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): June 6, 2014
JA ENERGY
(Exact name of registrant as specified in its charter)
Commission File Number: 0-54236
| Nevada | 27-3349143 | |
| (State or other jurisdiction of | (IRS Employer | |
| incorporation) | Identification No.) |
| 10010 Alta Drive, Suite 115, Las Vegas, NV | 89145 | |
| (Address of principal executive offices) | (Zip Code) |
(702) 629-5154
(Registrant’s telephone number, including area code)
Not Applicable
(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:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Item 1.01 Entry into a Material Definitive Agreement.
On June 6, 2014, at a meeting of the Board of Directors (the "Board") of JA Energy, Inc. (“JA Energy” or “the Company”) a Settlement Agreement with Mr. Mark DeStefano was ratified and approved.
Under the terms and conditions of the Settlement Agreement, Mr. DeStefano agrees not to foreclose on his Note and take the pending patents from the Company, which were used as collateral to secure his $20,000 Note to the Company. H e further agrees to forgive the $20,000 Note, its interest and the interest only on the $50,000 Note in exchange for 1,000,000 Preferred Voting Stock, that are designated where each Voting Preferred share carries the voting power of fifty (50) common shares. In return, JA Energy agrees to file Articles of Designation for the Preferred Voting Shares with the Nevada Secretary of State and agrees to issue 1,000,000 Preferred Voting Stock to Mr. DeStefano.
The Settlement Agreement further stipulates that Mr. DeStefano agrees to return the 1,000,000 Preferred Voting Stock to JA Energy for cancellation, upon payment-in-full of his $50,000 Note, without interest, and the sale and delivery of five (5) Units of both the Modular Distillation Unit ("MDU") and the Electrical Generation System, Method of Producing Electrical Energy, And Manufacturing An Electrical Generation System ("MEG"). The MDU and MEG are two products that have been under development by the Company.
Item 3.02 Unregistered Sales of Equity Securities
As of June 6, 2014, in connection with the Settlement Agreement, JA Energy agreed to issue 1,000,000 unregistered restricted Preferred Voting Stock, which carries a voting weight equal to fifty (50) Common Shares to Mark DeStefano in exchange the forgiveness of his $20,000 Note and Interest, the Interest on his $50,000 Note to the Company, and he agreed not to foreclose on the Company's pending patents, which were used as collateral to secure his $20,000 Note to the Company.
Before Mr. DeStefano received the 1,000,000 unregistered Preferred Voting Stock, he was known to JA Energy and its management, through long-term pre-existing business relationship. JA Energy did not engage in any form of general solicitation or general advertising in connection with this transactions. The shareholder was provided access to all material information, which they requested and all information necessary to verify such information and was afforded access to our management in connection with this transaction. Mr. DeStefano acquired these securities for investment and not with a view toward distribution, acknowledging such intent to us. He understood the ramifications of his actions. The shares of Preferred Voting Stock issued contained a legend restricting transferability absent registration or applicable exemption.
JA Energy relied upon Section 4(2) of the Securities Act for the offer and sale. JA Energy believed that Section 4(2) was available because the offer and sale did not involve a public offering and there was not general solicitation or general advertising involved in the offer or sale.
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Item 5.01. Changes in Control of Registrant.
In connection with the Settlement Agreement, described in Section 1.01 of this Current Report on Form 8-K, JA Energy on June 9, 2014 issued 1,000,000 unregistered restricted Preferred Voting Stock, which carries a voting weight equal to fifty (50) Common Shares from its treasury to Mark DeStefano. As a result, Mr. DeStefano will have the voting power of approximately 53.5% of the JA Energy's stock immediately following the transfer of the Preferred Voting Stock.
Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.
On June 6, 2014, upon Board approval, JA Energy filed Articles of Designation with the Nevada Secretary of State. The Articles of Designation create a class of Preferred Voting Stock, par value $0.001. Two Million (2,000,000) Preferred Voting Stock were authorized. The Preferred Voting Stock carry a voting weight equal to fifty (50) Common Shares. The shares of the Preferred Voting Stock are not redeemable and cannot be converted into Common Shares, unless it is approved by the Board of Directors and agreed upon by the Preferred Voting Shareholders.
The Company’s Articles of Designation is attached hereto as Exhibit 3.3 and is incorporated herein by reference.
ITEM 9.01 - FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(d) Exhibits:
| Incorporated by reference | ||||||
| Exhibit | Exhibit Description | Filed herewith | Form | Period Ending | Exhibit | Filing Date |
| 3.3 | Articles of Designation of Preferred Voting Stock, filed June 6, 2014 | X | ||||
| 10.1 |
Settlement Agreement between JA Energy and Mark DeStefano, dated June 6, 2014 |
X | ||||
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SIGNATURES
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.
| JA Energy | |
| Registrant | |
| Date: June 9, 2014 | By:/s/ Barry Hall |
|
Barry Hall
Director/CFO |
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Exhibit 3.3
ARTICLES OF DESIGNATION
of
PREFERRED VOTING STOCK
of
JA Energy
Pursuant to Section 78.195 of the
Revised Statutes of the State of Nevada
JA Energy, a corporation organized and existing under the laws of the State of Nevada (the “Corporation”), does hereby certify that, pursuant to the authority conferred on its board of directors (the “Board of Directors”) by its articles of incorporation (the “Articles of Incorporation”), as amended, and in accordance with Section 78.195 of the Revised Statutes of the State of Nevada (“NRS”), the Board of Directors (or, as to certain matters allowed by law, a duly authorized committee thereof) adopted the following resolution establishing a series of 2,000,000 shares of Preferred Stock of the Corporation designated as “Preferred Voting Stock.”
RESOLVED, that pursuant to the authority conferred on the Board of Directors of this Corporation (the “Corporation”) by the Articles of Incorporation, a series of Preferred Stock, $0.001 par value, of the Corporation be and hereby is established and created, and that the designation and number of shares thereof and the voting and other powers, preferences and relative, participating, optional or other rights of the shares of such series and the qualifications, limitations and restrictions thereof are as follows:
Preferred Stock
1. Designation and Amount . There shall be a series of Preferred Stock designated as “Preferred Voting Stock,” and the number of shares constituting such Series shall be 2,000,000. Such series is referred to herein as the “Preferred Stock.”
2. Stated Capital . The amount to be represented in stated capital at all times for each share of Preferred Stock shall be $0.001.
3. Rank . All shares of Preferred Voting Stock shall rank superior with all of the Corporation’s Common Stock, par value $0.001 per share (the “Common Stock”), now or hereafter issued, as to distributions of assets upon liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary, including the payment of dividends.
4. Dividends . No dividend shall be declared or paid on the Preferred Stock.
5. No Liquidation Preference . In the event of any voluntary or involuntary liquidation, dissolution, or winding-up of the Corporation, the Preferred Voting Shares shall have a priority on liquidation superior to that of the other Preferred Stock. The Preferred Voting Shareholders will be entitled to preferential amounts paid in to the Corporation and be paid in full, for funds paid for the Preferred Voting Shares, if sufficient funds exist . The holders of shares of other series of Preferred Stock shall be entitled to participate with the Common Stock in all of the remaining assets of the Corporation available for distribution to its stockholders, ratably with the holders of Common Stock in proportion to the number of shares of Common Stock held by them, assuming for each holder of Preferred Stock on the record date for such distribution that each holder was the holder of record of the number (including any fraction) of shares of Common Stock into which the shares of Preferred Stock then held by such holder are then convertible. A liquidation, dissolution, or winding-up of the Corporation, as such terms are used in this Section 5, shall not be deemed to be occasioned by or to include any merger of the Corporation with or into one or more corporations or other entities, any acquisition or exchange of the outstanding shares of one or more classes or series of the Corporation, or any sale, lease, exchange, or other disposition of all or a part of the assets of the Corporation.
6. Voting Rights . Except as otherwise required by law, each Preferred Voting Share shall have voting rights and shall carry a voting weight equal to fifty (50) Common Shares. Except as otherwise required by law or by these Articles, the holders of shares of Common Stock and Preferred Stock shall vote together.
7. No Redemption . The shares of Preferred Stock are not redeemable, unless approved by the Board of Directors and agreed upon by the Preferred Voting Shareholders.
8. Conversion Provisions . Each Preferred Voting Share cannot be converted into Common Shares, unless it is approved by the Board of Directors and agreed upon by the Preferred Voting Shareholders.
9. Outstanding Shares . For purposes of these Articles of Designation, all shares of Preferred Stock shall be deemed outstanding except (i) from the date of surrender of certificates representing shares of Preferred Stock, all shares of Preferred Stock converted into Common Stock; and (ii) from the date of registration of transfer, all shares of Preferred Stock held of record by the Corporation or any subsidiary of the Corporation.
10. The Securities Act of 1933
(a) Securities Not Registered . The shares of Preferred Voting Stock have not been registered under the Securities Act of 1933 or the laws of any state of the United States and may not be transferred without such registration or an exemption from registration.
(b) Restrictive Legends . Each share of Preferred Voting Stock, shall be stamped or otherwise imprinted with a legend in substantially the following form:
“The securities represented hereby have not been registered under the Securities Act of 1933. Such securities may not be sold or transferred in the absence of such registration or an exemption therefrom under said Act.”
11. Severability of Provisions . Whenever possible, each provision hereof shall be interpreted in a manner as to be effective and valid under applicable law, but if any provision hereof is held to be prohibited by or invalid under applicable law, such provision shall be ineffective only the extent of such prohibition or invalidity, without invalidating or otherwise adversely affecting the remaining provisions hereof. If a court of competent jurisdiction should determine that a provision hereof would be valid or enforceable if a period of time were extended or shortened or a particular percentage were increased or decreased, then such court may make such change as shall be necessary to render the provision in question effective and valid under applicable law.
IN WITNESS WHEREOF, JA Energy has caused this certificate to be signed by its Chief Financial Officer, as of the 6th day of June, 2014.
JA Energy
By: /s/ Barry Hall
Barry Hall
Principal Financial Officer
Exhibit 10.1
SETTLEMENT AGREEMENT
This Settlement Agreement ("Agreement") has been entered into between, JA Energy, a Nevada corporation and Mark DeStefano (hereinafter “Mr. DeStefano ”) The foregoing are sometimes referred to collectively as the "Parties" and individually as a "Party."
RECITALS
On or about April 4, 2014 and May 5, 2014, Mr. DeStefano loaned $50,000 and $20,000 respectfully to JA Energy, a Nevada Corporation. The $20,000 loan was earmarked to pay certain patent filing fees on behalf of the Company. Mr. DeStefano received a Collateral Pledge Agreement against the loan, whereby the pending patents would be issued to him upon default of the Note. The Note is now is default and Parties want to resolve the transfer of pending patents by entering into this Settlement Agreement.
The Parties have agreed to resolve the Action under the terms of this Agreement rather than litigate the Action. In doing so, the Parties agree to settle their claims in accordance with the terms and conditions detailed herein.
AGREEMENT
NOW THEREFORE , in consideration of the mutual covenants, agreements and releases contained in this Agreement, the Parties agree as follows:
I. NO ADMISSIONS
Each Party understands, acknowledges and agrees that the negotiation, execution, and performance of this Agreement shall not constitute, or be construed as, an admission of any liability or wrongdoing on the part of any Party.
II. PROPOSED ACTION
In order to stop the transfer of the JA Energy's the pending patents, pursuant to the terms of Collateral Pledge Agreement, which include Modular Electric Generator (MEG), Patent Application No. 61/909,919, Ref. No. 0348730-PROV3 the Modular Distillation Unit and Ethanol Separating Apparatus, assigned serial number 14/272,358 to Mr. DeStefano, , the Parties agree to the following:
1. Mr. DeStefano agrees not to foreclose on his Note and take the pending patents from the Company, he further agrees to forgive the $20,000 Note, its interest and the interest only on the $50,000 Note in exchange for 1,000,000 Preferred Voting Stock, that are designated where each Voting Preferred share carries the voting power of fifty (50) common shares. Note: in no way, does the giving up of the interest on the $50,000 Note infringe on the Proxy that James Lusk coupled with the $50,000 Note to the Company. Mr. DeStefano will maintain the voting proxy of Mr. James Lusk, until the $50,000 Note is paid in full by either JA Energy or James Lusk.
2. JA Energy agrees to file Articles of Designation for the Preferred Voting Stock with the Nevada Secretary of State.
3. JA Energy agrees to issue 1,000,000 Preferred Voting Stock to Mr. DeStefano.
4. Mr. DeStefano agrees to return the 1,000,000 Preferred Voting Stock to JA Energy for cancellation, upon payment-in-full of his $50,000 Note, without interest and the sale and delivery of five (5) units of both the MDU and MEG.
In consideration of JA Energy's agreement to the above actions, Mr. DeStefano releases JA Energy from transferring the patents to him, as required in the Collateral Pledge Agreement.
III. COSTS AND FEES
Except as to the mediation costs, and consistent with the other provisions of the Agreement, each Party agrees to bear and pay such Party's own costs, attorneys' fees, and consultants’ and experts’ fees, if any, incurred in connection with the Action, the Mediation, and the negotiation of this Agreement and all claims released in this Agreement.
IV. INTERPRETATION, CONSTRUCTION, SEVERABILITY,
THIRD PARTY RIGHTS AND WAIVER
A. No Prejudice. Nothing in this Agreement is intended to waive or prejudice any claims or defenses of any Party in any subsequent litigation between the Parties, except as provided herein, and may not be used as evidence for or against either Party except in the case of an action or proceeding relating to:
1. The specific enforcement of its provisions, including any action relating to breach of the Agreement or pursuant to Section V
B. Interpretation, construction and severability. If any provision of this Agreement requires interpretation or construction, the Parties agree that this Agreement will be interpreted or construed without any presumption that the provisions of this Agreement are to be strictly construed against the Party which itself, or through its agents, prepared the Agreement; it being agreed that the Parties and their respective counsel, if any, and other agents have fully and equally participated in the preparation, negotiation, review and approval of all provisions of this Agreement. If any provision in this Agreement is held to be invalid or unenforceable on any occasion or in any circumstance, such holding shall not be deemed to render the Agreement invalid or unenforceable, and to that extent the provisions of this Agreement are severable; provided, however, that this provision shall not preclude a court of competent jurisdiction from refusing to sever any provision if severance would be inequitable to one or more of the Parties.
C. Third-Party Rights Not Created. Nothing in this Agreement is intended to create any substantive, procedural or other rights in or benefits for any person not a party to this Agreement. This includes any right to sue for enforcement based upon any claim as a third-party beneficiary.
D. No Waiver. This Agreement does not waive any applicable statutory or administrative prerequisites to challenging any agency final decision.
V. GOVERNING LAW, DISPUTE RESOLUTION
The Parties agree that this Agreement will be construed and enforced in accordance with the laws of the United States and the State of Nevada. If any dispute arises between the Parties arising out of, or relating to this Agreement or the interpretation or enforcement thereof, or a dispute dealing with the enforcement or implementation of this Agreement ("Dispute"), the Parties agree that they will first attempt to resolve the Dispute through direct negotiations. If such efforts to resolve the Dispute through negotiations fail, the Parties agree to mediate the Dispute with the Parties sharing the mediation costs equally. The Parties will jointly select a mediator. If a Party refuses to participate or the mediation does not produce a prompt resolution, the Dispute will be resolved in the Nevada court system.
VI. CONFIDENTIALITY .
It is specifically agreed between the parties hereto that the terms of this Agreement are confidential, and shall not be recorded made public, or otherwise disclosed to any third person, during or after the parties’ dispute, except as is necessary between the parties and their respective attorneys or in response to a subpoena or court order.
VII. EXECUTION
A. Counterparts. This Agreement may be executed in two or more counterparts, all of which shall, upon execution and delivery of identical counterparts by all Parties, comprise a single agreement. The Parties will accept facsimile signatures as original signatures. Each Party will promptly provide the other Parties with original signatures after execution.
B. When Binding. The Parties recognize that decisions whether to execute this Agreement are made individually by the Parties. As a result, this Agreement will be binding on the Parties when signed by all of their representatives as delineated below.
Executed this 6th day of June, 2014.
JA Energy
/s/ Barry Hall
___________________________
Barry Hall
Director/CFO
/s/ Mark DeStefano
___________________________
Mark DeStefano