As filed with the Securities and Exchange Commission on January 29,
2021
Registration No. 333-
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
_______________
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. [ ]
______________
CALCULATION OF REGISTRATION FEE
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Title of Each
Class of Securities to be Registered (1)
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Amount to
be
Registered
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Proposed
Maximum
Aggregate
Offering
Price per
Unit
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Proposed
Maximum
Offering
Price
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Amount
of
Registration
Fee
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Common
Stock, par value $0.001 per share
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Preferred
Stock, par value $0.001 per share
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Total
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$100,000,000
(2)
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$10,910
(3)
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(1)
The securities
registered consist of $100,000,000 of an indeterminate number or
amount of common stock and preferred stock, as may be issued from
time to time at indeterminate prices. In no event will the
aggregate initial offering price of all securities issued from time
to time pursuant to this registration statement exceed
$100,000,000 or the
equivalent thereof in foreign currencies, foreign currency units or
composite currencies. This registration statement also covers an
indeterminate amount of securities registered hereunder and listed
in the “Calculation of Registration Fee” table above as
may be issued in exchange for, or upon conversion or exercise of,
as the case may be, the securities registered hereunder and listed
in the “Calculation of Registration Fee” table above.
In addition, pursuant to Rule 416 under the Securities Act of 1933,
as amended (the “Securities Act”), the shares being
registered hereunder include such indeterminate number of shares of
common stock and preferred stock as may be issuable with respect to
the shares being registered hereunder as a result of stock splits,
stock dividends, or similar transactions.
(2)
The
proposed maximum aggregate offering price has been estimated solely
for the purpose of calculating the registration fee pursuant to
Rule 457(o) of the Securities Act.
(3)
Calculated in
accordance with Rule 457(o) of the 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 JANUARY 29, 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.” The last reported sale price of our
common stock on January 27, 2021 was $7.44 per share.
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;
●
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;
●
our ability to
realize revenue projected in our backlog and our ability to collect
accounts receivable and process accounts payable in a timely
manner;
●
our ability to
increase our backlog, revenue and profitability;
●
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
attract and retain key professional personnel;
●
our ability to
obtain additional financing when needed;
●
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 uncertainties
related to the U.S. Government's budgetary process and their
effects on our long-term U.S. Government contracts;
●
the risk of
unexpected liability claims or poor safety
performance;
●
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 28, 2019, our Quarterly Report for the quarterly period
ended September 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 28, 2019, filed
with the SEC on March 27, 2020 (File No. 001-14217), and portions
of our Definitive Proxy Statement on Schedule 14A filed with the
SEC on April 27, 2020, incorporated by reference therein (File No.
001-14217);
●
our Quarterly
Reports on Form 10-Q for the quarters ended March 28, 2020, filed
with the SEC on May 7, 2020, June 27, 2020, filed with the SEC
on August 6, 2020, and September 26, 2020, filed with the SEC on
November 5, 2020 (File No. 001-14217);
●
our Current Reports
on Form 8-K, filed with the SEC on April 15, 2016, March 26, 2020,
April 16, 2020, April 24, 2020, May 7, 2020, May 26, 2020, June 3,
2020, June 11, 2020, August 6, 2020, September 29, 2020, November
5, 2020, December 1, 2020, December 7, 2020 and January 29, 2021
(excluding any information furnished pursuant to Item 2.02 or Item
7.01 of any such Current Report on Form 8-K 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 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 28, 2019, our
Quarterly Reports on Form 10-Q for the quarterly periods ended
March 28, 2020, June 27, 2020, September 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
January 27, 2021, there were 27,553,186 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;
●
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:
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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 28, 2019 and December 29,
2018, 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 audit report covering the December 28, 2019
financial statements refers to the Company changing its method of
accounting for leases as of December 30, 2018 due to the adoption
of Accounting Standards Update (ASU) No.
2016-02, Leases (Topic
842), and the related
amendments.
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 JANUARY 29, 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 January 27, 2021 was
$7.44 per share.
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 3 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 3, 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(1)
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Up to
30,920,901 shares, assuming sales of 3,360,215 shares of our common
stock in this offering at an offering price at a price of $7.44 per
share, which was the closing price of our common stock on The
Nasdaq Capital Market on January 27, 2021. 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 3 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 September 26, 2020 and the sale of 3,360,215 shares of our
common stock at an assumed offering price of $7.44 per share, the
last reported sale price of our common stock on The Nasdaq Capital
Market on January 27, 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
September 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 and
in our most recent Quarterly Report on Form 10-Q, which are
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.
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.
Our stock price could be volatile, which could cause you to lose
part or all of your investment.
The stock market has from time to time experienced significant
price and volume fluctuations that may be unrelated to the
operating performance of particular companies. In particular, the
market price of our common stock, like that of the securities of
other energy related companies, has been and may continue to be
highly volatile. 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. Factors such as
announcements concerning our financial and operating results, the
availability of capital, and economic and other external factors,
as well as period-to-period fluctuations and financial results, may
have a significant effect on the market price of our common stock.
From time to time, there has been limited trading volume in our
common stock. In addition, there can be no assurance that there
will continue to be a trading market or that any securities
research analysts will continue to provide research coverage with
respect to our common stock. It is possible that such factors will
adversely affect the market for our common stock, including the
shares we sell under this prospectus.
The
COVID-19 pandemic has 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 spread of the
COVID–19 coronavirus 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 continued
spread of COVID–19 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 continued spread
of COVID–19 could 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 $27.4 million
from $59.2 million as of December 28, 2019 to $31.8 million as of
September 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 may 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 a significant decline 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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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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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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our ability to
increase our backlog, revenue and profitability;
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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
attract and retain key professional personnel;
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our ability to
obtain additional financing when needed;
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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 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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the risk of
unexpected liability claims or poor safety
performance;
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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 28, 2019 our Quarterly Report for the quarterly period
ended September 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
January 27, 2021, there were 27,553,186 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 28, 2019 and December 29,
2018, 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 audit report covering the December 28, 2019
financial statements refers to the Company changing its method of
accounting for leases as of December 30, 2018 due to the adoption
of Accounting Standards Update (ASU) No.
2016-02, Leases (Topic
842), and the related
amendments.
CERTAIN DOCUMENTS INCORPORATED 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 28, 2019, filed
with the SEC on March 27, 2020 (File No. 001-14217), and portions
of our Definitive Proxy Statement on Schedule 14A filed with the
SEC on April 27, 2020, incorporated by reference therein (File No.
001-14217);
●
our Quarterly
Reports on Form 10-Q for the quarters ended March 28, 2020, filed
with the SEC on May 7, 2020, June 27, 2020, filed with the SEC
on August 6, 2020, and September 26, 2020, filed with the SEC on
November 5, 2020 (File No. 001-14217);
●
our Current Reports
on Form 8-K, filed with the SEC on April 15, 2016, March 26, 2020,
April 16, 2020, April 24, 2020, May 7, 2020, May 26, 2020, June 3,
2020, June 11, 2020, August 6, 2020, September 29, 2020, November
5, 2020, December 1, 2020, December 7, 2020 and January 29, 2020
(excluding any information furnished pursuant to Item 2.02 or Item
7.01 of any such Current Report on Form 8-K 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 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.**
|
|
|
|
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.**
|
|
|
|
Consent
of Moss Adams LLP.**
|
|
|
|
Consent
of Porter Hedges LLP.**
|
|
|
|
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 29th day of January,
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)
|
|
January
29, 2021
|
|
William
A. Coskey, P.E.
|
|
|
|
|
|
|
|
|
|
|
|
/s/
Mark A. Hess
|
|
Chief
Financial Officer, Treasurer
|
|
January
29, 2021
|
|
Mark A.
Hess
|
|
(Principal
Financial and Accounting Officer)
|
|
|
|
|
|
|
|
|
|
/s/
David W. Gent
|
|
Director
|
|
January
29, 2021
|
|
David
W. Gent, P.E.
|
|
|
|
|
|
|
|
|
|
|
|
/s/
Randall B. Hale
|
|
Director
|
|
January
29, 2021
|
|
Randall
B. Hale
|
|
|
|
|
|
|
|
|
|
|
|
/s/
David C. Roussel
|
|
Director
|
|
January
29, 2021
|
|
David
C. Roussel
|
|
|
|
|
|
|
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|
|
|
|
/s/
Kevin M. Palma
|
|
Director
|
|
January
29, 2021
|
|
Kevin
M. Palma
|
|
|
|
|
Exhibit 1.2
Execution Version
ENGLOBAL CORPORATION
Common
Stock
(par
value $0.001 per share)
At
Market Issuance Sales Agreement
January
29, 2021
B.
Riley Securities, Inc.
299
Park Avenue, 21st Floor
New
York, NY 10171
Ladies
and Gentlemen:
ENGlobal
Corporation, a Nevada corporation (the “Company”), confirms its
agreement (this “Agreement”) with B. Riley
Securities, Inc. (the “Agent”) as
follows:
1. Issuance and Sale of Shares.
The Company agrees that, from time to time during the term of this
Agreement, on the terms and subject to the conditions set forth
herein, it may issue and sell through or to the Agent, as sales
agent or principal, shares (the “Placement
Shares”) of the Company’s common
stock, par value $0.001 per share (the “Common Stock”);
provided however, that in
no event shall the Company issue or sell through or to the Agent
such number of Placement Shares that (a) exceeds the number of
shares or dollar amount of Common Stock registered on the effective
Registration Statement (as defined below) pursuant to which the
offering is being made or (b) exceeds the number of shares or
dollar amount registered on the ATM Prospectus or other prospectus
supplement specifically relating to the offering of the Placement
Shares pursuant to this Agreement (the lesser of (a) or (b) the
“Maximum
Amount”) and provided
further, however, that in no event shall the aggregate
number of Placement Shares sold pursuant to this Agreement exceed
the number of authorized but unissued shares of Common Stock.
Notwithstanding anything to the contrary contained herein, the
parties hereto agree that compliance with the limitations set forth
in this Section 1
on the number of Placement Shares issued and sold under this
Agreement shall be the sole responsibility of the Company and that
the Agent shall have no obligation in connection with such
compliance. The issuance and sale of Placement Shares through or to
the Agent will be effected pursuant to the Registration Statement,
although nothing in this Agreement shall be construed as requiring
the Company to use the Registration Statement to issue any
Placement Shares.
The
Company shall file, in accordance with the provisions of the
Securities Act of 1933, as amended and the rules and regulations
thereunder (the “Securities Act”), with
the Securities and Exchange Commission (the “Commission”), a
registration statement on Form S-3, including a base prospectus
(the “Base
Prospectus”), relating to certain securities,
including Common Stock, to be issued from time to time by the
Company, and which incorporates by reference documents that the
Company has filed or will file in accordance with the provisions of
the Securities Exchange Act of 1934, as amended and the rules and
regulations thereunder (the “Exchange Act”). The
Company has prepared a prospectus specifically relating to the
offering of the Placement Shares pursuant to this Agreement
included as part of such registration statement (the
“ATM
Prospectus” and, together with the Base Prospectus,
the “Initial
Prospectus”). As soon as reasonably practicable
following the date such registration statement is declared
effective, the Company will furnish to the Agent, for use by the
Agent, copies of the ATM Prospectus included as part of such
registration statement, as amended when it becomes effective,
relating to the Placement Shares. Except where the context
otherwise requires, such registration statement, and any
post-effective amendment thereto, including all documents filed as
part thereof or incorporated by reference therein, and including
any information contained in a Prospectus (as defined below)
subsequently filed with the Commission pursuant to Rule 424(b)
under the Securities Act or deemed to be a part of such
registration statement pursuant to Rule 430B of the Securities
Act, or any subsequent registration statement on Form S-3 filed
pursuant to Rule 415(a)(6) under the Securities Act by the Company
to cover any Placement Shares, is herein called the
“Registration
Statement.” The Initial Prospectus, including all
documents incorporated or deemed incorporated therein by reference
to the extent such information has not been superseded or modified
in accordance with Rule 412 under the Securities Act (as qualified
by Rule 430B(g) of the Securities Act), included in the
Registration Statement, as it may be supplemented by any prospectus
supplement, in the form in which such Initial Prospectus and/or ATM
Prospectus have most recently been filed by the Company with the
Commission pursuant to Rule 424(b) under the Securities Act is
herein called the “Prospectus.” Any
reference herein to the Registration Statement, the Prospectus or
any amendment or supplement thereto shall be deemed to refer to and
include the documents incorporated by reference therein, and any
reference herein to the terms “amend,”
“amendment” or “supplement” with respect to
the Registration Statement or the Prospectus shall be deemed to
refer to and include the filing after the execution hereof of any
document with the Commission incorporated by reference therein (the
“Incorporated
Documents”).
For
purposes of this Agreement, all references to the Registration
Statement, the Prospectus or to any amendment or supplement thereto
shall be deemed to include the most recent copy filed with the
Commission pursuant to its Electronic Data Gathering Analysis and
Retrieval System, or if applicable, the Interactive Data Electronic
Application system when used by the Commission (collectively,
“EDGAR”).
2. Placements. Each time that the
Company wishes to issue and sell Placement Shares hereunder (each,
a “Placement”), it will
notify the Agent by electronic mail (or other method mutually
agreed to in writing by the parties) of the number of Placement
Shares to be sold, the time period during which sales are requested
to be made, any limitation on the number of Placement Shares that
may be sold in any one day and any minimum price below which sales
may not be made (a “Placement Notice”), the
form of which is attached hereto as Schedule 1. The Placement
Notice shall originate from any of the individuals from the Company
set forth on Schedule
3 (with a copy to each of the other individuals from the
Company listed on such schedule), and shall be addressed to each of
the individuals from the Agent set forth on Schedule 3, as such
Schedule 3 may be
amended from time to time. The Placement Notice shall be effective
immediately upon receipt by the Agent unless and until (i) the
Agent declines to accept the terms contained therein for any
reason, in its sole discretion, which declination shall be
communicated by the Agent to the Company promptly, (ii) the entire
amount of the Placement Shares thereunder has been sold, (iii) the
Company suspends or terminates the Placement Notice, which
suspension and termination rights may be exercised by the Company
in its sole discretion, or (iv) this Agreement has been terminated
under the provisions of Section 13. The amount of any
discount, commission or other compensation to be paid by the
Company to the Agent in connection with the sale of the Placement
Shares shall be calculated in accordance with the terms set forth
in Schedule 2. It
is expressly acknowledged and agreed that neither the Company nor
the Agent will have any obligation whatsoever with respect to a
Placement or any Placement Shares unless and until the Company
delivers a Placement Notice to the Agent and the Agent does not
decline such Placement Notice pursuant to the terms set forth
above, and then only upon the terms specified therein and herein.
In the event of a conflict between the terms of Sections 2 or 3 of this Agreement and the
terms of a Placement Notice, the terms of the Placement Notice will
control.
3. Sale of Placement Shares by the
Agent.
a. Sale of Placement Shares.
Subject to the terms and conditions of this Agreement, for the
period specified in a Placement Notice, the Agent will use its
commercially reasonable efforts consistent with its normal trading
and sales practices and applicable state and federal laws, rules
and regulations and the rules of the Nasdaq Stock Market (the
“Exchange”), to sell the
Placement Shares up to the amount specified in, and otherwise in
accordance with the terms of, such Placement Notice. The Agent will
provide written confirmation to the Company no later than the
opening of the Trading Day (as defined below) immediately following
the Trading Day on which it has made sales of Placement Shares
hereunder setting forth the number of Placement Shares sold on such
day, the compensation payable by the Company to the Agent pursuant
to Section 2 with
respect to such sales, and the Net Proceeds (as defined below)
payable to the Company, with an itemization of the deductions made
by the Agent (as set forth in Section 5(a)) from the gross
proceeds that it receives from such sales. Subject to the terms of
a Placement Notice, the Agent may sell Placement Shares by any
method permitted by law deemed to be an “at the market
offering” as defined in Rule 415 of the Securities Act. The
Company acknowledges and agrees that (i) there can be no assurance
that the Agent will be successful in selling Placement Shares, (ii)
the Agent will incur no liability or obligation to the Company or
any other person or entity if it does not sell Placement Shares for
any reason other than a failure by the Agent to use its
commercially reasonable efforts consistent with its normal trading
and sales practices and applicable state and federal laws, rules
and regulations and the rules of the Exchange to sell such
Placement Shares as required under this Agreement and (iii) the
Agent shall be under no obligation to purchase Placement Shares on
a principal basis pursuant to this Agreement, except as otherwise
agreed by the Agent and the Company. “Trading Day” means any
day on which shares of Common Stock are purchased and sold on the
Exchange.
b. Limitations on Offering Size.
Under no circumstances shall the Company cause or request the offer
or sale of any Placement Shares if, after giving effect to the sale
of such Placement Shares, the aggregate number of Placement Shares
sold pursuant to this Agreement would exceed the lesser of (A)
together with all sales of Placement Shares under this Agreement,
the Maximum Amount, (B) the amount available for offer and sale
under the currently effective Registration Statement and (C) the
amount authorized from time to time to be issued and sold under
this Agreement by the Company’s board of directors, a duly
authorized committee thereof or a duly authorized executive
committee, and notified to the Agent in writing. Under no
circumstances shall the Company cause or request the offer or sale
of any Placement Shares pursuant to this Agreement at a price lower
than the minimum price authorized from time to time by the
Company’s board of directors, a duly authorized committee
thereof or a duly authorized executive committee, and notified to
the Agent in writing.
4. Suspension of Sales. The
Company or the Agent may, upon notice to the other party in writing
(including by email correspondence to each of the individuals of
the other party set forth on Schedule 3, if receipt of such
correspondence is actually acknowledged by any of the individuals
to whom the notice is sent, other than via auto-reply) or by
telephone (confirmed immediately by verifiable facsimile
transmission or email correspondence to each of the individuals of
the other party set forth on Schedule 3), suspend any sale
of Placement Shares (a “Suspension”);
provided, however, that
such suspension shall not affect or impair any party’s
obligations with respect to any Placement Shares sold hereunder
prior to the receipt of such notice. While a Suspension is in
effect, any obligation under Sections 7(l), 7(m), and 7(n) with respect to the
delivery of certificates, opinions, or comfort letters to the
Agent, shall be waived. Each of the parties agrees that no such
notice under this Section
4 shall be effective against any other party unless it is
made to one of the individuals named on Schedule 3 hereto, as such
Schedule may be amended from time to time.
5. Settlement and Delivery to the
Agent.
a. Settlement of Placement Shares.
Unless otherwise specified in the applicable Placement Notice,
settlement for sales of Placement Shares will occur on the
second (2nd) Trading Day (or
such earlier day as is industry practice for regular-way trading)
following the date on which such sales are made (each, a
“Settlement
Date”). The Agent shall notify the Company of each
sale of Placement Shares no later than opening of the Trading Day
following the Trading Day that the Agent sold Placement Shares. The
amount of proceeds to be delivered to the Company on a Settlement
Date against receipt of the Placement Shares sold (the
“Net
Proceeds”) will be equal to the aggregate sales price
received by the Agent, after deduction for (i) the Agent’s
commission, discount or other compensation for such sales payable
by the Company pursuant to Section 2 hereof, and (ii) any
transaction fees imposed by any governmental or self-regulatory
organization in respect of such sales.
b. Delivery of Placement Shares.
On or before each Settlement Date, the Company will, or will cause
its transfer agent to, electronically transfer the Placement Shares
being sold by crediting the Agent’s or its designee’s
account (provided the Agent shall have given the Company written
notice of such designee and such designee’s account
information at least one Trading Day prior to the Settlement Date)
at The Depository Trust Company through its Deposit and Withdrawal
at Custodian System or by such other means of delivery as may be
mutually agreed upon by the parties hereto which in all cases shall
be freely tradable, transferable, registered shares in good
deliverable form. On each Settlement Date, the Agent will deliver
the related Net Proceeds in same day funds to an account designated
by the Company on, or prior to, the Settlement Date. The Company
agrees that if the Company, or its transfer agent (if applicable),
defaults in its obligation to deliver Placement Shares on a
Settlement Date through no fault of the Agent, then in addition to
and in no way limiting the rights and obligations set forth in
Section 11(a)
hereto, it will (i) hold the Agent harmless against any loss,
claim, damage, or reasonable, documented expense (including
reasonable and documented legal fees and expenses), as incurred,
arising out of or in connection with such default by the Company or
its transfer agent (if applicable) and (ii) pay to the Agent
(without duplication) any commission, discount, or other
compensation to which it would otherwise have been entitled absent
such default.
6. Representations and Warranties of the
Company. Except as disclosed in the Registration Statement
or Prospectus (including the Incorporated Documents), the Company
represents and warrants to, and agrees with the Agent that as of
the date of this Agreement and as of each Applicable Time (as
defined below), unless such representation, warranty or agreement
specifies a different date or time:
a. Registration Statement and
Prospectus. The transactions contemplated by this Agreement,
assuming no act or omission on the part of the Agents that would
make such statement untrue, meet the requirements for and comply
with the conditions for the use of Form S-3 under the Securities
Act. The Registration Statement has been filed with the Commission
and has been declared effective under the Securities Act. The
Prospectus will name the Agent as the agent in the section entitled
“Plan of Distribution.” The Company has not received,
and has no notice of, any order of the Commission preventing or
suspending the use of the Registration Statement, or threatening or
instituting proceedings for that purpose. The Registration
Statement and the offer and sale of Placement Shares as
contemplated hereby meet the requirements of Rule 415 under the
Securities Act and comply in all material respects with said Rule.
Any statutes, regulations, contracts or other documents that are
required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits to the Registration Statement
have been so described or filed, as applicable. Copies of the
Registration Statement, the Prospectus, and any such amendments or
supplements and all documents incorporated by reference therein
that were filed with the Commission on or prior to the date of this
Agreement have been delivered, or are available through EDGAR, to
the Agent and its counsel. The Company has not distributed and,
prior to the later to occur of each Settlement Date and completion
of the distribution of the Placement Shares, will not distribute
any offering material in connection with the offering or sale of
the Placement Shares other than the Registration Statement and the
Prospectus and any Issuer Free Writing Prospectus (as defined
below) to which the Agent has consented, which consent will not be
unreasonably withheld or delayed, or that is required by applicable
law or the listing maintenance requirements of the Exchange. The
Common Stock is currently quoted on the Exchange under the trading
symbol “ENG.” The Company has not, in the
12 months preceding the date hereof, received notice from the
Exchange to the effect that the Company is not in compliance with
the listing or maintenance requirements of the Exchange. To the
Company’s knowledge, it is in compliance with all such
listing and maintenance requirements. Notwithstanding anything to
the contrary contained in this Agreement, the representations and
warranties set forth in the first three (3) sentences of this
Section 6(a) shall not be made by the Company as of the date of
this Agreement.
b. No Misstatement or Omission.
The Registration Statement, when it became or becomes effective,
did not, and will not, contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein not misleading. The
Prospectus and any amendment and supplement thereto, on the date
thereof and at each Applicable Time (defined below), did not or
will not include an untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not
misleading. The foregoing shall not apply to statements in, or
omissions from, any such document made in reliance upon, and in
conformity with, information furnished to the Company by the Agent
specifically for use in the preparation thereof. Notwithstanding
anything to the contrary contained in this Agreement, the
representations and warranties set forth in this Section 6(b) shall
not be made by the Company as of the date of this
Agreement.
c. Conformity with Securities Act and
Exchange Act. The Registration Statement, the Prospectus,
any Issuer Free Writing Prospectus or any amendment or supplement
thereto, when such documents were or are filed with the Commission
under the Securities Act or the Exchange Act or became or become
effective under the Securities Act, as the case may be, conformed
or will conform in all material respects with the requirements of
the Securities Act and the Exchange Act, as
applicable.
d. Financial Information. The
consolidated financial statements of the Company included or
incorporated by reference in the Registration Statement and the
Prospectus, together with the related notes and schedules, present
fairly, in all material respects, the consolidated financial
position of the Company and the Subsidiaries (as defined below) as
of the dates indicated and the consolidated results of operations,
cash flows and changes in stockholders’ equity of the Company
and the Subsidiaries for the periods specified (subject, in the
case of unaudited statements, to normal year-end audit adjustments)
and have been prepared in all material respects in compliance with
the published requirements of the Securities Act and Exchange Act,
as applicable, and in conformity with generally accepted accounting
principles in the United States (“GAAP”) applied on a
consistent basis (except (i) for such adjustments to accounting
standards and practices as are noted therein and (ii) in the case
of unaudited interim statements, to the extent they may exclude
footnotes or may be condensed or summary statements) during the
periods involved; the other financial and statistical data with
respect to the Company and the Subsidiaries contained or
incorporated by reference in the Registration Statement and the
Prospectus, are based on or derived from sources that the Company
believes to be reliable and accurate in all material respects or
represents the Company’s good faith estimates on data derived
from such source; there are no financial statements (historical or
pro forma) that are required to be included or incorporated by
reference in the Registration Statement, or the Prospectus that are
not included or incorporated by reference as required; the Company
and the Subsidiaries do not have any material liabilities or
obligations, direct or contingent (including any off balance sheet
obligations), not described in the Registration Statement, and the
Prospectus which are required to be described in the Registration
Statement or Prospectus; and all disclosures contained or
incorporated by reference in the Registration Statement and the
Prospectus, if any, regarding “non-GAAP financial
measures” (as such term is defined by the rules and
regulations of the Commission) comply in all material respects with
Regulation G of the Exchange Act and Item 10 of Regulation S-K
under the Securities Act, to the extent applicable.
e. Conformity with EDGAR Filing.
The Prospectus delivered to the Agent for use in connection with
the sale of the Placement Shares pursuant to this Agreement will be
identical to the versions of the Prospectus created to be
transmitted to the Commission for filing via EDGAR, except to the
extent permitted by Regulation S-T.
f. Organization. The Company and
any subsidiary that is a significant subsidiary (as such term is
defined in Rule 1-02 of Regulation S-X promulgated by the
Commission) (each, a “Subsidiary,”
collectively, the “Subsidiaries”), are, and
will be, duly organized, validly existing as a corporation and in
good standing under the laws of their respective jurisdictions of
organization. The Company and the Subsidiaries are duly licensed or
qualified as a foreign corporation for transaction of business and
in good standing under the laws of each other jurisdiction in which
their respective ownership or lease of property or the conduct of
their respective businesses requires such license or qualification,
and have all corporate power and authority necessary to conduct
their respective businesses as described in the Registration
Statement and the Prospectus, except where the failure to be so
qualified or in good standing or have such power or authority would
not, individually or in the aggregate, have a material adverse
effect on the assets, business, operations, earnings, properties,
condition (financial or otherwise), prospects, stockholders’
equity or results of operations of the Company and the Subsidiaries
taken as a whole, or prevent the consummation of the transactions
contemplated hereby (a “Material Adverse
Effect”).
g. Subsidiaries. The Company owns
directly or indirectly, all of the equity interests of the
Subsidiaries free and clear of any lien, charge, security interest,
encumbrance, right of first refusal or other restriction, and all
the equity interests of the Subsidiaries are validly issued and are
fully paid, nonassessable and free of preemptive and similar
rights. The Company does not own or control, directly or
indirectly, any corporation, association or other entity other than
the subsidiaries listed in Exhibit 21.1 to the Company’s
Annual Report on Form 10-K for the most recently ended fiscal year
and other than (i) those subsidiaries not required to be listed on
Exhibit 21.1 by Item 601 of Regulation S-K under the Exchange Act
and (ii) those subsidiaries formed since the last day of the most
recently ended fiscal year.
h. No Violation or Default.
Neither the Company nor any Subsidiary is (i) in violation of
its charter or by-laws or similar organizational documents; (ii) in
default, and no event has occurred that, with notice or lapse of
time or both, would constitute such a default, in the due
performance or observance of any term, covenant or condition
contained in any indenture, mortgage, deed of trust, loan agreement
or other similar agreement or instrument to which the Company or
any Subsidiary is a party or by which the Company or any Subsidiary
is bound or to which any of the property or assets of the Company
or any Subsidiary is subject; or (iii) in violation of any law or
statute or any judgment, order, rule or regulation of any court or
arbitrator or governmental or regulatory authority having
jurisdiction over the Company or any Subsidiary, except, in the
case of each of clauses (ii) and (iii) above, for any such
violation or default that would not, individually or in the
aggregate, have a Material Adverse Effect. To the Company’s
knowledge, no other party under any material contract or other
agreement to which it or any Subsidiary is a party is in default in
any respect thereunder where such default would reasonably be
expected to have a Material Adverse Effect.
i. No Material Adverse Effect.
Since the date of the most recent financial statements of the
Company included or incorporated by reference in the Registration
Statement and Prospectus, there has not been (i) any Material
Adverse Effect, or any development that would result in a Material
Adverse Effect, (ii) any transaction which is material to the
Company and the Subsidiaries taken as a whole, (iii) any obligation
or liability, direct or contingent (including any off-balance sheet
obligations), incurred by the Company or the Subsidiaries, which is
material to the Company and the Subsidiaries taken as a whole, (iv)
any material change in the capital stock (other than (A) the grant
of additional options and other equity awards under the
Company’s existing stock option plans and equity incentive
plans, (B) changes in the number of outstanding Common Stock of the
Company due to the issuance of shares upon the exercise or
conversion of securities exercisable for, or convertible into,
Common Stock or upon the vesting, exercise or settlement of equity
awards under the Company’s equity incentive plans or due to
the sale of shares of Common Stock in connection with any employee
stock purchase plan of the Company whether now in effect or
hereafter implemented, (C) as a result of the issuance of Placement
Shares, (D) any repurchases of capital stock of the Company, (E) as
described in a proxy statement filed on Schedule 14A or a
Registration Statement on Form S-4, or (F) otherwise publicly
announced) or outstanding long-term indebtedness of the Company or
the Subsidiaries or (v) any dividend or distribution of any kind
declared, paid or made on the capital stock of the Company or any
Subsidiary, other than in each case above in the ordinary course of
business or (i) as otherwise disclosed in the Registration
Statement or Prospectus (including any document incorporated by
reference therein) or (ii) where such matter, item, change or
development would not make the statements in the Registration
Statement or Prospectus contain an untrue statement of a material
fact or omit to state a material fact required to make the
statements therein not misleading.
j. Capitalization. The issued and
outstanding shares of capital stock of the Company have been
validly issued, are fully paid and non-assessable and, other than
as disclosed in the Registration Statement or the Prospectus, are
not subject to any preemptive rights, rights of first refusal or
similar rights. The Company has an authorized, issued and
outstanding capitalization as set forth in the Registration
Statement and the Prospectus as of the dates referred to therein
(other than (i) the grant of additional options or other equity
awards under the Company’s existing stock option plans or
equity incentive plans, (ii) changes in the number of outstanding
Common Stock of the Company due to the issuance of shares upon the
exercise or conversion of securities exercisable for, or
convertible into, Common Stock or upon the vesting, exercise or
settlement of equity awards under the Company’s equity
incentive plans or due to the sale of shares of Common Stock in
connection with any employee stock purchase plan of the Company
whether now in effect or hereafter implemented, (iii) as a result
of the issuance of Placement Shares, or (iv) any repurchases of
capital stock of the Company) and such authorized capital stock
conforms in all material respects to the description thereof set
forth in the Registration Statement and the Prospectus. The
description of the Common Stock in the Registration Statement and
the Prospectus is complete and accurate in all material respects.
Except as disclosed in or contemplated by the Registration
Statement or the Prospectus, the Company did not have outstanding
any options to purchase, or any rights or warrants to subscribe
for, or any securities or obligations convertible into, or
exchangeable for, or any contracts or commitments to issue or sell,
any shares of capital stock or other securities (other than equity
awards under the Company’s equity incentive plans or sale of
shares of Common Stock in connection with any employee stock
purchase plan of the Company whether now in effect or hereafter
implemented).
k. S-3 Eligibility. (i) At the
time of filing the Registration Statement and (ii) at the time
of the most recent amendment thereto for the purposes of complying
with Section 10(a)(3) of the Securities Act (whether such amendment
was by post-effective amendment, incorporated report filed pursuant
to Section 13 or 15(d) of the Exchange Act or form of prospectus),
the Company met the then applicable requirements for use of Form
S-3 under the Securities Act, including compliance with General
Instruction I.B.1 of Form S-3, as applicable. The Company is not a
shell company (as defined in Rule 405 under the Securities Act) and
has not been a shell company for at least 12 calendar months
previously and if it has been a shell company at any time
previously, has filed current Form 10 information (as defined in
General Instruction I.B.6 of Form S-3) with the Commission at least
12 calendar months previously reflecting its status as an entity
that is not a shell company.
l. Authorization; Enforceability.
The Company has full legal right, power and authority to enter into
this Agreement and perform the transactions contemplated hereby.
This Agreement has been duly authorized, executed and delivered by
the Company and is a legal, valid and binding agreement of the
Company enforceable against the Company in accordance with its
terms, except to the extent that (i) enforceability may be limited
by bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting creditors’ rights generally and by general
equitable principles and (ii) the indemnification and contribution
provisions of Section
11 hereof may be limited by federal or state securities laws
and public policy considerations in respect thereof.
m. Authorization of Placement
Shares. The Placement Shares, when issued and delivered
pursuant to the terms approved by the board of directors of the
Company or a duly authorized committee thereof, or a duly
authorized executive committee, against payment therefor as
provided herein, will be duly and validly authorized and issued and
fully paid and nonassessable, free and clear of any pledge, lien,
encumbrance, security interest or other claim (other than any
pledge, lien, encumbrance, security interest or other claim arising
from an act or omission of the Agent or a purchaser), including any
statutory or contractual preemptive rights, resale rights, rights
of first refusal or other similar rights, and will be registered
pursuant to Section 12 of the Exchange Act. The Placement Shares,
when issued, will conform in all material respects to the
description thereof set forth in or incorporated into the
Prospectus.
n. No Consents Required. No
consent, approval, authorization, order, registration or
qualification of or with any court or arbitrator or any
governmental or regulatory authority is required for the execution,
delivery and performance by the Company of this Agreement, and the
issuance and sale by the Company of the Placement Shares as
contemplated hereby, except for such consents, approvals,
authorizations, orders and registrations or qualifications (i) as
may be required under applicable state securities laws or by the
by-laws and rules of the Financial Industry Regulatory Authority
(“FINRA”) or the Exchange,
including any notices that may be required by the Exchange, in
connection with the sale of the Placement Shares by the Agent, (ii)
as may be required under the Securities Act and (iii) as have been
previously obtained by the Company or the absence of which would
not, individually or in the aggregate reasonably be expected to
have a Material Adverse Effect.
o. No Preferential Rights. (i) No
person, as such term is defined in Rule 1-02 of Regulation S-X
promulgated under the Securities Act (each, a “Person”), has the right,
contractual or otherwise, to cause the Company to issue or sell to
such Person any Common Stock or shares of any other capital stock
or other securities of the Company (other than upon the exercise of
options or warrants to purchase Common Stock, the vesting of
restricted stock units or restricted shares of Common Stock, the
conversion of convertible securities or upon the exercise of
options that may be granted from time to time under the
Company’s stock option plan or equity inventive plan or upon
the sale of Common Stock in connection with any employee stock
purchase plan of the Company whether now in effect or hereafter
implemented), (ii) no Person has any preemptive rights, rights of
first refusal, or any other rights (whether pursuant to a
“poison pill” provision or otherwise) to purchase any
Common Stock or shares of any other capital stock or other
securities of the Company from the Company which have not been duly
waived with respect to the offering contemplated hereby, (iii) no
Person has the right to act as an underwriter or as a financial
advisor to the Company in connection with the offer and sale of the
Common Stock, and (iv) no Person has the right, contractual or
otherwise, to require the Company to register under the Securities
Act any Common Stock or shares of any other capital stock or other
securities of the Company, or to include any such shares or other
securities in the Registration Statement or the offering
contemplated thereby, whether as a result of the filing or
effectiveness of the Registration Statement or the sale of the
Placement Shares as contemplated thereby or otherwise, except in
each case for such rights as have been waived on or prior to the
date hereof.
p. Independent Public Accountant.
Moss Adams LLP (the “Accountant”), whose
report on the consolidated financial statements of the Company is
filed with the Commission as part of the Company’s most
recent Annual Report on Form 10-K filed with the Commission and
incorporated into the Registration Statement, are and, during the
periods covered by their report, were independent public
accountants within the meaning of the Securities Act and the Public
Company Accounting Oversight Board (United States). To the
Company’s knowledge, the Accountant is not in violation of
the auditor independence requirements of the Sarbanes-Oxley Act of
2002 (the “Sarbanes-Oxley Act”) with
respect to the Company.
q. Enforceability of Agreements.
All agreements between the Company and third parties expressly
referenced in the Prospectus, other than such agreements that have
expired by their terms or whose termination is disclosed in
documents filed by the Company on EDGAR, are legal, valid and
binding obligations of the Company and, to the Company’s
knowledge, enforceable in accordance with their respective terms,
except to the extent that (i) enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors’ rights generally and by general
equitable principles and (ii) the indemnification provisions of
certain agreements may be limited by federal or state securities
laws or public policy considerations in respect thereof, and except
for any unenforceability that, individually or in the aggregate,
would not reasonably be expected to have a Material Adverse
Effect.
r. No Litigation. There are no
legal or governmental proceedings or investigations pending or, to
the Company’s knowledge, threatened to which the Company or a
Subsidiary is a party or to which any property of the Company or
any Subsidiary is the subject that, individually or in the
aggregate, if determined adversely to the Company or any
Subsidiary, would reasonably be expected to have a Material Adverse
Effect or materially and adversely affect the ability of the
Company to perform its obligations under this Agreement or the
consummation of the transactions contemplated hereby. There are no
current or pending legal or governmental proceedings or, to the
Company’s knowledge, investigations that are required under
the Securities Act to be described in the Prospectus that are not
described in the Prospectus.
s. Licenses and Permits. The
Company and the Subsidiaries possess or have obtained, all
licenses, certificates, consents, orders, approvals, permits and
other authorizations issued by, and have made all declarations and
filings with, the appropriate federal, state, local or foreign
governmental or regulatory authorities that are necessary for the
ownership or lease of their respective properties or the conduct of
their respective businesses as currently conducted, as described in
the Registration Statement and the Prospectus (the
“Permits”), except where
the failure to possess, obtain or make the same would not,
individually or in the aggregate, have a Material Adverse Effect.
Neither the Company nor any Subsidiary has received written notice
of any proceeding relating to revocation or modification of any
such Permit, except where such revocation or modification or the
failure to obtain any such renewal would not, individually or in
the aggregate, reasonably be expected to have a Material Adverse
Effect.
t. No Material Defaults. Neither
the Company nor any Subsidiary has defaulted on any installment on
indebtedness for borrowed money or on any rental on one or more
long-term leases, which defaults, individually or in the aggregate,
would have a Material Adverse Effect. The Company has not filed a
report pursuant to Section 13(a) or 15(d) of the Exchange Act since
the filing of its last Annual Report on Form 10-K, indicating that
it (i) has failed to pay any dividend or sinking fund installment
on preferred stock or (ii) has defaulted on any installment on
indebtedness for borrowed money or on any rental on one or more
long-term leases, which defaults, individually or in the aggregate,
would reasonably be expected to have a Material Adverse
Effect.
u. Certain Market Activities.
Neither the Company, nor any Subsidiary, nor, to the knowledge of
the Company, any of their respective directors, officers or
controlling persons has taken, directly or indirectly, any action
designed, or that has constituted or would cause or result in,
under the Exchange Act or otherwise, the stabilization or
manipulation of the price of any security of the Company to
facilitate the sale or resale of the Placement Shares.
v. Broker/Dealer Relationships.
Neither the Company nor any Subsidiary or any related entities (i)
is required to register as a “broker” or
“dealer” in accordance with the provisions of the
Exchange Act or (ii) directly or indirectly through one or more
intermediaries, controls or is a “person associated with a
member” or “associated person of a member”
(within the meaning set forth in the FINRA Manual).
w. No Reliance. The Company has
not relied upon the Agent or legal counsel for the Agent for any
legal, tax or accounting advice in connection with the offering and
sale of the Placement Shares.
x. Taxes. The Company and the
Subsidiaries have filed all federal, state, local and foreign tax
returns which have been required to be filed and paid all taxes
shown thereon through the date hereof, to the extent that such
taxes have become due and are not being contested in good faith,
except where the failure to do so would not reasonably be expected
to have a Material Adverse Effect. Except as otherwise disclosed in
or contemplated by the Registration Statement or the Prospectus, no
tax deficiency has been determined adversely to the Company or any
Subsidiary which has had, or would have, individually or in the
aggregate, a Material Adverse Effect. The Company has no knowledge
of any federal, state or other governmental tax deficiency, penalty
or assessment which has been asserted or threatened against it
which would have a Material Adverse Effect.
y. Title to Real and Personal
Property. The Company and the Subsidiaries have good and
marketable title in fee simple to real property, or have valid
rights to lease or otherwise use personal property, in each case
described in the Registration Statement or Prospectus as being
owned or leased by them that are material to the businesses of the
Company or such Subsidiary, in each case free and clear of all
liens, encumbrances and claims, except those that (i) do not
materially interfere with the use made and proposed to be made of
such property by the Company and the Subsidiaries or (ii) would
not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect.
z. Intellectual Property. The
Company and the Subsidiary own or possess adequate enforceable
rights to use, or can acquire on reasonable terms, all patents,
patent applications, trademarks (both registered and unregistered),
trade names, trademark registrations, service marks, service mark
registrations, Internet domain name registrations, copyrights,
copyright registrations, licenses and know-how (including trade
secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures) (collectively, the
“Intellectual
Property”), necessary for the conduct of their
respective businesses as conducted as of the date hereof, except to
the extent that the failure to own or possess adequate rights to
use such Intellectual Property would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse
Effect. The Company and the Subsidiaries have not received any
written notice of any claim of infringement or conflict which
asserted Intellectual Property rights of others, which infringement
or conflict, if the subject of an unfavorable decision, would
reasonably be expected to result in a Material Adverse Effect.
There are no pending, or to the Company’s knowledge,
threatened judicial proceedings or interference proceedings
challenging the Company’s or any Subsidiary’s rights in
or to or the validity of the scope of any of the Company’s or
its Subsidiaries’ patents, patent applications or proprietary
information, except for such right or claim that would not,
individually or in the aggregate, reasonably be expected to result
in a Material Adverse Effect. To the knowledge of the Company, no
other entity or individual has any right or claim in any of the
Company’s or any of its Subsidiary’s patents, patent
applications or any patent to be issued therefrom by virtue of any
contract, license or other agreement entered into between such
entity or individual and the Company or any Subsidiary or by any
non-contractual obligation, other than by written licenses granted
by the Company or any Subsidiary, except for such right or claim
that would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect. The Company has not
received any written notice of any claim challenging the rights of
the Company or its Subsidiaries in or to any Intellectual Property
owned, licensed or optioned by the Company or any Subsidiary which
claim, if the subject of an unfavorable decision, would result in a
Material Adverse Effect.
aa. Environmental Laws. The Company
and the Subsidiaries (i) are in compliance with any and all
applicable federal, state, local and foreign laws, rules,
regulations, decisions and orders relating to the protection of
human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants (collectively,
“Environmental
Laws”); (ii) have received and are in compliance
with all permits, licenses or other approvals required of them
under applicable Environmental Laws to conduct their respective
businesses as described in the Registration Statement and the
Prospectus; and (iii) have not received notice of any actual or
potential liability for the investigation or remediation of any
disposal or release of hazardous or toxic substances or wastes,
pollutants or contaminants, except, in the case of any of clauses
(i), (ii) or (iii) above, for any such failure to comply or failure
to receive required permits, licenses, other approvals or liability
as would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
bb. Disclosure Controls. The
Company maintains a system of internal accounting controls designed
to provide reasonable assurance that (i) transactions are executed
in accordance with management’s general or specific
authorizations; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with GAAP
and to maintain asset accountability; (iii) access to assets is
permitted only in accordance with management’s general or
specific authorization; and (iv) the recorded accountability for
assets is compared with the existing assets at reasonable intervals
and appropriate action is taken with respect to any differences.
The Company is not aware of any material weaknesses in its internal
control over financial reporting (other than as set forth in the
Registration Statement or the Prospectus). Since the date of the
latest audited financial statements of the Company included in the
Prospectus, there has been no change in the Company’s
internal control over financial reporting that has materially
affected, or is reasonably likely to materially affect, the
Company’s internal control over financial reporting (other
than as set forth in the Registration Statement or the Prospectus).
The Company has established disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15 and 15d-15) that comply with
the requirements of the Exchange Act. The Company’s
certifying officers have evaluated the effectiveness of the
Company’s controls and procedures as of a date within 90 days
prior to the filing date of the Form 10-K for the fiscal year most
recently ended (such date, the “Evaluation Date”). The
Company presented in its Form 10-K for the fiscal year most
recently ended the conclusions of the certifying officers about the
effectiveness of the disclosure controls and procedures based on
their evaluations as of the most recent Evaluation Date, and the
“disclosure controls and procedures” are
effective.
cc. Sarbanes-Oxley Act. The Company
is in compliance in all material respects with any applicable
provisions of the Sarbanes-Oxley Act and the rules and regulations
promulgated thereunder. Each of the principal executive officer and
the principal financial officer of the Company (or each former
principal executive officer of the Company and each former
principal financial officer of the Company as applicable) has made
all certifications required by Sections 302 and 906 of the
Sarbanes-Oxley Act with respect to all reports, schedules, forms,
statements and other documents required to be filed by it or
furnished by it to the Commission during the past 12 months. For
purposes of the preceding sentence, “principal executive
officer” and “principal financial officer” shall
have the meanings given to such terms in the Exchange Act Rules
13a-15 and 15d-15.
dd. Finder’s Fees. Neither
the Company nor any Subsidiary has incurred any liability for any
finder’s fees, brokerage commissions or similar payments in
connection with the transactions herein contemplated, except as may
otherwise exist with respect to the Agent pursuant to this
Agreement.
ee. Labor Disputes. No labor
disturbance by or dispute with employees of the Company or any
Subsidiary exists or, to the knowledge of the Company, is
threatened which would result in a Material Adverse
Effect.
ff. Investment Company Act. Neither
the Company nor any Subsidiary is or, after giving effect to the
offering and sale of the Placement Shares, will be required to
register as an “investment company” or an entity
“controlled” by an “investment company,” as
such terms are defined in the Investment Company Act of 1940, as
amended (the “Investment Company
Act”).
gg. Operations. The operations of
the Company and the Subsidiaries are and have been conducted at all
times in compliance with applicable financial record keeping and
reporting requirements of the Currency and Foreign Transactions
Reporting Act of 1970, as amended, the money laundering statutes of
all jurisdictions to which the Company or the Subsidiaries are
subject, the rules and regulations thereunder and any related or
similar rules, regulations or guidelines, issued, administered or
enforced by any governmental agency having jurisdiction over the
Company (collectively, the “Money Laundering Laws”),
except where the failure to be in such compliance would not
reasonably be expected to result in a Material Adverse Effect; and
no action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving
the Company or any Subsidiary with respect to the Money Laundering
Laws is pending or, to the knowledge of the Company,
threatened.
hh. Off-Balance Sheet Arrangements.
There are no transactions, arrangements and other relationships
between and/or among the Company, and/or, to the knowledge of the
Company, any of its affiliates and any unconsolidated entity,
including, but not limited to, any structured finance, special
purpose or limited purpose entity (each, an “Off Balance Sheet
Transaction”) that would affect materially the
Company’s liquidity or the availability of or requirements
for its capital resources, including those Off Balance Sheet
Transactions described in the Commission’s Statement about
Management’s Discussion and Analysis of Financial Conditions
and Results of Operations (Release Nos. 33-8056; 34-45321; FR-61),
required to be described in the Registration Statement or the
Prospectus which have not been described as required.
ii. Underwriter Agreements. Other
than with respect to this Agreement, the Company is not a party to
any agreement with an agent or underwriter for any other “at
the market” or continuous equity transaction.
jj. ERISA. To the knowledge of the
Company, (i) each material employee benefit plan, within the
meaning of Section 3(3) of the Employee Retirement Income Security
Act of 1974, as amended (“ERISA”) that is
maintained, administered or contributed to by the Company or any of
its affiliates for employees or former employees of the Company and
the Subsidiaries has been maintained in material compliance with
its terms and the requirements of any applicable statutes, orders,
rules and regulations, including but not limited to ERISA and the
Internal Revenue Code of 1986, as amended (the “Code”); (ii) no
prohibited transaction, within the meaning of Section 406 of ERISA
or Section 4975 of the Code, has occurred which would result in a
material liability to the Company with respect to any such plan
excluding transactions effected pursuant to a statutory or
administrative exemption; and (iii) for each such plan that is
subject to the funding rules of Section 412 of the Code or Section
302 of ERISA, no “accumulated funding deficiency” as
defined in Section 412 of the Code has been incurred, whether or
not waived, and the fair market value of the assets of each such
plan (excluding for these purposes accrued but unpaid
contributions) equals or exceeds the present value of all benefits
accrued under such plan determined using reasonable actuarial
assumptions, other than, in the case of (i), (ii) and (iii) above,
as would not reasonably be expected to have a Material Adverse
Effect.
kk. Forward-Looking Statements. No
forward-looking statement (within the meaning of Section 27A of the
Securities Act and Section 21E of the Exchange Act)
(a “Forward-Looking
Statement”) contained in the Registration Statement
and the Prospectus has been made or reaffirmed without a reasonable
basis or has been disclosed other than in good faith.
ll. Margin Rules. Neither the
issuance, sale and delivery of the Placement Shares nor the
application of the proceeds thereof by the Company as described in
the Registration Statement and the Prospectus will violate
Regulation T, U or X of the Board of Governors of the Federal
Reserve System.
mm. Insurance. The Company and the
Subsidiaries carry, or are covered by, insurance in such amounts
and covering such risks as the Company and the Subsidiaries
reasonably believe are adequate for the conduct of their
business.
nn. No Improper Practices. (i)
Neither the Company nor, to the Company’s knowledge, the
Subsidiaries, nor to the Company’s knowledge, any of their
respective executive officers has, in the past five years, made any
unlawful contributions to any candidate for any political office
(or failed fully to disclose any contribution in violation of law)
or made any contribution or other payment to any official of, or
candidate for, any federal, state, municipal, or foreign office or
other person charged with similar public or quasi-public duty in
violation of any law or of the character required to be disclosed
in the Prospectus; (ii) no relationship, direct or indirect, exists
between or among the Company or, to the Company’s knowledge,
the Subsidiaries or any affiliate of any of them, on the one hand,
and the directors, officers and stockholders of the Company or, to
the Company’s knowledge, the Subsidiaries, on the other hand,
that is required by the Securities Act to be described in the
Registration Statement and the Prospectus that is not so described;
(iii) no relationship, direct or indirect, exists between or among
the Company or the Subsidiaries or any affiliate of them, on the
one hand, and the directors, officers, stockholders or directors of
the Company or, to the Company’s knowledge, the Subsidiaries,
on the other hand, that is required by the rules of FINRA to be
described in the Registration Statement and the Prospectus that is
not so described; (iv) there are no material outstanding loans or
advances or material guarantees of indebtedness by the Company or,
to the Company’s knowledge, the Subsidiaries to or for the
benefit of any of their respective officers or directors or any of
the members of the families of any of them; and (v) the Company has
not offered, or caused any placement agent to offer, Common Stock
to any person with the intent to influence unlawfully (A) a
customer or supplier of the Company or the Subsidiaries to alter
the customer’s or supplier’s level or type of business
with the Company or the Subsidiaries or (B) a trade journalist or
publication to write or publish favorable information about the
Company or the Subsidiaries or any of their respective products or
services, and, (vi) neither the Company nor the Subsidiaries nor,
to the Company’s knowledge, any employee or agent of the
Company or the Subsidiaries has made any payment of funds of the
Company or the Subsidiaries or received or retained any funds in
violation of any law, rule or regulation (including, without
limitation, the Foreign Corrupt Practices Act of 1977), which
payment, receipt or retention of funds is of a character required
to be disclosed in the Registration Statement or the
Prospectus.
oo. Status Under the Securities
Act. The Company was not and is not an ineligible issuer as
defined in Rule 405 under the Securities Act at the times specified
in Rules 164 and 433 under the Securities Act in connection
with the offering of the Placement Shares.
pp. No Misstatement or Omission in an
Issuer Free Writing Prospectus. Each Issuer Free Writing
Prospectus, as of its issue date and as of each Applicable Time (as
defined in Section
25 below), did not, does not and will not, through the
completion of the Placement or Placements for which such Issuer
Free Writing Prospectus is issued, include any information that
conflicted, conflicts or will conflict with the information
contained in the Registration Statement or the Prospectus,
including any incorporated document deemed to be a part thereof
that has not been superseded or modified. The foregoing sentence
does not apply to statements in or omissions from any Issuer Free
Writing Prospectus based upon and in conformity with written
information furnished to the Company by the Agent specifically for
use therein.
qq. No Conflicts. Neither the
execution of this Agreement by the Company, nor the issuance,
offering or sale of the Placement Shares, nor the consummation by
the Company of any of the transactions contemplated herein, nor the
compliance by the Company with the terms and provisions hereof will
conflict with, or will result in a breach of, any of the terms and
provisions of, or has constituted or will constitute a default
under, or has resulted in or will result in the creation or
imposition of any lien, charge or encumbrance upon any property or
assets of the Company pursuant to the terms of any contract or
other agreement to which the Company may be bound or to which any
of the property or assets of the Company is subject, except
(i) such conflicts, breaches or defaults as may have been
waived and (ii) such conflicts, breaches and defaults that would
not reasonably be expected to have a Material Adverse Effect; nor
will such action result (x) in any violation of the provisions of
the organizational or governing documents of the Company, or
(y) in any material violation of the provisions of any statute
or any order, rule or regulation applicable to the Company or of
any court or of any federal, state or other regulatory authority or
other government body having jurisdiction over the Company, except
where such violation would not reasonably be expected to have a
Material Adverse Effect.
rr. OFAC.
(i) Neither the Company
nor any Subsidiary (collectively, the “Entity”) nor, to the
Company’s knowledge, any director, officer, employee, agent,
affiliate or representative of the Entity, is a government,
individual, or entity (in this paragraph (rr), “Person”) that is, or is
owned or controlled by a Person that is:
(a) the subject of any
sanctions administered or enforced by the U.S. Department of
Treasury’s Office of Foreign Assets Control
(“OFAC”), the United
Nations Security Council (“UNSC”), the European
Union (“EU”), Her Majesty’s
Treasury (“HMT”), or other relevant
sanctions authority (collectively, “Sanctions”),
nor
(b) located, organized
or resident in a country or territory that is the subject of
Sanctions.
(ii) The
Entity will not, directly or indirectly, knowingly use the proceeds
of the offering, or lend, contribute or otherwise make available
such proceeds to any subsidiary, joint venture partner or other
Person:
(a) to fund or
facilitate any activities or business of or with any Person or in
any country or territory that, at the time of such funding or
facilitation, is the subject of Sanctions; or
(b) in any other manner
that will result in a violation of Sanctions by any Person
(including any Person participating in the offering, whether as
underwriter, advisor, investor or otherwise).
(iii) The
Entity represents and covenants that, except as detailed in the
Registration Statement and the Prospectus, for the past 5 years, it
has not knowingly engaged in and is not now knowingly engaged in
any dealing or transactions with any Person, or in any country or
territory, that at the time of the dealing or transaction is or was
the subject of Sanctions.
ss. Stock Transfer Taxes. On each
Settlement Date, all material stock transfer or other taxes (other
than income taxes) which are required to be paid in connection with
the sale and transfer of the Placement Shares to be sold hereunder
will be, or will have been, fully paid or provided for by the
Company and all laws imposing such taxes will be or will have been
fully complied with by the Company in all material
respects.
tt. IT Systems. (i)(x) To the
knowledge of Company, there has been no security breach or other
compromise of any Company’s information technology and
computer systems, networks, hardware, software, data (including the
data of their respective customers, employees, suppliers, vendors
and any third party data maintained by or on behalf of them),
equipment or technology used in the Company’s business
(collectively, “IT
Systems and Data”) and (y) the Company has not been
notified of any event or condition that would reasonably be
expected to result in, any security breach or other compromise to
their IT Systems and Data; (ii) the Company is presently in
material compliance with all applicable laws or statutes and all
judgments, orders, rules and regulations of any court or arbitrator
or governmental or regulatory authority, internal policies and
contractual obligations relating to the privacy and security of IT
Systems and Data and to the protection of such IT Systems and Data
from unauthorized use, access, misappropriation or modification,
except as would not, in the case of this clause (ii), individually
or in the aggregate, reasonably be expected to have a Material
Adverse Effect; and (iii) the Company has implemented commercially
reasonable backup and disaster recovery technology consistent with
industry standards and practices.
uu. FINRA Exemption. To enable the
Agent to rely on Rule 5110(h)(1)(C) of FINRA, the Company
represents that as of the date hereof, the Company (i) has a
non-affiliate, public common equity float of at least $150 million
or a non-affiliate, public common equity float of at least $100
million and annual trading volume of at least three million shares
and (ii) has been subject to the Exchange Act reporting
requirements for a period of at least 36 months.
Any
certificate signed by an officer of the Company and delivered to
the Agent or to counsel for the Agent pursuant to or in connection
with this Agreement shall be deemed to be a representation and
warranty by the Company, as applicable, to the Agent as to the
matters set forth therein.
7. Covenants of the Company. The
Company covenants and agrees with the Agent that:
a. Registration Statement
Amendments. After the date of this Agreement and during any
period in which a prospectus relating to any Placement Shares is
required to be delivered by the Agent under the Securities Act
(including in circumstances where such requirement may be satisfied
pursuant to Rule 172 under the Securities Act) (the
“Prospectus Delivery
Period”) (i) the Company will notify the Agent
promptly of the time when any subsequent amendment to the
Registration Statement, other than documents incorporated by
reference or amendments not related to any Placement, has been
filed with the Commission and/or has become effective or any
subsequent supplement to the Prospectus has been filed (other than
any supplement not related to any Placement) and of any request by
the Commission for any amendment or supplement to the Registration
Statement or Prospectus related to the Placement or for additional
information related to the Placement, (ii) the Company will prepare
and file with the Commission, promptly upon the Agent’s
request, any amendments or supplements to the Registration
Statement or Prospectus that, upon the advice of the
Company’s legal counsel, may be necessary or advisable in
connection with the distribution of the Placement Shares by the
Agent (provided, however,
that the failure of the Agent to make such request shall not
relieve the Company of any obligation or liability hereunder, or
affect the Agent’s right to rely on the representations and
warranties made by the Company in this Agreement and provided,
further, that the only remedy the Agent shall have with respect to
the failure to make such filing shall be to cease making sales
under this Agreement until such amendment or supplement is filed);
(iii) the Company will not file any amendment or supplement to the
Registration Statement or Prospectus relating to the Placement
Shares or a security convertible into the Placement Shares (other
than an Incorporated Document) unless a copy thereof has been
submitted to the Agent within a reasonable period of time before
the filing and the Agent has not reasonably objected thereto
(provided, however, that
(A) the failure of the Agent to make such objection shall not
relieve the Company of any obligation or liability hereunder, or
affect the Agent’s right to rely on the representations and
warranties made by the Company in this Agreement and (B) the
Company has no obligation to provide the Agent any advance copy of
such filing or to provide the Agent an opportunity to object to
such filing if the filing does not name the Agent or does not
relate to the transaction herein provided; and provided, further,
that the only remedy the Agent shall have with respect to the
failure by the Company to obtain such consent shall be to cease
making sales under this Agreement) and the Company will furnish to
the Agent at the time of filing thereof a copy of any document that
upon filing is deemed to be incorporated by reference into the
Registration Statement or Prospectus, except for those documents
available via EDGAR; and (iv) the Company will cause each amendment
or supplement to the Prospectus to be filed with the Commission as
required pursuant to the applicable paragraph of Rule 424(b) of the
Securities Act or, in the case of any document to be incorporated
therein by reference, to be filed with the Commission as required
pursuant to the Exchange Act, within the time period prescribed
(the determination to file or not file any amendment or supplement
with the Commission under this Section 7(a), based on the
Company’s reasonable opinion or reasonable objections, shall
be made exclusively by the Company).
b. Notice of Commission Stop
Orders. The Company will advise the Agent, promptly after it
receives notice or obtains knowledge thereof, of the issuance or
threatened issuance by the Commission of any stop order suspending
the effectiveness of the Registration Statement, of the suspension
of the qualification of the Placement Shares for offering or sale
in any jurisdiction, or of the initiation or threatening of any
proceeding for any such purpose; and it will use its commercially
reasonable efforts to prevent the issuance of any stop order or to
obtain its withdrawal if such a stop order should be issued. The
Company will advise the Agent promptly after it receives any
request by the Commission for any amendments to the Registration
Statement or any amendment or supplements to the Prospectus or any
Issuer Free Writing Prospectus or for additional information
related to the offering of the Placement Shares or for additional
information related to the Registration Statement, the Prospectus
or any Issuer Free Writing Prospectus.
c. Delivery of Prospectus; Subsequent
Changes. During the Prospectus Delivery Period, the Company
will use commercially reasonable efforts to comply with all
requirements imposed upon it by the Securities Act, as from time to
time in force, and to file on or before their respective due dates
all reports and any definitive proxy or information statements
required to be filed by the Company with the Commission pursuant to
Sections 13(a), 13(c), 14, 15(d) or any other provision of or under
the Exchange Act. If the Company has omitted any information from
the Registration Statement pursuant to Rule 430A under the
Securities Act, it will use its commercially reasonable efforts to
comply with the provisions of and make all requisite filings with
the Commission pursuant to said Rule 430A and to notify the Agent
promptly of all such filings. If during the Prospectus Delivery
Period any event occurs as a result of which the Prospectus as then
amended or supplemented would include an untrue statement of a
material fact or omit to state a material fact necessary to make
the statements therein, in the light of the circumstances then
existing, not misleading, or if during such Prospectus Delivery
Period it is necessary to amend or supplement the Registration
Statement or Prospectus to comply with the Securities Act, the
Company will promptly notify the Agent to suspend the offering of
Placement Shares during such period and the Company will promptly
amend or supplement the Registration Statement or Prospectus (at
the expense of the Company) so as to correct such statement or
omission or effect such compliance; provided, however, that the Company may
delay the filing of any amendment or supplement, if in the judgment
of the Company, it is in the best interest of the
Company.
d. Listing of Placement Shares.
During the Prospectus Delivery Period, the Company will use its
commercially reasonable efforts to cause the Placement Shares to be
listed on the Exchange and to qualify the Placement Shares for sale
under the securities laws of such jurisdictions in the United
States as the Agent reasonably designates and to continue such
qualifications in effect so long as required for the distribution
of the Placement Shares; provided,
however, that the Company shall not be required in
connection therewith to qualify as a foreign corporation or dealer
in securities, file a general consent to service of process, or
subject itself to taxation in any jurisdiction if it is not
otherwise so subject.
e. Delivery of Registration Statement and
Prospectus. The Company will furnish to the Agent and its
counsel (at the reasonable expense of the Company) copies of the
Registration Statement, the Prospectus (including all documents
incorporated by reference therein) and all amendments and
supplements to the Registration Statement or Prospectus that are
filed with the Commission during the Prospectus Delivery Period
(including all documents filed with the Commission during such
period that are deemed to be incorporated by reference therein), in
each case as soon as reasonably practicable and in such quantities
as the Agent may from time to time reasonably request and, at the
Agent’s request, will also furnish copies of the Prospectus
to each exchange or market on which sales of the Placement Shares
may be made; provided,
however, that the Company shall not be required to furnish
any document (other than the Prospectus) to the Agent to the extent
such document is available on EDGAR.
f. Earnings Statement. The Company
will make generally available to its security holders as soon as
practicable, but in any event not later than 15 months after the
end of the Company’s current fiscal quarter, an earnings
statement covering a 12-month period that satisfies the provisions
of Section 11(a) and Rule 158 of the Securities Act. The terms
“earnings statement” and “make generally
available to its security holders” shall have the meanings
set forth in Rule 158 under the Securities Act.
g. Use of Proceeds. The Company
will use the Net Proceeds as described in the Prospectus in the
section entitled “Use of Proceeds.”
h. Notice of Other Sales. Without
the prior written consent of the Agent, the Company will not,
directly or indirectly, offer to sell, sell, contract to sell,
grant any option to sell or otherwise dispose of any Common Stock
(other than the Placement Shares offered pursuant to this
Agreement) or securities convertible into or exchangeable for
Common Stock, warrants or any rights to purchase or acquire, Common
Stock during the period beginning on the date on which any
Placement Notice is delivered to the Agent hereunder and ending on
the third (3rd) Trading Day immediately following the final
Settlement Date with respect to Placement Shares sold pursuant to
such Placement Notice (or, if the Placement Notice has been
terminated or suspended prior to the sale of all Placement Shares
covered by a Placement Notice, the date of such suspension or
termination); and will not directly or indirectly in any other
“at the market” or continuous equity transaction offer
to sell, sell, contract to sell, grant any option to sell or
otherwise dispose of any Common Stock (other than the Placement
Shares offered pursuant to this Agreement) or securities
convertible into or exchangeable for Common Stock, warrants or any
rights to purchase or acquire, Common Stock prior to the
termination of this Agreement; provided, however, that such
restrictions will not apply in connection with the Company’s
issuance or sale of (i) Common Stock, options to purchase Common
Stock or Common Stock issuable upon the exercise, vesting or
settlement of options, restricted stock units, performance share
units or other equity awards, pursuant to any stock option, or
benefits plan, or other employee compensation plan, stock ownership
plan or dividend reinvestment plan (but not Common Stock subject to
a waiver to exceed plan limits in its dividend reinvestment plan)
of the Company whether now in effect or hereafter implemented; (ii)
Common Stock issuable upon conversion of securities or the exercise
of warrants, options or other rights in effect or outstanding, and
disclosed in filings by the Company available on EDGAR or otherwise
in writing to the Agent, (iii) Common Stock, or securities
convertible into or exercisable for Common Stock, offered and sold
in a privately negotiated transaction to vendors, customers,
strategic partners or potential strategic partners or other
investors conducted in a manner so as not to be integrated with the
offering of Common Stock hereby; (iv) Common Stock in connection
with any acquisition, strategic investment or other similar
transaction (including any joint venture, strategic alliance or
partnership); and (v) Common Stock issuable as a matching
contribution under the Company’s 401(k) or employee stock
purchase plan whether now in effect or hereafter implemented.
Notwithstanding the foregoing provisions, nothing herein will be
construed to restrict the Company’s ability, or require the
consent of the Agent, to file a registration statement under the
Securities Act.
i. Change of Circumstances. The
Company will, at any time during the pendency of a Placement Notice
advise the Agent promptly after it shall have received notice or
obtained knowledge thereof, of any information or fact that would
alter or affect in any material respect any opinion, certificate,
letter or other document required to be provided to the Agent
pursuant to this Agreement.
j. Due Diligence Cooperation.
During the term of this Agreement, the Company will cooperate with
any reasonable due diligence review conducted by the Agent or its
representatives in connection with the transactions contemplated
hereby, including, without limitation, providing information and
making available documents and senior corporate officers, during
regular business hours and at the Company’s principal
offices, or such other physical or electronic location mutually
agreed upon by the parties hereto, as the Agent may reasonably
request.
k. Required Filings Relating to Placement
of Placement Shares. The Company agrees that on such dates
as the Securities Act shall require, the Company will (i) file a
prospectus supplement with the Commission under the applicable
paragraph of Rule 424(b) under the Securities Act (each and every
date a filing under Rule 424(b) is made, a “Filing Date”), which
prospectus supplement will set forth, within the relevant period,
the amount of Placement Shares sold through the Agent, the Net
Proceeds to the Company and the compensation payable by the Company
to the Agent with respect to such Placement Shares, and (ii)
deliver such number of copies of each such prospectus supplement to
each exchange or market on which such sales were effected as may be
required by the rules or regulations of such exchange or
market.
l. Representation Dates;
Certificate. Each time during the term of this Agreement
that the Company:
(i) amends or
supplements (other than a prospectus supplement relating solely to
an offering of securities other than the Placement Shares) the
Registration Statement or the Prospectus relating to the Placement
Shares by means of a post-effective amendment, sticker, or
supplement but not by means of incorporation of documents by
reference into the Registration Statement or the Prospectus
relating to the Placement Shares;
(ii) files
an annual report on Form 10-K under the Exchange Act (including any
Form 10-K/A containing amended audited financial information or a
material amendment to the previously filed Form 10-K);
(iii) files
its quarterly reports on Form 10-Q under the Exchange Act;
or
(iv) files
a current report on Form 8-K containing amended financial
information (other than information “furnished”
pursuant to Items 2.02 or 7.01 of Form 8-K or to provide disclosure
pursuant to Item 8.01 of Form 8-K relating to the reclassification
of certain properties as discontinued operations in accordance with
Statement of Financial Accounting Standards No. 144) under the
Exchange Act;
(Each
date of filing of one or more of the documents referred to in
clauses (i) through (iv) shall be a “Representation
Date.”)
the
Company shall furnish the Agent (but in the case of clause (iv)
above only if the Agent reasonably determines that the information
contained in such Form 8-K is material) with a certificate, in the
form attached hereto as Exhibit 7(1). The requirement
to provide a certificate under this Section 7(1) shall be
automatically waived for any Representation Date occurring at a
time at which no Placement Notice is pending, which waiver shall
continue until the earlier to occur of the date the Company
delivers a Placement Notice hereunder (which for such calendar
quarter shall be considered a Representation Date) and the next
occurring Representation Date on which the Company files its annual
report on Form 10-K. Notwithstanding the foregoing, (i) upon the
delivery of the first Placement Notice hereunder and (ii) if the
Company subsequently decides to sell Placement Shares following a
Representation Date when the Company relied on such waiver and did
not provide the Agent with a certificate under this Section 7(1), then before the
Agent sells any Placement Shares, the Company shall provide the
Agent with a certificate, in the form attached hereto as
Exhibit 7(1), dated
the date of the Placement Notice.
m. Legal Opinion. On or prior to
the date of the first Placement Notice given hereunder the Company
shall cause to be furnished to the Agent a written opinion and a
negative assurance letter of Porter Hedges LLP (“Company Counsel”), and a
written opinion of Holland & Hart LLP, as Nevada counsel to the
Company (“Nevada
Counsel”), or other counsel reasonably satisfactory to
the Agent, each in form and substance reasonably satisfactory to
the Agent. Thereafter, within five (5) Trading Days of each
Representation Date with respect to which the Company is obligated
to deliver a certificate in the form attached hereto as Exhibit
7(l) for which no waiver is applicable, the Company shall cause to
be furnished to the Agent a negative assurance letter of
Company Counsel in form and substance reasonably satisfactory to
the Agent; provided that, in lieu of such negative assurance for
subsequent periodic filings under the Exchange Act, counsel may
furnish the Agent with a letter (a “Reliance Letter”) to the
effect that the Agent may rely on the negative assurance letter
previously delivered under this Section 7(m) to the same extent as
if it were dated the date of such letter (except that statements in
such prior letter shall be deemed to relate to the Registration
Statement and the Prospectus as amended or supplemented as of the
date of the Reliance Letter).
n. Comfort Letter. On or prior to
the date of the first Placement Notice given hereunder and within
five (5) Trading Days after each subsequent Representation Date,
other than pursuant to Section 7(l)(iii), the Company shall cause
its independent accountants to furnish the Agent letters (the
“Comfort
Letters”), dated the date the Comfort Letter is
delivered, which shall meet the requirements set forth in this
Section 7(n). The
Comfort Letter from the Company’s independent accountants
shall be in a form and substance reasonably satisfactory to the
Agent, (i) confirming that they are an independent public
accounting firm within the meaning of the Securities Act and the
Public Company Accounting Oversight Board (the “PCAOB”), (ii) stating, as
of such date, the conclusions and findings of such firm with
respect to the financial information and other matters ordinarily
covered by accountants’ “comfort letters” to
underwriters in connection with registered public offerings (the
first such letter, the “Initial Comfort Letter”)
and (iii) updating the Initial Comfort Letter with any
information that would have been included in the Initial Comfort
Letter had it been given on such date and modified as necessary to
relate to the Registration Statement and the Prospectus, as amended
and supplemented to the date of such letter.
o. Market Activities. The Company
will not, directly or indirectly, (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 security of the Company to facilitate the sale or
resale of Placement Shares or (ii) sell, bid for, or purchase
Common Stock in violation of Regulation M, or pay anyone any
compensation for soliciting purchases of the Placement Shares other
than the Agent.
p. Investment Company Act. The
Company will conduct its affairs in such a manner so as to
reasonably ensure that neither it nor the Subsidiaries will be or
become, at any time prior to the termination of this Agreement, an
“investment company,” as such term is defined in the
Investment Company Act.
q. No Offer to Sell. Other than an
Issuer Free Writing Prospectus approved in advance by the Company
and the Agent in its capacity as agent hereunder pursuant to
Section 23, neither
of the Agent nor the Company (including its agents and
representatives, other than the Agent in its capacity as such) will
make, use, prepare, authorize, approve or refer to any written
communication (as defined in Rule 405), required to be filed with
the Commission, that constitutes an offer to sell or solicitation
of an offer to buy Placement Shares hereunder.
r. Sarbanes-Oxley Act. The Company
will maintain and keep accurate books and records reflecting its
assets and maintain internal accounting controls in a manner
designed to provide reasonable assurance regarding the reliability
of financial reporting and the preparation of financial statements
for external purposes in accordance with GAAP and including those
policies and procedures that (i) pertain to the maintenance of
records that in reasonable detail accurately and fairly reflect the
transactions and dispositions of the assets of the Company, (ii)
provide reasonable assurance that transactions are recorded as
necessary to permit the preparation of the Company’s
consolidated financial statements in accordance with GAAP, (iii)
that receipts and expenditures of the Company are being made only
in accordance with management’s and the Company’s
directors’ authorization, and (iv) provide reasonable
assurance regarding prevention or timely detection of unauthorized
acquisition, use or disposition of the Company’s assets that
could have a material effect on its financial statements. The
Company will maintain disclosure controls and procedures that
comply with the requirements of the Exchange Act.
8. Representations and Covenants of the
Agent. The Agent represents and warrants that it is duly
registered as a broker-dealer under FINRA, the Exchange Act and the
applicable statutes and regulations of each state in which the
Placement Shares will be offered and sold, except such states in
which the Agent is exempt from registration or such registration is
not otherwise required. The Agent shall continue, for the term of
this Agreement, to be duly registered as a broker-dealer under
FINRA, the Exchange Act and the applicable statutes and regulations
of each state in which the Placement Shares will be offered and
sold, except such states in which it is exempt from registration or
such registration is not otherwise required, during the term of
this Agreement. The Agent shall comply with all applicable law and
regulations in connection with the transactions contemplated by
this Agreement, including the issuance and sale through the Agent
of the Placement Shares.
9. Payment of Expenses. The
Company will pay all expenses incident to the performance of its
obligations under this Agreement, including (i) the preparation,
filing, including any fees required by the Commission, and printing
of the Registration Statement (including financial statements and
exhibits) as originally filed and of each amendment and supplement
thereto and each Free Writing Prospectus, in such number as the
Agent shall deem reasonably necessary, (ii) the printing and
delivery to the Agent of this Agreement and such other documents as
may be required in connection with the offering, purchase, sale,
issuance or delivery of the Placement Shares, (iii) the
preparation, issuance and delivery of the certificates, if any, for
the Placement Shares to the Agent, including any stock or other
transfer taxes and any capital duties, stamp duties or other duties
or taxes payable upon the sale, issuance or delivery of the
Placement Shares to the Agent, (iv) the fees and disbursements of
the counsel, accountants and other advisors to the Company, (v) the
reasonable and documented out-of-pocket fees and disbursements of
counsel to the Agent incurred in connection with (a) entering into
the transactions contemplated by this Agreement in an amount not to
exceed $50,000 in the aggregate, and (b) ongoing diligence arising
from the transactions contemplated by this Agreement in an amount
not to exceed $2,500 in the aggregate per calendar quarter in which
the Company has issued or intends to issue a Placement Notice; (vi)
the fees and expenses of the transfer agent and registrar for the
Common Stock, (vii) the filing fees incident to any review by FINRA
of the terms of the sale of the Placement Shares, and (viii) the
fees and expenses incurred in connection with the listing of the
Placement Shares on the Exchange.
10. Conditions to the Agent’s
Obligations. The obligations of the Agent hereunder with
respect to a Placement will be subject to the continuing accuracy
and completeness of the representations and warranties made by the
Company herein (other than those representations and warranties
made as of a specified date or time), to the due performance in all
material respects by the Company of its obligations hereunder, to
the completion by the Agent of a due diligence review satisfactory
to it in its reasonable judgment, and to the continuing reasonable
satisfaction (or waiver by the Agent in its sole discretion) of the
following additional conditions:
a. Registration Statement
Effective. The Registration Statement shall remain effective
and shall be available for the sale of all Placement Shares
contemplated to be issued by any Placement Notice.
b. No Material Notices. None of
the following events shall have occurred and be continuing: (i)
receipt by the Company of any request for additional information
from the Commission or any other federal or state governmental
authority during the period of effectiveness of the Registration
Statement, the response to which would require any post-effective
amendments or supplements to the Registration Statement or the
Prospectus; (ii) the issuance by the Commission or any other
federal or state governmental authority of any stop order
suspending the effectiveness of the Registration Statement or
receipt by the Company of notification of the initiation of any
proceedings for that purpose; (iii) receipt by the Company of any
notification with respect to the suspension of the qualification or
exemption from qualification of any of the Placement Shares for
sale in any jurisdiction or receipt by the Company of notification
of the initiation of, or a threat to initiate, any proceeding for
such purpose; or (iv) the occurrence of any event that makes any
material statement made in the Registration Statement or the
Prospectus or any material Incorporated Document untrue in any
material respect or that requires the making of any changes in the
Registration Statement, the Prospectus or any material Incorporated
Document so that, in the case of the Registration Statement, it
will not contain any materially untrue statement of a material fact
or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading and, that
in the case of the Prospectus or any material Incorporated
Document, it will not contain any materially untrue statement of a
material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in the
light of the circumstances under which they were made, not
misleading.
c. No Misstatement or Material
Omission. The Agent shall not have advised the Company that
the Registration Statement or Prospectus, or any amendment or
supplement thereto, contains an untrue statement of fact that in
the Agent’s reasonable opinion is material, or omits to state
a fact that in the Agent’s reasonable opinion is material and
is required to be stated therein or is necessary to make the
statements therein not misleading.
d. Material Changes. Except as
contemplated in the Prospectus, or disclosed in the Company’s
reports filed with the Commission, there shall not have been any
Material Adverse Effect, or any development that would cause a
Material Adverse Effect, or a downgrading in or withdrawal of the
rating assigned to any of the Company’s securities (other
than asset backed securities) by any “nationally recognized
statistical rating organization,” as such term is defined by
the Commission for purposes of Rule 436(g)(2) under the Securities
Act (a “Rating
Organization”), or a public announcement by any Rating
Organization that it has under surveillance or review its rating of
any of the Company’s securities (other than asset backed
securities), the effect of which, in the case of any such action by
a Rating Organization described above, in the reasonable judgment
of the Agent (without relieving the Company of any obligation or
liability it may otherwise have), is so material as to make it
impracticable or inadvisable to proceed with the offering of the
Placement Shares on the terms and in the manner contemplated in the
Prospectus.
e. Company Counsel Legal Opinion.
The Agent shall have received the opinion and negative assurance
letter of Company Counsel and the opinion of Nevada Counsel
required to be delivered pursuant to Section 7(m) on or before
the date on which such delivery of such opinions and negative
assurance letter are required pursuant to Section 7(m).
f. Agent Counsel Legal Opinion.
Agent shall have received from Duane Morris LLP, counsel for the
Agent, such opinion or opinions, on or before the date on which the
delivery of the Company Counsel legal opinion is required pursuant
to Section 7(m),
with respect to such matters as the Agent may reasonably require,
and the Company shall have furnished to such counsel such documents
as they request for enabling them to pass upon such
matters.
g. Comfort Letter. The Agent shall
have received the Comfort Letter required to be delivered pursuant
Section 7(n) on or
before the date on which such delivery of such letter is required
pursuant to Section
7(n).
h. Representation Certificate. The
Agent shall have received the certificate required to be delivered
pursuant to Section
7(1) on or before the date on which delivery of such
certificate is required pursuant to Section 7(1).
i. Secretary’s Certificate.
On or prior to the first Representation Date, the Agent shall have
received a certificate, signed on behalf of the Company by its
corporate Secretary, in form and substance satisfactory to the
Agent and its counsel.
j. No Suspension. Trading in the
Common Stock shall not have been suspended on the Exchange and the
Common Stock shall not have been delisted from the
Exchange.
k. Other Materials. On each date
on which the Company is required to deliver a certificate pursuant
to Section 7(1),
the Company shall have furnished to the Agent such appropriate
further information, certificates and documents as the Agent may
reasonably request and which are usually and customarily furnished
by an issuer of securities in connection with a securities offering
of the type contemplated hereby. All such opinions, certificates,
letters and other documents will be in compliance with the
provisions hereof.
l. Securities Act Filings Made.
All filings with the Commission with respect to the Placement
Shares required by Rule 424 under the Securities Act to have been
filed prior to the issuance of any Placement Notice hereunder shall
have been made within the applicable time period prescribed for
such filing by Rule 424.
m. Approval for Listing. The
Placement Shares shall either have been approved for listing on the
Exchange, subject only to notice of issuance, or the Company shall
have filed an application for listing of the Placement Shares on
the Exchange at, or prior to, the issuance of any Placement
Notice.
n. No Termination Event. There
shall not have occurred any event that would permit the Agent to
terminate this Agreement pursuant to Section 13(a).
11. Indemnification and
Contribution.
(a) Company
Indemnification. The Company agrees to indemnify and hold
harmless the Agent, its partners, members, directors, officers,
employees and agents and each person, if any, who controls the
Agent within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act as follows:
(i) against any and all
loss, liability, claim, damage and expense whatsoever, as incurred,
joint or several, arising out of or based upon any untrue statement
or alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), or the omission
or alleged omission therefrom of a material fact required to be
stated therein or necessary to make the statements therein not
misleading, or arising out of any untrue statement or alleged
untrue statement of a material fact included in any related Issuer
Free Writing Prospectus or the Prospectus (or any amendment or
supplement thereto), or the omission or alleged omission therefrom
of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were
made, not misleading;
(ii) against
any and all loss, liability, claim, damage and expense whatsoever,
as incurred, joint or several, to the extent of the aggregate
amount paid in settlement of any litigation, or any investigation
or proceeding by any governmental agency or body, commenced or
threatened, or of any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or
omission; provided that (subject to Section 11(d) below) any
such settlement is effected with the written consent of the
Company, which consent shall not unreasonably be delayed or
withheld; and
(iii) against
any and all expense whatsoever, as incurred (including the
reasonable and documented out-of-pocket fees and disbursements of
counsel), reasonably incurred in investigating, preparing or
defending against any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or
omission, to the extent that any such expense is not paid under (i)
or (ii) above,
provided, however, that this indemnity agreement shall not
apply to any loss, liability, claim, damage or expense to the
extent arising out of any untrue statement or omission or alleged
untrue statement or omission made solely in reliance upon and in
conformity with written information furnished to the Company by the
Agent expressly for use in the Registration Statement (or any
amendment thereto), or in any related Issuer Free Writing
Prospectus or the Prospectus (or any amendment or supplement
thereto).
(b) Indemnification
by the Agent. The Agent agrees to indemnify and hold
harmless the Company and its directors and officers, and each
person, if any, who (i) controls the Company within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act
or (ii) is controlled by or is under common control with the
Company against any and all loss, liability, claim, damage and
expense described in the indemnity contained in Section 11(a), as incurred, but
only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, made in the Registration Statement
(or any amendments thereto) or in any related Issuer Free Writing
Prospectus or the Prospectus (or any amendment or supplement
thereto) in reliance upon and in conformity with information
relating to the Agent and furnished to the Company in writing by
the Agent expressly for use therein.
(c) Procedure.
Any party that proposes to assert the right to be indemnified under
this Section 11
will, promptly after receipt of notice of commencement of any
action against such party in respect of which a claim is to be made
against an indemnifying party or parties under this Section 11, notify each such
indemnifying party of the commencement of such action, enclosing a
copy of all papers served, but the omission to so notify such
indemnifying party will not relieve the indemnifying party from (i)
any liability that it might have to any indemnified party otherwise
than under this Section
11 and (ii) any liability that it may have to any
indemnified party under the foregoing provisions of this
Section 11 unless,
and only to the extent that, such omission results in the
forfeiture of substantive rights or defenses by the indemnifying
party. If any such action is brought against any indemnified party
and it notifies the indemnifying party of its commencement, the
indemnifying party will be entitled to participate in and, to the
extent that it elects by delivering written notice to the
indemnified party promptly after receiving notice of the
commencement of the action from the indemnified party, jointly with
any other indemnifying party similarly notified, to assume the
defense of the action, with counsel reasonably satisfactory to the
indemnified party, and after notice from the indemnifying party to
the indemnified party of its election to assume the defense, the
indemnifying party will not be liable to the indemnified party for
any legal or other expenses except as provided below and except for
the reasonable costs of investigation subsequently incurred by the
indemnified party in connection with the defense. The indemnified
party will have the right to employ its own counsel in any such
action, but the fees, expenses and other charges of such counsel
will be at the expense of such indemnified party unless (1) the
employment of counsel by the indemnified party has been authorized
in writing by the indemnifying party, (2) the indemnified party has
reasonably concluded (based on advice of counsel) that there may be
legal defenses available to it or other indemnified parties that
are different from or in addition to those available to the
indemnifying party, (3) a conflict or potential conflict of
interest exists (based on advice of counsel to the indemnified
party) between the indemnified party and the indemnifying party (in
which case the indemnifying party will not have the right to direct
the defense of such action on behalf of the indemnified party) or
(4) the indemnifying party has not in fact employed counsel to
assume the defense of such action within a reasonable time after
receiving notice of the commencement of the action, in each of
which cases the reasonable and documented out-of-pocket fees,
disbursements and other charges of counsel will be at the expense
of the indemnifying party or parties. It is understood that the
indemnifying party or parties shall not, in connection with any
proceeding or related proceedings in the same jurisdiction, be
liable for the reasonable and documented out-of-pocket fees,
disbursements and other charges of more than one separate firm
admitted to practice in such jurisdiction at any one time for all
such indemnified party or parties. All such reasonable and
documented out-of-pocket fees, disbursements and other charges will
be reimbursed by the indemnifying party promptly after the
indemnifying party receives a written invoice relating to fees,
disbursements and other charges in reasonable detail. An
indemnifying party will not, in any event, be liable for any
settlement of any action or claim effected without its written
consent. No indemnifying party shall, without the prior written
consent of each indemnified party, settle or compromise or consent
to the entry of any judgment in any pending or threatened claim,
action or proceeding relating to the matters contemplated by this
Section 11 (whether
or not any indemnified party is a party thereto), unless such
settlement, compromise or consent (1) includes an unconditional
release of each indemnified party from all liability arising out of
such litigation, investigation, proceeding or claim and (2) does
not include a statement as to or an admission of fault, culpability
or a failure to act by or on behalf of any indemnified
party.
(d) Contribution.
In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in the
foregoing paragraphs of this Section 11 is applicable in
accordance with its terms but for any reason is held to be
unavailable from the Company or the Agent, the Company and the
Agent will contribute to the total losses, claims, liabilities,
expenses and damages (including any investigative, legal and other
expenses reasonably incurred in connection with, and any amount
paid in settlement of, any action, suit or proceeding or any claim
asserted, but after deducting any contribution received by the
Company from persons other than the Agent, such as persons who
control the Company within the meaning of the Securities Act or the
Exchange Act, officers of the Company who signed the Registration
Statement and directors of the Company, who also may be liable for
contribution) to which the Company and the Agent may be subject in
such proportion as shall be appropriate to reflect the relative
benefits received by the Company on the one hand and the Agent on
the other hand. The relative benefits received by the Company on
the one hand and the Agent on the other hand shall be deemed to be
in the same proportion as the total Net Proceeds from the sale of
the Placement Shares (before deducting expenses) received by the
Company bear to the total compensation received by the Agent
(before deducting expenses) from the sale of Placement Shares on
behalf of the Company. If, but only if, the allocation provided by
the foregoing sentence is not permitted by applicable law, the
allocation of contribution shall be made in such proportion as is
appropriate to reflect not only the relative benefits referred to
in the foregoing sentence but also the relative fault of the
Company, on the one hand, and the Agent, on the other hand, with
respect to the statements or omission that resulted in such loss,
claim, liability, expense or damage, or action in respect thereof,
as well as any other relevant equitable considerations with respect
to such offering. Such relative fault shall be determined by
reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or omission or alleged omission
to state a material fact relates to information supplied by the
Company or the Agent, the intent of the parties and their relative
knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Company and the Agent agree
that it would not be just and equitable if contributions pursuant
to this Section
11(d) were to be determined by pro rata allocation or by any
other method of allocation that does not take into account the
equitable considerations referred to herein. The amount paid or
payable by an indemnified party as a result of the loss, claim,
liability, expense, or damage, or action in respect thereof,
referred to above in this Section 11(d) shall be deemed
to include, for the purpose of this Section 11(d), any legal or
other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim
to the extent consistent with Section 11(c) hereof.
Notwithstanding the foregoing provisions of this Section 11(d), the Agent shall
not be required to contribute any amount in excess of the
commissions received by it under this Agreement and no person found
guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) will be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 11(d), any person who
controls a party to this Agreement within the meaning of the
Securities Act or the Exchange Act, and any officers, directors,
partners, employees or agents of the Agent, will have the same
rights to contribution as that party, and each officer who signed
the Registration Statement and director of the Company will have
the same rights to contribution as the Company, subject in each
case to the provisions hereof. Any party entitled to contribution,
promptly after receipt of notice of commencement of any action
against such party in respect of which a claim for contribution may
be made under this Section
11(d), will notify any such party or parties from whom
contribution may be sought, but the omission to so notify will not
relieve that party or parties from whom contribution may be sought
from any other obligation it or they may have under this
Section 11(d)
except to the extent that the failure to so notify such other party
materially prejudiced the substantive rights or defenses of the
party from whom contribution is sought. Except for a settlement
entered into pursuant to the last sentence of Section 11(c) hereof, no party
will be liable for contribution with respect to any action or claim
settled without its written consent if such consent is required
pursuant to Section
11(c) hereof.
12. Representations and Agreements to
Survive Delivery. The indemnity and contribution agreements
contained in Section 11 of this Agreement and all representations
and warranties of the Company herein or in certificates delivered
pursuant hereto shall survive, as of their respective dates,
regardless of (i) any investigation made by or on behalf of the
Agent, any controlling persons, or the Company (or any of their
respective officers, directors or controlling persons), (ii)
delivery and acceptance of the Placement Shares and payment
therefor or (iii) any termination of this Agreement.
13. Termination.
a. The Agent may
terminate this Agreement, by notice to the Company, as hereinafter
specified at any time (1) if there has been, since the time of
execution of this Agreement or since the date as of which
information is given in the Prospectus, any Material Adverse
Effect, or any development that would have a Material Adverse
Effect that, in the sole judgment of the Agent, is material and
adverse and makes it impractical or inadvisable to market the
Placement Shares or to enforce contracts for the sale of the
Placement Shares, (2) if there has occurred any material adverse
change in the financial markets in the United States or the
international financial markets, any outbreak of hostilities or
escalation thereof or other calamity or crisis or any change or
development involving a prospective change in national or
international political, financial or economic conditions, in each
case the effect of which is such as to make it, in the judgment of
the Agent, impracticable or inadvisable to market the Placement
Shares or to enforce contracts for the sale of the Placement
Shares, (3) if trading in the Common Stock has been suspended or
limited by the Commission or the Exchange, or if trading generally
on the Exchange has been suspended or limited, or minimum prices
for trading have been fixed on the Exchange, (4) if any suspension
of trading of any securities of the Company on any exchange or in
the over-the-counter market shall have occurred and be continuing,
(5) if a major disruption of securities settlements or clearance
services in the United States shall have occurred and be
continuing, or (6) if a banking moratorium has been declared
by either U.S. Federal or New York authorities. Any such
termination shall be without liability of any party to any other
party except that the provisions of Section 9 (Payment of
Expenses), Section
11 (Indemnification and Contribution), Section 12 (Representations and
Agreements to Survive Delivery), Section 18 (Governing Law and
Time; Waiver of Jury Trial) and Section 19 (Consent to
Jurisdiction) hereof shall remain in full force and effect
notwithstanding such termination. If the Agent elects to terminate
this Agreement as provided in this Section 13(a), the Agent shall
provide the required notice as specified in Section 14
(Notices).
b. The Company shall
have the right, by giving five (5) days’ notice as
hereinafter specified to terminate this Agreement in its sole
discretion at any time after the date of this Agreement. Any such
termination shall be without liability of any party to any other
party except that the provisions of Section 9 (Payment of
Expenses), Section
11 (Indemnification and Contribution), Section 12 (Representations and
Agreements to Survive Delivery), Section 18 (Governing Law and
Time; Waiver of Jury Trial) and Section 19 (Consent to
Jurisdiction) hereof shall remain in full force and effect
notwithstanding such termination.
c. The Agent shall
have the right, by giving five (5) days’ notice as
hereinafter specified to terminate this Agreement in its sole
discretion at any time after the date of this Agreement. Any such
termination shall be without liability of any party to any other
party except that the provisions of Section 9 (Payment of
Expenses), Section 11
(Indemnification and Contribution), Section 12 (Representations and
Agreements to Survive Delivery), Section 18 (Governing Law and
Time; Waiver of Jury Trial) and Section 19 (Consent to
Jurisdiction) hereof shall remain in full force and effect
notwithstanding such termination.
d. Unless earlier
terminated pursuant to this Section 13, this Agreement
shall automatically terminate upon the issuance and sale of all of
the Placement Shares through the Agent on the terms and subject to
the conditions set forth herein except that the provisions of
Section 9 (Payment
of Expenses), Section
11 (Indemnification and Contribution), Section 12 (Representations and
Agreements to Survive Delivery), Section 18 (Governing Law and
Time; Waiver of Jury Trial) and Section 19 (Consent to
Jurisdiction) hereof shall remain in full force and effect
notwithstanding such termination.
e. This Agreement
shall remain in full force and effect unless terminated pursuant to
Sections 13(a),
(b), (c), or (d) above or otherwise by
mutual agreement of the parties; provided, however, that any such
termination by mutual agreement shall in all cases be deemed to
provide that Section
9 (Payment of Expenses), Section 11 (Indemnification and
Contribution), Section
12 (Representations and Agreements to Survive Delivery),
Section 18
(Governing Law and Time; Waiver of Jury Trial) and Section 19 (Consent to
Jurisdiction) shall remain in full force and effect. Upon
termination of this Agreement, the Company shall not have any
liability to the Agent for any discount, commission or other
compensation with respect to any Placement Shares not otherwise
sold by the Agent under this Agreement.
f. Any termination of
this Agreement shall be effective on the date specified in such
notice of termination; provided,
however, that such termination shall not be effective until
the close of business on the date of receipt of such notice by the
Agent or the Company, as the case may be. If such termination shall
occur prior to the Settlement Date for any sale of Placement
Shares, such Placement Shares shall settle in accordance with the
provisions of this Agreement.
14. Notices. All notices or other
communications required or permitted to be given by any party to
any other party pursuant to the terms of this Agreement shall be in
writing, unless otherwise specified, and if sent to the Agent,
shall be delivered to:
B.
Riley Securities, Inc.
299
Park Avenue, 7th Floor
New
York, NY 10171
Attention:
General Counsel
Telephone:
(212) 457-9947
Email:
atmdesk@brileyfbr.com
with a
copy to:
Duane
Morris LLP
1540
Broadway
New
York, NY 10036
Attention:
Dean Colucci
Telephone:
(973) 424-2020
Email:
dmcolucci@duanemorris.com
and if
to the Company, shall be delivered to:
ENGlobal
Corporation
654
North Sam Houston Parkway East, Suite 400
Houston, Texas
77060
Attention:
Mark Hess
Telephone:
281-878-4384
Email:
mark.hess@englobal.com
with a
copy to:
Porter
Hedges LLP
1000
Main St, 36th Floor
Houston, TX
77002
Attention:
E. James Cowen, Adam K. Nalley
Telephone:
(713) 226-6649, (713) 226-6642
Email:
JCowen@porterhedges.com, ANalley@porterhedges.com
Each
party to this Agreement may change such address for notices by
sending to the parties to this Agreement written notice of a new
address for such purpose. Each such notice or other communication
shall be deemed given (i) when delivered personally, by email, or
by verifiable facsimile transmission on or before 4:30 p.m., New
York City time, on a Business Day or, if such day is not a Business
Day, on the next succeeding Business Day, (ii) on the next Business
Day after timely delivery to a nationally-recognized overnight
courier and (iii) on the Business Day actually received if
deposited in the U.S. mail (certified or registered mail, return
receipt requested, postage prepaid). For purposes of this
Agreement, “Business
Day” shall mean any day on which the Exchange and
commercial banks in the City of New York are open for
business.
15. Successors and Assigns. This
Agreement shall inure to the benefit of and be binding upon the
Company and the Agent and their respective successors and the
affiliates, controlling persons, officers and directors referred to
in Section 11
hereof. References to any of the parties contained in this
Agreement shall be deemed to include the successors and permitted
assigns of such party. Nothing in this Agreement, express or
implied, is intended to confer upon any party other than the
parties hereto or their respective successors and permitted assigns
any rights, remedies, obligations or liabilities under or by reason
of this Agreement, except as expressly provided in this Agreement.
Neither the Company nor the Agent may assign its rights or
obligations under this Agreement without the prior written consent
of the other party.
16. Adjustments for Stock Splits.
The parties acknowledge and agree that all share-related numbers
contained in this Agreement shall be adjusted to take into account
any share consolidation, stock split, stock dividend, corporate
domestication or similar event effected with respect to the
Placement Shares.
17. Entire Agreement; Amendment;
Severability. This Agreement (including all schedules and
exhibits attached hereto and Placement Notices issued pursuant
hereto) constitutes the entire agreement and supersedes all other
prior and contemporaneous agreements and undertakings, both written
and oral, among the parties hereto with regard to the subject
matter hereof. Neither this Agreement nor any term hereof may be
amended except pursuant to a written instrument executed by the
Company and the Agent. In the event that any one or more of the
provisions contained herein, or the application thereof in any
circumstance, is held invalid, illegal or unenforceable as written
by a court of competent jurisdiction, then such provision shall be
given full force and effect to the fullest possible extent that it
is valid, legal and enforceable, and the remainder of the terms and
provisions herein shall be construed as if such invalid, illegal or
unenforceable term or provision was not contained herein, but only
to the extent that giving effect to such provision and the
remainder of the terms and provisions hereof shall be in accordance
with the intent of the parties as reflected in this
Agreement.
18. GOVERNING LAW AND TIME; WAIVER OF JURY
TRIAL. THIS AGREEMENT, AND ALL CLAIMS OR CAUSES OF ACTION
(WHETHER IN CONTRACT OR TORT) THAT MAY BE BASED UPON, ARISE OUT OF
OR RELATE TO THIS AGREEMENT OR THE NEGOTIATION, EXECUTION OR
PERFORMANCE OF THIS AGREEMENT (INCLUDING ANY CLAIM OR CAUSE OF
ACTION BASED UPON, ARISING OUT OF OR RELATED TO ANY REPRESENTATION
OR WARRANTY MADE IN OR IN CONNECTION WITH THIS AGREEMENT), WILL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF NEW YORK WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS.
SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME. THE COMPANY AND
THE AGENT EACH HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN
ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT
OR THE TRANSACTIONS CONTEMPLATED HEREBY.
19. CONSENT TO JURISDICTION. EACH
PARTY HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION
OF THE STATE AND FEDERAL COURTS SITTING IN THE CITY OF NEW YORK,
BOROUGH OF MANHATTAN, FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER
OR IN CONNECTION WITH ANY TRANSACTION CONTEMPLATED HEREBY, AND
HEREBY IRREVOCABLY WAIVES, AND AGREES NOT TO ASSERT IN ANY SUIT,
ACTION OR PROCEEDING, ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT
TO THE JURISDICTION OF ANY SUCH COURT, THAT SUCH SUIT, ACTION OR
PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM OR THAT THE VENUE OF
SUCH SUIT, ACTION OR PROCEEDING IS IMPROPER. EACH PARTY HEREBY
IRREVOCABLY WAIVES PERSONAL SERVICE OF PROCESS AND CONSENTS TO
PROCESS BEING SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING BY
MAILING A COPY THEREOF (CERTIFIED OR REGISTERED MAIL, RETURN
RECEIPT REQUESTED) TO SUCH PARTY AT THE ADDRESS IN EFFECT FOR
NOTICES TO IT UNDER THIS AGREEMENT AND AGREES THAT SUCH SERVICE
SHALL CONSTITUTE GOOD AND SUFFICIENT SERVICE OF PROCESS AND NOTICE
THEREOF. NOTHING CONTAINED HEREIN SHALL BE DEEMED TO LIMIT IN ANY
WAY ANY RIGHT TO SERVE PROCESS IN ANY MANNER PERMITTED BY
LAW.
20. Use of Information. The Agent
may not use any information gained in connection with this
Agreement and the transactions contemplated by this Agreement,
including due diligence, to advise any party with respect to
transactions not expressly approved by the Company.
21. Counterparts. This Agreement
may be executed in two or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one
and the same instrument. Delivery of an executed Agreement by one
party to the other may be made by facsimile transmission or email
of a .pdf attachment.
22. Effect of Headings. The
section, Schedule and Exhibit headings herein are for convenience
only and shall not affect the construction hereof.
23. Permitted Free Writing
Prospectuses. The Company represents, warrants and agrees
that, unless it obtains the prior consent of the Agent, which
consent will not be unreasonably withheld, conditioned or delayed,
and the Agent represents, warrants and agrees that, unless it
obtains the prior consent of the Company, it has not made and will
not make any offer relating to the Placement Shares that would
constitute an Issuer Free Writing Prospectus, or that would
otherwise constitute a “free writing prospectus,” as
defined in Rule 405, required to be filed with the Commission. Any
such free writing prospectus consented to by the Agent or by the
Company, as the case may be, is hereinafter referred to as a
“Permitted Free Writing Prospectus.” The Company
represents and warrants that it has treated and agrees that it will
treat each Permitted Free Writing Prospectus as an “issuer
free writing prospectus,” as defined in Rule 433, and has
complied and will comply with the requirements of Rule 433
applicable to any Permitted Free Writing Prospectus, including
timely filing with the Commission where required, legending and
record keeping. For the purposes of clarity, the parties hereto
agree that all free writing prospectuses, if any, listed in
Exhibit 23 hereto
are Permitted Free Writing Prospectuses.
24. Absence of Fiduciary
Relationship. The Company acknowledges and agrees
that:
a. The Agent is acting
solely as agent in connection with the public offering of the
Placement Shares and in connection with each transaction
contemplated by this Agreement and the process leading to such
transactions, and no fiduciary or advisory relationship between the
Company or any of its respective affiliates, stockholders (or other
equity holders), creditors or employees or any other party, on the
one hand, and the Agent, on the other hand, has been or will be
created in respect of any of the transactions contemplated by this
Agreement, irrespective of whether or not the Agent has advised or
is advising the Company on other matters, and the Agent has no
obligation to the Company with respect to the transactions
contemplated by this Agreement except the obligations expressly set
forth in this Agreement;
b. it is capable of
evaluating and understanding, and understands and accepts, the
terms, risks and conditions of the transactions contemplated by
this Agreement;
c. the Agent has not
provided any legal, accounting, regulatory or tax advice with
respect to the transactions contemplated by this Agreement and it
has consulted its own legal, accounting, regulatory and tax
advisors to the extent it has deemed appropriate;
d. it is aware that
the Agent and its affiliates are engaged in a broad range of
transactions which may involve interests that differ from those of
the Company and the Agent has no obligation to disclose such
interests and transactions to the Company by virtue of any
fiduciary, advisory or agency relationship or otherwise;
and
e. it waives, to the
fullest extent permitted by law, any claims it may have against the
Agent for breach of fiduciary duty or alleged breach of fiduciary
duty in connection with the sale of Placement Shares under this
Agreement and agrees that the Agent shall not have any liability
(whether direct or indirect, in contract, tort or otherwise) to it
in respect of such a fiduciary duty claim or to any person
asserting a fiduciary duty claim on its behalf or in right of it or
the Company, employees or creditors of Company, other than in
respect of the Agent’s obligations under this Agreement and
to keep information provided by the Company to the Agent and its
counsel confidential to the extent not otherwise
publicly-available.
25. Definitions. As used in this
Agreement, the following terms have the respective meanings set
forth below:
“Applicable Time” means
(i) each Representation Date and (ii) the time of each sale of any
Placement Shares pursuant to this Agreement.
“Issuer Free Writing
Prospectus” means any “issuer free writing
prospectus,” as defined in Rule 433, relating to the
Placement Shares that (1) is required to be filed with the
Commission by the Company, (2) is a “road show” that is
a “written communication” within the meaning of Rule
433(d)(8)(i) whether or not required to be filed with the
Commission, or (3) is exempt from filing pursuant to Rule
433(d)(5)(i) because it contains a description of the Placement
Shares or of the offering that does not reflect the final terms, in
each case in the form filed or required to be filed with the
Commission or, if not required to be filed, in the form retained in
the Company’s records pursuant to Rule 433(g) under the
Securities Act.
“Rule
172,” “Rule 405,”
“Rule
415,” “Rule 424,”
“Rule
424(b),” “Rule 430B,” and
“Rule
433” refer to such rules under the Securities
Act.
All
references in this Agreement to financial statements and schedules
and other information that is “contained,”
“included” or “stated” in the Registration
Statement or the Prospectus (and all other references of like
import) shall be deemed to mean and include all such financial
statements and schedules and other information that is incorporated
by reference in the Registration Statement or the Prospectus, as
the case may be.
All
references in this Agreement to the Registration Statement, the
Prospectus or any amendment or supplement to any of the foregoing
shall be deemed to include the copy filed with the Commission
pursuant to EDGAR; all references in this Agreement to any Issuer
Free Writing Prospectus (other than any Issuer Free Writing
Prospectuses that, pursuant to Rule 433, are not required to be
filed with the Commission) shall be deemed to include the copy
thereof filed with the Commission pursuant to EDGAR; and all
references in this Agreement to “supplements” to the
Prospectus shall include, without limitation, any supplements,
“wrappers” or similar materials prepared in connection
with any offering, sale or private placement of any Placement
Shares by the Agent outside of the United States.
[Remainder
of the page intentionally left blank]
If the
foregoing correctly sets forth the understanding between the
Company and the Agent, please so indicate in the space provided
below for that purpose, whereupon this letter shall constitute a
binding agreement between the Company and the Agent.
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Very truly
yours,
ENGLOBAL
CORPORATION
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By:
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/s/ Mark A.
Hess
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Name:
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Mark A.
Hess
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Title:
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Chief Financial
Officer,
Treasurer and
Corporate
Secretary
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ACCEPTED
as of the date first-above
written:
B.
RILEY SECURITIES, INC.
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By:
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/s/ Patrice
McNicoll
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Name:
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Patrice
McNicoll
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Title:
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Co-Head of
Investment Banking
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SCHEDULE 1
________________________
FORM
OF PLACEMENT NOTICE
________________________
From:
ENGlobal
Corporation
To:
B. Riley
Securities, Inc.
Subject: At Market
Issuance--Placement Notice
Ladies
and Gentlemen:
Pursuant to the
terms and subject to the conditions contained in the At Market
Issuance Sales Agreement between ENGlobal Corporation, a Nevada
corporation (the “Company”), and B. Riley
Securities, Inc. (the “Agent”), dated January
29, 2021, the Company hereby requests that the Agent sell up to
[____] of the Company’s Common Stock, par value $0.001 per
share, at a minimum market price of $per share, during the time
period beginning [month, day, time] and ending [month, day,
time].
SCHEDULE 2
________________________
Compensation
________________________
The
Company shall pay to the Agent in cash, upon each sale of Placement
Shares pursuant to this Agreement, an amount equal to 3.0% of the
gross proceeds from each sale of Placement Shares.
SCHEDULE 3
________________________
Notice Parties
________________________
The Company
Bill
Coskey
bill.coskey@englobal.com
Mark
Hess
mark.hess@englobal.com
B. Riley Securities
Seth
Appel
sappel@brileyfbr.com
Ramzi
Nassar
rnassar@brileyfin.com
Patrice
McNicoll
pmcnicoll@brileyfbr.com
Keith
Pompliano
kpompliano@brileyfbr.com
with a
copy to atmdesk@brileyfbr.com
SCHEDULE 6(g)
________________________
Subsidiaries
________________________
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Company
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Jurisdiction
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ENGlobal
U.S., Inc. Texas
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Texas
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ENGlobal
Government Services, Inc. Texas
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Texas
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EXHIBIT 7(1)
Form of Representation Date Certificate
___________, 20___
This
Representation Date Certificate (this “Certificate”) is executed
and delivered in connection with Section 7(1) of the At Market
Issuance Sales Agreement (the “Agreement”), dated
January 29, 2021, and entered into between ENGlobal Corporation
(the “Company”) and B. Riley
Securities, Inc. All capitalized terms used but not defined herein
shall have the meanings given to such terms in the
Agreement.
The
Company hereby certifies as follows:
1. As of the date of
this Certificate (i) the Registration Statement does not contain
any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary in order to make
the statements therein not misleading and (ii) neither the
Registration Statement nor the Prospectus contain any untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they
were made, not misleading and (iii) no event has occurred as a
result of which it is necessary to amend or supplement the
Prospectus in order to make the statements therein not untrue or
misleading for this paragraph 1 to be true.
2. Each of the
representations and warranties of the Company contained in the
Agreement were, when originally made, and are, as of the date of
this Certificate, true and correct in all material
respects.
3. Except as waived by
the Agent in writing, each of the covenants required to be
performed by the Company in the Agreement on or prior to the date
of the Agreement, this Representation Date, and each such other
date prior to the date hereof as set forth in the Agreement, has
been duly, timely and fully performed in all material respects and
each condition required to be complied with by the Company on or
prior to the date of the Agreement, this Representation Date, and
each such other date prior to the date hereof as set forth in the
Agreement has been duly, timely and fully complied with in all
material respects.
4. Subsequent to the
date of the most recent financial statements in the Prospectus, and
except as described in the Prospectus, including Incorporated
Documents, there has been no Material Adverse Effect.
5. No stop order
suspending the effectiveness of the Registration Statement or of
any part thereof has been issued, and no proceedings for that
purpose have been instituted or are pending or threatened by any
securities or other governmental authority (including, without
limitation, the Commission).
6. No order suspending
the effectiveness of the Registration Statement or the
qualification or registration of the Placement Shares under the
securities or Blue Sky laws of any
jurisdiction
are in effect and no proceeding for such purpose is pending before,
or threatened, to the Company’s knowledge or in writing by,
any securities or other governmental authority (including, without
limitation, the Commission).
The
undersigned has executed this Representation Date Certificate as of
the date first written above.
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ENGlobal
Corporation
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By:
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Name:
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Title:
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EXHIBIT 23
Permitted Issuer Free Writing Prospectuses
None.
