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”), 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”), 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 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 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 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 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:

ENGLOBAL CORP Exhibit
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About ENGlobal Corporation (NASDAQ:ENG)

ENGlobal Corporation is engaged in providing engineering and professional services to the energy industry. The Company operates through two segments: Engineering, Procurement and Construction Management (EPCM), and Automation. The EPCM segment provides services relating to the development, management and execution of projects requiring professional engineering and related project services to the energy industry throughout the United States. The EPCM segment includes the government services group, which provides engineering, design, installation and operation and maintenance of various government, public sector and international facilities. The Automation segment provides services related to the design, fabrication and implementation of process distributed control and analyzer systems, advanced automation, information technology and electrical projects to the upstream and downstream sectors throughout the United States, as well as a specific project in Central Asia.