CONFIDENTIAL PRIVATE PLACEMENT MEMORANDUM PROPHETIC … · Name: Copy No. CONFIDENTIAL PRIVATE...

Name: Copy No.

CONFIDENTIAL PRIVATE PLACEMENT MEMORANDUM

PROPHETIC OIL INC. $52,500,000

35,000,000 Common Shares

Par Value $0.00001 Per Share

$1.50 Per Share

Minimum Investment 4,000 shares ($6,000.00)

Prophetic Oil, Inc., a Nevada corporation (the “Company”), is offering 35,000,000 Common Shares, par value

$0.00001 per share (the “Shares”), at an offering price of $1.50 per share, for a period of 180 days from the date of

this Memorandum (the “Offering Period”), which period may be extended for an additional 90 days at the sole

discretion of the Company. (See “DESCRIPTION OF SECURITIES”)

The Shares are being offered by the Company through its officers and directors on a 35,000,000 Share “Best

Efforts” basis, pursuant to a non-public offering exemption from the registration requirements imposed by the

Securities Act of 1933, as amended. (“1933 Act”) The Shares may also be offered and sold through Broker-Dealers

(“Participating Broker-Dealers”) who are members of the National Association of Securities Dealers, Inc. (“NASD”)

THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE

AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE 1933 ACT

AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR

EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY WILL BE REQUIRED

TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.

THE SECURITIES OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK AND IMMEDIATE

SUBSTANTIAL DILUTION AND SHOULD ONLY BE PURCHASED BY THOSE WHO CAN AFFORD

TO LOSE THEIR INVESTMENT IN ITS ENTIRETY. (SEE “RISK FACTORS” AND “DILUTION”)

THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE 1933 ACT, OR ANY OTHER

APPLICABLE SECURITIES LAW. THESE SECURITIES HAVE NOT BEEN APPROVED OR

DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE

SECURITIES COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY

STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS

CONFIDENTIAL PRIVATE PLACEMENT MEMORANDUM. ANY REPRESENTATION TO THE

CONTRARY IS A CRIMINAL OFFENSE.

THESE SECURITIES ARE OFFERED TO “ACCREDITED INVESTORS” PURSUANT TO THE

NON-PUBLIC OFFERING EXEMPTION FROM REGISTRATION WITH THE SECURITIES AND

EXCHANGE COMMISSION PROVIDED BY RULE 506 OF REGULATION D UNDER THE

SECURITIES ACT AND RULE 144A UNDER THE SECURITIES ACT.

Offering

Price to Public

Underwriting Discounts

and Commissions (1)

Proceeds to the

Company (1) (2) (3)

Per Share

Total

$1.50

$52,500,000

$0.15

$5,250,000

$1.35

$47,250,000

See footnotes on Page 2.

PROPHETIC OIL INC. 1717 ANGEL PARKWAY

SUITE #136

ALLEN, TEXAS 75002

(214) 585-0524

(877) 645-4772

EMAIL: [email protected]

THE DATE OF THIS MEMORANDUM IS AUGUST 1, 2013

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(1) Includes a 10% sales commission payable to Participating Broker-Dealers (“Participating

Broker- Dealers”) based upon the gross proceeds from any sales made through the efforts

of such firms or their representatives. The Company has not entered into any agreement

with any Participating Broker-Dealers as of the date of this Memorandum. In connection

with any future engagement by the Company of Participating Broker-Dealers, the

Company may agree to indemnify Participating Broker-Dealers against certain liabilities,

including liabilities under the 1933 Act.

(2) Before deducting expenses of the Offering, currently estimated to be $5,000, including

legal and accounting fees, printing expenses, Blue Sky filing fees and other expenses.

(3) There is no minimum amount of Shares that the Company is required to sell prior to

using the proceeds received from a sale of Shares and none of the proceeds of this

Offering will be placed in an escrow account. Accordingly, all proceeds from the sale of

any of the Shares shall be provided directly to the Company to be used for the purposes

described in this Memorandum.

The Shares will be offered by the Company through its officers and directors and, upon engagement, through

broker-dealers that are members of the National Association of Securities Dealers, Inc., on a “Best Efforts” basis, for

a period of 180 days from the date of this Memorandum. This period may be extended for an additional 90 day

period at the sole discretion of the Company. Payment for the Shares offered hereby should be made payable to the

order of “Prophetic Oil Inc.”. Any subscriptions received by Participating Broker-Dealers on behalf of the

Company will be transmitted to the Company by noon on the next business day following receipt.

NO DEALER, SALESMAN OR OTHER PERSON UNAFFILIATED WITH THE COMPANY HAS BEEN

AUTHORIZED BY THE COMPANY TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATIONS

OTHER THAN THOSE CONTAINED IN THIS PRIVATE PLACEMENT MEMORANDUM IN CONNECTION

WITH THE OFFERING DESCRIBED HEREIN AND IF GIVEN OR MADE, SUCH INFORMATION OR

REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE

COMPANY. THIS MEMORANDUM DOES NOT CONSTITUTE AN OFFER OR SOLICITATION BY, ANY

ONE IN ANY STATE IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED, OR IN WHICH

THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO, OR TO ANY

PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE

DELIVERY OF THIS MEMORANDUM, NOR ANY SALES MADE HEREUNDER SHALL, UNDER ANY

CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS

OF THE COMPANY SINCE THE DATE HEREOF.

THE COMPANY HAS AGREED TO MAKE AVAILABLE TO EACH OFFEREE OF THE SECURITIES OR HIS

ADVISOR(S) OR BOTH, THE OPPORTUNITY TO ASK QUESTIONS OF AND RECEIVE ANSWERS FROM,

THE COMPANY OR ANY PERSONS ACTING ON ITS BEHALF CONCERNING THE TERMS AND

CONDITIONS OF THIS OFFERING AND TO OBTAIN ANY ADDITIONAL INFORMATION, TO THE

EXTENT THAT THE COMPANY POSSESSES SUCH INFORMATION OR CAN ACQUIRE IT WITHOUT

UNREASONABLE EFFORT OR EXPENSE, NECESSARY TO VERIFY THE ACCURACY OF THE

INFORMATION SET FORTH HEREIN. OFFEREES OR ADVISORS DESIRING SUCH ADDITIONAL

INFORMATION SHOULD CONTACT THE COMPANY, PROPHETIC OIL, INC., 1717 ANGEL PARKWAY,

SUITE #136, ALLEN, TEXAS 75002. THE TELEPHONE NUMBERS ARE (214) 385-0524 AND (877) 645-

4772. THE EMAIL ADDRESS IS [email protected]

3

PROPHETIC OIL INC.

TABLE OF CONTENTS

Page

Summary of the Offering 5

The Capital Offering 6

Risk Factors 7

Use of Proceeds 10

Dilution 11

Business 11

Mission Statement 13

Competition 13

Regulation 14

Management 14

Principal Stockholders 15

Description of Capital Stock 16

Terms of the Offering 16

Exit Strategy 16

Dividends 17

Litigation 17

Additional Information 17

Information for Residents of Certain States 17

Suitability Information 19

Subscription Agreement 23

Accredited Investor Status 27

AUGUST 1, 2013

No dealer, salesman or any other person has been authorized in connection with this Offering to give any

information or to make any representations other than those contained in this Offering and, if given or

made, such information or representations must not be relied upon as having been made or authorized by

the Company. This Offering does not constitute an offer or a solicitation in any jurisdiction to any person

to whom it is unlawful to make such an offer or solicitation. Neither the delivery of this Offering nor, any

sale made hereunder shall, under any circumstances, create an implication that there has been no change

in the circumstances of the Company or the facts herein.

4

THE SECURITIES OFFERED HEREIN HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND

EXCHANGE COMMISSION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR

REGISTERED UNDER THE SECURITIES LAWS OF ANY STATE IN RELIANCE UPON EXEMPTIONS

FROM REGISTRATION AS PROVIDED IN APPLICABLE STATUTES. THE SALE OR OTHER

DISPOSITION OF THE SECURITIES IS RESTRICTED AND THE EFFECTIVENESS OF ANY SUCH SALE

OR OTHER DISPOSITION MAY BE CONDITIONED UPON RECEIPT BY THE COMPANY OF AN OPINION

OF COUNSEL SATISFACTORY TO THE COMPANY AND ITS COUNSEL THAT SUCH SALE OR OTHER

DISPOSITION CAN BE MADE WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS

AMENDED, AND OTHER APPLICABLE STATUTES. BY ACQUIRING THE SECURITIES OFFERED

HEREIN, THE PURCHASERS REPRESENT THAT THEY WILL NOT SELL OR OTHERWISE DISPOSE OF

THE SECUREITES WITHOUT REGISTRATION OR OTHER COMPLIANCE WITH THE AFORESAID

STATUTES AND THE RULES AND REGULATIONS THEREUNDER. THESE SECURITIES HAVE NOT

BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION NOR ANY

STATE SECURITIES COMMISSIONER, AND NEITHER THE COMMISSION NOR ANY STATE

SECURITIES COMMISSIONER HAS PASSED UPON THE ACCURACY OR ADEQUACY OF THIS

PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

THE SALE OF SECURITIES WHICH ARE THE SUBJECT OF THIS MEMORANDUM HAS NOT BEEN

QUALIFIED WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND

THE ISSUANCE OF SUCH SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE

CONSIDERATION THEREFORE PRIOR TO SUCH QUALIFICATION IS UNLAWFUL, UNLESS THE SALE

AND SECURITIES IS EXEMPT FROM THE QUALIFICATION BY VIRTUE OF §25100, 25102 OR 25105 OF

THE CALIFORNIA CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES AS DESCRIBED IN THIS

PROSPECTUS ARE EXPRESSLY CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED,

UNLESS THE SALE IS SO EXEMPT.

PROSPECTIVE INVESTORS ARE NOT TO CONSTRUE THE CONTENTS OF THIS OFFERING AS LEGAL,

TAX OR BUSINESS ADVICE. EACH INVESTOR SHOULD CONSULT HIS OWN COUNSEL,

ACCOUNTANT OR PURCHASE REPRESENTATIVE AS TO ANY LEGAL, TAX AND RELATED MATTERS

CONCERNING HIS INVESTMENT.

THIS OFFERING DOCUMENT CONSTITUTES AN OFFER ONLY TO THE PERSON WHOSE NAME

APPEARS IN THE APPROPRIATE SPACE PROVIDED ON THE COVER HEREOF. DELIVERY OF THIS

OFFERING DOCUMENT, OR ANY OTHER DOCUMENTS OR INFORMATION FURNISHED TO AN

OFFEREE, TO ANYONE OTHER THAN THE PERSON NAMED ON THE COVER HEREOF IS

UNAUTHORIZED, AND ANY REPRODUCTION HEREOF, IN WHOLE OR IN PART, OR ANY

DIVULGENCE OF THE CONTENTS HEREOF, IN WHOLE OR IN PART, WITHOUT THE PRIOR WRITTEN

CONSENT OF THE COMPANY IS PROHIBITED. ANY PERSON ACTING CONTRARY TO THE

FOREGOING RESTRICTIONS MAY PLACE HIMSELF AND THE COMPANY IN VIOLATION OF

FEDERAL AND STATE SECURITIES LAWS. THE OFFEREE, BY ACCEPTING DELIVERY OF THIS

OFFERING, AGREES TO PROMPTLY RETURN TO THE COMPANY THIS OFFERING DOCUMENT AND

ANY OTHER DOCUMENTS OR INFORMATION FURNISHED TO HIM UPON REACHING A DECISION

NOT TO MAKE AN INVESTMENT IN THE COMPANY.

ANY OFFER TO PARTICIPATE IN THE SECURITIES DESCRIBED HEREIN SHALL ONLY BE MADE TO

QUALIFIED PERSONS BY AN AUTHORIZED REPRESENTATIVE OF THE COMPANY. THE PURPOSE OF

THIS MEMORANDUM IS TO PROVIDE THE PROSPECTIVE INVESTOR WITH THAT INFORMATION

WHICH THE COMPANY FEELS IS PERTINENT TO AN INFORMED INVESTMENT DECISION. IT IS

RECOGNIZED THAT ADDITIONAL INFORMATION MAY BE NEEDED BY THE PROSPECTIVE

INVESTOR TO FORM SUCH AN INVESTMENT DECISION.

THEREFORE, EACH PERSON TO WHOM AN OFFER IS MADE IS ENCOURAGED TO MAKE FURTHER

INQUIRY OF THE COMPANY TO SATISFACTORILY ANSWER ANY QUESTIONS. REQUESTS FOR

FURTHER INFORMATION SHOULD BE MADE TO THE COMPANY AND SUCH INFORMATION SHOULD

ONLY BE RELIED UPON WHEN FURNISHED IN WRITTEN FORM AND SIGNED BY A DULY

AUTHORIZED REPRESENTATIVE OF THE COMPANY.

THERE ARE VARIOUS MATERIAL RISKS ASSOCIATED WITH AN INVESTMENT IN THE COMPANY

WHICH POTENTIAL INVESTORS SHOULD CAREFULLY CONSIDER, INCLUDING, BUT NOT LIMITED

TO; THE RISK FACTORS SET FORTH IN THE SECTION HEADED “RISK FACTORS”.

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THE SECURITIES AND EXCHANGE COMMISSION (THE “COMMISSION”) DOES NOT PASS UPON THE

MERITS OF ANY SECURITIES OFFERED OR THE TERMS OF THE OFFERING, OR DOES IT PASS UPON

THE ACCURACY OR COMPLETENESS OF OR GIVE ITS APPROVAL TO, ANY OFFERING

MEMORANDUM OR OTHER SELLING LITERATURE. THESE SECURITIES ARE OFFERED PURSUANT

TO AN EXEMPTION FROM REGISTRATION WITH THE COMMISSION; HOWEVER, THE COMMISSION

HAS NOT MADE AN INDEPENDENT DETERMINATION THAT THE SECURITIES OFFERED

HEREUNDER ARE EXEMPT FROM REGISTRATION. THE SECURITIES MAY NOT BE TRANSFERRED

BY THE INVESTOR IN THIS OFFERING IN THE ABSENCE OF AN EFFECTIVE REGISTRATION

STATEMENT UNLESS THE PROSPECTIVE TRANSFEREE ESTABLISHES, TO THE SATISFACTION OF

THE COMPANY, THAT AN EXEMPTION FROM REGISTRATION IS AVAILABLE. (SEE “DESCRIPTION

OF SECURITIES”)

THE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED WITH, OR APPROVED OR

DISAPPROVED BY, THE COMMISSION, NOR BY THE SECURITIES REGULATORY AUTHORITY OF

ANY STATE, NOR HAS ANY SUCH AUTHORITY PASSED UPON OR ENDORSED THE MERITS OF THIS

OFFERING OR THE ACCURACY OR ADEQUACY OF THIS MEMORANDUM. ANY REPRESENTATION

TO THE CONTRARY IS UNLAWFUL.

INVESTMENT IN THESE SECURITIES MAY NOT BE SUITABLE FOR INDIVIDUALS OR ENTITIES WHO

DO NOT MEET THE SUITABILITY REQUIREMENTS ESTABLISHED BY THE COMPANY, OR WHO

CANNOT AFFORD A NON-LIQUID, SPECULATIVE INVESTMENT. (SEE “RISK FACTORS” AND

“SUBSCRIPTION AND PLAN OF DISTRIBUTION.”)

SUMMARY OF THE OFFERING

This summary is qualified in its entirety by the detailed information appearing elsewhere in this

Memorandum dated August 1, 2013.

The Company

Prophetic Oil Inc. was organized under the laws of the State of Nevada on January 9, 2008, as amended.

Prophetic Oil Inc., is an initial stage oil exploration planning company that intends to, subject to obtaining

adequate resources, build a business to locate and drill for oil in Israel, the focus to be the Southwest end

of the Dead Sea and possibly other or replacement location(s). The Company needs to develop more plans

and relationships to advance its business and is in need of capital which it may or may not adequately

obtain. Our plans have changed and are subject to change but currently our main plan focuses on using

relationships to identify business candidates who may be possible partners, joint venture partners, or

parties to contract with that are already familiar the Israeli government and or are drilling or have some

form of drilling related rights, since it appears to difficult now for us to secure the necessary permits from

the Ministry of National Infrastructure (Israel) or appropriate regulatory agency there. We also continue

our efforts to obtain existing geological information from others, joint venture or contracts with others

who are located in Israel, and other steps being developed. Current plans and activities could be deemed a

continuation of a preliminary stage.

The Company has a limited operating history and revenues and must be considered a development stage

company. Prospective investors should be aware of the difficulties encountered by such enterprises, as

the Company faces all the risks inherent in any business, including competition, the absence of both a

long term operating history, limited profitability and the need for additional working capital. The

likelihood of the success of the Company must be considered in light of the problems and expenses that

are frequently encountered in connection with the operation of a business and the competitive

environment in which the Company will be operating.

The Company is not subject to informational requirements of the Securities and Exchange Act of 1934, as

amended. However, the Company intends to provide annual reports to stockholders that will include

audited financial statements. In addition, the Company intends to provide stockholders with other

pertinent information regarding the Company, as its development progresses.

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This offering is being made on a best efforts basis with no minimum amount required to affect a closing.

No refunds will be given, no matter how many Shares are sold. The proceeds from this offering will be

immediately available to the Company for expenditure as set forth in the “Use of Proceeds’. If less than

the maximum number of Shares offered hereby are sold, the Company may not have sufficient funds to

accomplish all objectives for which the offering is being undertaken and, consequently, the risk to the

early investors in this offering is significantly greater than to those investing later. It should also be noted

that the percentage of funds available for operating purposes decreases if less than the maximum offering

is received.

THE CAPITAL OFFERING

Securities Offered: A maximum of 35,000,000 Common Shares

Par Value $0.00001 Per Share. (the “Shares”)

Offering Price: $1.50 per Share

Minimum subscription: 4,000 Shares ($6,000.00)

Common Shares Currently Outstanding: 42,518,500 Shares

Common Shares Outstanding After Offering: 77,518,500 Shares (Maximum)(1)

Termination of Offering: January 28, 2014, unless extended by the

Company for an additional 90-day period.

_____________________

(1) Includes 35,000,000 Common Shares, assuming the maximum Offering is

completed.

RISK FACTORS

The Shares offered hereby involve a high degree of risk. Risk factors involving the Company and the

offering include, but are not limited to; limited operating history, need for additional working capital,

dependence on key personnel and senior management’s history of experience, immediate availability of

funds, lack of cash dividend, industry, product liability, assumptions, lack of underwriter, no commitment

to purchase shares, shares subject to Rule 144, immediate substantial dilution, arbitrary offering price,

other non public sales of securities, no assurance of liquidity, public will bear risk of loss, officer and

director control, use of proceeds not specific and other information.

USE OF PROCEEDS

The proceeds from this Offering will be used to defray administrative expenses, legal and consulting,

equipment purchases, oil leases, miscellaneous, offering costs, salaries, supplies and working capital.

DILUTION

Purchasers of the Shares offered hereby will experience immediate and substantial dilution in net tangible

book value of their purchase. In the event we offer additional Shares in the future, purchasers in the

Offering may experience further dilution in the net tangible book value.

RESTRICTION ON TRANSFERABILITY

The Shares offered hereby are restricted securities and none may be transferred or sold without

registration under the Securities Act of 1933, as amended, unless an exemption from such registration is

available.

7

RISK FACTORS

A purchase of the Shares offered hereby involves a high degree of risk. Prospective investors should

carefully consider the following factors, among others set forth in this Confidential Private Placement

Memorandum dated August 1, 2013, before making a decision to purchase the Shares offered hereby.

Limited Operating History. Prophetic Oil, Inc. was organized under the laws of the State of Nevada

on January 9, 2008, as amended. Prophetic Oil Inc., is an initial stage oil exploration planning company

that intends to, subject to obtaining adequate resources, build a business to locate and drill for oil in Israel,

the focus to be the Southwest end of the Dead Sea and possibly other or replacement location(s). The

Company needs to develop more plans and relationships to advance its business and is in need of capital

which it may or may not adequately obtain. Our plans have changed and are subject to change but

currently our main plan focuses on using relationships to identify business candidates who may be

possible partners, joint venture partners, or parties to contract with that are already familiar the Israeli

government and or are drilling or have some form of drilling related rights, since it appears to difficult

now for us to secure the necessary permits from the Ministry of National Infrastructure (Israel) or

appropriate regulatory agency there. We also continue our efforts to obtain existing geological

information from others, joint venture or contracts with others who are located in Israel, and other steps

being developed. Current plans and activities could be deemed a continuation of a preliminary stage.

The Company is not profitable, with no guarantee it will be, and does not generate material revenues and

also it currently operates within cash flow restraints. It has, and may continue, to seek money in the form

of capital and possibly loans or otherwise. The Company has attempted and may continue its efforts to

obtain necessary funding by means of private investment, and/or additional funding. Inability to obtain

such needed investment or funding may affect the Company’s ability to continue operations.

Dependence upon Key Personnel and Senior Management’s History of Experience. The success of

the Company will be largely dependent upon the active participation of its Management’s personnel. The

loss of the services of key personnel could materially and adversely affect the business of the Company

and its future prospects. While the Management brings a wide variety of and substantial experience to the

Company, this experience is no assurance that the Company will be successful.

Immediate Availability of Funds. This Offering is being made on a “Best Efforts” basis with no

minimum amount required to affect a closing. No refunds will be given no matter how many Shares are

sold. The proceeds from this Offering will be immediately available to the Company for expenditure in

accordance with the “Use of Proceeds” section set forth in this document. If less than the full number of

Shares offered hereby are sold, the Company may not have sufficient funds to accomplish all objectives

for which this Offering is being undertaken and consequently, the risk to the early investors in this

Offering is significantly greater than to those investing later.

Need for Additional Working Capital. The Company anticipates that the proceeds from the sale of all

of the Shares offered will provide the capital requirements to implement the Company’s business plans

over the next twelve (12) months. If less than all of the Shares offered are sold or if the capital needs of

the Company are greater than currently anticipated, the Company will be required to seek other sources of

financing. No assurance can be given that the Company will sell any of the Shares offered or that other

financing will be available, if required; or if available, will be available on terms and conditions

satisfactory to management.

Lack of Cash Dividends. The Company has not paid any cash dividends on its Common Shares to date

and there are no plans for paying cash dividends in the foreseeable future. Initial earnings that the

Company may realize will be retained to finance the growth of the Company. Any future dividends, of

which there can be no assurance, will be directly dependent upon earnings of the Company, its financial

requirements and other factors.

8

Lack of Financial Statements. The Company does not have any material financial statements since the

Company has a limited operating history and we have not consistently expended time and expenses to

obtain and maintain an accountant to assist us. The Company does not know when we will have financial

statements or an audit. Also to the extent financial statements, once prepared, are not audited, be

cautioned that, as to any financial statements, an audit of any such financials may result in different

results. The Company believes our operations and liquidity reflect ongoing lack of revenues and losses

and lack of material cash or cash equivalents since we mostly are expending funds on our business plan

and are not seeking revenues in the short term, among other reasons. The Company intends to have

financial statements prepared subsequent to this Offering, but all plans and intentions are subject to risks

and conditions such as the need for sufficient capital to pay for such work.

Product Liability. The Company presently does not maintain any product liability insurance and will

not secure such insurance until the Company deems it necessary. Ultimately, such coverage may be a

requirement under certain agreements. As a result of the Company’s limited operations to date, no

threatened or actual claims have been made upon the Company for product liability.

Immediate Substantial Dilution. Purchasers of the Shares offered hereby will experience immediate

and substantial dilution in net tangible book value of their purchase. In the event we offer additional

Shares in the future, purchasers in the Offering may experience further dilution in the net tangible book

value.

Competition. The oil and gas industry is highly competitive in many of the phases, with competition for

favorable land leases, licenses, and rights being key, coupled with scientific data and good contractors

knowing how to drill and assist. The Company believes that price, the markets, politics and geological

and geophysical skill and familiarity with the industry is important as well as the area of good operations.

Major oil companies, a number of which have substantially greater technical and financial resources than

the Company, may be competitors at some point as we proceed to develop the business. We have no

reserves. The limited success of larger firms, can be viewed as supportive that there may be significant

finds or success ahead in locating significant oil and gas, but only is indicative that it is not a guarantee

and is costly apart from risk.

Government Regulations. The Company is subject to applicable provisions of Federal and State

securities and other laws. Also, our intended success may be dependent in the future upon the application

of foreign laws and regulations such as Israel. Although we will endeavor to comply with applicable laws

and regulations, we can provide no assurance of compliance nor can we predict the effect of these or

future laws and regulations on proposed activities.

Lack of Underwriter - No Commitment to Purchase Shares. The Shares are being offered by the

Company through its officers and directors and, upon engagement, through qualified broker-dealers, on a

“Best Efforts” basis. However, no broker-dealer has been retained as an underwriter and no broker-dealer

is under any obligation to purchase any of the Shares. In addition, the officers and directors of the

Company collectively have limited experience in the offer and sale of securities on behalf of the

Company. Consequently, there is no assurance that the Company is capable of selling all, or any, of the

Shares offered. In addition, no entity, including any broker-dealer or the Company, has an obligation to

purchase any of the Shares offered. Subscribers will not be entitled to any refund of their subscriptions

during such 90 day period or any extension thereof.

Shares Subject to Rule 144. On July 31, 2013, the Company had 42,518,500 Common Shares, par

value $0.00001 per share, issued and outstanding that have not been registered with the Commission or

any State securities agency and which are currently restricted pursuant to Rule 144 promulgated by the

Commission under the 1933 Act. Rule 144 provides, in essence, that a person holding restricted

securities for six months from the date the securities were purchased from the issuer, or an affiliate of the

issuer and fully paid, may sell limited quantities of the securities to the public without registration,

provided there shall be certain public information with respect to the issuer.

9

Pursuant to Rule 144, securities held by non-affiliates for more than three years may generally be sold

without reference to the current public information or broker transaction requirements, or the volume

limitations. None of the current outstanding restricted shares are available for resale pursuant to Rule 144.

The sale of some or all of the currently restricted Common Shares could have a material negative impact

upon the market price of the Common Shares if a market for the Common Shares should develop in the

future.

No Assurance of Liquidity. There is currently no public market for the Common Shares or any other

securities of the Company, and there can be no assurance that a trading market will develop in the future.

Furthermore, the Common Shares are “Restricted Securities” as that term is defined in Rule 144 under the

1934 Act and, as a result, cannot be resold without registration under the 1934 Act or an exemption from

registration. As a result, purchasers must bear the economic risk of their investments for an indefinite

period of time and may have difficulty in selling the Shares, if and when they decide to do so.

Arbitrary Offering Price. The offering price of the Shares offered hereunder has been arbitrarily

determined by the Company and bears no relationship to any recognized criterion of value. The price

does not bear any relationship to the assets, book value, earnings or net worth of the Company. In

determining the offering price, the Company considered such factors as the prospects, if any, for the

Company’s products within the industry, the previous experience of management, the technological

development with respect to the Company's products to date, the Company's historical and anticipated

results of operations, the present financial resources of the Company and the likelihood of acceptance of

the proposed offering in the current securities markets.

Other Non Public Sales of Securities. As part of the Company's plan to raise additional working

capital, the Company may make a limited number of offers and sales of its Shares to qualified investors in

transactions that are exempt from registration under the 1934 Act. Accordingly, such purchasers may

acquire an investment in the Company on terms more favorable than offered hereunder. Other offers and

sales of Common Shares may be at prices per share that are higher or lower than the price of the Shares in

this Offering. The Company reserves the right to set prices at its discretion, which prices need not relate

to any ascertainable criterion of value. There can be no assurance the Company will not make other

offers of its securities at a lower price, when, in the Company's discretion, such prices are deemed by the

Company to be reasonable under the circumstances.

Public Will Bear Risk of Loss. The capital required by the Company to accelerate their development

plans are being sought from the proceeds of this Offering. Therefore, investors hereunder will bear most

of the risk of the Company’s operations until such time as it attains greater profitability, if ever.

Furthermore, if management is successful in attaining its goals for utilization of the proceeds of this

offering, the Company may need additional working capital, of which there is no assurance of its ability

to raise such funds upon terms and conditions favorable to the Company.

Officer and Director Control. Under the terms of the Company's Articles of Incorporation, as amended

and filed with the Secretary of State of Nevada, with respect to the rights, preferences and limitations of

the Shares offered hereunder. Although the maximum number of Shares offered hereunder may be sold,

of which there is no assurance the present officers and directors of the Company will own 52.27% of the

issued and outstanding Common Shares, which are the only voting shares of the Company authorized by

the Company’s Articles of Incorporation. In the event that the maximum number of Shares offered is sold,

the purchasers in this offering will own 45.15% of the Company's Common Shares. As a result,

purchasers of the Shares will have only a limited voice in the Company's management.

Use of Proceeds Not Specific. The proceeds of this offering have been allocated only generally.

Proceeds from the offering have been allocated generally to administrative expenses, legal and consulting,

equipment purchases, oil leases, miscellaneous, offering costs, salaries, supplies and working capital.

Accordingly, investors will entrust their funds with management in whose judgment investors may

depend, with only limited information about management's specific intentions with respect to a significant

amount of the proceeds of this offering.

10

Possible Conflict of Interest. We may contract with affiliated parties or other companies or members of

Management of the Company or companies that members of Company Management own, or control.

These persons may obtain compensation and other benefits in transactions relating to the Company.

Company Management has other pursuits outside the business of the Company, since Management

services are not supplied on an exclusive basis, unless and until employment agreements are executed

providing for exclusive services, and so the attention and time of the officers may be on other businesses

separate from the Company. Notwithstanding this, all decisions concerning Company transactions will be

made in the sole discretion of Management.

Other Information. No dealer, salesman or other person unaffiliated with the Company has been

authorized by the Company to give any information or make any representations other than those

contained in this Confidential Private Placement Memorandum dated August 1, 2013, in connection with

this Offering and if given or made, such information or representations must not be relied upon as having

been authorized by the Company.

USE OF PROCEEDS

The net proceeds to be realized by the Company from this offering, after allowance for commissions to

Participating Broker-Dealers, if any and estimated expenses of the Company in connection with this

offering ($5,000), will be $47,250,000, if the maximum is sold. The following summary, based upon

management estimates, illustrates the manner in which the net proceeds of this offering are expected to be

applied and allocated over the ensuing twelve (12) months.

Proceeds from this offering that are not expended for the purposes outlined above may be allocated to

working capital of the Company and be available for any valid corporate purpose. Working capital may

be utilized for acquisition or development of other products, business assets, for payment of general and

administrative expenses, including marketing, advertising and compensation of officers and employees of

the Company.

APPLICATION

MAXIMUM

PERCENTAGE

Administrative Expenses (1) $204,000 0.43%

Legal & Consulting

Equipment Purchases

Oil Leases

Miscellaneous

Offering Costs

Salaries

Supplies

Working Capital

Total

50,000

5,000,000

28,500,000

500,000

5,000

500,000

1,750,000

10,741,000

$47,250,000

0.10%

10.58%

60.32%

1.06%

0.01%

1.06%

3.71%

22.73%

100.00% __________________

(1) Will include the costs associated with opening an executive office for the

Company. It will include all normal expenses, but not limited to electricity,

telephone, utilities and other office expenses.

Although these amounts indicate the Company’s present intentions for the use of the proceeds of this

Offering, actual expenditures may vary substantially from those indicated, depending upon economic

conditions and other factors, including the results of future operations. Although the Company estimates

that the proceeds of this Offering will be used over the next 12 months, due to the uncertainty of the

Company's future sales revenue, it is not possible to predict with certainty the date by which the proceeds

will be fully utilized. Pending the specific application of the proceeds of this Offering, they will be

invested in interest bearing obligations.

11

DILUTION

Purchasers of the Shares offered hereby will experience immediate and substantial dilution in net tangible

book value of their purchase. In the event we offer additional Shares in the future, purchasers in the

Offering may experience further dilution in the net tangible book value.

BUSINESS

Prophetic Oil Inc. was organized under the laws of the State of Nevada on January 9, 2008, as amended.













The Company has a limited operating history and revenues and must be considered a development stage

company. Prospective investors should be aware of the difficulties encountered by such enterprises, as

the Company faces all the risks inherent in any business, including competition, the absence of both a

long term operating history, limited profitability and the need for additional working capital. The

likelihood of the success of the Company must be considered in light of the problems and expenses that

are frequently encountered in connection with the operation of a business and the competitive

environment in which the Company will be operating.













Although there has been much speculation as to the existence of oil reserves in Israel, and we ourselves

are aware of critics who don't believe exploration is viable, Israel has an established regulatory structure

for oil and gas exploration. It is our belief that adequate sources support our opinion that Israel contains

much of the same type of hydrocarbon formations as the remainder of the productive Middle Eastern

countries.

Our Chief Executive Officer and founder believes that scientific, business and scripture based data

support the goal of the project to seek oil and gas in Israel. While personal beliefs and opinions motivate

many companies, building upon the vision of the founder, we intend to operate as a commercial business

in dealing with regulatory, legal, financial and operational matters.

12

Nevertheless, our foundation is the vision that Israel is a remarkable, though risky, opportunity for

potential exploration with significant potential, based upon the studies of our founder. (Recent news from

Israel indicates, in our opinion, oil and gas reserves may be present at commercial levels. While we could

try and gather and present such news to you, the reader, given the fact that such information is third party

sources, and we cannot independently verify or obtain clarifications, we leave to you the opportunity to

obtain or consider such outside information and its value, if any.)

There are companies working projects and sufficient public information exists, in our opinion, to support

our beliefs to pursue the venture.

The Company believes there is sufficient basis from both scientific and faith based information, opinions

and beliefs that we could, with sufficient capital and success in a variety of key areas, like governmental

in obtaining needed Israeli exploration licenses, be a candidate or participant in the Israeli oil and gas

exploration industry and potentially locate a significant historical amount of oil and gas.

The Company is currently developing a comprehensive plan to address the overall needs of our business

including, without limitation, operations, auditing, legal, acquisition of key advisors and also of assets

such as licenses, scientific support, and needed materials. Some portions of this Plan are underway, such

as identifying certain firms for certain work, such as a candidate for accounting work for us.

Oil and Gas Exploration

The Company is not currently undertaking oil and gas exploration. We hope to partner or contract with

others in Israel who are or who plan to do so. The oil and gas industry is highly competitive in many of

the phases, with competition for favorable land leases, licenses, and rights being key, coupled with

scientific data and good contractors knowing how to drill and assist. The Company believes that price,

the markets, politics and geological and geophysical skill and familiarity with the industry is important as

well as the area of good operations. Major oil companies, a number of which have substantially greater

technical and financial resources than the Company, may be competitors at some point as we proceed to

develop the business. We have no reserves. The limited success of larger firms, can be viewed as

supportive that there may be significant finds or success ahead in locating significant oil and gas, but only

is indicative that it is not a guarantee and is costly apart from risk.

Israel and the market regulate and or impacts pursuits relating to the exploration, development, production

and prices on the sale of oil and gas. Markets for, and value of, oil and gas, discovered, could be

dependent on such factors as regulation, including well spacing and production allowable, quotas, and

proximity of pipelines and price-fixing by governments, all of which are beyond our control.

The Company believes building our management team and advisors and proceeding carefully will help us

to develop a sound business plan and improve on the chances of success.

Management and Affiliated Transactions

The Company is strictly in the hands of Stanley E. Johnson. If all the shares in the Offering are sold Mr.

Johnson will be the beneficial owner of 51.60% of the common shares of the Company . Therefore, Mr.

Johnson can determine the use of proceeds, operations, and other matters of the Company. Mr. Johnson

is the Chairman of the Board, Chief Executive Officer, Chief Financial Officer, President and Secretary of

the Company.

Mr. Johnson believes he has pinpointed 30 scriptures which indicate Israel could have more oil and gas

discovered in the future than in Saudi Arabia.

Based on faith, and his understanding of Biblical scriptures, Mr. Johnson believes he can work with

professionals to project the best place to drill and how deep to drill to find oil in Israel and seeks to

confirm this belief through scientific means.

13

Mr. Johnson's personal beliefs are not absolutes nor free from conflicts nor can assurance be given these

will prove accurate. We are subject to many risks and the need for capital. Drilling based upon, in whole

or part, biblical interpretation, is not industry customary, nor scientific based, as a matter of faith. Mr.

Johnson anticipates his management skills and planning on the potential future drilling will be based upon

a mix of advice from professionals, data, and other aspects which may be deemed typical industry guides

but also personal biblically based interpretations. Since we don't anticipate drilling ourselves at this time,

any drilling is also subject to both arrangements we may hopefully reach with others and the possible

success of others, things we can't control.

Important Note. The Company's business description incorporates opinions, beliefs, and other

subjective information, and is primarily a statement of forecast of our plans. Plans may change without

notice and should not be taken as if being fully accurate or a promise or representation. Often, our

discussion should be considered not as reflecting actual results or facts about our Company or any

representation or promise, but being plans subject to risks, without assurance of accuracy or eventual

success (you are, therefore, cautioned, given we are a new company under development subject to many

risks and on-going re-direction in the discretion of Management).

Apart from being subject to risks, our statements may also be forecasts or projections which may differ

from actual results.

Potential Conflict of Interest. Mr. Johnson, the Company's controlling shareholder has formed and is

developing a company called Debash Oil, Inc. ("Debash"). Debash has similar risks, plans and financial

picture (losses and needs capital). In establishing Debash, it is his belief that more than one company with

investors and similar plans, but separate from one another, is beneficial as part of an overall plan to attract

capital, build relationships, and advance the pursuits of exploring in Israel and related goals. Conflicts

apply in that determinations and efforts may overlap or be more focused at times on one rather than the

other company. It may be at some point the companies merge, or enter into more definitive agreements,

but at this time risks apply apart from the conflicts, and assurances do not exist but the Company has

entered into a Cooperative Agreement with Debash (simple document confirming a memorandum of

understanding) that supplies for sharing of information and relationships.

MISSION STATEMENT

Prophetic Oil Inc. seeks to develop an international company primarily focused on the establishment, by

joint venture, direct drilling, contracted third parties, or otherwise, of an Oil and Gas exploration and

drilling business in Israel.

COMPETITION

The oil and gas industry is highly competitive in many of the phases, with competition for favorable land

leases, licenses, and rights being key, coupled with scientific data and good contractors knowing how to

drill and assist. The Company believes that price, the markets, politics and geological and geophysical

skill and familiarity with the industry is important as well as the area of good operations. Major oil

companies, a number of which have substantially greater technical and financial resources than the

Company, may be competitors at some point as we proceed to develop the business. We have no reserves.

The limited success of larger firms, can be viewed as supportive that there may be significant finds or

success ahead in locating significant oil and gas, but only is indicative that it is not a guarantee and is

costly apart from risk.

14

REGULATION

The Company is subject to applicable provisions of Federal and state securities and other laws. Also, our

intended success may be dependent in the future upon the application of foreign laws and regulations such

as Israel. Although we will endeavor to comply with applicable laws and regulations, we can provide no

assurance of compliance nor can we predict the effect of these or future laws and regulations on proposed

activities.

MANAGEMENT

The following sets forth information concerning the directors and officers of the Company:

Name Positions

Stanley E. Johnson Chairman of the Board, Chief Executive

Officer, Chief Financial Officer, President

and Secretary

Matt Lucchese Director

Larry Lyons Director

Mark Neil Speight, MD Director

Each director is elected to hold office until the next annual meeting of shareholders and until his

successor has been elected and qualified. Officers are elected annually by the Board of Directors and

hold office until such successors are duly elected and qualified. The following is a brief account of

business experience of each director and executive officer of the Company.

The Board members have advised Mr. Johnson that they are of the same personal beliefs as Mr. Johnson

for biblical support to seek oil and gas in Israel.

Stanley E. Johnson

Mr. Johnson has been the Chairman of the Board, Chief Executive Officer, Chief Financial Officer and

President since the Company was founded on January 9, 2008. Mr. Johnson's background is primarily

operating the Prophecy Club; a faith based non-profit media organization. Mr. Johnson grew up in the oil

patch in the Midland-Odessa Texas area. He is considered a national speaker and student and teacher in

Bible prophecy. Mr. Johnson has been the Chairman of the Board, Chief Executive Officer, President and

Secretary of Debash Oil since May 14, 2009. Given its extensive relationships, the Company, from time

to time, utilizes and pays expenses to obtain the assistance of the Prophecy Club to help the Companies

operations, such as printing, office space, staff assistance, phones, and the like. Mr. Johnson directly

benefits at times from his work and relationship with Prophecy Club.

Matt Lucchese

Mr. Lucchese is a Director of the Company. Mr. Lucchese obtained a Bachelors of Arts in Finance from

Wayne State University located in Detroit, Michigan in the year 1992. Mr. Lucchese has worked in the

Automotive Industry for 20 years in New Business Development; working with the major automotive

manufacturers.

15

Larry Lyons

Mr. Lyons is a Director of the Company. Mr. Lyons holds a Bachelors of Science degree in Civil

Engineering from University of Texas at El Paso he graduated in 1967. He graduated with a Master’s

Degree Education from Framingham College in Framingham Massachusetts in 1995. Mr. Lyons worked

for Amoco Production (and oil and gas company) in the 60's and 70's as a Petroleum Engineer. He was in

charge of many aspects of oil exploration, development and production. Beyond the oil business, Mr.

Lyons has run his own construction company for some 25 years.

Mark Neil Speight, MD

Dr. Speight is a Director of the Company. Dr. Neal Speight obtained his undergraduate degree in

Chemistry from the University of North Carolina at Chapel Hill in the year 1982 and medical degree from

Brody School of Medicine at East Carolina University in the year 1984. Currently Dr. Speight is a

medical doctor in Private Practice in Charlotte, North Carolina.

PRINCIPAL STOCKHOLDERS

On July 31, 2013, the Company had 42,518,500 Common Shares, par value $0.00001 per share issued

and outstanding. The following table sets forth information regarding ownership of the Company’s

Common Shares, par value $0.00001 per share, by each person known by the Company to be the

beneficial owner of the outstanding Common Stock, by each director and executive officer of the

Company. All shares are held beneficially and of record and each recorded stockholder has sole voting

and investment power.

Shares Percentage of Common Shares

Name Beneficially Owned Prior to Offering After Offering (3)(4)

Stanley E. Johnson (1) (2) 20,000,000 47.03% 25.80%

Pamela L. Johnson (2) 10,000,000 23.52% 12.90%

Matt Lucchese (1) 320,100 0.75% 0.41%

Larry Lyons (1) 100,000 0.24% 0.13%

Mark Neal Speight, MD (1) 100,000 0.24% 0.13%

All Officers and Directors

as a group (four) 30,520,100 71.78% 39.37%

_____________________

(1) Director and Officer of the Company.

(2) Stanley E. Johnson is the husband of Pamela L. Johnson and therefore is deemed to be the

beneficial owner of these shares. In addition, Mr. Johnson's children are the owners of record of

an additional 10,000,000 common shares.

(3) Assumes that none of the Shares offered hereby are purchased by officers, directors or principal

shareholders as listed herein.

(4) Assumes that the maximum offering is completed.

16

DESCRIPTION OF CAPITAL STOCK

Common Stock

The Company is authorized to issue 200,000,000 shares of Common Stock with par value $0.00001 per

share.

Holders of Common Stock are entitled to one vote per share in each matter to be decided by stockholders.

The Common Stock has no redemption provisions and the holders thereof have no preemptive rights.

Holders of Common Stock are entitled to receive ratably such dividends, if any, as the Board of Directors

may declare from time to time out of funds legally available thereof.

Preferred Stock

The Company has authorized a total of 30,000,000 shares of Preferred Stock with par value $0.00001 per

share. All preferred shares are to be issued within the discretion of the Board of Directors as to voting

rights, classes, preferences and other terms as may be fixed by the Board. No preferred shares have been

issued at this time.

Issuance Authority

The Board of Directors has the authority to provide the terms for the issuance of all securities and same

may include issuances to members of management as determined by the Board of Directors.

TERMS OF THE OFFERING

The Company is offering 35,000,000 Common Shares, par value $0.00001 per share at a purchase price

of $1.50 per share. The Offering is being made on a “Best Efforts” basis by the Officers and Directors of

the Company. The minimum investment is 4,000 Common Shares, par value $0.00001 per share

($6,000.00). An investor may subscribe for additional Shares.

Method of Subscribing

Persons may subscribe to the offering by delivering to the Company the completed Subscription

Agreement in the form attached hereto as "Exhibit A", together with the subscription price for the amount

of the desired subscription. The subscription price must be paid by check or bank draft, payable to the

order of “Prophetic Oil Inc.". The Company reserves the right to reject or accept subscriptions, in

whole or in part, in its sole discretion.

EXIT STRATEGY

It is anticipated that the Company will pursue filing a Form S-1 registration statement under the Securities

and Exchange Act of 1933 at such time as market conditions and Company fundamentals warrant such a

transaction. This is the Securities and Exchange general form for registration of securities of small

business issuers. Upon the completion of the corporate filing the Company will proceed with locating

market makers to commence trading of the Companies common shares on the “Electronic Bulletin Board”

maintained by the National Quotation Bureau, Inc., which reports quotations by brokers or dealers

making a market in the Company’s Common Shares, or other exchanges that market and Company

fundamentals might support. The Company does not make any representations as to how long the

registration process will take, nor does it warrant that such transaction may ever occur at all. If the proper

circumstances develop, the Company will retain a Broker/Dealer to pursue an initial public offering.

17

DIVIDENDS

Holders of the shares of Common Shares are entitled to dividends when, as and if declared by the Board

of Directors out of funds legally available. The Company has not paid any dividends on its Common

Shares and intends to retain earnings, if any, to finance the development and expansion of its business.

Future dividend policy is subject to the discretion of the Board of Directors and will depend upon a

number of factors, including future earnings, capital requirements and the financial condition of the

Company.

LITIGATION

The Company knows of no litigation pending, threatened or contemplated, or unsatisfied judgment

against it, or any proceedings in which the Company is a party. The Company knows of no legal actions

pending or threatened or judgment entered against any officer or director of the Company in their capacity

as such.

ADDITIONAL INFORMATION

This Confidential Private Offering document does not propose to restate all of the relevant provisions of

the documents referred to or relevant to the matters discussed herein. All of these documents must be

read for a thorough understanding of the terms of all matters relevant to the purchase of the Shares. Each

prospective investor is invited to ask questions of and receive answers from, authorized representatives of

the Company and to obtain such information concerning the terms and conditions of the Offering, to the

extent that they possess the same or can obtain it without unreasonable effort or expense, as such

prospective investor deems necessary to verify the accuracy of the information referred to in this

Confidential Private Placement Memorandum dated August 1, 2013.

INFORMATION FOR RESIDENTS OF CERTAIN STATES

For Arizona Investors Only:

THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE ARIZONA SECURITIES ACT IN

RELIANCE UPON AN EXEMPTION FROM REGISTRATION PURSUANT TO A.R.S. SECTION 44-1844 (1)

AND, THEREFORE, CANNOT BE RESOLD UNLESS THEY ARE ALSO REGISTERED OR UNLESS AN

EXEMPTION FROM REGISTRATION IS AVAILABLE.

For California Investors Only:

THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS

AMENDED, OR THE CALIFORNIA CORPORATIONS CODE BY REASON OF SPECIFIC EXEMPTIONS

THEREUNDER, RELATING TO THE LIMITED AVAILABILITY OF THE OFFERING. THESE SECURITIES

CANNOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF TO ANY PERSON OR ENTITY

UNLESS SUBSEQUENTLY REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR

THE CALIFORNIA CORPORATIONS CODE, IF SUCH REGISTRATION IS REQUIRED.

ALL OFFERS OR SALES MADE IN CALIFORNIA SHALL BE SUBJECT TO THE FOLLOWING

RESTRICTIONS: IT IS UNLAWFUL TO CONSUMMATE A SALE OR TRANSFER OF THIS SECURITY, OR

ANY INTEREST THEREIN, OR TO RECEIVE ANY CONSIDERATION THEREFORE, WITHOUT THE

PRIOR WRITTEN CONSENT OF THE COMMISSIONER OF CORPORATIONS OF THE STATE OF

CALIFORNIA, EXCEPT AS PERMITTED IN THE COMMISSIONER'S RULES. UPON ANY TRANSFER IN

WHOLE OR IN PART OF ANY OF THE SHARES OR INTERESTS THEREIN TO CALIFORNIA RESIDENTS

OR TO, IN, OR FROM CALIFORNIA, ANY DOCUMENTS OR ASSIGNMENTS OF TRANSFER MUST BEAR

THE SAME LEGEND.

18

For Colorado Investors Only:

THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS

AMENDED (THE “ACT”), OR THE COLORADO SECURITIES ACT OF 1991, BY REASON OF SPECIFIC

EXEMPTIONS THEREUNDER, RELATING TO THE LIMITED AVAILABILITY OF THE OFFERING.

THESE SECURITIES CANNOT BE RESOLD, TRANSFERRED OR OTHERWISE DISPOSED OF TO ANY

PERSON OR ENTITY UNLESS SUBSEQUENTLY REGISTERED UNDER THE ACT OF 1933, AS AMENDED,

OR THE COLORADO SECURITIES ACT 1991, IF SUCH REGISTRATION IS REQUIRED.

For Florida Investors Only:

PURSUANT TO §517.061(12) OF THE FLORIDA SECURITIES ACT, WHEN SALES ARE MADE TO 5 OR

MORE PERSONS IN FLORIDA, ANY SALE IN FLORIDA MADE TO A PURCHASER (OTHER THAN

THOSE EXCLUDED FROM THE DEFINITION OF “PURCHASER” BY §517.061(12)(b) PURSUANT TO

§517.061(12)(a) OF THE FLORIDA SECURITIES ACT, SHALL BE VOIDED BY THE PURCHASER IF SUCH

SALE IS WITHIN 3 DAYS AFTER (a) THE FIRST TENDER OF CONSIDERATION IS MADE BY SUCH

PURCHASER TO THE ISSUER, AN AGENT OF THE ISSUER, OR ANY ESCROW AGENT OR (b) THE

AVAILABILITY OF SUCH PURCHASER'S PRIVILEGE TO AVOID SUCH SALE IS COMMUNICATED TO

HIM (WHICHEVER IS LATER.)

For New Hampshire Investors Only:

NEITHER THE FACT THAT A REGISTRATION STATEMENT OR AN APPLICATION FOR A LICENSE

UNDER THIS CHAPTER HAS BEEN FILED WITH THE STATE OF NEW HAMPSHIRE, NOR THE FACT

THAT A SECURITY IS EFFECTIVELY REGISTERED OR A PERSON IS LICENSED IN THE STATE OF

NEW HAMPSHIRE, CONSTITUTES A FINDING BY THE SECRETARY OF STATE THAT ANY

DOCUMENT FILED UNDER RSA 421-B IS TRUE, COMPLETE AND NOT MISLEADING. NEITHER ANY

SUCH FACT, NOR THE FACT THAT AN EXEMPTION OR EXCEPTION IS AVAILABLE FOR A

SECURITY OR A TRANSACTION MEANS THAT THE SECRETARY OF STATE HAS NOT PASSED IN

ANY WAY UPON THE MERITS OR QUALIFICATIONS OF, OR RECOMMENDED OR GIVEN APPROVAL

TO, ANY PERSON, SECURITY, OR TRANSACTION.

For New York Investors Only:

THIS PRIVATE PLACEMENT MEMORANDUM HAS NOT BEEN REVIEWED BY THE ATTORNEY

GENERAL PRIOR TO ITS ISSUANCE AND USE. THE ATTORNEY GENERAL OF THE STATE OF NEW

YORK HAS NOT PASSED UPON OR ENDORSED THE MERITS OF THIS OFFERING. ANY

REPRESENTATION TO THE CONTRARY IS UNLAWFUL.

For Oregon Investors Only:

THESE SECURITIES HAVE NOT BEEN RECOMMENDED BY ANY STATE SECURITIES COMMISSION

OR REGULATORY AUTHORITY. FURTHERMORE, THE FOREGOING AUTHORITIES HAVE NOT

CONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY OF THIS MEMORANDUM. ANY

REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. THESE SECURITIES ARE SUBJECT

TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR

RESOLD, EXCEPT AS PERMITTED UNDER THE SECURITIES ACT PURSUANT TO REGISTRATION OR

EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY WILL BE REQUIRED TO

BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.

For Pennsylvania Investors Only:

EACH PERSON WHO ACCEPTS AN OFFER TO PURCHASE SECURITIES EXEMPTED FROM

REGISTRATION BY SECTION 203 (d), DIRECTLY FROM THE ISSUER OR AFFILIATE OF THIS ISSUER,

SHALL HAVE THE RIGHT TO WITHDRAW HIS ACCEPTANCE WITHOUT INCURRING ANY LIABILITY

TO THE SELLER, UNDERWRITER (IF ANY) OR ANY OTHER PERSON WITHIN TWO (2) BUSINESS

DAYS FROM THE DATE OF RECEIPT BY THE ISSUER OF HIS WRITTEN BINDING CONTRACT OF

PURCHASE OR, IN THE CASE OF A TRANSACTION IN WHICH THERE IS NO BINDING CONTRACT OF

PURCHASE, WITHIN TWO (2) BUSINESS DAYS AFTER HE MAKES THE INITIAL PAYMENT FOR THE

SECURITIES BEING OFFERED.

19

IF YOU HAVE ACCEPTED AN OFFER TO PURCHASE THESE SECURITIES MADE PURSUANT TO A

PROSPECTUS WHICH CONTAINS A NOTICE EXPLAINING YOUR RIGHT TO WITHDRAW YOUR

ACCEPTANCE PURSUANT TO SECTION 207 (m) OF THE PENNSYLVANIA SECURITIES ACT OF 1972

(70 P.S. § 1-207(m)), YOU MAY ELECT, WITHIN TWO (2) BUSINESS DAYS AFTER THE FIRST TIME YOU

HAVE RECEIVED THIS NOTICE AND A PROSPECTUS, TO WITHDRAW FROM YOUR PURCHASE

AGREEMENT AND RECEIVE A FULL REFUND OF ALL MONIES PAID BY YOU. YOUR WITHDRAWAL

WILL BE WITHOUT ANY FURTHER LIABILITY TO ANY PERSON.

TO ACCOMPLISH THIS WITHDRAWAL, YOU NEED ONLY SEND A LETTER OR TELEGRAM TO THE

ISSUER (OR UNDERWRITER IF ONE IS LISTED ON THE FRONT PAGE OF THE PROSPECTUS)

INDICATING YOUR INTENTION TO WITHDRAW. SUCH LETTER OR TELEGRAM SHOULD BE SENT

AND POSTMARKED PRIOR TO THE END OF THE AFOREMENTIONED SECOND BUSINESS DAY. IF

YOU ARE SENDING A LETTER, IT IS PRUDENT TO SEND IT BY CERTIFIED MAIL, RETURN RECEIPT

REQUESTED, TO ENSURE THAT IT IS RECEIVED AND ALSO EVIDENCE THE TIME WHEN IT WAS

MAILED. SHOULD YOU MAKE THIS REQUEST ORALLY, YOU SHOULD ASK WRITTEN

CONFIRMATION THAT YOUR REQUEST HAS BEEN RECEIVED.

For Texas Investors Only:

THE SECURITIES OFFERED HEREUNDER HAVE NOT BEEN REGISTERED UNDER APPLICABLE

TEXAS SECURITIES LAWS AND, THEREFORE, ANY PURCHASER THEREOF MUST BEAR THE

ECONOMIC RISK OF THE INVESTMENT FOR AN INDEFINITE PERIOD OF TIME BECAUSE THE

SECURITIES CANNOT BE RESOLD UNLESS THEY ARE SUBSEQUENTLY REGISTERED UNDER SUCH

SECURITIES LAWS OR AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE. FURTHER,

PURSUANT TO §109.13 UNDER THE TEXAS SECURITIES ACT, THE COMPANY IS REQUIRED TO

APPRISE PROSPECTIVE INVESTORS OF THE FOLLOWING: A LEGEND SHALL BE PLACED, UPON

ISSUANCE, ON CERTIFICATES REPRESENTING SECURITIES PURCHASED HEREUNDER, THE

TRANSFER AGENT FOR THE COMPANY SHALL BE ISSUED “STOP TRANSFER” INSTRUCTIONS WITH

RESPECT TO THE SECURITIES PURCHASED HEREUNDER, AND ANY PURCHASER HEREUNDER

SHALL BE REQUIRED TO SIGN A WRITTEN AGREEMENT THAT HE WILL NOT SELL THE SUBJECT

SECURITIES WITHOUT REGISTRATION UNDER APPLICABLE SECURITIES LAWS, OR EXEMPTIONS

THEREFROM.

All States:

THE PRESENCE OF A LEGEND FOR ANY GIVEN STATE REFLECTS ONLY THAT A LEGEND MAY BE

REQUIRED BY THE STATE AND SHOULD NOT BE CONSTRUED TO MEAN AN OFFER OR SALES MAY

BE MADE IN ANY PARTICULAR STATE. THIS MEMORANDUM MAY BE SUPPLEMENTED BY

ADDITIONAL STATE LEGENDS. IF YOU ARE UNCERTAIN AS TO WHETHER OR NOT OFFERS OR

SALES MAY BE LAWFULLY MADE IN ANY GIVEN STATE, YOU ARE ADVISED TO CONTACT THE

COMPANY FOR A CURRENT LIST OF STATES IN WHICH OFFERS OR SALES MAY BE LAWFULLY

MADE.

SUITABILITY INFORMATION

General Suitability Standards:

The Company is relying on certain Federal and State exemptions from the registration and qualification

provisions of the Act and applicable State securities laws in offering the Shares, including Regulation D

promulgated under the Act (“Registration D”). The Shares are being offered by the Company to a limited

number of persons subject to stringent standards of suitability pursuant to the foregoing exemptions. The

Company will offer and sell the Shares only to “Accredited Investors,” as that term is defined in Rule

501(a) promulgated under the Act.

20

The Shares offered hereby are suitable only for those “Accredited Investors”: (i) whose business and

investment experience makes them capable of evaluating the merits and risks of their prospective

investment in the Company; (ii) who can afford to bear the economic risks of their investment for an

indefinite period of time and do not have a need for liquidity in this investment; and (iii) who can afford

to assume the risk of receiving less than the anticipated return or a complete loss of their investment.

THESE STANDARDS REPRESENT MINIMUM REQUIREMENTS FOR PROSPECTIVE INVESTORS AND

DO NOT NECESSARILY MEAN THAT THESE SECURITIES ARE A SUITABLE INVESTMENT FOR ANY

INVESTOR MEETING THESE REQUIREMENTS. MOREOVER, THE COMPANY RESERVES THE RIGHT

TO MODIFY THE SUITABILITY STANDARDS ON A CASE-BY-CASE BASIS IN VIEW OF AN INVESTORS

FINANCIAL CIRCUMSTANCES OR INVESTMENT EXPERIENCE.

Each investor will be required to represent in writing that: (i) he or she is acquiring the Shares for his or

her own account, for investment and not for resale, distribution or on behalf of an undisclosed principal;

(ii) he or she is aware that the transfer of the Shares purchased through this Offering are restricted by

Federal and State securities laws and that a market does not exist for the Shares, except as may be

permitted under Rule 144(a); (c) he or she has such knowledge and experience in financial and business

matters that he or she is capable of evaluating the merits and risks of an investment in the Sharers; (iv) he

or she is financially capable of bearing the possible loss of his or her entire investment herein, can afford

to bear the economic risks of his or her investment for an indefinite period of time and does not have a

need for liquidity in this investment; (v) he or she has read this Memorandum and the related Exhibits and

in making his or her decision to purchase the Shares, all matters to this Memorandum and its Exhibits

have been discussed and explained to him or her to their satisfaction and he or she understands the highly

speculative nature of and the risks involved in the proposed investment; (vi) he or she is acquiring the

Shares without relying on any sales literature or information other than this Memorandum and the

Exhibits hereto; and (vii) he or she recognizes that the purchase of the Shares involves certain significant

risks, including, but not limited to; those set forth under the caption “Risk Factors” of this Memorandum.

In addition, each Qualified Investor will be required to represent in writing that such investor comes

within any of the following categories at the time of the sale of the Shares offered hereby:

(a) Any private business development company as defined in Section 202(a)(22) of

the Investment Advisors Act of 1940;

(b) Any organization described in Section 501(c)(3) of the Internal Revenue Code of

1986, as amended, corporation, Massachusetts or similar trust, or partnership, not

formed for the specific purpose of acquiring the securities offered, with total

assets in excess of $5,000,000;

(c) Any director or executive officer of the issuer of the securities being offered or

sold, or any director or executive officer of that issuer;

(d) Any natural person whose individual net worth, or joint net worth with that

person’s spouse, at the time of his or her purchase, exceeds $1,000,000;

(e) Any bank as defined in Section 3(a)(2) of the Act, or any savings and loan

association or other institution, as defined in Section 3(a)(5)(A) of the Act,

whether acting in its individual or fiduciary capacity; any broker or dealer

registered pursuant to Section 15 of the Securities and Exchange Act of 1934; an

insurance company, as defined in Section 2(13) of the Act; an investment

company registered under the Investment Company Act of 1940 or a business

development company, as defined in Section 2(a)(48) of that Act; a Small

Business Investment Company licensed by the United States Small Business

Administration under Section 301(c) or (d) of the Small Business Investment Act

of 1958; any plan established and maintained by a State, its political subdivisions

or any agency or instrumentality of a State or its political subdivisions for the

21

benefit of its employees, if such plan has total assets in excess of $5,000,000; or

an employee benefit plan within the meaning of Title I of the Employee

Retirement Income Security Act of 1974, if the investment decision is made by a

plan fiduciary, as defined in Section 3(21) of that Act, which is either a bank,

savings and loan association, insurance company, or registered investment

advisor, or if the employee benefit plan has total assets in excess of $5,000,000

or, if a self-directed plan, with investment decisions made solely by persons that

are accredited investors:

(f) Any natural person who had an individual income in excess of $200,000 in each

of the two most recent years or joint income with that person’s spouse in excess

of $300,000 in each of those years and has a reasonable expectation of reaching

the same income level in the current year;

(g) Any trust, with total assets in excess of $5,000,000, not formed for the specific

purpose of acquiring the Shares offered, whose purchase is directed by a

sophisticated person who has such knowledge and experience in financial and

business matters that he or she is capable of evaluating the merits and risks of the

prospective investment; and

(h) Any entity in which all of the equity owners are accredited investors under

subdivisions (a) - (g) of this paragraph.

IN ADDITION, EACH INVESTOR WILL FURTHERMORE BE REQUIRED TO REPRESENT AND

WARRANT IN WRITING TO THE COMPANY THAT:

(1) He or she recognizes that the purchase of the Shares involves certain risks,

including, but not limited to; those set forth under the caption “Risk Factors” of

this Memorandum.

(2) He or she is relying upon his or her own business judgment and financial

experience or that of a qualified Purchaser Representative, as defined below.

(3) He or she has read this Memorandum and the related Exhibits when making his

or her decision to purchase the Shares. All matters relating to the Memorandum

and its Exhibits have been discussed and explained to him or her to their

satisfaction and he or she understands the speculative nature of and the risks

involved in the proposed investment. He or she is acquiring the Shares

purchased by him or her without relying on any sales literature or information

other than this Memorandum and the Exhibits hereto.

Use of a Purchaser Representative:

Prior to purchase, any offeree who does not have the requisite knowledge or experience to be capable of

evaluating the merits and risks of an investment in the Company will be required to represent that he or

she has relied upon a “Purchaser Representative.”

The Company will evaluate the qualifications of each proposed Purchaser Representative and will notify

the prospective investor if such person is not acceptable as a Purchaser Representative. In order for a

person to qualify as a Purchaser Representative, the Company must believe and have reasonable grounds

to believe, that such person satisfies all of the following criteria; (a) such person is not affiliated with the

Company or its officers and directors, or other employees of the Company, or the beneficial owner of ten

percent (10%) or more of any class of the equity securities or ten percent (10%) or more of the equity

interest in the issuer (unless such person is also; (1) related to the offeree by blood, marriage or adoption,

no more remote than as first cousins;

22

(2) a trust or estate in which the Purchaser Representative and any person related to him or her, as

specified in subdivision (a)(1) of this paragraph or paragraph (h)(1)(ii) of Rule 501 under Regulation D,

collectively have more than fifty percent (50%) of the beneficial interest (excluding contingent interest),

or of which the Purchaser Representative serves as trustee, executor, or in any similar capacity; or (3) a

corporation or other organization of which the Purchaser Representative and any persons related to him or

her as specified in subdivision (a)(1) of this paragraph or paragraph (h)(1)(ii) of Rule 501 under

Regulation D, collectively are the beneficial owners of more than fifty percent (50%) of the equity

securities (excluding directors, qualifying shares or equity interests); (b) such person has such knowledge

and experience in financial and business matters that he or she, either alone or together with other

Purchaser Representatives of the offeree, is capable of evaluating the merits and risks of the prospective

investment; (c) such person is acknowledged by the investor, in writing during the course of the

transaction, to be his or her Purchaser Representative in connection with evaluating the merits and risks of

the prospective investment in the Company; and (d) such person discloses to the investor, in writing, prior

to the acknowledgment specified in subdivision (c) of this paragraph, any material relationship between

such person or his or her affiliates and the Company or its affiliates, which then exists or is mutually

understood to be contemplated or which has existed at any time during the previous two years and any

compensation received or to be received as a result of such relationship.

If any representation made by an offeree or other person acting on his or her behalf, misleads the

Company as to the financial or other circumstances of a particular offeree, or if, because of any error or

misunderstanding as to such circumstances, a copy of this Memorandum is delivered to such offeree, the

delivery of such copy of the Memorandum shall not be deemed to be an offer and such Memorandum

must be immediately returned to the Company.

THESE SECURITIES HAVE BEEN ACQUIRED PURSUANT TO INVESTMENT

REPRESENTATIONS BY THE HOLDER AND SHALL NOT BE SOLD, PLEDGED,

HYPOTHECATED OR DONATED OR OTHERWISE TRANSFERRED, EXCEPT UPON

THE ISSUANCE TO PROPHETIC OIL INC. A FAVORABLE OPINION OF COUNSEL

AND THE SUBMISSION TO THE COMPANY OF OTHER EVIDENCE,

SATISFACTORY TO IT AND AS REQUIRED BY COUNSEL TO THE COMPANY,

THAT ANY SUCH TRANSFER WILL NOT VIOLATE THE SECURITIES ACT OF 1933,

AS AMENDED AND APPLICABLE STATE SECURITIES LAWS.

The Subscription Agreement that accompanies this Memorandum are designed to elicit information

necessary to enable the Company and Participating Broker-Dealers, if any, to determine the suitability of

a prospective investor and to assure that the Offering complies with the applicable Federal and State

securities laws. The information supplied in those documents will be reviewed to determine the suitability

of prospective investors. The Company and Participating Broker-Dealers, if any, will have the right to

refuse any subscription, if in its discretion it believes that the prospective investor does not meet the

applicable suitability standards or that the Shares are otherwise unsuitable as an investment for the

prospective investor.

This document contains “forward looking statements” within the meaning of Section 27A of the

Securities Act of 1933, as amended and Section 21B of the Securities Exchange Act of 1934. Any

statements that express or involve discussions with respect to predictions, expectations, beliefs,

plans, projections, objectives, goals, assumptions or future events of performance are not

statements of historical fact and may be “forward looking statements”. “Forward looking

statements” are based on expectations, estimates and projections at the time the statements are

made that involve a number of risks and uncertainties that could cause actual results or events to

differ materially from those presently anticipated.

23


SUITE #136

ALLEN, TEXAS 75002

(214) 585-0524


EXHIBIT "A"

SUBSCRIPTION AGREEMENT

IMPORTANT -- PLEASE READ CAREFULLY AND COMPLETLY BEFORE SIGNING.

SIGNIFICANT PURCHASER REPRESENTATIONS ARE REQUIRED HEREIN. THE SECURITIES REFERRED TO HEREIN HAVE NOT BEEN REGISTERED UNDER THE

SECURITIES ACT OF 1933 OR QUALIFIED UNDER ANY STATE SECURITIES LAWS IN RELIANCE

UPON EXEMPTIONS THEREFROM. THE SECURITIES MAY BE ACQUIRED FOR INVESTMENT

PURPOSES ONLY AND NOT WITH A VIEW TO DISTRIBUTION OR RESALE AND MAY NOT BE

SOLD, MORTGAGED, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED OR

OFFERED TO BE SO TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT

FOR SUCH SECURITIES UNDER THE SECURITIES ACT OF 1933 AND QUALIFICATION UNDER

APPLICABLE STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL SATISFACTORY TO THE

COMPANY THAT SUCH TRANSACTION SHALL NOT VIOLATE ANY FEDERAL OR STATE

SECURITIES LAWS.

The undersigned desires to become a holder of the Common Shares, $0.00001 par value per share, of

Prophetic Oil Inc., (the “Company”) pursuant to the Company’s Confidential Private Placement

Memorandum (the “Offering”) dated August 1, 2013, upon the terms and conditions set forth below:

1. Subscription. The undersigned hereby agrees to contribute to the capital of the Company the sum of

$_______________ representing the purchase price of ___________ Common Shares at a price of $1.50

per Share. A check payable to the order of “Prophetic Oil Inc. ” in full payment of the purchase price of

the Shares is delivered herewith. A minimum purchase of four thousand (4,000) Shares ($6,000.00) is

required. An investor may subscribe to additional Shares.

2. Representations and Warranties. The undersigned hereby represents and warrants to and agrees

with the Company as follows:

(a) The Shares are being purchased for his own account, for investment purposes only and

not for the account of any other person and not with a view to distribution, assignment or

resale to others or to fractionalization in whole or in part and that the offering and sale of

the Shares is intended to be exempt from registration under the Securities Act of 1933

(the “Act”) by virtue of Section 4(2) of the Act and the provisions of Regulation D

promulgated thereunder (“Regulation D”). In furtherance thereof, the undersigned

represents, warrants, and agrees as follows: (i) no other person has or will have a direct or

indirect beneficial interest in such Shares and the undersigned will not sell, hypothecate

or otherwise transfer his Shares except in accordance with the Act and applicable state

securities laws or unless, in the opinion of counsel for the Company, an exemption from

the registration requirements of the Act and such laws is available; and (ii) the Company

is under no obligation to register the Shares on behalf of the undersigned or to assist him

in complying with any exemption from registration.

24

(b) The undersigned has been furnished with and has carefully read the Offering. In

evaluating the suitability of an investment in the Company, the undersigned has not relied

upon any representations or other information (whether oral or written) from the

Company, the Sales Agent or any of its agents other than as set forth in the Offering and

no oral or written representations have been made or oral or written information

furnished to the undersigned or his advisors, if any, in connection with the offering of the

Shares which were in any way inconsistent with the Offering.

(c) The Company has made available to the undersigned all documents and information that

the undersigned has requested relating to an investment in the Company.

(d) The undersigned recognizes that the Company has a limited financial and operating

history and that an investment in the Company involves substantial risks and he has taken

full cognizance of and understands all of the risk factors related to the purchase of Shares,

including, but not limited to, those set forth under the caption “Risk Factors” in the

Offering.

(e) The undersigned has carefully considered and has, to the extent he believes such

discussion necessary, discussed with his professional legal, tax and financial advisers the

suitability of an investment in the Company for his particular tax and financial situation

and he has determined that the Shares are a suitable investment for him.

(f) All information which the undersigned has provided to the Company concerning himself

and his financial position is correct and complete as of the date set forth below and if

there should be any change in such information prior to his acceptance as a shareholder

of the Company, he will immediately provide such information to the Company and will

promptly send confirmation of such information to the Company.

(g) If this Subscription Agreement is executed and delivered on behalf of a partnership,

corporation, trust or estate, (i) the undersigned has been duly authorized and is duly

qualified (a) to execute and deliver this Subscription Agreement and all other instruments

executed and delivered on behalf of such partnership, corporation, trust or estate in

connection with the purchase of the Shares and (b) to purchase and hold Shares and (ii)

the signature of the undersigned is binding upon such partnership, corporation, trust or

estate, and (iii) such entity has not been formed for the specific purpose of acquiring

Shares.

3. Investor Information.

(a) Name: _______________________________________________________________________

Taxpayer Identification or Social Security Number: ____________________________________

(b) Address: _______________________________________________________________________

________________________________________________ Zip Code: _____________________

Telephone Number: _____________________________________________________________

25

(c) Title to the Shares shall be taken as follows (circle one):

(i) Individual or separate property;

(ii) Husband and wife, as community property;

(iii) Joint Tenancy with right of survivorship;

(iv) Tenants in Common;

(v) Other (e.g., corporation, partnership, custodian, trustee, etc.):

4. Understandings. The undersigned understands, acknowledges and agrees with the Company as

follows:

(a) This Subscription may be rejected, in whole or in part, by the Company in its sole

discretion, at any time prior to the Closing Date, notwithstanding prior receipt by the

undersigned of notice of acceptance of the undersigned’s subscription.

(b) This Subscription is and shall be irrevocable, except that the undersigned shall have no

obligations hereunder in the event that (i) this Subscription is rejected for any reason or

(ii) the purchase and sale of Shares is not consummated by the Closing Date.

(c) No federal or state agency has made any finding or determination as to the fairness of this

offering for investment, nor any recommendation or endorsement of the Shares.

(d) There can be no assurance as to the federal or state tax results of an investment in the

Shares.

(e) The undersigned acknowledges that the information contained in the Offering is

confidential and non-public and agrees that all such information shall be kept in

confidence by him and neither used by him to his personal benefit (other than in

connection with his subscription for Shares) nor disclosed to any third party for any

reason; provided that this obligation shall not apply to any such information which (i) is

part of the public knowledge or literature and readily accessible at the date hereof; (ii)

becomes part of the public knowledge or literature and readily accessible by publication

(except as a result of a breach of these provisions); or (iii) is received from third parties

(except third parties who disclose such information in violation of any confidentiality

agreements including, without limitation, any Subscription Agreement they may have

with the Company).

(f) The undersigned’s commitment to investments that are not readily marketable is not

disproportionate to his net worth and will not become so after purchasing the Shares and

the undersigned has such knowledge and experience in financial and business matters that

he is capable of evaluating the merits and risks of an investment in the Company and of

making an informed investment decision.

26

5. Miscellaneous.

(a) All pronouns and any variations thereof used herein shall be deemed to refer to the

masculine, feminine, singular or plural as the identity of the person or persons may

require.

(b) Neither this Subscription Agreement, nor any provisions hereof shall be waived,

modified, changed, discharged, terminated, revoked or canceled except by an instrument

in writing signed by the party against whom any change, discharge or termination is

sought.

(c) Notices required or permitted to be given hereunder shall be in writing and shall be

deemed to be sufficiently given when personally delivered or sent by registered mail,

return receipt requested, addressed to the other party at the address of such party set forth

in the Offering, as amended from time to time, or to such other address furnished by

notice given in accordance with this Section 5.

(d) This Subscription Agreement and the Offering constitute the entire agreement among the

parties hereto with respect to the subject matter hereof and supersede any and all prior or

contemporaneous representations, warranties, agreements and understandings in

connection therewith. This Agreement may be amended only in writing executed by all

parties hereto.

IN WITNESS WHEREOF, the undersigned has executed this Subscription Agreement on this

______day of ___________________, 2013.

_____________________________________________

Name of Purchaser

____________________________________________

Signature of Purchaser

_____________________________________________

Title of Authorized Signatory if Purchaser is a

corporation, partnership or other entity.

_____________________________________________

Name of Co-Purchaser (if applicable)

_____________________________________________

Signature of Co-Purchaser

27


SUITE #136

ALLEN, TEXAS 75002

(214) 585-0524


FOR ALL SUBSCRIBERS, PLEASE COMPLETE

Accredited Investor Status. Please answer by marking the appropriate item below.

(i) Did your individual annual income during each of the last two years exceed $200,000 and do you

expect your annual income during the current year to exceed $200,000, or did your joint annual income

(together with your spouse) during each of the last two years exceed $300,000 and do you expect your

joint annual income during the current year to exceed $300,000?

Yes _____ No

(ii) Does your individual or joint (together with your spouse) net worth, exclusive of your primary

residence, exceed $1,000,000?

Yes _____ No

(iii) If you are an organization, do you otherwise satisfy the requirements of being an accredited

investor as stated above except having net worth of at least $5,000,000?

Yes _____ No

Investor Suitability Information. Please supply as much information as possible to confirm you are a

sophisticated experienced business person, investor or on your own or through your purchaser advisor, if

true.

Occupation/Profession: ___________________________________________________

Business: ______________________________________________________________

Do you have sufficient knowledge and experience in financial and business matters so as to be capable of

evaluating the merits and risks associated with investing in the Company?

_____

Yes No

Please briefly describe the basis of your knowledge and experience:

_____________________________________________________________________________________

_____________________________________________________________________________________

Return this page with your subscription agreement

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