Business Context and Reporting Period
This Form 8-K, filed on September 18, 2015, reports material events for Probe Manufacturing, Inc. (Nevada), with the earliest event date of September 11, 2015. The Company announced a strategic pivot to focus on Organic Rankine Cycle (ORC)-based heat recovery power systems. Consequently, the Company intends to change its name to "Clean Energy Technologies, Inc." and has updated its principal executive office address to 150 E. Baker Street, Costa Mesa, CA 92626.
Key Financial Metrics and Agreements
The filing details two primary financial transactions executed in September 2015:
- Asset Acquisition: The Company's subsidiary, Clean Energy HRS LLC, entered into an Asset Purchase Agreement with General Electric International, Inc. (GEII) to acquire Heat Recovery Solutions (HRS) assets, including intellectual property, patents, and machinery. Consideration includes a three-year promissory note and the assumption of certain GEII liabilities. Specific purchase price amounts are not disclosed in the text.
- Financing Facility: The Company entered into a Transaction Completion and Financing Agreement (TCF Agreement) with ETI Partners IV LLC (ETI) to secure $5,000,000 in financing.
- Equity Issuance: In connection with the financing, the Company agreed to issue 104,910,323 shares of restricted common stock to ETI. This issuance represents 70% of the Company's fully diluted common stock.
Material Changes Versus Prior Period
The filing indicates a fundamental shift in the Company's business model and capital structure:
- Change of Control: The issuance of 70% of fully diluted common stock to ETI Partners IV LLC constitutes a change in control of the registrant.
- Board Composition: The Board of Directors will expand to 11 directors, with ETI granted the right to nominate five persons.
- Operational Focus: The Company is transitioning from its existing business accelerator operations to manufacturing and commercializing ORC-based heat recovery systems using acquired GEII assets.
Guidance, Outlook, and Risks
Management intends to co-locate and integrate the acquired HRS assets with existing operations at the Costa Mesa facility. The financing is intended to support the acquisition and integration of these assets. The filing notes that the securities were offered under Section 4(a)(2) of the Securities Act and Rule 506(b) of Regulation D. No specific financial guidance, revenue projections, or risk factors beyond the standard transaction risks are explicitly detailed in this summary text.
Investor Verification Checklist
- Verify the specific terms and interest rate of the three-year promissory note issued to GEII for the asset purchase.
- Confirm the exact amount of liabilities assumed from GEII related to the HRS assets.
- Review the full text of the Loan, Guarantee, and Collateral Agreement (Exhibit 10.3) to understand the covenants and collateral requirements for the $5,000,000 facility.
- Assess the impact of the 70% equity dilution on existing shareholders and the new capitalization table.
- Confirm the timeline for the official name change to "Clean Energy Technologies, Inc."