Royale Energy, Inc. reported significant financial developments in its 10-Q filing for the quarter ending September 30, 2024. The company experienced an increase in total revenues, which reached $574,414 for the three months ended September 30, 2024, compared to $467,035 for the same period in 2023. For the nine months ended September 30, 2024, total revenues were $1,794,083, up from $1,480,452 in the prior year, marking a 21.2% increase.

Despite the revenue growth, the company faced rising costs and expenses. Total costs and expenses for the three months ended September 30, 2024, were $1,650,701, significantly higher than $937,111 in the same quarter of 2023. For the nine-month period, costs and expenses increased to $4,179,071 from $3,433,863. This led to a loss from operations of $(1,076,287) for the third quarter of 2024, compared to $(471,153) in 2023, and a nine-month loss from operations of $(1,857,273), up from $(615,106) in the previous year.

The net loss for the three months ended September 30, 2024, was $(1,184,291), compared to $(470,730) in the same quarter of 2023. For the nine months, the net loss increased to $(2,065,017) from $(503,761) in 2023. The net loss available to common stockholders also rose, reaching $(1,405,701) for the third quarter and $(2,718,747) for the nine months, compared to $(684,537) and $(1,132,768), respectively, in the prior year.

As of September 30, 2024, Royale Energy reported total assets of $14,884,002, an increase from $12,915,393 at the end of 2023. Current assets decreased to $8,971,747 from $9,669,618, while current liabilities rose to $19,962,529 from $16,853,936, resulting in a working capital deficiency of $10,990,782. The company’s accumulated deficit also grew to $(93,042,036) from $(90,323,289).

Strategically, Royale Energy has been implementing cost control measures, including reducing overhead and selling non-strategic assets, to address liquidity concerns. The company also reported an increase in its oil and gas properties, with net capitalized costs rising to $5,054,940 from $2,394,098. Additionally, the company incurred an impairment loss of $400,554 during the nine months ended September 30, 2024, compared to no impairment losses in the same period of 2023.

Management has acknowledged substantial doubt about the company's ability to continue as a going concern, reflecting its financial position and ongoing losses. The company is actively working to improve its financial controls following the identification of a material weakness in its disclosure controls and procedures.