Item 1.01 Entry into a Material Definitive Agreement.
On May 5, 2022, Daybreak Oil and Gas, Inc. (OCT PINK:DBRM), a Washington
corporation ("Daybreak" or the "Company"), entered into a Subscription Agreement
with Portillion Capital Ltd., a private company incorporated in the United
Kingdom ("Portillion"), pursuant to which Portillion has subscribed to purchase
125,000,000 shares of the Company's common stock, par value, $0.001, for a
purchase price of $0.02 per share, or $2,500,000 in the aggregate (the "Capital
Raise").
In connection with the closing of the Capital Raise, the Company has agreed to
pay Portillion (1) an incentive fee equal to 20% of the subscription amount,
payable 17.5% in cash ($437,000) and 2.5% in additional shares of common stock
(3,125,000 shares); and (2) an equity exchange fee equal to 3% of the
subscription amount. Further, if the Capital Raise does not close within 24
months, the Company has agreed to pay Portillion a termination fee of 20% of the
subscription amount.
The closing of the Capital Raise will take place immediately following the
closing of the previously disclosed Equity Exchange Agreement dated as of
October 20, 2021 entered into by and among the Company, 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 Daybreak will acquire Reabold in exchange for
issuing 160,964,489 shares of its common stock to Gaelic (the foregoing
transaction, the "Equity Exchange"). Entering into the Subscription Agreement
with respect to the Capital Raise is a condition to the closing of the Equity
Exchange. If the Equity Exchange does not close, the Company will not complete
the Capital Raise and will instead pay the termination fee.
Item 8.01 Other Events.
On May 5, 2022, the purchaser of a convertible promissory note in the amount of
US$200,000 (the "Convertible Note") issued by the Company as of February 15,
2022 notified the Company that it has elected to convert the Convertible Note.
The Convertible Note converted by its terms at a price per share of $0.0085, and
the total principal balance of the note plus accrued interest, totaling
$236,000, converted into 27,764,705 shares of common stock, par value, $0.001,
of the Company.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Number Exhibit
99.1* Press Release issued by Daybreak Oil and Gas, Inc., on May 11, 2022.
104 Cover Page Interactive Data File (formatted in Inline XBRL).
* Filed herewith.
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DAYBREAK OIL AND GAS, INC. 
