Item 1.01. Entry into a Material Definitive Agreement.
On January 29, 2021, ENGlobal Corporation (the "Company") filed a shelf
registration statement on Form S-3 with the U.S. Securities and Exchange
Commission (the "SEC") (the "Registration Statement"), pursuant to which the
Company may offer and sell, at its option, securities having an aggregate
offering price of up to $100,000,000. On the same date, the Company entered into
an at market issuance sales agreement with B. Riley Securities, Inc. ("B.
Riley"), pursuant to which the Company may offer and sell shares of its common
stock, par value $0.001 per share, having an aggregate offering price of up to
$25,000,000 (the "Placement Shares"), to or through B. Riley, as sales agent
(the "Sales Agreement"), from time to time, in an "at the market offering" (as
defined in Rule 415(a)(4) under the Securities Act of 1933, as amended) of the
Placement Shares (the "ATM Offering"). The Registration Statement includes a
base prospectus (the "Base Prospectus") and a sales agreement prospectus
relating to the ATM Offering, specifically relating to the sale of the Placement
Shares under the Sales Agreement (the "ATM Prospectus," and collectively with
the Base Prospectus, the "Prospectus") both of which form part of the
Registration Statement. No Placement Shares may be sold under the Prospectus
until the Registration Statement has been declared effective by the SEC.
The Placement Shares may be sold through the ATM Prospectus by any method
permitted by law deemed to be an "at the market offering." Upon delivery of a
placement notice (a "Placement Notice") by the Company and subject to the terms
and conditions of the Sales Agreement, B. Riley is required to use its
commercially reasonable efforts consistent with its normal trading and sales
practices, applicable state and federal law, rules and regulations, and the
rules of The Nasdaq Stock Market to sell the Placement Shares from time to time
based upon the Company's instructions, including any price, time or size limits
specified by the Company in such Placement Notice. B. Riley is not under any
obligation to purchase any of the Placement Shares on a principal basis pursuant
to the Sales Agreement, except as otherwise agreed by B. Riley and the Company
in writing and expressly set forth in a Placement Notice. B. Riley's obligations
to sell the Placement Shares under the Sales Agreement are subject to
satisfaction of certain conditions, including customary closing conditions. The
Company is not obligated to make any sales of Placement Shares under the Sales
Agreement and any determination by the Company to do so will be dependent, among
other things, on market conditions and the Company's capital raising needs.
The Company will pay B. Riley commissions for its services in acting as its
sales agent in the sale of the Placement Shares pursuant to the Sales Agreement.
B. Riley is entitled to compensation at a commission rate of 3.0% of the gross
proceeds from each sale of the Placement Shares on the Company's behalf pursuant
to the Sales Agreement. The Sales Agreement contains representations, warranties
and covenants that are customary for transactions of this type. In addition, the
Company has provided B. Riley with customary indemnification and contribution
rights. The Company has also agreed to reimburse B. Riley for certain specified
expenses, including the expenses of counsel to B. Riley. The offering of the
Placement Shares pursuant to the Sales Agreement will terminate upon the
termination of the Sales Agreement by B. Riley or the Company, as permitted
therein.
The foregoing description of the Sales Agreement is qualified in its entirety by
reference to the full text of the Sales Agreement, which is attached as an
exhibit to the Registration Statement as Exhibit 1.2 and is incorporated herein
in its entirety by reference.
This Current Report on Form 8-K shall not constitute an offer to sell or the
solicitation of an offer to buy any Placement Shares under the Sales Agreement,
nor shall there be any sale of such Placement Shares in any state in which such
offer, solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such state.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
The following exhibits are included with this Current Report on Form 8-K:
Exhibit No. Description
1.1 At Market Issuance Sales Agreement, dated January 29, 2021, by and
between ENGlobal Corporation and B. Riley Securities, Inc. (incorporated
by reference to Exhibit 1.2 to the Company's Registration Statement on
Form S-3 filed on January 29, 2021).
3.1 Restated Articles of Incorporation of ENGlobal Corporation dated January
29, 2021.
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