ENGlobal Corporation (NASDAQ:ENG) Files An 8-K Termination of a Material Definitive Agreement
Item 1.02. Termination of a Material Definitive Agreement.
On March 31, 2017, ENGlobal Corporation, a Nevada corporation
(the Company) issued a termination notice to Regions
Bank, an Alabama bank (the Lender), to terminate all
Commitments on the Termination Date of March 31, 2017 and to
satisfy in full all Loans and other non-contingent obligations of
Borrowers (as defined below) to Lender outstanding on the
effective date of such termination, except for the Excluded
Obligations, under the Loan and Security Agreement dated as of
September 16, 2014 (as amended, the Loan Agreement ) by
and between the Company and its subsidiaries, ENGlobal U.S.,
Inc., a Texas corporation (ENGlobal US ), ENGlobal
Government Services, Inc., a Texas corporation ( ENGlobal
Government and, together with the Company and ENGlobal US,
the Borrowers), ENGlobal International, Inc., a
corporation organized under the BVI Business Companies Act of
2004 (ENGlobal International), and ENGlobal Emerging
Markets, Inc., a Texas corporation (ENGlobal Emerging
Markets and, together with ENGlobal International, the
Guarantors and, together with the Borrowers, the
Loan Parties). The Excluded Obligations are related to
cash collateral to secure outstanding letters of credit,
indemnity obligations, and obligations associated with depository
accounts and Depository Agreements. The Lender issued a Payoff
Termination Letter on the same date establishing the Termination
Date as March 31, 2017. The Company did not incur any material
early termination penalties in connection with the termination.
The Company expects to continue to utilize Regions Bank for its
deposit accounts and for its outstanding Letter of Credit in the
amount of $659,683. The Loan Agreement and the description
thereof are incorporated by reference to our Current Reports on
Form 8-K filed with the SEC on September 17, 2014, April 21, 2015
and June 17, 2016. Capitalized terms used but not otherwise
defined herein shall have the meaning given to them in the Loan
Agreement.
The Company believes its current cash on hand, internally
generated funds and other working capital is sufficient to fund
its current operations and that the elimination of the Loan
Agreement will significantly reduce costs to the Company. Not
having access to the Loan Agreement or a replacement credit
facility may limit the Companys ability to engage in certain
business activities or negatively impact is financial condition,
as further discussed in the Companys Annual Report on Form 10-K.
Forward-Looking Statements
This filing includes forward-looking statements. Words such as
may, may not, believes, do not believe, expects, do not expect,
anticipates,anticipated,do not anticipate, see, do not see,
should, possible, or other similar expressions may be used to
identify forward-looking statements. Forward-looking statements
are not statements of historical fact and reflect the Companys
current views about future events. Actual results could vary
significantly from those expressed or implied in such statements
and are subject to a number of risks and uncertainties. Although
the Company believes that the expectations reflected in the
forward-looking statements are reasonable, it can give no
assurance that such expectations will prove to be correct. The
forward-looking statements involve risks and uncertainties that
affect the Companys operations and financial performance. The
Company does not undertake any duty to update any forward-looking
statement, except as required by applicable law.
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. ENGlobal Corporation (NASDAQ:ENG) Recent Trading Information
ENGlobal Corporation (NASDAQ:ENG) closed its last trading session up +0.04 at 1.82 with 16,701 shares trading hands.