UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 8-K
  
CURRENT REPORT
 
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
 
Date of Report (Date of earliest event reported) April 13, 2020
  
ENGlobal Corporation
(Exact name of registrant as specified in its charter)
 
Nevada
 
001-14217
 
88-0322261
(State or other jurisdiction of incorporation)
 
(Commission File Number)
 
(IRS Employer Identification No.)
 
654 N. Sam Houston Parkway E., Suite 400,
Houston, Texas
 
77060-5914
(Address of principal executive offices)
 
(Zip Code)
 
Registrant’s telephone number, including area code: 281-878-1000
 
 
(Former name or former address, if changed since last report)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
☐
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
 
☐
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
 
☐
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
 
☐
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
Securities registered pursuant to Section 12(b) of the Act:
 
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock, $0.001 par value
ENG
The Nasdaq Stock Market LLC
 
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
 
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 13(a) of the Exchange Act. ☐
 


 
 
Item 1.01. Entry into a Material Definitive Agreement
 
On April 13, 2020, ENGlobal Corporation (“ENGlobal”) was granted an unsecured loan (the “Loan”) from Origin Bank in the aggregate principal amount of $4,915,800 pursuant to the Paycheck Protection Program (the “PPP”) under Division A, Title I of Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), which was enacted on March 27, 2020. The Loan is evidenced by a promissory note, dated as of April 13, 2020 (the “Note”), by ENGlobal in favor of Origin Bank, as lender.
 
Interest Rate
 
The interest rate on the Loan is 1% per year.
 
Maturity
 
The term of the Loan is two years. ENGlobal will be required to pay any unforgiven principle and interest in eighteen equal monthly installments, with the first payment being due on November 13, 2020 and continuing on the same day of each subsequent month until the date of maturity.
 
Potential Loan Forgiveness
 
Under the PPP, ENGlobal may apply for forgiveness of the amount due on the Loan in an amount equal to the sum of the following costs incurred during the 8-week period beginning on the date of the first disbursement of the Loan: (a) payroll costs, (b) any payment of interest on a covered obligation (which shall not include any prepayment of or payment of principal on a covered mortgage obligation), (c) any payment on a covered rent obligation, and (d) any covered utility payment, calculated in accordance with the terms of the CARES Act.
 
Events of Default
 
The Loan provides for customary events of default including, among other things, cross-defaults on any other loan with the lender. The Loan may be accelerated upon the occurrence of an event of default.
 
The foregoing description of the Loan is included to provide you with information regarding its terms. It does not purport to be a complete description and is qualified in its entirety by reference to the full text of the Note, which is filed as Exhibit 10.1 hereto and is incorporated herein by reference.
 
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant
 
The information set forth under Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 2.03.
 
Item 9.01. Financial Statements and Exhibits.
 
(d) Exhibits.
 
The following exhibit is included with this Current Report on Form 8-K:
 
Exhibit No.
 
Description
 
 
 
 
U.S. Small Business Administration Note dated as of April 13, 2020, by ENGlobal Corporation in favor of Origin Bank, as lender.
 
 
 

 
 
SIGNATURE
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
 
ENGlobal Corporation
 
 
(Registrant)
 
 
 
April 16, 2020
 
/s/ MARK A. HESS
(Date)
 
Mark A. Hess,
Chief Financial Officer, Treasurer
and Corporate Secretary
 
 
 

 
 
Exhibit Index
 
Exhibit No.
 
Description
 
 
 
 
U.S. Small Business Administration Note dated as of April 13, 2020, by ENGlobal Corporation in favor of Origin Bank, as lender.
 
 
  

 Exhibit 10.1