Past year: ▲ 150%(1.00c – 11.0c USD)
Each one in plain English, with the numbers worked through for a shareholder.
7 Apr 2014material agreement● NeutralMajor
On April 4, 2014 Royale signed a sales agreement with Roth Capital Partners to sell up to $10,000,000 of common stock at the market, with Roth taking a 3.5% commission. Proceeds are intended for acquiring and developing Alaskan properties and working capital; Royale need not sell any shares, and issuance needs Nasdaq approval. The amount actually sold is not stated, but any sales would dilute shareholders.
22 Jan 2014financial restatement▼ BadMajor
On January 16, 2014 Royale said its 2012 and 2011 financial statements (and 2013's first three quarterly reports) should no longer be relied on, after SEC staff comments led it to change how it accounts for sales of working interests to drilling participants. For Dec 31, 2012, total assets fall from $17.5M to $13.1M and stockholders' equity from $662,593 to a deficit of $(3,771,018); 2012 net loss moves only from $(11,961,026) to $(11,908,835). Restated 9/30/2013 equity is $320,201 versus $4,837,119 previously. Restated 10-K is planned before March 31, 2014. This is a second restatement after the 2010 one, and it sharply weakens the equity position tied to the Nasdaq equity requirements.
30 Dec 2013asset acquisition disposition● Neutral
On December 24, 2013 Royale bought commercial property in San Diego from North Island Financial Credit Union for $2,000,000: $500,000 in cash and $1,500,000 borrowed from an unaffiliated financial institution on a note secured by the property. This adds a new secured loan.
24 May 2013material agreement▲ GoodMajor
On May 22, 2013 Royale signed a deal letting Rampart Energy (an Australian company) earn up to 75% of the working interest in two blocks of Royale's Alaska North Slope acreage (up to about 50,875 acres). Rampart earns by paying about $3.4 million (two $1.7 million payments due June 3 and Dec 1, 2013), completing a 3D seismic survey by March 31, 2014, and drilling two wells (up to $30 million, by March 31, 2016); it can add the Central Block with a further ~$1.7 million. Rampart also gives Royale an option on Rampart shares. This advances the Alaska plans first mentioned in 2012, the acreage for which Royale won leases after a December 2011 bid and took in December 2012.
29 Oct 2012debt financing▼ BadMajor
On October 28, 2012 Royale agreed to sell convertible notes with $3,333,333.33 principal for $3,000,000 (about 10% discount) to institutional investors, with Series E warrants for 500,000 shares at $3.00. Notes mature December 31, 2014, convert at $4.50 (reset lower on cheaper share issuances), and from 2013 holders can demand redemption of up to 25% of principal each quarter, which Royale may pay in cash at 102.5% or in shares at a discount to market. Default triggers cash redemption at 135%. Royale must hold a shareholder meeting by June 30, 2013 to raise authorized shares to 50 million common and lift the Nasdaq-related caps. C.K. Cooper is placement agent at 5%. This is new debt with potentially heavy dilution, and Cranshire again waived its 2008 warrant adjustment.
18 May 2012listing compliance notice▲ Good
Nasdaq wrote on May 15, 2012 that Royale has regained compliance with the three-member audit committee rule and closed the matter, resolving the issue reported May 14. The filing also notes a press release on first-quarter 2012 earnings, but the text gives no figures.
14 May 2012listing compliance notice● Neutral
On May 8, 2012 Royale told Nasdaq that its audit committee had only two members since the July 8, 2011 annual meeting, when one member retired and wasn't replaced, breaching Rule 5605(c)(2), which requires three independent members. The board appointed Gary Grinsfelder, whom it determined to be independent, restoring three members.
3 Apr 2012capital raising announcement● Neutral
Between January 23 and March 28, 2012 six directors exercised options to buy a total of 165,188 shares, 43,782 at $3.25 and 121,406 at $3.50. The options were originally granted as pay for board service. This adds a modest number of new shares.
What it means for a shareholder
165,188 new shares at US$3.25 to raise about US$536,861. That's 1.5% dilution: every existing holder's slice gets 1.5% smaller. If you held US$1,000 of shares (308 at the issue price), your slice goes from 0.0028% to 0.00276% of the company. To keep it you'd need 5 more shares - about US$16 at the issue price.
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17 Feb 2012material agreement● NeutralMajor
On February 17, 2012 Royale signed a sales agreement with C.K. Cooper & Company allowing it to sell up to $10 million of common stock over time at market prices, with a 3.5% commission. Royale has no obligation to sell any shares. Proceeds are expected to go to acquiring and developing Alaskan oil and gas properties and working capital, and issuances are subject to Nasdaq Capital Market approval. The shares would come from a shelf registration declared effective February 14, 2012. Shares sold would dilute existing holders; no amount sold is stated. The reference to the Nasdaq Capital Market suggests (inference) the stock is no longer on the Global Market.
5 Aug 2010financial restatement● NeutralMajor
On August 4, 2010 Royale said its 2009 annual and the September 30, 2009 and March 31, 2010 quarterly financial statements should no longer be relied on, and filed corrected versions. The fix is to record shares of a start-up received in a 2000 legal settlement at market value after that company's September 2009 IPO; Royale says it learned of the public market only in June 2010. This raises current assets, total assets and stockholders' equity, while net income and earnings per share are unchanged.
16 Nov 2009listing compliance notice▲ Good
Royale says Nasdaq staff found it had failed to meet shareholder-approval requirements (Rule 5635(d)(2)) in a recent equity offering. Royale agreed to modify some offering terms, and Nasdaq's November 11, 2009 letter says it has regained full compliance. The filing does not say which terms changed. The press release says Royale raised $4.2 million in equity over the prior 90 days in two transactions. This resolves the new approval problem; the filing does not address the earlier $10 million stockholders' equity issue.
21 Oct 2009capital raising announcement● NeutralMajor
On October 16, 2009 Royale agreed to sell 623,053 shares at $3.21 to an institutional investor (closed October 20) for about $2.0 million gross and about $1.88 million net, plus warrants for 342,679 shares at $3.53 for 5 years. The placement agent also received warrants for 33,994 shares at $3.53. Royale says the money will speed up drilling after a recent discovery, including the Wylie well starting that week and permitting for the Vann and Magnum prospects. The investor (Cranshire, per the waiver exhibit) again waived the upward share adjustment on its 2008 warrant. This is a second raise after the August placement and adds further dilution potential through the warrants.
What it means for a shareholder
623,053 new shares at US$3.21 to raise about US$2.0m. Shares on issue before the raise aren't in the record, so the dilution can't be worked out.
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6 Aug 2009capital raising announcement● NeutralMajor
On August 4, 2009 Royale agreed to sell 552,764 shares at $1.99 each to one institutional investor, closing August 5, for about $1.1 million gross and about $999,000 net. The investor also received four series of warrants (329,850 at $2.19; 1,808 at $2.19; 511,628 at $2.15; 306,977 at $2.19, the last only if the Series B warrants are exercised), and the placement agent got warrants for 33,166 shares at $1.99. Royale says the money will go to developing its Sacramento basin properties and it must file a resale registration within 30 days of closing. Cranshire Capital waived the upward share adjustment on its June 2008 warrant, whose exercise price resets to $1.99 from $7.30 as a result of this sale. This is the capital raise the board was weighing earlier in the year, and it adds dilution risk through the warrants.
What it means for a shareholder
552,764 new shares at US$1.99 to raise about US$1.1m. Shares on issue before the raise aren't in the record, so the dilution can't be worked out.
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24 July 2009listing compliance notice▼ BadMajor
On July 20, 2009 Nasdaq determined Royale had not completed the plan it filed April 16 to restore the $10 million equity minimum, and Royale intends to appeal and request a hearing. Royale says it requested SEC approval of an S-3 registration on April 22, 2009 to raise capital, which is part of its compliance plan, and it needs time for the SEC process. This continues the April listing problem and the delisting risk is still open.
7 Apr 2009listing compliance notice▼ BadMajor
Nasdaq notified Royale that its stockholders' equity of $7,394,467 at December 31, 2008 is below the $10 million needed to stay on the Nasdaq Global Market. Royale has until about April 16, 2009 to submit a plan or seek a Nasdaq Capital Market listing, and its board has authorized seeking additional equity by issuing stock, so more dilution is possible. The filing text says April 1, 2008, an apparent typo for 2009.
9 Mar 2009business combination● NeutralMajor
Royale terminated its exchange offer for Aspen Exploration shares and asked to withdraw the S-4 registration statement. The filing gives no reason. This ends the thread, so no new Royale shares will be issued for Aspen, and Royale keeps its small existing Aspen stake (353,125 shares per the February filing).
6 Mar 2009listing compliance notice▼ Bad
ROYALE ENERGY FUNDS, INC withdrew a registration statement, abandoning the offering it covered.
19 Feb 2009material agreement● NeutralMajor
On February 13, 2009 Royale signed a $15 million revolving credit line with Texas Credit Bank, replacing its Guaranty Bank line. Interest is the greater of the bank's prime rate or the Federal Funds Rate, with a 3% floor. Covenants bar cash dividends and require minimum earnings-to-interest, current-ratio and tangible-net-worth levels. The filing does not say how much is drawn.
18 Feb 2009business combination● Neutral
Amendment No. 3 only attaches a press release issued February 18, 2009; the filing text itself does not describe the release's contents, and no terms of the Aspen offer are changed in it.
13 Feb 2009business combination● Neutral
Royale filed its own Amendment No. 2 to the tender offer statement to match the amended registration statement. It restates the 1-for-3.5 exchange ratio and adds no new terms.
13 Feb 2009business combination● Neutral
Royale filed Amendment No. 2 to the Aspen exchange offer registration, keeping the terms of 1 Royale share per 3.5 Aspen shares, up to 1,140,798 Royale shares, and a 51% minimum (3,484,619 Aspen shares). The filing says Royale holds 353,125 Aspen shares (about 4.867%) and would hold up to 4,345,917 (about 59.867%) if the offer is fully accepted. The expiration date is still blank. This offer was terminated about three weeks later, per the March 9 filing.
16 Jan 2009business combination● NeutralMajor
Royale amended its registration for the Aspen exchange offer: it now offers up to 1,140,798 Royale shares (down from 1,451,925) for up to 3,992,792 Aspen shares at 1 Royale per 3.5 Aspen. The minimum tender is 3,484,619 Aspen shares (51%), down from 3,720,036. Using January 6, 2009 closing prices (Aspen $0.65, Royale $3.36) the filing puts the offer at $0.96 per Aspen share, a 47.8% premium. Fewer new Royale shares would be issued than first planned if it completes.
16 Jan 2009business combination● Neutral
Royale filed Amendment No. 2 to its Aspen tender offer statement to fix errors in Amendment No. 1, which it says misstated the exchange ratio and the earnings-to-fixed-charges calculation. The ratio is now one Royale share for each 3.5 Aspen shares (the earlier terms were 1 for 2.75), a less generous offer to Aspen holders, and the filing shows a 7.5 coverage ratio for the nine months to September 30, 2008.
16 Jan 2009business combination● Neutral
Amendment No. 1 to the Aspen tender offer statement, filed January 16, 2009, adds earnings-to-fixed-charges figures but no change to the offer terms. It shows pre-tax income of $2,186,310 for the nine months to September 30, 2008 against a pre-tax loss of $4,424,562 for 2007 (pro forma), and Royale's own losses in 2006 and 2007 against profits in 2003 to 2005.
25 Nov 2008business combination● Neutral
This is the formal tender offer statement for the same Aspen exchange offer, filed alongside the S-4 on November 25, 2008. It repeats the terms (up to 3,992,792 Aspen shares at 2.75 per Royale share) and points to the prospectus for details; it adds no new terms.
25 Nov 2008business combination● NeutralMajor
Royale filed to register up to 1,451,925 of its own shares for an exchange offer to buy up to 3,992,792 shares of Aspen Exploration Corporation, at 1 Royale share per 2.75 Aspen shares. The offer is conditional on at least 3,720,036 Aspen shares (51%) being tendered, which with Royale's existing Aspen holding would give it a majority; Royale says it plans to use that to elect new Aspen directors and does not intend further offers or a merger. On November 20, 2008 Aspen closed at $0.92 and Royale at $2.31, making the offer worth about $0.84 per Aspen share, an 8.7% discount. If completed, Royale shareholders would be diluted by the new shares issued.
3 Sept 2008material agreement● NeutralMajor
On August 30, 2008 Royale agreed to sell its interest in the Rio Bravo oil field in Kern County, California to Occidental Petroleum of Elk Hills, Inc. for $4.75 million cash. This is a field the June 2008 press release had named as a place for increased activity, so the sale is a change from that stated plan.
12 June 2008capital raising announcement● NeutralMajor
On June 10, 2008 Royale sold 547,945 new common shares at $7.30 to one institutional investor for about $4 million gross (about $3.725 million net), and also issued a warrant for 191,781 shares at $7.30 expiring June 10, 2013. The placement agent got warrants for 32,877 shares, and the agreements include provisions for issuing additional shares if later dilutive issuances occur. The company says proceeds are for general corporate purposes including buying oil and gas properties, and its press release mentions more activity in the Rio Bravo and Moon Canyon (Uintah Basin) fields. This dilutes existing shareholders but adds cash.
What it means for a shareholder
547,945 new shares at US$7.30 to raise about US$4.0m. Shares on issue before the raise aren't in the record, so the dilution can't be worked out.
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9 Nov 2007auditor change● Neutral
Because auditor Sprouse & Anderson merged into Padgett, Stratemann & Co., LLP, Royale ended the Sprouse engagement on November 5, 2007 and hired the merged firm, keeping the same audit team. The company reports no disagreements with Sprouse, which had audited 2004 through 2006. This is an administrative change following the firm's merger.
1 May 2007listing compliance notice▼ Bad
ROYALE ENERGY FUNDS, INC withdrew a registration statement, abandoning the offering it covered.
