Royale Energy Reports Material Agreement and Equity Sales

TL;DR

Royale Energy inked a deal, took on debt, and sold stock on Oct 11th.

AI Summary

On October 11, 2024, Royale Energy, Inc. entered into a material definitive agreement related to its operations. The company also disclosed the creation of a direct financial obligation and unregistered sales of equity securities. This filing also includes financial statements and exhibits.

Why It Matters

This 8-K filing indicates significant financial and operational developments for Royale Energy, including new obligations and equity transactions that could impact its financial structure and shareholder value.

Risk Assessment

Risk Level: medium — The filing details material definitive agreements, financial obligations, and unregistered equity sales, which can introduce financial and operational risks.

Key Players & Entities

• Royale Energy, Inc. (company) — Registrant
• October 11, 2024 (date) — Date of earliest event reported
• Delaware (jurisdiction) — State of incorporation
• 000-55912 (filing_number) — SEC File Number
• 81-4596368 (tax_id) — I.R.S. Employer Identification No.
• 1530 Hilton Head Road, Suite 205 (address) — Principal business address
• El Cajon, California 92019 (address) — City, State, Zip of principal business address

FAQ

Key Financial Figures

• $2,466,455 — es in the aggregate principal amount of $2,466,455 (the " Preferred Exchange Notes "), and
• $0.10 — "), which provide an exercise price of $0.10 per share and an option term expiring o
• $2,820,424 — he Creditors in the aggregate amount of $2,820,424 (the " Historical Liabilities "). Pursu
• $282,042 — es in the aggregate principal amount of $282,042 (the " Release Notes "). The foregoing

Filing Documents

• royaleinc20241017_8k.htm (8-K) — 42KB
• ex_734071.htm (EX-10.1) — 108KB
• ex_734072.htm (EX-10.2) — 56KB
• ex_734073.htm (EX-10.3) — 69KB
• ex_734074.htm (EX-10.4) — 39KB
• ex_734076.htm (EX-99.1) — 6KB
• 0001185185-24-000993.txt ( ) — 501KB
• royl-20241011.xsd (EX-101.SCH) — 3KB
• royl-20241011_lab.xml (EX-101.LAB) — 19KB
• royl-20241011_pre.xml (EX-101.PRE) — 10KB
• royaleinc20241017_8k_htm.xml (XML) — 3KB

01 Entry into a Material Definitive Agreement

Item 1.01 Entry into a Material Definitive Agreement. Series B Preferred Stock Exchange On October 11, 2024 (the " Closing Date "), Royale Energy, Inc., a Delaware corporation (the " Company "), entered into privately negotiated exchange agreements (the " Exchange Agreements ") with each of the holders (the " Preferred Holders ") of its Series B 3.5% Convertible Preferred Stock (the " Series B Preferred Stock "). Pursuant to the Exchange Agreements, which were dated effective as of June 30, 2024, each Preferred Holder exchanged all of the outstanding shares of the Series B Preferred Stock it holds to the Company in exchange for a certain number of shares of the Company's common stock, par value $.001 per share (the " Common Stock "), payment obligations of the Company evidenced by new senior notes (the " Notes "), options to purchase shares of Common Stock (the " Stock Options "), and the conveyance of certain specified property interests to a holding company owned by the Preferred Holders (the " Property Holdco "). As a result of these exchanges under the Exchange Agreements, the Company no longer has any issued and outstanding shares of the Series B Preferred Stock. In connection with the exchange transactions, the Company conveyed to the Property Holdco (i) 50% of the overriding royalty interests held by the Company and/or its affiliates in certain oil and gas properties in Alaska and (ii) the Company's ownership in certain real property located in Kern County California. The Company issued an aggregate of 22,198,095 shares of Common Stock (the " Preferred Exchange Common Shares "), Notes in the aggregate principal amount of $2,466,455 (the " Preferred Exchange Notes "), and stock options (the " Options ") to purchase an aggregate of 25,000,000 shares of Common Stock (the " Option Shares ") to the Preferred Holders pursuant to the Exchange Agreement. The Options were issued to the Preferred Holders pursuant to stock option agreements (the " Stock Option Agr

02 Unregistered Sales of Equity Securities

Item 3.02 Unregistered Sales of Equity Securities The information set forth under Item 1.01 of this Current Report on Form 8-K regarding the transactions contemplated by the Exchange Agreements and the Release Agreements Notes and the issuance of the Preferred Exchange Common Shares, the Release Shares and the Options is incorporated by reference into this Item 3.02. The issuance of the Preferred Exchange Common Shares, the Release Shares and the Options resulted in no cash proceeds to the Company. The Company did not engage any investment advisors with respect to the transactions contemplated by the Exchange Agreements or the Release Agreements, and no finders' fees or commissions will be paid to any party in connection therewith. The Preferred Exchange Shares, the Release Shares and the Options were issued and sold by the Company in private placement transactions in reliance upon an exemption from registration pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended (the " Securities Act ").

01 Regulation FD Disclosure

Item 7.01 Regulation FD Disclosure. On October 17, 2024, the Company issued a press release announcing the transactions contemplated by the Exchange Agreements and the Release Agreements. A copy of the press release is furnished herewith as Exhibit 99.1 In accordance with General Instructions B.2 and B.6 of Form 8-K, the foregoing information, including Exhibit 99.1, shall not be deemed "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the " Exchange Act ") or otherwise subject to the liabilities of that section, nor shall such information and Exhibit be deemed incorporated by reference in any filing under the Securities Act or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

01. Financial Statements and Exhibits

Item 9.01. Financial Statements and Exhibits. (d) Exhibits. The following exhibits are included with this Current Report on Form 8-K: Exhibit No. Description Exhibit 10.1 Form of Exchange Agreement Exhibit 10.2 Form of Note Exhibit 10.3 Form of Stock Option Agreement Exhibit 10.4 Form of Release Agreement Exhibit 99.1 Press Release dated October 17, 2024 Exhibit 104 Cover Page Interactive Data File (embedded within the Inline XBRL document) SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Date: October 17, 2024 ROYALE ENERGY, INC. By: /s/ Johnny Jordan Johnny Jordan Chief Executive Officer