[X]
|
ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
[ ]
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
Washington
|
91-0626366
|
|
(State
or other jurisdiction of incorporation or organization)
|
(I.R.S.
Employer Identification No.)
|
|
601
W. Main Ave., Suite 1012, Spokane, WA
|
99201
|
|
(Address
of principal executive offices)
|
(Zip
code)
|
Large
accelerated filer
¨
|
Accelerated
filer
¨
|
Non-accelerated
filer
¨
|
Smaller
reporting company
þ
|
(Do
not check if a smaller reporting company)
|
For
the Year Ended
February
28, 2009
|
For
the Year Ended
February
29, 2008
|
||||||||||||||||||
Project
|
Location
|
Product
|
Customer
|
Revenue
|
Percentage
|
Revenue
|
Percentage
|
||||||||||||
East
Gilbertown
|
Alabama
|
Oil
|
Hunt
Crude Oil Supply
|
$ | 148,741 | 73.7 | % | $ | 119,409 | 61.5 | % | ||||||||
|
|||||||||||||||||||
Krotz
Springs
|
Louisiana
|
Gas
|
JP
Oil Company
|
$ | 22,944 | 11.4 | % | $ | 37,121 | 19.1 | % | ||||||||
Liquids
|
JP
Oil Company
|
$ | 26,122 | 12.9 | % | $ | 30,591 | 15.7 | % |
|
||
Daybreak
Oil and Gas, Inc.
|
||
601
W. Main Ave., Suite 1012
|
||
Spokane,
WA 99201-0613
|
||
Attention:
Corporate Secretary
|
||
Telephone:
(509) 232-7674
|
Oil
|
Gas
|
Total
|
|||||||||||||||||||
State
|
Field
|
Net
Bbl
|
Net
Revenue
|
Net
Mcf**
|
Net
Revenue
|
Revenue
|
|||||||||||||||
California
|
East
Slopes
|
44 | 1,290 | - | - | 1,290 | |||||||||||||||
Alabama
|
East
Gilbertown
|
2,344 | $ | 148,741 | - | $ | - | $ | 148,741 | ||||||||||||
Louisiana
|
Krotz
Springs
|
24 | 2,725 | 14,743 | 49,156 | 51,881 | |||||||||||||||
2,412 | $ | 152,756 | 14,743 | $ | 49,156 | $ | 201,912 |
Average
Sales Price
|
Average
Cost
|
|||||||||||||||
Oil (Bbl)
|
Gas (Mcf)**
|
BOE
|
of
Production
|
|||||||||||||
February
28, 2007
|
$ | 35.40 | - | 35.40 | $ | 26.47 | ||||||||||
February
29, 2008
|
$ | 56.13 | 3.00 | 21.67 | $ | 14.21 | ||||||||||
February
28, 2009
|
$ | 63.31 | 3.33 | 41.47 | $ | 26.01 |
Developed
Acres
|
Undeveloped
Acres
|
|||||||||||||||
Location
|
Gross
|
Net
|
Gross
|
Net
|
||||||||||||
California
|
1,514 | 379 | 27,777 | 9,194 | ||||||||||||
Alabama
|
2,025 | 253 | - | - | ||||||||||||
Total
|
3,539 | 632 | 27,777 | 9,194 |
State
|
Field
|
Gross
|
Net
|
||||||
California
|
East
Slopes
|
2 | 0.50 | ||||||
Alabama
|
Gilbertown
|
17 | 2.13 | ||||||
Louisiana
|
Krotz
Springs
|
1 | 0.38 | ||||||
Total
|
20 | 3.01 |
Fiscal
Year 2009
|
Fiscal
Year 2008
|
||||||||||||||||
State
|
Productive
|
Dry
|
Productive
|
Dry
|
|||||||||||||
California
|
2 | 2 | - | - | |||||||||||||
Louisiana
|
- | - | 1 | 1 | |||||||||||||
Total
|
2 | 2 | 1 | 1 |
Fiscal Year Ending
February 29, 2008
|
High
Closing
|
Low
Closing
|
||||||
First
Quarter
|
$ | 0.95 | $ | 0.48 | ||||
Second
Quarter
|
$ | 0.70 | $ | 0.39 | ||||
Third
Quarter
|
$ | 0.62 | $ | 0.35 | ||||
Fourth
Quarter
|
$ | 0.45 | $ | 0.25 | ||||
Fiscal Year Ending
February 28, 2009
|
High
Closing
|
Low
Closing
|
||||||
First
Quarter
|
$ | 0.51 | $ | 0.24 | ||||
Second
Quarter
|
$ | 0.51 | $ | 0.29 | ||||
Third
Quarter
|
$ | 0.33 | $ | 0.16 | ||||
Fourth
Quarter
|
$ | 0.20 | $ | 0.07 |
Equity
Compensation Plan Information
|
|||
Plan
Category
|
Number
of securities to be issued upon exercise of outstanding options, warrants
and rights
|
Weighted-average
exercise price of outstanding options, warrants and rights
|
Number
of securities remaining available for future issuance under equity
compensation plans
|
Equity
compensation plans approved by security holders
|
-
|
-
|
-
|
Equity
compensation plans not approved by security holders
(1)
|
-
|
-
|
2,100,000
(
2
)
|
Total
|
-
|
-
|
2,100,000
(
2
)
|
(1)
|
On
April 6, 2009, the Board of Directors approved the 2009 Restricted Stock
and Restricted Stock Unit Plan, as described in detail below, under the
heading “2009 Restricted Stock and Restricted Stock Unit
Plan”.
|
(2)
|
Reflects
initial 4,000,000 shares in the 2009 Restricted Stock and Restricted Stock
Unit Plan, reduced by (i) 900,000 shares of restricted stock awarded to
the Company’s non-employee directors in recognition of their leadership
and contribution during the restructuring and transformation of the
Company during the fiscal year ended February 28, 2009, and (ii) 1,000,000
shares of restricted stock awarded to our current President and Chief
Executive Officer and our former interim President and Chief Executive
Officer in recognition of past service as executive
officers.
|
February
28, 2009
|
February
29, 2008
|
|||||||
Current
Assets
|
$ | 2,784,213 | $ | 1,049,217 | ||||
Current
Liabilities
|
$ | 356,307 | $ | 316,253 | ||||
Working
Capital
|
$ | 2,427,906 | $ | 732,964 | ||||
Current
Ratio
|
7.81 | 3.32 |
For
the Year Ended
|
||||||||
Net
Cash Provided by or (Used in)
|
February 28, 2009
|
February 29, 2008
|
||||||
Operating
activities
|
$ | (2,791,659 | ) | $ | (1,302,213 | ) | ||
Investing
activities
|
5,000,636 | 576,574 | ||||||
Financing
activities
|
14,700 | 406,815 | ||||||
Net
change in cash
|
$ | 2,223,677 | $ | (318,824 | ) |
2009
|
2008
|
|||||||
California
– East Slopes
|
1,290 | - | ||||||
Alabama
– East Gilbertown
|
$ | 148,741 | $ | 119,740 | ||||
Louisiana
– Krotz Springs
|
51,881 | 74,209 | ||||||
Total
Revenues
|
$ | 201,912 | $ | 193,949 |
Fiscal
Year 2009
|
Fiscal
Year 2008
|
|||||||
Production
Costs
|
$ | 158,413 | $ | 144,900 | ||||
Exploration
Costs
|
1,304,894 | 654,765 | ||||||
Depreciation,
Depletion,
Amortization & Impairment
|
556,651 | 1,358,246 | ||||||
General
& Administrative
|
2,483,681 | 2,524,547 | ||||||
Total
Operating Expenses
|
$ | 4,503,639 | $ | 4,682,458 |
Fiscal
Year 2009
|
Fiscal
Year 2008
|
|||||||
Louisiana
– Tuscaloosa
|
$ | 234,474 | $ | 775,730 | ||||
Texas
– Saxet Deep Field
|
77,728 | 172,901 | ||||||
Total
Revenues
|
$ | 312,202 | $ | 948,631 |
Fiscal
Year 2009
|
Fiscal
Year 2008
|
|||||||
Production
Costs
|
$ | 169,219 | $ | 461,340 | ||||
Exploration
Costs
|
- | 62,500 | ||||||
Depreciation,
Depletion. Amortization and Impairment
|
67,923 | 975,324 | ||||||
Total
Operating Expenses
|
$ | 237,142 | $ | 1,499,164 |
From
Inception
|
||||||||||||
Years
Ended
|
Through
|
|||||||||||
February
28,
|
February
29,
|
February
28,
|
||||||||||
2009
|
2008
|
2009
|
||||||||||
REVENUE:
|
||||||||||||
Oil
and gas sales
|
$ | 201,912 | $ | 193,949 | $ | 397,971 | ||||||
OPERATING
EXPENSES:
|
||||||||||||
Production
costs
|
158,413 | 144,900 | 308,644 | |||||||||
Exploration
and drilling
|
1,304,894 | 654,765 | 3,483,768 | |||||||||
Depreciation,
depletion, amortization, and
|
||||||||||||
impairment
|
556,651 | 1,358,246 | 2,130,506 | |||||||||
General
and administrative
|
2,483,681 | 2,524,547 | 12,847,965 | |||||||||
Total
operating expenses
|
4,503,639 | 4,682,458 | 18,770,883 | |||||||||
OPERATING
LOSS
|
(4,301,727 | ) | (4,488,509 | ) | (18,372,912 | ) | ||||||
OTHER
INCOME (EXPENSE):
|
||||||||||||
Interest
income
|
7,671 | 43,550 | 153,280 | |||||||||
Dividend
income
|
30,256 | 3,691 | 39,493 | |||||||||
Interest
expense
|
(2,577 | ) | (208,893 | ) | (1,654,824 | ) | ||||||
Total
other income (expense)
|
35,350 | (161,652 | ) | (1,462,051 | ) | |||||||
LOSS
FROM CONTINUING OPERATIONS
|
(4,266,377 | ) | (4,650,161 | ) | (19,834,963 | ) | ||||||
DISCONTINUED
OPERATIONS
|
||||||||||||
Income
(loss) from discontinued operations
|
||||||||||||
(net
of tax of $ -0-)
|
75,060 | (550,533 | ) | (2,421,119 | ) | |||||||
Gain
from sale of oil and gas properties
|
||||||||||||
(net
of tax of $ -0-)
|
4,060,820 | - | 4,060,820 | |||||||||
INCOME
(LOSS) FROM DISCONTINUED
|
||||||||||||
OPERATIONS
|
4,135,880 | (550,533 | ) | 1,639,701 | ||||||||
NET
LOSS
|
(130,497 | ) | (5,200,694 | ) | (18,195,262 | ) | ||||||
Cumulative
convertible preferred stock
|
||||||||||||
dividend
requirement
|
(208,212 | ) | (237,752 | ) | (599,930 | ) | ||||||
Deemed
dividend - Beneficial conversion feature
|
- | - | (4,199,295 | ) | ||||||||
NET
LOSS AVAILABLE TO COMMON
|
||||||||||||
SHAREHOLDERS
|
$ | (338,709 | ) | $ | (5,438,446 | ) | $ | (22,994,487 | ) | |||
NET
INCOME (LOSS) PER COMMON SHARE
|
||||||||||||
Loss
from continuing operations
|
$ | (0.10 | ) | $ | (0.11 | ) | ||||||
Income
from discontinued operations
|
0.09 | (0.01 | ) | |||||||||
NET
LOSS PER COMMON SHARE - Basic
|
||||||||||||
and
diluted
|
$ | (0.01 | ) | $ | (0.13 | ) | ||||||
WEIGHTED
AVERAGE NUMBER OF
|
||||||||||||
COMMON
SHARES OUTSTANDING -
|
||||||||||||
Basic
and diluted
|
44,731,420 | 41,292,659 | ||||||||||
Series
A Convertible
|
Accumulated
|
|||||||||||||||||||||||
Preferred
Stock
|
Common
Stock
|
Additional
|
During
the
|
|||||||||||||||||||||
Paid-In
|
Accumulated
|
Exploration
|
||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
Capital
|
Deficit
|
Stage
|
Total
|
|||||||||||||||||
BALANCE,
March 1, 2005 (Exploration
|
||||||||||||||||||||||||
stage
date of inception)
|
- | $ | - | 18,199,419 | $ | 18,199 | $ | 709,997 | $ | (736,035 | ) | $ | - | $ | (7,839 | ) | ||||||||
Issuance
of common stock for:
|
- | |||||||||||||||||||||||
Cash
|
- | - | 4,400,000 | 4,400 | 1,083,100 | - | - | 1,087,500 | ||||||||||||||||
Services
|
- | - | 5,352,667 | 5,353 | 3,622,176 | - | - | 3,627,529 | ||||||||||||||||
Oil
and gas properties
|
- | - | 700,000 | 700 | 411,300 | - | - | 412,000 | ||||||||||||||||
Conversion
of convertible debentures
and interest
payable
|
- | - | 806,135 | 806 | 200,728 | - | - | 201,534 | ||||||||||||||||
Discount
on convertible notes payable
|
- | - | - | - | 1,240,213 | - | - | 1,240,213 | ||||||||||||||||
Net
loss
|
- | - | - | - | - | - | (4,472,041 | ) | (4,472,041 | ) | ||||||||||||||
BALANCE,
FEBRUARY 28, 2006
|
- | - | 29,458,221 | 29,458 | 7,267,514 | (736,035 | ) | (4,472,041 | ) | 2,088,896 | ||||||||||||||
Issuance
of common stock for:
|
- | |||||||||||||||||||||||
Cash
|
- | - | 8,027,206 | 8,027 | 5,180,230 | - | - | 5,188,257 | ||||||||||||||||
Services
|
- | - | 1,270,000 | 1,270 | 2,606,430 | - | - | 2,607,700 | ||||||||||||||||
Oil
and gas properties
|
- | - | 222,500 | 223 | 528,527 | - | - | 528,750 | ||||||||||||||||
Conversion
of convertible debentures
|
- | - | 2,049,303 | 2,049 | 1,022,473 | - | - | 1,024,522 | ||||||||||||||||
Purchase
and cancellation of common stock:
|
- | - | (150,000 | ) | (150 | ) | (149,850 | ) | (150,000 | ) | ||||||||||||||
Issuance
of preferred stock for:
|
||||||||||||||||||||||||
Cash
|
1,399,765 | 1,400 | - | - | 3,624,804 | - | - | 3,626,204 | ||||||||||||||||
Discount
on convertible notes payable
|
- | - | - | - | 25,000 | - | - | 25,000 | ||||||||||||||||
Extension
warrants on convertible notes
|
||||||||||||||||||||||||
payable
|
- | - | - | - | 119,283 | - | - | 119,283 | ||||||||||||||||
Discount
on preferred stock
|
- | - | - | - | 4,199,295 | - | - | 4,199,295 | ||||||||||||||||
Deemed
dividend on preferred stock
|
- | - | - | - | (4,199,295 | ) | - | - | (4,199,295 | ) | ||||||||||||||
Net
loss
|
- | - | - | - | - | - | (8,392,030 | ) | (8,392,030 | ) | ||||||||||||||
BALANCE,
FEBRUARY 28, 2007
|
1,399,765 | 1,400 | 40,877,230 | 40,877 | $ | 20,224,411 | (736,035 | ) | (12,864,071 | ) | 6,666,582 | |||||||||||||
Issuance
of common stock for:
|
- | |||||||||||||||||||||||
Cash
|
- | - | 3,062,000 | 3,062 | 728,754 | - | - | 731,816 | ||||||||||||||||
Services
|
- | - | 10,000 | 10 | 4,491 | - | - | 4,501 | ||||||||||||||||
Conversion
of convertible debentures
|
- | - | 37,169 | 38 | 27,840 | - | - | 27,878 | ||||||||||||||||
Extension
warrants on convertible notes
|
||||||||||||||||||||||||
payable
|
- | - | - | - | 60,973 | - | - | 60,973 | ||||||||||||||||
Conversion
of preferred stock
|
(102,300 | ) | (102 | ) | 306,900 | 307 | (205 | ) | - | - | - | |||||||||||||
Issuance
of goodwill warrants
|
- | - | - | - | 934,521 | - | - | 934,521 | ||||||||||||||||
Net
loss
|
- | - | - | - | - | - | (5,200,694 | ) | (5,200,694 | ) | ||||||||||||||
BALANCE,
FEBRUARY 29, 2008
|
1,297,465 | 1,298 | 44,293,299 | 44,294 | $ | 21,980,785 | (736,035 | ) | (18,064,765 | ) | $ | 3,225,577 | ||||||||||||
Issuance
of common stock for:
|
||||||||||||||||||||||||
Cash
|
- | - | 60,000 | 60 | 14,640 | - | - | 14,700 | ||||||||||||||||
Conversion
of preferred stock
|
(237,000 | ) | (237 | ) | 711,000 | 711 | (474 | ) | - | - | - | |||||||||||||
Other
|
15,600 | 16 | (16 | ) | - | |||||||||||||||||||
Issuance
of goodwill warrants
|
- | - | - | - | 52,425 | - | - | 52,425 | ||||||||||||||||
- | - | |||||||||||||||||||||||
Net
loss
|
- | - | - | - | - | (130,497 | ) | (130,497 | ) | |||||||||||||||
BALANCE,
FEBRUARY 28, 2009
|
1,060,465 | $ | 1,061 | 45,079,899 | $ | 45,081 | $ | 22,047,360 | $ | (736,035 | ) | $ | (18,195,262 | ) | $ | 3,162,205 |
From
|
||||||||||||
Inception
|
||||||||||||
March
1, 2005
|
||||||||||||
Years
Ended
|
Through
|
|||||||||||
February
28,
|
February
29,
|
February
28,
|
||||||||||
2009
|
2008
|
2009
|
||||||||||
CASH
FLOWS FROM OPERATING ACTIVITIES
|
||||||||||||
Net
loss
|
$ | (130,497 | ) | $ | (5,200,694 | ) | $ | (18,195,262 | ) | |||
Adjustments
to reconcile net loss to net cash
|
||||||||||||
used
in operating activities:
|
||||||||||||
Common
stock issued for services
|
- | 4,500 | 6,239,729 | |||||||||
Gain
on sale of oil and gas properties
|
(4,060,820 | ) | - | (4,060,820 | ) | |||||||
Depreciation,
depletion and impairment expense
|
624,575 | 2,333,571 | 5,356,194 | |||||||||
Exploration
expense - dry wells
|
- | 33,233 | 849,753 | |||||||||
Bad
debt expense
|
326,707 | - | 326,707 | |||||||||
Non
cash interest expense
|
- | 164,873 | 1,470,051 | |||||||||
Non
cash interest and dividend income
|
(5,427 | ) | (28,108 | ) | (62,120 | ) | ||||||
Non
cash general and administrative expense
|
52,425 | 934,521 | 986,946 | |||||||||
Changes
in assets and liabilities:
|
||||||||||||
Investment
in marketable securities
|
155,445 | 2,200,768 | - | |||||||||
Accounts
receivable - oil and gas sales
|
(135,598 | ) | (254,371 | ) | (446,876 | ) | ||||||
Accounts
receivable - related party participants
|
- | 41,357 | - | |||||||||
Accounts
receivable - joint interest participants
|
216,013 | (202,450 | ) | (786,407 | ) | |||||||
Prepaid
expenses and other current assets
|
18,052 | 55,954 | (2,448 | ) | ||||||||
Accounts
payable and other accrued liabilities
|
147,466 | (1,385,367 | ) | 950,009 | ||||||||
Other
assets
|
- | - | (77,177 | ) | ||||||||
Net
cash used in operating activities
|
(2,791,659 | ) | (1,302,213 | ) | (7,451,721 | ) | ||||||
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
||||||||||||
Purchase
of reclamation bond
|
(100,000 | ) | (250,000 | ) | (375,000 | ) | ||||||
Additions
to note receivable
|
- | - | (800,000 | ) | ||||||||
Additions
to oil and gas properties
|
(716,646 | ) | (2,036,888 | ) | (9,632,390 | ) | ||||||
Purchase
of fixed assets
|
- | (8,930 | ) | (31,841 | ) | |||||||
Proceeds
from sale of oil and gas properties
|
5,812,500 | 2,000,000 | 7,812,500 | |||||||||
Proceeds
from note receivable
|
- | 800,000 | 800,000 | |||||||||
Additions
to oil and gas prepayments
|
4,782 | 72,392 | 77,174 | |||||||||
Net
cash provided by (used) in investing activities
|
5,000,636 | 576,574 | (2,149,557 | ) | ||||||||
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
||||||||||||
Proceeds
from sales of preferred stock, net
|
- | - | 3,626,204 | |||||||||
Proceeds
from sales of common stock, net
|
14,700 | 731,816 | 7,022,273 | |||||||||
Proceeds
from related party notes payable
|
- | - | 200,000 | |||||||||
Proceeds
(repayments) from borrowings
|
- | (325,001 | ) | 1,035,520 | ||||||||
Net
cash provided by financing activities
|
14,700 | 406,815 | 11,883,997 | |||||||||
NET
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
|
2,223,677 | (318,824 | ) | 2,282,719 | ||||||||
CASH
AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
|
59,133 | 377,957 | 91 | |||||||||
CASH
AND CASH EQUIVALENTS AT END OF PERIOD
|
$ | 2,282,810 | $ | 59,133 | $ | 2,282,810 | ||||||
CASH
PAID FOR:
|
||||||||||||
Interest
|
$ | 2,577 | $ | 41,327 | $ | 57,673 | ||||||
Income
taxes
|
||||||||||||
- | ||||||||||||
SUPPLEMENTAL
CASH FLOW INFORMATION:
|
||||||||||||
Common
stock issued for services
|
$ | - | $ | 4,501 | $ | 6,239,729 | ||||||
Common
stock issued for oil and gas properties
|
- | - | 940,750 | |||||||||
Common
stock repurchased and cancelled
|
- | - | (150,000 | ) | ||||||||
Common
stock issued on conversion of convertible debentures
|
||||||||||||
and
interest
|
- | 27,878 | 1,253,934 | |||||||||
Discount
on convertible notes payable
|
- | 60,973 | 1,326,186 | |||||||||
Extension
warrants on convertible notes payable
|
- | - | 119,283 | |||||||||
Conversion
of preferred stock to common stock
|
$ | 711 | $ | 307 | $ | 1,018 |
For
the Year Ended
February
28, 2009
|
For
the Year Ended
February
29, 2008
|
||||||||||||||||||
Project
|
Location
|
Product
|
Customer
|
Revenue
|
Percentage
|
Revenue
|
Percentage
|
||||||||||||
East
Gilbertown
|
Alabama
|
Oil
|
Hunt
Crude Oil Supply
|
$ | 148,741 | 73.7 | % | $ | 119,409 | 61.5 | % | ||||||||
Krotz
Springs
|
Louisiana
|
Gas
|
JP
Oil Company
|
$ | 22,944 | 11.4 | % | $ | 37,121 | 19.1 | % | ||||||||
Liquids
|
JP
Oil Company
|
$ | 26,122 | 12.9 | % | $ | 30,591 | 15.7 | % |
February
28, 2009
|
February
29, 2008
|
|||||||
Proved
leasehold costs
|
$ | 299,571 | $ | 299,571 | ||||
Unproved
leasehold costs
|
104,700 | 104,700 | ||||||
Costs
of wells and development
|
1,881,463 | 1,157,447 | ||||||
Capitalized
asset retirement costs
|
13,880 | 10,518 | ||||||
Total cost of oil and gas
properties
|
2,299,614 | 1,572,236 | ||||||
Accumulated
depletion, depreciation,
amortization
and impairment
|
(1,943,334 | ) | (1,421,037 | ) | ||||
Oil
and gas properties, net
|
$ | 356,280 | $ | 151,199 |
Asset
retirement obligations, beginning of period
|
$
|
119,207
|
||
Accretion
expense
|
2,739
|
|||
Asset
retirement additions
|
3,368
|
|||
Asset
retirement eliminations due to sale of assets
|
(105,303)
|
|||
Asset
retirement obligations, end of period
|
$
|
20,011
|
2009
|
2008
|
From
Inception through
February
28, 2009
|
||||||||||
Oil
and gas sales revenues – Tuscaloosa Project
|
$ | 234,474 | $ | 775,730 | $ | 1,484,762 | ||||||
Cost
and Expenses
|
(115,092 | ) | (1,143,653 | ) | (3,420,252 | ) | ||||||
Income
(loss) from discontinued operations
|
$ | 119,382 | $ | (367,923 | ) | $ | (1,935,490 | ) |
February
28, 2009
|
February
29, 2008
|
|||||||
Proved
leasehold costs
|
$ | - | $ | 1,556,423 | ||||
Unproved
leasehold costs
|
- | 310,657 | ||||||
Costs
of wells and development
|
- | 1,393,790 | ||||||
Unevaluated
capitalized exploratory well costs
|
- | 896,067 | ||||||
Capitalized
asset retirement costs
|
- | 57,567 | ||||||
Total
cost of oil and gas properties
|
- | 4,214,504 | ||||||
Accumulated
depletion, depreciation,
amortization
and impairment
|
- | (2,580,033 | ) | |||||
Oil
and gas properties, net
|
$ | - | $ | 1,634,471 |
2009
|
2008
|
|||||||
Beginning
balance at March 1 of fiscal year
|
$ | 896,067 | $ | 1,223,177 | ||||
Total
exploration well additions
|
- | 517,316 | ||||||
Sales
of exploratory wells
|
(896,067 | ) | (844,426 | ) | ||||
Ending
balance at February 28 of fiscal year
|
$ | - | $ | 896,067 |
2009
|
2008
|
From
Inception through
February
28, 2009
|
||||||||||
Oil
and gas sales revenues – Saxet Deep Field
|
$ | 77,728 | $ | 172,901 | $ | 403,307 | ||||||
Cost
and expenses
|
(122,050 | ) | (355,511 | ) | (888,936 | ) | ||||||
Loss
from discontinued operations
|
$ | (44,322 | ) | $ | (182,610 | ) | $ | (485,629 | ) |
February
28, 2009
|
February
29, 2008
|
|||||||
Proved
leasehold costs
|
$ | - | $ | - | ||||
Unproved
leasehold costs
|
- | - | ||||||
Costs
of wells and development
|
- | 575,511 | ||||||
Unevaluated
capitalized exploratory well costs
|
- | - | ||||||
Capitalized
asset retirement costs
|
- | 12,222 | ||||||
Total
cost of oil and gas properties
|
- | 587,733 | ||||||
Accumulated
depletion, depreciation,
amortization
and impairment
|
- | (569,411 | ) | |||||
Oil
and gas properties, net
|
$ | - | $ | 18,322 |
2009
|
2008
|
|||||||
Beginning
balance at March 1 of fiscal year
|
$ | 587,739 | $ | 587,739 | ||||
Sales
of exploratory wells
|
(587,739 | ) | - | |||||
Ending
balance at end of fiscal year
|
$ | - | $ | 587,739 |
Fiscal
Period
|
Shareholders
at Period End
|
Accumulated
Dividends
|
||||||
Year
Ended February 28, 2007
|
100
|
$ | 153,966 | |||||
Year
Ended February 29, 2008
|
90
|
237,752 | ||||||
Year
Ended February 28, 2009
|
78
|
208,212 | ||||||
Total
Accumulated Dividends
|
$ | 599,930 |
Description
|
Shares
|
Relative Fair Value
|
||||||
Series
A Convertible Preferred
|
1,399,765 | $ | 2,710,073 | |||||
Common
Stock Purchase Warrants
|
2,799,530 | 1,489,222 | ||||||
Total
Proceeds
|
4,199,295 | |||||||
Offering
Costs
|
(573,091 | ) | ||||||
Net
Proceeds
|
$ | 3,626,204 |
Description
|
Shares
|
Relative Fair Value
|
||||||
Common
Stock
|
8,027,206 | $ | 4,241,232 | |||||
Common
Stock Purchase Warrants
|
4,013,602 | 1,779,172 | ||||||
Total
Proceeds
|
6,020,404 | |||||||
Offering
Costs
|
(832,147 | ) | ||||||
Net
Proceeds
|
5,188,257 |
Exercise
|
Remaining
|
Exercisable
Warrants
|
||||||||||||||
Description
|
Warrants
|
Price
|
Life
(Years)
|
Remaining
|
||||||||||||
Spring
2006 Common Stock Private Placement
|
4,013,602 | $ | 2.00 | 2.25 | 4,013,602 | |||||||||||
Placement
Agent Warrants - Spring 2006 PP
|
802,721 | $ | 0.75 | 4.25 | 802,721 | |||||||||||
Placement
Agent Warrants - Spring 2006 PP
|
401,361 | $ | 2.00 | 4.25 | 401,361 | |||||||||||
July
2006 Preferred Stock Private Placement (PP)
|
2,799,530 | $ | 2.00 | 2.50 | 2,799,530 | |||||||||||
Placement
Agent Warrants - July 2006 PP
|
419,930 | $ | 1.00 | 4.50 | 419,930 | |||||||||||
Convertible
Debenture Term Extension
|
150,001 | $ | 2.00 | 2.75 | 150,001 | |||||||||||
Convertible
Debenture 2
nd
Term Extension
|
112,000 | $ | 0.53 | 0.50 | 112,000 | |||||||||||
Convertible
Debenture 3
rd
Term Extension
|
90,000 | $ | 0.25 | 0.75 | 90,000 | |||||||||||
Spring
2006 PP - Goodwill Warrants
|
3,227,934 | $ | 0.65 | 1.00 | 3,227,934 | |||||||||||
July
2006 PP - Goodwill Warrants
|
1,250,264 | $ | 0.65 | 1.00 | 1,250,264 | |||||||||||
Placement
Agent Warrants - January 2008 PP
|
39,550 | $ | 0.25 | 2.00 | 39,550 | |||||||||||
13,306,893 | 13,306,893 |
2009
|
||||
Computed
at U.S. and State statutory rates (40%)
|
$ | (52,196 | ) | |
Permanent
differences
|
25,731 | |||
Changes
in valuation allowance
|
26,465 | |||
Total
|
$ | - |
Deferred
tax assets:
|
2009
|
2008
|
||||||
Net
operating loss carryforwards
|
$ | 4,130,040 | $ | 2,574,000 | ||||
Oil
and gas properties
|
216,245 | 1,745,820 | ||||||
Less
valuation allowance
|
(4,346,285 | ) | (4,319,820 | ) | ||||
Total
|
$ | - | $ | - |
As
of
|
||||||||
February
28, 2009
|
February
29, 2008
|
|||||||
Proved
properties
|
||||||||
Mineral
interests
|
$ | 299,571 | $ | 1,855,994 | ||||
Wells, equipment and
facilities
|
1,895,343 | 3,207,055 | ||||||
Total
proved properties
|
2,194,914 | 5,063,049 | ||||||
Unproved
properties
|
||||||||
Mineral
interests
|
104,700 | 415,357 | ||||||
Uncompleted wells, equipment and
facilities
|
- | 896,067 | ||||||
Total
unproved properties
|
104,700 | 1,311,424 | ||||||
Less
accumulated depreciation, depletion, amortization and
impairment
|
(1,943,334 | ) | (4,570,481 | ) | ||||
Net
Capitalized Costs
|
$ | 356,280 | $ | 1,803,992 |
Twelve
Months Ended
|
||||||||
February
28, 2009
|
February
29, 2008
|
|||||||
Acquisition
of proved properties
|
$ | 2,839 | $ | 119,235 | ||||
Acquisition
of unproved properties
|
- | 7,043 | ||||||
Development
costs
|
468,701 | 921,334 | ||||||
Exploration
costs
|
1, 322,852 | 1,264,784 | ||||||
Total
Costs Incurred
|
$ | 1,794,392 | $ | 2,312,396 |
Twelve
Months Ended
|
||||||||
February
28, 2009
|
February
29, 2008
|
|||||||
Oil
and gas revenues
|
$ | 514,114 | $ | 1,017,604 | ||||
Production
costs
|
(327,632 | ) | (606,240 | ) | ||||
Exploration
expenses
|
(1,304,894 | ) | (717,265 | ) | ||||
Depletion,
depreciation, and impairment
|
(624,574 | ) | (2,314,160 | ) | ||||
Result
of oil and gas producing operations before income taxes
|
(1,742,986 | ) | (2,620,061 | ) | ||||
Provision
for income taxes
|
- | - | ||||||
Results
of Oil and Gas Producing Operations
|
$ | (1,742,986 | ) | $ | (2,620,061 | ) |
Oil (Bbl)
|
Gas (Mcf)**
|
BOE
|
||||||||||
Proved
reserves:
|
||||||||||||
February
28, 2007
|
29,425 | 211,800 | 64,725 | |||||||||
Revisions
(1)
|
(15,775 | ) | (104,264 | ) | (33,152 | ) | ||||||
Extensions
and discoveries
|
9,776 | 18,148 | 12,801 | |||||||||
Production
|
(6,792 | ) | (49,584 | ) | (15,056 | ) | ||||||
Purchases
(sales) of minerals-in-place
|
(3,522 | ) | (10,600 | ) | (5,289 | ) | ||||||
February
29, 2008
|
13,112 | 65,500 | 24,029 | |||||||||
Revisions
(2)
|
(68 | ) | (31,257 | ) | (5,278 | ) | ||||||
Extensions
and discoveries
|
17,250 | - | 17,250 | |||||||||
Production
|
(4,119 | ) | (27,220 | ) | (8,656 | ) | ||||||
Purchases
(sales) of minerals-in-place
|
(8,925 | ) | (7,023 | ) | (10,095 | ) | ||||||
February
28, 2009
|
17,250 | - | 17,250 |
(1)
|
The
revisions of previous estimates for the year ended February 29, 2008
resulted from two sources. In the Tuscaloosa Project in
Louisiana, the F-1 and F-3 wells were shut in for the majority of the
fiscal year resulting in a marked decline in field performance. This
decline then resulted in the previous estimates of proved reserves being
decreased.
|
(2)
|
The
revisions of previous estimates for the fiscal year ended February 28,
2009, resulted from a revised lower estimate of reserve value due to
depressed hydrocarbon prices in the energy
markets.
|
Twelve
Months Ended
|
||||||||
February
28,
2009
|
February
29,
2008
|
|||||||
Future
cash inflows
|
$ | 597,368 | $ | 1,876,287 | ||||
Future
production costs
(1)
|
(151,111 | ) | (632,786 | ) | ||||
Future
development costs
|
(12,500 | ) | - | |||||
Future
income tax expenses
(2)
|
- | - | ||||||
Future
net cash flows
|
433,757 | 1,243,501 | ||||||
10%
annual discount for estimated timing of cash flows
|
(77,478 | ) | (113,236 | ) | ||||
Standardized
measure of discounted future net cash flows at the end of the
year
|
$ | 356,279 | $ | 1,130,265 |
(1)
|
Production
costs include oil and gas operations expense, production ad valorem taxes,
transportation costs and general and administrative expense supporting the
Company’s oil and gas
operations.
|
(2)
|
The
Company has sufficient tax deductions and allowances related to proved oil
and gas reserves to offset future net
revenues.
|
Average
Price
|
||||||||
Year
Ended
|
Oil (Bbl)
|
Gas (Mcf)**
|
||||||
February
28, 2009
|
$ | 35.40 | $ | - | ||||
February
29, 2008
|
56.13 | 3.00 | ||||||
February
28, 2007
|
63.31 | 3.33 |
Twelve
Months Ended
|
||||||||
February
28, 2009
|
February
29, 2008
|
|||||||
Standardized
measure of discounted future net cash flows at the beginning of the
year
|
$ | 1,130,265 | $ | 1,940,367 | ||||
Extensions,
discoveries and improved recovery, less related costs
|
- | 644,889 | ||||||
Revisions
of previous quantity estimates
|
(37,959 | ) | (1,559,345 | ) | ||||
Changes
in estimated future development costs
|
(464,940 | ) | (185,701 | ) | ||||
Purchases
of minerals in place
|
370,671 | - | ||||||
Sales
of minerals in place
|
(954,039 | ) | (330,401 | ) | ||||
Net
changes in prices and production costs
|
(116,325 | ) | 283,361 | |||||
Accretion
of discount
|
113,027 | 194,037 | ||||||
Sales
of oil and gas produced, net of production costs
|
(186,482 | ) | (411,365 | ) | ||||
Development
costs incurred during the period
|
464,939 | 356,463 | ||||||
Change
in timing of estimated future production and other
|
37,122 | 197,959 | ||||||
Net
change in income taxes
|
- | - | ||||||
Standardized
measure of discounted future net cash flows at the
end
of the year
|
$ | 356,279 | $ | 1,130,265 |
1)
|
pertain
to the maintenance of records that, in reasonable detail, accurately and
fairly reflect the transactions and dispositions of our
assets;
|
2)
|
provide
reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted
accounting principles, and that our receipts and expenditures are being
made in accordance with authorizations of management and our Board of
Directors; and
|
3)
|
provide
reasonable assurance regarding prevention or timely detection of any
unauthorized acquisition, use or disposition of assets that could have a
material effect on the financial
statements.
|
3.01
|
Articles
of Incorporation, as amended
(1)
|
3.02
|
Amended
and Restated Bylaws
(2)
|
4.01
|
Specimen
Stock Certificate
(1
4
)
|
4.02
|
Designations
of Series A Convertible Preferred Stock (filed as Articles of Amendment to
the Articles of Incorporation of Daybreak Oil & Gas, Inc. dated June
30, 2006 and filed as part of Exhibit
3.01.)
|
4.03
|
Warrant
for the purchase shares of common stock, March 2006 private
placement
(3)
|
4.04
|
Registration
rights agreement, March 2006 private placement
(3)
|
4.05
|
Warrant
for the purchase shares of common stock, July 2006 private
placement
(4)
|
4.06
|
Registration
rights agreement, July 2006 private placement
(4)
|
4.07
|
Form
of agreement whereby recipients of goodwill warrants waived rights under
registration rights agreement associated with the Spring 2006 and the July
2006 private placement offerings.
(14)
|
4.08
|
2009
Restricted Stock and Restricted Stock Unit Plan
(
5
)
|
4.09
|
Form
of Restricted Stock Award Agreement
(
5
)
|
4.10
|
Form
of Restricted Stock Unit Award Agreement
(
5
)
|
10.01
|
Development
agreement with Chicago Mill Joint Venture for Louisiana
project
(6)
|
10.02
|
Prospect
review and non-competition agreement for California project
(6)
|
10.03
|
Joint
Venture Agreement with Nomad Hydrocarbons, Ltd. for California
project
(6)
|
10.04
|
Prospect
review agreement for California project
(6)
|
10.05
|
Development
agreement with Vision Exploration for Krotz Springs 3D
Prospect
(6)
|
10.06
|
Subscription
agreement and letter of investment intent, March 2006 private
placement
(3)
|
10.07
|
Pipeline
license agreement for Tuscaloosa project in Louisiana
(6)
|
10.08
|
Subscription
agreement and letter of investment intent, July 2006 private
placement
(4)
|
10.09
|
Purchase
of additional mineral interest in Tuscaloosa project in
Louisiana
(7)
|
10.10
|
Farmout
agreement with Monarch Gulf Exploration, Inc.
(8)
|
10.11
|
Oil
and gas lease with Anadarko E&P Company, L.P.
(9)
|
10.12
|
Drilling
contract with Energy Drilling for two wells in Louisiana
(10)
|
10.13
|
Seismic
Option Farmin Agreement with Chevron U.S.A.
(11)
|
10.14
|
Joint
Development Participation Agreement for Tuscaloosa project in
Louisiana
(1
2
)
|
10.15
|
Purchase
and Sale Agreement with Lasso Partners, LLC
(1)
|
10.16
|
Letter
of Agreement to amend the Purchase and Sale Agreement with Lasso Partners,
LLC
(1
3
)
|
10.17
|
Purchase
of Tuscaloosa interest from Kirby Cochran
(1)
|
10.18
|
Purchase
of Tuscaloosa interest from 413294 Alberta Ltd. (Robert N.
Martin)
(1)
|
10.19
|
Purchase
of Tuscaloosa interest from Tempest Energy, Inc (Eric L. Moe)
(1)
|
10.20
|
Letter
of Agreement on North Shuteston Assignment of Interest
(1)
|
(1)
|
Previously
filed as exhibit to Form 10-KSB filed on May 27, 2008, and incorporated by
reference herein.
|
(2)
|
Previously
filed as exhibit to Form 8-K on April 9, 2008, and incorporated by
reference herein.
|
(3)
|
Previously
filed as exhibit to Form SB-2 on July 18, 2006, and incorporated by
reference herein.
|
(4)
|
Previously
filed as exhibit to Form 10-KSB on September 21, 2007, and incorporated by
reference herein.
|
(5)
|
Previously
filed as exhibit to Form S-8 filed on April 7, 2009 and incorporated by
reference herein.
|
(6)
|
Previously
filed as exhibit to Form SB-2/A on December 28, 2006, and incorporated by
reference herein.
|
(7)
|
Previously
filed as exhibit to Form 8-K on September 28, 2006, and incorporated by
reference herein.
|
(8)
|
Previously
filed as exhibit to Form 8-K on October 26, 2006, and incorporated by
reference herein.
|
(9)
|
Previously
filed as exhibit to Form 8-K on November 7, 2006, and incorporated by
reference herein.
|
(10)
|
Previously
filed as exhibit to Form 8-K on November 17, 2006, and incorporated by
reference herein.
|
(11)
|
Previously
filed as exhibit to Form 8-K on July 16, 2007, and incorporated by
reference herein.
|
(12)
|
Previously
filed as exhibit to Form 8-K on July 20, 2007, and incorporated by
reference herein.
|
(13)
|
Previously
filed as exhibit to Form 8-K on May 2, 2008, and incorporated by reference
herein.
|
(14)
|
Filed
herewith.
|
DAYBREAK OIL AND GAS, INC. | |||
|
By:
|
/s/ JAMES F. WESTMORELAND | |
James F. Westmoreland, its | |||
President,
Chief Executive Officer
and
interim principal finance and accounting officer
|
|||
Date: May
27, 2009
|
By: |
/s/
JAMES F. WESTMORELAND
|
By: |
/s/
DALE B. LAVIGNE
|
||
James
F. Westmoreland
|
Dale
B. Lavigne
|
||||
Director/
President and Chief Executive Officer
|
Director
/ Chairman
|
||||
Date: May 27, 2009 | Date: May 27, 2009 | ||||
By: | /s/ TIMOTHY R. LINDSEY | By: | /s/ WAYNE G. DOTSON | ||
Timothy R. Lindsey | Wayne G. Dotson | ||||
Director | Director | ||||
Date: May 27, 2009 | Date: May 27, 2009 | ||||
By: | /s/ RONALD D. LAVIGNE | By: | /s/ JAMES F. MEARA | ||
Ronald D. Lavigne | James F. Meara | ||||
Director | Director | ||||
Date: May 27, 2009 | Date: May 27, 2009 | ||||
The following abbreviations, when used
in the inscription on the face of this certificate, shall be construed as
though they were written out in full
according
to applicable laws or
regulations:
|
||||
TEN
COM
|
-
as tenants in common
|
UNIF
GIFT MIN ACT
|
Custodian
|
|
(Cust)
|
(Minor)
|
|||
TEN
ENT
|
-
as tenants by the entireties
|
under
Uniform Gifts to Minors Act
|
||
(State)
|
||||
JT
TEN
|
-
as joint tenants with right of survivorship
and
not as tenants in common
|
UNIF
TRF MIN ACT
|
Custodian
(until age )
|
|
(Cust)
|
(Minor)
|
|||
under
Uniform Transfers to Minors Act
|
||||
(State)
|
||||
Additional
abbreviations may also be used though not in the above
list.
|
PLEASE
INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF
ASSIGNEE
|
|
For
value received, ____________________________hereby sell, assign and
transfer unto
|
Dated:
|
20
|
Signature(s)
Guaranteed: Medallion Guarantee Stamp
|
|||
THE SIGNATURE(S)
SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (Banks,
Stockbrokers, Savings and Loan Associations and Credit Unions) WITH
MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM, PURSUANT
TO S.E.C. RULE 17Ad-15.
|
|||||
Signature:
|
|||||
Signature:
|
|||||
Notice:
The signature to this assignment must correspond with the name
as
written upon the face of the certificate, in every particular,
without
alteration or enlargement, or any change whatever.
|
|||||
Where:
|
X
=
the
number of Shares and/or Warrants to be issued to the
Holder;
|
|
(a)
|
the
Company shall declare a dividend or authorize any other distribution on
its Common Stock; or
|
(b)
|
the
Company shall authorize the granting to the shareholders of its Common
Stock of rights to subscribe for or purchase any securities or any other
similar rights; or
|
(c)
|
any
reclassification, reorganization or similar change of the Common Stock, or
any consolidation or merger to which the Company is a party, or the sale,
lease, or exchange of any significant portion of the assets of the
Company; or
|
(d)
|
the
voluntary or involuntary dissolution, liquidation or winding up of the
Company; or
|
(e)
|
any
purchase, retirement or redemption by the Company of its Common
Stock;
|
(x)
|
the
date on which a record is to be taken for the purpose of such dividend,
distribution or rights, or, if a record is not to be taken, the date as of
which the shareholders of Common Stock of record to be entitled to such
dividend, distribution or rights are to be
determined;
|
(y)
|
the
date on which such reclassification, reorganization, consolidation,
merger, sale, transfer, dissolution, liquidation, winding up or purchase,
retirement or redemption is expected to become effective, and the date, if
any, as of which the Company's shareholders of Common Stock of record
shall be entitled to exchange their Common Stock for securities or other
property deliverable upon such reclassification, reorganization,
consolidation, merger, sale, transfer, dissolution, liquidation, winding
up, purchase, retirement or redemption;
and
|
(z)
|
if
any matters referred to in the foregoing clauses (x) and (y) are to be
voted upon by shareholders of Common Stock, the date as of which those
shareholders to be entitled to vote are to be
determined.
|
(a)
|
"THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 OR ANY STATE SECURITIES LAWS
AND MAY NOT BE SOLD, EXCHANGED, HYPOTHECATED OR TRANSFERRED IN ANY MANNER
EXCEPT IN COMPLIANCE WITH THE AGREEMENT PURSUANT TO WHICH THEY WERE
ISSUED.”
|
(b)
|
Any
legend required by applicable state securities
laws.
|
DAYBREAK OIL AND GAS, INC. | |||
Dated
_____________
|
By:
|
/s/ | |
James F. Westmoreland | |||
Name
|
|
|
(please
type or print in block letters)
|
||
Address
|
||
|
Name
|
|
|
(please
type or print in block letters)
|
||
Address
|
Signature
|
Dated
|
|
TO:
|
Daybreak
Oil and Gas, Inc.
|
Name
|
|
|
(please
type or print in block letters)
|
||
Address
|
||
Deliver
to:
|
Signature
|
Dated
|
|
Where:
|
X
=
|
the
number of Shares and/or Warrants to be issued to the
Holder;
|
|
Y
=
|
the
number of Shares and/or Warrants to be converted under this
Warrant;
|
|
A
=
|
the
Current Market Price of one share of Common Stock;
and
|
|
B
=
|
the
Share Exercise Price.
|
Re:
|
Securities
and Exchange Commission
Form
10-K
Consent
of Independent
Engineer
|
Very truly yours, | |||
HUDDLESTON & CO., INC. | |||
|
By:
|
/s/ GREGORY S. FLOYD, P.E. | |
Name: | Gregory S. Floyd, P.E. | ||
Title: | Vice President | ||
(1)
|
I
have reviewed this annual report on Form 10-K of Daybreak Oil and Gas,
Inc.
|
(2)
|
Based
on my knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
|
(3)
|
Based
on my knowledge, the financial statements, and other financial information
included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this
report;
|
(4)
|
The
registrant’s other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15(d)-15(f)) for the registrant and
have:
|
(a)
|
Designed
such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under my supervision, to ensure
that material information relating to the registrant, including its
consolidated subsidiaries, is made known to me by others within those
entities, particularly during the period in which this report is being
prepared;
|
(b)
|
Designed
such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision, to
provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting
principles;
|
(c)
|
E
valuated
the effectiveness of the registrant’s disclosure controls and procedures
and presented in this report our conclusions about the effectiveness of
the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation;
and
|
(d)
|
Disclosed
in this report any change in the registrant’s internal control over
financial reporting that occurred during the registrant’s most recent
fiscal quarter (the registrant’s fourth fiscal quarter in the case of an
annual report) that has materially affected, or is reasonably likely to
materially affect, the registrant’s internal control over
financial reporting; and
|
(5)
|
The
registrant’s other certifying officer and I have disclosed, based on our
most recent evaluation of internal control over financial reporting, to
the registrant’s auditors and the audit committee of the
registrant’s board of directors (or persons performing the equivalent
functions):
|
(a)
|
All
significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant’s ability to record,
process, summarize and report financial information;
and
|
(b)
|
Any
fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant’s internal control
over financial reporting.
|
(1)
|
The
Report fully complies with the requirements of Section 13(a) or 15(d) of
the Securities Exchange Act of 1934;
and
|
(2)
|
The
information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the
Company.
|