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EX-99 - DEBENTURE - Jayhawk Energy, Inc. | jayhawkenergyconvertibledebe.htm |
EX-99 - SPA - Jayhawk Energy, Inc. | jayhawksecuritiespurchaseagr.htm |
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 3, 2014
Commission File Number: 000-53311
Jayhawk Energy, Inc.
(Exact name of registrant as specified in its charter)
Colorado (State or other jurisdiction of incorporation or organization) | 20-0990109 (I.R.S. Employer Identification No.) |
611 E. Sherman Avenue, Coeur dAlene, ID 83814
(Address of principal executive offices) (Zip Code)
208-667-1328
(Registrants Telephone Number, Including Area Code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 1.01 Material Definitive Agreements and Item 2.03 Creation of a Direct Financial Obligation
On June 3, 2014, the Registrant (the Company or JayHawk) entered into Securities Purchase Agreements with an institutional investor and Lindsay E. Gorrill, an officer and director of the Company (each an Investor and together the Investors), wherein the Company agreed to sell and the Investors agreed to each purchase $200,000 of Secured Convertible Debentures (the Debentures). The Debentures are due sixty (60) months from the date of closing (the Securities Purchase Agreement, and Debentures collectively constitute the Offering). The Debentures are secured by a security agreement granting the Investors a security interest in and to all of the Companys assets located in the State of Kansas. At closing, the Company will also enter into a Stock Pledge Agreement pledging to each Investor, as additional security, all of the Companys right, title and interest in and to the capital stock of JayHawk Gas Transportion Corporation (a wholly owned subsidiary of the Company and the owner of the Companys gas transmission pipeline in Kansas).
Additionally, each Investor will receive: 1) a Wastewater Disposal Fee; and 2) a Royalty Interest.
Wastewater Disposal Fee: the Company agrees to pay each Investor a per barrel fee (the Disposal Fee) for each barrel of wastewater, which emanates from the Companys five (5) currently producing, as of the original issue date of the Debentures, oil wells located in North Dakota, which is disposed of in the Companys proposed wastewater disposal well to be located in North Dakota (the Disposal Well). For a period commencing on the original issue date of the Debentures and continuing for five (5) years or until the Debenture is repaid by the Company, whichever is sooner, the Disposal Fee will be equal to one and no/100 dollars ($1.00) per barrel of wastewater disposed of in the Disposal Well. After year five and continuing until each respective Debenture repaid by the Company the Disposal Fee shall be equal to fifty cents ($.50) per barrel of wastewater, emanating from the Companys 5 currently producing, as of the date the Debenture is issued, oil wells located in North Dakota, disposed of in the Disposal Well.
Royalty Interest: beginning on the original issue date of the Debentures and continuing thereafter so long as the Company owns the subject wells, the Company agrees to pay each Investor a one percent (1%) overriding royalty interest, calculated monthly, on all proceeds received by the Company from sales of crude oil produced from the Companys five (5) currently, as of the date the Debentures are issued, producing oild wells located in North Dakota.
The Debentures are convertible at any time after the original issue date into a number of shares of the registrants common stock, determined by dividing the amount to be converted by a conversion price of $0.01 per share, or an aggregate of 40,000,000 shares.
The securities were issued by the Company in reliance upon Section 4(2) of the Securities Act of 1933 and Rule 506 of Regulation D. The proceeds received may be used as general working capital.
Item 9.01 Financial Statements and Exhibits
Exhibits
99.01 Form Securities Purchase Agreement
99.02 Form of Secured Convertible Debenture
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 thereunto duly authorized.
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Date: June 3, 2014 | By: | /s/ Kelly J. Stopher |
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| Name: Kelly J. Stopher Title: President, CEO and CFO |
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