UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported)      August 7, 2013

 

PROBE MANUFACTUIRNG, INC.

(Exact name of registrant as specified in its charter)

 

 

 

 

 

 

Nevada

 

333-125678

 

20-2675800

(State or other jurisdiction

 

(Commission

 

(IRS Employer

of incorporation)

 

File Number)

 

Identification No.)

 

 

 

 

 

17475 Gillette Blvd., Irvine, CA

 

92614

(Address of principal executive offices)

 

(Zip Code)

 

Registrant’s telephone number, including area code      (949) 273-4990

 

 

(Former name or former address, if changed since last report.)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

o   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

o   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

o   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

o   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 





 Item 1.01

Entry into a Material Definitive Agreement


The information reported in Item 3.02 of this Current Report on Form 8-K are incorporated herein by reference.



Item 3.02

Unregistered Sales of Equity Securities

On August 7, 2013, we held our initial closing of our Series D Preferred Stock private financing offering with two related parties, whereby we received $750,000 in financing.  Our Series D Preferred Stock offering terms allow us to raise up to $1,000,000 US with an over-allotment of $500,000 in multiple closings over the course of 6 months.

The following are primary terms of the Series D Preferred Stock Offering.  The Series D Preferred holders will be paid a special monthly divided at the rate of 17.5% per annum or at the option of the Investor such special may accrue such special dividends.  If the Company does not pay the special dividend within five (5) business days from the end of the calendar month for which the payment of such dividend to owed, the Company will pay the investor a penalty of 3.5%. Any unpaid or accrued special dividends will be paid upon a liquidation or redemption. For any other dividends or distributions, participation with common stock on an as-converted basis. The Series D Preferred holders may elect to convert the Series D Preferred Stock, in his sole discretion, at any time after a one year (1) year holding period, by sending the Company a notice to convert.  The conversion rate shall equal to the greater of $0.08 or a 20% discount to the average of the three (3) lowest closing market prices of the common stock during the ten (10) trading day period prior to conversion. The Series D Preferred shall be redeemable from funds legally available for distribution at the option of the individual holders of the Series D Preferred commencing any time after the one (1) year period from the Closing (the “Redemption Period”) at a price equal to the Purchase Price plus all accrued but unpaid dividends.  If Company is not in financial position to pay it back it need to notify the Investors thirty (30) days prior the Redemption Period commencing and both parties will negotiate in good faith for an extension of the Redemption Period.  Notwithstanding, the Company may elect to redeem the Series D Preferred shares any time after the Closing at a price equal to Purchase Price plus all accrued but unpaid dividends subject to the Investors right to convert by providing the Investors written notice about its intent to redeem whereby the Investor shall have the right to convert per the terms of the conversion terms at least ten (10) days prior to such redemption by the Company.

The capital received from the Series D Preferred Stock offering shall be used as working capital and is intended to replace the accounts receivable financing and credit line we have with Far West Capital, which upon the final closing Series D Preferred Stock offering.


Item 7.01 Regulation FD Disclosure.

On August 8, 2013, we disseminated an executive summary to institutional investors providing an overview of our company, our business strategy and our market opportunity, or the Executive Summary. A copy of the Executive Summary, which is hereby incorporated into this filing in its entirety, is attached to this Current Report on Form 8-K as Exhibit 99.1.


The information furnished under this Item 7.01 of this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed to be "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section.


Item 9.01  Financial Statements and Exhibits

(d) Exhibits.

10.1  Form of Series D Preferred Stock Purchase Agreement.

10.2  Form of Series F Warrant Agreement.



10.3  Form of Series G Warrant Agreement

99.1  Probe Manufacturing, Inc. Executive Summary.


SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

 

 

 

 

 

Probe Manufacturing, Inc.

 

(Registrant)

 

 

Date

  August 8, 2013

 

 

 

 

 

/s/ Kambiz Mahdi

 

(Signature)

 

Print Name: Kambiz Mahdi

 

Title: Chief Executive Officer



Exhibit Index


         

 Exhibit No.     

Description  

___________

__________________________________________________________


10.1

Form of Series D Preferred Stock Purchase Agreement.


10.2

Form of Series F Warrant Agreement.


10.3

Form of Series G Warrant Agreement.


99.1

Probe Manufacturing, Inc. Executive Summary.





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SERIES D PREFERRED STOCK

INVESTMENT AGREEMENT


IMPORTANT NOTICE

Before investing in Probe’s Offering, investors need to have read Probe’s Offering documents and the related information and should know significant risks associated with making an investment in Probe which are more fully detailed in Probe’s Offering documents.


Probe can provide no assurance and no guarantee is hereby expressed or implied regarding achievement of all, or any of, Probe’s financial projections or business objectives.


THIS IS NEITHER AN OFFER TO SELL NOR AN OFFER TO BUY SECURITIES.  THE OFFERING IS MADE ONLY BY THE OFFERING DOCUMENTS.  ALL DOCUMENTS RELATED TO CORTXT’S OFFERING MUST BE READ IN CONJUNCTION WITH THE OFFERING DOCUMENTS IN ORDER TO UNDERSTAND FULLY ALL OF THE IMPLICATION AND RISKS OF THE OFFERING OF SECURITIES TO WHICH IT RELATES.  A COPY OF THE OFFERING DOCUMENTS MUST BE MADE AVAILABLE TO YOU IN CONNECTION WITH THIS OFFERING.




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SERIES D PREFERRED STOCK INVESTMENT AGREEMENT

This Series D Preferred Stock Investment Agreement (this “ Agreement ”) is made as of the ___________ __ , 2013, by and among Probe Manufacturing, Inc. (the “Company”), a Nevada corporation, and the Purchaser(s) listed in the signature page hereof (the “Purchaser”).

RECITALS:

WHEREAS, the Company and the Investor are executing and delivering this Agreement in reliance upon the exemption from securities registration afforded by the rules and regulations as promulgated by the United States Securities and Exchange Commission (the “SEC”) under the Securities Act of 1933, as amended (the “1933 Act”); and

WHEREAS, Subject to the terms and conditions of this Agreement, (i) each Purchaser agrees to purchase at the applicable Closing and the Company agrees to sell and issue to each Purchaser at such Closing that number of shares of Series D Preferred Stock set forth opposite such Purchaser’s name on Schedule 1 , at a price per share equal to the Purchase Price and (ii) each Purchaser and the Company agree to be bound by the obligations set forth herein and to grant to the other parties hereto the rights set forth in this Agreement.

NO THREFORE, the Company and the Investor hereby agree as follows:


1.

PURCHASE AND SALE OF SERIES D PREFERRED STOCK .

1.1

Sale and Issuance of Series D Preferred Stock .

1.1.1

The Company’s board of directors shall adopt a resolution approving the terms and sale of the Series D Preferred Stock pursuant to the terms of this Agreement and the Company shall file a Certificate of Designation stating the voting powers, designations, preferences, limitations, restrictions and relative rights of the class or series in accordance with the terms of this Agreement with the Secretary of State of the State of Nevada on or before the Initial Closing (as defined below).

1.1.2

Subject to the terms and conditions of this Agreement, each investor listed as a “Purchaser” on Schedule 1 hereto (each “ Purchaser ” and together the “ Purchasers ”) agrees to purchase at the applicable Closing (as defined below) and the Company agrees to sell and issue to each Purchaser at such Closing that number of shares of Series D Preferred Stock of the Company (“ Series D Preferred Stock ”)set forth opposite such Purchaser’s name on Schedule 1 , at a purchase price per share equal to the Purchase Price.  The minimum investment made by each Purchaser shall be $100,000 with a maximum investment of $500,000.  The Company will offer up to $1,000,000 of the Series D Preferred Stock with an over-allotment not to exceed $500,000 for a total of $1,500,000 on a best efforts basis.

1.1.3   The Purchase Price shall be $100.00 per share of Series D Preferred Stock.

1.2

Closing; Delivery .

1.2.1

Theinitial purchase and sale of the shares of Series D Preferred Stock hereunder shall take place remotely via the exchange of documents and signatures on the Agreement Date



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or the subsequent date on which one or more Purchasers execute counterpart signature pages to this Agreement and deliver the Purchase Price to the Company (which date is referred to herein as the “ Initial Closing ”).

1.2.2

At any time and from time to time during the sixty (60) day period immediately following the Initial Closing (the “ Additional Closing Period ”), the Company may, at one or more additional closings (each an “ Additional Closing ” and together with the Initial Closing, each, a “ Closing ”), without obtaining the signature, consent or permission of any of the Purchasers in the Initial Closing or any prior Additional Closing, offer and sell to other investors (the “ New Purchasers ”), at a per share purchase price equal to the Purchase Price, up to that number of shares of Series D Preferred Stock that is equal to that number of shares of Series D Preferred Stock equal to the quotient of (x) Total Series D Investment Amount divided by (y) the Purchase Price, rounded up to the next whole share ( the “ Total Shares Authorized for Sale ”) less the number of shares of Series D Preferred Stock actually issued and sold by the Company at the Initial Closing and any prior Additional Closings.  New Purchasers may include persons or entities who are already Purchasers under this Agreement.  The Company and each of the New Purchasers purchasing shares of Series D Preferred Stock at each Additional Closing will execute counterpart signature pages to this Agreement and each New Purchaser will, upon delivery by such New Purchaser and acceptance by the Company of such New Purchaser’s signature page and delivery of the Purchase Price by such New Purchaser to the Company, become a party to, and bound by, this Agreement to the same extent as if such New Purchaser had been a Purchaser at the Initial Closing and each such New Purchaser shall be deemed to be a Purchaser for all purposes under this Agreement as of the date of the applicable Additional Closing.

1.2.3

Promptly following each Closing, if required by the Company’s governing documents, the Company shall deliver to each Purchaser participating in such Closing a certificate representing the shares of Series D Preferred Stock being purchased by such Purchaser at such Closing against payment of the Purchase Price therefor by check payable to the Company, by wire transfer to a bank account designated by the Company, by cancellation or conversion of indebtedness of the Company to Purchaser or by any combination of such methods.

1.3

Special Dividend . The Series D Preferred will be paid a special monthly divided at the rate of 17.5% per annum or at the option of the Purchaser such special may accrue such special dividends.  If the Company does not pay the special dividend within five (5) business days from the end of the calendar month for which the payment of such dividend to owed, the Company will pay the investor a penalty of 3.5%. Any unpaid or accrued special dividends will be paid upon a liquidation or redemption. For any other dividends or distributions, participation with Common Stock will be on an as-converted basis.

1.4

Conversion Rights .  The Purchaser may elect to convert the Series D Preferred Stock purchased hereunder, in his sole discretion, at any time after a one year (1) year holding period (the Holding Period”), by sending the Company a notice to convert.  The conversion rate shall equal to the greater of $0.08 or a 20% discount to the average of the three (3) lowest closing market prices of the common stock during the ten (10) trading day period prior to conversion. This Warrant is exercisable during the period commencing on the next day after the Holding Period, in whole or from time to time in part, at the option of the Purchaser, upon submitting to the Company a duly completed Notice of Conversion in the form attached hereto.



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1.4.1  Each conversion of the Series D Preferred Stock shall be deemed to have been effected immediately prior to the close of business on the day on a duly completed Notice of Conversion is received by the Company.  


1.4.2  Within fifteen (15) business days after a duly completed Notice of Conversion is received by the Company, the Company at its expense will use its best efforts to cause to be issued in the name of, and delivered to the Purchaser a certificate or certificates for the number of full Common Stock Shares to which such Purchaser shall be entitled upon such conversion, which shall be rounded up to the nearest whole share in lieu of any fractional share to which such Purchaser would otherwise be entitled.


1.5

Common Stock Warrant(s) . Investor shall receive one (1) warrant to purchase 50,000 shares of common stock for every $100,000 invested in the offering at a price per share equal to $0.10 per share and one (1) warrant to purchase 50,000 shares of common stock at a price per share equal to $0.20 (the “Warrants”).  The Warrants will be valid for a period of 5 years from the date of the Closing. The amount and price per share shall be subject to adjustments for stock dividends, splits, combinations and similar events.  The Warrants are governed by the terms of the Series F & G Common Stock Purchase Agreements.

1.6

Security Interest .  The Purchasers hereunder will have their investment secured by all assets, including but not limited to the equipment, accounts receivables and inventory of the Company and its subsidiaries.  Upon any default of this

2.

REPRESENTATIONS AND WARRANTIES OF THE COMPANY .  The Company hereby represents and warrants to each Purchaser that, except as set forth on the Disclosure Schedule attached as Exhibit B to this Agreement (the “ Disclosure Schedule ”), if any, which exceptions shall be deemed to be part of the representations and warranties made hereunder, the following representations are true and complete as of the date of the Agreement Date, except as otherwise indicated.  

2.1

Organization, Good Standing, Corporate Power and Qualification .The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Nevada and has all corporate power and corporate authority required (a) to carry on its business as presently conducted and as presently proposed to be conducted and (b) to execute, deliver and perform its obligations under this Agreement.  The Company is duly qualified to transact business as a foreign corporation and is in good standing under the laws of each jurisdiction in which the failure to so qualify or be in good standing would have a material adverse effect on the business, assets (including intangible assets), liabilities, financial condition, property, or results of operations of the Company.

2.2

Capitalization .The authorized capital of the Company consists, immediately prior to the Closing (unless otherwise noted), of the following.

2.2.1

200,000,000 shares of the common stock of the Company, $0.001 par value per share (the “ Common Stock ”), (a) 20,331,906 shares of which are issued and outstanding immediately prior to the Closing.  All of the outstanding shares of Common Stock are duly authorized, validly issued, fully paid and nonassessable and were issued in material compliance with all applicable federal and state securities laws.  

2.2.2

10,000,000 shares of the preferred stock of the Company, $0.001 par value per share (the “ Preferred Stock ”), 15,000 of which will be designated as Series D Preferred Stock, none of which are issued and outstanding immediately prior to the Closing.  



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2.2.3

2,000,000shares of Common Stock are subject to issuance to officers, directors, employees and consultants of the Company pursuant to the Company’s Equity Incentive Plan duly adopted by the Board of Directors of the Company (the “ Board ”) and approved by the Company stockholders (the “ Stock Plan ”).  Of such shares of Common Stock reserved under the Stock Plan, options to purchase 1,500,000 shares have been granted and are currently outstanding, and 313,362shares of Common Stock remain available for issuance to officers, directors, employees and consultants pursuant to the Stock Plan.

2.2.4

There are no outstanding preemptive rights, options, warrants, conversion privileges or rights (including but not limited to rights of first refusal or similar rights), orally or in writing, to purchase or acquire any securities from the Company including, without limitation, any shares of Common Stock, or Preferred Stock, or any securities convertible into or exchangeable or exercisable for shares of Common Stock or Preferred Stock, except for (a) the conversion privileges of the Shares to be issued under this Agreement pursuant to the terms of the Certificate of Designation, (b), and (c) the securities and rights described in Section 2.2.3 of this Agreement.  

2.3

Subsidiaries .  The Company currently does not own or control, directly or indirectly, any interest in any other corporation, partnership, trust, joint venture, limited liability company, association, or other business entity, other than a 100% controlling interest in Trident Manufacturing, Inc., a Utah corporation.  The Company is not a participant in any joint venture, partnership or similar arrangement.

2.4

Authorization .All corporate action has been taken, or will be taken prior to the applicable Closing, on the part of the Board and stockholders that is necessary for the authorization, execution and delivery of this Agreement by the Company and the performance by the Company of the obligations to be performed by the Company as of the date hereof under this Agreement.  This Agreement, when executed and delivered by the Company, shall constitute the valid and legally binding obligation of the Company, enforceable against the Company in accordance with its terms except (a) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, or other laws of general application relating to or affecting the enforcement of creditors’ rights generally, or (b) as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies.

2.5

Valid Issuance of Shares .  The shares of Series D Preferred Stock, when issued, sold and delivered in accordance with the terms and for the consideration set forth in this Agreement, will be duly authorized, validly issued, fully paid and nonassessable and free of restrictions on transfer other than restrictions on transfer under this Agreement, applicable state and federal securities laws and liens or encumbrances created by or imposed by a Purchaser.  Based in part on the accuracy of the representations of the Purchasers in Section 3 of this Agreement and subject to filings pursuant to Regulation D of the Securities Act of 1933, as amended (the “ Securities Act ”), and applicable state securities laws, the offer, sale and issuance of the shares of Series D Preferred Stock to be issued pursuant to and in conformity with the terms of this Agreement and the issuance of the Common Stock, if any, to be issued upon conversion thereof for no additional consideration and pursuant to the Restated Charter, will be issued in compliance with all applicable federal and state securities laws.  The Common Stock issuable upon conversion of the shares of Series D Preferred Stock has been duly reserved for issuance, and upon issuance in accordance with the terms of the Restated Charter, will be duly authorized, validly issued, fully paid and nonassessable and free of restrictions on transfer other than restrictions on transfer under this Agreement, applicable federal and state securities laws and liens or encumbrances created by or imposed by a Purchaser.  Based in part upon the representations of the Purchasers in Section 3 of this Agreement, and subject to filings pursuant to Regulation D of the Securities Act and applicable state securities laws, the Common Stock



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issuable upon conversion of the shares of Series D Preferred Stock will be issued in compliance with all applicable federal and state securities laws.

2.6

Litigation .There is no pending action, suit, proceeding, arbitration, mediation, complaint, claim, charge or investigation before any court, arbitrator, mediator or governmental body or, to the Company’s knowledge, currently threatened in writing (a) against the Company or (b) against any consultant, officer, director or key employee of the Company arising out of his or her consulting, employment or board relationship with the Company or that could otherwise materially impact the Company.  

2.7

Intellectual Property .  The Company owns or possesses sufficient legal rights to all Intellectual Property (as defined below) that is necessary to the conduct of the Company’s business as now conducted and as presently proposed to be conducted (the “ Company Intellectual Property ”) without any violation or infringement (or in the case of third-party patents, patent applications, trademarks, trademark applications, service marks, or service mark applications, without any violation or infringement known to the Company) of the rights of others. No product or service marketed or sold (or proposed to be marketed or sold) by the Company violates or will violate any license or infringes or will infringe any rights to any patents, patent applications, trademarks, trademark applications, service marks, trade names, copyrights, trade secrets, licenses, domain names, mask works, information and proprietary rights and processes (collectively, “ Intellectual Property ”) of any other party, except that with respect to third-party patents, patent applications, trademarks, trademark applications, service marks, or service mark applications the foregoing representation is made to the Company’s knowledge only.  Other than with respect to commercially available software products under standard end-user object code license agreements, there is no outstanding option, license, agreement, claim, encumbrance or shared ownership interest of any kind relating to the Company Intellectual Property, nor is the Company bound by or a party to any options, licenses or agreements of any kind with respect to the Intellectual Property of any other person. The Company has not received any written communications alleging that the Company has violated or, by conducting its business, would violate any of the Intellectual Property of any other person.

2.8

Employee and Consultant Matters . Each current and former employee, consultant and officer of the Company has executed an agreement with the Company regarding confidentiality and proprietary information substantially in the form or forms made available to the Purchasers or delivered to the counsel for the Purchasers.  No current or former employee or consultant has excluded any work or invention from his or her assignment of inventions. To the Company’s knowledge, no such employees or consultants is in violation thereof.  To the Company’s knowledge, none of its employees is obligated under any judgment, decree, contract, covenant or agreement that would materially interfere with such employee’s ability to promote the interest of the Company or that would interfere with such employee’s ability to promote the interests of the Company or that would conflict with the Company’s business. To the Company’s knowledge, all individuals who have purchased unvested shares of the Company’s Common Stock have timely filed elections under Section 83(b) of the Internal Revenue Code of 1986, as amended.

2.9

Compliance with Other Instruments .  The Company is not in violation or default (a) of any provisions of the Restated Charter or the Company’s bylaws, (b) of any judgment, order, writ or decree of any court or governmental entity, (c) under any agreement, instrument, contract, lease, note, indenture, mortgage or purchase order to which it is a party that is required to be listed on the Disclosure Schedule, or, (d) to its knowledge, of any provision of federal or state statute, rule or regulation materially applicable to the Company.  The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated by this Agreement will not result in any such violation or default, or constitute, with or without the passage of time and giving of



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notice, either (i) a default under any such judgment, order, writ, decree, agreement, instrument, contract, lease, note, indenture, mortgage or purchase order or (ii) an event which results in the creation of any lien, charge or encumbrance upon any assets of the Company or the suspension, revocation, forfeiture, or nonrenewal of any material permit or license applicable to the Company .

2.10

Title to Property and Assets .  The Company owns its properties and assets free and clear of all mortgages, deeds of trust, liens, encumbrances and security interests except for statutory liens for the payment of current taxes that are not yet delinquent and liens, encumbrances and security interests which arise in the ordinary course of business and which do not affect material properties and assets of the Company.  With respect to the property and assets it leases, the Company is in material compliance with each such lease.

2.11

Agreements .  Except for this Agreement, there are no agreements, understandings, instruments, contracts or proposed transactions to which the Company is a party that involve (a) obligations (contingent or otherwise) of, or payments to, the Company in excess of $500,000, (b) the license of any Intellectual Property to or from the Company other than licenses with respect to commercially available software products under standard end-user object code license agreements or standard customer terms of service and privacy policies for Internet sites, (c) the grant of rights to manufacture, produce, assemble, license, market, or sell its products to any other person, or that limit the Company’s exclusive right to develop, manufacture, assemble, distribute, market or sell its products, or (d) indemnification by the Company with respect to infringements of proprietary rights other than standard customer or channel agreements (each, a “ Material Agreement ”).  The Company is not in material breach of any Material Agreement.  Each Material Agreement is in full force and effect and is enforceable by the Company in accordance with its respective terms, except as may be limited by (i) applicable bankruptcy, insolvency, reorganization or others laws of general application relating to or affecting the enforcement of creditors’ rights generally, or (ii) the effect of rules of law governing the availability of equitable remedies.

2.12

Liabilities .The Company has no liabilities or obligations, contingent or otherwise, in excess of $250,000 individually or $2,000,000 in the aggregate.  

3.

REPRESENTATIONS AND WARRANTIES AND COVENANTS OF THE PURCHASERS . Each Purchaser hereby represents and warrants to the Company, severally and not jointly, as follows.

3.1

Authorization .The Purchaser has full power and authority to enter into this Agreement.  This Agreement, when executed and delivered by the Purchaser, will constitute a valid and legally binding obligation of the Purchaser, enforceable in accordance with their terms, except (a) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, and any other laws of general application relating to or affecting the enforcement of creditors’ rights generally, or (b) the effect of rules of law governing the availability of equitable remedies.

3.2

Purchase Entirely for Own Account .This Agreement is made with the Purchaser in reliance upon the Purchaser’s representation to the Company, which by the Purchaser’s execution of this Agreement, the Purchaser hereby confirms, that the shares of Series D Preferred Stock to be acquired by the Purchaser will be acquired for investment for the Purchaser’s own account, not as a nominee or agent, and not with a view to the resale or distribution of any part thereof, and that the Purchaser has no present intention of selling, granting any participation in, or otherwise distributing the same.  By executing this Agreement, the Purchaser further represents that the Purchaser does not presently have any contract, undertaking, agreement or arrangement with any



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person to sell, transfer or grant participations to such person or to any third person, with respect to any of the shares of Series D Preferred Stock.  The Purchaser has not been formed for the specific purpose of acquiring the shares of Series D Preferred Stock.  

3.3

Disclosure of Information .The Purchaser has had an opportunity to discuss the Company’s business, management, financial affairs and the terms and conditions of the offering of the shares of Series D Preferred Stock with the Company’s management.  Nothing in this Section 3, including the foregoing sentence, limits or modifies the representations and warranties of the Company in Section 2 of this Agreement or the right of the Purchasers to rely thereon.

3.4

Restricted Securities . The Purchaser understands that the shares of Series D Preferred Stock have not been, and will not be, registered under the Securities Act, by reason of a specific exemption from the registration provisions of the Securities Act which depends upon, among other things, the bona fide nature of the investment intent and the accuracy of the Purchaser’s representations as expressed herein.  The Purchaser understands that the shares of Series D Preferred Stock are “restricted securities” under applicable United States federal and state securities laws and that, pursuant to these laws, the Purchaser must hold theshares of Series D Preferred Stock indefinitely unless they are registered with the Securities and Exchange Commission and qualified by state authorities or an exemption from such registration and qualification requirements is available.  The Purchaser acknowledges that the Company has no obligation to register or qualify the shares of Series D Preferred Stock, or the Common Stock into which it may be converted, for resale.  The Purchaser further acknowledges that if an exemption from registration or qualification is available, it may be conditioned on various requirements including, but not limited to, the time and manner of sale, the holding period for the shares of Series D Preferred Stock, and on requirements relating to the Company which are outside of the Purchaser’s control, and which the Company is under no obligation and may not be able to satisfy.

3.5

No Public Market . The Purchaser understands that no public market now exists for the shares of Series D Preferred Stock, and that the Company has made no assurances that a public market will ever exist for the shares of Series D Preferred Stock.

3.6

Legends .  The Purchaser understands that the shares of Series D Preferred Stock and any securities issued in respect of or exchange for the shares of Series D Preferred Stock, may bear any one or more of the following legends:  (a) any legend set forth in, or required by, this Agreement; (b) any legend required by the securities laws of any state to the extent such laws are applicable to the shares of Series D Preferred Stock represented by the certificate so legended; and (c) the following legend:

“THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF.  NO TRANSFER MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL IN A FORM REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.”

3.7

Accredited and Sophisticated Purchaser . The Purchaser is an accredited investor as defined in Rule 501(a) of Regulation D promulgated under the Securities Act.  The Purchaser is an investor in securities of companies in the development stage and acknowledges that



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Purchaser is able to fend for itself, can bear the economic risk of its investment, and has such knowledge and experience in financial or business matters that it is capable of evaluating the merits and risks of the investment in the shares of Series D Preferred Stock.  If other than an individual, Purchaser also represents it has not been organized for the purpose of acquiring the shares of Series D Preferred Stock.

3.8

No General Solicitation .  Neither the Purchaser nor any of its officers, directors, employees, agents, stockholders or partners has either directly or indirectly, including through a broker or finder (a) engaged in any general solicitation with respect to the offer and sale of the shares of Series D Preferred Stock, or (b) published any advertisement in connection with the offer and sale of the shares of Series D Preferred Stock.

3.9

Exculpation Among Purchasers .  The Purchaser acknowledges that it is not relying upon any person, other than the Company and its officers and directors, in making its investment or decision to invest in the Company.  The Purchaser agrees that neither any Purchaser nor the respective controlling persons, officers, directors, partners, agents, or employees of any Purchaser shall be liable to any other Purchaser for any action heretofore taken or omitted to be taken by any of them in connection with the purchase of the shares of Series D Preferred Stock.

3.10

Residence .If the Purchaser is an individual, then the Purchaser resides in the state identified in the address of the Purchaser set forth on the signature page hereto and/or on Schedule 1 ; if the Purchaser is a partnership, corporation, limited liability company or other entity, then the office or offices of the Purchaser in which its principal place of business is identified in the address or addresses of the Purchaser set forth on the signature page hereto and/or on Schedule 1 . In the event that the Purchaser is not a resident of the United States, such Purchaser hereby agrees to make such additional representations and warranties relating to such Purchaser’s status as a non-United States resident as reasonably may be requested by the Company and to execute and deliver such documents or agreements as reasonably may be requested by the Company relating thereto as a condition to the purchase and sale of any shares of Series D Preferred Stock by such Purchaser.  

4.

COVENANTS OF THE COMPANY .  The Company shall become obligated to strictly comply with the following covenants upon receiving $750,000 in funds from the sale of the Series D. Preferred Stock, the failure of which will constitute a material breach of this Agreement.

4.1

Information Rights .

4.1.1

Financial Information .  The Company will furnish to each Purchaser monthlyunaudited financial statements of the Company, including the Company’s sales data, customer bookings and current sales backlog, account receivables, account payables, profit and loss statements and other relevant financial data that may be deemed necessary to keep the Purchaser informed about the Company’s financial condition.; and (2) quarterly unaudited financial statements for each fiscal quarter of the Company (except the last quarter of the Company’s fiscal year), including an unaudited balance sheet as of the end of such fiscal quarter, an unaudited statement of operations and an unaudited statement of cash flows of the Company for such quarter, all prepared in accordance with generally accepted accounting principles and practices, subject to changes resulting from normal year-end audit adjustments.  If the Company has audited records of any of the foregoing, it shall provide those in lieu of the unaudited versions.

4.1.2

Confidentiality .  Anything in this Agreement to the contrary notwithstanding, no Purchaser by reason of this Agreement shall have access to any trade secrets or confidential information of the Company.  The Company shall not be required to comply with any



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information rights in respect of any Purchaser whom the Company reasonably determines to be a competitor or an officer, employee, director or holder of ten percent (10%) or more of a competitor.  Each Purchaser agrees that such Purchaser will keep confidential and will not disclose, divulge, or use for any purpose (other than to monitor its invest­ment in the Company) any confidential information obtained from the Company pursuant to the terms of this Agreement other than to any of the Purchaser’s attorneys, accountants, consultants, and other professionals, to the extent necessary to obtain their services in connection with monitoring the Purchaser’s investment in the Company.

4.1.3

Inspection Rights .  The Company shall permit each Purchaser to visit and inspect the Company’s properties, to examine its books of account and records and to discuss the Company’s affairs, finances and accounts with its officers, all at such reasonable times as may be requested by such Purchaser.

4.2

Use of Proceeds .The Company hereby agrees that it shall use the proceeds for the purpose of paying off any outstanding credit lines, account-receivables financing arrangements and like financial arrangements.

4.3

Payment of Special Dividend .Pay the special monthly divided at the rate of 17.5% per annum or at the option of the Purchaser such special may accrue such special dividends.  If the Company does not pay the special dividend within five (5) business days from the end of the calendar month for which the payment of such dividend to owed, the Company will pay the investor a penalty of 3.5%. Any unpaid or accrued special dividends will be paid upon a liquidation or redemption.  

4.4

Reservation of Common Stock .The Company will at all times reserve and keep available, solely for issuance and delivery upon the conversion of the Series D Preferred Stock, all Common Stock issuable from time to time upon conversion of that number of shares of Series D Preferred Stock equal to the Total Shares Authorized for Sale, regardless of whether or not all such shares have been issued at such time.

4.5

Investor Relations .  The Company shall retain an investor relations firm and shall pay a minimum of $2,500 per month on investor relations.

4.6

Additional Capital Offering(s) .  The Company shall use its best efforts to raise an additional $250,000 in equity financing on or before October 31, 2013.

4.7

Security Interest .  The Company hereby grants to Purchaser(s) a first priority security interest in all assets, including but not limited to, the equipment, account receivables and inventory of the Company and its subsidiaries (the “Collateral”).  The Company hereby irrevocably authorizes the Purchaser(s) at any time, and from time to time, to file in any jurisdiction any initial financing statements and amendments thereto that the Purchaser(s) reasonably deems necessary to establish and maintain valid, attached and perfected first priority security interests in the Collateral in favor of the Purchaser(s), free and clear of all Liens and claims and rights of third parties whatsoever, and the Company shall cooperate with the Investor with respect to such filings.  Without the prior written consent of the Purchaser(s), the Company will not, in any way, hypothecate or create or permit to exist any Lien on or other interest in the Collateral, and the Company will not sell, transfer, assign, pledge, collaterally assign, exchange or otherwise dispose of the Collateral.

5.

RESTRICTIONS ON TRANSFER .



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5.1

Limitations on Disposition .  Each person owning of record shares of Common Stock of the Company issued or issuable pursuant to the conversion of the shares of Series D Preferred Stock and any shares of Common Stock of the Company issued as a dividend or other distribution with respect thereto or in exchange therefor or in replacement thereof (collectively, the “ Securities ”) or any assignee of record of Securities (each such person, a “ Holder ”) hereby agrees not to make any disposition of all or any portion of any Securities unless and until:

(a)

there is then in effect a registration statement under the Securities Act, covering such proposed disposition and such disposition is made in accordance with such registration statement; or

(b)

such Holder shall have notified the Company of the proposed disposition and shall have furnished the Company with a statement of the circumstances surrounding the proposed disposition, and, at the expense of such Holder or its transferee, with an opinion of counsel, reasonably satisfactory to the Company, that such disposition will not require registration of such securities under the Securities Act.

Notwithstanding the provisions of Sections 5.1(a) and (b) above, no such registration statement or opinion of counsel shall be required: (i) for any transfer of any Securities in compliance with the Securities and Exchange Commission’s Rule 144 or Rule 144A, or (ii) for any transfer of any Securities by a Holder that is a partnership, limited liability company, a corporation or a venture capital fund to (A) a partner of such partnership, a member of such limited liability company or stockholder of such corporation, (B) an affiliate of such partnership, limited liability company or corporation (including, without limitation, any affiliated investment fund of such Holder), (C) a retired partner of such partnership or a retired member of such limited liability company, (D) the estate of any such partner, member or stockholder, or (iii) for the transfer by gift, will or intestate succession by any Holder to his or her spouse or lineal descendants or ancestors or any trust for any of the foregoing; provided that in the case of clauses (ii) and (iii) the transferee agrees in writing to be subject to the terms of this Agreement to the same extent as if the transferee were an original Purchaser hereunder and in the case of clause (iii) the transfer was without additional consideration or at no greater than cost.

6.

PROTECTIVE PROVISIONS .

6.1

General .  So long as51% of shares of Series D Preferred are outstanding, in addition to any other vote or approval required under the Company’s Charter or By-laws, the Company will not, without the written consent of the holders of at least 51% of the Company’s Series D Preferred outstanding, either directly or indirectly by amendment, merger, consolidation, or otherwise: (i) liquidate, dissolve or wind-up the business and affairs of the Company, or effect any Deemed Liquidation Event or consent to any of the foregoing if such Deemed Liquidation Event would result in the Investor not being made whole in their investment hereunder; (ii) amend, alter, or repeal any provision of the Certificate of Incorporation or Bylaws in a manner adverse to the Series D Preferred; (iii) create or authorize the creation of or issue or obligate itself to issue shares of, any other security convertible into or exercisable for any equity security, having rights, preferences or privileges senior toor on parity with the Series D Preferred, or increase the authorized number of shares of Series D Preferred or of any additional class or series of capital stock unless it ranks junior to the Series D Preferred; (iv) reclassify, alter or amend any existing security that is junior to or on parity with the Series D Preferred, if such reclassification, alteration or amendment would render such other security senior to or on parity with the Series D Preferred; (v) purchase or redeem or pay any dividend on any capital stock prior to the Series D Preferred, other than stock repurchased from former employees or consultants in connection with the cessation of their employment/services, at the lower of fair market



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value or cost; other than as approved by the Board; or (vii) dispose of any subsidiary stock or all or substantially all of any subsidiary assets.




7.

REDEMPTION; LIQUIDATION PREFERENCE .

7.1

Purchaser Redemption Right .  The Series D Preferred shall be redeemable from funds legally available for distribution at the option of the individual holders of the Series D Preferred commencing any time after the one (1) year period from the Closing(the “Redemption Period”) at a price equal to the Purchase Price plus all accrued but unpaid dividends.  If Company is not in financial position to pay it back it need to notify the Purchaser(s) thirty (30) days prior the Redemption Period commencing and both parties will negotiate in good faith for an extension of the Redemption Period.

7.2

Company Redemption Right .   Notwithstanding, the Company may elect to redeem the Series D Preferred shares any time after the Closing at a price equal to Purchase Price plus all accrued but unpaid dividends subject to the Purchaser(s) right to convert by providing the Purchaser’s written notice about its intent to redeem whereby the Purchaser(s) shall have the right to convert per the terms of the conversion terms at least ten (10) days prior to such redemption by the Company.

7.3

Liquidation Preference .  The Company hereby agrees to first pay one times the Purchase Price plus accrued dividends plus declared and unpaid dividends on each share of Series D Preferred.  Thereafter, the Series D Preferred participates with the Common Stock pro rata on an as-converted basis.

8.

GENERAL PROVISIONS .

8.1

Successors and Assigns . The terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors and assigns of the parties.  Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.

8.2

Governing Law . This Agreement shall be governed by, and construed in accordance with the laws of the State of California, regardless of the laws that might otherwise govern under applicable principles of conflicts of law.

8.3

Counterparts; Facsimile or Electronic Signature . This Agreement may be executed and delivered by facsimile or electronic signature and in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

8.4

Titles and Subtitles . The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.  

8.5

Notices .  All notices and other communications given or made pursuant to this Agreement shall be in writing and shall be deemed effectively given upon the earlier of actual receipt or:  (a) personal delivery to the party to be notified, (b) when sent, if sent by facsimile or electronic mail during normal business hours of the recipient, and if not sent during normal business hours, then



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on the recipient’s next business day, (c) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) one (1) business day after deposit with a nationally recognized overnight courier, freight prepaid, specifying next business day delivery, with written verification of receipt.  All communications shall be sent to the respective parties at their address as set forth on the signature page or Schedule 1 , or to such address, facsimile number or electronic mail address as subsequently modified by written notice given in accordance with this Section 8.5.

8.6

No Finder’s Fees . Each party represents that it neither is nor will be obligated for any finder’s fee or commission in connection with this transaction.  Each Purchaser agrees to indemnify and to hold harmless the Company from any liability for any commission or compensation in the nature of a finder’s or broker’s fee arising out of this transaction (and the costs and expenses of defending against such liability or asserted liability) for which each Purchaser or any of its officers, employees, or representatives is responsible.  The Company agrees to indemnify and hold harmless each Purchaser from any liability for any commission or compensation in the nature of a finder’s or broker’s fee arising out of this transaction (and the costs and expenses of defending against such liability or asserted liability) for which the Company or any of its officers, employees or representatives is responsible.

8.7

Attorneys’ Fees .  If any action at law or in equity (including arbitration) is necessary to enforce or interpret the terms of this Agreement, the prevailing party shall be entitled to reasonable attorneys’ fees, costs and necessary disbursements in addition to any other relief to which such party may be entitled.  Each party shall pay all costs and expenses that it incurs with respect to the negotiation, execution, delivery and performance of the Agreement; provided, however, that the Company shall, at the Closing, reimburse the fees and expenses of one counsel for Purchasers, for a flat fee equal to the Purchaser Counsel Reimbursement Amount.

8.8

Amendments and Waivers . Except as specified in Section 1.2.2, any term of this Agreement may be amended, terminated or waived (either generally or in a particular instance and either retroactively or prospectively) only with the written consent of the Company and the Purchasers holding a majority of the then-outstanding shares of Series D Preferred Stock (or Common Stock issued on conversion thereof); provided , however , that any amendment to Section 7.1(a) or Section 7.1(c) shall also require the additional written consent of the holders of a majority of the outstanding shares of the Company’s Common Stock then held by all of the Common Control Holders.  Any amendment or waiver effected in accordance with this Section 8.8 shall be binding upon the Purchasers, the Key Holders, each transferee of the shares of Series D Preferred Stock (or the Common Stock issuable upon conversion thereof) or Common Stock from a Purchaser or Key Holders, as applicable, and each future holder of all such securities, and the Company.

8.9

Severability . The invalidity or unenforceability of any provision hereof shall in no way affect the validity or enforceability of any other provision.

8.10

Delays or Omissions .No delay or omission to exercise any right, power or remedy accruing to any party under this Agreement, upon any breach or default of any other party under this Agreement, shall impair any such right, power or remedy of such non-breaching or non-defaulting party nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring.  Any waiver, permit, consent or approval of any kind or character on the part of any party of any breach or default under this Agreement, or any waiver on the part of any party of any provisions or conditions of this Agreement, must be in writing and shall be effective only to the extent



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specifically set forth in such writing.  All remedies, either under this Agreement or by law or otherwise afforded to any party, shall be cumulative and not alternative.

8.11

Termination .  Unless terminated earlier pursuant to the terms of this Agreement, (x) the rights, duties and obligations under Sections 4, 6 and 7 shall terminate immediately prior to the closing of the Company’s initial public offering of Common Stock pursuant to an effective registration statement filed under the Securities Act, (y) notwithstanding anything to the contrary herein, this Agreement (excluding any then-existing obligations) shall terminate upon the closing of a Deemed Liquidation Event as defined in the Company’s Restated Charter, as amended from time to time and (z) notwithstanding anything to the contrary herein, Section 1, Section 2, Section 3, Section 4.1.2 and this Section 8 shall survive any termination of this Agreement.

8.12

Dispute Resolution . The Parties hereby irrevocably and unconditionally agree that Any controversy, dispute, or claim of whatever nature arising out of, in connection with, or in relation to the interpretation, performance or breach of this agreement, shall be settled at the request of any party to this agreement, by final and binding arbitration administered by American Arbitration Association, conducted in Irvine, California, administered by and in accordance with the then existing Rules of Practice and Procedure of American Arbitration Association, and judgment upon any award rendered by the arbitrator(s) may be entered by any state or federal court having jurisdiction thereof. The cost of arbitration shall be borne by the party against whom the award is rendered or, if in the interest of fairness, as allocated in accordance with the judgment of the arbitrators. All awards in arbitration made in good faith and not infected with fraud or other misconduct shall be final and binding.

8.13

Entire Agreement . This Agreement (including the Exhibits and Schedules hereto) together with the Restated Charter constitute the full and entire understanding and agreement between the parties with respect to the subject matter hereof, and any other written or oral agreement relating to the subject matter hereof existing between the parties are expressly canceled.



[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]











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IN WITNESS WHEREOF , the parties hereto have executed this Agreement as of the date and year first written above.

THE COMPANY :

 

Name:

 

 

 

By:

 

 

 

Title:

 

 


PURCHASERS :

 

[FOR ENTITY INVESTOR USE
FOLLOWING SIGNATURE BLOCK:]

[FOR INDIVIDUAL INVESTOR USE
FOLLOWING SIGNATURE BLOCK:]

Name:

 

Name:

 

 

 

 

[TYPE NAME ON LINE]

By:

 

By:

 

Title:

 

 

[SIGN HERE]


SUBSCRIPTION AMOUNT:

Purchaser hereby irrevocably commits to purchase a Note in the principal amount of

$_________________________.

Note that the principal amount shown above must be in increments of US$25,000.00 and must meet the following minimum investment requirements of $100,000.



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EXHIBIT A

SCHEDULE OF PURCHASERS

PURCHASERS :


Name, Address and E-Mail of Purchaser

 

Series D Preferred Stock Shares Purchased

 

Indebtedness Cancellation

 

Cash Payment

 

Total

Purchase
Amount

 

 

 

 

 

 

 

 

 





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EXHIBIT B

DISCLOSURE SCHEDULE



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EXHIBIT C


FORM OF OFFICER’S CERTIFICATE




[EXHIBIT101_EX10Z1002.JPG]


Officer’s Certificate


The undersigned, Kambiz Mahdi, is the Chief Executive Officer and Chairman of Probe Manufacturing, Inc., a Nevada Company, ("Company"), and is delivering this Officer's Certificate to the Purchaser(s) of the Series D Preferred Stock Offering ("Purchaser"), pursuant to that certain Preferred Series D Stock Investment Agreement, dated June 20, 2013, by and between Company and the Purchaser(s) (the "Agreement"). Capitalized terms used herein shall have the meanings given to them in the Agreement. Company hereby certifies to Purchaser that as of the date hereof the following conditions precedent to consummate the Closing have been satisfied:

1. All representations and warranties of the Company contained in the Agreement are true and correct in all material respects as of the date of the Closing, and

2. All covenants and agreements required by the terms of the Preferred Series D Stock Investment Agreement to be performed and complied with by Company prior to or at the Closing have been duly performed in all material respects as of the date of the Closing.

IN WITNESS WHEREOF, the undersigned has caused this Certificate to be duly executed June [ __ ], 2013.

Probe Manufacturing, Inc.


By: ____________________________

Kambiz Mahdi, CEO & Chairman




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EXHIBIT D


FORM OF LEGAL OPINION


Based upon the foregoing and subject to the additional qualifications set forth below, we are of the opinion that:


1.

The Company is validly existing as a corporation and in good standing under Nevada law and is qualified as a foreign corporation and in good standing in California.


2.

The Company has the corporate power to execute and deliver the Transaction Documents in which it is named as a party and to perform its obligations thereunder.


3.

The Company has duly authorized, executed and delivered the Transaction Documents in which it is named as a party, and such Transaction Documents constitute its valid and binding obligations enforceable against it in accordance with their terms.


4.

The execution and delivery by the Company of the Transaction Documents and the performance by the Company of its obligations under the Transaction Documents, including its issuance and sale of the Preferred Shares and issuance of shares of Common Stock upon conversion of the Preferred Shares in accordance with the Company’s certificate of incorporation (the “Conversion Shares”), do not and will not (i) violate the Nevada Revised Statutes governing corporations (“NRS”), the law of State of California or United States federal law,  (ii) violate any court order, judgment or decree,  (iii) result in a breach of, or constitute a default under, any of the agreements or instruments; and/or (iv) violate the Company’s certificate of incorporation or by-laws.


5.

The Company is not required to obtain any consent, approval, license or exemption by, or order or authorization of, or to make any filing, recording or registration with, any governmental authority pursuant to the NRS, the law of California or United States federal law in connection with the execution and delivery by the Company of the Transaction Documents in which it is named as a party or the performance by it of its obligations other than those that have been obtained or made.


6.

The authorized capital stock of the Company is accurately stated in the Preferred Series D Stock Investment Agreement, dated June 20, 2013. All such issued and outstanding shares have been duly authorized and validly issued and are fully paid and nonassessable.


7.

The Preferred Shares have been duly authorized, and when issued, delivered and paid for in accordance with the Purchase Agreement, will be validly issued, fully paid and nonassessable.  The Conversion Shares have been duly authorized and, when issued in accordance with the Company's certificate of incorporation upon conversion of the Preferred Shares, will be validly issued, fully paid and nonassessable.  Neither the issuance or sale of the Preferred Shares nor the issuance of the Conversion Shares is subject to any preemptive rights under the NRS or the Company’s certificate of incorporation or by-laws.



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8.

Based on, and assuming the accuracy of, the representations of each of the Purchasers in the Purchase Agreement, the sale of the Preferred Shares pursuant to the Purchase Agreement does not, the sale of the Warrants pursuant to the Series F & G Warrant Purchase Agreements and the issuance of the Conversion Shares upon conversion of the Preferred Shares or the Warrants in accordance with the Company’s certificate of incorporation will not (assuming no commission or other remuneration is paid or given directly or indirectly for soliciting the conversion), require registration under the Securities Act.


LAW OFFICE


______________________

Name of Attorney



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EXHIBIT E


CONVERSION NOTICE



Probe Manufacturing, Inc.:


Theundersignedherebyelectstoconvert _________________________sharesofSeriesDPreferred Stock(“SeriesD Stock”)ofProbe Manufacturing,Inc.(the“Company”), represented bythe attached certificate no. , into shares of the Company’sStock(“CommonShares”)pursuant to the formula stated in Section 1.4 of the Series D Preferred Stock Investment Agreement, dated June 17, 2013.


ThestockcertificatefortheCommon Sharesissuableupontheconversion ofthe

Series D Stock shouldberegisteredinthenameof _____________________ and delivered to the following address:


______________________________________

______________________________________

______________________________________

______________________________________


Executed this ___ day of _____________, 201__



By: _______________________________________________

Signature

Print Name:_________________________________________


[If the holder of the attached Series 1 Class B Shares is an entity and not an individual, please print below the name of the entity and the title of the Authorized Representative who signed this conversion notice on behalf of such entity]


Entity Name:_______________________________________ _

Title of Authorized

Representative:_____________________________________ _



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[EXHIBIT102_EX10Z2001.JPG]




Class FWarrant Agreement







IMPORTANT NOTICE

Before investing in Probe’s Offering, investors need to have read Probe’s Offering documents and the related information and should know significant risks associated with making an investment in Probe which are more fully detailed in Probe’s Offering documents.


Probe can provide no assurance and no guarantee is hereby expressed or implied regarding achievement of all, or any of, Probe’s financial projections or business objectives.


THIS IS NEITHER AN OFFER TO SELL NOR AN OFFER TO BUY SECURITIES.  THE OFFERING IS MADE ONLY BY THE OFFERING DOCUMENTS.  ALL DOCUMENTS RELATED TO CORTXT’S OFFERING MUST BE READ IN CONJUNCTION WITH THE OFFERING DOCUMENTS IN ORDER TO UNDERSTAND FULLY ALL OF THE IMPLICATION AND RISKS OF THE OFFERING OF SECURITIES TO WHICH IT RELATES.  A COPY OF THE OFFERING DOCUMENTS MUST BE MADE AVAILABLE TO YOU IN CONNECTION WITH THIS OFFERING.



Confidential




THIS WARRANT HAS BEEN ACQUIRED FOR INVESTMENT AND HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR APPLICABLE STATE SECURITIES LAWS.  THIS WARRANT AND THE WARRANT SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR PURSUANT TO AN OPINION OF COUNSEL IN FORM, SUBSTANCE AND SCOPE REASONABLY SATISFACTORY TO COUNSEL TO THE COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT.


Warrant No.: XXX

XXXXX Class F Warrants

Date: XXXXXXX



Void after 5:00 p.m., Pacific Time on ____________, 2018


CLASS F

COMMON STOCK

PURCHASE WARRANT


OF


PROBE MANUFACTURING, INC.


CORTXT, INC., a Nevada corporation (the “Company”), hereby certifies that, for value received, ___________________________________ ( the “Warrant Holder”) is the owner of the number of common stock purchase warrants (“Warrants”) specified above, each of which entitles the holder thereof to purchase, at any time during the period commencing on the Commencement Date (as defined herein) and ending on the Expiration Date (as defined herein), fully paid Common Stock of the Company per the terms below and at a purchase price equal to the Exercise Price of $0.10 per share in lawful money of the United States of America in cash, subject to adjustment as hereinafter provided.  

1.

WARRANT; NUMBERS, WARRANT SHARES AND EXERCISE PRICE .

1.1

For each $100,000 invested by the Warrant Holder the Company’s Series D Preferred Stock Offering, the Warrant Holder shall receive 10Class FWarrants ( “AW” ) entitling the Warrant Holder the right to purchase 50,000 sharesthe Company’s Common Stock Shares the Company (individually, a “Warrant Share” severally, the “Warrant Shares”).

1.2

The purchase price payable upon exercise of each Warrant (“Exercise Price”) shall be $0.10. The Exercise Price and number of Warrant Shares purchasable pursuant to each Warrant are subject to adjustment as provided in Section 8.






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2.

EXERCISE OF  WARRANT; EXPIRATION DATE .

2.1

This Warrant is exercisable during the period commencing on the next day after thefinal Closing Date of the Series D Preferred Stock offering(“Commencement Date”) and ending on the Expiration Date (as defined below in Section 2.5), in whole or from time to time in part, at the option of the Warrant Holder, upon surrender of this Warrant to the Company together with a duly completed Notice of Exercise in the form attached hereto and payment of an amount equal to the then applicable Exercise Price multiplied by the number of Warrant Shares then being purchased upon such exercise.  

2.2

Each exercise of this Warrant shall be deemed to have been effected immediately prior to the close of business on the day on which this Warrant shall have been surrendered to the Company as provided in Section 2.1.  At such time, the person or persons in whose name or names any certificates for Warrant Shares shall be issuable upon such exercise as provided in subsection 2.3 below shall be deemed to have become the holder or holders of record of the Warrant Shares represented by such certificates.

2.3

Within fifteen (15) business days after the exercise of the purchase right represented by this Warrant, the Company at its expense will use its best efforts to cause to be issued in the name of, and delivered to, the Warrant Holder, or, subject to the terms and conditions hereof, to such other individual or entity as such Warrant Holder (upon payment by such Warrant Holder of any applicable transfer taxes) may direct the following:

(a)

a certificate or certificates for the number of full Warrant Shares to which such Warrant Holder shall be entitled upon such exercise plus, in lieu of any fractional share to which such Warrant Holder would otherwise be entitled, cash in an amount determined pursuant to Section 2.4 hereof, and

(b)

in case such exercise is in part only, a new Common Stock Purchase Warrant or Warrants (dated the date hereof) of like tenor, stating on the face or faces thereof the number of shares currently stated on the face of this Warrant minus the number of such shares purchased by the Warrant Holder upon such exercise as provided in subsection 2.1 (in each case prior to any adjustments made thereto pursuant to the provisions of this Warrant).

2.4

The Company shall not be required upon the exercise of this Warrant to issue any fractional shares, but shall make an adjustment thereof in cash on the basis of the “last sale price” (as defined below) of the Company's Common Stock on the trading day immediately prior to the date of exercise.  For purposes of this Section 2.4, “last sale price” shall mean (i) if the Common Stock is listed on a national securities exchange or quoted on the NASDAQ National Market, NASDAQSmallCap Market or OTC QB Bulletin Board (or successor such as the Bulletin Board Exchange), the last sale price of the Common Stock in the principal trading market for the Common Stock as reported by the exchange, NASDAQ or the OTC QB, as the case may be; (ii) if the Common Stock is not listed on a national securities exchange or quoted on the NASDAQ National Market, NASDAQSmallCap Market or the OTC QB Bulletin Board (or successor such as the Bulletin Board Exchange), but is traded in the residual over-the-counter



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market, the closing bid price for the Common Stockon the last trading day preceding the date in question for which such quotations are reported by the Pink Sheets, LLC or similar publisher of such quotations; and (iii) if the fair market value of the Common Stock cannot be determined pursuant to clause (i) or (ii) above, such price as the Board of Directors of the Company shall determine, in good faith.  

2.5

The term “Expiration Date” shall mean 5:00 p.m., Pacific time on _______________, 2018, or if such date shall in the State of California be a holiday or a day on which banks are authorized to close, then 5:00 p.m., Pacific time the next following day which in the State of California is not a holiday or a day on which banks are authorized to close.

3.

REGISTRATION AND TRANSFER ON COMPANY BOOKS .

3.1

The Company (or an agent of the Company) will maintain a register containing the names and addresses of the Warrant Holders.  Any Warrant Holder may change its, his or her address as shown on the warrant register by written notice to the Company requesting such change.

3.2

The Company shall register upon its books any transfer of a Warrant upon surrender of same as provided in Section 5.  

4.

RESERVATION OF SHARES .  The Company will at all times reserve and keep available, solely for issuance and delivery upon the exercise of this Warrant, such Warrant Shares and other stock, securities and property, as from time to time shall be issuable upon the exercise of this Warrant.  As long as the Warrant shall be outstanding, the Company shall use its best efforts to cause all Warrant Shares issuable upon exercise of the Warrants to be listed on any securities exchange (or, if applicable on NASDAQ or the OTC QB Bulletin Board or any successor trading market) on which the Common Stock is then listed and/or quoted (the "Applicable Trading Market").

5.

EXCHANGE, TRANSFER, ASSIGNMENT OR LOSS OR MUTILATION OF  WARRANTS .  This Warrant is exchangeable, without expense, at the option of the Warrant Holder, upon presentation and surrender hereof to the Company for other warrants of different denominations entitling the holder thereof to purchase in the aggregate the same number of shares of Common Stock shares purchasable hereunder.  Subject to the terms of Section 6, upon surrender of this Warrant to the Company at its principal office or at the office of its transfer agent, if any, with the Assignment Form annexed hereto duly executed and funds sufficient to pay any transfer tax, the Company shall, without charge, execute and deliver a new Warrant in the name of the assignee named in such instrument of assignment and this Warrant shall be promptly canceled.  This Warrant may be divided or combined with other warrants which carry the same rights upon presentation hereof at the principal office of the Company together with a written notice specifying the names and denominations in which new Warrants are to be issued and signed by the Warrant Holder hereof.  The term “Warrant” as used herein includes any Warrants into which this Warrant may be divided or exchanged.  Upon receipt by the Company of reasonable evidence of the ownership of and the loss, theft, destruction or mutilation of this Warrant and, in the case of loss, theft or destruction, of indemnity reasonably satisfactory to the Company, or, in the case of mutilation, upon surrender and cancellation of the mutilated



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Warrant, the Company shall execute and deliver in lieu thereof a new Warrant of like tenor and date representing an equal number of Warrants.

6.

LIMITATION ON EXERCISE AND SALES .  Each holder of this Warrant acknowledges that this Warrant and the Warrant Shares have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), as of the date of issuance hereof and agrees not to sell, pledge, distribute, offer for sale, transfer or otherwise dispose of this Warrant, or any Warrant Shares issued upon its exercise, in the absence of (i) an effective registration statement under the Securities Act as to this Warrant or such Warrant Shares or (ii) an opinion of counsel in form, substance and scope reasonably satisfactory to counsel to the Company that registration under the Securities Act is not required.

The Company shall be under no obligation to issue the shares covered by such exercise unless and until the Warrant Holder shall have executed the form of exercise annexed hereto that states that at the time of such exercise that it is then an “accredited investor” within the meaning of Rule 501(a) promulgated by the Securities and Exchange Commission (the "SEC") under the Securities Act, is acquiring such shares for its own account, and will not transfer the Warrant Shares unless pursuant to an effective and current registration statement under the Securities Act or an exemption from the registration requirements of the Securities Act and any other applicable restrictions, in which event the Warrant Holder shall be bound by the provisions of a legend or legends to such effect that shall be endorsed upon the certificate(s) representing the Warrant Shares issued pursuant to such exercise.  In such event, the Warrant Shares issued upon exercise hereof shall be imprinted with a legend in substantially the following form:

“THIS SECURITY HAS BEEN ACQUIRED FOR INVESTMENT AND HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS.  THIS SECURITY MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR PURSUANT TO AN EXEMPTION THEREFROM UNDER SAID ACT AND SUCH LAWS, SUPPORTED BY AN OPINION OF COUNSEL, REASONABLY SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED.”

7.

COMPANY'S RIGHT TO CALL .  The Company shall have the right to call this Warrant at any time on or after six months following the date a registration statement filed with the SEC covering the resale of the Warrant Shares is declared effective, in the event (i) the volume weighted average trading price of the Common Stock as listed on the Applicable Trading Market equals or exceeds$0.30 per share for a period of twenty consecutive trading days, and (ii) the average daily trading volume of the Common Stock equals or exceeds 100,000 shares on the Applicable Trading Market during said period (a "Call Qualification Period").  The Company must provide thirty (30) days written notice to the Warrant Holder of such a call, which notice must be received on or before the date that is twenty (20) days after the end of a Call Qualification Period.

8.

ADJUSTMENT OF PURCHASE PRICE AND NUMBER OF SHARES DELIVERABLE . The Exercise Price and the number of Warrant Shares purchasable pursuant to



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each Warrant shall be subject to adjustment from time to time as hereinafter set forth in this Section 8:

(a)

In case, prior to the expiration of this Warrant by exercise or by its terms, the Company shall issue any shares of its Capital Stock as a stock dividend, except with respect to the Company’s Convertible Preferred Stock, or subdivide the number of outstanding shares of its Capital Stock into a greater number of shares, then in either of such cases, the then applicable Exercise Price per Warrant Share purchasable pursuant to this Warrant in effect at the time of such action shall be proportionately reduced, as is fair, in relation to the change in the Capital Stock outstanding,  and the number of Warrant Shares at that time purchasable pursuant to this Warrant shall be proportionately increased, as is fair, in relation to the change in the Capital Stock outstanding; and conversely, in the event the Company shall reduce the number of outstanding shares of Common Stock by combining such shares into a smaller number of shares, then, in such case, the then applicable Exercise Price per Warrant Share purchasable pursuant to this Warrant in effect at the time of such action shall be proportionately increased, as is fair, in relation to the change in the Capital Stock outstanding,  and the number of Warrant Shares at that time purchasable pursuant to this Warrant shall be proportionately decreased, as is fair, in relation to the change in the Capital Stock outstanding. If the Company shall, at any time during the life of this Warrant, declare a dividend payable in cash on its Capital Stock and shall at substantially the same time offer to its stockholders a right to purchase new Capital Stock from the proceeds of such dividend or for an amount substantially equal to the dividend, all Capital Stock so issued shall, for the purpose of this Warrant, be deemed to have been issued as a stock dividend.  Any dividend paid or distributed upon the Common Stock in stock of any other class of securities convertible into shares of Common Stock shall be treated as a dividend paid in Common Stock to the extent that shares of Common Stock are issuable upon conversion thereof.

(b)

In case, prior to the expiration of this Warrant by exercise or by its terms, the Company shall be recapitalized by reclassifying its outstanding Capital Stock, (other than a change in par value to no par value), or the Company or a successor corporation shall consolidate or merge with or convey all or substantially all of its or of any successor corporation’s property and assets to any other corporation or corporations (any such other corporations being included within the meaning of the term “successor corporation” hereinbefore used in the event of any consolidation or merger of any such other corporation with, or the sale of all or substantially all of the property of any such other corporation to, another corporation or corporations), then, as a condition of such recapitalization, consolidation, merger or conveyance, lawful and adequate provision shall be made whereby the holder of this Warrant shall thereafter have the right to purchase, upon the basis and on the terms and conditions specified in this Warrant, in lieu of the Warrant Shares theretofore purchasable upon the exercise of this Warrant, such shares of stock, securities or assets as may be issued or payable with respect to, or in exchange for, the number of Warrant Shares theretofore purchasable upon the exercise of this Warrant, had such recapitalization, consolidation, merger, or conveyance not taken place; and in any such event, the rights of the Warrant Holder to any adjustment in the number of Warrant Shares purchasable upon the exercise of this Warrant, as herein provided, shall continue and be preserved in respect of any stock which the Warrant Holder becomes entitled to purchase.

(c)

In case the Company at any time while this Warrant shall remain unexpired and unexercised shall sell all or substantially all of its property or dissolve, liquidate,



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or wind up its affairs, lawful provision shall be made as part of the terms of any such sale, dissolution, liquidation or winding up, so that the holder of this Warrant may thereafter receive upon exercise hereof in lieu of each Warrant Share that it would have been entitled to receive, the same kind and amount of any securities or assets as may be issuable, distributable or payable upon any such sale, dissolution, liquidation or winding up with respect to each share of Common Stock of the Company, provided, however, that in any case of any such sale or of dissolution, liquidation or winding up, the right to exercise this Warrant shall terminate on a date fixed by the Company; such date so fixed to be not earlier than 5:00 p.m., Pacific time, on the forty-fifth day next succeeding the date on which notice of such termination of the right to exercise this Warrant has been given by mail to the registered holder of this Warrant at its address as it appears on the books of the Company.

(d)

No adjustment in the per share Exercise Price shall be required unless such adjustment would require an increase or decrease in the Exercise Price by at least $0.01; provided, however, that any adjustments that by reason of this subsection are not required to be made shall be carried forward and taken into account in any subsequent adjustment.  All calculations under this Section 8 shall be made to the nearest cent or to the nearest 1/100th of a share, as the case may be.

(e)

The Company will not, by amendment of its Certificate of Incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Company but will at all times in good faith assist in the carrying out of all the provisions of this Section 8 and in the taking of all such actions as may be necessary or appropriate in order to protect against impairment of the rights of the Warrant Holder to adjustments in the Exercise Price.

(f)

Upon the happening of any event requiring an adjustment of the Exercise Price hereunder, the Company shall give written notice thereof to the Warrant Holder stating the adjusted Exercise Price and the adjusted number of Warrant Shares resulting from such event and setting forth in reasonable detail the method of calculation and the facts upon which such calculation is based.

9.

VOLUNTARY ADJUSTMENT BY THE COMPANY .  The Company may, at its option, at any time during the term of the Warrants, reduce the then current Exercise Price to any amount deemed appropriate by the Board of Directors of the Company and/or extend the date of the expiration of the Warrants.

10.

RIGHTS OF THE HOLDER . The Warrant Holder shall not, by virtue hereof, be entitled to any rights of a stockholder in the Company, either at law or equity, and the rights of the Warrant Holder are limited to those expressed in this Warrant and are not enforceable against the Company except to the extent set forth herein.






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11.

NOTICES OF RECORD DATE .  In case:

(a)

the Company shall take a record of the holders of its Capital Stock (or other stock or securities at the time deliverable upon the exercise of this Warrant) for the purpose of entitling or enabling them to receive any dividend or other distribution, or to receive any right to subscribe for or purchase any shares of any class or any other securities, or to receive any other right, or

(b)

of any capital reorganization of the Company, any reclassification of the capital stock of the Company, any consolidation or merger of the Company with or into another corporation (other than a consolidation or merger in which the Company is the surviving entity), or any transfer of all or substantially all of the assets of the Company, or

(c)

of the voluntary or involuntary dissolution, liquidation or winding-up of the Company, then, and in each such case, the Company will mail or cause to be mailed to the Warrant Holder a notice specifying, as the case may be, (i) the date on which a record is to be taken for the purpose of such dividend, distribution or right, and stating the amount and character of such dividend, distribution or right, or (ii) the effective date on which such reorganization, reclassification, consolidation, merger, transfer, dissolution, liquidation or winding-up is to take place, and the time, if any is to be fixed, as of which the holders of record of Capital Stock (or such other stock or securities at the time deliverable upon the exercise of this Warrant) shall be entitled to exchange their shares of Capital Stock (or such other stock or securities) for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, transfer, dissolution, liquidation or winding-up.  Such notice shall be mailed at least ten days prior to the record date or effective date for the event specified in such notice, provided that the failure to mail such notice shall not affect the legality or validity of any such action.

12.

SUCCESSORS .  The rights and obligations of the parties to this Warrant will inure to the benefit of and be binding upon the parties hereto and their respective heirs, successors, assigns, pledgees, transferees and purchasers.

13.

CHANGE OR WAIVER .  Any term of this Warrant may be changed or waived only by an instrument in writing signed by the party against whom enforcement of the change or waiver is sought.

14.

HEADINGS .  The headings in this Warrant are for purposes of reference only and shall not limit or otherwise affect the meaning of any provision of this Warrant.

15.

GOVERNING LAW .  This Warrant shall be governed by and construed in accordance with the laws of the State of California as such laws are applied to contracts made and to be fully performed entirely within that state between residents of that state.

16.

JURISDICTION AND VENUE . The Company (i) agrees that any legal suit, action or proceeding arising out of or relating to this Warrant shall be instituted exclusively in the United States District Court for the Southern District of California or any court of competent jurisdiction in the State of California located in Los Angeles County, (ii) waives any objection to the venue of any such suit, action or proceeding and the right to assert that such forum is not a convenient forum, and (iii) irrevocably consents to the jurisdiction of the such court(s) in any



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such suit, action or proceeding, and the Company further agrees to accept and acknowledge service or any and all process that may be served in any such suit, action or proceeding in such court(s) in person or by certified mail addressed as provided in the following Section.

17.

MAILING OF NOTICES, ETC .  All notices and other communications under this Warrant (except payment) shall be in writing and shall be sufficiently given if delivered to the addressees in person, by Federal Express or similar overnight courier service, or if mailed, postage prepaid, by certified mail, return receipt requested, as follows:

Registered Holder:

To his or her last known address as indicated on the Company’s books and records.

The Company:

Probe Manufacturing, Inc.

17475 Gillette Avenue,

Irvine, CA, 92614

Attention:  Chief Financial Officer

or to such other address as any of them, by notice to the others, may designate from time to time.  Notice shall be deemed given (a) when personally delivered, (b) the scheduled delivery date if sent by Federal Express or other overnight courier service or (c) the fifth day after sent by certified mail.

IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by its duly authorized officer as of _________________, 2013.


PROBE MANUFACTURING, INC.




By:

______________________________

Name:

Kambiz Mahdi

Title:

Chief Executive Officer





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EXERCISE FORM

To Be Executed by the Warrant Holder

In Order to Exercise Class FWarrants


TO: Probe Manufacturing, Inc.


The undersigned hereby: (1) irrevocably subscribes for and offers to purchase _______ shares of Common Stock of Probe Manufacturing, Inc., pursuant to Class F Warrant No. _____________  heretofore issued to _______________________ on ________________________, _______; (2) encloses a cash payment of $____________; and (3) requests that a certificate for the shares be issued in the name of the undersigned, or the undersigned's designee, and delivered to the undersigned, or the undersigned's designee, at the address specified below.


The undersigned hereby represents and warrants to the Company that it is an “Accredited Investor” within the meaning of Rule 501(a) of the Securities Act of 1933, as amended (the “Securities Act”), and is acquiring these securities for its own account and not with a view to, or for sale in connection with, any distribution thereof, nor with any present intention of distributing or selling the same.  The undersigned further represents that it does not have any contract, agreement, understanding or arrangement with any person to sell, transfer or grant the shares of Common Stock issuable under this Warrant.  The undersigned understands that the shares it will be receiving are “restricted securities” under Federal securities laws inasmuch as they are being acquired from Probe Manufacturing, Inc., in transactions not including any public offering and that under such laws, such shares may only be sold pursuant to an effective and current registration statement under the Securities Act or an exemption from the registration requirements of the Securities Act and any other applicable restrictions, in which event a legend or legends will be placed upon the certificate(s) representing the Common Stockissuable under this Warrant denoting such restrictions.  The undersigned understands and acknowledges that the Company will rely on the accuracy of these representations and warranties in issuing the securities underlying the Warrant


Date:

__________________________________________________________


Investor Name:

____________________________________________________


Taxpayer Identification Number:

_______________________________________


By:

_________________________________________________________________


Printed Name:

____________________________________________________


Title:

__________________________________________________________


Address:

__________________________________________________________



Note: The above signature should correspond exactly with the name on the face of this Warrant Certificate or with the name of assignee appearing in assignment form below.


AND, if said number of shares shall not be all the shares purchasable under the within Warrant, a new Warrant Certificate is to be issued in the name of said undersigned for the balance remaining of the shares purchasable thereunder less any fraction of a share paid in cash and delivered to the address stated above.



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ASSIGNMENT FORM

To be executed by the Warrant Holder

In order to Assign Warrants



FOR VALUE RECEIVED,____________________________________ hereby sell, assigns and transfer unto

PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER


 




(Please print or type name and address)


______________________ of the Warrants represented by this Warrant, and hereby irrevocably constitutes and appoints ________________________ Attorney-in-Fact to transfer this Warrant on the books of the Company, with full power of substitution in the premises.

Dated:______________________

(Signature of Registered Holder)




THE SIGNATURE ON THE EXERCISE FORM OR THE ASSIGNMENT FORM MUST CORRESPOND TO THE NAME AS WRITTEN UPON THE FACE OF THIS WARRANT IN EVERY PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATSOEVER,.

CERTIFICATION OF STATUS OF TRANSFEREE

TO BE EXECUTED BY THE TRANSFEREE OF THIS WARRANT


The undersigned transferee hereby certifies to the registered holder of this Warrant and to Probe Manufacturing, Inc. that the transferee is an “accredited investor” within the meaning of Rule 501 of Regulation D promulgated under the Securities Act of 1933, as amended.

Dated:_____________________

(Signature of Transferee)






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[EXHIBIT103_EX10Z3001.JPG]




Class GWarrant Agreement







IMPORTANT NOTICE

Before investing in Probe’s Offering, investors need to have read Probe’s Offering documents and the related information and should know significant risks associated with making an investment in Probe which are more fully detailed in Probe’s Offering documents.


Probe can provide no assurance and no guarantee is hereby expressed or implied regarding achievement of all, or any of, Probe’s financial projections or business objectives.


THIS IS NEITHER AN OFFER TO SELL NOR AN OFFER TO BUY SECURITIES.  THE OFFERING IS MADE ONLY BY THE OFFERING DOCUMENTS.  ALL DOCUMENTS RELATED TO CORTXT’S OFFERING MUST BE READ IN CONJUNCTION WITH THE OFFERING DOCUMENTS IN ORDER TO UNDERSTAND FULLY ALL OF THE IMPLICATION AND RISKS OF THE OFFERING OF SECURITIES TO WHICH IT RELATES.  A COPY OF THE OFFERING DOCUMENTS MUST BE MADE AVAILABLE TO YOU IN CONNECTION WITH THIS OFFERING.



Confidential




THIS WARRANT HAS BEEN ACQUIRED FOR INVESTMENT AND HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR APPLICABLE STATE SECURITIES LAWS.  THIS WARRANT AND THE WARRANT SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR PURSUANT TO AN OPINION OF COUNSEL IN FORM, SUBSTANCE AND SCOPE REASONABLY SATISFACTORY TO COUNSEL TO THE COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT.


Warrant No.: XXX

XXXXX Class GWarrants

Date: XXXXXXX



Void after 5:00 p.m., Pacific Time on ________________, 2018


CLASS G

COMMON STOCK

PURCHASE WARRANT


OF


PROBE MANUFACTURING, INC.


CORTXT, INC., a Nevada corporation (the “Company”), hereby certifies that, for value received, ___________________________________ ( the “Warrant Holder”) is the owner of the number of common stock purchase warrants (“Warrants”) specified above, each of which entitles the holder thereof to purchase, at any time during the period commencing on the Commencement Date (as defined herein) and ending on the Expiration Date (as defined herein), fully paid Common Stock of the Company per the terms below and at a purchase price equal to the Exercise Price of $0.20 per share in lawful money of the United States of America in cash, subject to adjustment as hereinafter provided.  

1.

WARRANT; NUMBERS, WARRANT SHARES AND EXERCISE PRICE .

1.1

For each $100,000 invested by the Warrant Holder the Company’s Series D Preferred Stock Offering, the Warrant Holder shall receive 10Class GWarrants ( “AW” ) entitling the Warrant Holder the right to purchase 50,000 sharesthe Company’s Common Stock Shares the Company (individually, a “Warrant Share” severally, the “Warrant Shares”).

1.2

The purchase price payable upon exercise of each Warrant (“Exercise Price”) shall be $0.20. The Exercise Price and number of Warrant Shares purchasable pursuant to each Warrant are subject to adjustment as provided in Section 8.






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2.

EXERCISE OF  WARRANT; EXPIRATION DATE .

2.1

This Warrant is exercisable during the period commencing on the next day after thefinal Closing Date of the Series D Preferred Stock offering(“Commencement Date”) and ending on the Expiration Date (as defined below in Section 2.5), in whole or from time to time in part, at the option of the Warrant Holder, upon surrender of this Warrant to the Company together with a duly completed Notice of Exercise in the form attached hereto and payment of an amount equal to the then applicable Exercise Price multiplied by the number of Warrant Shares then being purchased upon such exercise.  

2.2

Each exercise of this Warrant shall be deemed to have been effected immediately prior to the close of business on the day on which this Warrant shall have been surrendered to the Company as provided in Section 2.1.  At such time, the person or persons in whose name or names any certificates for Warrant Shares shall be issuable upon such exercise as provided in subsection 2.3 below shall be deemed to have become the holder or holders of record of the Warrant Shares represented by such certificates.

2.3

Within fifteen (15) business days after the exercise of the purchase right represented by this Warrant, the Company at its expense will use its best efforts to cause to be issued in the name of, and delivered to, the Warrant Holder, or, subject to the terms and conditions hereof, to such other individual or entity as such Warrant Holder (upon payment by such Warrant Holder of any applicable transfer taxes) may direct the following:

(a)

a certificate or certificates for the number of full Warrant Shares to which such Warrant Holder shall be entitled upon such exercise plus, in lieu of any fractional share to which such Warrant Holder would otherwise be entitled, cash in an amount determined pursuant to Section 2.4 hereof, and

(b)

in case such exercise is in part only, a new Common Stock Purchase Warrant or Warrants (dated the date hereof) of like tenor, stating on the face or faces thereof the number of shares currently stated on the face of this Warrant minus the number of such shares purchased by the Warrant Holder upon such exercise as provided in subsection 2.1 (in each case prior to any adjustments made thereto pursuant to the provisions of this Warrant).

2.4

The Company shall not be required upon the exercise of this Warrant to issue any fractional shares, but shall make an adjustment thereof in cash on the basis of the “last sale price” (as defined below) of the Company's Common Stock on the trading day immediately prior to the date of exercise.  For purposes of this Section 2.4, “last sale price” shall mean (i) if the Common Stock is listed on a national securities exchange or quoted on the NASDAQ National Market, NASDAQSmallCap Market or OTC QB Bulletin Board (or successor such as the Bulletin Board Exchange), the last sale price of the Common Stock in the principal trading market for the Common Stock as reported by the exchange, NASDAQ or the OTC QB, as the case may be; (ii) if the Common Stock is not listed on a national securities exchange or quoted on the NASDAQ National Market, NASDAQSmallCap Market or the OTC QB Bulletin Board (or successor such as the Bulletin Board Exchange), but is traded in the residual over-the-counter



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market, the closing bid price for the Common Stockon the last trading day preceding the date in question for which such quotations are reported by the Pink Sheets, LLC or similar publisher of such quotations; and (iii) if the fair market value of the Common Stock cannot be determined pursuant to clause (i) or (ii) above, such price as the Board of Directors of the Company shall determine, in good faith.  

2.5

The term “Expiration Date” shall mean 5:00 p.m., Pacific time on _________ , 2018, or if such date shall in the State of California be a holiday or a day on which banks are authorized to close, then 5:00 p.m., Pacific time the next following day which in the State of California is not a holiday or a day on which banks are authorized to close.

3.

REGISTRATION AND TRANSFER ON COMPANY BOOKS .

3.1

The Company (or an agent of the Company) will maintain a register containing the names and addresses of the Warrant Holders.  Any Warrant Holder may change its, his or her address as shown on the warrant register by written notice to the Company requesting such change.

3.2

The Company shall register upon its books any transfer of a Warrant upon surrender of same as provided in Section 5.  

4.

RESERVATION OF SHARES .  The Company will at all times reserve and keep available, solely for issuance and delivery upon the exercise of this Warrant, such Warrant Shares and other stock, securities and property, as from time to time shall be issuable upon the exercise of this Warrant.  As long as the Warrant shall be outstanding, the Company shall use its best efforts to cause all Warrant Shares issuable upon exercise of the Warrants to be listed on any securities exchange (or, if applicable on NASDAQ or the OTC QB Bulletin Board or any successor trading market) on which the Common Stock is then listed and/or quoted (the "Applicable Trading Market").

5.

EXCHANGE, TRANSFER, ASSIGNMENT OR LOSS OR MUTILATION OF  WARRANTS .  This Warrant is exchangeable, without expense, at the option of the Warrant Holder, upon presentation and surrender hereof to the Company for other warrants of different denominations entitling the holder thereof to purchase in the aggregate the same number of shares of Common Stock shares purchasable hereunder.  Subject to the terms of Section 6, upon surrender of this Warrant to the Company at its principal office or at the office of its transfer agent, if any, with the Assignment Form annexed hereto duly executed and funds sufficient to pay any transfer tax, the Company shall, without charge, execute and deliver a new Warrant in the name of the assignee named in such instrument of assignment and this Warrant shall be promptly canceled.  This Warrant may be divided or combined with other warrants which carry the same rights upon presentation hereof at the principal office of the Company together with a written notice specifying the names and denominations in which new Warrants are to be issued and signed by the Warrant Holder hereof.  The term “Warrant” as used herein includes any Warrants into which this Warrant may be divided or exchanged.  Upon receipt by the Company of reasonable evidence of the ownership of and the loss, theft, destruction or mutilation of this Warrant and, in the case of loss, theft or destruction, of indemnity reasonably satisfactory to the Company, or, in the case of mutilation, upon surrender and cancellation of the mutilated



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Warrant, the Company shall execute and deliver in lieu thereof a new Warrant of like tenor and date representing an equal number of Warrants.

6.

LIMITATION ON EXERCISE AND SALES .  Each holder of this Warrant acknowledges that this Warrant and the Warrant Shares have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), as of the date of issuance hereof and agrees not to sell, pledge, distribute, offer for sale, transfer or otherwise dispose of this Warrant, or any Warrant Shares issued upon its exercise, in the absence of (i) an effective registration statement under the Securities Act as to this Warrant or such Warrant Shares or (ii) an opinion of counsel in form, substance and scope reasonably satisfactory to counsel to the Company that registration under the Securities Act is not required.

The Company shall be under no obligation to issue the shares covered by such exercise unless and until the Warrant Holder shall have executed the form of exercise annexed hereto that states that at the time of such exercise that it is then an “accredited investor” within the meaning of Rule 501(a) promulgated by the Securities and Exchange Commission (the "SEC") under the Securities Act, is acquiring such shares for its own account, and will not transfer the Warrant Shares unless pursuant to an effective and current registration statement under the Securities Act or an exemption from the registration requirements of the Securities Act and any other applicable restrictions, in which event the Warrant Holder shall be bound by the provisions of a legend or legends to such effect that shall be endorsed upon the certificate(s) representing the Warrant Shares issued pursuant to such exercise.  In such event, the Warrant Shares issued upon exercise hereof shall be imprinted with a legend in substantially the following form:

“THIS SECURITY HAS BEEN ACQUIRED FOR INVESTMENT AND HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS.  THIS SECURITY MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR PURSUANT TO AN EXEMPTION THEREFROM UNDER SAID ACT AND SUCH LAWS, SUPPORTED BY AN OPINION OF COUNSEL, REASONABLY SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED.”

7.

COMPANY'S RIGHT TO CALL .  The Company shall have the right to call this Warrant at any time on or after six months following the date a registration statement filed with the SEC covering the resale of the Warrant Shares is declared effective, in the event (i) the volume weighted average trading price of the Common Stock as listed on the Applicable Trading Market equals or exceeds$0.30 per share for a period of twenty consecutive trading days, and (ii) the average daily trading volume of the Common Stock equals or exceeds 100,000 shares on the Applicable Trading Market during said period (a "Call Qualification Period").  The Company must provide thirty (30) days written notice to the Warrant Holder of such a call, which notice must be received on or before the date that is twenty (20) days after the end of a Call Qualification Period.

8.

ADJUSTMENT OF PURCHASE PRICE AND NUMBER OF SHARES DELIVERABLE . The Exercise Price and the number of Warrant Shares purchasable pursuant to



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each Warrant shall be subject to adjustment from time to time as hereinafter set forth in this Section 8:

(a)

In case, prior to the expiration of this Warrant by exercise or by its terms, the Company shall issue any shares of its Capital Stock as a stock dividend, except with respect to the Company’s Convertible Preferred Stock, or subdivide the number of outstanding shares of its Capital Stock into a greater number of shares, then in either of such cases, the then applicable Exercise Price per Warrant Share purchasable pursuant to this Warrant in effect at the time of such action shall be proportionately reduced, as is fair, in relation to the change in the Capital Stock outstanding,  and the number of Warrant Shares at that time purchasable pursuant to this Warrant shall be proportionately increased, as is fair, in relation to the change in the Capital Stock outstanding; and conversely, in the event the Company shall reduce the number of outstanding shares of Common Stock by combining such shares into a smaller number of shares, then, in such case, the then applicable Exercise Price per Warrant Share purchasable pursuant to this Warrant in effect at the time of such action shall be proportionately increased, as is fair, in relation to the change in the Capital Stock outstanding,  and the number of Warrant Shares at that time purchasable pursuant to this Warrant shall be proportionately decreased, as is fair, in relation to the change in the Capital Stock outstanding. If the Company shall, at any time during the life of this Warrant, declare a dividend payable in cash on its Capital Stock and shall at substantially the same time offer to its stockholders a right to purchase new Capital Stock from the proceeds of such dividend or for an amount substantially equal to the dividend, all Capital Stock so issued shall, for the purpose of this Warrant, be deemed to have been issued as a stock dividend.  Any dividend paid or distributed upon the Common Stock in stock of any other class of securities convertible into shares of Common Stock shall be treated as a dividend paid in Common Stock to the extent that shares of Common Stock are issuable upon conversion thereof.

(b)

In case, prior to the expiration of this Warrant by exercise or by its terms, the Company shall be recapitalized by reclassifying its outstanding Capital Stock, (other than a change in par value to no par value), or the Company or a successor corporation shall consolidate or merge with or convey all or substantially all of its or of any successor corporation’s property and assets to any other corporation or corporations (any such other corporations being included within the meaning of the term “successor corporation” hereinbefore used in the event of any consolidation or merger of any such other corporation with, or the sale of all or substantially all of the property of any such other corporation to, another corporation or corporations), then, as a condition of such recapitalization, consolidation, merger or conveyance, lawful and adequate provision shall be made whereby the holder of this Warrant shall thereafter have the right to purchase, upon the basis and on the terms and conditions specified in this Warrant, in lieu of the Warrant Shares theretofore purchasable upon the exercise of this Warrant, such shares of stock, securities or assets as may be issued or payable with respect to, or in exchange for, the number of Warrant Shares theretofore purchasable upon the exercise of this Warrant, had such recapitalization, consolidation, merger, or conveyance not taken place; and in any such event, the rights of the Warrant Holder to any adjustment in the number of Warrant Shares purchasable upon the exercise of this Warrant, as herein provided, shall continue and be preserved in respect of any stock which the Warrant Holder becomes entitled to purchase.

(c)

In case the Company at any time while this Warrant shall remain unexpired and unexercised shall sell all or substantially all of its property or dissolve, liquidate,



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or wind up its affairs, lawful provision shall be made as part of the terms of any such sale, dissolution, liquidation or winding up, so that the holder of this Warrant may thereafter receive upon exercise hereof in lieu of each Warrant Share that it would have been entitled to receive, the same kind and amount of any securities or assets as may be issuable, distributable or payable upon any such sale, dissolution, liquidation or winding up with respect to each share of Common Stock of the Company, provided, however, that in any case of any such sale or of dissolution, liquidation or winding up, the right to exercise this Warrant shall terminate on a date fixed by the Company; such date so fixed to be not earlier than 5:00 p.m., Pacific time, on the forty-fifth day next succeeding the date on which notice of such termination of the right to exercise this Warrant has been given by mail to the registered holder of this Warrant at its address as it appears on the books of the Company.

(d)

No adjustment in the per share Exercise Price shall be required unless such adjustment would require an increase or decrease in the Exercise Price by at least $0.01; provided, however, that any adjustments that by reason of this subsection are not required to be made shall be carried forward and taken into account in any subsequent adjustment.  All calculations under this Section 8 shall be made to the nearest cent or to the nearest 1/100th of a share, as the case may be.

(e)

The Company will not, by amendment of its Certificate of Incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Company but will at all times in good faith assist in the carrying out of all the provisions of this Section 8 and in the taking of all such actions as may be necessary or appropriate in order to protect against impairment of the rights of the Warrant Holder to adjustments in the Exercise Price.

(f)

Upon the happening of any event requiring an adjustment of the Exercise Price hereunder, the Company shall give written notice thereof to the Warrant Holder stating the adjusted Exercise Price and the adjusted number of Warrant Shares resulting from such event and setting forth in reasonable detail the method of calculation and the facts upon which such calculation is based.

9.

VOLUNTARY ADJUSTMENT BY THE COMPANY .  The Company may, at its option, at any time during the term of the Warrants, reduce the then current Exercise Price to any amount deemed appropriate by the Board of Directors of the Company and/or extend the date of the expiration of the Warrants.

10.

RIGHTS OF THE HOLDER . The Warrant Holder shall not, by virtue hereof, be entitled to any rights of a stockholder in the Company, either at law or equity, and the rights of the Warrant Holder are limited to those expressed in this Warrant and are not enforceable against the Company except to the extent set forth herein.






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11.

NOTICES OF RECORD DATE .  In case:

(a)

the Company shall take a record of the holders of its Capital Stock (or other stock or securities at the time deliverable upon the exercise of this Warrant) for the purpose of entitling or enabling them to receive any dividend or other distribution, or to receive any right to subscribe for or purchase any shares of any class or any other securities, or to receive any other right, or

(b)

of any capital reorganization of the Company, any reclassification of the capital stock of the Company, any consolidation or merger of the Company with or into another corporation (other than a consolidation or merger in which the Company is the surviving entity), or any transfer of all or substantially all of the assets of the Company, or

(c)

of the voluntary or involuntary dissolution, liquidation or winding-up of the Company, then, and in each such case, the Company will mail or cause to be mailed to the Warrant Holder a notice specifying, as the case may be, (i) the date on which a record is to be taken for the purpose of such dividend, distribution or right, and stating the amount and character of such dividend, distribution or right, or (ii) the effective date on which such reorganization, reclassification, consolidation, merger, transfer, dissolution, liquidation or winding-up is to take place, and the time, if any is to be fixed, as of which the holders of record of Capital Stock (or such other stock or securities at the time deliverable upon the exercise of this Warrant) shall be entitled to exchange their shares of Capital Stock (or such other stock or securities) for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, transfer, dissolution, liquidation or winding-up.  Such notice shall be mailed at least ten days prior to the record date or effective date for the event specified in such notice, provided that the failure to mail such notice shall not affect the legality or validity of any such action.

12.

SUCCESSORS .  The rights and obligations of the parties to this Warrant will inure to the benefit of and be binding upon the parties hereto and their respective heirs, successors, assigns, pledgees, transferees and purchasers.

13.

CHANGE OR WAIVER .  Any term of this Warrant may be changed or waived only by an instrument in writing signed by the party against whom enforcement of the change or waiver is sought.

14.

HEADINGS .  The headings in this Warrant are for purposes of reference only and shall not limit or otherwise affect the meaning of any provision of this Warrant.

15.

GOVERNING LAW .  This Warrant shall be governed by and construed in accordance with the laws of the State of California as such laws are applied to contracts made and to be fully performed entirely within that state between residents of that state.

16.

JURISDICTION AND VENUE . The Company (i) agrees that any legal suit, action or proceeding arising out of or relating to this Warrant shall be instituted exclusively in the United States District Court for the Southern District of California or any court of competent jurisdiction in the State of California located in Los Angeles County, (ii) waives any objection to the venue of any such suit, action or proceeding and the right to assert that such forum is not a convenient forum, and (iii) irrevocably consents to the jurisdiction of the such court(s) in any



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such suit, action or proceeding, and the Company further agrees to accept and acknowledge service or any and all process that may be served in any such suit, action or proceeding in such court(s) in person or by certified mail addressed as provided in the following Section.

17.

MAILING OF NOTICES, ETC .  All notices and other communications under this Warrant (except payment) shall be in writing and shall be sufficiently given if delivered to the addressees in person, by Federal Express or similar overnight courier service, or if mailed, postage prepaid, by certified mail, return receipt requested, as follows:

Registered Holder:

To his or her last known address as indicated on the Company’s books and records.

The Company:

Probe Manufacturing, Inc.

17475 Gillette Avenue,

Irvine, CA, 92614

Attention:  Chief Financial Officer

or to such other address as any of them, by notice to the others, may designate from time to time.  Notice shall be deemed given (a) when personally delivered, (b) the scheduled delivery date if sent by Federal Express or other overnight courier service or (c) the fifth day after sent by certified mail.

IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by its duly authorized officer as of _________________, 2013.


PROBE MANUFACTURING, INC.




By:

______________________________

Name:

Kambiz Mahdi

Title:

Chief Executive Officer





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EXERCISE FORM

To Be Executed by the Warrant Holder

In Order to Exercise Class GWarrants


TO: Probe Manufacturing, Inc.


The undersigned hereby: (1) irrevocably subscribes for and offers to purchase _______ shares of Common Stock of Probe Manufacturing, Inc., pursuant to Class G Warrant No. _____________  heretofore issued to _______________________ on ________________________, _______; (2) encloses a cash payment of $____________; and (3) requests that a certificate for the shares be issued in the name of the undersigned, or the undersigned's designee, and delivered to the undersigned, or the undersigned's designee, at the address specified below.


The undersigned hereby represents and warrants to the Company that it is an “Accredited Investor” within the meaning of Rule 501(a) of the Securities Act of 1933, as amended (the “Securities Act”), and is acquiring these securities for its own account and not with a view to, or for sale in connection with, any distribution thereof, nor with any present intention of distributing or selling the same.  The undersigned further represents that it does not have any contract, agreement, understanding or arrangement with any person to sell, transfer or grant the shares of Common Stock issuable under this Warrant.  The undersigned understands that the shares it will be receiving are “restricted securities” under Federal securities laws inasmuch as they are being acquired from Probe Manufacturing, Inc., in transactions not including any public offering and that under such laws, such shares may only be sold pursuant to an effective and current registration statement under the Securities Act or an exemption from the registration requirements of the Securities Act and any other applicable restrictions, in which event a legend or legends will be placed upon the certificate(s) representing the Common Stockissuable under this Warrant denoting such restrictions.  The undersigned understands and acknowledges that the Company will rely on the accuracy of these representations and warranties in issuing the securities underlying the Warrant


Date:

__________________________________________________________


Investor Name:

____________________________________________________


Taxpayer Identification Number:

_______________________________________


By:

_________________________________________________________________


Printed Name:

____________________________________________________


Title:

__________________________________________________________


Address:

__________________________________________________________



Note: The above signature should correspond exactly with the name on the face of this Warrant Certificate or with the name of assignee appearing in assignment form below.


AND, if said number of shares shall not be all the shares purchasable under the within Warrant, a new Warrant Certificate is to be issued in the name of said undersigned for the balance remaining of the shares purchasable thereunder less any fraction of a share paid in cash and delivered to the address stated above.



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ASSIGNMENT FORM

To be executed by the Warrant Holder

In order to Assign Warrants



FOR VALUE RECEIVED,____________________________________ hereby sell, assigns and transfer unto

PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER


 




(Please print or type name and address)


______________________ of the Warrants represented by this Warrant, and hereby irrevocably constitutes and appoints ________________________ Attorney-in-Fact to transfer this Warrant on the books of the Company, with full power of substitution in the premises.

Dated:______________________

(Signature of Registered Holder)




THE SIGNATURE ON THE EXERCISE FORM OR THE ASSIGNMENT FORM MUST CORRESPOND TO THE NAME AS WRITTEN UPON THE FACE OF THIS WARRANT IN EVERY PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATSOEVER,.

CERTIFICATION OF STATUS OF TRANSFEREE

TO BE EXECUTED BY THE TRANSFEREE OF THIS WARRANT


The undersigned transferee hereby certifies to the registered holder of this Warrant and to Probe Manufacturing, Inc. that the transferee is an “accredited investor” within the meaning of Rule 501 of Regulation D promulgated under the Securities Act of 1933, as amended.

Dated:_____________________

(Signature of Transferee)






1



[PMIEXECUTIVESUMMARY080713001.JPG]

Probe Manufacturing

Trading Symbol : PMFI

Global Electronics Design & Manufacturing Services

(EMS Industry)

Executive Summary

[PMIEXECUTIVESUMMARY080713003.GIF]


[PMIEXECUTIVESUMMARY080713005.GIF]

DISCLAIMER

THIS IS NEITHER AN OFFER TO SELL NOR AN OFFER TO BUY ANY SECURITIES DESCRIBED HEREIN.    OFFERINGS ARE MADE ONLY BY

A PROSPECTUS OR OTHER OFFERING MATERIALS.   THIS SALES AND ADVERTISING LITERATURE MUST BE READ IN CONJUNCTION

WITH A PROSPECTUS OR OTHER OFFERING MATERIALS IN ORDER TO UNDERSTAND FULLY ALL OF THE IMPLICATION AND RISKS OF

AN OFFERING OF SECURITIES TO WHICH IT RELATES.   A COPY OF A PROSPECTUS OR OTHER OFFERING MATERIALS MUST BE MADE

AVAILABLE TO YOU IN CONNECTION WITH AN OFFERING. An investment in Probe Manufacturing, Inc.   involves a high degree of

risk and there can be no assurance that the investment objectives of the program will be attained.

This presentation contains certain forward looking statements (under Section 27A of the Securities Act of 1933, as amended, and

Section 21E of the Securities Exchange Act of 1934, as amended) with respect to our ability to operate our business in a profitable

manner, our ability to attract new customers, the potential size of the OEM/EMS market for our services and the accuracy of our

financial projections. Because such statements include risks, uncertainties and contingencies, actual results may differ materially from

those expressed or implied by such forward looking statements. These risks, uncertainties and contingencies include, but are not

limited to, the following: our ability to raise additional funds for operations, our ability to effectively market our services to new

customers and to our existing customers; uncertainties relating to changes in general economic and manufacturing conditions;

uncertainties regarding changes in the manufacturing industry and the industries of our clients including, healthcare, aerospace and

general contract manufacturing services.; the uncertainties relating to the implementation of our real estate investment strategy; and

other risk factors as outlined herein, and as detailed from time to time in our periodic reports, as filed with the Securities and Exchange

Commission.   Forward looking statements in this document speak only as of the date on which such statements were made, and we

undertake no obligation to update any such statements that may become untrue because of subsequent events. We claim the safe

harbor protection for forward looking statements contained in the Private Securities Litigation Reform Act of 1995.

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[PMIEXECUTIVESUMMARY080713007.GIF]



[PMIEXECUTIVESUMMARY080713005.GIF]

RISK FACTORS

WE FACE INTENSE COMPETITION, WHICH MAY REDUCE OUR SALES, OPERATING PROFITS, OR BOTH;

WE MAY BE ADVERSELY AFFECTED BY SHORTAGES OF REQUIRED ELECTRONIC COMPONENTS.  IN ADDITION, WE

DEPEND ON A LIMITED NUMBER OF SUPPLIERS TO PROCURE OUR PARTS FOR PRODUCTION WHICH IF

AVAILABILITY OF PRODUCTS BECOMES COMPROMISED IT COULD ADD TO OUR COST OF GOODS SOLD AND AFFECT

OUR REVENUE GROWTH;

OUR PRINCIPAL SHAREHOLDERS, DIRECTORS AND EXECUTIVE OFFICERS , IN THE AGGREGATE, BENEFICIALLY OWN

MORE THAN 50% OF OUR OUTSTANDING COMMON STOCK AND THESE SHAREHOLDERS, IF ACTING TOGETHER,

WILL BE ABLE TO EXERT SUBSTANTIAL INFLUENCE OVER ALL MATTERS REQUIRING APPROVAL OF OUR

SHAREHOLDERS .

WE CURRENTLY SERVICE AND ATTEMPT TO OBTAIN THE MAJORITY OF OUR CUSTOMERS IN THE LIMITED

GEOGRAPHIC OF SOUTHERN CALIFORNIA WHICH IS A SMALL ADDRESSABLE MARKET AND COULD BE SUBJECT TO

ECONOMIC HARDSHIP OR SLOWDOWN, AS A RESULT OUR GROWTH COULD BE LIMITED AND ADVERSELY AFFECT

OUR PROJECTED SALES AND OPERATING INCOME.

THE MAJORITY OF OUR SALES COME FROM A SMALL NUMBER OF CUSTOMERS WITH WHOM WE DO NOT HAVE

LONG TERM CONTRACTS; IF WE LOSE ANY OF THESE CUSTOMERS, OUR SALES COULD DECLINE SIGNIFICANTLY.

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[PMIEXECUTIVESUMMARY080713007.GIF]



[PMIEXECUTIVESUMMARY080713005.GIF]

Introduction

   Global Electronics Design & Manufacturing   Services Company providing

manufacturing services to Medical, Aerospace, Industrial &

Instrumentation   Markets

   Established in 1994

   Corporate Headquarters, 25000 sq ft facility in Irvine, California

o   16000 sq ft facility in Salt Lake City, Utah (Trident Manufacturing)

Acquired in March 2013

   Strategic Manufacturing Partners in China ( PCB Fabrication, Plastics, Sheet

Metal)

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[PMIEXECUTIVESUMMARY080713007.GIF]



[PMIEXECUTIVESUMMARY080713005.GIF]

9 th Fastest Growing Public Company in OC

Probe Manufacturing Recognized by the Orange County Business Journal

as 9 th Fastest Growing Public Company in Orange County, CA

Irvine, California, (December 5, 2012) Probe Manufacturing, Inc. , (OTC QB : PMFI) , a global electronics

design & manufacturing services ranked 9th in the Orange County Business Journal's 2012 Fastest Growing

Public Companies list. Rankings are based on percentage revenue growth for the 12 month period ended

June 30, 2012 as compared with the 12 month period ended June 30, 2010. Probe grew 157% during this

period.

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[PMIEXECUTIVESUMMARY080713005.GIF]

MARKETS / PRODUCTS SERVED

[PMIEXECUTIVESUMMARY080713009.JPG]

[PMIEXECUTIVESUMMARY080713010.JPG]

[PMIEXECUTIVESUMMARY080713011.JPG]

  Medical

o   Ventilators; Diagnostics

o   Ultrasound/Therapeutic; Optical

  Automotive

o   Alternate Fuel Systems

o   Tracking and Fleet Management

o   Instrumentation

o   Tire Pressure Controllers

  Instrumentation

o   Optical Power Meters

o   Fluid Flow Meters; Test Equipment

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[PMIEXECUTIVESUMMARY080713007.GIF]


[PMIEXECUTIVESUMMARY080713005.GIF]

[PMIEXECUTIVESUMMARY080713012.JPG]

[PMIEXECUTIVESUMMARY080713013.JPG]

MARKETS / PRODUCTS SERVED

  Defense/Aerospace & Avionics

o   Components & Water Systems for

Commercial Aircrafts

o   Components for Landing Gear [PMIEXECUTIVESUMMARY080713014.JPG] Systems

& Flap Controllers

[PMIEXECUTIVESUMMARY080713015.JPG]

o   Sensors and Controls

  Industrial

o   Precision Laser Welding Equipment

o   Lasers & Motion Controllers

o   Mass Flow Controllers

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[PMIEXECUTIVESUMMARY080713005.GIF]

Quality Systems

•   ISO 9001-2008 Certified

•   ITAR Certified

•   EIA-625 & 2020 [PMIEXECUTIVESUMMARY080713017.GIF]

•   AS9100 Compliant

Compliant ESD Program

•   ISO13485 Compliant

[PMIEXECUTIVESUMMARY080713018.JPG]

[PMIEXECUTIVESUMMARY080713020.GIF]

•   IPC 610 Class I,II,III

•   onsite certified training program

[PMIEXECUTIVESUMMARY080713021.JPG]

[PMIEXECUTIVESUMMARY080713023.GIF]

[PMIEXECUTIVESUMMARY080713025.GIF]

•   Regulatory support for

•   UL, CSA, BABT, PPAP, etc.

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8

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[PMIEXECUTIVESUMMARY080713005.GIF]

[PMIEXECUTIVESUMMARY080713027.GIF]

[PMIEXECUTIVESUMMARY080713029.GIF]

OUR VISION & BUSINESS

The preeminent manufacturing

Next Winners

solution for technological innovators

by providing innovative, domestic

manufacturing and global material

FOUNDRY

sourcing solutions.

Core Expertise

PROGRAM [PMIEXECUTIVESUMMARY080713031.GIF] MANAGEMENT

Core Service

[PMIEXECUTIVESUMMARY080713032.JPG]

MANUFACTURING

Low Cost, Flexible, Scalable

[PMIEXECUTIVESUMMARY080713033.JPG]

[PMIEXECUTIVESUMMARY080713034.JPG]

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[PMIEXECUTIVESUMMARY080713005.GIF]

[PMIEXECUTIVESUMMARY080713035.JPG]

MANAGEMENT

[PMIEXECUTIVESUMMARY080713037.GIF]

Co Founder and served as

22 years of experience in the    25 years of experience

Over 30 years of

President/CEO of Probe from   electronic manufacturing

with Aerospace, Defense,      experience with expertise

1996 until October of 2005      Industry, including finance

Raytheon Systems, GM

in Design, Development,

and operations

Hughes Electronics, and

Manufacturing & Test of

Rockwell

Military and Commercial

[PMIEXECUTIVESUMMARY080713038.JPG] [PMIEXECUTIVESUMMARY080713039.JPG] Electronic Products.

[PMIEXECUTIVESUMMARY080713041.GIF]

[PMIEXECUTIVESUMMARY080713042.JPG]

CEO

CFO

V.P. Of Quality / Operations      Director of Engr. / Prog. Mgmt.

Kam Mahdi

John Bennett

Linwood Goddard

Ken Brookes

[PMIEXECUTIVESUMMARY080713044.GIF]

[PMIEXECUTIVESUMMARY080713045.JPG]

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[PMIEXECUTIVESUMMARY080713005.GIF]

[PMIEXECUTIVESUMMARY080713046.JPG]

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BOARD OF DIRECTORS

[PMIEXECUTIVESUMMARY080713051.GIF]

[PMIEXECUTIVESUMMARY080713052.JPG] Director of Mobile Services

[PMIEXECUTIVESUMMARY080713053.JPG] for Boeing Satellite Systems,      CEO with American

the CFO and Chief of Biz Ops     Steel, completed

for a JV between Hughes,

11 mergers and

Co Founder and CEO

Chief   Financial

CEO, Drumbi

GM and Delco, Kinecta

sold 12 companies

Officer

Federal Credit Union

for stockholders

[PMIEXECUTIVESUMMARY080713055.GIF]

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Kambiz Mahdi

John Bennett

Shervin Talieh

Robert Young

Ralph Adams

Chairman

Director

Director

Director

Special Advisor

[PMIEXECUTIVESUMMARY080713062.GIF]

[PMIEXECUTIVESUMMARY080713063.JPG]

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[PMIEXECUTIVESUMMARY080713075.GIF]

[PMIEXECUTIVESUMMARY080713073.GIF]

[PMIEXECUTIVESUMMARY080713073.GIF]

[PMIEXECUTIVESUMMARY080713075.GIF]

[PMIEXECUTIVESUMMARY080713075.GIF]

[PMIEXECUTIVESUMMARY080713075.GIF]

[PMIEXECUTIVESUMMARY080713075.GIF]

[PMIEXECUTIVESUMMARY080713075.GIF]

[PMIEXECUTIVESUMMARY080713075.GIF]

[PMIEXECUTIVESUMMARY080713075.GIF]

[PMIEXECUTIVESUMMARY080713075.GIF]

[PMIEXECUTIVESUMMARY080713075.GIF]

[PMIEXECUTIVESUMMARY080713075.GIF]

CORPORATE HISTORY

[PMIEXECUTIVESUMMARY080713077.GIF]

[PMIEXECUTIVESUMMARY080713079.GIF]

Company is formed

Revenue reaches $19m

Revenue drops to 1.8m

1994

2001

2006     [PMIEXECUTIVESUMMARY080713081.GIF]     2009

2009

[PMIEXECUTIVESUMMARY080713083.GIF]

Company goes public

CEO Kam Mahdi along with a

strategic investor purchase a

significant stake in Sept 2009

[PMIEXECUTIVESUMMARY080713085.GIF]

8/7/2013

Confidential

12

[PMIEXECUTIVESUMMARY080713007.GIF]



[PMIEXECUTIVESUMMARY080713005.GIF]

TURNAROUND PLAN

  þ    Establish core team

  þ    Emphasize on financial management and right sizing

  þ    Discontinue all non core businesses

  þ    Expand service offerings

  þ    Engage previous customers and understand their needs

  þ    Utilize intellectual property as competitive differentiator

  þ    Invest in new Technology Start ups (Manufacturing

Foundry)

  þ    Create margin advantage

8/7/2013

Confidential

13

[PMIEXECUTIVESUMMARY080713007.GIF]



[PMIEXECUTIVESUMMARY080713087.GIF]

[PMIEXECUTIVESUMMARY080713087.GIF]

[PMIEXECUTIVESUMMARY080713087.GIF]

[PMIEXECUTIVESUMMARY080713087.GIF]

[PMIEXECUTIVESUMMARY080713087.GIF]

[PMIEXECUTIVESUMMARY080713087.GIF]

[PMIEXECUTIVESUMMARY080713087.GIF]

[PMIEXECUTIVESUMMARY080713087.GIF]

[PMIEXECUTIVESUMMARY080713087.GIF]

[PMIEXECUTIVESUMMARY080713087.GIF]

[PMIEXECUTIVESUMMARY080713089.GIF]

[PMIEXECUTIVESUMMARY080713089.GIF]

[PMIEXECUTIVESUMMARY080713087.GIF]

[PMIEXECUTIVESUMMARY080713087.GIF]

[PMIEXECUTIVESUMMARY080713089.GIF]

[PMIEXECUTIVESUMMARY080713089.GIF]

[PMIEXECUTIVESUMMARY080713089.GIF]

[PMIEXECUTIVESUMMARY080713089.GIF]

[PMIEXECUTIVESUMMARY080713089.GIF]

[PMIEXECUTIVESUMMARY080713089.GIF]

[PMIEXECUTIVESUMMARY080713089.GIF]

[PMIEXECUTIVESUMMARY080713089.GIF]

[PMIEXECUTIVESUMMARY080713091.GIF]

[PMIEXECUTIVESUMMARY080713091.GIF]

[PMIEXECUTIVESUMMARY080713089.GIF]

[PMIEXECUTIVESUMMARY080713089.GIF]

[PMIEXECUTIVESUMMARY080713005.GIF]

[PMIEXECUTIVESUMMARY080713091.GIF]

[PMIEXECUTIVESUMMARY080713091.GIF]

[PMIEXECUTIVESUMMARY080713091.GIF]

[PMIEXECUTIVESUMMARY080713091.GIF]

[PMIEXECUTIVESUMMARY080713091.GIF]

[PMIEXECUTIVESUMMARY080713091.GIF]

[PMIEXECUTIVESUMMARY080713091.GIF]

[PMIEXECUTIVESUMMARY080713091.GIF]

[PMIEXECUTIVESUMMARY080713091.GIF]

[PMIEXECUTIVESUMMARY080713091.GIF]

[PMIEXECUTIVESUMMARY080713093.GIF]

[PMIEXECUTIVESUMMARY080713095.GIF]

[PMIEXECUTIVESUMMARY080713097.GIF]

TRACK RECORD

[PMIEXECUTIVESUMMARY080713099.GIF]

Moved to centrally located

Reduced overhead and    23,000 sq ft state of the art

Development of PMI’s

expenditures

manufacturing facility in

proprietary management

Irvine, California [PMIEXECUTIVESUMMARY080713101.GIF]

system (PMX)

Reverse Stock Split

[PMIEXECUTIVESUMMARY080713103.GIF]

2010

2010

2011

2011

2012

2013

[PMIEXECUTIVESUMMARY080713105.GIF]

[PMIEXECUTIVESUMMARY080713107.GIF]

Extinguished

Reestablished commitment     2 consecutive years of

Completed the Acquisition

$1,000,000 of debt

to EMS business and re

profitability

Of Trident Manufacturing, Inc.

secured customer base

Revenue reaches $5 Million

[PMIEXECUTIVESUMMARY080713109.GIF]

[PMIEXECUTIVESUMMARY080713109.GIF]

[PMIEXECUTIVESUMMARY080713109.GIF]

[PMIEXECUTIVESUMMARY080713109.GIF]

[PMIEXECUTIVESUMMARY080713109.GIF]

[PMIEXECUTIVESUMMARY080713109.GIF]

[PMIEXECUTIVESUMMARY080713109.GIF]

[PMIEXECUTIVESUMMARY080713109.GIF]

[PMIEXECUTIVESUMMARY080713109.GIF]

[PMIEXECUTIVESUMMARY080713109.GIF]

[PMIEXECUTIVESUMMARY080713111.GIF]

[PMIEXECUTIVESUMMARY080713113.GIF]

[PMIEXECUTIVESUMMARY080713113.GIF]

[PMIEXECUTIVESUMMARY080713109.GIF]

[PMIEXECUTIVESUMMARY080713109.GIF]

[PMIEXECUTIVESUMMARY080713113.GIF]

[PMIEXECUTIVESUMMARY080713113.GIF]

[PMIEXECUTIVESUMMARY080713109.GIF]

[PMIEXECUTIVESUMMARY080713109.GIF]

[PMIEXECUTIVESUMMARY080713113.GIF]

[PMIEXECUTIVESUMMARY080713113.GIF]

[PMIEXECUTIVESUMMARY080713113.GIF]

[PMIEXECUTIVESUMMARY080713113.GIF]

[PMIEXECUTIVESUMMARY080713113.GIF]

[PMIEXECUTIVESUMMARY080713113.GIF]

[PMIEXECUTIVESUMMARY080713115.GIF]

[PMIEXECUTIVESUMMARY080713117.GIF]

[PMIEXECUTIVESUMMARY080713117.GIF]

[PMIEXECUTIVESUMMARY080713113.GIF]

[PMIEXECUTIVESUMMARY080713113.GIF]

[PMIEXECUTIVESUMMARY080713117.GIF]

[PMIEXECUTIVESUMMARY080713117.GIF]

[PMIEXECUTIVESUMMARY080713113.GIF]

[PMIEXECUTIVESUMMARY080713113.GIF]

[PMIEXECUTIVESUMMARY080713117.GIF]

[PMIEXECUTIVESUMMARY080713117.GIF]

[PMIEXECUTIVESUMMARY080713117.GIF]

[PMIEXECUTIVESUMMARY080713117.GIF]

[PMIEXECUTIVESUMMARY080713117.GIF]

[PMIEXECUTIVESUMMARY080713117.GIF]

[PMIEXECUTIVESUMMARY080713117.GIF]

[PMIEXECUTIVESUMMARY080713117.GIF]

[PMIEXECUTIVESUMMARY080713117.GIF]

[PMIEXECUTIVESUMMARY080713117.GIF]

8/7/2013

Confidential

14

[PMIEXECUTIVESUMMARY080713007.GIF]



[PMIEXECUTIVESUMMARY080713005.GIF]

CAPITAL STRUCTURE

   OTC QB: Fully reporting and compliant

   Capital Structure

o   Float = 4.8M

o   Restricted Shares = 16.7M

22%

Float

30%

Kam Mahdi

6%

Insiders

42%

Strategic Investors

8/7/2013

Confidential

15

[PMIEXECUTIVESUMMARY080713007.GIF]



[PMIEXECUTIVESUMMARY080713005.GIF]

[PMIEXECUTIVESUMMARY080713119.GIF]

COMPETITIVE ADVANTAGE

[PMIEXECUTIVESUMMARY080713121.GIF]

[PMIEXECUTIVESUMMARY080713123.GIF]

+

+

+ +

Experienced

Debt free

High technology

Manufacturing foundry

Proprietary

management with

equipment and low      onshore manufacturing

platform offering

Management System

proven track record

overhead    [PMIEXECUTIVESUMMARY080713125.GIF]

and managed offshore      product & engineering

supply chain

services

[PMIEXECUTIVESUMMARY080713127.GIF]

8/7/2013

Confidential

16

[PMIEXECUTIVESUMMARY080713007.GIF]



[PMIEXECUTIVESUMMARY080713005.GIF]

PMX PLATFORM COMPETITIVE ADVANTAGE THROUGH I.P.

[PMIEXECUTIVESUMMARY080713129.GIF]

[PMIEXECUTIVESUMMARY080713130.JPG]

[PMIEXECUTIVESUMMARY080713132.GIF]

8/7/2013

Confidential

17

[PMIEXECUTIVESUMMARY080713007.GIF]



[PMIEXECUTIVESUMMARY080713005.GIF]

[PMIEXECUTIVESUMMARY080713134.GIF]

[PMIEXECUTIVESUMMARY080713136.GIF]

MARKET OVERVIEW

[PMIEXECUTIVESUMMARY080713138.GIF]

Worldwide

Electronics

Assembly

[PMIEXECUTIVESUMMARY080713140.GIF]

Market 1 Trillion

2010 – $64B

2010 – $260B

2015 – $120B

2015 – $460B

• Industrial

• Computer

[PMIEXECUTIVESUMMARY080713142.GIF]

• Instrumentation

• Telecommunication

• Medical

• Consumer

Aerospace

• Renewable Energy

Automotive

[PMIEXECUTIVESUMMARY080713144.GIF]

[PMIEXECUTIVESUMMARY080713146.GIF]

8/7/2013 [PMIEXECUTIVESUMMARY080713148.GIF]

Confidential [PMIEXECUTIVESUMMARY080713150.GIF] [PMIEXECUTIVESUMMARY080713152.GIF]

18

[PMIEXECUTIVESUMMARY080713154.GIF] [PMIEXECUTIVESUMMARY080713007.GIF]



[PMIEXECUTIVESUMMARY080713005.GIF]

[PMIEXECUTIVESUMMARY080713155.JPG]

[PMIEXECUTIVESUMMARY080713157.GIF]

[PMIEXECUTIVESUMMARY080713159.GIF]

[PMIEXECUTIVESUMMARY080713161.GIF]

[PMIEXECUTIVESUMMARY080713163.GIF]

[PMIEXECUTIVESUMMARY080713165.GIF]

[PMIEXECUTIVESUMMARY080713166.JPG]

[PMIEXECUTIVESUMMARY080713168.GIF]

NORTH AMERICA MARKET OVERVIEW

[PMIEXECUTIVESUMMARY080713169.JPG]

[PMIEXECUTIVESUMMARY080713171.GIF]

   Medical , Automotive, Industrial & Aer [PMIEXECUTIVESUMMARY080713166.JPG] [PMIEXECUTIVESUMMARY080713173.GIF]    ospace areas gaining focus with

higher profits and growth:

[PMIEXECUTIVESUMMARY080713174.JPG]

[PMIEXECUTIVESUMMARY080713176.GIF]

o    % of Total Available Market outsourced and 5 [PMIEXECUTIVESUMMARY080713178.GIF]   year compound annual growth

rate

[PMIEXECUTIVESUMMARY080713179.JPG]

[PMIEXECUTIVESUMMARY080713181.GIF]

[PMIEXECUTIVESUMMARY080713182.JPG]

60 o

[PMIEXECUTIVESUMMARY080713184.GIF]

50

[PMIEXECUTIVESUMMARY080713179.JPG]

[PMIEXECUTIVESUMMARY080713186.GIF]

40

[PMIEXECUTIVESUMMARY080713182.JPG]

[PMIEXECUTIVESUMMARY080713188.GIF]

30

20

[PMIEXECUTIVESUMMARY080713190.GIF]

[PMIEXECUTIVESUMMARY080713192.GIF]

10

[PMIEXECUTIVESUMMARY080713193.JPG]

[PMIEXECUTIVESUMMARY080713195.GIF]

0

er

Consum

Peripherals

Telecom

orking

[PMIEXECUTIVESUMMARY080713196.JPG]

[PMIEXECUTIVESUMMARY080713198.GIF]

Netw

[PMIEXECUTIVESUMMARY080713199.JPG]

[PMIEXECUTIVESUMMARY080713201.GIF]

puters &

Com

Industrial/ Aerospace

edical

ve

o

M

Autom

% of Tam Outsourced

5Year CAGR 2010 2015E

8/7/2013

Confidential

19

[PMIEXECUTIVESUMMARY080713007.GIF]



[PMIEXECUTIVESUMMARY080713005.GIF]

HISTORICAL VIEW OF COMPETITION

[PMIEXECUTIVESUMMARY080713203.GIF]

[PMIEXECUTIVESUMMARY080713204.JPG]

8/7/2013

Confidential

20

[PMIEXECUTIVESUMMARY080713007.GIF]



[PMIEXECUTIVESUMMARY080713005.GIF]

WHAT’S MISSING? PROFITABILITY

[PMIEXECUTIVESUMMARY080713206.GIF]

8/7/2013

Confidential

21

[PMIEXECUTIVESUMMARY080713007.GIF]



[PMIEXECUTIVESUMMARY080713005.GIF]

GROSS MARGIN VS. GROWTH

8/7/2013

Confidential

22

[PMIEXECUTIVESUMMARY080713007.GIF] [PMIEXECUTIVESUMMARY080713207.JPG] [PMIEXECUTIVESUMMARY080713208.JPG]



[PMIEXECUTIVESUMMARY080713005.GIF]

STATEMENT OF OPERATIONS 2011 ACTUAL 2016 FORECAST

Actual

Actual

2011

2012

2013

2014

2015

2016

Probe Sales

$

4,549,798      $

4,961,612      $

3,341,856      $

5,000,000      $

6,250,000      $

7,812,500

Probe / Trident   Sales

1,198,952

2,000,000

2,500,000

3,125,000

Total Sales

4,549,798

4,961,612

4,540,808

7,000,000

8,750,000

10,937,500

Probe Cost of Goods Sold

3,146,478

3,581,639

2,381,340

3,559,947

4,334,947

5,434,947

Trident Cost of Goods Sold

785,519

1,315,313

1,515,313

1,765,313

Total Cost of Goods Sold

3,146,478

3,581,639

3,166,860

4,875,260

5,850,260

7,200,260

Gross Profit

1,403,320

1,379,973

1,373,948

2,124,740

2,899,740

3,737,240

Total Admin Expense Probe

1,139,131

1,265,038

984,308

1,124,143

1,368,827

1,539,312

Total Admin Expense Trident

319,424

444,163

555,681

643,170

EBITDA

264,189

114,935

70,217

556,434

975,232

1,554,758

6%

2%

2%

8%

11%

14%

Other Income

13,755

Depreciation

35,469

43,425

60,000

60,000

200,000

400,000

Interest Expense

136,897

187,883

179,000

197,000

262,500

328,125

Net Profit before Tax

105,578

(116,373)

(168,783)

299,434

512,732

826,633

Income Tax

14,638

48,758

76,204

126,833

Net Profit

90,940

(116,373)

(168,783)

250,676

436,528

699,800

8/7/2013

Confidential

23

[PMIEXECUTIVESUMMARY080713007.GIF]



[PMIEXECUTIVESUMMARY080713005.GIF]

GROWTH STRATEGY

Organic Growth

Foundry Platform

M&A

8/7/2013

Confidential

24

[PMIEXECUTIVESUMMARY080713007.GIF]



[PMIEXECUTIVESUMMARY080713005.GIF]

WHY INVEST IN PMFI

[PMIEXECUTIVESUMMARY080713210.GIF]

[PMIEXECUTIVESUMMARY080713212.GIF]

TEAM

I.P.

[PMIEXECUTIVESUMMARY080713214.GIF]

[PMIEXECUTIVESUMMARY080713215.JPG] VALUE

[PMIEXECUTIVESUMMARY080713217.GIF]

FINANCIALS [PMIEXECUTIVESUMMARY080713219.GIF]

TIMING

FOUNDRY

[PMIEXECUTIVESUMMARY080713220.JPG]

8/7/2013

Confidential

25

[PMIEXECUTIVESUMMARY080713007.GIF]



[PMIEXECUTIVESUMMARY080713221.JPG]

QUESTIONS?

[PMIEXECUTIVESUMMARY080713222.JPG]

www.probeglobal.com

kmahdi@probeglobal.c [PMIEXECUTIVESUMMARY080713223.JPG]

om

17475 Gillette Avenue, Irvine, CA

(949) 273 4990

[PMIEXECUTIVESUMMARY080713225.GIF]