SCHEDULE
14C INFORMATION STATEMENT
(Pursuant
to Regulation 14C of the Securities Exchange Act of 1934 as amended)
ROYAL
ENERGY RESOURCES, INC.
56
Broad Street, Suite 2
Charleston,
South Carolina 29401
WE
ARE NOT ASKING FOR A PROXY AND
YOU
ARE REQUESTED NOT TO SEND US A PROXY.
Notice
of Written Consent of Shareholders in Lieu of
Special
Meeting of Shareholders
This
Information Statement is being furnished by Royal Energy Resources, Inc., a Delaware Corporation (the “
Company
”),
to the holders of record (the “
Stockholders
”) of the outstanding common stock, $0.00001 par value per
share (the “
Common Stock
”) as of the close of business on May 9, 2019 (the “
Record Date
”),
pursuant to Rule 14c-2 promulgated under the Securities Exchange Act of 1934, as amended (the “
Exchange Act
”).
This Information Statement relates to a written consent in lieu of a meeting, dated May 9, 2019 (the “
Written Consent
”)
of stockholders of the Company owning common shares and Series A Preferred Stock that represents a majority of the outstanding
votes of the capital stock of the Company as of the Record Date (the “
Consenting Stockholders
”).
The
Written Consent authorized the removal of Brian Hughs as a director of the Company (the “
Shareholder Action
”).
The
Written Consent constitutes the consent of a majority of the votes at any meeting of stockholders, and is sufficient under the
Delaware General Corporation Law, and the Company’s Amended and Restated Certificate of Incorporation to approve the Shareholder
Action. Accordingly, the Shareholder Action is not presently being submitted to the Company’s other Stockholders for a vote.
The action by Written Consent will become effective on twenty-one calendar days after this Written Consent is mailed to all shareholders
(the “
Effective Date
”).
This
is not a notice of a meeting of Stockholders and no Stockholders meeting will be held to consider the matters described herein.
This Information Statement is being furnished to you solely for the purpose of informing Stockholders of the matters described
herein pursuant to Section 14(c) of the Exchange Act and the regulations promulgated thereunder, including Regulation 14C. Except
as otherwise indicated by the context, references in this information statement to “Company,” “we,” “us,”
or “our” are references to Royal Energy Resources, Inc.
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By
Order of the Board of Directors,
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/s/
William L. Tuorto
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William
L. Tuorto, Executive Chairman
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GENERAL
INFORMATION
This
Information Statement is being first mailed on or about May ___, 2019, to Stockholders of the Company by the board of directors
to provide material information regarding corporate actions that have been approved by the Written Consent of the Consenting Stockholders.
Only
one Information Statement is being delivered to two or more Stockholders who share an address unless we have received contrary
instruction from one or more of such Stockholders. This practice known as “householding” is intended to reduce the
Company’s printing and postage costs. We will promptly deliver, upon written or oral request, a separate copy of the Information
Statement to a security holder at a shared address to which a single copy of the document was delivered. If you would like to
request additional copies of the Information Statement, or if in the future you would like to receive multiple copies of information
statements or proxy statements, or annual reports, or, if you are currently receiving multiple copies of these documents and would,
in the future, like to receive only a single copy, please so instruct us by writing to the corporate Executive Chairman at the
Company’s executive offices at the address specified above.
PLEASE
NOTE THAT THIS IS NOT A REQUEST FOR YOUR VOTE OR A PROXY STATEMENT, BUT RATHER AN INFORMATION STATEMENT DESIGNED TO INFORM YOU
OF SHAREHOLDER ACTION.
The
entire cost of furnishing this Information Statement will be borne by the Company. We will request brokerage houses, nominees,
custodians, fiduciaries and other like parties to forward this Information Statement to the beneficial owners of the Common Stock
held of record by them.
ACTION
BY THE CONSENTING STOCKHOLDERS
Pursuant
to Section 141(k) of the Delaware General Corporation Law (“
DGCL
”), any director may be removed at any
time, with or without cause, by the holders of a majority of the shares then entitled to vote (other than in the case of exceptions
for classified boards or boards elected by cumulative voting, which are not applicable). Pursuant to Section 228 of the DGCL,
any action that can be taken at an annual or special meeting of shareholders may be taken without a meeting, without prior notice
and without a vote, if the holders of outstanding capital stock having not less than the minimum number of votes that will be
necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted consent
to such action in writing. On the Record Date, we had 18,579,293 shares of Common Stock issued and outstanding with the holders
thereof being entitled to cast one vote per share, and 51,000 shares of Series A Preferred Stock issued and outstanding, with
the holders thereof being entitled to cast, as a group, 54% of the total votes on any matter submitted to stockholders for a vote.
As of the Record Date, the total votes at any meeting of Stockholders was 40,389,767, and 20,194,884 votes constituted a simple
majority of the total votes.
On
May 9, 2019, the Consenting Stockholders adopted resolutions approving the Shareholder Action. The Consenting Stockholders are
the record or beneficial owner of 8,013,119 shares of Common Stock and 51,000 shares of Series A Preferred Stock, which cumulatively
represented a total of 29,823,593 votes, or 73.8% of the total votes entitled to be case at any meeting of Stockholders. No consideration
was paid for the consents. The Consenting Stockholders names, affiliations with the Company and beneficial holdings are as follows:
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Name of Beneficial Owner
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Common Stock
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Series A Preferred Stock
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Total Votes
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Percent of Total Votes
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William L. Tuorto*
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824,559
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51,000
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22,635,033
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56.0
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%
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E. Starts Money Co.**
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7,188,560
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—
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7,188,560
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17.8
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%
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Total
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8,013,119
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51,000
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29,823,593
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73.8
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%
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*Director
and Executive Chairman of the Company
**
Owned by William L. Tuorto
Accordingly,
the Company has obtained all necessary corporate approvals in connection with the Shareholder Action. The Company is not seeking
written consent from any other Stockholders, and the other Stockholders will not be given an opportunity to vote with respect
to the actions described in this Information Statement. This Information Statement is furnished solely for the purposes of advising
Stockholders of the action taken by written consent and giving Stockholders notice of such actions taken as required by the Exchange
Act.
The
Shareholder Action will become effective twenty-one (21) days after this Information Statement is first mailed to Stockholders.
DESCRIPTION
OF THE COMPANY’S CAPITAL STOCK
The
authorized capital stock of the Company consists of 25,000,000 shares of Common Stock, par value $0.00001 per share, and 5,000,000
shares of Preferred Stock, par value $0.00001 per share. There were 18,579,293 shares of Common Stock and 51,000 shares of Preferred
Stock outstanding as of the Record Date. All of our outstanding shares of Common Stock and Preferred Stock are validly issued,
fully paid and non-assessable.
Common
Stock
Holders
of Common Stock are entitled to one vote for each share on all matters submitted to a stockholder vote. Holders of Common Stock
do not have cumulative voting rights. Holders of Common Stock are entitled to share in all dividends that the Board, in its discretion,
declares from legally available funds. In the event of our liquidation, dissolution or winding up, subject to the preferences
of any shares of our Preferred Stock which may then be outstanding, each outstanding share entitles its holder to participate
in all assets that remain after payment of liabilities and after providing for each class of stock, if any, having preference
over the common stock.
Holders
of Common Stock have no conversion, preemptive or other subscription rights, and there are no redemption provisions for the common
stock. The rights of the holders of Common Stock are subject to any rights that may be fixed for holders of Preferred Stock, when
and if any Preferred Stock is authorized and issued. All outstanding shares of Common Stock are duly authorized, validly issued,
fully paid and non-assessable.
Preferred
stock
Our
Board, without further stockholder approval, may issue Preferred Stock in one or more series from time to time and fix or alter
the designations, relative rights, priorities, preferences, qualifications, limitations and restrictions of the shares of each
series. The rights, preferences, limitations and restrictions of different series of Preferred Stock may differ with respect to
dividend rates, amounts payable on liquidation, voting rights, conversion rights, redemption provisions, sinking fund provisions
and other matters. Our Board may authorize the issuance of Preferred Stock, which ranks senior to our common stock for the payment
of dividends and the distribution of assets on liquidation. In addition, our Board can fix limitations and restrictions, if any,
upon the payment of dividends on our common stock to be effective while any shares of Preferred Stock are outstanding.
The
Board has authorized one series of Preferred Stock, which is known as the “Series A Preferred Stock.” The Board has
authorized the issuance of 100,000 shares of Series A Preferred Stock. The Series A Preferred Stock has the following rights and
preferences:
Dividends
:
The Series A Preferred Stock is entitled to receive dividends equal to the dividends per share paid on the Common Stock.
Liquidation
Preference
: The Series A Preferred Stock is entitled to receive, prior to any distribution to any junior class of securities,
an amount equal to the original issue price of the Series A Preferred Stock as a liquidation preference.
Voting
Rights
: The Series A Preferred Stock has voting rights entitling it to 54% of the total votes on any matter on which stockholders
are entitled to vote. In addition, the Company cannot authorize or issue any class of capital stock or bonds, debentures, notes
or other securities or other obligations ranking senior to or on a parity with the Series A Preferred Stock without the approval
of the Series A Preferred Stock voting as a separate class.
Conversion
Rights
: Each share of Series A Preferred Stock is convertible into one (1) share of Common Stock.