Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Nov. 30, 2015 | Jan. 12, 2016 | |
Document And Entity Information | ||
Entity Registrant Name | Daybreak Oil & Gas, Inc. | |
Entity Central Index Key | 1,164,256 | |
Document Type | 10-Q | |
Document Period End Date | Nov. 30, 2015 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --02-29 | |
Is Entity a Well-known Seasoned Issuer? | No | |
Is Entity a Voluntary Filer? | No | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 51,487,373 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,016 |
Balance Sheets (Unaudited)
Balance Sheets (Unaudited) - USD ($) | Nov. 30, 2015 | Feb. 28, 2015 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 108,646 | $ 496,772 |
Accounts receivable: | ||
Oil and natural gas sales | 119,555 | 202,732 |
Joint interest participants | 62,934 | 51,382 |
Other receivables, net | 101,003 | 160,996 |
Production revenue receivable, current | 65,000 | 120,000 |
Prepaid expenses and other current assets | 254,649 | 201,693 |
Note receivable, current | 642,540 | 1,320,944 |
Total current assets | 1,354,327 | 2,554,519 |
OIL AND NATURAL GAS PROPERTIES, successful efforts method, net | ||
Proved properties | 4,209,511 | 4,379,606 |
Unproved properties | 700,805 | 733,478 |
PREPAID DRILLING COSTS | 16,452 | 16,452 |
PRODUCTION REVENUE RECEIVABLE, NON-CURRENT | 0 | 35,000 |
DEFERRED FINANCING COSTS, NET | 748,599 | 1,058,751 |
NOTE RECEIVABLE, NON-CURRENT | 3,738,296 | 3,429,056 |
OTHER ASSETS | 106,263 | 106,199 |
Total assets | 10,874,253 | 12,313,061 |
CURRENT LIABILITIES: | ||
Accounts payable and other accrued liabilities | 1,634,331 | 1,435,677 |
Accounts payable, related parties | 963,716 | 905,891 |
Accrued interest | 188,290 | 158,797 |
Notes payable, related party | 250,100 | 250,100 |
Debt, current portion, net | 3,315,906 | 4,691,211 |
Line of credit | 853,136 | 869,865 |
Total current liabilities | 7,205,479 | 8,311,541 |
LONG TERM LIABILITIES: | ||
12% Notes payable, net | 315,000 | 315,000 |
12% Notes payable, related party, net | 250,000 | 250,000 |
Debt, non-current portion, net | 10,138,706 | 8,591,507 |
Asset retirement obligation | 31,873 | 29,603 |
Total liabilities | 17,941,058 | $ 17,497,651 |
COMMITMENTS AND CONTINGENCIES | ||
STOCKHOLDERS' DEFICIT: | ||
Preferred stock | 0 | $ 0 |
Common stock | 51,487 | 51,457 |
Additional paid-in capital | 22,968,714 | 22,968,734 |
Accumulated deficit | (30,087,731) | (28,205,516) |
Total stockholders' deficit | (7,066,805) | (5,184,590) |
Total liabilities and stockholders' deficit | 10,874,253 | 12,313,061 |
Series A Convertible Preferred Stock | ||
STOCKHOLDERS' DEFICIT: | ||
Preferred stock | $ 725 | $ 735 |
Balance Sheets (Parenthetical)
Balance Sheets (Parenthetical) - $ / shares | Nov. 30, 2015 | Feb. 28, 2015 |
Preferred stock, par value in dollars | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value in dollars | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 51,487,373 | 51,457,373 |
Common stock, shares outstanding | 51,487,373 | 51,457,373 |
Series A Convertible Preferred Stock | ||
Preferred stock, par value in dollars | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 2,400,000 | 2,400,000 |
Preferred stock, shares issued | 724,565 | 734,565 |
Preferred stock, shares outstanding | 724,565 | 734,565 |
Preferred stock, cumulative dividend rate | 6.00% | 6.00% |
Statements of Operations (Unaud
Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Nov. 30, 2015 | Nov. 30, 2014 | Nov. 30, 2015 | Nov. 30, 2014 | |
REVENUE: | ||||
Oil and natural gas sales | $ 276,332 | $ 663,650 | $ 1,087,450 | $ 2,518,375 |
OPERATING EXPENSES: | ||||
Production expenses | 62,637 | 86,140 | 208,243 | 251,625 |
Exploration and drilling | 9,756 | 7,362 | 29,823 | 20,172 |
Depreciation, depletion, amortization and impairment | 141,969 | 134,873 | 399,698 | 426,366 |
General and administrative | 248,357 | 230,040 | 782,860 | 849,964 |
Total operating expenses | 462,719 | 458,415 | 1,420,624 | 1,548,127 |
OPERATING INCOME (LOSS) | (186,387) | 205,235 | (333,174) | 970,248 |
OTHER INCOME (EXPENSE): | ||||
Interest income | 339,096 | 378,932 | 763,700 | 833,778 |
Interest expense | (982,270) | (718,586) | (2,312,741) | (2,081,590) |
Total other income (expense) | (643,174) | (339,654) | (1,549,041) | (1,247,812) |
NET INCOME (LOSS) | (829,561) | (134,419) | (1,882,215) | (277,564) |
Cumulative convertible preferred stock dividend requirement | (32,514) | (33,097) | (98,410) | (100,020) |
NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS | $ (862,075) | $ (167,516) | $ (1,980,625) | $ (377,584) |
NET INCOME (LOSS) PER COMMON SHARE, Basic and diluted | $ 0.02 | $ 0 | $ (0.04) | $ (0.01) |
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING, Basic and diluted | 51,487,373 | 51,448,373 | 51,484,073 | 55,035,219 |
Statements of Cash Flows (Unaud
Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Nov. 30, 2015 | Nov. 30, 2014 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
NET LOSS | $ (1,882,215) | $ (277,564) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Stock compensation | 0 | 2,515 |
Depreciation, depletion, impairment and ARO expense | 399,698 | 426,366 |
Amortization of debt discount | 100,896 | 127,960 |
Amortization of deferred financing costs | 319,808 | 316,126 |
Interest income | (64) | (64) |
Changes in assets and liabilities: | ||
Accounts receivable, oil and gas sales | 83,177 | 82,071 |
Accounts receivable, joint interest participants | (11,552) | 246,367 |
Accounts receivable, other | (258,343) | (98,558) |
Prepaid expenses and other current assets | (52,956) | (160,096) |
Accounts payable and other accrued liabilities | 111,258 | (505,498) |
Accounts payable, related parties | 57,825 | (100,386) |
Accrued interest | 693,921 | 195,406 |
Net cash provided by (used in) operating activities | (438,547) | 254,645 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Additions to oil and natural gas properties | (107,263) | (1,285,857) |
Prepaid drilling costs | 0 | (184,227) |
Additions to note receivable | 0 | (4,725,000) |
Collections of note receivable | 777,500 | 2,806,710 |
Deferred interest | 0 | 655 |
Net cash provided by (used in) investing activities | 670,237 | (3,387,719) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from long-term debt | 25,000 | 5,700,000 |
Payment on long-term debt | (618,431) | (2,202,910) |
Proceeds from warrant conversion | 0 | 7,000 |
Payment of deferred financing fees | (9,656) | (345,000) |
Payments on line of credit | (16,729) | (5,421) |
Net cash provided by (used in) financing activities | (619,816) | 3,153,669 |
NET DECREASE IN CASH AND CASH EQUIVALENTS | (388,126) | 20,595 |
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 496,772 | 500,431 |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | 108,646 | 521,026 |
Cash paid for Interest | 1,862,544 | 1,465,881 |
Cash paid for Income taxes | 0 | 0 |
SUPPLEMENTAL CASH FLOW INFORMATION: | ||
Unpaid additions to oil and natural gas properties | 87,396 | 3,702 |
Conversion of warrants | 0 | 1,874 |
Share-to-warrant exchange | 0 | 428 |
Increase in note receivable for interest added to principal | 408,336 | 0 |
Increase converted to principal on long term debt | 664,428 | 0 |
ARO asset and liability increase | 140 | 2,428 |
Increase in note payable for stock acquisition and subsequent retirement | 0 | 1,708,447 |
Transfer agent balancing adjustment | 0 | 140 |
Conversion of preferred stock to common stock | 30 | 0 |
Repurchase of stock through payment of payroll taxes | $ 0 | $ 490 |
Organization and Basis of Prese
Organization and Basis of Presentation | 9 Months Ended |
Nov. 30, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Basis of Presentation | NOTE 1 ORGANIZATION AND BASIS OF PRESENTATION: Organization Originally incorporated as Daybreak Uranium, Inc., (Daybreak Uranium) under the laws of the State of Washington on March 11, 1955, Daybreak Uranium was organized to explore for, acquire, and develop mineral properties in the Western United States. During 2005, management of the Company decided to enter the oil and natural gas exploration and production industry. On October 25, 2005, the Company shareholders approved a name change from Daybreak Mines, Inc. to Daybreak Oil and Gas, Inc. (referred to herein as Daybreak or the Company) to better reflect the business of the Company. All of the Companys oil and natural gas production is sold under contracts which are market-sensitive. Accordingly, the Companys financial condition, results of operations, and capital resources are highly dependent upon prevailing market prices of, and demand for, oil and natural gas. These commodity prices are subject to wide fluctuations and market uncertainties due to a variety of factors that are beyond the control of the Company. These factors include the level of global demand for petroleum products, foreign supply of oil and natural gas, the establishment of and compliance with production quotas by oil-exporting countries, the relative strength of the U.S. dollar, weather conditions, the price and availability of alternative fuels, and overall economic conditions, both foreign and domestic. Basis of Presentation The accompanying unaudited interim financial statements and notes for the Company have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q for quarterly reports under Section 13 or 15(d) of the Securities Exchange Act of 1934 (the Exchange Act). Accordingly, they do not include all of the information and footnote disclosures normally required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation of the financial statements have been included and such adjustments are of a normal recurring nature. Operating results for the nine months ended November 30, 2015 are not necessarily indicative of the results that may be expected for the fiscal year ending February 29, 2016. These financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Companys Annual Report on Form 10-K for the fiscal year ended February 28, 2015. Use of Estimates In preparing financial statements in conformity with accounting principles generally accepted in the United States of America, management is required to make estimates and assumptions. These estimates and assumptions may affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, and revenues and expenses during the reporting period. Actual results could differ materially from those estimates. The accounting policies most affected by managements estimates and assumptions are as follows: The reliance on estimates of proved reserves to compute the provision for depreciation, depletion and amortization and to determine the amount of any impairment of proved properties; The valuation of unproved acreage and proved oil and natural gas properties to determine the amount of any impairment of oil and natural gas properties; Judgment regarding the productive status of in-progress exploratory wells to determine the amount of any provision for abandonment; and Estimates regarding abandonment obligations. Reclassifications Certain reclassifications have been made to conform the prior periods financial information to the current periods presentation. These reclassifications had no effect on previously reported net loss or accumulated deficit. |
Going Concern
Going Concern | 9 Months Ended |
Nov. 30, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Going Concern | NOTE 2 GOING CONCERN: Financial Condition The Companys financial statements for the nine months ended November 30, 2015 have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities in the normal course of business. The Company has incurred net losses since entering the oil and natural gas exploration industry and as of November 30, 2015 has an accumulated deficit of $30,087,731 and a working capital deficit of $5,851,152 which raises substantial doubt about the Companys ability to continue as a going concern. Management Plans to Continue as a Going Concern The Company continues to implement plans to enhance its ability to continue as a going concern. Daybreak currently has a net revenue interest in 20 producing oil wells in its East Slopes Project located in Kern County, California (the East Slopes Project). The revenue from these wells has created a steady and reliable source of revenue. The Companys average working interest in these wells is 36.6% and the average net revenue interest (NRI) is 28.4% for these same wells. Additionally, the Company has become involved in a shallow oil development project in an existing natural gas field in Lawrence County, Kentucky, through its acquisition of an average 25% working interest in approximately 7,300 acres in two large contiguous blocks in the Twin Bottoms Field in Lawrence County, Kentucky. Daybreak currently has 14 producing horizontal oil wells in the Twin Bottoms Field with some supplementary natural gas production. The Companys average working interest in these 14 horizontal oil wells is 22.6% and the average NRI is 19.7% in these same wells. The Company anticipates revenues will continue to decrease from lower hydrocarbon prices even as it participates in the drilling of more wells in California and Kentucky. Daybreak plans to continue its development drilling programs in both Kentucky and California at a rate that is compatible with its cash flow; funding opportunities and hydrocarbon prices. The Companys sources of funds in the past have included the debt and equity markets and select asset sales, The Company has experienced revenue growth that has resulted in positive cash flow in the past from its oil and natural gas properties, however, it has not yet established consistent positive cash flow on a company-wide basis primarily due to lower oil prices. The Company has hired an investment banking firm to assist in refinancing its current debt to more favorable terms and secure additional capital to continue to develop its properties in Kentucky and California. As part of the efforts to refinance its debt, the Company may seek additional funding from the equity markets. However, the Company cannot offer any assurance that it will be successful in executing the aforementioned plan to continue as a going concern. Daybreaks financial statements as of November 30, 2015 do not include any adjustments that might result from the inability to implement or execute Daybreaks plans to improve our ability to continue as a going concern. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 9 Months Ended |
Nov. 30, 2015 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Recent Accounting Pronouncements | NOTE 3 RECENT ACCOUNTING PRONOUNCEMENTS: There are no new accounting pronouncements issued or effective that have had, or are expected to have, a material impact on the Companys financial statements. |
Concentration of Credit Risk
Concentration of Credit Risk | 9 Months Ended |
Nov. 30, 2015 | |
Risks and Uncertainties [Abstract] | |
Concentration of Credit Risk | NOTE 4 CONCENTRATION OF CREDIT RISK: Substantially all of the Companys trade accounts receivable result from crude oil and natural gas sales or joint interest billings to its working interest partners. This concentration of customers and joint interest owners may impact the Companys overall credit risk as these entities could be affected by similar changes in economic conditions including lower oil prices as well as other related factors. Trade accounts receivable are generally not collateralized. There were no allowances for doubtful accounts for the Companys trade accounts receivable at November 30, 2015 and February 28, 2015, as all joint interest owners have a history of paying their obligations. At the Companys East Slopes project in California, there is only one buyer available for the purchase of all oil production. At the Companys Twin Bottoms Field project located in Lawrence County, Kentucky, there is only one buyer available for the purchase of its oil production and only one buyer available for the purchase of its natural gas production. At November 30, 2015 and February 28, 2015 these three individual customers represented 100.0% of crude oil and natural gas revenue accounts receivable. If these buyers are unable to resell their products or if they lose a significant sales contract then the Company may incur difficulties in selling its oil and natural gas production. The Companys accounts receivable from Kentucky and California oil and natural gas sales at November 30, 2015 and February 28, 2015 are set forth in the table below. November 30, 2015 February 28, 2015 Project Customer Revenue Receivable Percentage Revenue Receivable Percentage Kentucky Twin Bottoms Field (Oil) Appalachian Oil $ 37,640 31.5% $ 90,906 44.9% Kentucky Twin Bottoms Field (Natural gas) Jefferson Gas 6,674 5.6% 16,676 8.2% California East Slopes Project (Oil) Plains Marketing 75,241 62.9% 95,150 46.9% $ 119,555 100.0% $ 202,732 100.0% Other receivables balances primarily include amounts advanced to certain minority working interest partners in Kentucky and monthly principal and interest receivable on the loan to App Energy, LLC, a Kentucky limited liability company (App Energy). For additional information on the App Energy loan refer to the discussion in Note 8 Note Receivable. |
Oil and Natural Gas Properties
Oil and Natural Gas Properties | 9 Months Ended |
Nov. 30, 2015 | |
Oil and Gas Exploration and Production Industries Disclosures [Abstract] | |
Oil and Natural Gas Properties | NOTE 5 OIL AND NATURAL GAS PROPERTIES: Oil and natural gas property balances at November 30, 2015 and February 28, 2015 are set forth in the table below. November 30, 2015 February 28, 2015 Proved leasehold costs $ 700,573 $ 695,231 Unproved leasehold costs 700,805 733,478 Costs of wells and development 591,576 542,563 Capitalized exploratory well costs 5,447,249 5,308,876 Total cost of oil and natural gas properties 7,440,203 7,280,148 Accumulated depletion, depreciation, amortization and impairment (2,529,887) (2,167,064) Net oil and natural gas properties $ 4,910,316 $ 5,113,084 |
Production Revenue Receivable
Production Revenue Receivable | 9 Months Ended |
Nov. 30, 2015 | |
Receivables [Abstract] | |
Production Revenue Receivable | NOTE 6 PRODUCTION REVENUE RECEIVABLE: Production revenue receivable balances of $65,000 in aggregate represent amounts due the Company from a portion of the sale price of a 25% working interest in East Slopes Project in Kern County, California that was acquired through the default of certain original working interest partners in the project. Production revenue receivable balances at November 30, 2015 and February 28, 2015 are set forth in the table below: November 30, 2015 February 28, 2015 Production revenue receivable current $ 65,000 $ 120,000 Production revenue receivable non-current - 35,000 $ 65,000 $ 155,000 |
Deferred Financing Costs
Deferred Financing Costs | 9 Months Ended |
Nov. 30, 2015 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Deferred Financing Costs | NOTE 7 DEFERRED FINANCING COSTS: Deferred financing costs at November 30, 2015 and February 28, 2015 relate to the original and the amended credit facility with Maximilian Resources LLC, a Delaware limited liability company and successor by assignment to Maximilian Investors LLC (either party, as appropriate, is referred to in these notes to the financial statements as Maximilian), are set forth in the table below: November 30, 2015 February 28, 2015 Deferred financing costs loan fees $ 160,794 $ 151,139 Deferred financing costs loan commissions 630,662 630,662 Deferred financing costs fair value of warrants 530,488 530,488 Deferred financing costs fair value of common stock 419,832 419,832 1,741,776 1,732,121 Accumulated amortization (993,177) (673,370) $ 748,599 $ 1,058,751 The Company recognized amortization expense of $319,808 for the nine months ended November 30, 2015. |
Note Receivable
Note Receivable | 9 Months Ended |
Nov. 30, 2015 | |
Receivables [Abstract] | |
Note Receivable | NOTE 8 NOTE RECEIVABLE: Note receivable balances at November 30, 2015 and February 28, 2015 are set forth in the table below: November 30, 2015 February 28, 2015 Note receivable current $ 642,540 $ 1,320,944 Note receivable non-current 3,738,296 3,429,056 $ 4,380,836 $ 4,750,000 In connection with entering into the Third Amendment to the Amended and Restated Loan and Security Agreement and Second Warrant Amendment with Maximilian, (See Note 11 - Short-Term and Long-Term Borrowings), the Company concurrently entered into a Third Amendment to Loan and Security Agreement with App Energy (the App Amendment), which amended the Companys loan agreement with App Energy in which the Company, as lender, lends to App Energy, as borrower, a portion of the advances it receives pursuant to its loan agreement with Maximilian. The App Amendment provides for a reduction in interest rate from 19.2% to 17.0% and a reduction in monthly payments to $37,500 for principal payments to be made by App Energy to the Company for the same payment cycles as the reduced payment to be made by the Company under the Maximilian Amendment. The reduction in monthly payments by App Energy will allow App Energy to fund its share of drilling and completing additional wells in Kentucky with the Company. As consideration for the reduction in the monthly payment amount, App Energy agreed that certain amounts will be treated as additional advances under the App Energy loan agreement, and that it would fund a portion of the Companys drilling and development expenses with respect to two wells. App Energy also agreed to grant to Maximilian an overriding royalty interest on the same terms as the overriding royalty interest agreed to by the Company. |
Accounts Payable
Accounts Payable | 9 Months Ended |
Nov. 30, 2015 | |
Payables and Accruals [Abstract] | |
Accounts Payable | NOTE 9 ACCOUNTS PAYABLE: On March 1, 2009, the Company became the operator for its East Slopes Project. Additionally, the Company at that time assumed certain original partners default liability of approximately $1.5 million representing a 25% working interest in the drilling and completion costs associated with the East Slopes Project four earning well program. The Company subsequently sold the same 25% working interest on June 11, 2009. Of the $1.5 million default, $244,849 remains unpaid and is included in the November 30, 2015 accounts payable balance. |
Accounts Payable - Related Part
Accounts Payable - Related Parties | 9 Months Ended |
Nov. 30, 2015 | |
Related Party Transactions [Abstract] | |
Accounts Payable - Related Parties | NOTE 10 ACCOUNTS PAYABLE- RELATED PARTIES: The November 30, 2015 and February 28, 2015 accounts payable related parties balances were comprised primarily of deferred salaries of the Companys Executive Officers and certain employees; deferred directors fees; expense reimbursements; and interest to the Companys President and Chief Executive Officer on the 12% Subordinated Notes further described in Note 11 Short-Term and Long-Term Borrowings below. Payment of these items has been deferred until the Companys cash flow situation improves. |
Short-Term and Long-Term Borrow
Short-Term and Long-Term Borrowings | 9 Months Ended |
Nov. 30, 2015 | |
Debt Disclosure [Abstract] | |
Short-Term and Long-Term Borrowings | NOTE 11 SHORT-TERM AND LONG-TERM BORROWINGS: Note Payable Related Party As of November 30, 2015 and February 28, 2015, the Companys President and Chief Executive Officer had loaned the Company $250,100 in aggregate that was used for a variety of corporate purposes including an escrow requirement on a loan commitment; extension fees on third party loans; and a reduction of principal on the Companys credit line with UBS Bank. These loans are non-interest bearing loans and repayment will be made upon a mutually agreeable date in the future. Line of Credit The Company has an existing $890,000 line of credit for working capital purposes with UBS Bank USA (UBS), established pursuant to a Credit Line Agreement dated October 24, 2011 that is secured by the personal guarantee of our President and Chief Executive Officer. Interest is payable monthly at a stated reference rate of 0.249% + 337.5 basis points and totaled $28,770 for the nine months ended November 30, 2015. The reference rate is based on the 30 day LIBOR (London Interbank Offered Rate) and is subject to change from UBS. At November 30, 2015 the Line of credit had an outstanding balance of $853,136. Long-term Borrowings 12% Subordinated Notes The Companys 12% Subordinated Notes (the Notes) issued pursuant to a March 2010 private placement (of which $250,000 was from a related party) accrue interest at 12% per annum, payable semi-annually on January 29th and July 29th. On January 29, 2015, the Company and 12 of the 13 note holders agreed to extend the maturity date of the Notes from January 29, 2015 for an additional two years. The note principal is payable in full at the amended maturity date of the Notes, which is January 29, 2017. Should the Board of Directors, on the amended maturity date, decide that the payment of the principal and any unpaid interest would impair the financial condition or operations of the Company, the Company may then elect a mandatory conversion of the unpaid principal and interest into the Companys common stock at a conversion rate equal to 75% of the average closing price of the Companys common stock over the 20 consecutive trading days preceding December 31, 2016. The Notes consist of the following: November 30, 2015 February 28, 2015 12% Subordinated Notes $ 315,000 $ 315,000 12% Subordinated Notes related party 250,000 250,000 $ 565,000 $ 565,000 Maximilian Credit Facility On October 31, 2012, the Company entered into a loan agreement with Maximilian, which provided for a revolving credit facility of up to $20 million, maturing on October 31, 2016, with a minimum commitment of $2.5 million. The loan had annual interest of 18% and a monthly commitment fee of 0.5%. The Company also granted Maximilian a 10% working interest in its share of the oil and natural gas leases in Kern County, California. The relative fair value of this 10% working interest amounting to $515,638 was recognized as a discount to debt and is being amortized over the original term of the loan. Amortization expense was $100,896 for the nine months ended November 30, 2015. Unamortized debt discount was $103,168 at November 30, 2015. In 2012, the Company also issued 2,435,517 warrants to third parties who assisted in the closing of the loan. The warrants have an exercise price of $0.044; contain a cashless exercise provision; have piggyback registration rights; and are exercisable for a period of five years expiring on October 31, 2017. The fair value of the warrants, as determined by the Black-Scholes option pricing model, was $98,084 and included the following assumptions: a risk free interest rate of 0.72%; stock price of $0.04, volatility of 153.44%; and a dividend yield of 0.0%. The fair value of the warrants was recognized as a financing cost and is being amortized as a part of deferred financing cost over the term of the loan. As of November 30, 2015, 316,617 of these warrants remain unexercised and outstanding. Maximilian Credit Facility - Amended and Restated Loan Agreement In connection with the Companys acquisition of a working interest from App Energy in the Twin Bottoms Field in Lawrence County, Kentucky, the Company amended its loan agreement with Maximilian on August 28, 2013. The amended loan agreement provided for an increase in the revolving credit facility from $20 million to $90 million and a reduction in the annual interest rate from 18% to 12%. The monthly commitment fee of 0.5% per month on the outstanding principal balance remained unchanged. Advances under the amended loan agreement will mature on August 28, 2017. The obligations under the amended loan agreement continue to be secured by a perfected first priority security interest in substantially all of the personal property of the Company, and a mortgage on the Companys leases in Kern County, California. The amended loan agreement also provided for the revolving credit facility to be divided into two borrowing sublimits. The first borrowing sublimit is $50 million and is for borrowing by the Company, primarily for its ongoing oil and natural gas exploration and development activities. The second borrowing sublimit, of $40 million, is for loans to be extended by the Company, as lender, to App Energy, as borrower pursuant to a Loan and Security Agreement entered into between the Company and App Energy on August 28, 2013 (See Note 8 Note Receivable). The amended loan agreement contains customary covenants for loans of such type, including among other things, covenants that restrict the Companys ability to make capital expenditures, incur indebtedness, incur liens and dispose of property. The amended loan agreement also contains various events of default, including failure to pay principal and interest when due, breach of covenants, materially incorrect representations and bankruptcy or insolvency. If an event of default occurs, all of the Companys obligations under the amended loan agreement could be accelerated by Maximilian, causing all loans outstanding (including accrued interest and fees payable thereunder) to be declared immediately due and payable. As consideration for Maximilian facilitating the Companys transactions with App Energy and entering into the amended loan agreement, the Company (a) issued to Maximilian approximately 6.1 million common shares, representing 9.99% of the Companys outstanding common stock on a fully-diluted basis at the time of grant, and (b) issued approximately 6.1 million warrants to purchase shares of the Companys common stock representing the right to purchase up to an additional 9.99% of the Companys outstanding common stock on a fully-diluted basis, calculated as of the date of grant. The warrants had an exercise price of $0.10; contained a cash exercise provision and were exercisable for a period of three years expiring on August 28, 2016; and contained an exercise blocker provision that prevents any exercise of the warrants if such exercise and related issuance of common stock would increase the Maximilian holdings of the Companys common stock to more than 9.99% of the Companys currently issued and outstanding shares at the time of the exercise. The Company also granted to Maximilian a 50% net profits interest in the Companys approximate 25% working interest, after the Company recovers its investment in the Kentucky acreage, pursuant to an Assignment of Net Profits Interest entered into as of August 28, 2013 by and between the Company and Maximilian. On May 28, 2014 at Maximilians request, the Company finalized a share-for-warrant exchange agreement in which Maximilian returned to the Company 427,729 common shares and was in turn issued the same number of warrants containing the same provisions as the originally issued warrants. This share-for-warrant exchange occurred so that Maximilian would hold no more than 9.99% of the Companys common shares, issued and outstanding. The Company determined that the share-for-warrant exchange did not result in any incremental fair value. On August 21, 2014, the Company entered into a First Amendment to Amended and Restated Loan and Security Agreement and Share Repurchase Agreement (the First Amendment) with Maximilian. The Amendment secured for the Company an additional advance of $2,200,000 under its credit facility with Maximilian since the advances made by Maximilian had already exceeded its minimum funding commitment. Additionally, Maximilian agreed to temporarily reduce the required monthly payment made by the Company until it had paid $1,000,000 less than principal payments required by the previous agreement. Furthermore, Maximilian agreed to reduce the regular interest rate applicable to the loan from 12% per annum to 9% per annum and the default interest rate by 3%. The additional advance, the reduction in the required monthly payment and the reduction in the interest rate were facilitated through the Companys acquisition of 5,694,823 shares of its common stock held by Maximilian. The repurchased shares were cancelled and restored to the status of authorized, but unissued stock. The Company paid for the share repurchase transaction through an advance of $1,708,447 under the existing loan agreement with Maximilian. On August 21, 2014, the Company entered into a First Amendment to Amended and Restated Loan and Security Agreement and Share Repurchase Agreement (the First Amendment) with Maximilian. The Amendment secured for the Company an additional advance of $2,200,000 under its credit facility with Maximilian since the advances made by Maximilian had already exceeded its minimum funding commitment. Additionally, Maximilian agreed to temporarily reduce the required monthly payment made by the Company until it had paid $1,000,000 less than principal payments required by the previous agreement. Furthermore, Maximilian agreed to reduce the regular interest rate applicable to the loan from 12% per annum to 9% per annum and the default interest rate by 3%. The additional advance, the reduction in the required monthly payment and the reduction in the interest rate were facilitated through the Companys acquisition of 5,694,823 shares of its common stock held by Maximilian. The repurchased shares were cancelled and restored to the status of authorized, but unissued stock. The Company paid for the share repurchase transaction through an advance of $1,708,447 under the existing loan agreement with Maximilian. On May 20, 2015, the Company entered into a Second Amendment to Amended and Restated Loan and Security Agreement (the Second Amendment) with Maximilian. The Second Amendment modified the calculation of the required monthly payment for a three-month period ending June 30, 2015. As consideration for entering into the loan modification, the Company agreed to modify the exercise price of the warrants Maximilian currently holds from $0.10 to $0.04. No other terms of the warrant agreement were changed. The modification did not result to any accounting since these warrants were deemed to be investor warrants. On October 14, 2015, the Company entered into a Third Amendment to the Amended and Restated Loan and Security Agreement and Second Warrant Amendment with Maximilian, (the Third Amendment). Pursuant to the Third Amendment, Maximilian agreed to a reduction in the Companys monthly payments under the loan agreement to $50,000 per month for a period of six months ending on February 29, 2016. The reduction in monthly payments allows for additional funds to be used by the Company in drilling and completing additional wells in Kentucky. As consideration for the reduction in the monthly payment amount, the Company agreed that twenty percent (20%) of the amount by which the monthly payment was reduced would be added to the loan balance, and the portion of the monthly payment savings that constitutes savings in interest or commitment fees would be treated as an additional advance of principal under the loan agreement (the Deemed Advances). The 20% fee is being recognized as additional interest expense. The Company also agreed to grant to Maximilian an overriding royalty interest of 1.5% of its working interest in four wells in Kentucky. As part of the Maximilian Amendment, the Company also agreed to extend the expiration date of the warrants held by Maximilian to purchase up to 6,550,281 shares of common stock of the Company to August 28, 2018. The Company determined that the accounting of the loan modification was not substantial. Likewise, the Company determined that the modification of the warrant term did not result in any accounting since these warrants were deemed to be investor warrants. With the cooperation of Maximilian, the Company is currently working with an investment banking firm to assist in securing refinancing of its debt with Maximilian, since the long-term commitment needed to develop the Kentucky and California projects no longer fits the Maximilian business model. A waiver was granted by Maximilian for the January 1, 2016 payment that was not made by the Company to Maximilian. Maximilian is continuing to work with the Company in modifying the credit facility terms during this period of lower hydrocarbon prices. Current debt balances at November 30, 2015, and February 28, 2015 are set forth in the table below: November 30, 2015 February 28, 2015 Maximilian note $ 3,419,074 $ 4,823,325 Maximilian note - discount (103,168) (132,114) $ 3,315,906 $ 4,691,211 Non-current debt balances at November 30, 2015 and February 28, 2015 are set forth in the table below: November 30, 2015 February 28, 2015 Maximilian note $ 10,138,706 $ 8,663,458 Maximilian note - discount - (71,951) $ 10,138,706 $ 8,591,507 |
Stockholders' Deficit
Stockholders' Deficit | 9 Months Ended |
Nov. 30, 2015 | |
Equity [Abstract] | |
Stockholders' Deficit | NOTE 12 STOCKHOLDERS DEFICIT: Series A Convertible Preferred Stock The Company has designated 2,400,000 shares of the 10,000,000 preferred shares as Series A Convertible Preferred Stock (Series A Preferred), with a $0.001 par value. At November 30, 2015, there were 724,565 shares issued and outstanding, that had not been converted into our common stock. As of November 30, 2015, there are 43 accredited investors who have converted 675,200 Series A Preferred shares into 2,025,600 shares of Daybreak common stock. The conversions of Series A Preferred that have occurred since the Series A Preferred was first issued in July 2006 is set forth in the table below. Fiscal Period Shares of Series A Preferred Converted to Common Stock Shares of Common Stock Issued from Conversion Number of Accredited Investors Year Ended February 29, 2008 102,300 306,900 10 Year Ended February 28, 2009 237,000 711,000 12 Year Ended February 28, 2010 51,900 155,700 4 Year Ended February 28, 2011 102,000 306,000 4 Year Ended February 29, 2012 - - - Year Ended February 28, 2013 18,000 54,000 2 Year Ended February 28, 2014 151,000 453,000 9 Year Ended February 28, 2015 3,000 9,000 1 Nine Months Ended November 30, 2015 10,000 30,000 1 Totals 675,200 2,025,600 43 Holders of Series A Preferred shall be paid dividends, in the amount of 6% of the original purchase price per annum. Dividends are cumulative from the date of the final closing of the private placement, whether or not in any dividend period or periods we have assets legally available for the payment of such dividends. As of November 30, 2015, no dividends have been paid. Dividends earned since issuance for each fiscal year and the nine months ended November 30, 2015 are set forth in the table below: Fiscal Period Shareholders at Period End Earned Dividends Year Ended February 28, 2007 100 $ 155,311 Year Ended February 29, 2008 90 242,126 Year Ended February 28, 2009 78 209,973 Year Ended February 28, 2010 74 189,973 Year Ended February 28, 2011 70 173,707 Year Ended February 29, 2012 70 163,624 Year Ended February 28, 2013 68 161,906 Year Ended February 28, 2014 59 151,323 Year Ended February 28, 2015 58 132,634 Nine Months Ended November 30, 2015 57 98,410 Total Accumulated Dividends $ 1,678,987 Common Stock The Company is authorized to issue up to 200,000,000 shares of $0.001 par value common stock of which 51,487,373 shares were issued and outstanding as of November 30, 2015. In comparison, at February 28, 2015, a total of 51,457,373 shares were issued and outstanding. The increase of 30,000 shares was attributable as shown below: Common Stock Balance Par Value Common stock, Issued and Outstanding, February 28, 2015 51,457,373 Conversion of Series A Convertible Preferred Stock to Common Stock 30,000 $ 30 Common stock, Issued and Outstanding, November 30, 2015 51,487,373 |
Warrants
Warrants | 9 Months Ended |
Nov. 30, 2015 | |
Equity [Abstract] | |
Warrants | NOTE 13 WARRANTS: Warrants outstanding and exercisable as of November 30, 2015 are set forth in the table below: Warrants Exercise Price Remaining Life (Years) Exercisable Warrants Remaining 12% Subordinated notes 1,190,000 $0.14 1.17 980,000 Warrants issued in 2012 for debt financing 2,435,517 $0.044 1.92 316,617 Warrants issued for Kentucky oil project 3,498,601 $0.04 2.75 3,498,601 Warrants issued for Kentucky debt financing 2,623,951 $0.04 2.75 2,623,951 Warrants issued for Kentucky debt financing 309,503 $0.214 2.75 309,503 Warrants issued in share-for-warrant exchange 427,729 $0.04 2.75 427,729 10,485,301 8,156,401 There were 150,000 warrants issued in 2010 for services that expired during the nine months ended November 30, 2015. During the nine months ended November 30, 2015 there were no warrants issued or exercised. The remaining outstanding warrants as of November 30, 2015, have a weighted average exercise price of $0.06, a weighted average remaining life of 2.53 years, and an intrinsic value of -$0-. |
Income Taxes
Income Taxes | 9 Months Ended |
Nov. 30, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 14 INCOME TAXES: Reconciliation between actual tax expense (benefit) and income taxes computed by applying the U.S. federal income tax rate and state income tax rates to income from continuing operations before income taxes is set forth in the table below: November 30, 2015 February 28, 2015 Computed at U.S. and state statutory rates (40%) $ (752,885) $ (293,176) Permanent differences 88,175 142,925 Changes in valuation allowance 664,710 150,251 $ - $ - Tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred liabilities are set forth in the table below: November 30, 2015 February 28, 2015 Deferred tax assets: Net operating loss carryforwards $ 9,913,956 $ 9,188,905 Oil and natural gas properties (1,420,887) (1,436,249) Stock based compensation 88,723 88,723 Other (178,602) (102,899) Less valuation allowance (8,403,190) (7,738,480) $ - $ - At November 30, 2015, Daybreak had estimated net operating loss (NOL) carryforwards for federal and state income tax purposes of approximately $24,784,890 which will begin to expire, if unused, beginning in 2024. The valuation allowance increased $664,710 for the nine months ended November 30, 2015 and increased by $150,251 for the year ended February 28, 2015. Section 382 of the Internal Revenue Code places annual limitations on the Companys NOL carryforward. The above estimates are based on managements decisions concerning elections which could change the relationship between net income and taxable income. Management decisions are made annually and could cause estimates to vary significantly. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Nov. 30, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 15 COMMITMENTS AND CONTINGENCIES: Various lawsuits, claims and other contingencies arise in the ordinary course of the Companys business activities. While the ultimate outcome of any future contingency is not determinable at this time, management believes that any liability or loss resulting therefrom will not materially affect the financial position, results of operations or cash flows of the Company. The Company, as an owner or lessee and operator of oil and natural gas properties, is subject to various federal, state and local laws and regulations relating to discharge of materials into, and protection of, the environment. These laws and regulations may, among other things, impose liability on the lessee under an oil and natural gas lease for the cost of pollution clean-up resulting from operations and subject the lessee to liability for pollution damages. In some instances, the Company may be directed to suspend or cease operations in the affected area. The Company maintains insurance coverage that is customary in the industry, although the Company is not fully insured against all environmental risks. The Company is not aware of any environmental claims existing as of November 30, 2015. There can be no assurance, however, that current regulatory requirements will not change or that past non-compliance with environmental issues will not be discovered on the Companys oil and natural gas properties. |
Accounting Policies (Policies)
Accounting Policies (Policies) | 9 Months Ended |
Nov. 30, 2015 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited interim financial statements and notes for the Company have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q for quarterly reports under Section 13 or 15(d) of the Securities Exchange Act of 1934 (the Exchange Act). Accordingly, they do not include all of the information and footnote disclosures normally required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation of the financial statements have been included and such adjustments are of a normal recurring nature. Operating results for the nine months ended November 30, 2015 are not necessarily indicative of the results that may be expected for the fiscal year ending February 29, 2016. These financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Companys Annual Report on Form 10-K for the fiscal year ended February 28, 2015. |
Use of Estimates | Use of Estimates In preparing financial statements in conformity with accounting principles generally accepted in the United States of America, management is required to make estimates and assumptions. These estimates and assumptions may affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, and revenues and expenses during the reporting period. Actual results could differ materially from those estimates. The accounting policies most affected by managements estimates and assumptions are as follows: The reliance on estimates of proved reserves to compute the provision for depreciation, depletion and amortization and to determine the amount of any impairment of proved properties; The valuation of unproved acreage and proved oil and natural gas properties to determine the amount of any impairment of oil and natural gas properties; Judgment regarding the productive status of in-progress exploratory wells to determine the amount of any provision for abandonment; and Estimates regarding abandonment obligations. |
Reclassifications | Reclassifications Certain reclassifications have been made to conform the prior periods financial information to the current periods presentation. These reclassifications had no effect on previously reported net loss or accumulated deficit. |
Concentration of Credit Risk (T
Concentration of Credit Risk (Tables) | 9 Months Ended |
Nov. 30, 2015 | |
Risks and Uncertainties [Abstract] | |
Schedule of Concentration of Risk, by Risk Factor | November 30, 2015 February 28, 2015 Project Customer Revenue Receivable Percentage Revenue Receivable Percentage Kentucky Twin Bottoms Field (Oil) Appalachian Oil $ 37,640 31.5% $ 90,906 44.9% Kentucky Twin Bottoms Field (Natural gas) Jefferson Gas 6,674 5.6% 16,676 8.2% California East Slopes Project (Oil) Plains Marketing 75,241 62.9% 95,150 46.9% $ 119,555 100.0% $ 202,732 100.0% |
Oil and Natural Gas Properties
Oil and Natural Gas Properties (Tables) | 9 Months Ended |
Nov. 30, 2015 | |
Oil and Gas Exploration and Production Industries Disclosures [Abstract] | |
Capitalized Costs Relating to Oil and Gas Activities | November 30, 2015 February 28, 2015 Proved leasehold costs $ 700,573 $ 695,231 Unproved leasehold costs 700,805 733,478 Costs of wells and development 591,576 542,563 Capitalized exploratory well costs 5,447,249 5,308,876 Total cost of oil and natural gas properties 7,440,203 7,280,148 Accumulated depletion, depreciation, amortization and impairment (2,529,887) (2,167,064) Net oil and natural gas properties $ 4,910,316 $ 5,113,084 |
Production Revenue Receivable (
Production Revenue Receivable (Tables) | 9 Months Ended |
Nov. 30, 2015 | |
Receivables [Abstract] | |
Schedule of Production Revenue Receivable | November 30, 2015 February 28, 2015 Production revenue receivable current $ 65,000 $ 120,000 Production revenue receivable non-current - 35,000 $ 65,000 $ 155,000 |
Deferred Financing Costs (Table
Deferred Financing Costs (Tables) | 9 Months Ended |
Nov. 30, 2015 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Deferred Costs, Capitalized, Prepaid, and Other Assets | November 30, 2015 February 28, 2015 Deferred financing costs loan fees $ 160,794 $ 151,139 Deferred financing costs loan commissions 630,662 630,662 Deferred financing costs fair value of warrants 530,488 530,488 Deferred financing costs fair value of common stock 419,832 419,832 1,741,776 1,732,121 Accumulated amortization (993,177) (673,370) $ 748,599 $ 1,058,751 |
Note Receivable (Tables)
Note Receivable (Tables) | 9 Months Ended |
Nov. 30, 2015 | |
Receivables [Abstract] | |
Schedule of Accounts, Notes, Loans and Financing Receivables | November 30, 2015 February 28, 2015 Note receivable current $ 642,540 $ 1,320,944 Note receivable non-current 3,738,296 3,429,056 $ 4,380,836 $ 4,750,000 |
Short-Term and Long-Term Borr27
Short-Term and Long-Term Borrowings (Tables) | 9 Months Ended |
Nov. 30, 2015 | |
Debt Disclosure [Abstract] | |
Schedule of Debt Instruments | November 30, 2015 February 28, 2015 12% Subordinated Notes $ 315,000 $ 315,000 12% Subordinated Notes related party 250,000 250,000 $ 565,000 $ 565,000 |
Schedule of Debt | Current November 30, 2015 February 28, 2015 Maximilian note $ 3,419,074 $ 4,823,325 Maximilian note - discount (103,168) (132,114) $ 3,315,906 $ 4,691,211 Non-Current November 30, 2015 February 28, 2015 Maximilian note $ 10,138,706 $ 8,663,458 Maximilian note - discount - (71,951) $ 10,138,706 $ 8,591,507 |
Stockholders' Deficit (Tables)
Stockholders' Deficit (Tables) | 9 Months Ended |
Nov. 30, 2015 | |
Equity [Abstract] | |
Schedule of Stockholder's Equity | Fiscal Period Shares of Series A Preferred Converted to Common Stock Shares of Common Stock Issued from Conversion Number of Accredited Investors Year Ended February 29, 2008 102,300 306,900 10 Year Ended February 28, 2009 237,000 711,000 12 Year Ended February 28, 2010 51,900 155,700 4 Year Ended February 28, 2011 102,000 306,000 4 Year Ended February 29, 2012 - - - Year Ended February 28, 2013 18,000 54,000 2 Year Ended February 28, 2014 151,000 453,000 9 Year Ended February 28, 2015 3,000 9,000 1 Nine Months Ended November 30, 2015 10,000 30,000 1 Totals 675,200 2,025,600 43 |
Schedule of Dividends Payable | Fiscal Period Shareholders at Period End Earned Dividends Year Ended February 28, 2007 100 $ 155,311 Year Ended February 29, 2008 90 242,126 Year Ended February 28, 2009 78 209,973 Year Ended February 28, 2010 74 189,973 Year Ended February 28, 2011 70 173,707 Year Ended February 29, 2012 70 163,624 Year Ended February 28, 2013 68 161,906 Year Ended February 28, 2014 59 151,323 Year Ended February 28, 2015 58 132,634 Nine Months Ended November 30, 2015 57 98,410 Total Accumulated Dividends $ 1,678,987 |
Schedule of Common Stock Outstanding | Common Stock Balance Par Value Common stock, Issued and Outstanding, February 28, 2015 51,457,373 Conversion of Series A Convertible Preferred Stock to Common Stock 30,000 $ 30 Common stock, Issued and Outstanding, November 30, 2015 51,487,373 |
Warrants (Tables)
Warrants (Tables) | 9 Months Ended |
Nov. 30, 2015 | |
Equity [Abstract] | |
Schedule of Stockholders' Equity Note Warrants and Rights | Warrants Exercise Price Remaining Life (Years) Exercisable Warrants Remaining 12% Subordinated notes 1,190,000 $0.14 1.17 980,000 Warrants issued in 2012 for debt financing 2,435,517 $0.044 1.92 316,617 Warrants issued for Kentucky oil project 3,498,601 $0.04 2.75 3,498,601 Warrants issued for Kentucky debt financing 2,623,951 $0.04 2.75 2,623,951 Warrants issued for Kentucky debt financing 309,503 $0.214 2.75 309,503 Warrants issued in share-for-warrant exchange 427,729 $0.04 2.75 427,729 10,485,301 8,156,401 |
Income Taxes (Tables)
Income Taxes (Tables) | 9 Months Ended |
Nov. 30, 2015 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense Benefit | November 30, 2015 February 28, 2015 Computed at U.S. and state statutory rates (40%) $ (752,885) $ (293,176) Permanent differences 88,175 142,925 Changes in valuation allowance 664,710 150,251 $ - $ - |
Schedule of Deferred Tax Assets and Liabilities | November 30, 2015 February 28, 2015 Deferred tax assets: Net operating loss carryforwards $ 9,913,956 $ 9,188,905 Oil and natural gas properties (1,420,887) (1,436,249) Stock based compensation 88,723 88,723 Other (178,602) (102,899) Less valuation allowance (8,403,190) (7,738,480) $ - $ - |
Going Concern (Details Narrativ
Going Concern (Details Narrative) | Nov. 30, 2015USD ($)anumber | Feb. 28, 2015USD ($) |
Oil and Gas Delivery Commitments and Contracts [Line Items] | ||
Accumulated deficit | $ | $ 30,087,731 | $ 28,205,516 |
Working capital deficit | $ | $ 5,851,152 | |
East Slopes Project | ||
Oil and Gas Delivery Commitments and Contracts [Line Items] | ||
Number of producing wells, net revenue interest | number | 20 | |
Average working interest | 36.60% | |
Average net revenue interest | 28.40% | |
Twin Bottoms Field | ||
Oil and Gas Delivery Commitments and Contracts [Line Items] | ||
Number of producing wells, net revenue interest | number | 14 | |
Average working interest | 22.60% | |
Average net revenue interest | 19.70% | |
Kentucky acreage | a | 7,300 |
Concentration of Credit Risk -
Concentration of Credit Risk - Schedule of Concentration of Risk, by Risk Factor (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Nov. 30, 2015 | Feb. 28, 2015 | |
Concentration Risk [Line Items] | ||
Revenue receivable | $ 119,555 | $ 202,732 |
Percent of revenue | 100.00% | 100.00% |
Customer Concentration Risk | Accounts Receivable | Plains Marketing (California - East Slopes Project (Oil)) | ||
Concentration Risk [Line Items] | ||
Revenue receivable | $ 75,241 | $ 95,150 |
Percent of revenue | 62.90% | 46.90% |
Customer Concentration Risk | Accounts Receivable | Jefferson Gas (Kentucky - Twin Bottoms Field (Gas)) | ||
Concentration Risk [Line Items] | ||
Revenue receivable | $ 6,674 | $ 16,676 |
Percent of revenue | 5.60% | 8.20% |
Customer Concentration Risk | Accounts Receivable | Appalachian Oil (Kentucky - Twin Bottoms Field (Oil)) | ||
Concentration Risk [Line Items] | ||
Revenue receivable | $ 37,640 | $ 90,906 |
Percent of revenue | 31.50% | 44.90% |
Concentration of Credit Risk (D
Concentration of Credit Risk (Details Narrative) | 9 Months Ended |
Nov. 30, 2015 | |
Risks and Uncertainties [Abstract] | |
Concentration of risk, description | At the Companys East Slopes project in California, there is only one buyer available for the purchase of all oil production. At the Companys Twin Bottoms Field project located in Lawrence County, Kentucky, there is only one buyer available for the purchase of its oil production and only one buyer available for the purchase of its natural gas production. At November 30, 2015 and February 28, 2015 these three individual customers represented 100.0% of crude oil and natural gas revenue accounts receivable. If these buyers are unable to resell their products or if they lose a significant sales contract then the Company may incur difficulties in selling its oil and natural gas production. |
Oil and Natural Gas Propertie34
Oil and Natural Gas Properties - Capitalized Costs Relating to Oil and Gas Activities (Details) - USD ($) | Nov. 30, 2015 | Feb. 28, 2015 |
Oil and Gas Exploration and Production Industries Disclosures [Abstract] | ||
Proved leasehold costs | $ 700,573 | $ 695,231 |
Unproved leasehold costs | 700,805 | 733,478 |
Costs of wells and development | 591,576 | 542,563 |
Capitalized exploratory well costs | 5,447,249 | 5,308,876 |
Total cost of oil and natural gas properties | 7,440,203 | 7,280,148 |
Accumulated depletion, depreciation, amortization and impairment | (2,529,887) | (2,167,064) |
Net oil and natural gas properties | $ 4,910,316 | $ 5,113,084 |
Production Revenue Receivable -
Production Revenue Receivable - Schedule of Production Revenue Receivable (Details) - USD ($) | Nov. 30, 2015 | Feb. 28, 2015 |
Receivables [Abstract] | ||
Production revenue receivable, current | $ 65,000 | $ 120,000 |
Production revenue receivable, non-current | 0 | 35,000 |
Production revenue receivables | $ 65,000 | $ 155,000 |
Production Revenue Receivable36
Production Revenue Receivable (Details Narrative) - USD ($) | Nov. 30, 2015 | Feb. 28, 2015 |
Receivables [Abstract] | ||
Production revenue receivables | $ 65,000 | $ 155,000 |
Deferred Financing Costs - Sche
Deferred Financing Costs - Schedule of Deferred Financing Costs (Details) - USD ($) | Nov. 30, 2015 | Feb. 28, 2015 |
Deferred financing costs, gross | $ 1,741,776 | $ 1,732,121 |
Accumulated amortization | (993,177) | (673,370) |
Deferred finance costs, net | 748,599 | 1,058,751 |
Revolving Credit Facility | Warrant | ||
Deferred financing costs, gross | 530,488 | 530,488 |
Revolving Credit Facility | Common Stock | ||
Deferred financing costs, gross | 419,832 | 419,832 |
Revolving Credit Facility | Loan Commissions | ||
Deferred financing costs, gross | 630,662 | 630,662 |
Revolving Credit Facility | Loan Fees | ||
Deferred financing costs, gross | $ 160,794 | $ 151,139 |
Deferred Financing Costs (Detai
Deferred Financing Costs (Details Narrative) | 9 Months Ended |
Nov. 30, 2015USD ($) | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Amortization expense of deferred financing costs | $ 319,808 |
Note Receivable - Schedule of N
Note Receivable - Schedule of Note Receivables (Details) - USD ($) | Nov. 30, 2015 | Feb. 28, 2015 |
Receivables [Abstract] | ||
Note receivable, current | $ 642,540 | $ 1,320,944 |
Note receivable, non-current | 3,738,296 | 3,429,056 |
Note receivable | $ 4,380,836 | $ 4,750,000 |
Note Receivable (Details Narrat
Note Receivable (Details Narrative) - App Energy Note Receivable | 9 Months Ended |
Nov. 30, 2015USD ($) | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Advances to certain minority working interest partners | $ 8,300,000 |
Note receivable terms | The App Amendment provides for a reduction in interest rate from 19.2% to 17.0% and a reduction in monthly payments to $37,500 for principal payments to be made by App Energy to the Company for the same payment cycles as the reduced payment to be made by the Company under the Maximilian Amendment. |
Accounts Payable (Details Narra
Accounts Payable (Details Narrative) - USD ($) | 4 Months Ended | |
Jun. 30, 2009 | Nov. 30, 2015 | |
Payables and Accruals [Abstract] | ||
Acquisition and disposition of East Slopes Project | On March 1, 2009, the Company became the operator for the East Slopes Project. The Company assumed certain original defaulting partners' approximate $1.5 million liability representing a 25% working interest in the drilling and completion costs associated with the East Slopes Project four earning well program. The Company subsequently sold the 25% working interest on June 11, 2009. | |
Accounts payable balance | $ 244,849 |
Short-Term and Long-Term Borr42
Short-Term and Long-Term Borrowings - Subordinated Notes (Details) - USD ($) | Nov. 30, 2015 | Feb. 28, 2015 |
Debt Instrument [Line Items] | ||
Notes payable | $ 565,000 | $ 565,000 |
12% Subordinated Notes | ||
Debt Instrument [Line Items] | ||
Notes payable | 315,000 | 315,000 |
12% Subordinated Notes | Chief Executive Officer | ||
Debt Instrument [Line Items] | ||
Notes payable | $ 250,000 | $ 250,000 |
Short-Term and Long-Term Borr43
Short-Term and Long-Term Borrowings - Credit Facility - Maximilian Loan (Details) - Revolving Credit Facility - USD ($) | Nov. 30, 2015 | Feb. 28, 2015 |
Line of Credit Facility [Line Items] | ||
Current debt, note | $ 3,419,074 | $ 4,823,325 |
Current debt, note discount | (103,168) | (132,114) |
Current debt, note balance | 3,315,906 | 4,691,211 |
Non-current debt, note | 10,138,706 | 8,663,458 |
Non-current debt, note discount | 0 | (71,951) |
Non-current debt, note balance | $ 10,138,706 | $ 8,591,507 |
Short-Term and Long-Term Borr44
Short-Term and Long-Term Borrowings (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||||||
Oct. 31, 2015 | Aug. 31, 2014 | Oct. 31, 2012 | May. 31, 2015 | May. 31, 2014 | Aug. 31, 2013 | Nov. 30, 2015 | Nov. 30, 2014 | Feb. 28, 2010 | May. 20, 2015 | Feb. 28, 2015 | |
Debt Instrument [Line Items] | |||||||||||
Warrants outstanding | 8,156,401 | ||||||||||
Warrants exercised | 30,000 | ||||||||||
Warrants, exercise price | $ 0.06 | ||||||||||
Amortization of debt discount | $ 100,896 | $ 127,960 | |||||||||
Common stock issued, shares | 51,487,373 | 51,457,373 | |||||||||
Notes payable, related party | $ 250,100 | $ 250,100 | |||||||||
Share-for-Warrant Exchange | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Warrants issued | 427,729 | ||||||||||
Stock repurchased and retired, shares | 427,729 | ||||||||||
12% Subordinated Notes | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Interest rate | 12.00% | ||||||||||
Maturity date | Jan. 29, 2017 | ||||||||||
Payment terms | Payable semi-annually on January 29th and July 29th. Should the Board of Directors, on the extended maturity date, decide that the payment of the principal and any unpaid interest would impair the financial condition or operations of the Company, the Company may then elect a mandatory conversion of the unpaid principal and interest into the Companys common stock at a conversion rate equal to 75% of the average closing price of the Companys common stock over the 20 consecutive trading days preceding December 31, 2016. | ||||||||||
Warrants outstanding | 980,000 | ||||||||||
Warrants, exercise price | $ 0.14 | ||||||||||
Line of Credit | UBS Bank USA | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Maximum borrowing | $ 890,000 | ||||||||||
Line of credit, amount outstanding | 853,136 | ||||||||||
Line of credit, interest expense | $ 28,770 | ||||||||||
Line of credit, interest rate description | Payable monthly at a stated reference rate of 0.249% + 337.5 basis points. The reference rate is based on the 30 day LIBOR ("London Interbank Offered Rate") and is subject to change from UBS. | ||||||||||
Revolving Credit Facility | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Unamortized debt discount | $ 103,168 | 132,114 | |||||||||
Revolving Credit Facility | Maximilian Loan | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Warrants outstanding | 316,617 | ||||||||||
Warrants issued | 2,435,517 | ||||||||||
Warrants, exercise price | $ 0.044 | ||||||||||
Warrant expiration date | Oct. 31, 2017 | ||||||||||
Fair value of stocks and warrants | $ 98,084 | ||||||||||
Weighted average risk free interest rate | 0.72% | ||||||||||
Weighted average volatility rate | 153.44% | ||||||||||
Stock price, fair value assumption | $ 0.04 | ||||||||||
Amortization of debt discount | $ 515,638 | ||||||||||
Amortization expense | $ 100,986 | ||||||||||
Unamortized debt discount | 103,168 | ||||||||||
Credit facility, description | The Company entered into a loan agreement with Maximilian Investors LLC which provided for a revolving credit facility of up to $20 million, maturing on October 31, 2016, with a minimum commitment of $2.5 million. The loan had annual interest of 18% and a monthly commitment fee of 0.5%. The Company also granted Maximilian a 10% working interest in its share of the oil and gas leases in Kern County, California. | ||||||||||
Maximum borrowing | $ 20,000,000 | ||||||||||
Credit facility, expiration date | Oct. 31, 2016 | ||||||||||
Minimum commitment terms | Minimum commitment of $2,500,000 | ||||||||||
Commitment fee percentage | 0.50% | ||||||||||
Line of credit facility, interest rate | 18.00% | ||||||||||
Revolving Credit Facility | Maximilian - Amended and Restated Loan Agreement | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Warrants issued | 6,100,000 | ||||||||||
Warrants, exercise price | $ 0.10 | ||||||||||
Warrants, exercisable date | Aug. 28, 2013 | ||||||||||
Warrant expiration date | Aug. 28, 2016 | ||||||||||
Credit facility, description | The Company's revolving credit facility was increased from $20 million to $90 million. The first borrowing sublimit is $50 million and is for borrowing by the Company, primarily for its ongoing oil and gas exploration and development activities. The second borrowing sublimit, of $40 million, is for loans to be extended by the Company, as lender, to App, as borrower pursuant to a Loan and Security Agreement entered into between the Company and App. | ||||||||||
Maximum borrowing | $ 90,000,000 | ||||||||||
Credit facility, expiration date | Aug. 28, 2017 | ||||||||||
Commitment fee percentage | 0.50% | ||||||||||
Line of credit facility, interest rate | 12.00% | ||||||||||
Common stock issued, shares | 6,100,000 | ||||||||||
Revolving Credit Facility | Maximilian- First Amendment to Amended and Restated Loan Agreement | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Credit facility, advances | $ 2,200,000 | ||||||||||
Credit facility, reduction to required monthly payments | Maximilian agreed to temporarily reduce the required monthly payment made by the Company until it has paid $1,000,000 less than principal payments required by the previous agreement. Furthermore, Maximilian agreed to reduce the regular interest rate applicable to the loan from 12% per annum to 9% per annum and the default interest rate by 3%. | ||||||||||
Stock repurchased and retired, shares | 5,694,823 | ||||||||||
Stock repurchased and retired, value | $ 1,708,447 | ||||||||||
Revolving Credit Facility | Maximilian- Second Amendment to Amended and Restated Loan Agreement | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Warrants, exercise price | $ 0.04 | ||||||||||
Credit facility, reduction to required monthly payments | The 2nd Amendment modified the calculation of the required monthly payment for a three-month period ending June 30, 2015. As consideration for entering into the loan modification, the Company agreed to modify the exercise price of the warrants Maximilian currently holds from $0.10 to $0.04. | ||||||||||
Revolving Credit Facility | Maximilian - Third Amendment to Amended and Restated Loan Agreement | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Payment terms | Maximilian agreed to a reduction in the Companys monthly payments under the loan agreement to $50,000 per month for a period of six months ending on February 29, 2016. The reduction in monthly payments allows for additional funds to be used by the Company in drilling and completing additional wells in Kentucky. As consideration for the reduction in the monthly payment amount, the Company agreed that twenty percent of the amount by which the monthly payment was reduced would be added to the loan balance, and the portion of the monthly payment savings that constitutes savings in interest or commitment fees would be treated as an additional advance of principal under the loan agreement (the Deemed Advances). The Company also agreed to grant to Maximilian an overriding royalty interest of 1.5% of its working interest in four wells in Kentucky, subject to reduction connected to the Companys ongoing efforts to refinance its loan agreement. As part of the Maximilian Amendment, the Company also agreed to extend the expiration date of the warrants held by Maximilian to purchase up to 6,550,281 shares of common stock of the Company to August 28, 2018. | ||||||||||
Warrant expiration date | Aug. 28, 2018 | ||||||||||
Credit facility, reduction to required monthly payments | Monthly payments in the amount of $50,000 per month for a period of six months ending on February 29, 2016. | ||||||||||
Chief Executive Officer | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Notes payable, related party | $ 250,100 | $ 250,100 |
Stockholders' Deficit - Convers
Stockholders' Deficit - Conversions of Series A Preferred Stock (Details) | 9 Months Ended | 12 Months Ended | |||||||
Nov. 30, 2015numbershares | Feb. 28, 2015numbershares | Feb. 28, 2014numbershares | Feb. 28, 2013numbershares | Feb. 29, 2012numbershares | Feb. 28, 2011numbershares | Feb. 28, 2010numbershares | Feb. 28, 2009numbershares | Feb. 29, 2008numbershares | |
Series A preferred shares converted to common stock | (675,200) | ||||||||
Shares of common stock issued from conversion | 2,025,600 | ||||||||
Accredited investors | number | 43 | ||||||||
Series A Convertible Preferred Stock | |||||||||
Series A preferred shares converted to common stock | (10,000) | (3,000) | (151,000) | (18,000) | 0 | (102,000) | (51,900) | (237,000) | (102,300) |
Shares of common stock issued from conversion | 30,000 | 9,000 | 453,000 | 54,000 | 0 | 306,000 | 155,700 | 711,000 | 306,900 |
Accredited investors | number | 1 | 1 | 9 | 2 | 0 | 4 | 4 | 12 | 10 |
Stockholders' Deficit - Preferr
Stockholders' Deficit - Preferred Stock Dividends Earned (Details) | 9 Months Ended | 12 Months Ended | ||||||||
Nov. 30, 2015USD ($)number | Feb. 28, 2015USD ($)number | Feb. 28, 2014USD ($)number | Feb. 28, 2013USD ($)number | Feb. 29, 2012USD ($)number | Feb. 28, 2011USD ($)number | Feb. 28, 2010USD ($)number | Feb. 28, 2009USD ($)number | Feb. 29, 2008USD ($)number | Feb. 28, 2007USD ($)number | |
Equity [Abstract] | ||||||||||
Preferred shareholders at period end | number | 57 | 58 | 59 | 68 | 70 | 70 | 74 | 78 | 90 | 100 |
Earned dividends | $ 98,410 | $ 132,634 | $ 151,323 | $ 161,906 | $ 163,624 | $ 173,707 | $ 189,973 | $ 209,973 | $ 242,126 | $ 155,311 |
Total accumulated dividends | $ 1,678,987 |
Stockholders' Deficit - Schedul
Stockholders' Deficit - Schedule of Common Stock Outstanding (Details) | 9 Months Ended |
Nov. 30, 2015$ / sharesshares | |
Common Stock Outstanding [Roll Forward] | |
Common Stock, Issued and Outstanding, February 28, 2015 | 51,457,373 |
Conversion of Series A Convertible Preferred Stock to common stock | 30,000 |
Conversion of Series A Convertible Preferred Stock to common stock, par value | $ / shares | $ 30 |
Common Stock, Issued and Outstanding, August 31, 2015 | 51,487,373 |
Stockholders' Deficit (Details
Stockholders' Deficit (Details Narrative) | 9 Months Ended | 12 Months Ended | |||||||
Nov. 30, 2015number$ / sharesshares | Feb. 28, 2015number$ / sharesshares | Feb. 28, 2014numbershares | Feb. 28, 2013numbershares | Feb. 29, 2012numbershares | Feb. 28, 2011numbershares | Feb. 28, 2010numbershares | Feb. 28, 2009numbershares | Feb. 29, 2008numbershares | |
Class of Stock [Line Items] | |||||||||
Preferred stock, par value in dollars | $ / shares | $ 0.001 | $ 0.001 | |||||||
Preferred stock, shares authorized | 10,000,000 | 10,000,000 | |||||||
Preferred stock, shares issued | 0 | 0 | |||||||
Preferred stock, shares outstanding | 0 | 0 | |||||||
Series A preferred shares converted to common stock | (675,200) | ||||||||
Shares of common stock issued from conversion | 2,025,600 | ||||||||
Preferred stock, cumulative dividend rate | 6.00% | ||||||||
Accredited investors | number | 43 | ||||||||
Common stock, par value in dollars | $ / shares | $ 0.001 | $ 0.001 | |||||||
Common stock, shares authorized | 200,000,000 | 200,000,000 | |||||||
Common stock, shares issued | 51,487,373 | 51,457,373 | |||||||
Common stock, shares outstanding | 51,487,373 | 51,457,373 | |||||||
Series A Convertible Preferred Stock | |||||||||
Class of Stock [Line Items] | |||||||||
Preferred stock, par value in dollars | $ / shares | $ 0.001 | $ 0.001 | |||||||
Preferred stock, shares authorized | 2,400,000 | 2,400,000 | |||||||
Preferred stock, shares issued | 724,565 | 734,565 | |||||||
Preferred stock, shares outstanding | 724,565 | 734,565 | |||||||
Series A preferred shares converted to common stock | (10,000) | (3,000) | (151,000) | (18,000) | 0 | (102,000) | (51,900) | (237,000) | (102,300) |
Shares of common stock issued from conversion | 30,000 | 9,000 | 453,000 | 54,000 | 0 | 306,000 | 155,700 | 711,000 | 306,900 |
Accredited investors | number | 1 | 1 | 9 | 2 | 0 | 4 | 4 | 12 | 10 |
Preferred Stock | |||||||||
Class of Stock [Line Items] | |||||||||
Preferred stock, par value in dollars | $ / shares | $ 0.001 | ||||||||
Preferred stock, shares authorized | 10,000,000 | ||||||||
Common Stock | |||||||||
Class of Stock [Line Items] | |||||||||
Shares of common stock issued from conversion | 30,000 | ||||||||
Common stock, par value in dollars | $ / shares | $ 0.001 | ||||||||
Common stock, shares authorized | 200,000,000 | ||||||||
Common stock, shares issued | 51,487,373 | 51,457,373 | |||||||
Common stock, shares outstanding | 51,487,373 | 51,457,373 |
Warrants - Schedule of Stockhol
Warrants - Schedule of Stockholders' Equity Note Warrants and Rights (Details) | 9 Months Ended |
Nov. 30, 2015$ / sharesshares | |
Class of Warrant or Right [Line Items] | |
Warrants | 10,485,301 |
Exercise price | $ / shares | $ 0.06 |
Remaining life (years) | 2 years 6 months |
Exercisable warrants remaining | 8,156,401 |
Kentucky Oil Project | |
Class of Warrant or Right [Line Items] | |
Warrants | 3,498,601 |
Exercise price | $ / shares | $ 0.04 |
Remaining life (years) | 2 years 9 months |
Exercisable warrants remaining | 3,498,601 |
Share-for-Warrant Exchange | |
Class of Warrant or Right [Line Items] | |
Warrants | 427,729 |
Exercise price | $ / shares | $ 0.04 |
Remaining life (years) | 2 years 9 months |
Exercisable warrants remaining | 427,729 |
12% Subordinated Notes | |
Class of Warrant or Right [Line Items] | |
Warrants | 1,190,000 |
Exercise price | $ / shares | $ 0.14 |
Remaining life (years) | 1 year 2 months |
Exercisable warrants remaining | 980,000 |
Debt Financing | |
Class of Warrant or Right [Line Items] | |
Warrants | 2,435,517 |
Exercise price | $ / shares | $ 0.044 |
Remaining life (years) | 1 year 11 months |
Exercisable warrants remaining | 316,617 |
Kentucky Debt Financing #1 | |
Class of Warrant or Right [Line Items] | |
Warrants | 2,623,951 |
Exercise price | $ / shares | $ 0.04 |
Remaining life (years) | 2 years 9 months |
Exercisable warrants remaining | 2,623,951 |
Kentucky Debt Financing #2 | |
Class of Warrant or Right [Line Items] | |
Warrants | 309,503 |
Exercise price | $ / shares | $ 0.214 |
Remaining life (years) | 2 years 9 months |
Exercisable warrants remaining | 309,503 |
Warrants (Details Narrative)
Warrants (Details Narrative) - USD ($) | 9 Months Ended | 12 Months Ended |
Nov. 30, 2015 | Feb. 28, 2010 | |
Equity [Abstract] | ||
Warrants expired | 150,000 | |
Warrants issued | 150,000 | |
Outstanding warrants, weighted average exercise price | $ 0.06 | |
Weighted average remaining life | 2 years 6 months | |
Intrinsic value | $ 0 |
Income Taxes - Income Tax Expen
Income Taxes - Income Tax Expense Benefit Reconciliation (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Nov. 30, 2015 | Feb. 28, 2015 | |
Income Tax Expense Benefit Continuing Operations Income Tax Reconciliation | ||
Computed at U.S. and state statutory rates (40%) | $ (752,885) | $ (293,176) |
Permanent differences | 88,175 | 142,925 |
Changes in valuation allowance | 664,710 | 150,251 |
Income tax expense (benefit) | $ 0 | $ 0 |
Income Taxes - Deferred Tax Ass
Income Taxes - Deferred Tax Assets and Liabilities (Details) - USD ($) | Nov. 30, 2015 | Feb. 28, 2015 |
Deferred tax assets: | ||
Net operating loss carryforwards | $ 9,913,956 | $ 9,188,905 |
Oil and gas properties | (1,420,887) | (1,436,249) |
Stock based compensation | 88,723 | 88,723 |
Other | (178,602) | (102,899) |
Less valuation allowance | (8,403,190) | (7,738,480) |
Deferred tax assets, net | $ 0 | $ 0 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | 9 Months Ended | 12 Months Ended |
Nov. 30, 2015 | Feb. 28, 2015 | |
Income Tax Disclosure [Abstract] | ||
Net operating loss carryforwards, federal and state, approximate | $ 24,784,890 | |
Net operating loss carryforwards, expiration date | Feb. 28, 2024 | |
Approximate increase in valuation allowance | $ 664,710 | $ 150,251 |