S-1 1 fs12020_atlastechnical.htm

As filed with the Securities and Exchange Commission on August 11, 2020.

Registration No. 333-          

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

_____________________________________

Form S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

_____________________________________

Atlas Technical Consultants, Inc.

(Exact name of registrant as specified in its charter)

_____________________________________

Delaware

 

83-0808563

(State or other jurisdiction of
incorporation or organization)

 

(I.R.S. Employer
Identification Number)

13215 Bee Cave Parkway, Building B, Suite 230
Austin, Texas 78738
(512) 851-1501

(Address, including zip code, and telephone number, including area code, of registrants’ and registrant guarantor’s principal executive offices)

_____________________________________

L. Joe Boyer
Chief Executive Officer
13215 Bee Cave Parkway, Building B, Suite 230
Austin, Texas 78738
(512) 851-1501

(Name, address, including zip code, and telephone number, including area code, of agent for service)

_____________________________________

 

Copies to:

   

Julian J. Seiguer, P.C.
Michael W. Rigdon
Kirkland & Ellis LLP
609 Main Street, Suite 4500
Houston, Texas 77002
(713) 836
-3600

     

Rachel W. Sheridan
Jason M. Licht
Latham & Watkins LLP
555 Eleventh Street, NW
Suite 1000
Washington, D.C. 20004
(202) 637
-2200

_____________________________________

Approximate date of commencement of proposed sale of the securities to the public: As soon as practicable after the effective date of this Registration Statement.

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, check the following box: £

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please 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 post-effective amendment filed pursuant to Rule 462(d) 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. £

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

 

£

 

Accelerated filer

 

S

Non-accelerated filer

 

£

 

Smaller reporting company

 

S

       

Emerging growth company

 

S

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 7(a)(2)(B) of the Securities Act. £

 

CALCULATION OF REGISTRATION FEE

Title of Each Class of Securities to be Registered

 

Amount to be
Registered(1)

 

Proposed
Maximum
Offering
Price Per
Security(2)

 

Proposed
Maximum
Aggregate
Offering
Price(1)(2)

 

Amount of
Registration
Fee(3)

Class A common stock, par value $0.0001 per share

 

7,187,500

 

$

8.89

 

$

63,896,875

 

$

8,293.81

____________

(1)      Includes 937,500 shares that the underwriters have the option to purchase. See “Underwriting (Conflicts of Interest).”

(2)      Estimated solely for the purpose of calculating the registration fee in accordance with Rule 457(c) under the Securities Act. The price per share and aggregate offering price are based on the average of the high and low prices of the Class A common stock on August 6, 2020, as reported on The Nasdaq Stock Market.

(3)     Pursuant to Rule 457(p) under the Securities Act, Atlas Technical Consultants, Inc. (the “Registrant”) is offsetting $8,293.81 of the filing fee previously paid with respect to the registration statement on Form S-3 (File Number 333-236470) filed by the Registrant with the Securities and Exchange Commission on February 14, 2020 ($110,630.36 of which was previously used to offset the filing fees due with respect to the registration statement on Form S-1 filed on April 17, 2020, $651.28 of which was previously used to offset the filing fees due with respect to the registration statement on Form S-8 filed on April 17, 2020 and $10,750.17 of which remains unused) against the entire filing fee of $8,293.81 due under this registration statement (the “Registration Statement”).

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 that specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended (the “Securities Act”), or until this Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

 

The information in this preliminary prospectus is not complete and may be changed. We and the selling stockholder may not sell these securities until the registration statement filed with the Securities and Exchange Commission (the “SEC”) is effective. This preliminary prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

PRELIMINARY PROSPECTUS

 

SUBJECT TO COMPLETION DATED AUGUST 11, 2020

Atlas Technical Consultants, Inc.

6,250,000 Shares of Class A Common Stock

_____________________

Atlas Technical Consultants, Inc. (formerly known as Boxwood Merger Corp. (prior to the Business Combination (defined below) “Boxwood”)), a Delaware corporation (the “Company,” “we,” “our” or “us”) is offering 5,000,000 shares of its Class A common stock, par value $0.0001 per share (the “Class A common stock”). The selling stockholder named in this prospectus is offering 1,250,000 shares of our Class A common stock. We will not receive any proceeds from the sale of our Class A common stock by such selling stockholder.

Our Class A common stock is traded on The NASDAQ Stock Market (“NASDAQ”) under the symbol “ATCX”. On August 10, 2020, the last reported sale price of our Class A common stock was $9.20 per share. As of August 10, 2020, we had 5,767,342 shares of Class A common stock issued and outstanding.

The selling stockholder named in this prospectus will grant the underwriters an option for a period of 30 days to purchase up to 937,500 additional shares of Class A common stock on the same terms and conditions set forth in this prospectus. We will not receive any of the proceeds from the sale of shares by the selling stockholder if the underwriters exercise their option to purchase 937,500 additional shares of Class A common stock.

 

Per share

 

Total

Public offering price

 

$

   

$

 

Underwriting discounts and commissions(1)

 

$

   

$

 

Proceeds to us before expenses

 

$

   

$

 

Proceeds to the selling stockholder

 

$

   

$

 

____________

(1)    We refer you to “Underwriting (Conflicts of Interest)” beginning on page 101 of this prospectus for additional information regarding total underwriters’ compensation.

_____________________

Investing in our common stock involves risks. See “Risk Factors” beginning on page 13.

We are an “emerging growth company” as defined in Section 2(a) of the Securities Act of 1933, as amended (the “Securities Act”), and are subject to reduced public company reporting requirements. See “Risk Factors.”

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

The underwriters expect to deliver the shares of our Class A common stock to purchasers on or about       , 2020.

Joint Book-Running Managers

 

Stifel

 

Raymond James

   

Macquarie Capital

Co-Manager

Lake Street

_____________________

The date of this prospectus is             , 2020.

 

TABLE OF CONTENTS

 

Page

Prospectus Summary

 

1

Risk Factors

 

13

Cautionary Statement Regarding Forward-Looking Statements

 

28

Unaudited Pro Forma Condensed Combined Financial Information

 

29

Use of Proceeds

 

35

Dividend Policy

 

36

Capitalization

 

37

Selected Historical Financial Data

 

38

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

39

Business

 

53

Management

 

65

Executive Compensation

 

71

Principal and Selling Stockholder

 

80

Certain Relationships and Related Party Transactions

 

84

Description of Securities

 

91

Shares Eligible for Future Sale

 

94

Material U.S. Federal Income Tax Considerations for Non-U.S. Holdings

 

97

Underwriting (Conflicts of Interest)

 

101

Legal Matters

 

106

Experts

 

106

Where You Can Find More Information

 

106

Index to Financial Statements

 

F-1

_________________________________

Neither we nor the selling stockholder nor the underwriters have authorized anyone to provide any information or to make any representations other than those contained in this prospectus, any accompanying prospectus supplement or any free writing prospectus we have prepared. We and the selling stockholder and the underwriters take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. This prospectus is an offer to sell only the securities offered hereby and only under circumstances and in jurisdictions where it is lawful to do so. The information contained in this prospectus is current only as of the date on the front cover of this prospectus, regardless of the time of delivery of this prospectus or any sale of the shares. Our business, financial condition, results of operations and prospects may have changed since the date on the front cover of this prospectus.

This prospectus contains forward-looking statements that are subject to a number of risks and uncertainties, many of which are beyond our control. See “Risk Factors” and “Cautionary Statement Regarding Forward-Looking Statements.”

i

Basis of Presentation

The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). Any reference in these notes to applicable guidance is meant to refer to the authoritative GAAP as found in the Accounting Standards Codification (“ASC”) and as amended by Accounting Standards Updates of the Financial Accounting Standards Board (“FASB”).

Atlas Technical Consultants, Inc. (formerly named Boxwood Merger Corp.) was a special purpose acquisition company that acquired Atlas Intermediate Holdings LLC, a Delaware limited liability company (“Atlas Intermediate”), and ATC Group Partners LLC, a Delaware limited liability company (“ATC Group”) and now an indirect subsidiary of Atlas Intermediate, in connection with the consummation of the Business Combination (as defined herein). The Business Combination has been accounted for as a reverse recapitalization. Under this method of accounting, Atlas Technical Consultants, Inc. was treated as the acquired company and Atlas Intermediate and ATC Group were treated as the acquirer for financial reporting purposes. Therefore, the combined consolidated financial results included in this prospectus for historical periods prior to the consummation of the Business Combination present the financial information of Atlas Intermediate and ATC Group as the Company’s predecessor entity. Atlas Intermediate and ATC Group have been presented on a combined basis for historical periods as they are entities under common control. In January 2019, the businesses of Atlas Intermediate and ATC Group were merged through a series of transactions.

Industry and Market Data

The market data and certain other statistical information used throughout this prospectus are based on independent industry publications, government publications and other published independent sources. Although we believe these third-party sources are reliable as of their respective dates, neither we nor the selling stockholder have independently verified the accuracy or completeness of this information. Some data is also based on our good faith estimates. The industry in which we operate is subject to a high degree of uncertainty and risk due to a variety of factors, including those described in the section entitled “Risk Factors.” These and other factors could cause results to differ materially from those expressed in these publications.

ii

Prospectus Summary

This summary highlights information contained elsewhere in this prospectus and does not contain all of the information that you should consider in making your investment decision. Before investing in our securities, you should carefully read this entire prospectus, including our consolidated financial statements and the related notes included in this prospectus and the information set forth under the headings “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

In this prospectus, unless the context requires otherwise, references to the “Company,” “we,” “our,” or “us” refer to (i) Atlas Intermediate, ATC Group, AS&M Holdings LP (formerly known as “Atlas Technical Consultants Holdings LP” (“Atlas Holdings”)) and all of their subsidiaries prior to the consummation of the Business Combination, (ii) Atlas Technical Consultants, Inc. and its consolidated subsidiaries following the consummation of the Business Combination and (iii) references to “Boxwood” refer to Boxwood Merger Corp. References to the “selling stockholder” refer to PTE Holdings, Inc., the selling stockholder that is offering shares of Class A common stock in this offering and will grant the underwriters a 30-day option to purchase additional shares of Class A common stock in this offering, as applicable. The acquisition of Atlas Intermediate and ATC Group, pursuant to that certain unit purchase agreement entered into by and between Atlas TC Buyer LLC (the “Buyer”), a Delaware limited liability company, Atlas Holdings and the other parties thereto on August 12, 2019 (as amended, the “Purchase Agreement”) is referred to herein as the “Business Combination.”

Our Company

Headquartered in Austin, Texas, we are a leading provider of professional and technical testing, inspection engineering and consulting services, offering solutions to public and private sector clients in the transportation, commercial, water, government, education and industrial markets. With approximately 135 offices located throughout the United States, we provide a broad range of mission-critical technical services, helping our clients test, inspect, plan, design, certify and manage a wide variety of projects across diverse end markets.

We act as a trusted advisor to our clients, helping clients design, engineer, inspect, manage and maintain civil and commercial infrastructure, servicing existing structures as well as helping to build new structures. However, we do not perform any construction and do not take construction risk.

We provide a broad range of mission-critical technical services, ranging from providing inspection services in small projects to managing significant aspects of large, multi-year projects. For the year ended December 31, 2019, we:

•        performed more than 50,000 projects, with average revenue per project of less than $10,000; and

•        delivered over 90% of our revenue under “time & material” and “cost-plus” contracts.

We have long-term relationships with a diverse set of clients, providing a base of repeating clients, projects and revenues. Approximately 90% of our revenues were derived from clients that have used our services at least twice in the past three years and more than 95% of our revenues are generated from client relationships longer than 10 years, with greater than 25% of revenues generated from relationships longer than 30 years. Examples of such long-term customers include the Georgia and Texas Departments Department of Transportation, US Postal Service, US Environmental Protection Agency, Gwinnett County Georgia, New York City Housing Authority, San Francisco International Airport, Stanford University, Port of Oakland, United Rentals, Inc., Speedway, Walmart Inc., and Apple Inc.

Our broad base of customers spans a diverse set of end markets including the transportation, commercial, water, government, education and industrial sectors. Our customers include government agencies (federal, state and local), quasi-public entities, schools, hospitals, utilities and airports, as well as private sector clients across many industries.

Our services require a high degree of technical expertise, as our clients rely on us to provide testing, inspection and quality assurance services to ensure that structures are designed, engineered, built and maintained in accordance with building codes, regulations and the highest safety standards. As such, our services are delivered by a highly-skilled, technical employee base that includes engineers, inspectors, scientists and other field experts. As of June 30, 2020, our technical staff represented 75% out of our 3200 employees. Our services are typically provided under contracts, some of which are long-term with long lead times between when contracts are signed and when our services are performed. As such, we have a significant amount of contracted backlog, providing for a high degree of visibility with respect to revenues expected to be generated from such backlog. As of June 30, 2020, our contracted backlog was estimated to be approximately $621 million. See “— Backlog” below for additional information relating to our backlog.

1

For the six months ended June 30, 2020 and year ended December 31, 2019, we recognized approximately $222.0 million and $471.0 million of gross revenues, ($21.3) million and $8.0 million of net (loss) income, and $28.3 million and $65.6 million of Adjusted EBITDA, respectively. Our Adjusted EBITDA for 2019 does not take into account approximately $7.0 million of pro forma cost synergies reflecting the impact of cost savings arising from the merger between Atlas Intermediate and ATC Group Services (defined below) in 2019 by eliminating duplicate costs including those relating to labor, rent and sourcing. The $(21.3) million loss for the six months ended June 30, 2020 represents a loss of ($21.1) million prior to the Business Combination and ($0.2) million following the Business Combination. The loss prior to the Business Combination was significantly influenced by transaction costs associated with the merger of approximately $25.0 million. For a definition of Adjusted EBITDA and a reconciliation of Adjusted EBITDA to historical combined net income (loss), see “Prospectus Summary — Non-GAAP Financial Measures.”

Company History

Since our inception, we have strategically strengthened our capabilities and widened our footprint through acquisitions of premier national and large regional technical service companies to create an industry-leading platform. Prior to the consummation of the Business Combination, in 2017, we sequentially acquired three regional market leaders in Texas (Pavetex Engineering and Testing Service (“PAVETEX”)), Georgia (Moreland), and California (Consolidated Engineering Laboratories (“CEL”)). These businesses established our core services and capabilities. In 2018, we further augmented our core services and regional leadership through the acquisitions of Piedmont Geotechnical Consultants (“Piedmont”) (Georgia) and SCST, Inc. (“SCST”) (California). In January 2019, we acquired ATC Group Services, an environmental and engineering consulting services company with over 1,700 employees across North America (“ATC Group Services”). As a result of these acquisitions, we established ourselves as a leading national platform. In February 2020, consistent with our ongoing acquisition strategy, we purchased Long Engineering, Inc. (“LONG”), a land surveying and engineering company headquartered in Atlanta, Georgia, adding an additional 113 technical resources.

On February 14, 2020, Boxwood, a special purpose acquisition company and the historical registrant prior to such date, consummated the Business Combination pursuant to the Purchase Agreement in which it acquired Atlas Intermediate. In connection with the Business Combination, Boxwood changed its name to Atlas Technical Consultants, Inc. Following the consummation of the Business Combination, the combined company is organized in an “Up-C” structure in which the business of Atlas Intermediate and its subsidiaries is held by Atlas TC Holdings LLC, a subsidiary of the Company (“Holdings”). The Company operates its business through the subsidiaries of Atlas Intermediate, and the Company’s only direct assets consist of units of Holdings (“Holdings Units”). The Company is the sole manager of Holdings in accordance with the terms of the amended and restated limited liability company agreement of Holdings (the “Holdings LLC Agreement”) entered into in connection with the consummation of the Business Combination. For a more detailed discussion of the Company’s organizational structure, see “— Our Principal Stockholders and Corporate Structure.”

Competitive Strengths

We believe that the following competitive strengths have been instrumental in our success and position us for continued growth:

National provider of highly technical and mission-critical services.    Our scale and breadth in our service offering enables us to compete for complex, marquee contract opportunities and deliver highly customized solutions on both national projects and at the local level. Established footholds in key geographies provide multiple touchpoints within the country’s highest growth markets. We believe our considerable technical expertise, qualifications and strong reputation in key infrastructure markets enables us to be successful with competitive opportunities and deliver high-quality rapid response capabilities to clients.

Repeatable, non-discretionary demand and entrenched relationships with long-term customers.    Non-discretionary, compliance-driven demand for our services creates repeating revenue from decades-long relationships with our blue-chip, diverse customer base. Our knowledge of our clients’ businesses drives transformative outcomes and high rates of customer retention. We generated approximately 76% of net revenue for the six months ended June 30, 2020 and the year ended December 31, 2019 from customers that have engaged us in each of the last three years and 90% of our net revenue was derived from customers that have engaged us in at least two of the past three years. Of our top 15 customers by net revenue in 2019, over 50% had relationships with us of over 20 years, through our predecessor companies, and 96% had relationships with us of over 10 years.

2

De-risked business profile.    More than 90% of our revenue are either “time & material” or “cost-plus” contracts. Additionally, we estimate that approximately 70% of net revenue is generated from work on existing assets and structures, which are less impacted by new construction trends. We also utilize an asset-light operating model and variable cost workforce that allows management to right-size the cost structure to match demand trends and generate strong free cash flow during periods of slower activity.

Customer, end-market and geographic diversity.    We provide technical services to a diverse variety of customers with no significant end market, geography, project or customer concentration. We serve over 9,000 customers annually across over 50,000 projects. As of June 30, 2020, we operated in 41 states with 3,200 employees stationed across approximately 135 offices. For the six months ended June 30, 2020 and the year ended December 31, 2019, on a combined, net revenue basis, no customer represented more than 10% of our total net revenue and our top ten customers accounted for approximately 25% of total net revenue. Our broad geographic reach enables us to provide local service on a national level with entrenched positions in key markets that have favorable infrastructure spending patterns.

Highly visible revenue through a robust backlog.    Our significant backlog growth and robust pipeline provides visibility into our near-term revenue forecast. Our backlog, consisting of only contracted and fully funded work, has increased from $601 million as of December 31, 2019 to $621 million as of June 30, 2020, which represents over 130% of our gross revenue for the fiscal year ended December 31, 2019.

Strong margins and free cash flow.    We maintain strong margins and have achieved significant margin expansion since 2015. This attractive margin profile, coupled with a capital-light business model, enables us to maintain strong free cash flow.

Proven and experienced management team.    Our management team has deep industry expertise. We are led by our Chief Executive Officer, L. Joe Boyer, who has more than 30 years of experience in the technical services industry and is supported by an executive leadership team which also has an average of over 25 years of experience. Our management team has a long track record of achieving organic growth, high employee retention and executing on both accretive acquisitions and cross-selling opportunities.

Growth Strategy

We focus on a multi-pronged growth strategy, with a clear path to achieving our strategic plan driven by a unique inflection point in our evolution following recent acquisitions.

We intend to pursue the following growth strategies as we seek to expand our market share and position as a preferred provider of professional and technical services:

•        capitalize on key market tailwinds;

•        continue to expand cross-selling and national accounts;

•        pursue larger, premier infrastructure opportunities; and

•        maintain a disciplined approach to strategic, accretive and deleveraging mergers and acquisitions.

Capitalize on Key Market Tailwinds

We built our platform to take advantage of multiple independent, positive, macroeconomic trends that underpin momentum in target-end markets. Demands for our technical services are driven by aging infrastructure, increasing complexity and scrutiny of regulatory requirements, and continued inspection and quality assurance outsourcing trends. We have strategically established operations in states with large, predictable transportation budgets, and are primed to capitalize on the strong demand for repair and maintenance of aging infrastructure.

Cross-Selling and National Accounts

We intend to leverage our expanded platform to cross-sell our diverse services to existing customers. As the platform integration continues, we expect the number of cross-selling opportunities to drive increasing and above market organic revenue growth. We had previously ceded opportunities to subcontractors that can now be performed under our expanded, unified platform. We have already demonstrated success in increasing our self-performance net revenue across our platform as well as our cross-selling initiatives through our long-term relationship with clients, such as Walmart Inc.

3

Pursue Larger, Premier Infrastructure Opportunities

We intend to use our expanded geographic reach and service capabilities to pursue and win premier infrastructure opportunities that require complex infrastructure delivery services. We have already begun to execute on this blueprint, as illustrated by an increase in the number of backlog projects greater than $5 million from ten, as of December 31, 2018, to twenty, as of December 31, 2019. As of June 30, 2020, our sales team is pursuing 67 opportunities of greater than $5 million for 2020 and beyond. In addition, we continue to see our average contract and project sizes increase.

Disciplined Approach to Mergers and Acquisitions

We maintain a rigorous and highly disciplined approach in our pursuit of accretive acquisitions. We intend to selectively pursue targets that provide complementary, low-risk services and expand our national platform. These strategic acquisitions represent a highly attractive opportunity for us to continue diversifying and expanding our customer base, geographic footprint, and service offering across the platform. We intend to deploy this strategy within the highly fragmented technical services market which is largely comprised of regional service providers. We have a demonstrated track record of successfully identifying target companies and integrating them at highly accretive valuations, having completed seven such acquisitions since 2017.

Our Principal Stockholders and Corporate Structure

As the sole managing member of Holdings, the Company operates and controls the business and affairs of Holdings, and through Holdings and its subsidiaries, conducts its business. As a result, the Company consolidates the financial results of Holdings and its subsidiaries and reports the non-controlling interest related to the portion of Holdings Units not owned by the Company, which will reduce net income (loss) attributable to the Company’s Class A stockholders. After giving effect to this offering, the Company will own 34.6% of the voting power of Holdings (assuming that the underwriters’ option to purchase additional shares is not exercised).

Holders of Class A common stock and Class B common stock vote together as a single class on all matters presented to our stockholders for their vote or approval, except as otherwise required by applicable law or by our amended and restated certificate of incorporation. Holders of our Class B common stock have no economic rights. Our Class B common stock is not listed on any exchange, nor do we intend to list it.

Under the Holdings LLC Agreement, AS&M Holdings LP, and following August 14, 2020 (the date that is six months from the consummation of the Business Combination), subject to the lock-up agreements described in “Shares Eligible for Future Sale — Lock-up Agreements,” each of the other members of Holdings (other than us and our subsidiaries) has a right to cause Holdings to redeem from time to time, all or a portion of such member’s Holdings Units (together with an equal number of shares of Class B common stock) for either (x) the delivery by Holdings of a number of shares of Class A common stock equal to the number of Holdings Units surrendered or (y) at Holdings’ election made in accordance with the Holdings LLC Agreement, the delivery by Holdings of cash equal to the Cash Election Amount (as defined in the Holdings LLC Agreement) calculated with respect to such redemption. For more information, see “Certain Relationships and Related Party Transactions — Material Relationships and Transactions with the Selling Stockholder.”

4

The following diagram indicates our simplified structure immediately following completion of this offering (assuming that the underwriters’ option to purchase additional shares is not exercised):

This diagram does not take into account shares that may be issuable to Alta Vista Solutions, Inc. (“Alta Vista”) as described in Note 16 to our financial statements included elsewhere in this prospectus

____________

(1)      Includes certain investment funds managed by Bernhard Capital Partners Management LP (AS&M Holdings LP and the other investment funds affiliated with Bernhard Capital Partners Management, LP are referred to herein as “Bernhard Capital Partners”) and certain members of management who were either direct or indirect limited partners of Atlas Holdings, at the time of the Business Combination.

(2)      Includes investments held by Boxwood Sponsor LLC (“Boxwood Sponsor”), MIHI Boxwood Sponsor, LLC and former officers of Boxwood that owned interests in Boxwood prior to the Business Combination.

Recent Developments

COVID-19 Pandemic

In March 2020, the World Health Organization categorized the novel coronavirus (“COVID-19”) as a pandemic. In conjunction with the spread of COVID-19 across the United States, recommendations and mandates have been handed down by various local, state and federal government agencies regarding social distancing, containment areas and against large gatherings. In addition, various travel restrictions have been imposed by the United States and foreign governments, and by companies with respect to their employees, and various event venues announced indefinite closures, which has negatively impacted our business. For example, shelter in place orders in large metropolitan areas on the West Coast and Eastern seaboard attributed to approximately ($15.2) million in decrease to revenue in the six months ended June 30, 2020. As a result of these and various other factors, we have taken a number of steps to ensure the safety of our clients and employees, including making a substantial increase in the number of our employees working remotely.

5

The domestic and global crisis resulting from the outbreak of the COVID-19 pandemic, and the measures being taken to address and limit the spread of the virus, have already adversely affected the U.S. economy and financial markets, resulting in an economic downturn that has negatively impacted the demand for our services. This crisis has affected our operations and liquidity in a number of ways. Project delays have negatively impacted our revenue, and if continued or exacerbated, could result in a material adverse effect to our business. Additionally, a prolonged downturn could ultimately result in an overall decrease in demand for our services. We cannot currently predict with certainty the full extent to which our business, results of operations, financial condition or liquidity will ultimately be impacted. We will continue to monitor the safety of our employees during the COVID-19 pandemic, and we are evaluating, and will continue to evaluate, the impact of COVID-19 on our current projects. The impact of the COVID-19 pandemic is fluid and continues to evolve, and therefore, we cannot currently predict with certainty the extent to which our business, results of operations, financial condition or liquidity will ultimately be impacted. Our top priority is to protect our employees and their families, as well as our clients.

Risks Associated with Our Business

Investing in our Class A common stock involves a high degree of risk. You should carefully consider these risks before investing in our Class A common stock, including the risks related to our business and industry described under “Risk Factors” elsewhere in this prospectus.

Our Controlled Company Status

The rules of NASDAQ define a “controlled company” as a company of which more than 50% of the voting power for the election of directors is held by an individual, a group or another company. Following the consummation of the Business Combination, Bernhard Capital Partners controlled, directly or indirectly, approximately 67.8% of the voting power of our common stock and pro forma for this offering will hold approximately 58.1% of the voting power of our common stock. As a result, we are a controlled company under the listing rules of NASDAQ (a “Controlled Company”) and the rules of the SEC. As a Controlled Company, the Company qualifies for exemptions from certain corporate governance rules.

Our Emerging Growth Company Status

As a company with less than $1.07 billion in revenue during our last fiscal year, we qualify as an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). As an emerging growth company, we are eligible for certain exemptions from various reporting requirements applicable to other public companies that are not emerging growth companies for as long as we continue to be an emerging growth company, including (i) the exemption from the auditor attestation requirements with respect to internal control over financial reporting under Section 404 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), (ii) the exemptions from say-on-pay, say-on-frequency and say-on-golden parachute voting requirements and (iii) reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements.

We may take advantage of these provisions until we are no longer an emerging growth company, which will occur on the earliest of (i) the last day of the fiscal year in which the market value of our Class A common stock that is held by non-affiliates exceeds $700 million as of June 30 of that fiscal year, (ii) the last day of the fiscal year in which we have total annual gross revenue of $1.07 billion or more during such fiscal year, (iii) the date on which we have issued more than $1.0 billion in non-convertible debt in the prior three-year period or (iv) the last day of the fiscal year following the fifth anniversary of the date of the first sale of our common stock in the IPO, which would be December 31, 2023.

In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the exemption from complying with new or revised accounting standards provided in Section 7(a)(2)(B) of the Securities Act as long as we are an emerging growth company. An emerging growth company can therefore delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, we, as an emerging growth company, can adopt the new or revised standard at the same time private companies adopt the new or revised standard.

6

Our Smaller Reporting Company Status

We are also currently a “smaller reporting company,” meaning that we have either (a) a public float of less than $250 million or (b) annual revenues of less than $100 million and either no public float or a public float of less than $700 million. In the event that we are still considered a “smaller reporting company,” at such time as we cease being an “emerging growth company,” the disclosure we will be required to provide in our SEC filings will increase, but will still be less than it would be if we were not considered either an “emerging growth company” or a “smaller reporting company.” Specifically, similar to “emerging growth companies,” “smaller reporting companies” are able to provide simplified executive compensation disclosures in their filings; are exempt from the provisions of Section 404(b) of the Sarbanes-Oxley Act requiring that independent registered public accounting firms provide an attestation report on the effectiveness of internal control over financial reporting; and have certain other decreased disclosure obligations in their SEC filings.

Accordingly, the information that we provide you may be different than what you may receive from other public companies in which you hold equity interests.

Our Corporate Information

Our principal executive offices are located at 13215 Bee Cave Parkway, Building B, Suite 230, Austin, Texas 78738 and our telephone number is (512) 851-1501. Our website is www.oneatlas.com. The information on our website does not constitute part of, and is not incorporated by reference in, this prospectus or any accompanying prospectus supplement, and you should not rely on our website or such information in making a decision to invest in our securities.

7

THE OFFERING

Class A common stock to be offered by us

 


5,000,000 shares.

Class A common stock to be offered by the selling stockholder

 


1,250,000 shares, all of which represent shares of Class A common stock to be issued upon redemption of an equivalent number of the selling stockholder’s Holdings Units (together with a corresponding number of shares of our Class B common stock) prior to completion of this offering.

Underwriters’ option to purchase additional shares

 


The selling stockholder will grant the underwriters a 30-day option to purchase up to an additional 937,500 shares of Class A common stock, all of which represent shares of Class A common stock to be issued upon redemption of an equivalent number of their Holdings Units (together with a corresponding number of shares of our Class B common stock) prior to completion of this offering.

Class A common stock to be outstanding immediately after completion of this offering

 



12,017,342 shares (12,954,842 shares if the underwriters exercise in full their option to purchase additional shares), which includes the Class A common stock offered by the selling stockholder (issued upon redemption of an equivalent number of the selling stockholder’s Holding Units (together with a corresponding number of shares of our Class B common stock)).

Class B common stock to be outstanding immediately after completion of this offering

 



22,724,368 shares (21,786,868 shares if the underwriters exercise in full their option to purchase additional shares), or one share for each Holdings Unit held by the members of Holdings (other than the Company) immediately following this offering. Class B shares are non-economic. When a Holdings Unit is redeemed for a share of Class A common stock, a corresponding share of Class B common stock will be cancelled.

Redemption Rights of Members of Holdings

 


Under the Holdings LLC Agreement, Bernhard Capital Partners, and following August 14, 2020 (the date that is six months from the consummation of the Business Combination), each of the other members of Holdings (other than the Company and its subsidiaries) has a right to cause Holdings to redeem, from time to time, but in any event subject to the lock-up agreements described in “Shares Eligible for Future Sale — Lock-up Agreements,” all or a portion of such member’s Holdings Units (together with an equal number of shares of Class B common stock) for either (x) the delivery by Holdings of a number of shares of Class A common stock equal to the number of Holdings Units surrendered or (y) at Holdings’ election made in accordance with the Holdings LLC Agreement, the delivery by Holdings of cash equal to the Cash Election Amount (as defined in the Holdings LLC Agreement) calculated with respect to such redemption. See “Certain Relationships and Related Party Transactions — Material Relationships and Transactions with the Selling Stockholder.”

Voting power of Class A common stock after giving effect to this offering

 



34.6% (or 37.3% if the underwriters’ option to purchase additional shares is exercised in full).

Voting power of Class B common stock after giving effect to this offering

 



65.4% (or 62.7% if the underwriters’ option to purchase additional shares is exercised in full).

8

Voting rights

 

Each share of our Class A common stock entitles its holder to one vote on all matters to be voted on by stockholders generally. Each share of our Class B common stock entitles its holder to one vote on all matters to be voted on by stockholders generally. Holders of our Class A common stock and Class B common stock vote together as a single class on all matters presented to our stockholders for their vote or approval, except as otherwise required by applicable law or by our certificate of incorporation. See “Description of Capital Stock.”

Use of proceeds

 

We estimate that, based on an assumed offering price of $9.20 per share (which is the last reported sales price of our Class A common stock on the NASDAQ on August 10, 2020), and after deducting underwriting discounts and commissions and estimated offering expenses payable by us, we will receive approximately $43.0 million of net proceeds from our offering of Class A common stock. Unless we inform you otherwise in a prospectus supplement or free writing prospectus, we intend to use a portion of the net proceeds from this offering to repay $24.0 million of revolver borrowings outstanding under the Atlas Credit Agreement (defined below) and the remaining net proceeds for general corporate purposes. We will not receive any proceeds from the sale of Class A common stock by the selling stockholder in this offering. See “Use of Proceeds.”

Dividend policy

 

We currently do not intend to declare any dividends on our common stock in the foreseeable future. Our ability to declare dividends may be limited by restrictive covenants contained in any of our existing or future indebtedness. See “Dividend Policy.”

NASDAQ Stock Market symbol

 

ATCX.

Risk factors

 

Investing in our common stock involves a high degree of risk. See “Risk Factors” beginning on page 13 of this prospectus for a discussion of factors you should carefully consider before investing in our common stock.

Conflicts of Interest

 

Boxwood Sponsor, which beneficially owns more than 10% of our outstanding common stock, is an affiliate of Macquarie Capital, an underwriter in this offering. In addition, an affiliate of Macquarie Capital (USA) Inc. (“Macquarie Capital”) is a lender under the Atlas Credit Agreement and will receive 5% or more of the net proceeds of this offering due to the repayment of our revolver borrowings outstanding under the Atlas Credit Agreement. As a result, Macquarie Capital is deemed to have a “conflict of interest” within the meaning of Rule 5121 (“Rule 5121”) of the Financial Industry Regulatory Authority (“FINRA”). Accordingly, this offering will be conducted in accordance with Rule 5121, which requires, among other things, that a “qualified independent underwriter” participate in the preparation of, and exercise the usual standards of “due diligence” with respect to, the registration statement and this prospectus. Lake Street Capital Markets, LLC has agreed to act as a qualified independent underwriter for this offering. Lake Street Capital Markets, LLC will not receive any additional fees for serving as a qualified independent underwriter in connection with this offering. We have agreed to indemnify Lake Street Capital Markets, LLC against liabilities incurred in connection with acting as a qualified independent underwriter, including liabilities under the Securities Act.

Except as otherwise indicated, all information contained in this prospectus assumes that the underwriters do not exercise their option to purchase additional shares of Class A common stock. Additionally, unless otherwise indicated, all information contained in this prospectus regarding the number of shares of common stock that will be outstanding immediately after this offering is based on 5,767,342 shares of Class A common stock and 23,974,368 shares of Class B common stock outstanding as of August 10, 2020, and:

•        excludes 598,275 shares of Class A common stock underlying restricted stock units that were outstanding as of August 10, 2020;

•        excludes 23,750,000 shares of Class A common stock underlying (i) 20,000,000 warrants (the “Public Warrants”) originally sold as part of the units in our initial public offering (the “IPO”) and (ii) 3,750,000 warrants originally sold as part of units to Boxwood Sponsor in private placements that closed concurrently with our IPO (the “Private Placement Warrants,” and together with the Public Warrants, the “Warrants”); and

•        excludes any shares that may be issuable to Alta Vista as described in Note 16 to our financial statements included elsewhere in this prospectus

9

SUMMARY HISTORICAL AND UNAUDITED PRO FORMA FINANCIAL DATA

The following tables set forth our summary historical and unaudited pro forma statement of operations data, balance sheet data and cash flow statement data as of the dates and for the periods indicated. The summary historical financial data as of and for the six months ended June 30, 2020 and for the six months ended June 30, 2019 is derived from our unaudited condensed consolidated financial statements appearing elsewhere in this prospectus. The summary historical and financial data as of and for the years ended December 31, 2019 and 2018 are derived from the audited consolidated financial statements of Atlas Intermediate and ATC Group appearing elsewhere in this prospectus. The following summary financial data should be read with the sections titled “Unaudited Pro Forma Condensed Combined Financial Statements,” “Selected Historical Financial Data” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” as well as our financial statements and the related notes included elsewhere in this prospectus. Our historical results are not necessarily indicative of the results that may be expected for any period in the future.

The summary unaudited pro forma condensed combined financial information presents our unaudited pro forma condensed combined financial results for the year ended December 31, 2019 and for the six months ended June 30, 2020 based upon the combined historical financial statements of the Company, Boxwood and Atlas Intermediate after giving effect to the Business Combination and related adjustments, including the related equity financing and debt financing, as if they had been completed on January 1, 2019 and is derived from the unaudited pro forma condensed combined consolidated financial statements appearing elsewhere in this prospectus.

This information has been developed from and should be read together with the Company’s, Boxwood’s and Atlas Intermediate and ATC Group’s historical audited and unaudited financial statements and related notes included herein.

The unaudited pro forma condensed combined financial information is provided for informational purposes only and is not necessarily indicative of the operating results or financial position that would have occurred if the Business Combination had been completed as of the dates set forth above, nor is it indicative of the future results or financial position of the combined company.

10

         

Pro Forma

   

Six Months Ended
June 30,

 

Years Ended
December 31,

 

Six Months Ended
June 30,
2020

 

Year Ended December 31,
2019

   

2020

 

2019

 

2019

 

2018

 
   

(in thousands, except share and per share data and Adjusted EBITDA)

   

(unaudited)

               

Statement of Operations Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

$

222,017

 

 

$

229,280

 

 

$

471,047

 

 

$

426,439

 

 

$

222,017

 

 

$

471, 047

 

Cost of revenues

 

 

(117,612

)

 

 

(125,624

)

 

 

(259,741

)

 

 

(249,504

)

 

 

(117,612

)

 

 

(259,741

)

Operating expenses

 

 

(113,741

)

 

 

(92,105

)

 

 

(192,075

)

 

 

(157,459

)

 

 

(94,697

)

 

 

(182,861

)

Operating (loss) income

 

 

(9,336

)

 

 

11,551

 

 

 

19,231

 

 

 

19,476

 

 

 

9,708

 

 

 

28,445

 

Interest expense, net

 

 

(12,038

)

 

 

(5,534

)

 

 

(9,862

)

 

 

(6,787

)

 

 

(11,519

)

 

 

(19,477

)

Other

 

 

50

 

 

 

(782

)

 

 

(1,339

)

 

 

(644

)

 

 

50

 

 

 

(4,252

)

Net (loss) income

 

$

(21,324

)

 

$

4,863

 

 

$

8,030

 

 

$

12,045

 

 

$

(1,761

)

 

$

4,716

 

Provision for non-controlling interest

 

 

5,141

 

 

 

 

 

 

 

 

 

 

 

 

7,926

 

 

 

7,077

 

Redeemable preferred stock dividends

 

 

(6,777

)

 

 

 

 

 

 

 

 

 

 

 

(8,973

)

 

 

(17,919

)

Net (loss) income attributable to Members/holders of Class A common stock

 

$

(22,960

)

 

$

4,863

 

 

$

8,030

 

 

$

12,045

 

 

$

(2,808

)

 

$

(6,126

)

Net loss per Class A common share: basic and diluted(1)

 

$

(22,960

)

 

 

N/A

 

 

 

N/A

 

 

 

N/A

 

 

$

(0.49

)

 

$

(1.05

)

Weighted-average Class A common shares used in computing net loss per share: basic and diluted(1)

 

 

N/A

 

 

 

N/A

 

 

 

N/A

 

 

 

N/A

 

 

 

5,767,342

 

 

 

5,827,342

 

Balance Sheet Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

16,881

 

 

 

 

 

 

$

20,185

 

 

$

6,509

 

 

 

 

 

 

 

 

 

Property and equipment, net

 

 

15,439

 

 

 

 

 

 

 

14,824

 

 

 

12,260

 

 

 

 

 

 

 

 

 

Total Assets

 

$

354,875

 

 

 

 

 

 

$

352,773

 

 

$

354,835

 

 

 

 

 

 

 

 

 

Long-term debt, net of current maturities and loan costs, and other long-term liabilities

 

 

270,915

 

 

 

 

 

 

 

158,557

 

 

 

112,362

 

 

 

 

 

 

 

 

 

Total shareholders’ equity (deficit)/members’ capital

 

 

(127,483

)

 

 

 

 

 

$

127,443

 

 

$

171,794

 

 

 

 

 

 

 

 

 

Cash Flow Statement Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net cash (used in) provided by operating activities

 

$

(6,250

)

 

$

6,942

 

 

$

31,507

 

 

$

36,916

 

 

 

 

 

 

 

 

 

Net cash (used in) investing activities

 

 

(12,881

)

 

 

(4,091

)

 

 

(9,607

)

 

 

(14,149

)

 

 

 

 

 

 

 

 

Net cash (used in) provided by financing activities

 

 

15,827

 

 

 

781

 

 

 

(8,224

)

 

 

(26,875

)

 

 

 

 

 

 

 

 

Other Financial Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA
(in millions)
(2)(3)

 

$

28.3

 

 

$

28.2

 

 

$

65.6

 

 

$

52.6

 

 

 

 

 

 

 

 

 

____________

(1)      See Notes 1 and 9 to our financial statements included elsewhere in this prospectus for an explanation of the calculations of our basic and diluted net loss per share and the weighted-average number of shares used in the computation of the per share amounts as of the years ended December 31, 2018 and 2019, and six months ended June, 2019 and 2020.

(2)      Our capital expenditures for 2018 and 2019 were $8,453 thousand and $5,626 thousand respectively.

(3)      For a definition of Adjusted EBITDA and a reconciliation of Adjusted EBITDA to historical combined net income (loss), see “— Non-GAAP Financial Measures” below.

11

NON-GAAP FINANCIAL MEASURES

Adjusted EBITDA

Adjusted EBITDA is not a financial measure determined in accordance with GAAP. We define Adjusted EBITDA as net income before interest expense, provision for income taxes, depreciation and amortization, further adjusted to reflect non-cash equity compensation as well as certain one-time or non-recurring items.

We believe Adjusted EBITDA is a useful performance measure because it allows for an effective evaluation of our operating performance when compared to our peers, without regard to our financing methods or capital structure. We exclude the items listed above from net income in arriving at Adjusted EBITDA because these amounts are either non-recurring or can vary substantially within the industry depending upon accounting methods and book values of assets, capital structures and the method by which the assets were acquired. Adjusted EBITDA should not be considered as an alternative to, or more meaningful than, net income determined in accordance with GAAP. Certain items excluded from Adjusted EBITDA are significant components in understanding and assessing a company’s financial performance, such as a company’s cost of capital and tax structure, as well as the historic costs of depreciable assets, none of which are reflected in Adjusted EBITDA. Our presentation of Adjusted EBITDA should not be construed as an indication that results will be unaffected by the items excluded from Adjusted EBITDA. Our computations of Adjusted EBITDA may not be identical to other similarly titled measures of other companies. The following table presents reconciliations of Adjusted EBITDA to net income, our most directly comparable financial measure calculated and presented in accordance with GAAP.

 

Six Months Ended
June 30,

 

Year Ended
December 31,

   

2020

 

2019

 

2019

 

2018

   

(in millions)

Net (loss) income

 

$

(21.3

)

 

 

4.9

 

$

8.0

 

$

12.0

Interest expense

 

 

12.0

 

 

 

5.5

 

 

9.9

 

 

6.8

Provision for income taxes

 

 

 

 

 

0.2

 

 

1.3

 

 

0.3

Depreciation and amortization

 

 

10.3

 

 

 

10.5

 

 

19.9

 

 

20.0

EBITDA

 

$

1.0

 

 

 

21.1

 

$

39.1

 

$

39.2

EBITDA for acquired businesses prior to acquisition date(1)

 

$

0.8

 

 

$

1.7

 

$

 

$

0.6

Non-cash increase in fair value of earnout

 

 

 

 

 

 

 

 

 

2.8

One-time legal/transaction costs and other non-recurring charges(2)

 

 

15.9

 

 

 

4.8

 

 

24.5

 

 

9.8

Non-cash equity compensation(4)

 

 

10.6

 

 

 

0.6

 

 

2.0

 

 

0.2

Adjusted EBITDA

 

$

28.3

 

 

$

28.2

 

$

65.6

 

$

52.6

____________

(1)      For year-end figures, includes the EBITDA of SCST (which we acquired in November 2018) and Piedmont (which we acquired in August 2018) for the period January 1, 2018 through the date of the respective acquisition. For quarterly figures, includes the EBITDA of LONG (which we acquired in February 2020) for the period January 1, 2020 through the date of the respective acquisition and January 1, 2019 through June 30, 2019.

(2)      Includes professional service-related service fees such as legal, accounting, tax, valuation and other consulting relating as well as change in control payments relating to the Business Combination. Additionally, it includes other acquisition related professional fees, previous owner expenses and costs to shut down the telecom division.

(3)      For year-end figures, includes non-recurring severance and lease termination costs associated with the ATC Group Services merger, startup expenses for new offices, corporate entity formation and enterprise resource planning costs, a non-recurring contract loss and discontinued operations. For quarterly figures, includes acquisition related professional fees, previous owner expenses, and shutdown of the telecom division costs and change in control payments relating to the Business Combination.

(4)      Includes the amortization of the unvested portion of our 2017 and 2019 Management Incentive Plan grants that vested immediately upon the change in control provisions contained within the agreements and compensation that was earned and accrued for in the three months ended March 31, 2020 that were share settled in the three months ended June 30, 2020.

12

Risk Factors

Investing in our securities involves a high degree of risk. You should consider carefully the risks and uncertainties described below, together with all of the other information in this prospectus, including the consolidated financial statements and related notes included herein, and any subsequently filed Quarterly Reports on Form 10-Q before deciding whether to purchase any of our securities. Any of these risks may have a material adverse effect on our business, financial condition, results of operations and cash flows and our prospects could be harmed. In that event, the price of our securities could decline and you could lose part or all of your investment.

Additionally, the risks and uncertainties described in this prospectus or any prospectus supplement are not the only risks and uncertainties that we face. Additional risks and uncertainties not presently known to us or that we currently believe to be immaterial may also adversely affect our business. Furthermore, the on-going global pandemic related to COVID-19 may amplify many of the risks discussed below to which we are subject and, given the unpredictable, unprecedented and fluid nature of the pandemic, it may materially and adversely affect us in ways that are not anticipated by or known to us or that we do not consider to present significant risk. Therefore, we are unable to estimate the extent to which the pandemic and its related impacts will adversely affect our business, financial condition and results of operations as well as our stock price following completion of this offering.

Risks Relating to Our Business and Industry 

Outbreaks of communicable diseases, including the on-going global pandemic related to COVID-19, have had and could continue to have, directly or indirectly, a material and adverse effect on our business, financial condition and results of operations. The duration and extent to which this will impact our future financial condition and results of operations remains uncertain.

Global or national health concerns, including the outbreak of pandemic or contagious disease, can negatively impact the global economy and, therefore, demand and pricing for our services. For example, the outbreak of the COVID-19 pandemic and the measures being taken to address and limit the spread of the virus have already adversely affected the U.S. economy and financial markets, resulting in an economic downturn that has negatively impacted the demand for our services. Furthermore, the COVID-19 pandemic also raises the possibility of an extended global economic downturn and has caused volatility in financial markets, which could affect demand for our services and impact our financial condition and results of operations even after the pandemic is contained and the containment measures are lifted. For example, if a client’s financial difficulties become severe, the client may be unwilling or unable to pay our invoices in the ordinary course of business, which could adversely affect collections of both our accounts receivable and unbilled services. The COVID-19 pandemic raises the possibility of an extended global economic downturn which may impact the ability of our customers to pay for our services. We continue to monitor the impact of the COVID-19 pandemic on our cash flows and on the credit and financial markets.

Additionally, we have an increased number of employees working remotely. As a result, we may have increased cyber security and data security risks, due to increased use of home Wi-Fi networks and virtual private networks, as well as increased disbursement of physical machines. While we implement IT controls to reduce the risk of a cyber-security and data security breach, there is no guarantee that these measures will be adequate to safeguard all systems with an increased number of employees working remotely.

At this time we are monitoring, and will continue to monitor, the safety of our employees during the COVID-19 pandemic. We are evaluating, and will continue to evaluate, the impact of COVID-19 on current projects, but the full effects of COVID-19 on our operations are still unknown. The duration and extent of the impact from the COVID-19 pandemic depends on future developments that cannot be accurately predicted at this time, such as the severity and transmission rate of the virus, the extent and effectiveness of containment actions, and the impact of these and other factors on our employees and clients. The extension of shelter-in-place orders within the cities and municipalities we operate in could further negatively impact future results as well as the re-designation of infrastructure spending to non-essential services. Disruptions to capital markets due to the uncertainty surrounding the length and severity of COVID-19 could delay the timing of our customers’ capital projects. In addition, the timing of payments from our commercial customers may be impacted.

13

We cannot assure you that we will achieve synergies and cost savings in connection with prior or future acquisitions.

We may not achieve anticipated cost savings in connection with prior or future acquisitions within the anticipated time frames or at all. A variety of risks could cause us not to realize some or all of these expected benefits. These risks include, among others, higher than expected standalone overhead expenses, delays in the anticipated timing of activities related to such initiatives and the incurrence of other unexpected costs associated with operating the business. Moreover, our implementation of cost savings initiatives may disrupt our operations and performance, and our estimated cost savings from such initiatives may be based on assumptions that prove to be inaccurate. If, for any reason, the benefits we realize are less than our estimates or our improvement initiatives adversely affect our operations or cost more or take longer to implement than we project, or if our assumptions prove inaccurate, our results of operations may be materially and adversely affected.

In addition, our operating results from these acquisitions could, in the future, result in impairment charges for any of our intangible assets, including goodwill, or other long-lived assets, particularly if economic conditions worsen unexpectedly. These changes could materially adversely affect our results of operations, financial condition, stockholders’ equity, and cash flows.

Our continued success is dependent upon our ability to hire, retain and utilize qualified personnel.

The success of our business is dependent upon our ability to hire, retain and utilize qualified personnel, including engineers, architects, designers, craft personnel and corporate management professionals who have the required experience and expertise at a reasonable cost. The market for these and other personnel is competitive. From time to time, it may be difficult to attract and retain qualified individuals with the expertise, and in the timeframe, demanded by our clients, or to replace such personnel when needed in a timely manner. In certain geographic areas, for example, we may not be able to satisfy the demand for our services because of our inability to successfully hire and retain qualified personnel. Furthermore, some of our personnel hold government granted clearance that may be required to obtain government projects. If we were to lose some or all of these personnel, they would be difficult to replace. Loss of the services of, or failure to recruit, qualified technical and management personnel could limit our ability to successfully complete existing projects and compete for new projects.

In addition, if any of our key personnel retire or otherwise leave the company, we need to have appropriate succession plans in place and to successfully implement such plans, which requires devoting time and resources toward identifying and integrating new personnel into leadership roles and other key positions. If we cannot attract and retain qualified personnel or effectively implement appropriate succession plans, it could have a material adverse impact on our business, financial condition and results of operations.

The cost of providing our services, including the extent to which we utilize our workforce, affects our profitability. For example, the uncertainty of contract award timing can present difficulties in matching our workforce size with our contracts. If an expected contract award is delayed or not received, we could incur costs resulting from excess staff, reductions in staff, or redundancy of facilities that could have a material adverse impact on our business, financial condition and results of operations.

Our profitability could suffer if we are not able to maintain adequate utilization of our workforce.

The cost of providing our services, including the extent to which we utilize our workforce, affects our profitability. The rate at which we utilize our workforce is affected by several factors, including:

•        our ability to transition employees from completed projects to new assignments and to hire and assimilate new employees;

•        our ability to forecast demand for our services and thereby maintain an appropriate headcount in each of our geographies and workforces;

•        our ability to manage attrition;

•        our need to devote time and resources to training, business development, professional development, and other non-chargeable activities;

14

•        our ability to match the skill sets of our employees to the needs of the marketplace; and

•        if we over-utilize our workforce, our employees may become disengaged, which will impact employee attrition. If we under-utilize our workforce, our profit margin and profitability could suffer.

If we are unable to integrate acquired businesses successfully, our business could be harmed.

As part of our business strategy to pursue accretive acquisitions, we intend to selectively pursue targets that provide complementary, low-risk services and expand our national platform. Our inability to successfully integrate future acquisitions could impede it from realizing all of the benefits of those acquisitions and could weaken our business operations. The integration process of any particular acquisition may disrupt our business and, if implemented ineffectively, may preclude realization of the full benefits expected by us and could harm our results of operations. In addition, the overall integration process may result in unanticipated problems, expenses, liabilities and competitive responses and may cause our stock price to decline.

The difficulties of integrating acquisitions include, among other things:

•        unanticipated issues in integration of information, communications and other systems;

•        unanticipated incompatibility of logistics, marketing and administration methods;

•        maintaining employee morale and retaining key employees;

•        integrating the business cultures of both companies;

•        preserving important strategic client relationships;

•        consolidating corporate and administrative infrastructures and eliminating duplicative operations; and

•        coordinating geographically separate organizations.

In addition, even if the operations of an acquisition are integrated successfully, we may not realize the full benefits of such acquisition, including the synergies, cost savings or growth opportunities that it expects. These benefits may not be achieved within the anticipated time frame, or at all.

Further, acquisitions may also cause us to:

•        cause our management to expend significant time, effort and resources;

•        issue securities that would dilute our current stockholders;

•        use a substantial portion of our cash resources;

•        increase our interest expense, leverage and debt service requirements if we incur additional debt to pay for an acquisition;

•        assume liabilities, including environmental liabilities, for which we do not have indemnification from the former owners or have indemnification that may be subject to dispute or concerns regarding the creditworthiness of the former owners;

•        record goodwill and non-amortizable intangible assets that are subject to impairment testing on a regular basis and potential impairment charges;

•        experience volatility in earnings due to changes in contingent consideration related to acquisition liability estimates;

•        incur amortization expenses related to certain intangible assets;

•        lose existing or potential contracts as a result of conflict of interest issues;

•        incur large and immediate write-offs; or

•        become subject to litigation.

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Construction and maintenance sites are inherently dangerous workplaces. If we, the owner, or others working at the project site fail to maintain safe work sites, we can be exposed to significant financial losses and reputational harm, as well as civil and criminal liabilities.

Construction and maintenance sites often put our employees and others in proximity with large pieces of mechanized equipment, moving vehicles, chemical and manufacturing processes, and highly regulated materials, in a challenging environment. If we fail to implement safety procedures or if the procedures we implement are ineffective, or if others working at the site fail to implement and follow appropriate safety procedures, our employees and others may become injured, disabled or even lose their lives, the completion or commencement of our projects may be delayed, and we may be exposed to litigation or investigations. Unsafe work sites also have the potential to increase employee turnover, increase the cost of a project to our clients, and raise our operating and insurance costs. Any of the foregoing could result in financial losses or reputational harm, which could have a material adverse impact on our business, financial condition and results of operations.

In addition, our projects can involve the handling of hazardous and other highly regulated materials, which, if improperly handled or disposed of, could subject us to civil and/or criminal liabilities. We are also subject to regulations dealing with occupational health and safety. Although we maintain functional groups whose primary purpose is to ensure we implements effective health, safety and environmental (“HSE”) work procedures throughout our organization, including construction sites and maintenance sites, the failure to comply with such regulations could subject it to liability. In addition, despite the work of our functional groups, we cannot guarantee the safety of our personnel or that there will be no damage to or loss of our work, equipment or supplies.

Our safety record is critical to our reputation. Many of our clients require that we meet certain safety criteria to be eligible to bid for contracts and many contracts provide for automatic termination or forfeiture of some or all of our contract fees or profit in the event we fail to meet certain measures. Accordingly, if we fail to maintain adequate safety standards, we could suffer reduced profitability or the loss of projects or clients, which could have a material adverse impact on our business, financial condition and results of operations.

Demand from clients is cyclical and vulnerable to economic downturns. If the economy weakens or client spending declines, our financial results may be impacted.

Demand for services from our clients is cyclical and vulnerable to economic downturns, which may result in clients delaying, curtailing or canceling proposed and existing projects. Our business traditionally lags the overall recovery in the economy. If the economy weakens or client spending declines, then our revenue, profits and overall financial condition may deteriorate.

In addition, if there is an economic downturn, our existing and potential clients may either postpone entering into new contracts or request price concessions. Difficult financing and economic conditions may cause some of our clients to demand better pricing terms or delay payments for services we perform, thereby increasing the average number of days our receivables are outstanding and the potential of increased credit losses on uncollectible invoices. Further, these conditions may result in the inability of some of our clients to pay us for services that it has already performed. Accordingly, these factors affect our ability to forecast our future revenue and earnings from business areas that may be adversely impacted by market conditions.

Our results of operations depend on the award of new contracts and the timing of the performance of these contracts.

Our revenues are derived from new contract awards. Delays in the timing of the awards or cancellations of such prospects as a result of economic conditions, material and equipment pricing and availability or other factors could impact our long-term projected results. It is particularly difficult to predict whether or when we will receive large-scale projects as these contracts frequently involve a lengthy and complex bidding and selection process, which is affected by several factors, such as market conditions or governmental and environmental approvals. Since a significant portion of our revenues is generated from such projects, our results of operations and cash flows can fluctuate significantly from quarter to quarter depending on the timing of our contract awards and the commencement or progress of work under awarded contracts. Furthermore, many of these contracts are subject to financing contingencies and, as a result, we are subject to the risk that the customer will not be able to secure the necessary financing for the project.

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In addition, certain contracts require us to satisfy specific progress or performance milestones in order to receive payment from the customer. As a result, we may incur significant costs for engineering, materials, components, equipment, labor or subcontractors prior to receipt of payment from a customer.

The uncertainty of contract award timing can also present difficulties in matching workforce size with contract needs. In some cases, we maintain and bear the cost of a ready workforce that is larger than necessary under existing contracts in anticipation of future workforce needs for expected contract awards. If an expected contract award is delayed or not received, we may incur additional costs resulting from reductions in staff or redundancy of facilities, which could have a material adverse effect on our business, financial condition and results of operations.

The contracts in our backlog may be adjusted, cancelled or suspended by our clients and, therefore, our backlog is not necessarily indicative of our future revenues or earnings. Additionally, even if fully performed, our backlog is not a good indicator of future gross margins.

Backlog represents the total dollar amount of revenues we expect to record in the future as a result of performing work under contracts that have been awarded to it. As of June 30, 2020, our backlog totaled approximately $621 million. There is no assurance that backlog will be realized as revenues in the amounts reported or, if realized, will result in profits. In accordance with industry practice, substantially all of our contracts are subject to cancellation, termination, or suspension at the discretion of the client. In the event of a project cancellation, we would generally have no contractual right to the total revenue reflected in our backlog. Projects can remain in backlog for extended periods of time because of the nature of the project and the timing of the services required by the project. The risk of contracts in backlog being cancelled or suspended generally increases during periods of widespread economic slowdowns or in response to changes in commodity prices.

The contracts in our backlog are subject to changes in the scope of services to be provided as well as adjustments to the costs relating to the contracts. The revenue for certain contracts included in backlog is based on estimates. Additionally, the way we perform on our individual contracts can affect greatly our gross margins and hence, future profitability.

Our services expose us to significant risks of liability, and our insurance policies may not provide adequate coverage.

If we fail to provide our services in accordance with applicable professional standards or contractual requirements, we could be exposed to significant monetary damages or even criminal violations. Our engineering practice, for example, involves professional judgments regarding the planning, design, development, construction, operations and management of industrial facilities and public infrastructure projects. While we do not generally accept liability for consequential damages in our contracts, and although we have adopted a range of insurance, risk management and risk avoidance programs designed to reduce potential liabilities, a catastrophic event at one of our project sites or completed projects resulting from the services we have performed could result in significant professional or product liability, and warranty or other claims against us as well as reputational harm, especially if public safety is impacted. These liabilities could exceed our insurance limits or the fees we generate, may not be covered by insurance at all due to various exclusions in our coverage and self-insured retention amounts, and could impact our ability to obtain insurance in the future. Further, even where coverage applies, the policies have deductibles, which result in our assumption of exposure for certain amounts with respect to any claim filed against us. In addition, clients or subcontractors who have agreed to indemnify us against any such liabilities or losses might refuse or be unable to pay it. An uninsured claim, either in part or in whole, as well as any claim covered by insurance but subject to a high deductible, if successful and of a material magnitude, could have a material adverse impact on our business, financial condition and results of operations.

Unavailability or cancellation of third-party insurance coverage would increase our overall risk exposure as well as disrupt the management of our business operations.

We maintain insurance coverage from third-party insurers as part of our overall risk management strategy and some of our contracts require us to maintain specific insurance coverage limits. If any of our third-party insurers fail, suddenly cancel coverage, or otherwise are unable to provide us with adequate insurance coverage, our overall risk exposure and operational expenses would increase and the management of our business operations would be disrupted. In addition, there can be no assurance that any of our existing insurance coverage will be renewable upon the expiration of the coverage period or that future coverage will be affordable at the required limits.

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Catastrophic events may adversely impact our business operations.

Our business operations may be adversely impacted by force majeure or extraordinary events beyond the control of the contracting parties, such as natural and man-made disasters as well as terrorist attacks. Such events could result in the closure of offices, interruption of projects, and the relocation of employees. We typically remain obligated to perform our services after a terrorist attack or natural disaster unless the contract contains a force majeure clause that relieves us of our contractual obligations. If we are not able to react quickly to force majeure, our operations may be affected significantly, which would have a negative impact on our business operations.

Further, we rely on our network and third-party infrastructure and enterprise applications, internal technology systems, and our website for our development, marketing, operational, support, hosted services, and sales activities. Despite our implementation of network security measures, we are vulnerable to disruption, infiltration, or failure of these systems or third-party hosted services in the event of a major earthquake, fire, power loss, telecommunications failure, cyber-attack, war, terrorist attack, or other catastrophic event could cause system interruptions, reputational harm, loss of intellectual property, lengthy interruptions in our services, breaches of data security, and loss of critical data and could harm our future operating results.

We engage in a highly competitive business. If we are unable to compete effectively, we could lose market share and our business and results of operations could be negatively impacted.

We face intense competition to provide technical, professional and construction services to clients. The markets we serve are highly competitive and we compete against many regional, national and multinational companies.

The extent of our competition varies by industry, geographic area and project type. Our projects are frequently awarded through a competitive bidding process, which is standard in our industry. We are constantly competing for project awards based on pricing, schedule and the breadth and technical sophistication of our services. Competition can place downward pressure on our contract prices and profit margins, and may force us to accept contractual terms and conditions that are less favorable to us, thereby increasing the risk that, among other things, we may not realize profit margins at the same rates as we have seen in the past or may become responsible for costs or other liabilities we have not accepted in the past. If we are unable to compete effectively, we may experience a loss of market share or reduced profitability or both, which, if significant, could have a material adverse impact on our business, financial condition and results of operations.

The nature of our contracts, particularly those that are fixed price, subject us to risks of cost overruns. We may experience reduced profits or, in some cases, losses if costs increase above budgets or estimates or if the project experiences schedule delays.

As of June 30, 2020 and December 31, 2019, less than 10% of our revenues were earned under fixed price contracts. Fixed price contracts require us to estimate the total cost of the project in advance of its performance. For fixed price contracts, we may benefit from any cost savings, but we bear greater risk of paying some, if not all, of any cost overruns. Fixed price contracts are established in part on partial or incomplete designs, cost and scheduling estimates that are based on several assumptions, including those about future economic conditions, commodity and other materials pricing and availability of labor, equipment and materials, and other exigencies. If the design or the estimates prove inaccurate or if circumstances change due to, among other things, unanticipated technical problems, difficulties in obtaining permits or approvals, changes in local laws or labor conditions, weather or other delays beyond our control, changes in the costs of equipment or raw materials, our vendors’ or subcontractors’ inability or failure to perform, or changes in general economic conditions, then cost overruns may occur and we could experience reduced profits or, in some cases, a loss for that project. These risks are exacerbated for projects with long-term durations because there is an increased risk that the circumstances on which we based our original estimates will change in a manner that increases costs. If the project is significant, or there are one or more issues that impact multiple projects, costs overruns could have a material adverse impact on our business, financial condition and results of operations.

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Governmental agencies may modify, curtail or terminate our contracts at any time prior to their completion and, if we do not replace them, we may suffer a decline in revenue.

Most government contracts may be modified, curtailed or terminated by the government either at our discretion or upon the default of the contractor. If the government terminates a contract at its discretion, then we typically can recover only costs incurred or committed, settlement expenses and profit on work completed prior to termination, which could prevent us from recognizing all our potential revenue and profits from that contract. In addition, for some assignments, the U.S. government may attempt to “insource” the services to government employees rather than outsource to a contractor. If a government terminates a contract due to our default, we could be liable for excess costs incurred by the government in obtaining services from another source.

Our failure to comply with a variety of complex procurement rules and regulations could damage our reputation and result on our being liable for penalties, including termination of our government contracts, disqualification from bidding on future government contracts, suspension or debarment from government contracting.

We must comply with laws and regulations relating to government contracts, which affect how we do business with our customers and may impose added costs on our business. Some significant laws and regulations that affect us include:

•        federal, state, and local laws and regulations (including the Federal Acquisition Regulation or “FAR”) regarding the formation, administration, and performance of government contracts;

•        the Civil False Claims Act, which provides for substantial civil penalties for violations, including for submission of a false or fraudulent claim to the U.S. government for payment or approval; and

•        federal, state, and local laws and regulations regarding procurement integrity including gratuity, bribery and anti-corruption requirements as well as limitations on political contributions and lobbying.

Any failure to comply with applicable laws and regulations could result in contract termination, damage to our reputation, price or fee reductions or suspension or debarment from contracting with the government, each of which could materially adversely affect our business, results of operations and financial condition.

In addition, federal, state, and local government entities may revise existing contract rules and regulations or adopt new contract rules and regulations at any time and may also face restrictions or pressure regarding the type and amount of services that they may obtain from private contractors. Any of these changes could impair our ability to obtain new contracts or renew contracts under which we currently perform when those contracts are eligible for recompetition.

We are dependent on third parties to complete certain elements of our contracts.

Third-party subcontractors we hire perform certain work under our contracts. We also rely on third-party equipment manufacturers or suppliers to provide equipment and materials used for certain of our projects. If we are unable to hire qualified subcontractors or find qualified equipment manufacturers or suppliers, our ability to successfully complete certain projects could be impaired. If we are not able to locate qualified third-party subcontractors or the amount we are required to pay for subcontractors or equipment and supplies exceeds what we have estimated, especially in a lump sum or a fixed price contract, we may suffer losses on these contracts. If a subcontractor, supplier or manufacturer fails to provide services, supplies or equipment as required under a contract for any reason, we may be required to source these services, equipment or supplies to other third parties on a delayed basis or on less favorable terms, which could impact contract profitability. There is a risk that we may have disputes with our subcontractors relating to, among other things, the quality and timeliness of work performed, customer concerns about a subcontractor or our failure to extend existing task orders or issue new task orders under a contract. In addition, faulty workmanship, equipment or materials could impact the overall project, resulting in claims against us for failure to meet required project specifications.

Third parties may find it difficult to obtain enough financing to help fund their operations. The inability to obtain financing could adversely affect a third party’s ability to provide materials, equipment or services which could have a material adverse impact on our business, financial condition and results of operations. In addition, a failure by a third-party subcontractor, supplier or manufacturer to comply with applicable laws, regulations or client requirements could negatively impact our business and, for government clients, could result in fines, penalties, suspension or even debarment being imposed on us, which could have a material adverse impact on our business, financial condition and results of operations.

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We rely on third-party internal and outsourced software to run our critical accounting, project management and financial information systems. As a result, any sudden loss, disruption or unexpected costs to maintain these systems could significantly increase our operational expense and disrupt the management of our business operations.

We rely on third-party software to run our critical accounting, project management and financial information systems. We also depend on our software vendors to provide long-term software maintenance support for our information systems. Software vendors may decide to discontinue further development, integration or long-term software maintenance support for our information systems, in which case we may need to abandon one or more of our current information systems and migrate some or all of our accounting, project management and financial information to other systems, thus increasing our operational expense as well as disrupting the management of our business operations.

Cyber security breaches of our systems and information technology could adversely impact our ability to operate.

We need to protect our own internal trade secrets and other business confidential information from disclosure. We face the threat to our computer systems of unauthorized access, computer hackers, computer viruses, malicious code, organized cyber-attacks and other security problems and system disruptions, including possible unauthorized access to our and our clients’ proprietary or classified information. We rely on industry-accepted security measures and technology to securely maintain all confidential and proprietary information on our information systems. We have devoted and will continue to devote significant resources to the security of our computer systems, but they are still vulnerable to these threats. A user who circumvents security measures can misappropriate confidential or proprietary information, including information regarding us, our personnel and/or our clients, or cause interruptions or malfunctions in operations. As a result, we can be required to expend significant resources to protect against the threat of these system disruptions and security breaches or to alleviate problems caused by these disruptions and breaches. Any of these events can damage our reputation and have a material adverse effect on our business, financial condition, results of operations and cash flows.

Negative conditions in the credit and financial markets and delays in receiving client payments could result in liquidity problems, adversely affecting our cost of borrowing and our business.

Although we finance much of our operations using cash provided by operations, at times we depend on the availability of credit to grow our business and to help fund business acquisitions. Instability in the credit markets in the U.S. or abroad could cause the availability of credit to be relatively difficult or expensive to obtain at competitive rates, on commercially reasonable terms or in sufficient amounts. This situation could make us more difficult or more expensive for us to access funds, refinance our existing indebtedness, enter into agreements for new indebtedness, or obtain funding through the issuance of securities or such additional capital may not be available on terms acceptable to us, or at all. We may also enter into business acquisition agreements that require us to access credit, which if not available at the closing of the acquisition could result in a breach of the acquisition agreement and a resulting claim for damages by the sellers of such business. In addition, market conditions could negatively impact our clients’ ability to fund their projects and, therefore, utilize our services, which could have a material adverse impact on our business, financial condition and results of operations.

Some of our customers, suppliers and subcontractors depend on access to commercial financing and capital markets to fund their operations. Disruptions in the credit or capital markets could adversely affect our clients’ ability to finance projects and could result in contract cancellations or suspensions, project delays and payment delays or defaults by our clients. In addition, clients may be unable to fund new projects, may choose to make fewer capital expenditures or otherwise slow their spending on our services or to seek contract terms more favorable to them. Our government clients may face budget deficits that prohibit them from funding proposed and existing projects or that cause them to exercise their right to terminate our contracts with little or no prior notice. In addition, any financial difficulties suffered by our subcontractors or suppliers could increase our cost or adversely impact project schedules. These disruptions could materially impact our backlog and have a material adverse impact on our business, financial condition and results of operations.

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If we fail to comply with federal, state and local governmental requirements, our business may be adversely affected.

We are subject to U.S. federal, state, and local laws and regulations that affect our business. Although we have policies and procedures to comply with U.S. trade laws, the violation of such laws could subject us and our employees to civil or criminal penalties, including substantial monetary fines, or other adverse actions including debarment from participation in U.S. government contracts, and could damage our reputation and our ability to do business.

Our business strategy relies in part on acquisitions to sustain our growth. Acquisitions of other companies present certain risks and uncertainties.

Our business strategy involves growth through, among other things, the acquisition of other companies. We try to evaluate companies that we believe will strategically fit into our business and growth objectives, including, for example, our acquisition of ATC Group Services in January 2019 and LONG in February 2020. If we are unable to successfully integrate and develop acquired businesses, we could fail to achieve anticipated synergies and cost savings, including any expected increases in revenues and operating results, which could have a material adverse effect on our financial results.

We may not be able to identify suitable acquisition or strategic investment opportunities or may be unable to obtain the required consent of our lenders and, therefore, may not be able to complete such acquisitions or strategic investments. We may incur expenses associated with sourcing, evaluating and negotiating acquisitions (including those that do not get completed), and we may also pay fees and expenses associated with financing acquisitions to investment banks and other advisors. Any of these amounts may be substantial, and together with the size, timing and number of acquisitions we pursue, may negatively affect and cause significant volatility in our financial results.

In addition, we have assumed, and may in the future assume, liabilities of the company we are acquiring. While we retain third-party advisors to consult on potential liabilities related to these acquisitions, there can be no assurances that all potential liabilities will be identified or known to us. If there are unknown liabilities or other obligations, our business could be materially affected.

Our quarterly results may fluctuate significantly, which could have a material negative effect on the price of our Class A common stock.

Our quarterly operating results may fluctuate due to several factors, including:

•        fluctuations in the spending patterns of our customers;

•        the number and significance of projects executed during a quarter;

•        unanticipated changes in contract performance, particularly with contracts that have funding limits;

•        the timing of resolving change orders, requests for equitable adjustments and other contract adjustments;

•        project delays;

•        changes in prices of commodities or other supplies;

•        weather conditions that delay work at project sites;

•        the timing of expenses incurred in connection with acquisitions or other corporate initiatives;

•        natural disasters or other crises;

•        staff levels and utilization rates;

•        changes in prices of services offered by our competitors; and

•        general economic and political conditions.

If our quarterly operating results fluctuate significantly, causing our operating results to fall below the expectations of securities analysts, the price of our Class A common stock may decrease substantially, which could have a material negative impact on our financial condition and results of operations.

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We are an “emerging growth company” and will be able to avail ourselves of reduced disclosure requirements applicable to emerging growth companies, which could make our common stock less attractive to investors.

We are an “emerging growth company,” as defined in the JOBS Act, and we intend to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including not being required to comply with the auditor attestation requirements of Section 404(b) of Sarbanes-Oxley, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. In addition, pursuant to Section 107 of the JOBS Act, as an “emerging growth company” we intend to take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies.

We cannot predict if investors will find our common stock less attractive because we may rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile. We may take advantage of these reporting exemptions until we are no longer an “emerging growth company.” We will remain an “emerging growth company” until the earliest of (i) the last day of the fiscal year in which we have total annual gross revenues of $1.07 billion or more; (ii) the last day of our fiscal year following the fifth anniversary of the date of our initial public offering; (iii) the date on which we have issued more than $1 billion in nonconvertible debt during the previous three years; or (iv) the date on which we are deemed to be a large accelerated filer under the rules of the SEC.

An impairment charge on our goodwill could have a material adverse impact on our financial position and results of operations.

Because we have grown in part through acquisitions, goodwill and intangible assets represent a substantial portion of our assets. Under U.S. GAAP, we are required to test goodwill carried in our combined balance sheets for possible impairment on an annual basis based upon a fair value approach. As of June 30, 2020, we have $92.3 million of goodwill, representing 26% of our total assets of $354.9 million. We also are required to test goodwill for impairment between annual tests if events occur or circumstances change that would more likely than not reduce our enterprise fair value below our book value. These events or circumstances could include a significant change in the business climate, including a significant sustained decline in a reporting unit’s market value, legal factors, operating performance indicators, competition, sale or disposition of a significant portion of our business, potential government actions toward our facilities, and other factors.

If our market capitalization drops significantly below the amount of net equity recorded on our balance sheet, we might indicate a decline in our fair value and would require us to further evaluate whether our goodwill has been impaired. If the fair value of our reporting units is less than their carrying value, we could be required to record an impairment charge. The amount of any impairment could be significant and could have a material adverse impact on our financial position and results of operations for the period in which the charge is taken.

Rising inflation, interest rates, and/or construction costs could reduce the demand for our services as well as decrease our profit on our existing contracts, in particular with respect to our fixed price contracts.

Rising inflation, interest rates, or construction costs could reduce the demand for our services. In addition, we bear all the risk of rising inflation with respect to those contracts that are fixed price. Because a portion of our revenues are earned from fixed price contracts (less than 10% as of June 30, 2020 and December 31, 2019), the effects of inflation on our financial condition and results of operations over the past few years have been generally minor. However, if we expand our business into markets and geographic areas where fixed price and lump sum work is more prevalent, inflation may have a larger impact on our results of operations in the future. Therefore, increases in inflation, interest rates or construction costs could have a material adverse impact on our business, financial condition and results of operations.

We are subject to professional standards, duties and statutory obligations on professional reports and opinions we issue, which could subject us to monetary damages.

We issue reports and opinions to clients based on our professional engineering expertise as well as our other professional credentials that subject us to professional standards, duties and obligations regulating the performance of

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our services. If a client or another third party alleges that our report or opinion is incorrect or it is improperly relied upon and we are held responsible, we could be subject to significant liability or claims for damages. In addition, our reports and other work product may need to comply with professional standards, licensing requirements, securities regulations and other laws and rules governing the performance of professional services in the jurisdiction where the services are performed. We could be liable to third parties who use or rely upon our reports and other work product even if we are not contractually bound to those third parties. These events could in turn result in monetary damages and penalties. 

The outcome of pending and future claims and litigation could have a material adverse impact on our business, financial condition and results of operations.

We are a party to claims and litigation in the normal course of business. Since we engage in engineering and construction activities for large facilities and projects where design, construction or systems failures can result in substantial injury or damage to employees or others, we are exposed to claims and litigation and investigations if there is a failure at any such facility or project. Such claims could relate to, among other things, personal injury, loss of life, business interruption, property damage, pollution and environmental damage and be brought by our clients or third parties, such as those who use or reside near our clients’ projects. We can also be exposed to claims if it agreed that a project will achieve certain performance standards or satisfy certain technical requirements and those standards or requirements are not met. In many of our contracts with clients, subcontractors, and vendors, we agree to retain or assume potential liabilities for damages, penalties, losses and other exposures relating to projects that could result in claims that greatly exceed the anticipated profits relating to those contracts. In addition, while clients and subcontractors may agree to indemnify us against certain liabilities, such third parties may refuse or be unable to pay it.

Risks Relating to this Offering and Our Common Stock

We may be required to take write-downs or write-offs, restructuring and impairment or other charges that could have a significant negative effect on our financial condition, results of operations and stock price, which could cause you to lose some or all of your investment.

Although we conducted due diligence prior to the Business Combination, we cannot assure you that this diligence revealed all material issues that may be present in our business, that it would be possible to uncover all material issues through a customary amount of due diligence, or that factors outside of our control will not later arise. As a result, the company may be forced to later write-down or write-off assets, restructure our operations, or incur impairment or other charges that could result in losses. Even if the due diligence successfully identified certain risks, unexpected risks may arise and previously known risks may materialize in a manner not consistent with our preliminary risk analysis. Even though these charges may be non-cash items and not have an immediate impact on our liquidity, the fact that the company reports charges of this nature could contribute to negative market perceptions about the company or our securities. In addition, charges of this nature may cause the company to violate net worth or other covenants to which we may be subject. Accordingly, our stockholders could suffer a reduction in the value of their shares. Such stockholders are unlikely to have a remedy for such reduction in value unless they are able to successfully claim that the reduction was due to the breach by our officers or directors of a duty of care or other fiduciary duty owed to them, or if they are able to successfully bring a private claim under securities laws that the proxy solicitation or tender offer materials, as applicable, relating to the Business Combination contained an actionable material misstatement or material omission.

Shares of Class A common stock issued pursuant to the terms of the Holdings LLC Agreement or upon exercise of any of our Public Warrants or Private Warrants, will increase the number of shares eligible for resale in the public market.

Pursuant to the terms of Holdings LLC Agreement, Atlas Holdings and its limited partners (the “Continuing Members”) may redeem any or all of the shares of Class B common stock issued to them along with a corresponding number of Holdings Units, for an equal number of shares of Class A common stock. In connection with this offering, the selling stockholder will redeem a portion of its Class B common stock and Holdings Units in exchange for the Class A common stock to be sold by it as part of this offering. Additionally, if the underwriters exercise in full their option to purchase additional shares, the selling stockholder will redeem additional shares of its Class B common stock and Holdings Units in exchange for the Class A common stock to be sold as part of the exercise of such option.

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After the completion of this offering, we will have 12,017,342 outstanding shares of Class A common stock and 22,724,368 outstanding shares of Class B common stock. The number of shares of outstanding Class A common stock includes 5,000,000 shares of Class A common stock that we are selling and 1,250,000 shares of Class A common stock that the selling stockholder is selling in this offering, which may be resold immediately in the public market. It does not include the 937,500 shares of Class A common stock that the selling stockholder may sell in this offering if the underwriters’ option to purchase additional shares of Class A common stock is fully exercised. Following the completion of this offering, Bernhard Capital Partners will continue to own 20,173,983 shares of Class B common stock, representing approximately 58.1% of the voting power of our total outstanding common stock.

Furthermore, we have (i) 20,000,000 outstanding exercisable Public Warrants to purchase 20,000,000 shares of Class A common stock at an exercise price of $11.50 per share and (ii) 3,750,000 Private Placement Warrants outstanding exercisable for 3,750,000 shares of common stock at an exercise price of $11.50 per share.

Shares of Class A common stock issued pursuant to the terms of the Holdings LLC Agreement, or upon exercise of any of the Warrants, will increase in the number of shares of Class A common stock eligible for resale in the public market. Additionally, we may sell additional shares of our Class A common stock in subsequent offerings and cannot predict the size of future issuances of our Class A common stock or securities convertible into Class A common stock or the effect, if any, that future issuances and sales of shares of our Class A common stock will have on the market price of our Class A common stock. Sales of a substantial number of such shares in the public market, or the perception that such sales could occur, may adversely affect the market price of Class A common stock.

This offering will result in dilution to our existing stockholders, and if we raise capital in the future by issuing shares of common or preferred stock or other equity or equity-linked securities, convertible debt or other hybrid equity securities, our then existing stockholders may experience dilution, such new securities may have rights senior to those of our common stock, and the market price of our common stock may be adversely effected.

This offering will result in dilution to our existing stockholders, and if we raise capital in the future by issuing equity or equity-linked securities, our then existing stockholders may experience further dilution. Our second amended and restated certificate of incorporation (the “Charter”) provides that preferred stock may be issued from time to time in one or more series. Our Board of Directors (the “Board”) is authorized to fix the voting rights, if any, designations, powers, preferences, the relative, participating, optional or other special rights and any qualifications, limitations and restrictions thereof, applicable to the shares of each series. Our Board may, without stockholder approval, issue preferred stock with voting and other rights that could adversely affect the voting power and other rights of the holders of the shares of common stock and could have anti-takeover effects. The ability of our Board to issue preferred stock without stockholder approval could have the effect of delaying, deferring or preventing a change of control of us or the removal of existing management. The issuance of any such securities may have the impact of adversely affecting the market price of our common stock.

We may redeem holders’ unexpired warrants prior to their exercise at a time that is disadvantageous to the holder, thereby making such warrants worthless.

We have the ability to redeem outstanding public warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per warrant, provided that the closing price of our Class A common stock equals or exceeds $18.00 per share (as adjusted for share splits, share dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a 30 trading-day period ending on the third trading day prior to proper notice of such redemption. If and when the warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying securities for sale under all applicable state securities laws. Redemption of the outstanding warrants could force holders (i) to exercise the warrants and pay the exercise price therefor at a time when it may be disadvantageous to do so, (ii) to sell the warrants at the then-current market price when the holder might otherwise wish to hold your warrants or (iii) to accept the nominal redemption price which, at the time the outstanding warrants are called for redemption, is likely to be substantially less than the market value of the warrants. The private placement warrants are not redeemable by us so long as they are held by Boxwood Sponsor or its permitted transferees.

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If we fail to develop or maintain an effective system of internal controls, we may not be able to accurately report our financial results or prevent fraud. As a result, current and potential stockholders could lose confidence in our financial reporting, which would harm our business and the trading price of our Class A common stock.

Effective internal controls are necessary for us to provide reliable financial reports, prevent fraud and operate successfully as a public company. If we cannot provide reliable financial reports or prevent fraud, our reputation and operating results would be harmed. We cannot be certain that our efforts to develop and maintain our internal controls will be successful, that we will be able to maintain adequate controls over our financial processes and reporting in the future or that we will be able to comply with our obligations under Section 404 of the Sarbanes-Oxley Act of 2002. Any failure to develop or maintain effective internal controls, or difficulties encountered in implementing or improving our internal controls, could harm our operating results or cause us to fail to meet our reporting obligations. Ineffective internal controls could also cause investors to lose confidence in our reported financial information, which would likely have a negative effect on the trading price of our Class A common stock.

We are a “controlled company” within the meaning of NASDAQ listing standards and the rules of the SEC. As a result, we qualify for, and may elect to rely on, exemptions from certain corporate governance requirements that would otherwise provide protection to stockholders of other companies.

Bernhard Capital Partners beneficially owns, and will continue to own after the consummation of this offering, a majority of the voting power of all outstanding shares of our common stock. Pursuant to NASDAQ listing standards, a company of which more than 50% of the voting power for the election of directors is held by an individual, a group or another company qualifies as a “controlled company” and may elect not to comply with certain corporate governance requirements. Therefore, for so long as Bernhard Capital Partners beneficially owns a majority of the voting power of all outstanding shares of our common stock, we may elect to not be subject to NASDAQ listing standards that would otherwise require us to have: (i) a board of directors comprised of a majority of independent directors; (ii) compensation of our executive officers determined by a majority of the independent directors or a compensation committee comprised solely of independent directors; (iii) a compensation committee charter which, among other things, provides the compensation committee with the authority and funding to retain compensation consultants and other advisors; and (iv) director nominees selected, or recommended for the Board’s selection, either by a majority of the independent directors or a nominating committee comprised solely of independent directors. Accordingly, if we remain a controlled company and if we elect to rely on the exemption and during any transition period following a time when we have made such election and are no longer a controlled company, our stockholders would not have the same protections afforded to stockholders of companies that are subject to all of the NASDAQ corporate governance requirements.

In addition, on June 20, 2012, the SEC passed final rules implementing provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 pertaining to compensation committee independence and the role and disclosure of compensation consultants and other advisers to the compensation committee. The SEC’s rules direct each of the national securities exchanges (including NASDAQ) to develop listing standards requiring, among other things, that: (i) compensation committees be composed of fully independent directors, as determined pursuant to new independence requirements; (ii) compensation committees be explicitly charged with hiring and overseeing compensation consultants, legal counsel and other committee advisors; and (iii) compensation committees be required to consider, when engaging compensation consultants, legal counsel or other advisors, certain independence factors, including factors that examine the relationship between the consultant or advisor’s employer and us. As a “controlled company,” we are not subject to these compensation committee independence requirements.

Our largest stockholder collectively holds a substantial majority of our common stock and will continue to hold a majority following this offering.

Holders of our common stock vote together as a single class on all matters presented to our stockholders for their vote or approval, except as otherwise required by applicable law or our certificate of incorporation. Bernhard Capital Partners owns, and will continue to own after the consummation of this offering, over a majority of the voting power of our common stock. Bernhard Capital Partners has the ability to determine the outcome of certain matters requiring stockholder approval, including mergers and other material transactions, and is able to cause or prevent certain changes in the composition of our board of directors or a change in control of our company that could deprive

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our stockholders of an opportunity to receive a premium for their common stock as part of a sale of our company. The existence of a significant stockholder may also have the effect of deterring hostile takeovers, delaying or preventing changes in control or changes in management, or limiting the ability of our other stockholders to approve transactions that they may deem to be in the best interests of our company.

So long as Bernhard Capital Partners continues to control a significant amount of our common stock, they will continue to be able to strongly influence all matters requiring stockholder approval, regardless of whether or not other stockholders believe that a potential transaction is in their own best interests. In any of these matters, the interests of Bernhard Capital Partners may differ or conflict with the interests of our other stockholders. In addition, Bernhard Capital Partners and its affiliates may, from time to time, acquire interests in businesses that directly or indirectly compete with our business, as well as businesses that are significant existing or potential customers. Bernhard Capital Partners and its affiliates may acquire or seek to acquire assets that we seek to acquire and, as a result, those acquisition opportunities may not be available to us or may be more expensive for us to pursue. Moreover, this concentration of stock ownership may also adversely affect the trading price of our common stock to the extent investors perceive a disadvantage in owning stock of a company with a controlling stockholder.

The market price of our common stock may be affected by low trading volume.

Although a trading market for our Class A common stock exists on the NASDAQ, the trading volume has not been significant, due in part to a substantial number of our outstanding shares of our common stock being subject to contractual lock-ups and other legal restrictions. Additionally, a large percentage of our common stock is currently made up of Class B common stock, which is not listed on a public exchange but is exchangeable (along with Holdings Units) for shares of Class A common stock. Following the consummation of this offering, the market price for shares of our Class A common stock may remain volatile because of the relatively low volume of trading. When trading volume is low, significant price movement can be caused by the trading in a relatively small number of shares. Low volume can also reduce liquidity, which could adversely affect the market price of our shares of common stock.

The underwriters of this offering may waive or release parties to the lock-up agreements entered into in connection with this offering, which could adversely affect the price of our Class A common stock.

We, all of our directors and executive officers, the selling stockholder and certain of our other significant stockholders have entered or will enter into lock-up agreements pursuant to which we and they will be subject to certain restrictions with respect to the sale or other disposition of our Class A common stock and Class B common stock for a period of 90 days following the date of this prospectus. The underwriters, at any time and without notice, may release all or any portion of the Class A common stock and Class B common stock subject to the foregoing lock-up agreements. See “Underwriting (Conflicts of Interest)” for more information on these agreements. If the restrictions under the lock-up agreements are waived, then the Class A common stock, subject to compliance with the Securities Act or exceptions therefrom, will be available for sale into the public markets, which could cause the market price of our Class A common stock to decline and impair our ability to raise capital. Sales of a substantial number of shares upon expiration of the lock-up and market stand-off agreements, the perception that such sales may occur, or early release of these agreements, could cause our market price to fall or make it more difficult for you to sell your Class A common stock at a time and price that you deem appropriate.

There can be no assurance that the warrants will be in the money at the time they become exercisable, and they may expire worthless.

The exercise price for the outstanding warrants is $11.50 per share of common stock. There can be no assurance that the warrants will be in the money following the time they become exercisable and prior to their expiration, and as such, the warrants may expire worthless.

There can be no assurance that we will be able to comply with the continued listing standards of NASDAQ.

Our continued eligibility for listing on NASDAQ depends on a number of factors. If NASDAQ delists the Class A common stock from trading on its exchange for failure to meet the listing standards, we and our stockholders could face significant material adverse consequences including:

•        a limited availability of market quotations for our securities;

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•        a determination that our Class A common stock is a “penny stock,” which will require brokers trading in our Class A common stock to adhere to more stringent rules, possibly resulting in a reduced level of trading activity in the secondary trading market for our Class A common stock;

•        a limited amount of analyst coverage; and

•        a decreased ability to issue additional securities or obtain additional financing in the future.

Provisions in our Charter and Delaware law may have the effect of discouraging lawsuits against our directors and officers.

The Charter requires, unless we consent in writing to the selection of an alternative forum, that (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee to us or our stockholders, (iii) any action asserting a claim against us, our directors, officers or employees arising pursuant to any provision of the DGCL or the Charter or our second amended and restated bylaws, or (iv) any action asserting a claim against us, our directors, officers or employees governed by the internal affairs doctrine may be brought only in the Court of Chancery in the State of Delaware, except any claim (A) as to which the Court of Chancery of the State of Delaware determines that there is an indispensable party not subject to the jurisdiction of the Court of Chancery (and the indispensable party does not consent to the personal jurisdiction of the Court of Chancery within ten days following such determination), (B) which is vested in the exclusive jurisdiction of a court or forum other than the Court of Chancery, (C) for which the Court of Chancery does not have subject matter jurisdiction, or (D) any action arising under the Securities Act, as to which the Court of Chancery and the federal district court for the District of Delaware shall have concurrent jurisdiction. If an action is brought outside of Delaware, the stockholder bringing the suit will be deemed to have consented to service of process on such stockholder’s counsel. Although we believe this provision benefits us by providing increased consistency in the application of Delaware law in the types of lawsuits to which it applies, a court may determine that this provision is unenforceable, and to the extent it is enforceable, the provision may have the effect of discouraging lawsuits against our directors and officers, although our stockholders will not be deemed to have waived our compliance with federal securities laws and the rules and regulations thereunder.

Notwithstanding the foregoing, the Charter provides that the exclusive forum provision will not apply to suits brought to enforce a duty or liability created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction. Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder. Although we believe this provision benefits us by providing increased consistency in the application of Delaware law in the types of lawsuits to which it applies, the provision may have the effect of discouraging lawsuits against our directors and officers.

Provisions in the Charter may inhibit a takeover of us, which could limit the price investors might be willing to pay in the future for our Class A common stock and could entrench management.

The Charter contains provisions that may discourage unsolicited takeover proposals that stockholders may consider to be in their best interests. These provisions include a staggered board of directors, the controlling provisions of the Nomination Agreement we entered into with Atlas Holdings at the consummation of the Business Combination (the “Nomination Agreement”), a supermajority vote required to amend certain provisions of the Charter and the ability of the Board to designate the terms of, and issue new series of, preferred stock, which may make more difficult the removal of management and may discourage transactions that otherwise could involve payment of a premium over prevailing market prices for our securities.

If securities or industry analysts adversely change their recommendations regarding our Class A common stock or if our operating results do not meet their expectations, our stock price could decline.

The trading market for our Class A common stock will be influenced by the research and reports that industry or securities analysts publish about us or our business. If one or more of these analysts cease coverage of our company or fail to publish reports on us regularly, we could lose visibility in the financial markets, which in turn could cause our stock price or trading volume to decline. Moreover, if one or more of the analysts who cover our company downgrades our Class A common stock or if our operating results do not meet their expectations, our stock price could decline.

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Cautionary Statement Regarding Forward-Looking Statements

The statements contained in this prospectus that are not purely historical are forward-looking statements. Our forward-looking statements include, but are not limited to, statements regarding our or our management team’s expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking.

The forward-looking statements contained in this prospectus are based on our current expectations and beliefs concerning future developments and their potential effects on us. There can be no assurance that future developments affecting us will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to:

•        the effect, impact, potential duration or other implications of the COVID-19 pandemic and any expectations we may have with respect thereto;

•        the adequacy of our efforts to mitigate cyber security risks and threats, especially with employees working remotely due to the COVID-19 pandemic;

•        the ability to maintain the listing of our Class A common stock on NASDAQ following the Business Combination;

•        our ability to raise financing in the future;

•        our success in retaining or recruiting, or changes required in, our officers, key employees or directors;

•        our officers and directors allocating their time to other businesses and potentially having conflicts of interest with our business, as a result of which they would then receive expense reimbursements;

•        our public securities’ potential liquidity and trading;

•        changes adversely affecting the business in which we are engaged;

•        the risks associated with cyclical demand for our services and vulnerability to industry downturns and regional national downturns;

•        fluctuations in our revenue and operating results;

•        unfavorable conditions or further disruptions in the capital and credit markets;

•        our ability to generate cash, service indebtedness and incur additional indebtedness;

•        competition from existing and new competitors;

•        our ability to integrate any businesses we acquire and achieve projected synergies;

•        the impact of potential information technology or data security breaches or other cyber-attacks or other disruptions;

•        our failure to maintain appropriate internal controls over financial reporting and disclosure controls and procedures;

•        our ability to recruit and retain qualified personnel;

•        risks related to legal proceedings or claims, including liability claims;

•        our dependence on third-party contractors to provide various services;

•        our ability to obtain additional capital on commercially reasonable terms;

•        safety and environmental requirements and governmental regulations that may subject us to unanticipated liabilities; and

•        general economic conditions.

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Unaudited Pro Forma Condensed Combined Financial Information

The following unaudited pro forma condensed combined financial information presents our unaudited pro forma condensed combined statement of operations for the six months ended June 30, 2020 and year ended December 31, 2019 based upon the combined historical financial statements of the Company, Boxwood and Atlas Intermediate after giving effect to the Business Combination and related adjustments described in the accompanying notes.

The unaudited pro forma condensed combined statements of operations for the six months ended June 30, 2020 and the year ended December 31, 2019 give pro forma effect to the Business Combination, equity financing, and debt financing as if they had been completed on January 1, 2019.

This information has been developed from and should be read together with the Company’s, Boxwood’s and Atlas Intermediate and ATC Group’s historical audited and unaudited financial statements and related notes included in this prospectus.

The unaudited pro forma condensed combined financial information is provided for informational purposes only and is not necessarily indicative of the operating results or financial position that would have occurred if the Business Combination had been completed as of the dates set forth above, nor is it indicative of the future results or financial position of the combined company. The unaudited pro forma condensed combined financial information also does not give effect to the potential impact, of any anticipated synergies, operating efficiencies or cost savings resulting from favorable vendor pricing had the Business Combination been completed prior to the periods indicated above, or any integration costs and benefits from restructuring plans.

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UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
FOR THE
SIX MONTHS ENDED JUNE 30, 2020
(in thousands, except share and per share data)

 

Atlas
Intermediate 
(Historical)
(1/1-2/14/2020)
(US GAAP)

 

Atlas Technical Consultants, Inc. (Historical) (2/15-6/30/2020) (US GAAP)

 

Atlas Combined (As Reported) (1/1-6/30/2020) (US GAAP)