Current Report Filing (8-k)
August 08 2017 - 5:23PM
Edgar (US Regulatory)
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date
of Report (Date of earliest event reported): June 12, 2017
ROYAL
ENERGY RESOURCES, INC.
(Exact
name of registrant as specified in its charter)
Delaware
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000-52547
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11-3480036
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(State or other jurisdiction
of incorporation)
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(Commission
file
number)
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(I.R.S.
Employer
Identification
Number)
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56
Broad Street, Suite 2, Charleston, SC 29401
(Address
of principal executive offices) (Zip Code)
(843)
900-7693
(Registrant’s
telephone number, including area code)
Check
the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant
under any of the following provisions:
[ ]
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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[ ]
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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[ ]
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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[ ]
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4c))
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Section
1 – Registrant’s Business and Operations
Item
1.01 Entry into Material Definitive Agreement.
On
June 12, 2017, Royal Energy Resources, Inc. (the “
Company
”), entered into a Secured Promissory Note dated May
31, 2017 with Cedarview Opportunities Master Fund, L.P. (the “
Lender
”), under which the Company borrowed $2,500,000
from the Lender. The loan bears non-default interest at the rate of 14%, and default interest at the rate of 17% per annum. The
Company and the Lender simultaneously entered into a Pledge and Security Agreement dated May 31, 2017, under which the Company
pledged 5,000,000 Common Units in Rhino Resource Partners, LP (“
Rhino
”) as collateral for the loan. The loan
is payable through quarterly payments of interest only until May 31, 2019, when the loan matures, at which time all principal
and interest is due and payable. The Company deposited $350,000 of the loan proceeds into an escrow account, from which interest
payments for the first year will be paid. After the first year, the Company is obligated to maintain at least one quarter of interest
on the loan in the escrow account at all times. In consideration for the Lender’s agreement to make the loan, the Company
transferred 25,000 Common Units of Rhino to the Lender as a fee. The Company intends to use the proceeds to repay in full
all loans made to the Company by E-Starts Money Co. in the principal amount of $578,593, and the balance for general corporate
overhead, as well as costs associated with potential acquisitions of mineral resource companies, including legal and engineering
due diligence, deposits, and down payments.
Section
3 – Securities and Trading Markets
Item
3.02 Unregistered Sales of Equity Securities.
On
July 17, 2017, the Company exercised its right to convert two promissory notes payable by the Company into common stock of the
Company. The first note was issued by the Company to Rhino on March 21, 2016 in the original principal amount of $7,000,000 (the
“SPA Note”). The balance owed on the SPA Note was $2,000,000 at the time of the conversion. The second note was issued
by the Company to Weston Energy, LLC on September 30, 2016 in the original principal amount of $2,000,000 (the “Weston Note”).
The balance owed on the Weston Note was $2,126,574.74 at the time of conversion. The Weston Note was assigned by the original
holder to Rhino on December 30, 2016.
Pursuant
to a letter agreement dated December 30, 2016 between the Company and Rhino, the parties agreed that all principal and interest
owed under the SPA Note and the Weston Note was convertible upon demand of the Company into shares of the Company’s common
stock at a price per share equal to seventy-five percent (75%) of the volume weighted average closing price for the ninety (90)
trading days preceding the date of the conversion, subject to a minimum conversion price of $3.50 per share and a maximum conversion
price of $7.50 per share. The volume weighted average closing price for the Company’s common stock for the ninety (90) trading
days ending on July 14, 2017, the last trading day prior to the conversion, was $6.014557 per share, which resulted in a conversion
price of $4.510918 per share. Accordingly, the number of shares of common stock issuable to Rhino upon conversion of both the
SPA Note and the Weston Note was 914,797 shares.
Section
9 – Financial Statements and Exhibits
Item
9.01 Financial Statements and Exhibits.
Item
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Description
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10.1
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Secured
Promissory Note dated May 31, 2017 between Royal Energy Resources, Inc. and Cedarview Opportunities Master Fund, LP.
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10.2
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Pledge
and Security Agreement dated May 31, 2017 between Royal Energy Resources, Inc. and Cedarview Opportunities Master Fund, LP.
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SIGNATURES
In
accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
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ROYAL ENERGY RESOURCES, INC.
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Date:
August 8, 2017
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By:
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/s/
William L. Tuorto
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William L. Tuorto, Chief Executive Officer
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