Item 1.01 Entry into a Material Definitive Agreement.
On January 25, 2022, Daybreak Oil and Gas, Inc. (OCT PINK:DBRM), a Washington
corporation ("Daybreak" or the "Company"), obtained the approval of a majority
of the outstanding shares of the Company's Series A Preferred shares to convert
each Series A Preferred share to three (3) shares of Daybreak's common stock,
par value $0.001. The accrued and unpaid dividends of $2,449,979 with respect to
the Series A Preferred Stock (the "Series A Conversion") will also be converted
into 1,100,000 shares of common stock.
As previously disclosed, the Series A Conversion was undertaken in connection
with the Equity Exchange Agreement (the "Exchange Agreement") dated as of
October 20, 2021 by and between Daybreak, Reabold California LLC, a California
limited liability company ("Reabold"), and Gaelic Resources Ltd., a private
company incorporated in the Isle of Man and the 100% owner of Reabold
("Gaelic"), pursuant to which the parties propose for (i) Gaelic to irrevocably
assign and transfer all of its ownership interests in Reabold to Daybreak, and
(ii) Daybreak to issue approximately 160,964,489 shares of its common stock to
Gaelic (the "Daybreak Shares"), which, will result in Reabold becoming a
wholly-owned subsidiary of Daybreak named "Daybreak, LLC" and Gaelic becoming
the owner of Daybreak Shares (the foregoing transaction, the "Equity Exchange").
The Series A Conversion was voted on by holders of the Series A Preferred shares
as of November 30, 2021, to be effective as of that date. Pursuant to the Series
A Conversion, a total of 709,568 Series A Preferred shares of the Company plus
accrued and unpaid dividends converted into a total of 3,228,704 shares of
Daybreak common stock.
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Item 3.02 Unregistered Sales of Equity Securities.
The information in Item 1.01 is incorporated by reference herein. The shares of
common stock to be issued pursuant to the Series A Conversion will be issued in
reliance upon exemptions pursuant to Section 3(a)(9) under the Securities Act of
1933, as amended, and pursuant to applicable state securities laws and
regulations, in that the shares of common were issued by the Company to its
existing security holders in exchange for Series A preferred stock, and no
commission or other remuneration was paid or given directly or indirectly for
soliciting such exchange.
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DAYBREAK OIL AND GAS, INC. 