As filed with the Securities and Exchange Commission on March
11, 2021
Registration No. 333-252572
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
_______________
AMENDMENT
NO. 1
TO
Form S-3
REGISTRATION
STATEMENT
UNDER
THE
SECURITIES ACT OF 1933
_______________
ENGlobal Corporation
(Exact
name of registrant as specified in its charter)
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Nevada
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88-0322261
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(State
or other jurisdiction of incorporation or
organization)
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(I.R.S.
Employer Identification No.)
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654 North Sam Houston Parkway East, Suite 400
Houston, Texas 77060-5914
(281)
878-1000
(Address,
including zip code, and telephone number, including area code, of
registrant’s principal executive offices)
Mark A. Hess
Chief Financial Officer, Treasurer and Secretary
ENGlobal Corporation
654 North Sam Houston Parkway East, Suite 400
Houston, Texas 77060-5914
(281)
878-1000
(Name,
address, including zip code, and telephone number, including area
code, of agent for service)
_______________
Copies to:
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E. James Cowen
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Porter Hedges LLP
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1000 Main, 36th Floor
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Houston, Texas 77002
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Telephone: (713) 226-6649
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Telecopy: (713) 226-6249
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_______________
Approximate date of
commencement of proposed sale to the public: From time to time
after this registration statement becomes effective.
If the
only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check
the following box. [ ]
If any
of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in
connection with dividend or interest reinvestment plans, check the
following box. [X]
If this
Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the
following box and list the Securities Act registration statement
number of the earlier effective registration statement for the same
offering. [ ]
If this
Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier
effective registration statement for the same offering. [
]
If this
Form is a registration statement pursuant to General Instruction
I.D. or a post-effective amendment thereto that shall become
effective upon filing with the Commission pursuant to Rule 462(e)
under the Securities Act, check the following box. [ ]
If this
Form is a post-effective amendment to a registration statement
filed pursuant to General Instruction I.D. filed to register
additional securities or additional classes of securities pursuant
to Rule 413(b) under the Securities Act, check the following box. [
]
Indicate by check
mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, a smaller reporting
company or an emerging growth company. See the definitions of
“large accelerated filer,” “accelerated
filer,” “smaller reporting company” and
“emerging growth company” in Rule 12b-2 of the Exchange
Act.
Large
accelerated filer [
] Accelerated
filer []
Non-accelerated
filer
[X] Smaller
reporting company [X]
Emerging growth
company []
If an
emerging growth company, indicate by check mark if the registrant
has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided
pursuant to Section 7(a)(2)(B) of Securities Act. [ ]
______________
The
Registrant hereby amends this Registration Statement on such date
or dates as may be necessary to delay its effective date until the
Registrant shall file a further amendment which specifically states
that this Registration Statement shall thereafter become effective
in accordance with Section 8(a) of the Securities Act of 1933 or
until the Registration Statement shall become effective on such
date as the Commission acting pursuant to said Section 8(a), may
determine.
EXPLANATORY NOTE
This
registration statement contains:
●
a
base prospectus, which covers the offering, issuance and sale by us
of up to $100,000,000 in the aggregate of the securities identified
above from time to time in one or more offerings; and
●
a
sales agreement prospectus, which covers the offering, issuance and
sale by us of up to $25,000,000 in the aggregate of shares of
common stock that may be issued and sold from time to time under an
at the market sales agreement (the “sales agreement”)
by and between us and B. Riley Securities, Inc., as sales
agent.
The base prospectus immediately follows this explanatory note. The
specific terms of any securities to be offered pursuant to the base
prospectus will be specified in a prospectus supplement to the base
prospectus. The sales agreement prospectus immediately follows the
base prospectus. The $25,000,000 of common stock that may be
offered, issued and sold under the sales agreement prospectus is
included in the $100,000,000 of securities that may be offered,
issued and sold by us under the base prospectus. Upon termination
of the sales agreement, any portion of the $25,000,000 included in
the sales agreement prospectus that is not sold pursuant to the
sales agreement will be available for sale in other offerings
pursuant to the base prospectus, and if no shares are sold under
the sales agreement, the full $25,000,000 of securities may be sold
in other offerings pursuant to the base prospectus.
The information in this prospectus is not complete and may be
changed. We may not sell these securities until the registration
statement filed with the Securities and Exchange Commission is
effective. This prospectus is not an offer to sell these securities
and it is not soliciting an offer to buy these securities in any
state where the offer or sale is not
permitted.
SUBJECT TO COMPLETION, DATED MARCH 11,
2021
PROSPECTUS
ENGlobal Corporation
$100,000,000
Common
Stock
Preferred
Stock
We may
offer from time to time shares of our common stock and shares of
our preferred stock.
The
aggregate initial offering price of the securities that we offer
will not exceed $100,000,000. We will offer the securities in
amounts, at prices and on terms to be determined at the time of the
offering.
Our
common stock is quoted on The Nasdaq Capital Market under the
symbol “ENG.”
We will
provide the specific terms of the offering in supplements to this
prospectus. You should read this prospectus and any supplement
carefully before you invest. This prospectus may not be used to
offer and sell our securities unless accompanied by a prospectus
supplement.
Investing
in our securities involves significant risks that are described in
the “Risk Factors” section beginning on page 4 of this
prospectus.
_______________
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these
securities or determined if this prospectus is truthful or
complete. Any representation to the contrary is a criminal
offense.
The
date of this prospectus is
, 2021.
TABLE OF CONTENTS
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This
prospectus is part of a registration statement that we filed with
the Securities and Exchange Commission (the
“Commission” or the “SEC”) utilizing a
“shelf” registration process. Under this shelf
registration process, we may sell any combination of the securities
described in this prospectus in one or more offerings up to a total
dollar amount of $100,000,000. This prospectus provides you with a
general description of the securities we may offer. Each time we
sell securities, we will provide a prospectus supplement that will
contain specific information about the terms of the offering and
the offered securities. This prospectus, together with applicable
prospectus supplements, any information incorporated by reference,
and any related free writing prospectuses we file with the
Commission, includes all material information relating to these
offerings and securities. We may also add, update or change in the
prospectus supplement any of the information contained in this
prospectus or in the documents that we have incorporated by
reference into this prospectus, including without limitation, a
discussion of any risk factors or other special considerations that
apply to these offerings or securities or the specific plan of
distribution. If there is any inconsistency between the information
in this prospectus and a prospectus supplement or information
incorporated by reference having a later date, you should rely on
the information in that prospectus supplement or incorporated
information having a later date. We urge you to read carefully this
prospectus, any applicable prospectus supplement and any related
free writing prospectus, together with the information incorporated
herein by reference as described under the heading
“Incorporation of Certain Documents By Reference” and
the additional information described under the heading “Where
You Can Find More Information,” before buying any of the
securities being offered.
You
should rely only on the information we have provided or
incorporated by reference in this prospectus, any applicable
prospectus supplement and any related free writing prospectus. We
have not authorized anyone to provide you with different
information. No dealer, salesperson or other person is authorized
to give any information or to represent anything not contained in
this prospectus, any applicable prospectus supplement or any
related free writing prospectus.
Neither
the delivery of this prospectus nor any sale made under it implies
that there has been no change in our affairs or that the
information in this prospectus is correct as of any date after the
date of this prospectus. You should assume that the information in
this prospectus, any applicable prospectus supplement or any
related free writing prospectus is accurate only as of the date on
the front of the document and that any information we have
incorporated by reference is accurate only as of the date of the
document incorporated by reference, regardless of the time of
delivery of this prospectus, any applicable prospectus supplement
or any related free writing prospectus, or any sale of a
security.
The
registration statement containing this prospectus, including
exhibits to the registration statement, provides additional
information about us and the securities offered under this
prospectus and any prospectus supplement. We have filed and plan to
continue to file other documents with the Commission that contain
information about us and our business. Also, we will file legal
documents that control the terms of the securities offered by this
prospectus as exhibits to the reports that we file with the
Commission. The registration statement and other reports can be
read at the Commission website or at the Commission offices
mentioned under the heading “Where You Can Find More
Information.”
This
prospectus contains summaries of certain provisions contained in
some of the documents described herein, but reference is made to
the actual documents for complete information. All of the summaries
are qualified in their entirety by the actual documents. Copies of
some of the documents referred to herein have been filed, will be
filed or will be incorporated by reference as exhibits to the
registration statement of which this prospectus is a part, and you
may obtain copies of those documents as described below under
“Where You Can Find More Information.”
As used
in this prospectus, unless otherwise indicated, “we,”
“our,” “us,” the “Company” or
similar terms refer collectively to ENGlobal Corporation, and not
the subsidiaries of ENGlobal Corporation.
The
Company, incorporated in the State of Nevada in June 1994, is a
leading provider of engineered modular solutions to the energy
industry. We deliver these solutions to our clients by utilizing
our vertically integrated project execution capabilities,
including, (i) professional engineering and project support
services, (ii) automation design, configuration and systems
integration expertise, and (iii) mechanical and modular fabrication
capabilities. We believe our vertically integrated strategy allows
us to differentiate our company from most of our competitors as a
full-service provider. As a result, our clients’ dependency
on and coordination of multiple vendors is reduced, improving
control over their projects’ costs and schedules. Our
strategy and positioning also allows the Company to pursue larger
scopes of work centered around many different types of modularized
engineered systems that can be both processing and automation
focused.
We
derive revenues primarily from three sources: (i) business
development efforts, (ii) preferred provider or alliance agreements
with strategic end user clients, original equipment manufacturers,
and technology partners, and (iii) referrals from existing
customers and industry members. Our business development
professionals are focused on specific market segments within the
energy industry. The market segments that we are targeting include
Renewables, Automation, Refining and Transportation, Upstream and
Government Services. This market focus allows us to develop centers
of expertise for each of our targeted markets.
Within
the Renewables group, our focus is to design and build production
facilities for hydrogen and associated products, together with
converting existing production facilities to produce products from
renewable feedstock sources. These projects often utilize
technologies that are more fuel efficient, and therefore reduce the
associated carbon footprint of the facility. Our scope of work on
these projects will typically include front-end development,
engineering, procurement, mechanical fabrication, automation and
commissioning services, and may be performed in conjunction with a
construction partner.
Our
Automation group designs, integrates and commissions modular
systems that include electronic distributed control, on-line
process analytical data, continuous emission monitoring, and
electric power distribution. Often these packaged systems are
housed in a fabricated metal enclosure, modular building or
freestanding metal rack, which are commonly included in our scope
of work. We provide automation engineering, procurement,
fabrication, systems integration, programing and on-site
commissioning services to our clients for both new and existing
facilities.
Our
Refining and Transportation group focuses on providing engineering,
procurement and automation services as well as fabricated products
to downstream refineries and petrochemical facilities as well as
midstream pipeline, storage and other transportation related
companies. These services are often applied to small capital
improvement and maintenance projects within refineries and
petrochemical facilities. For our transportation clients, we work
on facilities that include pumping, compression, gas processing,
metering, storage terminals, product loading and blending systems.
In addition, this group designs, programs and maintains supervisory
control and data acquisition (SCADA) systems for our transportation
clients.
The
Upstream group provides engineering, fabrication and automation
services to clients who have operations in the U.S. oil and gas
exploration and development markets. The operations are usually
associated with the completion, purification, storage and
transmission of the oil and gas from the well head to the terminal
or pipeline destination.
Our
Government Services group provides services related to the
engineering, design, installation and maintenance of automated fuel
handling and tank gauging systems for the U.S. military across the
globe in addition to cybersecurity assessment and SCADA systems
design and maintenance in the private sector.
Our
engineering services are strategically located in offices in cities
near our clients while our fabrication and integration facilities
are more centrally located. We generally enter into two principal
types of contracts with our clients: time-and-material contracts
and fixed-price contracts. Our clients typically determine the type
of contract to be utilized for a particular engagement, with the
specific terms and conditions of a contract being negotiated and
typically contained in a multiyear services agreement.
Our
business development professionals focus on building long-term
relationships with clients in order to provide solutions throughout
the life-cycle of their projects and facilities. Additionally, we
seek to capitalize on cross-selling opportunities between our
market segments and many of our projects will contain elements from
more than one market segment. Sales leads are often jointly
developed and pursued by our business development personnel from
multiple markets.
Products and services are also promoted through
trade advertising, participation in industry conferences and
on-line internet communication via our corporate home page
at www.englobal.com.
The ENGlobal website illustrates our company’s full range of
services and capabilities and is updated on a continuous basis.
Through the ENGlobal website, we seek to provide visitors and
investors with a single point of contact for obtaining information
about our company. We are not incorporating the contents of
the website into this prospectus.
We
also develop preferred provider and alliance agreements with
clients in order to facilitate repeat business. These preferred
provider agreements, also known as master service or umbrella
agreements, typically have a duration of three to five years. This
allows our clients to release work to us without having to
negotiate contract terms for each individual project. With the
primary terms of the contract agreed to, add-on projects with these
customers are easier to negotiate and can be accepted quickly,
without the necessity of a bidding process. Management believes
that these agreements can serve to stabilize project-centered
operations.
Our
principal executive offices are located at 654 N. Sam Houston
Parkway East, Suite 400, Houston, Texas 77060-5914. Our telephone
number is (281) 878-1000.
CAUTIONARY NOTE REGARDING
FORWARD-LOOKING STATEMENTS
The
information discussed in this prospectus, our filings with the SEC
and our public releases include “forward-looking
statements” within the meaning of Section 27A of the
Securities Act of 1933, as amended (the “Securities
Act”), and Section 21E of the Securities Exchange Act of
1934, as amended (the “Exchange Act”), the Private
Securities Litigation Reform Act of 1995 (the “PSLRA”),
or in releases made by the SEC. Such forward-looking statements
involve known and unknown risks, uncertainties and other important
factors that could cause the actual results, performance or
achievements of us to differ materially from any future results,
performance or achievements expressed or implied by such
forward-looking statements. Statements that are not historical fact
are forward-looking statements. Forward-looking statements can be
identified by, among other things, the use of forward-looking
language, such as the words “plan,”
“believe,” “expect,”
“anticipate,” “intend,”
“estimate,” “project,” “may,”
“will,” “would,” “could,”
“should,” “seeks,” or “scheduled
to,” or other similar words, or the negative of these terms
or other variations of these terms or comparable language, or by
discussion of strategy or intentions. These cautionary statements
are being made pursuant to the Securities Act, the Exchange Act and
the PSLRA with the intention of obtaining the benefits of the
“safe harbor” provisions of such laws.
The
forward-looking statements contained in or incorporated by
reference into this prospectus are largely based on our
expectations, which reflect estimates and assumptions made by our
management. These estimates and assumptions reflect our best
judgment based on currently known market conditions and other
factors. Although we believe such estimates and assumptions to be
reasonable, they are inherently uncertain and involve a number of
risks and uncertainties that are beyond our control,
including:
●
the impact of the
COVID-19 pandemic and of the actions taken by governmental
authorities, individuals and companies in response to the pandemic
on our business, financial condition, and results of operations,
including on our revenues and profitability;
our ability to
increase our backlog, revenue and
profitability;
●
our ability to
realize revenue projected in our backlog and our ability to collect
accounts receivable and process accounts payable in a timely
manner;
the effect of
economic downturns and the volatility and level of oil and natural
gas prices, including the severe disruptions in the worldwide
economy, including the global demand for oil and natural gas,
resulting from the COVID-19 pandemic;
the uncertainties
related to the U.S. Government's budgetary process and their
effects on our long-term U.S. Government
contracts;
●
our
ability to identify, evaluate, and complete any transactions in
connection with our review of strategic
transactions;
●
the
impact of the announcement of our review of strategic transactions
on our business, including our financial and operating results, or
our employees, suppliers and
customers;
●
our ability to
realize project awards or contracts on our pending proposals, and
the timing, scope and amount of any related awards or
contracts;
●
our ability to
retain existing customers and attract new customers;
●
our
ability to accurately estimate the overall risks, revenue or costs
on a contract;
●
the
risk of providing services in excess of original project scope
without having an approved change order;
●
our
ability to execute our expansion into the modular solutions market
and to execute our updated business growth strategy to position the
Company as a leading provider of engineered modular solutions to
its customer base;
●
our ability to
attract and retain key professional personnel;
●
our ability to
obtain additional financing when needed;
●
our
debt obligations may limit our financial
flexibility;
●
our
PPP loan may not be forgiven in full;
●
our dependence on
one or a few customers;
●
the risks of
internal system failures of our information technology systems,
whether caused by the Company, third-party service providers,
intruders or hackers, computer viruses, malicious code,
cyber-attacks, phishing and other cyber security problems, natural
disasters, power shortages or terrorist attacks;
●
the risk of
unexpected liability claims or poor safety
performance;
●
our
ability to identify, consummate and integrate potential
acquisitions;
●
our reliance on
third-party subcontractors and equipment
manufacturers;
●
our ability to
satisfy the continued listing standards of NASDAQ with respect to
our common stock or to cure any continued listing standard
deficiency with respect thereto; and
●
the effect of
changes in laws and regulations, including U.S. tax laws, with
which the Company must comply and the associated cost of compliance
with such laws and regulations.
Many of
these factors are beyond our ability to control or predict. These
factors are not intended to represent a complete list of the
general or specific factors that may affect us.
In
addition, management’s assumptions about future events may
prove to be inaccurate. All readers are cautioned that the
forward-looking statements contained in this prospectus and in the
documents incorporated by reference into this prospectus are not
guarantees of future performance, and we cannot assure any reader
that such statements will be realized or that the forward-looking
events and circumstances will occur. Actual results may differ
materially from those anticipated or implied in the forward-looking
statements due to factors described in “Risk Factors”
included elsewhere in this prospectus and in the documents that we
include in or incorporate by reference into this prospectus,
including our Annual Report on Form 10-K for the fiscal year ended
December 26, 2020, and our subsequent SEC filings. All
forward-looking statements speak only as of the date they are made.
We do not intend to update or revise any forward-looking statements
as a result of new information, future events or otherwise, except
as required by law. These cautionary statements qualify all
forward-looking statements attributable to us or persons acting on
our behalf.
WHERE YOU CAN FIND MORE
INFORMATION
This
prospectus forms a part of a registration statement on Form S-3 we
filed with the SEC. This prospectus does not contain all of the
information found in the registration statement. For further
information regarding us and our securities, you may desire to
review the full registration statement, including its exhibits and
schedules, filed under the Securities Act, as well as our proxy statement,
annual, quarterly and other reports and other information we file
with the SEC. The SEC maintains a website on the Internet at
www.sec.gov that contains
reports, proxy and information statements, and other information
regarding companies that file electronically with the SEC. We
maintain a website on the Internet at www.englobal.com. Our registration
statement, of which this prospectus constitutes a part, can be
downloaded from the SEC’s website or from our website at
www.englobal.com.
Information on the SEC website, our website or any other website is
not incorporated by reference in this prospectus and does not
constitute part of this prospectus.
INCORPORATION OF CERTAIN DOCUMENTS BY
REFERENCE
The
following documents, which have previously been filed by us with
the SEC under the Exchange Act, are incorporated herein by
reference:
●
our Annual Report
on Form 10-K for the fiscal year ended December 26, 2020, filed
with the SEC on March 11, 2021 (File No. 001-14217);
●
our Current Reports
on Form 8-K, filed with the SEC on April 15, 2016, January 29, 2021
and March 1, 2021 and our Current Report on Form 8-K/A filed with
the SEC on March 11, 2021 (excluding any information furnished
pursuant to Item 2.02 or Item 7.01 of any such Current Report on
Form 8-K or Form 8-K/A and any corresponding information furnished
under Item 9.01 or included as an exhibit) (File No. 001-14217);
and
●
the description of
our common stock set forth in our registration statement on Form
8-A, filed with the SEC on December 17, 2007 (File No. 001-14217),
including any and all subsequent amendments and reports filed for
the purpose of updating that description.
All
documents filed by us pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act (excluding any information furnished
pursuant to Item 2.02 or Item 7.01 on any Current Report on Form
8-K or Form 8-K/A and any corresponding information
furnished under Item 9.01 or included as an exhibit) after the date
of the initial registration statement of which this prospectus
forms a part and prior to the effectiveness of the registration
statement and after the date of this prospectus until the
termination of each offering under this prospectus shall be deemed
to be incorporated in this prospectus by reference and to be a part
hereof from the date of filing of such documents. Any statement
contained herein, or in a document incorporated or deemed to be
incorporated by reference herein, shall be deemed to be modified or
superseded for purposes of this prospectus to the extent that a
statement contained herein or in any subsequently filed document
which also is or is deemed to be incorporated by reference herein,
modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this
prospectus.
You may
request a free copy of these filings, other than any exhibits,
unless the exhibits are specifically incorporated by reference into
this prospectus, by writing or telephoning us at the following
address:
ENGlobal
Corporation
Attention: Chief
Financial Officer
654 N.
Sam Houston Parkway East, Suite 400
Houston, Texas
77060-5914
An
investment in our securities involves a high degree of risk. You
should carefully consider the risk factors and all of the other
information included in, or incorporated by reference into, this
prospectus, including those risk factors included in our Annual
Report on Form 10-K for the year ended December 26,
2020, and our subsequent Commission filings, in
evaluating an investment in our securities. If any of these risks
were to occur, our business, financial condition or results of
operations could be adversely affected. In that case, the trading
price of our securities could decline and you could lose all or
part of your investment. When we offer and sell any securities
pursuant to a prospectus supplement, we may include additional risk
factors relevant to such securities in the prospectus
supplement.
Unless
we inform you otherwise in the prospectus supplement or any pricing
supplement, we will use the net proceeds from the sale of the
securities offered by us for working capital needs, capital
expenditures, repayment or refinancing of indebtedness,
acquisitions, repurchases and redemptions of securities, and for
other general corporate purposes. Pending any specific application,
we may initially invest funds in short-term marketable securities
or apply them to the reduction of indebtedness.
DESCRIPTION OF CAPITAL
STOCK
The following description sets forth certain
material terms and provisions of our common stock and preferred
stock. This description also summarizes relevant provisions of the
Nevada Revised Statutes (“NRS”). The following
description is a summary and does not purport to be complete. It is
subject to, and qualified in its entirety by reference to, the
relevant provisions of the NRS, and to our Restated Articles of
Incorporation, dated January 29, 2021 (our “articles of incorporation”), and
our Second Amended and Restated Bylaws, dated April 14, 2016 (our
“bylaws”), which are filed as Exhibit 3.1 to our
Current Report on Form 8-K filed with the SEC on January 29, 2021 and Exhibit 3.1 to our Current Report on Form
8-K filed with the SEC on April 15, 2016, respectively, which are incorporated by
reference herein. Please read
“Where You Can Find More
Information.”
Authorized and Outstanding Capital Stock
The
following description of our common stock and provisions of our
articles of incorporation and bylaws are summaries and are
qualified by reference to our articles of incorporation and bylaws,
which have been incorporated by reference herein.
Our
authorized capital stock consists of 75,000,000 shares of common
stock, par value $0.001 per share, and 2,000,000 shares of
undesignated preferred stock, par value $0.001 per
share.
As of
March 8, 2021, there were
27,526,176 shares of common stock
outstanding, and no shares of preferred stock were issued or
outstanding.
Description of Common Stock
Voting. Holders of shares of the common stock are entitled
to one vote for each share held of record on matters properly
submitted to a vote of our stockholders. Stockholders are not
entitled to vote cumulatively for the election of
directors.
Dividends. Subject to the dividend rights of the holders of
any outstanding series of preferred stock, holders of shares of
common stock will be entitled to receive ratably such dividends, if
any, when, as, and if declared by our Board of Directors out of the
Company’s assets or funds legally available for such
dividends or distributions.
Liquidation and
Distribution. In the event of
any liquidation, dissolution, or winding up of the Company’s
affairs, holders of the common stock would be entitled to share
ratably in the Company’s assets that are legally available
for distribution to its stockholders. If the Company has any
preferred stock outstanding at such time, holders of the preferred
stock may be entitled to distribution preferences, liquidation
preferences, or both. In such case, the Company must pay the
applicable distributions to the holders of its preferred stock
before it may pay distributions to the holders of common
stock.
Conversion, Redemption, and
Preemptive Rights. Holders of
the common stock have no preemptive, subscription, redemption or
conversion rights.
Sinking Fund
Provisions. There are no
sinking fund provisions applicable to the common
stock.
Description of Preferred Stock
Subject
to the terms of our articles of incorporation, our Board of
Directors has the authority to approve the issuance of all or any
of our authorized shares of the preferred stock in one or more
series, to determine the number of shares constituting any series
and to determine any voting powers, conversion rights, dividend
rights and other designations, preferences, limitations,
restrictions and rights relating to such shares.
Anti-Takeover Effects of Nevada Law; Our Articles of Incorporation
and Our Bylaws
General. Certain provisions of our articles of
incorporation and bylaws, and certain provisions of the NRS could
make our acquisition by a third party, a change in our incumbent
management, or a similar change of control more difficult. These
provisions, which are summarized below, are likely to reduce our
vulnerability to an unsolicited proposal for the restructuring or
sale of all or substantially all of our assets or an unsolicited
takeover attempt. The summary of the provisions set forth below
does not purport to be complete and is qualified in its entirety by
reference to our articles of incorporation and our bylaws and the
relevant provisions of the NRS.
Preferred
Stock. The authorization of
undesignated preferred stock makes it possible for our Board of
Directors to issue preferred stock with voting or other rights or
preferences that could impede the success of any attempt to acquire
control of the Company.
No Action by Written
Consent. Our bylaws provide
that no action required or permitted to be taken at a meeting of
the stockholders may be taken by written
consent.
Advance Notice
Requirements. Stockholders
wishing to nominate persons for election to our Board of Directors
at a meeting or to propose any business to be considered by our
stockholders at a meeting must comply with certain advance notice
and other requirements set forth in our bylaws.
Special Meetings.
Our bylaws provide that special
meetings of stockholders may only be called by the President or
Secretary, by a majority of the Board of Directors, or by the
President at the written request of at least fifty percent (50%) of
the number of shares of the Company then outstanding and entitled
to vote.
Board
Vacancies. Our bylaws provide
that any vacancy on our Board of Directors, howsoever resulting,
may be filled by a majority vote of the remaining
directors.
Removal of Directors.
Our bylaws provide that any directors
may be removed either with or without cause at any time by the vote
of stockholders representing two-thirds of the voting power of the
issued and outstanding capital stock entitled to
vote.
Nevada Anti-Takeover
Statutes. The NRS contains
provisions restricting the ability of a Nevada corporation to
engage in business combinations with an interested stockholder.
Under the NRS, except under certain circumstances, business
combinations with interested stockholders are not permitted for a
period of two years following the date such stockholder becomes an
interested stockholder. The NRS defines an interested stockholder,
generally, as a person who is the beneficial owner, directly or
indirectly, of 10% of the outstanding shares of a Nevada
corporation. In addition, the NRS generally disallows the exercise
of voting rights with respect to “control shares” of an
“issuing corporation” held by an “acquiring
person,” unless such voting rights are conferred by a
majority vote of the disinterested stockholders. “Control
shares” are those outstanding voting shares of an issuing
corporation which an acquiring person and those persons acting in
association with an acquiring person (i) acquire or offer to
acquire in an acquisition of a controlling interest and (ii)
acquire within ninety days immediately preceding the date when the
acquiring person became an acquiring person. An “issuing
corporation” is a corporation organized in Nevada which has
two hundred or more stockholders, at least one hundred of whom are
stockholders of record and residents of Nevada, and which does
business in Nevada directly or through an affiliated corporation.
The NRS also permits directors to resist a change or potential
change in control of the corporation if the directors determine
that the change or potential change is opposed to or not in the
best interest of the corporation.
Amendment of Articles of Incorporation and Bylaws
Our
bylaws may be altered, amended or repealed and new bylaws may be
adopted at any regular or special meeting of the stockholders
owning a majority of the shares and entitled to vote thereon. The
bylaws may also be altered, amended or repealed and new bylaws may
be adopted at any regular or special meeting of our Board of
Directors by a majority vote of directors present at the meeting at
which a quorum is present, except that any such amendment may not
be inconsistent with or contrary to the provision of an amendment
adopted by the stockholders.
Limitation of Liability and Indemnification of Officers and
Directors
Our
articles of incorporation limits the personal liability of
directors and officers for breach of fiduciary duty to the Company
or our stockholders. However, this provision does not eliminate or
limit the liability of any of our directors and officers
for:
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acts or
omissions that involve intentional misconduct, fraud or a knowing
violation of law; or
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the
payment of dividends in violation of Section 78.300 of the
NRS.
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Any
repeal or modification of this provision will be prospective only
and will not adversely affect any limitation on the personal
liability of a director or officer of the Company for acts or
omissions prior to such repeal or modification.
Our
bylaws provide that the Company shall indemnify any director or
officer of the Company against all costs and expenses actually and
reasonably incurred by such person or on such person’s
behalf, to the extent such director or officer is a party to or a
witness in an action, suit or proceeding by reason of its position
with the Company.
Authorized but Unissued Shares
Our
authorized but unissued shares of common stock and preferred stock
are available for future issuance, subject to any limitations
imposed by the listing standards of The Nasdaq Capital Market.
These additional shares may be used for a variety of corporate
finance transactions, acquisitions and employee benefit plans. The
existence of authorized but unissued and unreserved common stock
and preferred stock could make it more difficult or discourage an
attempt to obtain control of us by means of a proxy contest, tender
offer, merger or otherwise.
Transfer Agent and Registrar
The
transfer agent and registrar for our common stock is Computershare
Investor Services, LLC. Its address is P.O. Box 30170, College
Station, Texas 77842-3170, and its telephone number is
1-800-662-7232.
Our
common stock is listed on The Nasdaq Capital Market under the
symbol “ENG.”
We may
sell our securities from time to time through underwriters, dealers
or agents or directly to purchasers, in one or more transactions at
a fixed price or prices, which may be changed, or at market prices
prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices. We may use these
methods in any combination.
We will
describe the terms of the offering of the securities in a
prospectus supplement, information incorporated by reference or any
related free writing prospectus, including:
●
the name or names
of any underwriters, if any;
●
the purchase price
of the securities and the proceeds we will receive from the
sale;
●
any underwriting
discounts and other items constituting underwriters’
compensation;
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any initial public
offering price;
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any discounts or
concessions allowed or reallowed or paid to dealers;
and
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any securities
exchange or market on which the securities may be
listed.
Only
underwriters we name in the prospectus supplement, information
incorporated by reference or any related free writing prospectus
are underwriters of the securities offered thereby.
The
distribution of securities may be effected, from time to time, in
one or more transactions, including:
●
block transactions
(which may involve crosses) and transactions on the NASDAQ or any
other organized market where the securities may be
traded;
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purchases by a
broker-dealer as principal and resale by the broker-dealer for its
own account pursuant to a prospectus supplement;
●
ordinary brokerage
transactions and transactions in which a broker-dealer solicits
purchasers;
●
sales “at the
market” to or through a market maker or into an existing
trading market, on an exchange or otherwise; and
●
sales in other ways
not involving market makers or established trading markets,
including direct sales to purchasers.
By Underwriters
We may
use an underwriter or underwriters in the offer or sale of our
securities.
●
If we use an
underwriter or underwriters, the offered securities will be
acquired by the underwriters for their own account.
●
We will include the
names of the specific managing underwriter or underwriters, as well
as any other underwriters, and the terms of the transactions,
including the compensation the underwriters and dealers will
receive, in the prospectus supplement.
●
The underwriters
will use this prospectus and the prospectus supplement to sell our
securities.
We may
also sell securities pursuant to one or more standby agreements
with one or more underwriters in connection with the call,
redemption or exchange of a specified class or series of any of our
outstanding securities. In a standby agreement, the underwriter or
underwriters would agree either:
●
to purchase from us
up to the number of shares of common stock that would be issuable
upon conversion or exchange of all the shares of the class or
series of our securities at an agreed price per share of common
stock; or
●
to purchase from us
up to a specified dollar amount of offered securities at an agreed
price per offered security, which price may be fixed or may be
established by formula or other method and which may or may not
relate to market prices of our common stock or any other
outstanding security.
The
underwriter or underwriters would also agree, if applicable, to
convert or exchange any securities of the class or series held or
purchased by the underwriter or underwriters into or for our common
stock or other security.
The
underwriter or underwriters may assist in the solicitation of
conversions or exchanges by holders of the class or series of
securities.
By Dealers
We may
use a dealer to sell our securities.
●
If we use a dealer,
we, as principal, will sell our securities to the
dealer.
●
The dealer will
then resell our securities to the public at varying prices that the
dealer will determine at the time it sells our
securities.
●
We will include the
name of the dealer and the terms of our transactions with the
dealer in the prospectus supplement.
By Agents
We may
designate agents to solicit offers to purchase our
securities.
●
We will name any
agent involved in offering or selling our securities and any
commissions that we will pay to the agent in the prospectus
supplement.
●
Unless we indicate
otherwise in the prospectus supplement, our agents will act on a
best efforts basis for the period of their
appointment.
●
Our agents may be
deemed to be underwriters under the Securities Act of any of our
securities that they offer or sell.
By Delayed Delivery Contracts
We may
authorize our agents and underwriters to solicit offers by certain
institutions to purchase our securities at the public offering
price under delayed delivery contracts.
●
If we use delayed
delivery contracts, we will disclose that we are using them in the
prospectus supplement and will tell you when we will demand payment
and delivery of the securities under the delayed delivery
contracts.
●
These delayed
delivery contracts will be subject only to the conditions that we
set forth in the prospectus supplement.
●
We will indicate in
the prospectus supplement the commission that underwriters and
agents soliciting purchases of our securities under delayed
delivery contracts will be entitled to receive.
Direct Sales
We may
directly solicit offers to purchase our securities, and we may
directly sell our securities to institutional or other investors,
including our affiliates. We will describe the terms of our direct
sales in the prospectus supplement. We may also sell our securities
upon the exercise of rights which we may issue.
General Information
Underwriters,
dealers and agents that participate in the distribution of our
securities may be underwriters as defined in the Securities Act,
and any discounts or commissions they receive and any profit they
make on the resale of the offered securities may be treated as
underwriting discounts and commissions under the Securities Act.
Any underwriters or agents will be identified and their
compensation described in a prospectus supplement. We may indemnify
agents, underwriters and dealers against certain civil liabilities,
including liabilities under the Securities Act, or make
contributions to payments they may be required to make relating to
those liabilities. Our agents, underwriters and dealers, or their
affiliates, may be customers of, engage in transactions with or
perform services for us in the ordinary course of
business.
Preferred stock may
be a new issue of securities with no established trading market.
Any underwriters to whom preferred stock offered by this prospectus
are sold by us for public offering and sale may make a market in
the preferred stock offered by this prospectus, but the
underwriters will not be obligated to do so and may discontinue any
market making at any time without notice. No assurance can be given
as to the liquidity of the trading market for preferred stock
offered by this prospectus.
Representatives of
the underwriters through whom our securities are sold for public
offering and sale may engage in over-allotment, stabilizing
transactions, syndicate short covering transactions and penalty
bids in accordance with Regulation M under the Exchange Act.
Over-allotment involves syndicate sales in excess of the offering
size, which creates a syndicate short position. Stabilizing
transactions permit bids to purchase the offered securities so long
as the stabilizing bids do not exceed a specified
maximum.
Syndicate covering
transactions involve purchases of the offered securities in the
open market after the distribution has been completed in order to
cover syndicate short positions. Penalty bids permit the
representative of the underwriters to reclaim a selling concession
from a syndicate member when the offered securities originally sold
by such syndicate member are purchased in a syndicate covering
transaction to cover syndicate short positions. Such stabilizing
transactions, syndicate covering transactions and penalty bids may
cause the price of the offered securities to be higher than it
would otherwise be in the absence of such transactions. These
transactions may be effected on a national securities exchange and,
if commenced, may be discontinued at any time. Underwriters,
dealers and agents may be customers of, engage in transactions with
or perform services for, us and our subsidiaries in the ordinary
course of business.
Fees and Commissions
If 5%
or more of the net proceeds of any offering of securities made
under this prospectus will be received by a Financial Industry
Regulatory Authority (“FINRA”) member participating in
the offering or affiliates or associated persons of such FINRA
member, the offering will be conducted in accordance with FINRA
Rule 5121.
Certain
legal matters in connection with the securities offered hereby will
be passed on for us by Holland & Hart LLP, Reno, Nevada. Any
underwriters will be advised about other issues relating to any
offering by their own legal counsel.
The
consolidated financial statements of ENGlobal Corporation and
subsidiaries (the Company) as of December 26, 2020 and
December 28, 2019, and for the years then ended, have
been incorporated by reference herein, in reliance upon the report
of Moss Adams LLP, independent registered public accounting firm,
incorporated by reference herein, and upon the authority of said
firm as experts in accounting and auditing.
The
information in this prospectus is not complete and may be changed.
We may not sell these securities until the registration statement
filed with the Securities and Exchange Commission is effective.
This prospectus is not an offer to sell these securities and it is
not soliciting an offer to buy these securities in any state where
the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED MARCH 11,
2021
Prospectus
ENGlobal Corporation
Up to $25,000,000
Shares of Common Stock
We
entered into an at the market sales agreement (the “sales
agreement”) with B. Riley Securities, Inc. (“B. Riley
Securities” or our “sales agent”), as our sales
agent, relating to shares of our common stock on January 29, 2021.
In accordance with the terms of the sales agreement, we may offer
and sell shares of our common stock having an aggregate offering
price of up to $25,000,000 from time to time through or to our
sales agent under this prospectus, as sales agent or as
principal.
Sales of our common
stock, if any, under this prospectus will be made by any method
that is deemed to be an “at the market offering” as
defined in Rule 415(a)(4) under the Securities Act of 1933, as
amended (the “Securities Act”). Our common stock is
listed on The Nasdaq Capital Market under the symbol
“ENG.” The last reported sale price of our common stock
on The Nasdaq Capital Market on March 9, 2021 was $4.42 per share.
On December 30, 2020, it was $2.97.
The trading price
of our common stock has been, and is likely to continue to be,
highly volatile, which could cause you to lose part or all of your
investment. During the past twelve months, the sales price of our
stock ranged from a low of $0.46 per share in March 2020, to a high
of $9.40 per share in January 2021. Although our financial
condition and results of operations have generally improved when
comparing 2020 with 2019, we do not
believe that this volatility corresponds to any recent change in
our financial condition. The stock market in general has
experienced extreme price and volume fluctuations that have often
been unrelated or disproportionate to the operating performance of
those companies.
The compensation of
our sales agent for sales of common stock pursuant to the sales
agreement shall be a commission rate equal to 3.0% of the gross
proceeds per share of common stock. The net proceeds from any sale
under this prospectus will be used as described under “Use of
Proceeds” in this prospectus. There is no arrangement for
funds to be received in escrow, trust or similar
arrangement.
In
connection with the sale of the common stock on our behalf, B.
Riley Securities will be deemed to be an “underwriter”
within the meaning of the Securities Act, and the compensation of
B. Riley Securities will be deemed to be underwriting commissions
or discounts. We have also agreed to provide indemnification and
contribution to B. Riley Securities with respect to certain civil
liabilities, including liabilities under the Securities Act. See
“Plan of Distribution.”
The
sales agent is not required to sell any specific number or dollar
amount of common stock but will use its commercially reasonable
efforts, as our agent and subject to the terms of the sales
agreement, to sell the common stock offered, as instructed by us.
The offering of common stock pursuant to this prospectus will
terminate upon the earlier of (i) the sale of all common stock
subject to this prospectus or (ii) the termination of the sales
agreement by us or by the sales agent pursuant to the terms of the
sales agreement.
Investing
in our common stock involves a high degree of risk. See “Risk
Factors” beginning on page 4 of this prospectus
and in our reports filed with the Securities and Exchange
Commission which are incorporated by reference herein for a
discussion of information that should be considered in connection
with an investment in our common stock.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these
securities or determined if this prospectus is truthful or
complete. Any representation to the contrary is a criminal
offense.
B. Riley Securities
The date of this prospectus
is
, 2021
TABLE OF CONTENTS
Prospectus
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You
should assume that the information contained in this prospectus is
accurate only as of the date on the front page of this prospectus
and that any information we have incorporated by reference into
this prospectus is accurate only as of the date of the document
incorporated by reference, regardless of the time of delivery of
this prospectus, or any sale of a security.
In
addition, we incorporate important information into this prospectus
by reference. You may obtain the information incorporated by
reference into this prospectus without charge by following the
instructions under “Where You Can Find More
Information” in this prospectus. We urge you to carefully
read this prospectus and the information incorporated by reference
before buying any of the securities being offered under this
prospectus.
To
the extent that any statement that we make in this prospectus is
inconsistent with statements made in any documents incorporated by
reference herein, the statements made in this prospectus will be
deemed to modify or supersede those made in such documents
incorporated by reference therein.
You
should rely only on the information contained, or incorporated
herein by reference, in this prospectus. We have not authorized
anyone to provide you with different information. No dealer,
salesperson or other person is authorized to give any information
or to represent anything not contained in this prospectus. You
should not rely on any unauthorized information or representation.
This prospectus is an offer to sell only the securities offered
hereby, and only under circumstances and in jurisdictions where it
is lawful to do so.
This
prospectus is part of a registration statement on Form S-3 we
filed with the Securities and Exchange Commission (the
“SEC”) using a “shelf” registration
process. Under this “shelf” process, we may sell from
time to time in one or more offerings up to $100,000,000 of our
common stock or preferred stock. The $25,000,000 of shares of
common stock that may be offered, issued and sold under this
prospectus is included in the $100,000,000 of securities that may
be offered, issued and sold by us pursuant to our shelf
registration statement.
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This summary highlights certain information about us, this offering
and information appearing elsewhere in this prospectus and in the
documents we incorporate by reference. This summary is not complete
and does not contain all of the information that you should
consider before investing in our securities. To fully understand
this offering and its consequences to you, you should read this
entire prospectus carefully, including the information referred to
under the heading “Risk Factors” in this prospectus on
page 4, and the financial statements and other
information incorporated by reference in this prospectus when
making an investment decision. In this prospectus, the terms
“we,” “us,” and the “Company”
refer to ENGlobal Corporation and its subsidiaries.
Our Company
The
Company, incorporated in the State of Nevada in June 1994, is a
leading provider of engineered modular solutions to the energy
industry. We deliver these solutions to our clients by utilizing
our vertically integrated project execution capabilities,
including, (i) professional engineering and project support
services, (ii) automation design, configuration and systems
integration expertise, and (iii) mechanical and modular fabrication
capabilities. We believe our vertically integrated strategy allows
us to differentiate our company from most of our competitors as a
full-service provider. As a result, our clients’ dependency
on and coordination of multiple vendors is reduced, improving
control over their projects’ costs and schedules. Our
strategy and positioning also allows the Company to pursue larger
scopes of work centered around many different types of modularized
engineered systems that can be both processing and automation
focused.
We
derive revenues primarily from three sources: (i) business
development efforts, (ii) preferred provider or alliance agreements
with strategic end user clients, original equipment manufacturers,
and technology partners, and (iii) referrals from existing
customers and industry members. Our business development
professionals are focused on specific market segments within the
energy industry. The market segments that we are targeting include
Renewables, Automation, Refining and Transportation, Upstream and
Government Services. This market focus allows us to develop centers
of expertise for each of our targeted markets.
Within
the Renewables group, our focus is to design and build production
facilities for hydrogen and associated products, together with
converting existing production facilities to produce products from
renewable feedstock sources. These projects often utilize
technologies that are more fuel efficient, and therefore reduce the
associated carbon footprint of the facility. Our scope of work on
these projects will typically include front-end development,
engineering, procurement, mechanical fabrication, automation and
commissioning services, and may be performed in conjunction with a
construction partner.
Our
Automation group designs, integrates and commissions modular
systems that include electronic distributed control, on-line
process analytical data, continuous emission monitoring, and
electric power distribution. Often these packaged systems are
housed in a fabricated metal enclosure, modular building or
freestanding metal rack, which are commonly included in our scope
of work. We provide automation engineering, procurement,
fabrication, systems integration, programing and on-site
commissioning services to our clients for both new and existing
facilities.
Our
Refining and Transportation group focuses on providing engineering,
procurement and automation services as well as fabricated products
to downstream refineries and petrochemical facilities as well as
midstream pipeline, storage and other transportation related
companies. These services are often applied to small capital
improvement and maintenance projects within refineries and
petrochemical facilities. For our transportation clients, we work
on facilities that include pumping, compression, gas processing,
metering, storage terminals, product loading and blending systems.
In addition, this group designs, programs and maintains supervisory
control and data acquisition (SCADA) systems for our transportation
clients.
The
Upstream group provides engineering, fabrication and automation
services to clients who have operations in the U.S. oil and gas
exploration and development markets. The operations are usually
associated with the completion, purification, storage and
transmission of the oil and gas from the well head to the terminal
or pipeline destination.
Our
Government Services group provides services related to the
engineering, design, installation and maintenance of automated fuel
handling and tank gauging systems for the U.S. military across the
globe in addition to cybersecurity assessment and SCADA systems
design and maintenance in the private sector.
Our
engineering services are strategically located in offices in cities
near our clients while our fabrication and integration facilities
are more centrally located. We generally enter into two principal
types of contracts with our clients: time-and-material contracts
and fixed-price contracts. Our clients typically determine the type
of contract to be utilized for a particular engagement, with the
specific terms and conditions of a contract being negotiated and
typically contained in a multiyear services agreement.
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Our
business development professionals focus on building long-term
relationships with clients in order to provide solutions throughout
the life-cycle of their projects and facilities. Additionally, we
seek to capitalize on cross-selling opportunities between our
market segments and many of our projects will contain elements from
more than one market segment. Sales leads are often jointly
developed and pursued by our business development personnel from
multiple markets.
Products and services are also promoted through
trade advertising, participation in industry conferences and
on-line internet communication via our corporate home page
at www.englobal.com.
The ENGlobal website illustrates our Company’s full range of
services and capabilities and is updated on a continuous basis.
Through the ENGlobal website, we seek to provide visitors and
investors with a single point of contact for obtaining information
about our company. We are not incorporating the contents of
the website into this prospectus.
We
also develop preferred provider and alliance agreements with
clients in order to facilitate repeat business. These preferred
provider agreements, also known as master service or umbrella
agreements, typically have a duration of three to five years. This
allows our clients to release work to us without having to
negotiate contract terms for each individual project. With the
primary terms of the contract agreed to, add-on projects with these
customers are easier to negotiate and can be accepted quickly,
without the necessity of a bidding process. Management believes
that these agreements can serve to stabilize project-centered
operations.
Corporate Information
Our
principal executive offices are located at 654 N. Sam Houston
Parkway East, Suite 400, Houston, Texas 77060-5914. Our telephone
number is (281) 878-1000.
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The Offering
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Common stock offered by us
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Shares of common stock having an aggregate offering price of up to
$25,000,000. The actual number of shares outstanding after this
offering will vary depending on the number of shares sold and
issued and the sales price of such shares.
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Plan of distribution
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“At
the market offering” that may be made from time to time to or
through B. Riley Securities, Inc., as sales agent or principal. See
“Plan of Distribution” in this prospectus.
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Common stock to be outstanding after
this offering, assuming an offering price of $4.42 per
share(1)
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Up to
33,216,794 shares, assuming
sales of 5,656,108 shares of
our common stock in this offering at an offering price at a price
of $4.42 per share, which was the closing price of our
common stock on The Nasdaq Capital Market on March 9,
2021. The actual number of shares issued will vary depending on the
sales price under this offering.
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Common
stock to be outstanding after this offering, assuming an offering
price of $2.97 per share(2)
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Up
to 35,978,194 shares, assuming sales of 8,417,508 shares of our
common stock in this offering at an offering price of $2.97 per
share, which was the closing price of our common stock on The
Nasdaq Capital Market on December 30, 2020. The actual number
of shares issued will vary depending on the sales price under this
offering.
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Use of proceeds
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We
intend to use the net proceeds from this offering for general
corporate purposes, which may include working capital needs,
capital expenditures, repayment or refinancing of indebtedness,
acquisitions, stock repurchases and redemptions of securities. See
“Use of Proceeds.”
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Risk factors
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Investing
in our common stock involves a high degree of risk. You should
carefully consider all of the information in this prospectus and
the documents incorporated by reference in this prospectus. In
particular, see “Risk Factors” beginning on page
4 of this prospectus.
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Nasdaq Capital Market symbol
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“ENG”
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(1)
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The
common stock outstanding after the offering is based on
approximately 27,560,686 shares of our common stock outstanding as
of December 26, 2020 and the sale of
5,656,108 shares of our
common stock at an assumed offering price of $4.42 per
share, the last reported sale price of our common stock on The
Nasdaq Capital Market on March 9, 2021, and excludes
478,049 shares of our common stock reserved for future issuance
under our Amended and Restated ENGlobal Corporation 2009 Equity
Incentive Plan as of December 26,
2020.
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(2)
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The
common stock outstanding after the offering is based on
approximately 27,560,686 shares of our common stock outstanding as
of December 26, 2020 and the sale of 8,417,508 shares of our common
stock at an assumed offering price of $2.97 per share, the last
reported sale price of our common stock on The Nasdaq Capital
Market on December 30, 2020, and excludes 478,049 shares of our
common stock reserved for future issuance under our Amended and
Restated ENGlobal Corporation 2009 Equity Incentive Plan as of
December 26, 2020.
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Investing in our common stock involves substantial risk. You should
carefully consider the risk factors disclosed below as well as
those contained in our most recent Annual Report on Form
10-K, which is incorporated by reference
herein, as updated by our subsequent filings under the Securities
Exchange Act of 1934, as amended (the “Exchange Act”),
and the other information contained in this prospectus before
acquiring any of our common stock. These risks could have a
material adverse effect on our business, results of operations or
financial condition and cause the value of our common stock to
decline. You could lose all or part of your
investment.
This prospectus also contain or incorporate by reference
forward-looking statements that involve risks and uncertainties.
Our actual results could differ materially from those anticipated
in the forward-looking statements as a result of certain factors,
including the risks faced by us described or incorporated by
reference in this prospectus. See “Cautionary Note Regarding
Forward-Looking Statements.”
Risks Related to our Common Stock and the Offering
Our management will have broad discretion as to the use of proceeds
from this offering and we may not use the proceeds
effectively.
Our
management will have broad discretion in the application of the net
proceeds from this offering, if any, and could spend the proceeds
in ways that do not improve our results of operations or enhance
the value of our common stock. You will be relying on the judgment
of our management concerning these uses and you will not have the
opportunity, as part of your investment decision, to assess whether
the proceeds are being used appropriately. The failure of our
management to apply these funds effectively could result in
unfavorable returns and uncertainty about our prospects, each of
which could cause the price of our common stock to
decline.
There may be future dilution of our common stock as a result of
future sales of our common stock, which could adversely impact our
stock price.
The
issuance of shares of our common stock from time to time pursuant
to the sales agreement may have a dilutive effect on our earnings
per share, which could adversely impact the market price of our
common stock. The actual amount of dilution and the effect on the
market price of our common stock, if any, will be based on numerous
factors, particularly the actual number of shares issued pursuant
to the sales agreement, the use of proceeds and the return
generated by the investments acquired with the net proceeds, and
cannot be determined at this time. In addition, the issuance and
sale of substantial amounts of our common stock, or the perception
that such issuances and sales may occur, could adversely affect the
market price of our common stock and impair our ability to raise
capital through the sale of additional equity securities.
Additionally, the sale of shares
of common stock in this offering will increase the supply of
available shares, which may result in a decrease in the price of
our common stock.
The shares of our common stock offered under this prospectus may be
sold in “at the market offerings”, and investors who
buy shares at different times will likely pay different
prices.
Investors who purchase shares under this prospectus at different
times will likely pay different prices, and so may experience
different outcomes in their investment results. We will have
discretion, subject to market demand, to vary the timing, prices,
and numbers of shares sold, and to determine the minimum sales
price for shares sold. Investors may experience declines in the
value of their shares as a result of share sales made in connection
with “at the market offerings” at prices lower than the
prices they paid.
The actual number of shares we will issue under the sales
agreement, at any one time or in total, is uncertain.
Subject to certain limitations in the sales agreement and
compliance with applicable law, we and our sales agent may mutually
agree to sell shares of our common stock under a placement notice
at any time throughout the term of the sales agreement. The number
of shares that are sold by our sales agent in connection with any
placement notice will fluctuate based on the market price of the
shares of our common stock during the sales period and limits we
set with our sales agent. Because the price per share of each share
sold will fluctuate based on the market price of our shares of
common stock during the sales period, it is not possible to predict
the number of shares that will ultimately be issued.
Additional stock offerings in the future may dilute then-existing
shareholders’ percentage ownership of the
Company.
Given
our plans and expectations that we will need additional capital in
the future, we anticipate that we will need to issue additional
shares of common stock or preferred stock. The issuance of
additional securities in the future will dilute the percentage
ownership and potentially voting power of then current stockholders
and could negatively impact the price of our common stock and other
securities.
The trading price of our stock price may continue to be volatile,
which could cause you to lose part or all of your
investment.
The
trading price of our common stock has been highly volatile and
could continue to be subject to wide fluctuations in response to
various factors, some of which are beyond our control. During the
past twelve months, the sales price of our stock ranged from a low
of $0.46 per share in March 2020, to a high of $9.40 per share in
January 2021. Although our financial condition and results of
operations have generally improved when comparing 2020 with 2019,
we do not believe that this volatility corresponds to any recent
change in our financial condition.
The
stock market in general has experienced extreme price and volume
fluctuations that have often been unrelated or disproportionate to
the operating performance of those companies.
As
a result of this volatility, our securities could experience rapid
and substantial decreases in price, and you may be able to sell
securities you purchase under this prospectus only at a substantial
loss to the price at which you purchased the securities in this
offering.
Some,
but not all, of the factors that may cause the market price of our
common stock to fluctuate include:
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fluctuations in our
quarterly or annual financial results or the quarterly or annual
financial results of companies perceived to be similar to us or
relevant for our business;
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changes in
estimates of our financial results or recommendations by securities
analysts;
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failure of our
services or products to achieve or maintain market
acceptance;
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changes in market
valuations of similar or relevant companies;
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success of
competitive service offerings or technologies;
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changes in our
capital structure, such as the issuance of securities or the
incurrence of debt;
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announcements by us
or by our competitors of significant services, contracts,
acquisitions or strategic alliances;
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regulatory
developments in the United States, foreign countries, or
both;
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additions or
departures of key personnel;
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investors’
general perceptions; and
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changes in general
economic, industry or market conditions.
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In
addition, if the market for energy related stocks, or the stock
market in general, experiences a loss of investor confidence, the
trading price of our common stock could decline for reasons
unrelated to our business, financial condition, or results of
operations. Further, in the past, following periods of volatility
in the overall market and the market price of a particular
company’s securities, securities class action litigation has
often been instituted against these companies. If any of the
foregoing occurs, it could cause our stock price to fall and may
expose us to lawsuits that, even if unsuccessful, could be costly
to defend and a distraction to management.
A possible
“short squeeze” due to a sudden increase in demand of
our common stock that largely exceeds supply may lead to additional
price volatility.
Historically
there has not been a large short position in our common stock.
However, in the future investors may purchase shares of our common
stock to hedge existing exposure or to speculate on the price of
our common stock. Speculation on the price of our common stock may
involve long and short exposures. To the extent an aggregate short
exposure in our common stock becomes significant, investors with
short exposure may have to pay a premium to purchase shares for
delivery to share lenders at times if and when the price of our
common stock increases significantly, particularly over a short
period of time. Those purchases may in turn, dramatically increase
the price of our common stock. This is often referred to as a
“short squeeze.” A short squeeze could lead to volatile
price movements in our common stock that are not directly
correlated to our business prospects, financial performance or
other traditional measures of value for the Company or our common
stock.
The
COVID-19 pandemic has adversely affected and could
continue to adversely affect our business, financial condition and
results of operations.
Our business is dependent upon the willingness and ability of our
customers to conduct transactions with us. The COVID–19
pandemic has caused severe disruptions in the
worldwide economy, including the global demand for oil and natural
gas. In response, companies within the energy industry (including
many of our customers) have announced capital spending cuts which,
in turn, may result in a decrease in new project awards or
adjustments, reductions, suspensions, cancellations or payment
defaults with respect to existing project awards. The
prolonged natured of the COVID–19
pandemic may result in a significant decrease in
business and/or cause our customers to be unable to meet existing
payment or other obligations to us, particularly in the event of a
spread of COVID–19 in our market areas. The COVID–19
pandemic may also negatively impact the availability
of our key personnel necessary to conduct our business as well as
the business and operations of third party service providers who
perform critical services for our business. For example, in June
2020 we temporarily closed one of our operational facilities for
one week in response to a potential COVID-19 exposure. Because the
severity, magnitude and duration of the COVID-19 pandemic and its
economic consequences are uncertain, rapidly changing and difficult
to predict, the impact on our business, financial condition and
results of operations remains uncertain and difficult to predict.
If COVID–19 continues to spread or if the response to contain
the COVID-19 pandemic is unsuccessful, we could experience a
material adverse effect on our business, financial condition, and
results of operations.
Our backlog is declining due to the COVID-19 pandemic and is
subject to unexpected adjustments and cancellations and is,
therefore, an uncertain indicator of our future revenue or
earnings.
While our backlog has not been materially impacted by the COVID-19
pandemic in terms of project cancellations, we have not been
successful in replacing our backlog as quickly as it has been
converted to revenues due to inefficiencies and complications
resulting from many of our clients’ remote working conditions
combined with the uncertainty of new project necessity and funding
caused by COVID-19 related disruptions that have led to delays in
project awards. Further, the COVID-19 pandemic has affected our
ability to make business development contacts with customers. As a
result, our backlog has decreased by approximately
$34.9 million from $59.2 million as of December 28,
2019 to $24.3 million as of December 26,
2020. We expect the majority of our backlog to be completed within
12 months. While we believe our backlog is sufficient to keep a
significant portion of our workforce productive in the near term,
it may not be at our current operating levels. We cannot assure investors that we will be
successful in replacing our backlog as quickly as it has been
converted to revenues, which will reduce future
revenue and profits and impact our financial performance. In
addition, we cannot assure investors that the revenue projected in
our backlog will be realized or, if realized, will result in
profits. Projects currently in our backlog may be canceled or may
remain in our backlog for an extended period of time prior to
project execution and, once project execution begins, it may occur
unevenly over the current and multiple future periods. In addition,
project terminations, suspensions or reductions in scope occur from
time to time with respect to contracts reflected in our backlog,
reducing the revenue and profit we actually receive from contracts
reflected in our backlog. Future project cancellations and scope
adjustments could further reduce the dollar amount of our backlog
in addition to the revenue and profits that we actually earn. The
potential for project cancellations, terminations, suspensions
or reductions in scope and adjustments to our backlog are
exacerbated by economic conditions, particularly in the energy
industry which is experiencing volatility in oil
prices since the beginning of 2020 due to concerns about the
COVID–19 pandemic and its impact on the worldwide economy and
global demand for oil. We are unable to predict when market
conditions may improve and worsening overall market conditions
could result in further declines in our
backlog.
CAUTIONARY NOTE REGARDING
FORWARD-LOOKING STATEMENTS
The
information discussed in this prospectus, our filings with the SEC
and our public releases include “forward-looking
statements” within the meaning of Section 27A of the
Securities Act of 1933, as amended (the “Securities
Act”), and Section 21E of the Securities Exchange Act of
1934, as amended (the “Exchange Act”), the Private
Securities Litigation Reform Act of 1995 (the “PSLRA”),
or in releases made by the SEC. Such forward-looking statements
involve known and unknown risks, uncertainties and other important
factors that could cause the actual results, performance or
achievements of us to differ materially from any future results,
performance or achievements expressed or implied by such
forward-looking statements. Statements that are not historical fact
are forward-looking statements. Forward-looking statements can be
identified by, among other things, the use of forward-looking
language, such as the words “plan,”
“believe,” “expect,”
“anticipate,” “intend,”
“estimate,” “project,” “may,”
“will,” “would,” “could,”
“should,” “seeks,” or “scheduled
to,” or other similar words, or the negative of these terms
or other variations of these terms or comparable language, or by
discussion of strategy or intentions. These cautionary statements
are being made pursuant to the Securities Act, the Exchange Act and
the PSLRA with the intention of obtaining the benefits of the
“safe harbor” provisions of such laws.
The
forward-looking statements contained in or incorporated by
reference into this prospectus are largely based on our
expectations, which reflect estimates and assumptions made by our
management. These estimates and assumptions reflect our best
judgment based on currently known market conditions and other
factors. Although we believe such estimates and assumptions to be
reasonable, they are inherently uncertain and involve a number of
risks and uncertainties that are beyond our control,
including:
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the impact of the
COVID-19 pandemic and of the actions taken by governmental
authorities, individuals and companies in response to the pandemic
on our business, financial condition, and results of operations,
including on our revenues and profitability;
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our ability to
increase our backlog, revenue and
profitability;
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our ability to
realize revenue projected in our backlog and our ability to collect
accounts receivable and process accounts payable in a timely
manner;
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the effect of
economic downturns and the volatility and level of oil and natural
gas prices, including the severe disruptions in the worldwide
economy, including the global demand for oil and natural gas,
resulting from the COVID-19 pandemic;
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the uncertainties
related to the U.S. Government's budgetary process and their
effects on our long-term U.S. Government
contracts;
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our ability to
identify, evaluate, and complete any transactions in connection
with our review of strategic transactions;
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the impact of the
announcement of our review of strategic transactions on our
business, including our financial and operating results, or our
employees, suppliers and customers;
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our ability to
realize project awards or contracts on our pending proposals, and
the timing, scope and amount of any related awards or
contracts;
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our ability to
retain existing customers and attract new customers;
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our ability to
accurately estimate the overall risks, revenue or costs on a
contract;
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the risk of
providing services in excess of original project scope without
having an approved change order;
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our ability to
execute our expansion into the modular solutions market and to
execute our updated business growth strategy to position the
Company as a leading provider of engineered modular solutions to
its customer base;
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our ability to
attract and retain key professional personnel;
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our ability to
obtain additional financing when needed;
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our debt
obligations may limit our financial
flexibility;
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our PPP loan may
not be forgiven in full;
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our dependence on
one or a few customers;
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the risks of
internal system failures of our information technology systems,
whether caused by the Company, third-party service providers,
intruders or hackers, computer viruses, malicious code,
cyber-attacks, phishing and other cyber security problems, natural
disasters, power shortages or terrorist attacks;
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the risk of
unexpected liability claims or poor safety
performance;
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our ability to
identify, consummate and integrate potential
acquisitions;
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our reliance on
third-party subcontractors and equipment
manufacturers;
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our ability to
satisfy the continued listing standards of NASDAQ with respect to
our common stock or to cure any continued listing standard
deficiency with respect thereto; and
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the effect of
changes in laws and regulations, including U.S. tax laws, with
which the Company must comply and the associated cost of compliance
with such laws and regulations.
Many of
these factors are beyond our ability to control or predict. These
factors are not intended to represent a complete list of the
general or specific factors that may affect us.
In
addition, management’s assumptions about future events may
prove to be inaccurate. All readers are cautioned that the
forward-looking statements contained in this prospectus and in the
documents incorporated by reference into this prospectus are not
guarantees of future performance, and we cannot assure any reader
that such statements will be realized or that the forward-looking
events and circumstances will occur. Actual results may differ
materially from those anticipated or implied in the forward-looking
statements due to factors described in “Risk Factors”
included elsewhere in this prospectus and in the documents that we
include in or incorporate by reference into this prospectus,
including our Annual Report on Form 10-K for the fiscal year ended
December 26, 2020, and our subsequent SEC filings. All
forward-looking statements speak only as of the date they are made.
We do not intend to update or revise any forward-looking statements
as a result of new information, future events or otherwise, except
as required by law. These cautionary statements qualify all
forward-looking statements attributable to us or persons acting on
our behalf.
We
may issue and sell shares of our common stock having aggregate sale
proceeds of up to $25,000,000 from time to time.
There
can be no assurance that we will be able to sell any additional
shares under or fully utilize the sales agreement with
B. Riley Securities as a source of financing. Because there is
no minimum offering amount required as a condition to close this
offering, the actual total public offering amount, commissions and
proceeds to us, if any, are not determinable at this time. We
currently intend to use the net proceeds from this offering, after
deducting the sales agent’s commissions and our offering
expenses, for general corporate purposes such as, but not limited
to, working capital, capital expenditures, repayment and
refinancing of debt, acquisitions and stock repurchases. The
amounts and timing of our use of proceeds will vary depending on
many factors, including regulatory developments, the amount of cash
generated or used by our operations, and the rate of growth, if
any, of our business and other capital requirements. As a result,
we will retain broad discretion in the allocation of the net
proceeds, if any, we receive in connection with securities offered
pursuant to this prospectus and investors will be relying on the
judgment of our management regarding the application of the
proceeds.
Until
we use the net proceeds of this offering, we intend to invest the
funds in short-term, investment-grade, interest-bearing
securities.
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DESCRIPTION OF COMMON
STOCK
The following description sets forth certain
material terms and provisions of our common stock. This description
also summarizes relevant provisions of the Nevada Revised Statutes
(“NRS”). The following description is a summary and
does not purport to be complete. It is subject to, and qualified in
its entirety by reference to, the relevant provisions of the NRS,
and to our Restated Articles of Incorporation, dated January
29, 2021 (our “articles of
incorporation”), and our Second Amended and Restated Bylaws,
dated April 14, 2016 (our “bylaws”), which are filed as
Exhibit 3.1 to our Current Report on Form 8-K filed with the
SEC on January 29, 2021
and Exhibit 3.1 to our Current
Report on Form 8-K filed with
the SEC on April 15, 2016,
respectively, which are incorporated by reference
herein. Please read
“Where You Can Find More
Information.”
Authorized and Outstanding Capital Stock
The
following description of our common stock and provisions of our
articles of incorporation and bylaws are summaries and are
qualified by reference to our articles of incorporation and bylaws,
which have been incorporated by reference herein.
Our
authorized capital stock consists of 75,000,000 shares of common
stock, par value $0.001 per share, and 2,000,000 shares of
undesignated preferred stock, par value $0.001 per
share.
As of
March 8, 2021, there were
27,526,176 shares of common stock
outstanding, and no shares of preferred stock were issued or
outstanding.
Description of Common Stock
Voting. Holders of shares of the common stock are entitled
to one vote for each share held of record on matters properly
submitted to a vote of our stockholders. Stockholders are not
entitled to vote cumulatively for the election of
directors.
Dividends. Subject to the dividend rights of the holders of
any outstanding series of preferred stock, holders of shares of
common stock will be entitled to receive ratably such dividends, if
any, when, as, and if declared by our Board of Directors out of the
Company’s assets or funds legally available for such
dividends or distributions.
Liquidation and
Distribution. In the event of
any liquidation, dissolution, or winding up of the Company’s
affairs, holders of the common stock would be entitled to share
ratably in the Company’s assets that are legally available
for distribution to its stockholders. If the Company has any
preferred stock outstanding at such time, holders of the preferred
stock may be entitled to distribution preferences, liquidation
preferences, or both. In such case, the Company must pay the
applicable distributions to the holders of its preferred stock
before it may pay distributions to the holders of common
stock.
Conversion, Redemption, and
Preemptive Rights. Holders of
the common stock have no preemptive, subscription, redemption or
conversion rights.
Sinking Fund
Provisions. There are no
sinking fund provisions applicable to the common
stock.
Anti-Takeover Effects of Nevada Law; Our Articles of Incorporation
and Our Bylaws
General. Certain provisions of our articles of
incorporation and bylaws, and certain provisions of the Nevada
Revised Statutes, or NRS, could make our acquisition by a third
party, a change in our incumbent management, or a similar change of
control more difficult. These provisions, which are summarized
below, are likely to reduce our vulnerability to an unsolicited
proposal for the restructuring or sale of all or substantially all
of our assets or an unsolicited takeover attempt. The summary of
the provisions set forth below does not purport to be complete and
is qualified in its entirety by reference to our articles of
incorporation and our bylaws and the relevant provisions of the
NRS.
Preferred
Stock. The authorization of
undesignated preferred stock makes it possible for our Board of
Directors to issue preferred stock with voting or other rights or
preferences that could impede the success of any attempt to acquire
control of the Company.
No Action by Written
Consent. Our bylaws provide
that no action required or permitted to be taken at a meeting of
the stockholders may be taken by written
consent.
Advance Notice
Requirements. Stockholders
wishing to nominate persons for election to our Board of Directors
at a meeting or to propose any business to be considered by our
stockholders at a meeting must comply with certain advance notice
and other requirements set forth in our bylaws.
Special Meetings.
Our bylaws provide that special
meetings of stockholders may only be called by the President or
Secretary, by a majority of the Board of Directors, or by the
President at the written request of at least fifty percent (50%) of
the number of shares of the Company then outstanding and entitled
to vote.
Board
Vacancies. Our bylaws provide
that any vacancy on our Board of Directors, howsoever resulting,
may be filled by a majority vote of the remaining
directors.
Removal of Directors.
Our bylaws provide that any directors
may be removed either with or without cause at any time by the vote
of stockholders representing two-thirds of the voting power of the
issued and outstanding capital stock entitled to
vote.
Nevada Anti-Takeover
Statutes. The NRS contains
provisions restricting the ability of a Nevada corporation to
engage in business combinations with an interested stockholder.
Under the NRS, except under certain circumstances, business
combinations with interested stockholders are not permitted for a
period of two years following the date such stockholder becomes an
interested stockholder. The NRS defines an interested stockholder,
generally, as a person who is the beneficial owner, directly or
indirectly, of 10% of the outstanding shares of a Nevada
corporation. In addition, the NRS generally disallows the exercise
of voting rights with respect to “control shares” of an
“issuing corporation” held by an “acquiring
person,” unless such voting rights are conferred by a
majority vote of the disinterested stockholders. “Control
shares” are those outstanding voting shares of an issuing
corporation which an acquiring person and those persons acting in
association with an acquiring person (i) acquire or offer to
acquire in an acquisition of a controlling interest and (ii)
acquire within ninety days immediately preceding the date when the
acquiring person became an acquiring person. An “issuing
corporation” is a corporation organized in Nevada which has
two hundred or more stockholders, at least one hundred of whom are
stockholders of record and residents of Nevada, and which does
business in Nevada directly or through an affiliated corporation.
The NRS also permits directors to resist a change or potential
change in control of the corporation if the directors determine
that the change or potential change is opposed to or not in the
best interest of the corporation.
Amendment of Articles of Incorporation and Bylaws
Our
bylaws may be altered, amended or repealed and new bylaws may be
adopted at any regular or special meeting of the stockholders
owning a majority of the shares and entitled to vote thereon. The
bylaws may also be altered, amended or repealed and new bylaws may
be adopted at any regular or special meeting of our Board of
Directors by a majority vote of directors present at the meeting at
which a quorum is present, except that any such amendment may not
be inconsistent with or contrary to the provision of an amendment
adopted by the stockholders.
Limitation of Liability and Indemnification of Officers and
Directors
Our
articles of incorporation limits the personal liability of
directors and officers for breach of fiduciary duty to the Company
or our stockholders. However, this provision does not eliminate or
limit the liability of any of our directors and
officers:
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for
acts or omissions not that involve intentional misconduct, fraud or
a knowing violation of law; or
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The
payment of dividends in violation of Section 78.300 of the Nevada
Revised Statutes.
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Any
repeal or modification of this provision will be prospective only
and will not adversely affect any limitation on the personal
liability of a director or officer of the Company for acts or
omissions prior to such repeal or modification.
Our
bylaws provide that the Company shall indemnify any director or
officer of the Company against all costs and expenses actually and
reasonably incurred by such person or on such person’s
behalf, to the extent such director or officer is a party to or a
witness in an action, suit or proceeding by reason of its position
with the Company.
Authorized but Unissued Shares
Our
authorized but unissued shares of common stock and preferred stock
are available for future issuance, subject to any limitations
imposed by the listing standards of The Nasdaq Capital Market.
These additional shares may be used for a variety of corporate
finance transactions, acquisitions and employee benefit plans. The
existence of authorized but unissued and unreserved common stock
and preferred stock could make it more difficult or discourage an
attempt to obtain control of us by means of a proxy contest, tender
offer, merger or otherwise.
Transfer Agent and Registrar
The
transfer agent and registrar for our common stock is Computershare
Investor Services, LLC. Its address is P.O. Box 30170, College
Station, Texas 77842-3170, and its telephone number is
1-800-662-7232.
Our
common stock is listed on The Nasdaq Capital Market under the
symbol “ENG.”
We
have entered into an at the market sales agreement (the
“sales agreement”) with B. Riley Securities, Inc.
(“B. Riley Securities”), as our sales agent, under
which we may issue and sell shares of our common stock having an
aggregate offering price of up to $25,000,000 from time to time
through or to B. Riley Securities as sales agent or principal. B.
Riley Securities may sell the common stock by any method that is
deemed to be an “at the market offering” as defined in
Rule 415 promulgated under the Securities Act.
Each
time we wish to issue and sell common stock under the sales
agreement, we will notify B. Riley Securities of the number or
dollar value of shares to be issued, the dates on which such sales
are anticipated to be made, and any minimum price below which sales
may not be made. Once we have so instructed B. Riley Securities,
unless B. Riley Securities declines to accept the terms of such
notice, they have agreed to use their commercially reasonable
efforts consistent with their normal trading and sales practices to
sell such shares up to the amount specified on such terms. The
obligations of B. Riley Securities under the sales agreement to
sell our common stock are subject to a number of customary
conditions that we must meet.
Settlement
for shares of our common stock will occur on the second trading day
following the date on which the sale was made. Sales of our common
stock as contemplated in this prospectus will be settled through
the facilities of The Depository Trust Company or by such other
means as we and B. Riley Securities may agree upon. There is no
arrangement for funds to be received in an escrow, trust or similar
arrangement.
We
will pay B. Riley Securities a commission of 3.0% of the gross
proceeds from each sale. We also agreed to reimburse B. Riley
Securities for their legal expenses up to (i) $50,000 in connection
with the filing of the sales agreement, and (ii) $2,500 per
calendar quarter thereafter in connection with updates at the time
of each representation date. Because there is no minimum offering
amount required as a condition to close this offering, the actual
total public offering amount, commissions and proceeds to us, if
any, are not determinable at this time. In connection with the sale
of the common stock on our behalf, B. Riley Securities will be
deemed to be an “underwriter” within the meaning of the
Securities Act as amended, and their compensation will be deemed to
be underwriting commissions or discounts. We have agreed to provide
indemnification and contribution to B. Riley Securities with
respect to certain civil liabilities, including liabilities under
the Securities Act. We estimate that the total expenses for the
offering, excluding compensation payable to B. Riley Securities and
expense reimbursement under the terms of the sales agreement, will
be up to approximately $150,000.
The
offering of our common stock pursuant to the sales agreement will
terminate upon the termination of the sales agreement as described
therein. We and B. Riley Securities may each terminate the sales
agreement at any time upon five days’ prior
notice.
This
summary of the material provisions of the sales agreement does not
purport to be a complete statement of its terms and conditions. A
copy of the sales agreement is filed with the SEC as an exhibit to
the registration statement of which this prospectus is a part. See
“Where You Can Find More Information”
below.
To
the extent required by Regulation M under the Exchange Act, B.
Riley Securities will not engage in any market making activities
involving our common stock while the offering is ongoing under this
prospectus.
B.
Riley Securities and its affiliates have in the past and may in the
future provide various investment banking and/or other financial
services for us and/or our affiliates, for which services they may
in the future receive customary fees.
In
addition, the sales agreement provides that we will not (i) take
any action designed to cause or result in, or that constitutes or
would reasonably be expected to constitute, the stabilization or
manipulation of the price of any of our securities to facilitate
the sale or resale of common stock, or (ii) sell, bid for, or
purchase common stock in violation of Regulation M, or pay anyone
any compensation for soliciting purchases of the common stock under
the sales agreement other than B. Riley Securities.
Certain
legal matters in connection with the common stock being offered by
this prospectus will be passed upon by Porter Hedges LLP, Houston,
Texas. The validity of the common stock being offered by this
prospectus and certain other legal matters concerning this offering
will be passed on for us by Holland & Hart LLP, Reno, Nevada.
B. Riley Securities, Inc. is being represented in connection with
this offering by Duane Morris LLP, New York, New York.
The
consolidated financial statements of ENGlobal Corporation and
subsidiaries (the Company) as of December 26,
2020 and December 28, 2019,
and for the years then ended, have been incorporated by reference
herein, in reliance upon the report of Moss Adams LLP, independent
registered public accounting firm, incorporated by reference
herein, and upon the authority of said firm as experts in
accounting and auditing.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The
following documents, which have previously been filed by us with
the SEC under the Exchange Act, are incorporated herein by
reference:
●
our Annual Report
on Form 10-K for the fiscal year ended December 26, 2020, filed
with the SEC on March 11, 2021 (File No. 001-14217);
●
our Current Reports
on Form 8-K filed with the SEC on April 15, 2016, January 29, 2021
and March 1, 2021 and our Current Report on Form 8-K/A filed with
the SEC March 11, 2021(excluding any information furnished pursuant
to Item 2.02 or Item 7.01 of any such Current Report on Form 8-K or
Form 8-K/A and any corresponding information furnished under Item
9.01 or included as an exhibit) (File No. 001-14217);
and
●
the description of
our common stock set forth in our registration statement on Form
8-A, filed with the SEC on December 17, 2007, including any and all
subsequent amendments and reports filed for the purpose of updating
that description.
All
documents filed by us pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act (excluding any information furnished
pursuant to Item 2.02 or Item 7.01 on any Current Report on Form
8-K or Form 8-K/A and any corresponding information
furnished under Item 9.01 or included as an exhibit) after the date
of the initial registration statement of which this prospectus
forms a part and prior to the effectiveness of the registration
statement and after the date of this prospectus until the
termination of the offering under this prospectus shall be deemed
to be incorporated in this prospectus by reference and to be a part
hereof from the date of filing of such documents. Any statement
contained herein, or in a document incorporated or deemed to be
incorporated by reference herein, shall be deemed to be modified or
superseded for purposes of this prospectus to the extent that a
statement contained herein or in any subsequently filed document
which also is or is deemed to be incorporated by reference herein,
modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this
prospectus.
You may
request a free copy of these filings, other than any exhibits,
unless the exhibits are specifically incorporated by reference into
this prospectus, by writing or telephoning us at the following
address:
ENGlobal
Corporation
Attention: Chief
Financial Officer
654 N.
Sam Houston Parkway East, Suite 400
Houston, Texas
77060-5914
WHERE YOU CAN FIND MORE
INFORMATION
We are
subject to the informational requirements of the Exchange Act and
in accordance therewith, file reports, proxy statements and other
information with the SEC. The SEC maintains an Internet site at
www.sec.gov that contains reports, proxy and information
statements, and other information regarding issuers that file
electronically with the SEC. We maintain a website at
www.englobal.com. Information on our website or any other website
is not incorporated by reference into this prospectus and does not
constitute part of this prospectus. Please note that information
contained in our website, whether currently posted or posted in the
future, is not a part of this prospectus or the documents
incorporated by reference in this prospectus.
$25,000,000
Shares
of Common Stock
Prospectus
B.
Riley Securities
,
2021
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item
14.
Other Expenses of Issuance and Distribution.
The
following table sets forth the various expenses, all of which will
be borne by us, in connection with the sale and distribution of the
securities being registered, other than the underwriting discounts,
commissions, and expenses. All amounts shown are estimates except
for the Securities and Exchange Commission registration
fee.
|
Securities and
Exchange Commission registration fee
|
$10,910
|
|
Accounting fees and
expenses
|
$*
|
|
Legal fees and
expenses
|
$*
|
|
Printing and
engraving expenses
|
$*
|
|
Transfer agent
fees
|
$*
|
|
Miscellaneous
|
$*
|
|
Total
|
$*
|
*
Estimated expenses are presently not known and
cannot be estimated.
Item
15.
Indemnification of Directors and Officers.
The
Registrant’s Articles of Incorporation provide that none of
its directors or officers shall be personally liable to the
Registrant or its stockholders for monetary damages for any breach
of fiduciary duty by such person as a director or officer, except
that a director or officer shall be liable, to the extent provided
by applicable law, (1) for acts or omissions which involve
intentional misconduct, fraud, or a knowing violation of law, or
(2) for the payment of dividends in violation of restrictions
imposed by Section 78.300 of the Nevada Revised Statutes
(“NRS”). The effect of these provisions is to eliminate
the rights of the Registrant’s stockholders, either directly
or through stockholders’ derivative suits brought on behalf
of the Registrant, to recover monetary damages from a director or
officer for breach of the fiduciary duty of care as a director or
officer except in those instances provided under the
NRS.
The
Registrant has adopted provisions in its bylaws that require it to
indemnify its directors, officers, and certain other
representatives against expenses, liabilities, and other matters
arising out of their conduct on the Registrant’s behalf, or
otherwise referred to in or covered by applicable provisions of the
NRS, to the fullest extent permitted by the NRS.
In
addition, the Registrant has entered into indemnification
agreements with its directors and executive officers, under which
the Registrant has agreed to indemnify such directors and officers
against expenses (including reasonable attorneys’ fees) and
other types of losses incurred by reason of such directors and
officers serving the Registrant, or other enterprise at the
Registrant’s request, as an officer, director, employee, or
agent, subject to certain limitations. Under the indemnification
agreements, the Registrant has also agreed to advance the
indemnitees’ expenses, and each indemnitee has undertaken to
repay the advances should a court ultimately determine that
indemnification was not authorized.
Section
78.7502 of the NRS provides that a corporation may indemnify its
directors and officers against expenses, including attorneys’
fees, judgments, fines and amounts paid in settlement actually and
reasonably incurred by the director or officer in connection with
an action, suit or proceeding in which the director or officer has
been made or is threatened to be made a party, if the director or
officer acted in good faith and in a manner which the director or
officer reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal
proceeding, had no reason to believe the director’s or
officer’s conduct was unlawful. Any such indemnification may
be made by the corporation only as ordered by a court, provided for
in the articles of incorporation, bylaws, or another agreement with
the corporation, or as authorized in a specific case upon a
determination made in accordance with the NRS that such
indemnification is proper in the circumstances.
Indemnification
may not be made under the NRS for any claim, issue, or matter as to
which the director or officer has been adjudged by a court of
competent jurisdiction, after exhaustion of all appeals therefrom,
to be liable to the corporation or for amounts paid in settlement
to the court of competent jurisdiction, after exhaustion of all
appeals therefrom, to be liable to the corporation or for amounts
paid in settlement to the corporation, unless and only to the
extent that the court in which the action or suit was brought or
other court of competent jurisdiction determines that in view of
all the circumstances of the case, that the director or officer is
fairly and reasonably entitled to indemnity for such expenses as
the court deems proper. To the extent that a director or officer of
a corporation has been successful on the merits or otherwise in
defense of any action, suit, or proceeding or in defense of any
claim, issue, or matter therein, the director or officer must be
indemnified under the NRS by the corporation against expenses,
including attorney’s fees, actually and reasonably incurred
by the director or officer in connection with the
defense.
The
Registrant maintains a general liability insurance policy that
covers certain liabilities of the Registrant’s directors and officers arising out
of claims based on acts or omissions in their capacities as
directors or officers. The Registrant’s directors and officers are covered
by insurance policies indemnifying them against certain
liabilities, including certain liabilities arising under the
Securities Act of 1933, as amended, which might be incurred by them
in such capacities and against which they cannot be indemnified by
the Registrant.
|
Exhibit No.
|
|
Description of Exhibit
|
|
1.1
|
|
Form of
Underwriting Agreement.*
|
|
|
|
At
Market Issuance Sales Agreement, dated January 29, 2021, by and
between ENGlobal Corporation and B. Riley Securities, Inc.
(previously filed).
|
|
|
|
Specimen
Certificate for Common Stock (incorporated by reference to Exhibit
4.1 to the Registrant’s
Registration Statement on Form S-3 filed on October 31,
2005).
|
|
|
|
Opinion
of Holland & Hart LLP with respect to legality of the
securities, including consent.(previously
filed).
|
|
|
|
Consent
of Moss Adams LLP.**
|
|
|
|
Consent
of Porter Hedges LLP (previously filed).
|
|
|
|
Consent
of Holland & Hart LLP (included in Exhibit 5.1).
|
|
|
|
Power of Attorney (contained in signature
pages).
|
|
|
*
|
The
Registrant will file as an exhibit to a current report on Form 8-K
(i) any underwriting agreement relating to securities offered
hereby, (ii) any additional required opinion of counsel to the
Registrant as to the legality of the securities offered hereby or
(iv) any required opinion of counsel to the Registrant as to
certain tax matters relative to securities offered
hereby.
|
|
**
|
Filed
herewith.
|
(a) The
undersigned registrant hereby undertakes:
(1) To
file, during any period in which offers or sales are being made, a
post-effective amendment to this registration
statement:
(i) To
include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To
reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set
forth in the registration statement. Notwithstanding the foregoing,
any increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form
of prospectus filed with the Commission pursuant to Rule 424(b) if,
in the aggregate, the changes in volume and price represent no more
than 20% change in the maximum aggregate offering price set forth
in the “Calculation of
Registration Fee” table
in the effective registration statement;
(iii)
To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement; provided, however, that
paragraphs (a)(1)(i), (a)(1)(ii) and (a)(1)(iii) of this section do
not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in
reports filed with or furnished to the Commission by the registrant
pursuant to section 13 or section 15(d) of the Securities Exchange
Act of 1934 that are incorporated by reference in the registration
statement, or is contained in a form of prospectus filed pursuant
to Rule 424(b) that is part of the registration
statement.
(2)
That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering
thereof.
(3) To
remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the
termination of the offering.
(4)
That, for the purpose of determining liability under the Securities
Act of 1933 to any purchaser:
(i) Each
prospectus filed by the registrant pursuant to Rule 424(b)(3) shall
be deemed to be part of the registration statement as of the date
the filed prospectus was deemed part of and included in the
registration statement; and
(ii) Each
prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5),
or (b)(7) as part of a registration statement in reliance on Rule
430B relating to an offering made pursuant to Rule 415(a)(1)(i),
(vii) or (x) for the purpose of providing the information required
by section 10(a) of the Securities Act of 1933 shall be deemed to
be part of and included in the registration statement as of the
earlier of the date such form of prospectus is first used after
effectiveness or the date of the first contract of sale of
securities in the offering described in the prospectus. As provided
in Rule 430B, for liability purposes of the issuer and any person
that is at that date an underwriter, such date shall be deemed to
be a new effective date of the registration statement relating to
the securities in the registration statement to which that
prospectus relates, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
Provided, however, that no statement made in a registration
statement or prospectus that is part of the registration statement
or made in a document incorporated or deemed incorporated by
reference into the registration statement or prospectus that is
part of the registration statement will, as to a purchaser with a
time of contract of sale prior to such effective date, supersede or
modify any statement that was made in the registration statement or
prospectus that was part of the registration statement or made in
any such document immediately prior to such effective date;
or
(5)
That, for the purpose of determining liability of the registrant
under the Securities Act of 1933 to any purchaser in the initial
distribution of the securities:
The
undersigned registrant undertakes that in a primary offering of
securities of the undersigned registrant pursuant to this
registration statement, regardless of the underwriting method used
to sell the securities to the purchaser, if the securities are
offered or sold to such purchaser by means of any of the following
communications, the undersigned registrant will be a seller to the
purchaser and will be considered to offer or sell such securities
to such purchaser:
(i) Any
preliminary prospectus or prospectus of the undersigned registrant
relating to the offering required to be filed pursuant to Rule
424;
(ii)
Any free writing prospectus relating to the offering prepared by or
on behalf of the undersigned registrant or used or referred to by
the undersigned registrant;
(iii)
The portion of any other free writing prospectus relating to the
offering containing material information about the undersigned
registrant or its securities provided by or on behalf of the
undersigned registrant; and
(iv)
Any other communication that is an offer in the offering made by
the undersigned registrant to the purchaser.
(a) The undersigned
registrant hereby undertakes that, for purposes of determining any
liability under the Securities Act of 1933, each filing of the
registrant’s annual
report pursuant to section 13(a) or section 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan’s
annual report pursuant to section 15(d) of the Securities Exchange
Act of 1934) that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial
bona fide
offering thereof.
(b) Insofar as
indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or
otherwise, the registrant has been advised that in the opinion of
the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant
of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in
the Act and will be governed by the final adjudication of such
issue.
SIGNATURES
Pursuant to the
requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused
this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Houston,
State of Texas, on the 11th day of
March, 2021.
|
|
|
|
|
|
|
|
|
|
By:
|
/s/
Mark A.
Hess
|
|
|
|
|
Mark A.
Hess
|
|
|
|
|
Chief Financial
Officer and Treasurer
|
|
POWER OF ATTORNEY AND
SIGNATURES
We the
undersigned officers and directors of ENGlobal Corporation, hereby,
severally constitute and appoint William A. Coskey and Mark A.
Hess, each of them singly, our true and lawful attorneys with full
power to them and each of them singly, to sign for us and in our
names in the capacities indicated below, the registration statement
on Form S-3 filed herewith and any and all pre-effective and
post-effective amendments to said registration statement and any
subsequent registration statement for the same offering which may
be filed under Rule 462(b) and generally to do all such things in
our names and on our behalf in our capacities as officers and
directors to enable ENGlobal Corporation to comply with the
provisions of the Securities Act of 1933, and all requirements of
the Securities and Exchange Commission, hereby ratifying and
confirming our signatures as they may be signed by our said
attorneys, or any of them, to said registration statement and any
and all amendments thereto or to any subsequent registration
statement for the same offering which may be filed under Rule
462(b).
Pursuant to the
requirements of the Securities Act of 1933, this registration
statement has been signed by the following persons in the
capacities and on the dates indicated.
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
|
|
|
|
Chief
Executive Officer, President, Chairman of the Board,
|
|
|
|
/s/
William A. Coskey
|
|
Director
(Principal Executive Officer)
|
|
March
11, 2021
|
|
William
A. Coskey, P.E.
|
|
|
|
|
|
|
|
|
|
|
|
/s/
Mark A. Hess
|
|
Chief
Financial Officer, Treasurer
|
|
March 11, 2021
|
|
Mark A.
Hess
|
|
(Principal
Financial and Accounting Officer)
|
|
|
|
|
|
|
|
|
|
/s/
David W. Gent
|
|
Director
|
|
March 11, 2021
|
|
David
W. Gent, P.E.
|
|
|
|
|
|
|
|
|
|
|
|
/s/
David C. Roussel
|
|
Director
|
|
March 11, 2021
|
|
David
C. Roussel
|
|
|
|
|
|
|
|
|
|
|
|
/s/
Kevin M. Palma
|
|
Director
|
|
March 11, 2021
|
|
Kevin
M. Palma
|
|
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Grafico Azioni ENGlobal (NASDAQ:ENG)
Storico
Da Ott 2024 a Nov 2024
Grafico Azioni ENGlobal (NASDAQ:ENG)
Storico
Da Nov 2023 a Nov 2024
