(2) of the Securities Act of 1933, as amended
(the “Securities Act”), and Rule 506 of Regulation D promulgated thereunder, the Company desires to issue and sell
to Subscriber, and Subscriber desires to purchase from the Company, securities of the Company as more fully described in this Agreement;
and

 

WHEREAS,
the Subscribers, severally and not jointly, desire to purchase and the Company desires to issue and sell to the Subscribers, in each
case upon the terms and subject to the conditions set forth in this Agreement up to 4,000,000 Units (as defined below).

 

NOW
THEREFORE, in consideration of the foregoing and the representations, warranties, covenants and agreements herein contained, the
Company and each of the Subscribers severally (and not jointly) hereby agree as follows:

 

1.
Purchase and Sale of Units.

 

(a)
Sale and Issuance of Units. Subject to the terms and conditions of this Agreement, each Subscriber agrees to purchase at the Closing
(as defined below), and upon payment of the Purchase Price (as defined below), the Company agrees to sell and issue to each Subscriber
a unit or units (the “Unit” or “Units”). Each Unit shall consist of the following:

 

	 	(i)	1
  share of the common stock (the “Share” or “Shares”), $.001 par value (the “Common Stock”)
  of the Company; and,
	 	 	 
	 	(ii)	1
  common stock purchase Warrant, in the form of Exhibit B (the “Warrant” or “Warrants”).
  Each Warrant provides the right to purchase one (1) share of Company Common Stock, which shall be exercisable immediately and have
  a term of two (2) years with an exercise price of $2.50 per share.

 

(b)
Form of Payment. On the Closing Date: (i) each Subscriber shall pay the Purchase Price (as hereinafter defined) for each Unit
at the Closing (as defined below) by check or wire transfer of funds to the Company’s account, in accordance with the Company’s
written wiring instructions, and (ii) the Company shall deliver such Shares and Warrants duly executed on behalf of the Company, to such
Subscriber, against delivery of such Purchase Price.

 

(c)
Closing Date. Subject to the satisfaction (or written waiver) of the conditions thereto set forth in Section 5 and Section 6 below,
the date and time of the issuance and sale of the Shares and the Warrants pursuant to this Agreement (the “Closing Date”)
shall be 10:00 a.m., Pacific Standard Time, on the date first written above, or such other mutually agreed upon time. The closing of
the transactions contemplated by this Agreement (the “Closing”) shall occur on the Closing Date at such location as
may be agreed to by the parties and may be undertaken remotely by facsimile or other electronic transmission.

 

(d)
Separate Agreements and Sales. The Company’s agreements with each of the Subscribers are separate agreements, and the sales
of the Units to each of the Subscribers are separate sales.

 

(e)
Purchase Price. The Purchase Price is $1.25 per Unit (the “Purchase Price”), and the Company is offering up
to 4,000,000 Units for gross proceeds of $5,000,000 (the “Offering”).

 

    	 

     

    

 

2.
Representations and Warranties of the Subscribers. Each Subscriber severally (and not jointly) hereby acknowledges, represents,
and warrants to the Company solely as to such Subscriber that:

 

(a)
Investment Purpose. As of the date hereof, the Subscriber is purchasing the Shares and the Warrants and the shares of Common Stock
issuable upon exercise thereof (the “Warrant Shares” and, collectively the Shares and Warrants are hereinafter referred
to as the “Securities”) for its own account and not with a view towards the public sale or distribution thereof, except
pursuant to sales registered or exempted from registration under the Securities Act; provided, however, that by making the representations
herein, the Subscriber does not agree to hold any of the Securities for any minimum or other specific term and reserves the right to
dispose of the Securities at any time in accordance with or pursuant to a registration statement or an exemption under the Securities
Act. The Subscriber has no agreement or arrangement, formal or informal, with any person to sell or transfer all or any part of the Securities,
and the Subscriber has no plans to enter into any such agreement or arrangement;

 

(b)
Accredited Investor Status. The Subscriber is an “accredited investor,” as that term is defined in Rule 501(a) of
Regulation D promulgated under the Securities Act (an “Accredited Investor”), and Subscriber has completed the “Investor
Questionnaire” as attached as Exhibit C.

 

(c)
Reliance on Exemptions. None of the Units or the Securities offered are registered under the Securities Act, or any state securities
laws. The Subscriber understands that the Securities are being offered and sold to it in reliance upon specific exemptions from the registration
requirements of United States federal and state securities laws and that the Company is relying upon the truth and accuracy of, and the
Subscriber’s compliance with, the representations, warranties, agreements, acknowledgments and understandings of the Subscriber
set forth herein in order to determine the availability of such exemptions and the eligibility of the Subscriber to acquire the Securities.

 

(d)
Information. The Subscriber and its advisors, if any, acknowledge that they have been furnished with all materials relating to
the business, finances and operations of the Company and materials relating to the offer and sale of the Securities which have been requested
by the Subscriber or its advisors, have carefully reviewed them and understands the information contained therein. Notwithstanding the
foregoing representations, neither such inquiries nor any other due diligence investigation conducted by Subscriber or any of its advisors
or representatives shall modify, amend or affect Subscriber’s right to rely on the Company’s representations and warranties
contained in Section 3 below.

 

(e)
Documents. All documents, records, and books pertaining to the investment in the Securities have been made available, subject
to certain confidentiality restrictions, for inspection by the Subscriber and its advisors, if any.

 

(f)
No Governmental Review. The Subscriber understands that no United States federal or state agency or any other government or governmental
agency has approved the Securities or passed upon or made any recommendation or endorsement of the Offering or confirmed the accuracy
or determined the adequacy of the Offering or this Agreement. Any representation to the contrary is a criminal offense. The Units and
the Securities are subject to restrictions on transferability and resale and may not be transferred or resold except as permitted under
the Securities Act, and the applicable state securities laws, pursuant to registration or exemption therefrom.

 

(g)
Transfer or Resale. The Subscriber understands that:

 

(i)
the sale or resale of the Securities has not been and is not being registered under the Securities Act or any applicable state securities
laws, and the Securities may not be transferred unless one of the following is satisfied:

 

(A)
the Securities are sold pursuant to an effective registration statement under the Securities Act,

 

(B)
the Subscriber shall have delivered to the Company, at the cost of the Company, a customary opinion of counsel that shall be in form,
substance and scope reasonably acceptable to the Company, to the effect that the Securities to be sold or transferred may be sold or
transferred pursuant to an exemption from such registration,

 

    	 

     

    

 

(C)
the Securities are sold or transferred to an “affiliate” (as defined in Rule 144 promulgated under the Securities Act (or
a successor rule) (“Rule 144”)) of the Subscriber who agrees to sell or otherwise transfer the Securities only in accordance
with this Section 2(g) and who is an Accredited Investor.

 

(D)
the Securities are sold pursuant to Rule 144, or

 

(E)
the Securities are sold pursuant to Regulation S under the Securities Act (or a successor rule) (“Regulation S”), and, in
each case, the Subscriber shall have delivered to the Company, at the cost of the Company, a customary opinion of counsel, in form, substance
and scope reasonably acceptable to the Company;

 

(ii)
neither the Company nor any other person is under any obligation to register such Securities under the Securities Act or any state securities
laws or to comply with the terms and conditions of any exemption thereunder.

 

(h)
Legends. The Subscriber understands that the Securities shall bear a restrictive legend in substantially the following form (and
a stop-transfer order may be placed against transfer of the certificates for such Securities):

 

“The
securities represented by this certificate have not been registered under the Securities Act of 1933, as amended. The securities may
not be sold, transferred or assigned in the absence of an effective registration statement for the securities under said Act, or an opinion
of counsel, in form, substance and scope customary for opinions of counsel in comparable transactions, that registration is not required
under said Act or unless sold pursuant to Rule 144 or Regulation S under said Act.”

 

The
legend set forth above shall be removed and the Company shall issue a certificate without such legend to the holder of any Security upon
which it is stamped, if, unless otherwise required by applicable state securities laws: (i) such Security is registered for sale under
an effective registration statement filed under the Securities Act or otherwise may be sold pursuant to Rule 144 or Regulation S without
any restriction as to the number of securities as of a particular date that can then be immediately sold or (ii) such holder provides
the Company with a reasonable and customary opinion of counsel to the effect that a public sale or transfer of such Security may be made
without registration under the Securities Act. The Subscriber agrees to sell all Securities, including those represented by a certificate(s)
from which the legend has been removed, in compliance with applicable prospectus delivery requirements, if any.

 

(i)
Authorization; Enforcement. Each document to which the Subscriber is a party: (i) has been duly and validly authorized, (ii) has
been duly executed and delivered on behalf of the Subscriber, and (iii) will constitute, upon execution and delivery by the Subscriber
thereof and the Company, the valid and binding agreements of the Subscriber enforceable in accordance with their terms, except to the
extent limited by applicable bankruptcy, insolvency, reorganization, moratorium or other laws of general application affecting enforcement
of creditors’ rights and general principles of equity that restrict the availability of equitable or legal remedies.

 

(j)
Residency. The Subscriber is a resident of the jurisdiction set forth immediately below such Subscriber’s name on the signature
pages hereto.

 

(k)
Subscriber’s Reliance. In evaluating the suitability of an investment in the Company, the Subscriber has not relied upon
any representation or other information (oral or written) other than as stated in this Agreement or as contained in documents so furnished
to the Subscriber or its advisors, if any, by the Company or the by persons acting on behalf of the Company. The Subscriber is not relying
on the Company, or any of its respective employees or agents with respect to the legal, tax, economic and related considerations of an
investment in the Units, and the Subscriber has relied on the advice of, or has consulted with, only its own advisors, if any.

 

(l)
No Solicitation. The Subscriber is unaware of, is in no way relying on, and did not become aware of the offering of the Units
directly or indirectly through or as a result of, any form of general solicitation or general advertising including, without limitation,
any press release, filing with the SEC, article, notice, advertisement or other communication published in any newspaper, magazine or
similar media or broadcast over television, radio or the internet, in connection with the offering and sale of the Units and is not subscribing
for Units and did not become aware of the offering of the Units through or as a result of any seminar or meeting to which the Subscriber
was invited by, or any solicitation of a subscription by, a person not previously known to the Subscriber in connection with investments
in securities generally.

 

    	 

     

    

 

(m)
Brokerage Fees. The Subscriber has taken no action which would give rise to any claim by any person for brokerage commissions,
finder’s fees or the like relating to this Agreement or the transactions contemplated hereby (other than commissions and other
compensation to be paid by as otherwise described in this Agreement or as contained in documents so furnished to the Subscriber or its
advisors, if any, by the Company or the by persons acting on behalf of the Company).

 

(n)
Independent Evaluation. The Subscriber’s decision to enter into this Agreement has been made based solely on the independent
evaluation of the Subscriber and its own advisors, if any, and the Subscriber, either alone or together with its advisors, if any, has
such knowledge and experience in financial, tax, and business matters, and, in particular, investments in securities, so as to enable
it to utilize the information made available to it in connection with the Offering to evaluate the merits and risks of an investment
in the Units and the Company and to make an informed investment decision with respect thereto.

 

(o)
Subscriber Affiliations. The Subscriber is neither a registered representative under the Financial Industry Regulatory Authority
(“FINRA”), a member of FINRA or associated or affiliated with any member of FINRA, nor a broker-dealer registered with the
SEC under the Exchange Act or engaged in a business that would require it to be so registered, nor is it an affiliate of a such a broker-dealer
or any person engaged in a business that would require it to be registered as a broker-dealer. In the event such Subscriber is a member
of FINRA, or associated or affiliated with a member of FINRA, such Subscriber agrees, if requested by FINRA, to sign a lock-up, the form
of which shall be satisfactory to FINRA with respect to the Securities. Furthermore, the Subscriber is not an underwriter of the Securities,
nor is it an affiliate of an underwriter of the Securities.

 

(p)
Risk. The purchase of the Units represents a high risk capital investment and the Subscriber is able to afford an investment in
a speculative venture having the risks and objectives of the Company. The Subscriber must bear the substantial economic risks of the
investment in the Units indefinitely because none of the Units may be sold, hypothecated or otherwise disposed of unless subsequently
registered under the Securities Act and applicable state securities laws or an exemption from such registration is available. Legends
shall be placed on the Units to the effect that they have not been registered under the Securities Act or applicable state securities
laws and appropriate notations thereof will be made in the Company’s books. Stop transfer instructions will be placed with the
transfer agent of the Securities, if any, or with the Company. There can be no assurance that there will be any market for resale of
the Units or the Securities.

 

(q)
Suitable Investment. The Subscriber has adequate means of providing for such Subscriber’s current financial needs and foreseeable
contingencies and has no need for liquidity of its investment in the Securities for an indefinite period of time. The Subscriber has
significant prior investment experience, including investments in high risk securities. The Subscriber is knowledgeable about investments
in small and thinly capitalized companies. The Subscriber has a sufficient net worth to sustain a loss of its entire investment in the
Company in the event such a loss should occur. The Subscriber’s overall commitment to investments which are not readily marketable
is not excessive in view of the Subscriber’s net worth and financial circumstances and the purchase of the Units will not cause
such commitment to become excessive. The investment is a suitable one for the Subscriber.

 

(r)
Subscriber Attributes. The Subscriber (i) if a natural person, represents that the Subscriber has reached the age of 21 and has
full power and authority to execute and deliver this Agreement and all other related agreements or certificates and to carry out the
provisions hereof and thereof; (ii) if a corporation, partnership, or limited liability company or partnership, or association, joint
stock company, trust, unincorporated organization or other entity, represents that such entity was not formed for the specific purpose
of acquiring the Units, such entity is duly organized, validly existing and in good standing under the laws of the state of its organization,
the consummation of the transactions contemplated hereby is authorized by, and will not result in a violation of any law applicable to
it or its charter or other organizational documents, such entity has full power and authority to execute and deliver this Agreement and
all other related agreements or certificates and to carry out the provisions hereof and thereof and to purchase and hold the Units, the
execution and delivery of this Agreement has been duly authorized by all necessary action, this Agreement has been duly executed and
delivered on behalf of such entity and is a legal, valid and binding obligation of such entity; or (iii) if executing this Agreement
in a representative or fiduciary capacity, represents that it has full power and authority to execute and deliver this Agreement in such
capacity and on behalf of the subscribing individual, ward, partnership, trust, estate, corporation, or limited liability company or
partnership, or other entity for whom the Subscriber is executing this Agreement, and such individual, partnership, ward, trust, estate,
corporation, or limited liability company or partnership, or other entity has full right and power to perform pursuant to this Agreement
and make an investment in the Company, and represents that this Agreement constitutes a legal, valid and binding obligation of such entity.
The execution and delivery of this Agreement will not violate or be in conflict with any order, judgment, injunction, agreement or controlling
document to which the Subscriber is a party or by which it is bound.

 

    	 

     

    

 

(s)
Additional Information. The Subscriber and the advisors, if any, have had the opportunity to obtain any additional information,
to the extent the Company had such information in its possession or could acquire it without unreasonable effort or expense, necessary
to verify the accuracy of the information contained in all documents received or reviewed in connection with the purchase of the Units
and have had the opportunity to have representatives of the Company provide them with such additional information regarding the terms
and conditions of this particular investment and the financial condition, results of operations, business and prospects of the Company
deemed relevant by the Subscriber or the advisors, if any, and all such requested information, to the extent the Company had such information
in its possession or could acquire it without unreasonable effort or expense, has been provided by the Company to the full satisfaction
of the Subscriber and the advisors, if any. The Subscriber is satisfied that it has received adequate information with respect to all
matters which it or the advisors, if any, consider material to its decision to make this investment.

 

(t)
Subscriber’s Information. Within 5 business days after receipt of a request from the Company, the Subscriber will provide
such information and deliver such documents as may reasonably be necessary to comply with any and all laws and ordinances to which the
Company is subject. Any information which the Subscriber has heretofore furnished or is furnishing herewith to the Company is complete
and accurate and may be relied upon by the Company in determining the availability of an exemption from registration under Federal and
state securities laws in connection with the Offering. The Subscriber further represents and warrants that it will notify and supply
corrective information to the Company immediately upon the occurrence of any change therein occurring prior to the Company’s issuance
of the Units.

 

(u)
Forward Looking Statements. The Subscriber acknowledges that any estimates or forward-looking statements or projections included
in this Agreement and any documents related to the Offering were prepared by the Company in good faith but that the attainment of any
such projections, estimates or forward-looking statements cannot be guaranteed and will not be updated by the Company and should not
be relied upon.

 

(v)
Inconsistent Representations. No oral or written representations have been made, or oral or written information furnished, to
the Subscriber or its advisors, if any, in connection with the Offering which are in any way inconsistent with the information contained
in this Agreement or in related documents. If there are any inconsistent representations between this Agreement and any other document,
the terms of this Agreement shall govern.

 

(w)
Relationship with Company. The Subscriber’s substantive relationship with the Company or subagent through which the Subscriber
is subscribing for Units predates the Company’s or such subagent’s contact with the Subscriber regarding an investment in
the Units.

 

(x)
Federal Regulations. The Subscriber should check the Office of Foreign Assets Control (“OFAC”) website at <http://www.treas.gov/ofac>
before making the following representations. The Subscriber represents that the amounts invested by it in the Company in the Offering
were not and are not directly or indirectly derived from activities that contravene federal, state or international laws and regulations,
including anti-money laundering laws and regulations. Federal regulations and Executive Orders administered by OFAC prohibit, among other
things, the engagement in transactions with, and the provision of services to, certain foreign countries, territories, entities and individuals.
The lists of OFAC prohibited countries, territories, persons and entities can be found on the OFAC website at <http://www.treas.gov/ofac>.
In addition, the programs administered by OFAC (the “OFAC Programs”) prohibit dealing with individuals[1] or entities
in certain countries regardless of whether such individuals or entities appear on the OFAC lists. To the best of the Subscriber’s
knowledge, none of: (1) the Subscriber; (2) any person controlling or controlled by the Subscriber; (3) if the Subscriber is a privately-held
entity, any person having a beneficial interest in the Subscriber; or (4) any person for whom the Subscriber is acting as agent or nominee
in connection with this investment is a country, territory, individual or entity named on an OFAC list, or a person or entity prohibited
under the OFAC Programs.

 

 

[1]
These individuals include specially designated nationals, specially designated narcotics traffickers and other parties subject
to OFAC sanctions and embargo programs.

 

    	 

     

    

 

Please
be advised that the Company may not accept any amounts from a prospective investor if such prospective investor cannot make the representation
set forth in the preceding paragraph. The Subscriber agrees to promptly notify the Company should the Subscriber become aware of any
change in the information set forth in these representations. The Subscriber understands and acknowledges that, by law, the Company may
be obligated to “freeze the account” of the Subscriber, either by prohibiting additional subscriptions from the Subscriber,
declining any redemption requests and/or segregating the assets in the account in compliance with governmental regulations, and may also
be required to report such action and to disclose the Subscriber’s identity to OFAC. The Subscriber further acknowledges that the
Company may, by written notice to the Subscriber, suspend the redemption rights, if any, of the Subscriber if the Company reasonably
deems it necessary to do so to comply with anti-money laundering regulations applicable to the Company or any of the Company’s
service providers. These individuals include specially designated nationals, specially designated narcotics traffickers and other parties
subject to OFAC sanctions and embargo programs.

 

(y)
Senior Foreign Political Figure. To the best of the Subscriber’s knowledge, none of: (1) the Subscriber; (2) any person
controlling or controlled by the Subscriber; (3) if the Subscriber is a privately-held entity, any person having a beneficial interest
in the Subscriber; or (4) any person for whom the Subscriber is acting as agent or nominee in connection with this investment is a senior
foreign political figure[2], or any immediate family[3] member or close associate[4] of a senior foreign
political figure, as such terms are defined in the footnotes below; and

 

(z)
Foreign Bank. If the Subscriber is affiliated with a non-U.S. banking institution (a “Foreign Bank”), or if the Subscriber
receives deposits from, makes payments on behalf of, or handles other financial transactions related to a Foreign Bank, the Subscriber
represents and warrants to the Company that: (1) the Foreign Bank has a fixed address, other than solely an electronic address, in a
country in which the Foreign Bank is authorized to conduct banking activities; (2) the Foreign Bank maintains operating records related
to its banking activities; (3) the Foreign Bank is subject to inspection by the banking authority that licensed the Foreign Bank to conduct
banking activities; and (4) the Foreign Bank does not provide banking services to any other Foreign Bank that does not have a physical
presence in any country and that is not a regulated affiliate.

 

3.
Representations and Warranties of the Company. The Company hereby represents and warrants to each Subscriber as of the
date hereof (unless the context specifically indicates otherwise) that:

 

(a)
Organization and Qualification. The Company is a Delaware corporation or other entity duly organized, validly existing and in
good standing under the laws of the jurisdiction in which it is incorporated or organized, with full power and authority (corporate and
other) to own, lease, use and operate its properties and to carry on its business as and where now owned, leased, used, operated and
conducted.

 

(b)
Authorization. All corporate action on the part of the Company, its officers and directors necessary for the authorization, execution
and delivery of this Agreement and the authorization, sale, issuance and delivery of the Units, and the performance of all obligations
of the Company hereunder and thereunder has been taken or will be taken prior to the Closing. This Agreement when executed and delivered
by the Company, shall constitute valid and legally binding obligations of the Company, enforceable against the Company in accordance
with their respective terms except as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance,
and other laws of general application affecting enforcement of creditors’ rights generally, and as limited by laws relating to
the availability of specific performance, injunctive relief, or other equitable remedies.

 

 

[2]
A “senior foreign political figure” is defined as a senior official in the executive, legislative, administrative,
military or judicial branches of a foreign government (whether elected or not), a senior official of a major foreign political party,
or a senior executive of a foreign government-owned corporation. In addition, a “senior foreign political figure” includes
any corporation, business or other entity that has been formed by, or for the benefit of, a senior foreign political figure.

 

[3]
“Immediate family” of a senior foreign political figure typically includes the figure’s parents, siblings, spouse,
children and in-laws.

 

[4]
A “close associate” of a senior foreign political figure is a person who is widely and publicly known to maintain an
unusually close relationship with the senior foreign political figure, and includes a person who is in a position to conduct substantial
domestic and international financial transactions on behalf of the senior foreign political figure.

 

    	 

     

    

 

(c)
No General Solicitation. Neither the Company nor any person participating on the Company’s behalf in the transactions contemplated
hereby has conducted any “general solicitation,” as such term is defined in Regulation D promulgated under the Securities
Act, with respect to any of the Securities being offered hereby.

 

4.
Covenants. In addition to the other agreements and covenants set forth herein, the Company hereby covenant as follows:

 

(a)
Stop Orders. The Company will advise each Subscriber promptly after it receives notice of issuance by the SEC, any state securities
commission or any other regulatory authority of any stop order or of any order preventing or suspending any offering of the Securities,
or of the suspension of the qualification of the Common Stock of the Company for offering or sale in any jurisdiction, or the initiation
of any proceeding for any such purpose.

 

(b)
Form D; Blue Sky Laws. The Company agrees to file a Form D with respect to the Securities as required under Regulation D. A copy
of the Form D shall be publicly available through the SEC’s EDGAR System. The Company shall take such action as the Company shall
reasonably determine is necessary to qualify the Securities for sale to the Subscribers under applicable securities or “blue sky”
laws of the states of the United States (or to obtain an exemption from such qualification).

 

(c)
Authorization and Reservation of Shares. The Company shall at all times have authorized, and reserved for the purpose of issuance,
a sufficient number of shares of Common Stock as required to fulfill its obligations under the Offering (collectively, the “Reserved
Amount”). The Company shall not reduce the number of shares of Common Stock reserved for issuance upon exercise of any Warrants.
If at any time the number of shares of Common Stock authorized and reserved for issuance (“Authorized and Reserved Shares”)
is below the Reserved Amount, the Company will promptly take all corporate action necessary to authorize and reserve a sufficient number
of shares, including, without limitation, calling a special meeting of stockholders to authorize additional shares to meet the Company’s
obligations under this Section 4(c), in the case of an insufficient number of authorized shares, obtain stockholder approval of an increase
in such authorized number of shares, and voting the shares of the Company’s officer’s and directors in favor of an increase
in the authorized shares of the Company to ensure that the number of authorized shares is sufficient to meet the Reserved Amount. The
Company shall use its best efforts to obtain such stockholder approval within thirty (30) days following the date on which the number
of Reserved Amount exceeds the Authorized and Reserved Shares.

 

(d)
Corporate Existence. So long as a Subscriber beneficially owns any Shares or Warrants, the Company shall maintain its corporate
existence and shall not sell all or substantially all of the Company’s assets, except in the event of a merger or consolidation
or sale of all or substantially all of the Company’s assets, where the surviving or successor entity in such transaction assumes
the Company’s obligations hereunder and under the agreements and instruments entered into in connection herewith and.

 

5.
Conditions to the Company’s Obligation to Sell. The obligation of the Company hereunder to issue and sell the Shares
and Warrants to a Subscriber at the Closing is subject to the satisfaction, at or before the Closing Date of each of the following conditions
thereto, provided that these conditions are for the Company’s sole benefit and may be waived by the Company at any time in its
sole discretion:

 

(a)
The applicable Subscriber shall have executed this Agreement and an investor suitability questionnaire, and delivered the same to the
Company.

 

(b)
The applicable Subscriber shall have delivered the Purchase Price in accordance with Section 1(b) above.

 

(c)
The representations and warranties of the applicable Subscriber shall be true and correct in all material respects, and the applicable
Subscriber shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions required
by this Agreement to be performed, satisfied or complied with by the applicable Subscriber at or prior to the Closing Date.

 

(d)
No litigation, statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated
or endorsed by or in any court or governmental authority of competent jurisdiction or any self-regulatory organization having authority
over the matters contemplated hereby which prohibits the consummation of any of the transactions contemplated by this Agreement.

 

    	 

     

    

 

6.
Conditions to Each Subscriber’s Obligation to Purchase. The obligation of each Subscriber hereunder to purchase the
Shares and Warrants at the Closing is subject to the satisfaction, at or before the Closing Date of each of the following conditions,
provided that these conditions are for such Subscriber’s sole benefit and may be waived by such Subscriber at any time in its sole
discretion:

 

(a)
deliver to such Subscriber duly executed Shares (in such denominations as the Subscriber shall request) and Warrants in accordance with
Section 1(a) above.

 

(b)
The representations and warranties of the Company shall be true and correct in all material respects, and the Company shall have performed,
satisfied and complied in all material respects with the covenants, agreements and conditions required by this Agreement to be performed,
satisfied or complied with by the Company at or prior to the Closing Date.

 

(c)
No litigation, statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated
or endorsed by or in any court or governmental authority of competent jurisdiction or any self-regulatory organization having authority
over the matters contemplated hereby which prohibits the consummation of any of the transactions contemplated by this Agreement.

 

7.
Reserved.

 

8.
Governing Law; Jurisdiction. This agreement shall be enforced, governed by and construed in accordance with the laws of the
state of Delaware applicable to agreements made and to be performed entirely within such state, without regard to the principles of conflicts
of law.

 

9.
Miscellaneous.

 

(a)
Counterparts; Signatures by Facsimile. This Agreement may be executed in one or more counterparts (with the Subscribers each executing
the counterpart in the form of Annex A hereto). Each of such counterparts shall be deemed an original, and all of which shall,
when taken together, constitute one and the same agreement, and shall become effective when counterparts have been signed by each party
and delivered to the other party. This Agreement, once executed by a party (including in the manner described above), may be delivered
to the other party hereto by facsimile transmission of a copy of this Agreement bearing the signature of the party so delivering this
Agreement.

 

(b)
Headings. The headings of this Agreement are for convenience of reference only and shall not form part of, or affect the interpretation
of, this Agreement.

 

(c)
Severability. In the event that any provision of this Agreement is invalid or unenforceable under any applicable statute or rule
of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to
conform with such statute or rule of law. Any provision hereof which may prove invalid or unenforceable under any law shall not affect
the validity or enforceability of any other provision hereof.

 

(d)
Entire Agreement; Amendments. This Agreement, any documents furnished to the Subscriber in connection with the Offering and the
instruments, documents and schedules referenced herein contain the entire understanding of the parties with respect to the matters covered
herein and therein and, except as specifically set forth herein or therein, neither the Company nor any Subscriber makes any representation,
warranty, covenant or undertaking with respect to such matters. No provision of this Agreement may be waived or amended other than by
an instrument in writing signed by the Company and a majority in interest of the Subscribers.

 

(e)
Notices. Any notices required or permitted to be given under the terms of this Agreement shall be sent by certified or registered
mail (return receipt requested) or delivered personally or by courier (including a recognized overnight delivery service) or by facsimile
transmission and shall be effective five days after being placed in the mail, if mailed by regular United States mail, or upon receipt,
if delivered personally or by courier (including a recognized overnight delivery service) or by facsimile transmission, with printed
confirmation of receipt, in each case addressed to a party. The addresses for such communications shall be:

 

    	 

     

    

 

If
to the Company:

 

AMMO,
INC.

6401
East Thomas Rd

Scottsdale,
AZ 85251

Attention:
Fred Wagenhals, CEO

Phone:

Email:
Fred@ammo-inc.com

 

	 	If to a Subscriber:	 To
the address and fax number set forth immediately below such Subscriber’s name on the subscriber signature pages hereto.

 

Each
party shall provide notice to the other party of any change in address, telephone or facsimile number.

 

(f)
Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and
assigns. Neither the Company nor any Subscriber shall assign this Agreement or any rights or obligations hereunder without the prior
written consent of the other. Notwithstanding the foregoing, but subject to the provisions of Section 2(g) hereof, any Subscriber may,
without the consent of the Company, assign its rights hereunder to any person that purchases Securities in a private transaction from
a Subscriber or to any of its “affiliates,” as that term is defined under the Exchange Act.

 

(g)
Third Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective permitted successors
and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other person.

 

(h)
Survival; Indemnification; Limitation on Liability.

 

(i)
The representations and warranties of the Subscribers and the Company set forth in Sections 2 and 3 hereof shall survive for 1 year following
the Closing Date notwithstanding any due diligence investigation conducted by or on behalf of the Subscribers or the Company, as applicable.
The agreements and covenants of the Company set forth in Section 4 shall survive for so long as any Subscriber beneficially owns any
Securities.

 

(ii)
The Company agrees to indemnify and hold harmless each of the Subscribers and all of their respective officers, directors, employees,
agents and representative from and against any and all claims, costs, expenses, liabilities, obligations, losses or damages (including
reasonable legal fees) of any nature (“Losses”), incurred by or imposed upon any such party arising as a result of
or related to any actual or alleged breach by the Company of any of its representations, warranties and covenants set forth in Sections
3 and 4 hereof or any of its covenants, agreements and obligations under this Agreement or any other Transaction Document.

 

(iii)
Each Subscriber agrees, severally but not jointly, to indemnify and hold harmless the Company and its officers, directors, employees
and agents for Losses arising as a result of or related to any actual or alleged breach any breach by such Subscriber of any of its representations
or warranties set forth in Section 2 hereof or any of its covenants, agreements and obligations under this Agreement or any other Transaction
Document.

 

(i)
Further Assurances. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and
shall execute and deliver all such other agreements, certificates, instruments and documents, as the other party may reasonably request
in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated
hereby.

 

(j)
No Strict Construction. The language used in this Agreement will be deemed to be the language chosen by the parties to express
their mutual intent, and no rules of strict construction will be applied against any party.

 

    	 

     

    

 

IN
WITNESS WHEREOF, the undersigned Subscribers and the Company have caused this Subscription Agreement to be duly executed as of the
date first above written.

 

	 	AMMO,
    Inc.
	 	 	 
	 	By:
    	 
	 	Name:	Fred
    Wagenhals
	 	Title:	CEO

 

	 	SUBSCRIBERS:
	 	 
	 	The
Subscribers executing the Signature Page in the form attached hereto as Annex A and delivering the same to the Company or its
agents shall be deemed to have executed this Agreement and agreed to the terms hereof.

 

    	 

     

    

 

Annex
A

 

Subscription
Agreement

Subscriber
Signature Page

 

IN
WITNESS WHEREOF, the undersigned have caused this Subscription Agreement to be duly executed by their respective authorized signatories
as of the date first indicated above.

 

Name
of Subscriber: _____________________________________________________________

 

Signature
of Authorized Signatory of Subscriber: ______________________________________

 

Name
of Authorized Signatory: ____________________________________________________

 

Title
of Authorized Signatory: _____________________________________________________

 

Tax
ID or SSN of Subscriber: _____________________________________________________

 

Email
Address of Subscriber: ______________________________________________________

 

Telephone
Number of Subscriber: __________________________________________________________

 

Fax
Number of Subscriber: __________________________________________________________

 

Address
for Notice of Subscriber:

 

______________________________________________________________________________

 

______________________________________________________________________________

 

Address
for Delivery of Securities for Subscriber (if not same as above):

 

______________________________________________________________________________

 

______________________________________________________________________________

 

Subscription
Amount: $___________________________________________________________

 

Number
of Units Purchased at $1.25 per Unit: _________________________________________

 

	Financial
    Advisor or Registered Representative:	 
	 	 
	 	 
	Signature	 
	 	 
	 	 
	Print
    Name	 

 

	Dated:

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