eng_8k
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of
Report (Date of earliest event reported) April 13, 2020
ENGlobal Corporation
(Exact
name of registrant as specified in its charter)
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Nevada
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001-14217
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88-0322261
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(State
or other jurisdiction of incorporation)
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(Commission
File Number)
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(IRS
Employer Identification No.)
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654 N. Sam Houston Parkway E., Suite 400,
Houston, Texas
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77060-5914
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(Address
of principal executive offices)
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(Zip
Code)
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Registrant’s
telephone number, including area code: 281-878-1000
(Former
name or former address, if changed since last report)
Check
the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant
under any of the following provisions:
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☐
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Written
communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
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☐
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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☐
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR 240.14d-2(b))
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☐
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR 240.13e-4(c))
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Securities
registered pursuant to Section 12(b) of the Act:
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Title
of each class
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Trading
Symbol(s)
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Name of
each exchange on which registered
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Common
Stock, $0.001 par value
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ENG
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The
Nasdaq Stock Market LLC
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Indicate by check
mark whether the registrant is an emerging growth company as
defined in Rule 405 of the Securities Act of 1933 (17 CFR
§230.405) or Rule 12b-2 of the Securities Exchange Act of 1934
(17 CFR §240.12b-2).
Emerging growth
company ☐
If an
emerging growth company, indicate by check mark if the registrant
has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided
pursuant to Section 13(a) of the Exchange Act. ☐
Item 1.01. Entry into a Material Definitive Agreement
On
April 13, 2020, ENGlobal Corporation (“ENGlobal”) was
granted an unsecured loan (the “Loan”) from Origin Bank
in the aggregate principal amount of $4,915,800 pursuant to the
Paycheck Protection Program (the “PPP”) under Division A, Title I of Coronavirus Aid,
Relief, and Economic Security Act (“CARES Act”), which was enacted on
March 27, 2020. The Loan is evidenced by a promissory note, dated
as of April 13, 2020 (the “Note”), by ENGlobal in favor
of Origin Bank, as lender.
Interest Rate
The
interest rate on the Loan is 1% per year.
Maturity
The
term of the Loan is two years. ENGlobal will be required to pay any
unforgiven principle and interest in eighteen equal monthly
installments, with the first payment being due on November 13, 2020
and continuing on the same day of each subsequent month until the
date of maturity.
Potential Loan Forgiveness
Under
the PPP, ENGlobal may apply for forgiveness of the amount due on
the Loan in an amount equal to the sum of the following costs
incurred during the 8-week period beginning on the date of the
first disbursement of the Loan: (a) payroll costs, (b) any payment
of interest on a covered obligation (which shall not include any
prepayment of or payment of principal on a covered mortgage
obligation), (c) any payment on a covered rent obligation, and (d)
any covered utility payment, calculated in accordance with the
terms of the CARES Act.
Events of Default
The
Loan provides for customary events of default including, among
other things, cross-defaults on any other loan with the lender. The
Loan may be accelerated upon the occurrence of an event of
default.
The
foregoing description of the Loan is included to provide you with
information regarding its terms. It does not purport to be a
complete description and is qualified in its entirety by reference
to the full text of the Note, which is filed as Exhibit 10.1 hereto
and is incorporated herein by reference.
Item 2.03 Creation of a Direct Financial Obligation or an
Obligation under an Off-Balance Sheet Arrangement of a
Registrant
The
information set forth under Item 1.01 of this Current Report on
Form 8-K is incorporated by reference into this Item
2.03.
Item 9.01. Financial Statements and Exhibits.
(d)
Exhibits.
The
following exhibit is included with this Current Report on Form
8-K:
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Exhibit No.
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Description
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U.S.
Small Business Administration Note dated as of April 13, 2020, by
ENGlobal Corporation in favor of Origin Bank, as
lender.
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SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
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ENGlobal Corporation
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(Registrant)
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April 16, 2020
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/s/ MARK A. HESS
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(Date)
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Mark A.
Hess,
Chief Financial Officer, Treasurer
and Corporate Secretary
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Exhibit Index
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Exhibit No.
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Description
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U.S.
Small Business Administration Note dated as of April 13, 2020, by
ENGlobal Corporation in favor of Origin Bank, as
lender.
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