As filed with the Securities and Exchange Commission on August 22, 2006
Registration No. 333-______
================================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
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ENGLOBAL CORPORATION
(Exact name of registrant as specified in its charter)
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State of Nevada 88-0322261
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(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
654 N. Sam Houston Parkway E., 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)
William A. Coskey, P.E.
Chairman
ENGlobal Corporation
654 N. Sam Houston Parkway E., Suite 400
Houston, Texas 77060-5914
(281) 878-1000
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
Copy to:
Kathryn K. Lindauer, Esq.
Jenkens & Gilchrist, P.C.
401 Congress Avenue, Suite 2500
Austin, Texas 78701
Telephone: (512) 499-3800
Facsimile: (512) 499-3810
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Approximate date of commencement of proposed sale to the public: From time
to time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to a dividend or interest reinvestment plans, 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, 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. [ ]
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CALCULATION OF REGISTRATION FEE
================================= ============ ================ ================ =========
Title of Each Class of Securities Amount to be Proposed Maximum Proposed Maximum Amount of
to be Registered Registered Offering Price Per Aggregate Registration
Share(1) Offering Price Fee
--------------------------------- ------------ ---------------- ---------------- ---------
Common Stock, $.001 par value
per share 175,000 $7.22 $1,263,500 $136.00
================================= ============ ================ ================ =========
(1) Estimated in accordance with Rule 457(c) of the Securities Act solely for
the purpose of computing the amount of the registration fee based on the
average of the high and low prices of the registrant's common stock as
reported on the American Stock Exchange on August 21, 2006.
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 Securities and Exchange Commission, acting
pursuant to Section 8(a), may determine.
Subject to completion, dated August 22, 2006
PROSPECTUS
175,000 Shares
ENGlobal Corporation
Common Stock
---------------------------
We are registering our common stock for resale by the selling stockholder
identified in this prospectus. We are not selling any shares of our common stock
under this prospectus and will not receive any of the proceeds from the sale of
shares by the selling stockholder. Specifically, this prospectus relates to the
resale of:
o 175,000 shares of our common stock that were issued to the selling
stockholder in connection with the acquisition of WRC Corporation on May 25,
2006.
For a description of the plan of distribution of the resale shares, see
page 11 of this prospectus.
Our common stock is currently traded on the American Stock Exchange under
the symbol "ENG." On August 21, 2006, the last reported sales price for our
common stock was $7.23 per share.
INVESTING IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. PLEASE
CAREFULLY CONSIDER THE "RISK FACTORS" BEGINNING ON PAGE 3 OF THIS PROSPECTUS.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities, or passed upon the
adequacy or accuracy of this prospectus. Any representation to the contrary is a
criminal offense.
------------------------
The date of this prospectus is _______, 2006.
The information in this prospectus is not complete and may be changed. The
selling stockholder 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 or jurisdiction where the offer or
sale is not permitted.
TABLE OF CONTENTS
Page
----
SUMMARY........................................................................1
RISK FACTORS...................................................................3
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS..............................8
SELLING STOCKHOLDER............................................................9
REGISTRATION RIGHTS OF SELLING STOCKHOLDER....................................10
PLAN OF DISTRIBUTION..........................................................11
USE OF PROCEEDS...............................................................12
LEGAL MATTERS.................................................................12
EXPERTS.......................................................................12
WHERE YOU CAN FIND MORE INFORMATION...........................................12
You should rely only on the information contained or incorporated or deemed
to be incorporated by reference in this prospectus. We have not authorized
anyone to provide you with different information. The offered shares are not
being offered in any jurisdiction where the offer or sale is not permitted. The
information contained in this prospectus speaks only as of the date of this
prospectus and the information in the documents incorporated or deemed to be
incorporated by reference in this prospectus speaks only as of the respective
dates those documents were filed with the Securities and Exchange Commission
(the "Commission").
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 or 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, "ENGlobal," "the Company," "we," "our," "ours,"
and "us" refer to ENGlobal Corporation and its consolidated subsidiaries, except
where the context otherwise requires or as otherwise clearly indicated.
SUMMARY
The following summary is qualified in its entirety by the more detailed
information and financial statements and notes thereto incorporated by reference
in this prospectus. Because it is a summary, it does not contain all the
information that you should consider before investing. You should read this
entire prospectus carefully, including the section entitled "Risk Factors" and
our financial statements and the notes thereto before making an investment
decision.
ENGLOBAL
Overview
We are a leading provider of engineering services and systems principally
to the petroleum refining, petrochemical, pipeline, production and process
industries throughout the United States and internationally. The services
provided by our multi-disciplined staff span the lifecycle of a project and
include feasibility studies, design, procurement and construction management. We
also supply automation, control, and uninterruptible electrical power systems to
our clients worldwide.
Our net revenue from continuing operations has grown from $17.8 million in
2001 to $233.6 million in 2005, a compounded annual growth rate of approximately
90.3%. Since our merger with Petrocon, our net revenue from continuous
operations has grown from $89.1 million in 2002, a compounded annual growth rate
of approximately 37.9%. We have accomplished this growth by expanding our
engineering and systems services and geographic presence through internal
growth, including new initiatives and to a lesser extent, through a series of
strategic acquisitions. We now have more than 2,155 full-time equivalent
employees in offices strategically located in Houston, Beaumont, Freeport,
Midland and Dallas, Texas; Baton Rouge and Lake Charles, Louisiana; and Tulsa,
Cleveland and Blackwell, Oklahoma, Denver, Colorado and Calgary, Alberta,
Canada.
We were incorporated as Industrial Data Systems Corporation in the State of
Nevada in June 1994. In December 2001, we merged with Petrocon Engineering, Inc.
and in June 2002, we changed our name from Industrial Data Systems Corporation
to ENGlobal Corporation. Effective June 16, 2002, the trading symbol for our
common stock, traded on the American Stock Exchange, changed from "IDS" to
"ENG".
Our principal executive offices are located at 654 N. Sam Houston Parkway
E., Suite 400, Houston, Texas 77060-5914 and our telephone number is (281)
878-1000. Our website address is www.englobal.com. The information contained in
our website is not a part of this prospectus.
1
The Offering
Common stock covered hereby........... 175,000 shares of our common stock held
by the selling stockholder.
Use of proceeds....................... We will not receive any proceeds from
the sale or other disposition of the
shares of our common stock by the
selling stockholder.
Registration Rights................... Pursuant to a stock purchase agreement,
as amended we have entered into with the
selling stockholder, we have filed a
shelf registration statement, of which
this prospectus is a part, with the
Commission relating to the resale of
175,000 shares of our common stock held
by the selling stockholder. We have
agreed to use our commercially
reasonable best efforts to file the
registration statement on or before
August 23, 2006 and to cause the
registration statement to be declared
effective no later than November 30,
2006.
American Stock Exchange symbol........ ENG
2
RISK FACTORS
You should carefully consider the risks described below before making an
investment decision. The risks described below are not the only ones facing our
Company. Additional risks not currently known to us or that we currently deem
immaterial may also impair our business operations.
Our business, financial condition or results of operations could be
materially adversely affected by any of these risks. The trading price of our
common stock could decline due to any of these risks, and you may lose all or
part of your investment.
This prospectus contains forward-looking statements that involve risks and
uncertainties. Our actual results could differ materially from those anticipated
in these forward-looking statements as a result of certain factors, including
the risks faced by us described below and elsewhere in this prospectus. See
"Special Note Regarding Forward Looking Statements."
Risks Relating to Our Business
We are engaged in highly competitive businesses and must typically bid against
competitors to obtain engineering and service contracts.
We are engaged in highly competitive businesses in which customer contracts
are typically awarded through competitive bidding processes. We compete with
other general and specialty contractors, both foreign and domestic, including
large international contractors and small local contractors. Some competitors
have greater financial and other resources than we do, which, in many instances,
could give them a competitive advantage over us.
The failure to attract and retain key professional personnel could adversely
affect us.
Our success depends on attracting and retaining qualified personnel in a
competitive environment. We are dependent upon our ability to attract and retain
highly qualified managerial, technical and business development personnel.
Competition for key personnel is intense. We cannot be certain that we will
retain our key managerial, technical and business development personnel or that
we will attract or assimilate key personnel in the future. Failure to retain or
attract such personnel could materially adversely affect our businesses,
financial position, results of operations and cash flows. This is a major risk
factor that could materially impact our operating results.
Our business and operating results could be adversely affected by our inability
to accurately estimate the overall risks, revenue or costs on a contract.
We generally enter into two principal types of contracts with our clients:
time and materials contracts and fixed-price contracts. Under our fixed-price
contracts, we receive a fixed-price irrespective of the actual costs we incur
and, consequently, we are exposed to a number of risks. These risks include
underestimation of costs, problems with new technologies, unforeseen
expenditures or difficulties, delays beyond our control, and economic and other
changes that may occur during the contract period. Our ability to secure change
orders on scope changes and our ability to invoice for such changes poses an
additional risk. In fiscal 2005, approximately 12% of our net revenue was
derived from fixed-price contracts.
Under our time and materials contracts, we are paid for labor at negotiated
hourly billing rates or reimbursement at specified mark-up hourly rates and
negotiated rates for other expenses. Profitability on these contracts is driven
by billable headcount and cost control. Some time and materials contracts are
subject to contract ceiling amounts, which may be fixed or performance-based. If
our costs generate billings that exceed the contract ceiling or are not
allowable under the provisions of the contract or any applicable regulations, we
may not be able to obtain reimbursement for all of our costs.
Revenue recognition for a contract requires judgment relative to assessing
the contract's estimated risks, revenue and costs and on making judgments on
other technical issues. Due to the size and nature of many of our contracts, the
3
estimation of overall risk, revenue and cost at completion is complicated and
subject to many variables. Changes in underlying assumptions, circumstances or
estimates may also adversely affect future period financial performance. This is
a major risk factor that could materially impact our operating results.
Economic downturns could have a negative impact on our businesses.
Demand for the services offered by us has been and is expected to continue
to be, subject to significant fluctuations due to a variety of factors beyond
our control, including demand for engineering services in the petroleum
refining, petroleum chemical and pipeline industries and in other industries
that we provide services to. During economic downturns in these industries, our
customer's ability to engage us may decline significantly. We cannot be certain
that economic or political conditions will be generally favorable or that there
will not be significant fluctuations adversely affecting our industry as a whole
or key markets targeted by us.
Our dependence on one or a few customers could adversely affect us.
One or a few clients have in the past and may in the future contribute a
significant portion of our consolidated revenues in any one year or over a
period of several consecutive years. In 2005, approximately 44% of our revenues
were from one client, approximately 12% of our revenues were from another client
and another 12% were from a third client. As our backlog frequently reflects
multiple projects for individual clients, one major customer may comprise a
significant percentage of our backlog at any point in time. Because these
significant customers generally contract with us for specific projects, we may
lose these customers from year to year as their projects with us are completed.
If we do not replace them with other customers or other projects, our business
would be materially adversely affected. Additionally, we have long-standing
relationships with many of our significant customers. Our contracts with these
customers, however, are on a project-by-project basis and the customers may
unilaterally reduce or discontinue their purchases at any time. The loss of
business from any one of such customers could have a material adverse effect on
our business or results of operations.
Additional acquisitions may adversely affect our ability to manage our business.
Our growth has been, in large part, the result of acquisitions of
companies. We plan to continue making acquisitions in the future on terms
management considers favorable to us. The successful acquisition of other
companies involves an assessment of future revenue opportunities, operating
costs, economies and earnings after the acquisition is completed, industry and
business risks, and liabilities beyond our control. This assessment is
necessarily inexact and its accuracy is inherently uncertain. In connection with
our assessments, we perform reviews of the subject acquisitions we believe to be
generally consistent with industry practices. These reviews, however, may not
reveal all existing or potential problems, nor will they permit a buyer to
become sufficiently familiar with the target companies to assess fully their
deficiencies and capabilities. We cannot assure you that we will identify,
finance and complete additional suitable acquisitions on acceptable terms. We
may not successfully integrate future acquisitions. Any acquisitions may require
substantial attention from our management, which may limit the amount of time
that management can devote to day-to-day operations. Our inability to find
additional attractive acquisition candidates or to effectively manage the
integration of any businesses acquired in the future would adversely affect our
ability to grow profitably or at all.
The seasonality of our industry may cause our revenues to fluctuate.
Holidays and employee vacations during our fourth quarter exert downward
pressure on revenues for that quarter, which is only partially offset by the
year-end efforts on the part of many clients to spend any remaining funds
budgeted for engineering services or capital expenditures during the year. The
annual budgeting and approval process under which these clients operate is
normally not completed until after the beginning of each new year, which can
depress results for the first quarter. Principally due to these factors, our
revenues during the first and fourth quarters generally tend to be lower than in
the second and third quarters.
4
Liability claims could result in losses.
Providing engineering and design services involves the risk of contract,
professional errors and omissions and other liability claims, as well as adverse
publicity. Further, many of our contracts will require us to indemnify our
clients not only for our negligence, if any, but also for the concurrent
negligence and in some cases, sole negligence of our clients. We currently
maintain liability insurance coverage, including coverage for professional
errors and omissions. However, claims outside of or exceeding our insurance
coverage may be made. A significant claim could result in unexpected
liabilities, take management time away from operations, and have a material
adverse impact on our cash flow.
If the operating results of either segment are adversely affected, an impairment
of goodwill could result in a write down.
Based on factors and circumstances impacting us and the business climate in
which we operate, we may determine that it is necessary to re-evaluate the
carrying value of our goodwill by conducting an impairment test in accordance
with SFAS No. 142. We have assigned goodwill to the two segments based on
estimates of the relative fair value of each segment. If changes in the
industry, market conditions, or government regulation negatively impact either
of our segments resulting in lower operating income, if assets are harmed, if
anticipated synergies or cost savings are not realized with newly acquired
entities, or if any circumstance occurs which results in the fair value of
either segment being reduced below its carrying value, an impairment to goodwill
would be created. In accordance with SFAS No. 142, we would be required to write
down the carrying value of goodwill.
Failure by us to achieve and maintain effective internal controls over financial
reporting could have a material effect on our operations.
We will be subject for the first time to internal control over financial
reporting requirements under Section 404 of the Sarbanes-Oxley Act of 2002 in
our Annual Report on Form 10-K for the fiscal year end December 31, 2006. We are
currently making concerted efforts to prepare ourselves to be able to comply
with such requirements. These efforts include documenting, evaluating the design
and testing the effectiveness of our internal control over financial reporting.
During this process, we expect to improve our internal processes as well as be
in compliance with the law; however we cannot be certain as to the timing of
completion of our documentation, evaluation and testing or the impact of the
same on our operations. Furthermore, upon completion of this process, we may
identify control deficiencies of varying degrees of severity under applicable
SEC and Public Company Accounting Oversight Board rules and regulations that
remain unremediated. Failure to comply with Section 404 in a timely manner may
cause investors to lose confidence in our financial statements, and out stock
price may be adversely affected as a result.
We are exposed to increased costs associated with complying with these
requirements, and will be spending management time and resources to document and
test our internal controls in anticipation of Section 404 reporting
requirements. Furthermore, our independent registered public accounting firm,
Hein & Associates, will be required to attest to whether its assessment of the
effectiveness of our internal control over financial reporting is fairly stated
in all material respects and separately report on whether it believes we
maintained, in all material respects, effective internal control over financial
reporting as of December 31, 2006.
Our backlog is subject to unexpected adjustments and cancellations and is,
therefore, an uncertain indicator of our future revenues or earnings.
As of December 31, 2005, our backlog was approximately $170 million. We
cannot assure investors that the revenues projected in our backlog will be
realized or, if realized, will result in profits. Projects 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 may occur from time to time with respect to contracts reflected in our
backlog. Such backlog reductions would reduce 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 and
the revenues and profits that we actually earn.
5
Our dependence on subcontractors and equipment manufacturers could adversely
affect us.
We rely on third-party subcontractors as well as third-party suppliers and
manufacturers to complete our projects. To the extent that we cannot engage
subcontractors or cannot engage them on a competitive basis, or cannot acquire
supplies or materials or cannot acquire them on a competitive basis, our ability
to complete a project in a timely fashion or at a profit may be impaired. If the
amount we are required to pay for these goods and services exceeds the amount we
have estimated in bidding for fixed-price or cost-plus contracts, we could
experience losses in the performance of these contracts. In addition, if a
subcontractor or supplier is unable to deliver its services or materials
according to the negotiated terms for any reason, including the deterioration of
its financial condition or over-commitment of its resources, we may be required
to purchase the services or materials from another source at a higher price.
This may reduce the profit to be realized or result in a loss on a project for
which the services or materials were needed.
If we are not able to successfully manage our growth, our business and results
of operations will be adversely affected.
We have grown rapidly over the last several years. Our growth presents
numerous managerial, administrative, operational and other challenges. Our
ability to manage the growth of our operations will require us to continue to
improve our management information systems and maintain discipline in our
internal systems and controls. Industry trends and our strategy to pursue larger
fixed-price EPC projects, our ability to manage and measure project performance
will require us to strengthen our internal project and cost control systems
within operations that have traditionally operated in a cost plus environment.
In addition, our growth will increase our need to attract, develop, motivate and
retain both our management and professional employees. The inability of our
management to effectively manage our growth or the inability of our employees to
achieve anticipated performance would have a material adverse effect on our
business.
If we are not able to successfully manage internal growth initiatives, our
business and results of operations may be adversely affected.
Our growth strategy seeks to utilize our technical expertise in conjunction
with industry trends. To support this strategy, we may elect to fund internal
growth initiatives targeted at markets that we believe may have significant
potential needs for our services. The downside risks are that such initiatives
could have a negative effect on current earnings until such initiatives reach
critical mass or that industry trends have been misread or delayed and continued
funding could have a negative impact on long term earnings.
Risks Relating to an Investment in Our Common Stock
Our Board of Directors may authorize future issuances of our common stock, which
could result in a decrease in value to existing stockholders of the shares they
hold.
As of July 31, 2006, our Articles of Incorporation, as amended, authorize
our board of directors to issue up to an additional 48,362,276 shares of common
stock and 2,000,000 shares of preferred stock. These shares may be issued
without stockholder approval unless the issuance is 20% or more of our
outstanding common stock, in which case the American Stock Exchange requires
stockholder approval. We may issue shares of stock in the future in connection
with acquisitions or financings. In addition, we may issue shares in connection
with our Employee Stock Purchase Plan and we may issue incentive and
nonqualified stock options and restricted stock as incentives under our 1998
Incentive Plan. Future issuances of substantial amounts of common stock or of
preferred stock, or the perception that these sales could occur, may affect the
market price of our common stock. In addition, the ability of the board of
directors to issue additional stock may discourage transactions involving actual
or potential changes of control of the Company, including transactions that
otherwise could involve payment of a premium over prevailing market prices to
holders of our common stock.
A small number of stockholders own a significant portion of our outstanding
common stock, thus limiting the extent to which other stockholders can effect
decisions subject to stockholder vote.
6
Directors, executive officers and principal stockholders of ENGlobal and
their affiliates, beneficially own approximately 39% of our outstanding common
stock on a fully diluted basis. Accordingly, these stockholders, as a group, are
able to influence the outcome of stockholder votes, including votes concerning
the adoption or amendment of provisions in our Articles of Incorporation, as
amended, or bylaws and the approval of mergers and other significant corporate
transactions. The existence of these levels of ownership concentrated in a few
people makes it unlikely that any other holder of common stock will be able to
affect the management or direction of the Company. These factors may also have
the effect of delaying or preventing a change in management or voting control of
the Company.
Our quarterly operating results may fluctuate significantly, which could have a
negative effect on the price of our common stock.
Our quarterly revenues, expenses and operating results may fluctuate
significantly because of a number of factors, including:
o Unanticipated changes in contract performance that may affect
profitability, particularly with contracts that have funding limits;
o The seasonality of the spending cycle of our clients;
o Acquisitions and the integration of acquired companies;
o Employee hiring and utilization rates;
o The number and significance of client engagements commenced and
completed during a quarter;
o Credit worthiness and solvency of clients;
o The ability of our clients to terminate engagements without penalties;
o Delays incurred in connection with an engagement;
o The size and scope of engagements;
o The timing of expenses incurred for corporate initiatives;
o Reductions in the prices of services offered by our competitors;
o Changes in accounting rules; and
o General economic or political conditions, either generally or in our
particular industry.
Variations in any of these factors could cause significant fluctuations in
our operating results from quarter to quarter and could result in net losses.
These fluctuations could result in downward pressure on the market price of our
common stock.
7
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
In connection with the provisions of the Private Securities Litigation
Reform Act of 1995 (the "Reform Act") we may include forward looking statements
(as defined in the Reform Act) in oral or written public statements used by or
on behalf of us with respect to our future financial or business performance,
strategies or expectations. Forward-looking statements are typically identified
by words or phrases such as "believe," "expect," "anticipate," "intend,"
"estimate," "position," "target," "mission," "assume," "achievable,"
"potential," "strategy," "goal," "objective," "plan," "aspiration," "outlook,"
"outcome," "continue," "remain," "maintain," "strive," "trend" and variations of
such words and similar expressions, or future or conditional verbs such as
"will," "would," "should," "could," "may" or similar expressions.
We caution that forward-looking statements are subject to numerous
assumptions, risks and uncertainties, which change over time. Forward-looking
statements speak only as of the date they are made, and we assume no duty and do
not undertake to update forward-looking statements. Actual results could differ
materially from those anticipated in forward-looking statements and future
results could differ materially from historical performance. In addition to
factors previously disclosed in our Commission reports and those identified
elsewhere in this prospectus, the following factors, among others, could cause
actual results to differ materially from forward-looking statements or
historical performance: (1) increased competition for engineering and service
contracts; (2) the ability to estimate costs on contracts; (3) the loss of one
or more significant customers; (4) the ability to attract and retain highly
trained professionals; (5) the identification of additional acquisition
opportunities and the integration of future acquisitions; (6) the ability to
engage subcontractors and acquire supplies on a competitive basis; (7)
significant liability claims arising from services provided; and (8) adverse
legal changes effecting our international operations.
You should carefully read the risk factors described in the "Risk Factors"
section of this prospectus for a description of certain risks that could, among
other things, cause our actual results to differ from these forward looking
statements.
8
SELLING STOCKHOLDER
We are registering for resale the shares covered by this prospectus on
behalf of the selling stockholder identified below. The selling stockholder
acquired the resale shares from us in connection with our acquisition of WRC
Corporation, a Colorado corporation. We are registering the shares to permit the
selling stockholder to resell the shares when and as he deems appropriate. The
following table sets forth:
o the name of the selling stockholder;
o the number and percent of shares of our common stock that the selling
stockholder beneficially owned prior to the offering for resale of the
shares under this prospectus;
o the number of shares of our common stock that may be offered for
resale for the account of the selling stockholder under this
prospectus; and
o the number and percent of shares of our common stock to be
beneficially owned by the selling stockholder after the offering of
the resale shares (assuming all of the offered resale shares are sold
by the selling stockholder).
The number of shares in the column "Number of Shares Being Offered"
represents all of the shares of our common stock that the stockholder may offer
under this prospectus. We do not know how long the selling stockholder will hold
the shares before selling them or how many shares he will sell. The shares are
currently subject to an Escrow Agreement that provides us ownership of the
shares to the extent we are entitled to indemnification under the Stock Purchase
Agreement between Michael H. Lee and ENGlobal for the acquisition of WRC
Corporation. Otherwise, we currently have no agreements, arrangements or
understandings with the selling stockholder regarding the sale of any of the
resale shares. The shares offered by this prospectus may be offered from time to
time by the selling stockholder listed below.
This table is prepared solely based on information supplied to us by the
listed selling stockholder and assumes the sale of all of the resale shares. The
applicable percentages of beneficial ownership are based on an aggregate of
26,637,724 shares of our common stock issued and outstanding on July 31, 2006.
Shares to be
Shares Beneficially Number of Beneficially
Owned Prior to the Shares Being Owned After
Offering Offered the Offering
------------------ ------------ ------------------
Selling stockholder Number Percentage Number Percentage
------------------- ------ ---------- ------ ----------
Michael H. Lee (1) 175,000 * 175,000 0 *
(1) The selling stockholder does not hold any option, warrant or other right to
acquire beneficial ownership of additional shares of our common stock
within 60 days from the date hereof. According to information provided to
us as of the date of filing, the selling stockholder is not a broker-dealer
or affiliate of a broker-dealer. All of the shares registered hereby for
Michael H. Lee were purchased in connection with the acquisition of WRC
Corporation by ENGlobal on May 25, 2006.
* Less than 1% of our common stock.
9
REGISTRATION RIGHTS OF SELLING STOCKHOLDER
We entered into a stock purchase agreement, as amended with the selling
stockholder, pursuant to which we have filed a shelf registration statement, of
which this prospectus is a part, with the Commission relating to the resale of
the registrable securities. We have agreed to use our commercially reasonable
best efforts to file the shelf registration statement on or before August 23,
2006 and to cause the shelf registration statement to be declared effective no
later than November 30, 2006.
When we use the term "registrable securities" in this section, we are
referring to:
o the shares of common stock offered by this prospectus; and
o any shares of common stock issued or issuable with respect to the
offered shares by way of a stock dividend or stock split or in
connection with a recapitalization, merger, consolidation or other
reorganization.
Any particular securities of common stock constituting registrable
securities will cease to be registrable securities when the securities:
o have been effectively registered under the Securities Act of 1933 (the
"Securities Act") and disposed of in accordance with the registration
statement covering them;
o have been sold to the public pursuant to Rule 144 or by a similar
provision of the Securities Act; or
o are eligible for resale under Rule 144(k) or by a similar provision of
the Securities Act.
We may suspend the use of the prospectus under certain circumstances
relating to pending corporate developments and events which would cause the
prospectus to contain an untrue statement of a material fact or omit a fact
necessary to make the statements therein not misleading.
Under the stock purchase agreement, as amended we have agreed to:
o pay all expenses of the shelf registration statement;
o provide the registered holder copies of the prospectus;
o notify the holder when the shelf registration statement has become
effective and the occurrence of any events effecting the accuracy or
effectiveness of the shelf registration statement; and
o take other reasonable steps reasonably necessary to effect the
registration of the registrable securities.
This summary is subject to, and is qualified in its entirety by reference
to, all the provisions of the stock purchase agreement.
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PLAN OF DISTRIBUTION
The selling stockholder (including his transferees, pledges, donees and
successors) may sell the offered shares from time to time directly to purchasers
or through broker-dealers or agents who may receive compensation in the form of
discounts, concessions or commissions from the selling stockholder or the
purchasers. If the offered shares are sold through broker-dealers or agents, the
selling stockholder will be responsible for any discounts, concessions or
commissions payable to those broker-dealers or agents.
The offered shares may be sold in one or more transactions at:
o fixed prices;
o prevailing market prices at the time of sale or prices related to such
prevailing market prices;
o varying prices determined at the time of sale; or
o negotiated prices.
These sales may be effected in transactions:
o on any national securities exchange or quotation service on which the
common stock may be listed or quoted at the time of sale;
o in the over-the-counter market;
o in privately negotiated transactions;
o through broker-dealers and resale exchanges;
o in a firm commitment or best efforts underwriting;
o otherwise than on such exchanges or services or in the
over-the-counter market; or through the writing of options.
The aggregate proceeds to the selling stockholder from the sale of the
shares will be the purchase price of such shares of common stock less discounts
and commissions, if any, payable by him. The selling stockholder reserves the
right to accept and, together with his broker-dealers or agents from time to
time, to reject, in whole or in part, any proposed purchase of the shares to be
made directly or through broker-dealers or agents. We will not receive any of
the proceeds from the offering of the offered shares.
Our common stock is listed on the American Stock Exchange under the symbol
ENG.
In some states the shares may not be sold unless they have been registered
or qualified for sale or an exemption from registration or qualification
requirements is available and is complied with.
The selling stockholder may not sell any, or may sell less then all of, the
shares offered by him pursuant to this prospectus. In addition, the selling
stockholder may, to the extent permitted by applicable law, sell, transfer,
devise or gift the shares by means not described in this prospectus. In that
regard, any shares that qualify for sale pursuant to Rule 144A or Rule 144 under
the Securities Act may be sold under that rule, if applicable, rather than
pursuant to this prospectus.
The selling stockholder and any broker-dealers or agents that participate
in the distribution of the shares may be "underwriters" within the meaning of
Section 2(11) of the Securities Act. As a result, any profits on the sale of the
shares received by selling stockholder and any discounts, commissions or
concessions received by any such broker-dealers or agents might be deemed to be
underwriting discounts and commissions under the Securities Act. If the selling
stockholder was deemed to be an underwriter, the selling stockholder could be
subject to certain statutory liabilities under the federal securities laws,
including under Sections 11, 12 and 17 of the Securities Act and Rule 10b-5
under the Securities Exchange Act of 1934 (the "Exchange Act").
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The selling stockholder and any other persons participating in the
distribution of the offered shares will be subject to the Exchange Act. The
Exchange Act rules include, without limitation, Regulation M, which may limit
the timing of or prohibit the purchase and sale of the shares by the selling
stockholder and any such other person. In addition, under Regulation M, any
selling stockholder or other person engaged in the "distribution," within the
meaning of Regulation M, of the shares may not engage in market-making
activities with respect to the shares for certain periods prior to the sale of
the offered shares, unless an applicable exemption is available under Regulation
M. The foregoing may affect the marketability of the offered shares and the
ability of any person or entity to engage in market-making activities with
respect to those shares.
Pursuant to the stock purchase agreement described above under
"Registration Rights of Selling Stockholder," we and the selling stockholder
have agreed, subject to exceptions, to indemnify each other against specified
liabilities, including liabilities under the Securities Act, and may be entitled
to contribution from each other in respect of those liabilities.
We will pay substantially all of the expenses incident to the offering and
sale of the offered shares pursuant to this prospectus, including the reasonable
fees and expenses of a single counsel retained by the selling stockholder. We
will not pay any underwriting discounts, selling commissions or stock transfer
taxes attributable to the sale of the offered shares.
Under the stock purchase agreement, we may be required from time to time to
require holders of offered shares to discontinue the sale or other disposition
of those shares under specified circumstances. See "Registration Rights of
Selling Stockholder" above.
USE OF PROCEEDS
We will not receive any of the proceeds from the sale of the common stock
offered by the selling stockholder. All proceeds from the sale of these shares
will be solely for the account of the selling stockholder.
LEGAL MATTERS
The validity of the issuance of common stock offered hereby will be passed
upon for us by Hale, Lane, Peek, Dennison and Howard, a Professional
Corporation, Reno, Nevada.
EXPERTS
The financial statements incorporated in this prospectus by reference to
the Annual Report on Form 10-K for the year ended December 31, 2005 have been so
incorporated in reliance on the report of Hein & Associates LLP, an independent
registered public accounting firm, given on the authority of said firm as
experts in auditing and accounting.
WHERE YOU CAN FIND MORE INFORMATION
We are subject to the reporting requirements of the Exchange Act, under
which we file annual, quarterly and special reports, proxy statements and other
information with the Commission. You may read and copy materials that we have
filed with the Commission at its public reference room located at 100 F. Street,
N.E., Room 1580, Washington D.C. 20549. Please call the Commission at
1-800-SEC-0330 for further information on the public reference room. Our
Commission filings are also available to the public on the Commission's Internet
website at www.sec.gov.
We incorporate by reference into this prospectus the documents listed below
and any future filings we make with the Commission under Sections 13(a), 13(c),
14 or 15(d) of the Exchange Act, including any filings on or after the date of
this prospectus, until we have sold all of the offered securities to which this
prospectus relates or the offering is otherwise terminated. The information
incorporated by reference is an important part of this prospectus. Any statement
in a document incorporated by reference into this prospectus will be deemed to
be modified or superseded to the extent a statement contained in (1) this
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prospectus or (2) any other subsequently filed document that is incorporated by
reference into this prospectus modifies or supersedes such statement. The
documents incorporated by reference herein include:
o our Annual Report on Form 10-K for the year ended December 31, 2005 filed
on March 31, 2006;
o our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2006
and June 30, 2006 filed on May 15, 2006 and August 14, 2006, respectively;
o our Current Reports on Form 8-K filed on February 24, 2006, March 24,
2006, April 18, 2006, May 11, 2006, June 1, 2006, June 7, 2006 and August 10,
2006; and
o our Form 10-SB Registration Statement filed with the Commission on
January 27, 1997, including any amendment or report filed for the purpose of
updating such description, in which there is described the terms, rights and
provisions applicable to our common stock.
We will provide without charge to each person, including any beneficial
owner, to whom this prospectus is delivered, upon written or oral request, a
copy of any and all of the documents that have been or may be incorporated by
reference in this prospectus. You should direct requests for documents by
writing to:
ENGlobal Corporation
654 N. Sam Houston Parkway E., Suite 400
Houston, Texas 77060-5914
Tel: (281) 878-1000
Attention: Investor Relations Officer
13
175,000 Shares
ENGLOBAL CORPORATION
Common Stock
----------------------------------------
PROSPECTUS
----------------------------------------
The date of this prospectus is _________, 2006
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the fees and expenses, other than discounts,
commissions and concessions payable to broker-dealers and agents, in connection
with the offering and distribution of the securities being offered hereunder.
All amounts other than the filing fee for the registration statement are
estimates. All of these fees and expenses will be borne by the registrant
Securities and Exchange Commission Filing Fee........ $ 136
Printing Fees and Expenses........................... 2,500
Legal Fees........................................... 10,000
Accounting and Auditor Fees.......................... 5,000
Miscellaneous Fees................................... 1,000
----------
Total........................................... $ 18,636
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Our Articles of Incorporation, as amended, provide that none of our
directors or officers shall be personally liable to the Company or our
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 General Corporation Law (the "NGCL"). The effect of these
provisions is to eliminate the rights of our stockholders, either directly or
through stockholders' derivative suits brought on behalf of the Company, 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 NGCL.
In addition, we have adopted provisions in our Amended and Restated Bylaws
that require the Company to indemnify our directors and officers against
expenses arising out of their conduct on the Company's behalf.
Section 78.7502 of the NGCL 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 NGCL that such indemnification is proper in the
circumstances.
Indemnification may not be made under the NGCL 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 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
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officer must be indemnified under the NGCL by the corporation against expenses,
including attorney's fees, actually and reasonably incurred by the director or
officer in connection with the defense.
ITEM 16. EXHIBITS.
The following is a list of all exhibits filed as a part of this
registration statement on Form S-3.
Exhibit Number Description of Exhibits
-------------- ------------------------------------------------------------
4.1 Specimen common stock certificate (incorporated by reference
to the Registrant's Registration Statement on Form S-3 filed
with the Commission on October 31, 2005)
4.2* Stock Purchase Agreement, dated as of May 25, 2006, by and
among the Registrant and Michael H. Lee
4.3* First Amendment to Stock Purchase Agreement dated as of May
25, 2006, by and among the Registrant and Michael H. Lee
4.4 Articles of Incorporation of the Registrant, as amended
(incorporated by reference to the Registrant's Quarterly
Report on Form 10-Q for the quarter ended September 30, 2002
filed with the Commission on November 14, 2002)
4.5* Certificate of Amendment to the Articles of Incorporation of
the Registrant filed with the Nevada Secretary of State on
June 2, 2006
4.6 Amended and Restated Bylaws of the Registrant (incorporated
by reference to the Registrant's Registration Statement on
Form S-3 filed with the Commission on October 31, 2005)
5.1* Opinion of Hale, Lane, Peek, Dennison and Howard, a
Professional Corporation
23.1* Consent of Hale, Lane, Peek, Dennison and Howard, a
Professional Corporation (contained in Exhibit 5.1)
23.2* Consent of Hein & Associates LLP, independent registered
public accounting firm
24* Power of Attorney (reference is made to the signature page
of the Registration Statement)
* Filed herewith
ITEM 17. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
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 percent change in the
maximum aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement; and
(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.
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Provided, however, that subparagraphs (i), (ii) and (iii) of this section
do not apply if the information required to be included in a post-effective
amendment by those subparagraphs 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.
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.
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.
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.
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:
1. Any preliminary prospectus or prospectus of the undersigned registrant
relating to the offering required to be filed pursuant to Rule 424;
2. 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;
3. 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
4. Any other communication that is an offer in the offering made by the
undersigned registrant to the purchaser.
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
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 this
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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.
To deliver or cause to be delivered with the prospectus, to each person to
whom the prospectus is sent or given, the latest annual report, to security
holders that is incorporated by reference in the prospectus and furnished
pursuant to and meeting the requirements of Rule 14a-3 and Rule 14c-3 under the
Securities Exchange Act of 1934; and, where interim financial information
required to be presented by Article 3 of Regulation S-X is not set forth in the
prospectus, to deliver, or cause to be delivered to each person to whom the
prospectus is sent or given, the latest quarterly report that is specifically
incorporated by reference in the prospectus to provide such interim financial
information.
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 of 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.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, 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 Houston, Texas, on the 21st day of August, 2006.
ENGLOBAL CORPORATION
By: /s/ William A. Coskey, P.E.
-------------------------------
William A. Coskey, P.E.
Chairman of the Board
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Michael L. Burrow and William A. Coskey,
and each of them, as true and lawful attorneys-in-fact and agents, with full
powers of substitution and resubstitution, for them and in their name, place and
stead, in any and all capacities, to sign any and all amendments (including
pre-effective and post-effective amendments) to this registration statement and
any additional registration statements filed pursuant to Rule 462, and to file
the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission (the "SEC"), and
generally to do all such things in their names and behalf in their capacities as
officers and directors to enable ENGlobal to comply with the provisions of the
Securities Act of 1933 and all requirements of the SEC, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
connection therewith, as fully to all intents and purposes as he or she might or
could do in person, ratifying and confirming all that aid attorneys-in-fact and
agents, or any of them, or their or his or her substitutes or substitute, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ William A. Coskey, P.E. Chairman of the Board August 21, 2006
---------------------------
William A. Coskey, P.E.
/s/ Michael L. Burrow, P.E. Director, President and August 21, 2006
--------------------------- Chief Executive Officer
Michael L. Burrow, P.E.
/s/ Robert W. Raiford Chief Financial Officer August 21, 2006
--------------------- and Treasurer
Robert W. Raiford
/s/ David W. Gent Director August 21, 2006
-----------------
David W. Gent
/s/ Randall B. Hale Director August 21, 2006
-------------------
Randall B. Hale
/s/ David C. Roussel Director August 21, 2006
--------------------
David C. Roussel
EXHIBIT INDEX
-------------
Exhibit Number Description of Exhibits
-------------- ------------------------------------------------------------
4.2 Stock Purchase Agreement, dated as of May 25, 2006, by and
among the Registrant and Michael H. Lee
4.3 First Amendment to Stock Purchase Agreement dated as of May
25, 2006, by and among Registrant and Michael H. Lee
4.5 Certificate of Amendment to the Articles of Incorporation of
the Registrant filed with the Nevada Secretary of State on
June 2, 2006
5.1 Opinion of Hale, Lane, Peek, Dennison and Howard, a
Professional Corporation
23.1 Consent of Hale, Lane, Peek, Dennison and Howard, a
Professional Corporation (contained in Exhibit 5.1)
23.2 Consent of Hein & Associates LLP, independent registered
public accounting firm
24 Power of Attorney (reference is made to the signature page
of the Registration Statement)