Daybreak Oil and Gas obtains financing

On October 31, Daybreak Oil and Gas, Inc. (OTCBB: DBRM), a Washington corporation, said that it had entered into a loan and security agreement with Maximilian Investors LLC. The agreement provides for a revolving credit facility of up to $20 million, maturing on Oct. 31, 2016, with a minimum commitment of $2.5 million.

Loans under the agreement bear interest at an annual rate of 18%. The obligations under the agreement are secured by a perfected first priority security interest in all the company’s assets, including the company’s in Kern County, California.

The proceeds of the initial drawdown of the borrowing under the facility were used to pay off its existing indebtedness with Luberski Inc. and to pay closing costs of the loan. The remaining proceeds will be used to fund Daybreak’s upcoming exploration and development program. Also, in connection with the loan, the company assigned 10% of its interest in its oil and gas leases at the East Slopes Project to the lender, that will result in Maximilian having a 4.167% working interest in the company’s East Slopes Project.

James. F. Westmoreland, president and CEO of Daybreak, commented, “Daybreak is pleased to partner with Maximilian, as this loan agreement will give us the capital we need to undertake the expansion of our East Slopes Project in Kern County, California. This funding enables us to put in place our business plan and follow a clear path enabling us to increase revenues and cash flow by ramping up our drilling efforts which will begin later this month. In addition, we look for this to be a new basis in assisting in building value for our shareholders.”

Financial West Group, member FINRA/SIPC, acted as financial advisor to Daybreak in connection with the transaction.

Daybreak Oil and Gas, Inc. is an independent oil and gas company engaged in the exploration, development and production of oil and gas in California. The company is headquartered in Spokane, Wash., with an operations office in Friendswood, Tex.. Daybreak owns a 3-D seismic survey that encompasses more than 20,000 acres over 32 square miles with approximately 13,000 acres under lease in the San Joaquin Valley of California.

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