Deal includes warrant coverage; proceeds to fund drilling activities
By Devika Patel
Knoxville, Tenn., Aug. 5 – Royale Energy Inc. raised $2.54 million in a private placement of units and convertible promissory notes on Aug. 2, according to an 8-K filed Friday with the Securities and Exchange Commission.
The company sold 2,392,500 units of one common share and one warrant for 0.2 shares at $0.40 per unit.
The company also sold $1.58 million of 10% convertible notes.
The notes mature in one year. They are convertible into 3.95 million common shares at $0.40 per share. The conversion price is a 42.03% discount to the Aug. 1 closing share price of $0.69.
The convertibles investors also received 30% warrant coverage.
Each warrant is exercisable at $0.80 for two years. The strike price is a 15.94% premium to the Aug. 1 closing price.
Proceeds will be used for drilling activities and general corporate purposes.
San Diego, Calif.-based Royale Energy is an independent oil and natural gas producer.
| Issuer: | Royale Energy Inc.
|
| Issue: | Units of one common share and one warrant for 0.2 shares, convertible promissory notes
|
| Amount: | $2,537,000
|
| Warrant expiration: | Two years
|
| Warrant strike price: | $0.80
|
| Settlement date: | Aug. 2
|
| Stock symbol: | Nasdaq: ROYL
|
| Stock price: | $0.69 at close Aug. 1
|
| Market capitalization: | $11.27 million
|
|
|
| Units
|
| Amount: | $957,000
|
| Units: | 2,392,500
|
| Price: | $0.40
|
| Warrants: | 0.2 warrants per unit
|
|
|
| Notes
|
| Amount: | $1.58 million
|
| Maturity: | One year
|
| Coupon: | 10%
|
| Conversion price: | $0.40
|
| Conversion ratio: | Into 3.95 million shares
|
| Warrants: | 30% coverage
|
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