Attached files
| file | filename |
|---|---|
| EXCEL - IDEA: XBRL DOCUMENT - ROYALE ENERGY FUNDS, INC | Financial_Report.xls |
| EX-31.2 - EX-31.2 - ROYALE ENERGY FUNDS, INC | ex31-2.htm |
| EX-32.1 - EX-32.1 - ROYALE ENERGY FUNDS, INC | ex32-1.htm |
| EX-31.1 - EX-31.1 - ROYALE ENERGY FUNDS, INC | ex31-1.htm |
| EX-32.2 - EX-32.2 - ROYALE ENERGY FUNDS, INC | ex32-2.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
|
For the Quarterly Period Ended March 31, 2014
|
Commission File No. 000-22750
|
ROYALE ENERGY, INC.
(Exact name of registrant as specified in its charter)
|
California
|
33-0224120
|
|
(State or other jurisdiction of
incorporation or organization)
|
(I.R.S. Employer
Identification No.)
|
3777 Willow Glen Drive
San Diego, CA 92019
(Address of principal executive offices) (Zip Code)
619-881-2800
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Check one:
|
Large accelerated filer o
|
Accelerated filer o
|
|
Non-accelerated filer o
|
Smaller reporting company x
|
Indicate by check mark whether the registrant is a blank check company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x
At March 31, 2014, a total of 14,942,728 shares of registrant’s common stock were outstanding.
TABLE OF CONTENTS
|
PART I
|
FINANCIAL INFORMATION
|
1
|
|
Item 1.
|
1
|
|
|
Item 2.
|
7
|
|
|
Item 3.
|
9
|
|
|
Item 4.
|
9
|
|
|
PART II
|
OTHER INFORMATION
|
10
|
|
Item 1.
|
10
|
|
|
Item 1A.
|
10
|
|
|
Item 6.
|
10
|
|
|
11
|
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
ROYALE ENERGY, INC.
BALANCE SHEETS
|
March 31,
2014
|
December 31,
2013
|
|||||||
|
(Unaudited)
|
(Audited)
|
|||||||
|
ASSETS
|
||||||||
|
Current Assets
|
||||||||
|
Cash and Cash Equivalents
|
$
|
3,664,400
|
$
|
4,878,233
|
||||
|
Accounts Receivable, net
|
2,331,501
|
1,680,792
|
||||||
|
Prepaid Expenses
|
636,736
|
684,848
|
||||||
|
Available for Sale Securities
|
16,448
|
16,448
|
||||||
|
Inventory
|
317,043
|
317,043
|
||||||
|
Total Current Assets
|
6,966,128
|
7,577,364
|
||||||
|
Other Assets
|
946
|
946
|
||||||
|
Oil and Gas Properties, at cost, (successful efforts basis),
Equipment and Fixtures
|
7,304,143
|
7,237,382
|
||||||
|
Total Assets
|
$
|
14,271,217
|
$
|
14,815,692
|
||||
See notes to unaudited financial statements
ROYALE ENERGY, INC.
BALANCE SHEETS
|
March 31,
2014
|
December 31,
2013
|
|||||||
|
(Unaudited)
|
(Audited)
|
|||||||
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
||||||||
|
Current Liabilities:
|
||||||||
|
Accounts Payable and Accrued Expenses
|
$
|
5,300,541
|
$
|
5,332,323
|
||||
|
Current Portion of Long-Term Debt
|
27,786
|
22,916
|
||||||
|
Current Portion of Deferred Tax Liability
|
1,775
|
1,775
|
||||||
|
Deferred Drilling Obligations
|
6,406,279
|
6,125,933
|
||||||
|
Total Current Liabilities
|
11,736,381
|
11,482,947
|
||||||
|
Noncurrent Liabilities:
|
||||||||
|
Asset Retirement Obligation
|
840,156
|
862,369
|
||||||
|
Note Payable
|
1,468,493
|
1,477,084
|
||||||
|
Total Noncurrent Liabilities
|
2,308,649
|
2,339,453
|
||||||
|
Total Liabilities
|
14,045,030
|
13,822,400
|
||||||
|
Stockholders' Equity:
|
||||||||
|
Common Stock, no par value, authorized 20,000,000 shares,
14,942,728 shares outstanding.
|
37,996,866
|
37,996,866
|
||||||
|
Convertible preferred stock, Series AA, no par value,
147,500 shares authorized; 52,784 outstanding
|
154,014
|
154,014
|
||||||
|
Accumulated (Deficit)
|
(38,238,493
|
)
|
(37,471,388
|
)
|
||||
|
Paid in Capital
|
303,855
|
303,855
|
||||||
|
Accumulated Other Comprehensive Income
|
9,945
|
9,945
|
||||||
|
Total Stockholders' Equity
|
226,187
|
993,292
|
||||||
|
Total Liabilities and Stockholders' Equity
|
$
|
14,271,217
|
$
|
14,815,692
|
||||
See notes to unaudited financial statements
ROYALE ENERGY, INC.
STATEMENTS OF OPERATIONS
FOR THE QUARTER ENDED MARCH 31, 2014 AND 2013
|
2014
|
2013-Restated
|
|||||||
|
(Unaudited)
|
(Unaudited)
|
|||||||
|
Revenues:
|
||||||||
|
Sale of Oil and Gas
|
$
|
825,556
|
$
|
330,895
|
||||
|
Supervisory Fees and Other
|
153,475
|
140,771
|
||||||
|
Total Revenues
|
979,031
|
471,666
|
||||||
|
Costs and Expenses:
|
||||||||
|
General and Administrative
|
835,061
|
860,013
|
||||||
|
Lease Operating
|
453,536
|
267,209
|
||||||
|
Delay Rentals
|
19,494
|
25,613
|
||||||
|
Legal and Accounting
|
218,652
|
171,631
|
||||||
|
Marketing
|
95,196
|
37,626
|
||||||
|
Depreciation, Depletion and Amortization
|
89,826
|
63,281
|
||||||
|
Total Costs and Expenses
|
1,711,765
|
1,425,373
|
||||||
|
Loss on Turnkey Drilling Programs
|
(19,033
|
)
|
(79,899
|
)
|
||||
|
Loss From Operations
|
(751,767
|
)
|
(1,033,606
|
)
|
||||
|
Other Income (Expense):
|
||||||||
|
Interest Expense
|
(15,338
|
)
|
(200,868
|
)
|
||||
|
Net Loss
|
$
|
(767,105
|
)
|
(1,234,474
|
)
|
|||
|
Basic Loss Per Share
|
$
|
(0.05
|
)
|
$
|
(0.10
|
)
|
||
|
Diluted Loss Per Share
|
$
|
(0.05
|
)
|
$
|
(0.10
|
)
|
||
See notes to unaudited financial statements
ROYALE ENERGY, INC.
STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2014 AND 2013
|
2014
|
2013-Restated
|
|||||||
|
(Unaudited)
|
(Unaudited)
|
|||||||
|
CASH FLOWS FROM OPERATING ACTIVITIES
|
||||||||
|
Net Loss
|
$
|
(767,105
|
)
|
$
|
(1,234,474
|
)
|
||
|
|
||||||||
|
Adjustments to Reconcile Net Loss to Net
Cash (Used in) Provided by Operating Activities:
|
||||||||
|
Depreciation, Depletion and Amortization
|
89,826
|
63,281
|
||||||
|
Loss on Turnkey Drilling Programs
|
19,033
|
79,899
|
||||||
|
Debt Discount Amortization, net of adjustments
|
0
|
178,083
|
||||||
|
Decrease (Increase) in:
|
||||||||
|
Accounts Receivable
|
(650,709
|
)
|
2,591,355
|
|||||
|
Prepaid Expenses and Other Assets
|
48,112
|
(572,460
|
)
|
|||||
|
Increase (Decrease) in:
|
||||||||
|
Accounts Payable and Accrued expenses
|
(53,995
|
)
|
(681,981
|
)
|
||||
|
Deferred Drilling Obligations
|
280,346
|
20,630
|
||||||
|
Net Cash (Used in) Provided (Used) by Operating Activities
|
(1,034,492
|
)
|
444,333
|
|||||
|
CASH FLOWS FROM INVESTING ACTIVITIES
|
||||||||
|
Expenditures for Oil and Gas Properties and Other Capital Expenditures
|
(560,773
|
)
|
(133,527
|
)
|
||||
|
Proceeds from Turnkey Drilling Programs
|
385,153
|
0
|
||||||
|
Net Cash Used by Investing Activities
|
(175,620
|
)
|
(133,527
|
)
|
||||
|
CASH FLOWS FROM FINANCING ACTIVITIES
|
||||||||
|
Principal Payments on Long-Term Debt
|
(3,721
|
)
|
(1,183,333
|
)
|
||||
|
Proceeds from Sale of Common Stock
|
0
|
1,021,668
|
||||||
|
Net Cash Used by Financing Activities
|
(3,721
|
)
|
(161,665
|
)
|
||||
|
Net Increase in Cash and Cash Equivalents
|
(1,213,833
|
)
|
149,141
|
|||||
|
Cash at Beginning of Year
|
$
|
4,878,233
|
$
|
1,489,930
|
||||
|
Cash at End of Period
|
$
|
3,664,400
|
$
|
1,639,071
|
||||
|
Cash Paid for Interest
|
$
|
15,338
|
$
|
22,785
|
||||
|
Cash Paid for Taxes
|
$
|
1,900
|
$
|
800
|
||||
See notes to unaudited financial statements
ROYALE ENERGY, INC.
NOTES TO UNAUDITED FINANCIAL STATEMENTS
NOTE 1 – In the opinion of management, the accompanying unaudited financial statements include all adjustments, consisting only of normally recurring adjustments, necessary to present fairly the Company’s financial position and the results of its operations and cash flows for the periods presented. The results of operations for the three month period are not, in management’s opinion, indicative of the results to be expected for a full year of operations. It is suggested that these financial statements be read in conjunction with the financial statements and the notes thereto included in the Company’s latest annual report.
NOTE 2 – LOSS PER SHARE
Basic and diluted earnings (loss) per share are calculated as follows:
|
For the Three Months ended
March 31, 2014
|
||||||||||||
|
Loss
(Numerator)
|
Shares
(Denominator)
|
Per-Share
Amount
|
||||||||||
|
Basic Loss Per Share:
|
||||||||||||
|
Net loss available to common stock
|
$
|
(767,105
|
)
|
14,942,728
|
$
|
(0.05
|
)
|
|||||
|
Diluted Loss Per Share:
|
||||||||||||
|
Effect of dilutive securities and stock options
|
0
|
0
|
0.00
|
|||||||||
|
Net loss available to common stock
|
$
|
(767,105
|
)
|
14,942,728
|
$
|
(0.05
|
)
|
|||||
|
For the Three Months ended
March 31, 2013 - Restated
|
||||||||||||
|
Loss
(Numerator)
|
Shares
(Denominator)
|
Per-Share
Amount
|
||||||||||
|
Basic Loss Per Share:
|
||||||||||||
|
Net income available to common stock
|
$
|
(1,234,474
|
)
|
12,673,243
|
$
|
(0.10
|
)
|
|||||
|
Diluted Loss Per Share:
|
||||||||||||
|
Effect of dilutive securities and stock options
|
0
|
0
|
0.00
|
|||||||||
|
Net loss available to common stock
|
$
|
(1,234,474
|
)
|
12,673,243
|
$
|
(0.10
|
)
|
|||||
For the three months ended March 31, 2014 and 2013, Royale Energy had dilutive securities of 406,225 and 643,017, respectively. These securities were not included in the dilutive loss per share due to their antidilutive nature.
ROYALE ENERGY, INC.
NOTES TO UNAUDITED FINANCIAL STATEMENTS
NOTE 3 – OIL AND GAS PROPERTIES, EQUIPMENT AND FIXTURES
Oil and gas properties, equipment and fixtures consist of the following:
|
March 31, 2014
(Unaudited)
|
December 31, 2013
(Unaudited)
|
|||||||
|
Oil and Gas
|
||||||||
|
Producing properties, including drilling costs
|
$
|
5,035,269
|
$
|
4,862,657
|
||||
|
Undeveloped properties
|
2,737,596
|
2,779,672
|
||||||
|
Lease and well equipment
|
4,099,321
|
4,075,320
|
||||||
|
11,872,186
|
11,717,649
|
|||||||
|
Accumulated depletion, depreciation & amortization
|
(7,127,452
|
)
|
(7,065,362
|
)
|
||||
|
4,744,734
|
4,652,287
|
|||||||
|
Commercial and Other
|
||||||||
|
Real estate, including furniture and fixtures
|
$
|
2,503,803
|
$
|
2,503,803
|
||||
|
Vehicles
|
120,314
|
120,314
|
||||||
|
Furniture and equipment
|
1,300,523
|
1,300,523
|
||||||
|
3,924,640
|
3,924,640
|
|||||||
|
Accumulated depreciation
|
(1,365,231
|
)
|
(1,339,545
|
)
|
||||
|
2,559,409
|
2,585,095
|
|||||||
|
$
|
7,304,143
|
$
|
7,237,382
|
|||||
The guidance set forth in the Continued Capitalization of Exploratory Well Costs paragraph of the Extractive Activities Topic of the FASB Accounting Standards Codification requires that we evaluate all existing capitalized exploratory well costs and disclose the extent to which any such capitalized costs have become impaired and are expensed or reclassified during a fiscal period. We did not make any additions to capitalized exploratory well costs pending a determination of proved reserves during the periods in 2014 or 2013.
NOTE 4 – RESTATEMENT TO REFLECT CHANGE IN REVENUE RECOGNITION POLICY
The Company has restated its previously issued 2013 financial statements for the correction of an error in the method of revenue recognition. The effect on the Company’s issued March 31, 2013 financial statements is summarized below:
|
As Previously
|
||||||||
|
Reported
|
As Restated
|
|||||||
|
Statement of Operations for the period ended March 31, 2013:
|
||||||||
|
Turnkey Drilling and Development Expense
|
43,143
|
0
|
||||||
|
Lease Operating Expense
|
292,822
|
267,209
|
||||||
|
Delay Rentals Expense
|
0
|
25,613
|
||||||
|
Depreciation, Depletion and Amortization Expense
|
221,360
|
63,281
|
||||||
|
Total Costs and Expenses
|
1,626,595
|
1,425,373
|
||||||
|
Net Loss
|
(1,355,797
|
)
|
(1,234,474
|
)
|
||||
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Forward Looking Statements
In addition to historical information contained herein, this discussion contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, subject to various risks and uncertainties that could cause our actual results to differ materially from those in the "forward-looking" statements. While we believe our forward looking statements are based upon reasonable assumptions, there are factors that are difficult to predict and that are influenced by economic and other conditions beyond our control. Investors are directed to consider such risks and other uncertainties discussed in documents filed by the Company with the Securities and Exchange Commission.
Results of Operations
For the first quarter of 2014, we had a net loss of $767,105 compared to net loss of $1,234,474 during the first quarter of 2013, a $467,369 improvement. Total revenues for the first quarter in 2014 were $979,031, an increase of $507,365 or 107.6% from the total revenues of $471,666 during the period in 2013. The lower net loss and higher revenues were the result of increases in both natural gas prices and production volumes during the quarter in 2014, when compared to 2013.
In the first quarter of 2014, revenues from oil and gas production increased $494,661 or 149.5% to $825,556 from the 2013 first quarter revenues of $330,895. This increase was due to higher natural gas commodity prices and increased production, as several new wells drilled at the end of 2013 and beginning of 2014 were brought online. The net sales volume of natural gas for the quarter ended March 31, 2014, was approximately 148,323 Mcf with an average price of $5.39 per Mcf, versus 88,530 Mcf with an average price of $3.48 per Mcf for the first quarter of 2013. This represents an increase in net sales volume of 59,793 Mcf or 67.5%. The net sales volume for oil and condensate (natural gas liquids) production was 280 barrels with an average price of $92.80 per barrel for the first three months of 2014, compared to 280 barrels at an average price of $87.67 per barrel for the first three months in 2013.
Oil and natural gas lease operating expenses increased by $186,327 or 69.7%, to $453,536 for the quarter ended March 31, 2014, from $267,209 for the quarter in 2013. This difference was mainly due to increased plugging and abandonment expenses and increased compression charges resulting from higher production volumes during the period in 2014. Delay rental costs decreased by $6,119 or 23.9%, to $19,494 for the quarter in 2014 from $25,613 for the same period in 2013.
The aggregate of supervisory fees and other income was $153,475 for quarter ended March 31, 2014, an increase of $12,704 or 9% from $140,771 during the period in 2013. This increase was the result of higher overhead rates during the period in 2014, stemming from higher production volumes.
Depreciation, depletion and amortization expense increased to $89,826 from $63,281, an increase of $26,545 or 42% for the quarter ended March 31, 2014, as compared to the same period in 2013. The depletion rate is calculated using production as a percentage of reserves. This increase in depreciation expense was mainly due to a higher depletion rate as production volumes were higher during the period.
General and administrative expenses decreased by $24,952 or 2.9% from $860,013 for the quarter ended March 31, 2013, to $835,061 for the period in 2014. This decrease was primarily due to lower employee related compensation expenses during the period in 2014, stemming from continued cost control measures. Marketing expense for the quarter ended March 31, 2014, increased $57,570, or 153%, to $95,196, compared to $37,626 for the same period in 2013. Marketing expense varies from period to period according to the number of marketing events attended by personnel and their associated costs.
Legal and accounting expense increased to $218,652 for the period, compared to $171,631 for the same period in 2013, a $47,021 or 27.4% increase. The increase in legal and accounting expense was a result of higher audit and tax fees paid during the period in 2014 when compared to the same period in 2013.
At March 31, 2014, Royale Energy had a Deferred Drilling Obligation of $6,406,279. During this period, we disposed of $385,153 of these obligations upon completing the drilling of one well, while incurring expenses of $404,186, resulting in a loss of $19,033. In the same period in 2013, there were no wells drilled, but an additional $79,899 of expenses was incurred on wells drilled during the previous period. During the second quarter 2014, Royale expects to drill three wells, disposing of an additional $2,045,678 of deferred drilling obligation in the second quarter of 2014.
Interest expense decreased to $15,338 for the quarter ended March 31, 2014, from $200,868 for the same period in 2013, a $185,530, or 92.4% decrease. This decrease resulted from a reduction of outstanding indebtedness after repayment during 2013 of a convertible note.
Capital Resources and Liquidity
At March 31, 2014, Royale Energy had current assets totaling $6,966,128 and current liabilities totaling $11,736,381, a $4,770,253 working capital deficit. We had cash and cash equivalents at March 31, 2014, of $3,664,400 compared to $4,878,233 at December 31, 2013.
In October 2012, the Company obtained $3 million from sale of a convertible note. See, The Company’s Prospectus Supplement filed pursuant to Rule 424(b) on October 29, 2012, and the Company’s Form 8-K filed on October 29, 2012. The Company used these proceeds for general corporate purposes, including the reduction of outstanding bank debt and for capital expenditures on oil and gas development. At March 31, 2013, the net outstanding balance of this note was $1,253,418. During 2013, Royale repaid the note by paying a portion of the principal and interest in cash and by exercising the conversion feature to convert a portion of the principal and interest to common stock, as of September 30, 2013, this note was paid in full.
In December of 2013, Royale purchased an office building valued at $2,000,000, of which $500,000 was paid in cash on the date of purchase, and $1,500,000 was borrowed from American West Bank, with a note secured by the property being purchased. The note carries an interest rate of 5.75% until paid in full. Royale will pay this loan in 119 regular payments of $9,525 each and one balloon payment estimated at $1,150,435. Royale’s first payment was due February 1, 2014, and all subsequent payments are due on the same day of each month after that. Royale’s final payment will be due on January 1, 2024, and will be for all principal and all accrued interest not yet paid. Payments include principal and interest. At March 31, 2014, the outstanding balance of this note was $1,496,279.
At March 31, 2014, our accounts receivable totaled $2,331,501, compared to $1,680,792 at December 31, 2013, a $650,709 or 38.7% increase. This was primarily due to higher oil and gas revenue receivables due to higher commodity prices and increased production during the period. At March 31, 2014, our accounts payable and accrued expenses totaled $5,300,541, a decrease of $31,782 or .6% from the accounts payable at December 31, 2013, of $5,332,323, mainly due to payments of accounts payable during the period.
Ordinarily, we fund our operations and cash needs from our available credit and cash flows generated from operations. We believe that we have sufficient liquidity for the foreseeable future and do not foresee any liquidity demands that cannot be met from cash flow or financing activities, including ongoing operations as the Company continues to increase its well inventory or additional sales of equity or debt securities pursuant to a Registration Statement on Form S-3 filed with the SEC.
Operating Activities. Net cash used by operating activities totaled $1,034,492 and provided by operating activities $444,333 for the three month periods ended March 31, 2014 and 2013, respectively. This $1,478,825 difference in cash was mainly due to increases in accounts receivable during the period in 2014, due to higher oil and natural gas revenue receivables.
Investing Activities. Net cash used by investing activities, primarily in capital acquisitions of oil and gas properties, amounted to $175,620 and $133,527 for the three month periods ended March 31, 2014 and 2013, respectively. This increase was due to higher drilling obligation costs during the quarter in 2014, as the Company completed one well while no wells were completed during the period in 2013.
Financing Activities. Net cash used by financing activities totaled $3,721 in the first quarter of 2014, which were principal payments on the Company’s long-term debt; while $161,665 was used by financing activities for the three month period ended March 31, 2013. During the quarter ended March 31, 2013, Royale received proceeds of $1,021,668 and issued 500,000 shares of its common stock relating to its market equity offering program, while payments of $1,183,333 were made on the Company’s convertible note payable.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Our major market risk exposure relates to pricing of oil and gas production. The prices we receive for oil and gas are closely related to worldwide market prices for crude oil and local spot prices paid for natural gas production. Prices have been volatile for the last several years, and we expect that volatility to continue. Monthly average natural gas prices ranged from a low of $4.69 per Mcf to a high of $6.77 per Mcf for the first three months of 2014. We have not entered into any hedging or derivative agreements to limit our exposure to changes in oil and gas prices or interest rates.
Item 4. Controls and Procedures
As of March 31, 2014, an evaluation was performed under the supervision and with the participation of our management, including our CEO and CFO, of the effectiveness of the design and operation of our disclosure controls and procedures. These controls and procedures are based on the definition of disclosure controls and procedures in Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities Exchange Act of 1934. Based on that evaluation, our management, including the CEO and CFO, concluded that our disclosure controls and procedures were effective as of March 31, 2014.
No changes occurred in our internal control over financial reporting during the three months ended March 31, 2014, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Douglas Jones v. Royale Energy, Inc., et.al.
On July 1, 2010, Douglas Jones filed a lawsuit against the Company in the Circuit Court, 17th Judicial District, Broward County, Florida. Mr. Jones was an independent contractor handling certain aspects of sales for the Company prior to July 2, 2008. He asserts that he is entitled to an unspecified amount for commissions and expenses. The Company denies that any money is owed to Mr. Jones. On August 16, 2010, the Company through Florida counsel Adam Hodkin filed a motion to dismiss the lawsuit for lack of jurisdiction in the Florida courts. The Court ruled that it wanted to have an evidentiary hearing on the motion. An evidentiary hearing on whether to grant or deny the motion to dismiss was held on May 5, 2014, and the judge currently has the case under advisement. If the motion to dismiss is denied, Royale intends to answer the complaint and oppose the lawsuit vigorously. At this time, we do not expect to incur any material losses resulting from these proceedings.
Item 1A. Risk Factors
Please review the risk factors contained in our Annual Report on Form 10-K for the year ended December 31, 2013.
Item 6. Exhibits
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31.1
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31.2
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32.1
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32.2
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101.INS
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XBRL Instance Document
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101.SCH
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XBRL Taxonomy Extension Schema
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101.CAL
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XBRL Taxonomy Extension Calculation Linkbase
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101.DEF
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XBRL Taxonomy Extension Definition Linkbase
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101.LAB
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XBRL Taxonomy Extension Label Linkbase
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101.PRE
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XBRL Taxonomy Extension Presentation Linkbase
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Signatures
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
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ROYALE ENERGY, INC.
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Date: May 9, 2014
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/s/ Donald H. Hosmer
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Donald H. Hosmer, Co-President and Co-Chief Executive Officer
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Date: May 9, 2014
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/s/ Stephen M. Hosmer
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Stephen M. Hosmer, Co-President, Co-Chief Executive Officer, and Chief Financial Officer
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