What changed in this filing

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Item 5. Market for Registrant’s Common Equity

2023-03-09 compared with 2022-03-02 · 87 added, 96 removed, 185 unchanged (50% of the section changed)

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Fourth quarter

The closing price for our common stock as of February 22, 2022 was $1.76.

As of February  

22, 2022, there were 43 holders of record of our common stock.

The closing price for our common stock as of March 6, 2023 was $4.65.

As of March 6, 2023, there were 49 holders of record of our common stock.

We have never paid cash dividends on our common stock and have no current plan to do so in the foreseeable future.

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We booked $368,027 in net new orders in 2022, up from $159,025 in 2021.

Gearing segment orders increased 83% compared to 2020 primarily due to increased demand from O&G and mining customers. This increase was partially offset by the timing of aftermarket wind gearing orders, which can fluctuate based on customer order patterns and market conditions.

Industrial fabrication product line orders, included in the Heavy Fabrications segment, increased 72% as compared to 2020 primarily due to increased demand in all end markets.

Orders within our Industrial Solutions segment increased 10% as compared to 2020 primarily due to the timing of orders associated with new gas turbine projects, partially offset by the timing of orders associated with aftermarket projects. These increases were partially offset by a 27% decrease in wind tower orders in our Heavy Fabrications segment as wind customers paused and delayed orders due to uncertainty regarding the timing and likelihood of potential wind energy incentives provided by the federal government and elevated steel prices.

At December 31, 2021, total backlog was $106,383, up 15% from $92,854 at December 31, 2020 primarily due to the aforementioned increase in gearing and industrial fabrication product line orders.

Heavy Fabrications orders increased by 215% from the prior year as demand increased for our capacity as tower customers secured production capacity through 2024 for ongoing wind turbine tower installation projects. Gearing segment orders increased 16% from the prior year primarily due to increased demand in all end markets led by industrial customers.

Industrial Solutions segment orders increased by 3% in 2022 from the prior year primarily due to an increase in orders associated with new gas turbine projects. At December 31, 2022, total backlog was $297,200, up 179% from $106,383 at December 31, 2021 primarily due to the aforementioned increase in Heavy Fabrication segment orders.

We recognized revenue of $176,759  

in 2021, down  

27% from revenue of $198,496 in 2020. Within the Heavy Fabrications segment, tower revenue decreased $50,064 primarily due to a 35% decrease in tower sections sold, a result of the aforementioned pause in wind tower orders.

Additionally, within the Heavy Fabrications segment, industrial fabrication product line revenues decreased 16% from 2020, primarily as a result of lower order intake in mining markets during the second half of 2020. Industrial Solutions revenue was down $2,897 or 16% from 2020 primarily due to the timing of new gas turbine and aftermarket installations in addition to supply chain constraints. Gearing revenue was up $3,447 or 14% from 2020, driven primarily by increased order intake in recent quarters from O&G and mining customers, partially offset by decreased demand from industrial customers. 

We reported net income of $2,847, or $0.15 per share in 2021, compared to a net loss of $1,487 or $0.09 per share in 2020.

The improvement in earnings was primarily due to income of $9,151 recognized from the PPP loan forgiveness and a $6,965 ERC benefit (described below).

Both of these items were recognized in “Other Income (expense), net” in our consolidated statement of operations for the year ended December 31, 2021.

This increase was partially offset by the volume related decreases discussed above. 

in 2022, up  

21% from revenue of $145,619 in 2021.

Heavy Fabrications segment revenues increased by 15% during 2022 primarily due to a 92% increase in industrial fabrication revenue as a result of higher recent order intake from industrial customers and revenue recognized from our PRS units in the current year. Gearing segment revenues increased 49% during 2022 from the prior year primarily due to recent higher order intake levels from customers in most end markets, particularly O&G, partially offset by a decrease in aftermarket wind revenue.

Industrial Solutions segment revenue increased 16% from the prior year primarily due to the timing of aftermarket installations. 

We reported a net loss of $9,730, or $0.48 per share in 2022, compared to a net income of $2,847 or $0.15 per share in 2021.

The decrease in earnings was primarily due to the absence of the $9,151 benefit recognized from the PPP loan forgiveness and the $6,965 ERC benefit (described below), both of which were recognized in “Other Income (expense), net” in our consolidated statement of operations for the year ended December 31, 2021.

This decrease was partially offset by the volume related increases discussed above. 

On March 27, 2020, the CARES Act was signed into law providing numerous tax provisions and other stimulus measures, including the Employee Retention Credit (“ERC”), which is a refundable tax credit against certain employment taxes. The Taxpayer Certainty and Disaster Tax Relief Act of 2020 and the American Rescue Plan Act of 2021 extended and expanded the availability of the ERC.

As amended, the ERC is available for wages paid through September 30, 2021 and is equal to 70% of qualified wages (which includes employer qualified health plan expenses) paid to employees.

During each quarter of 2021, a maximum of $10,000 in qualified wages for each employee is eligible for the ERC.

Therefore, the maximum tax credit that can be claimed by an eligible employer in 2021 is $7,000 per employee per calendar quarter.

As amended, the ERC was available for wages paid through September 30, 2021 and was equal to 70% of qualified wages (which included employer qualified health plan expenses) paid to employees.

During each quarter of 2021, a maximum of $10,000 in qualified wages for each employee was eligible for the ERC.

Therefore, the maximum tax credit that could be claimed by an eligible employer in 2021 was $7,000 per employee per calendar quarter.

We qualified for the ERC in the first quarter of the year because we experienced a reduction in gross receipts of more than 20% for the first quarter of 2021 compared to the first quarter of 2019, the relevant criteria for the ERC. Since we qualified for the ERC in the first quarter of 2021, we automatically qualified for the ERC in the second quarter of 2021.

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in our consolidated statement of operations. During the third quarter of 2021 due to relatively higher revenues in 2021 as compared to the third quarter of 2019, we did not qualify for the ERC benefit.

The receivable for the remaining uncollected ERC benefit is $497 as of December 31, 2021 and is included in the “Employee retention credit receivable”

The receivable for the remaining uncollected ERC benefit was $497 as of December 31, 2021 and was included in the “Employee retention credit receivable”

line item in our consolidated balance sheet at December 31, 2021.

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We use our credit facility to fund working capital requirements and believe that our credit facility, together with the operating cash generated by our businesses, and any potential proceeds from access to the public or private debt or equity markets, are sufficient to meet all cash obligations over the next twelve months.

On December 31, 2021, we had $6,350 drawn under our $30,000 line of credit, and $852 of cash on hand, resulting in $14,889 of available liquidity.

On December 31, 2022, we had $0 outstanding under our senior secured revolving credit facility, $7,217 outstanding under our senior secured term loan, $12,732 of cash on hand, with the ability to borrow an additional $27,351.

For a further discussion of our capital resources and liquidity, including a description of recent amendments and waivers under our credit facility, please see the discussion under “Liquidity, Financial Position and Capital Resources”

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COVID-19 Pandemic

In March 2020, the World Health Organization recognized a novel strain of coronavirus (COVID-19) as a pandemic.

In response to this pandemic, the United States and various foreign, state and local governments have, among other actions, imposed travel and business restrictions and required or advised communities in which we do business to adopt stay-at-home orders and social distancing guidelines, causing some businesses to adjust, reduce or suspend operating activities.

The pandemic and the various governments’

response have caused significant and widespread uncertainty, volatility and disruptions in the U.S.

and global economies, including in the regions in which we operate. 

Our facilities continued to operate as essential businesses in light of the customers and markets served. However, through December 31, 2021, we have experienced an adverse impact to our business, operations and financial results as a result of this pandemic due in part to a decline in order activity levels, manufacturing inefficiencies associated with supply chain disruptions and employee staffing constraints due to the spread of the COVID-19 pandemic. In response to the pandemic, we continue to right-size our workforce and delay certain capital expenditures.

Our facilities continued to operate as essential businesses in light of the customers and markets served. However, through December 31, 2022, we have experienced an adverse impact to our business, operations and financial results as a result of this pandemic due in part to manufacturing inefficiencies associated with supply chain disruptions and employee staffing constraints due to the spread of the COVID-19 pandemic. In response to the pandemic, we continue to right-size our workforce and delay certain capital expenditures.

In future periods, we may experience weaker customer demand, requests for extended payment terms, customer bankruptcies, additional supply chain disruption, employee staffing constraints and difficulties, government restrictions or other factors that could negatively impact the Company and its business, operations and financial results.

As we cannot predict the duration or scope of the pandemic, including in light of the emerging variants, or its impact on economic and financial markets, any negative impact to our results cannot be reasonably estimated, but it could be material.

Although the long-term effects of COVID-19 remain unknown, there have been some lifting of the related restrictions due to the increased availability of vaccinations and government stimulus programs.

Although the long-term effects of COVID-19 remain unknown, the availability of vaccines and reopening of state and local economies have improved the outlook for recovery from COVID-19 impacts. 

However, we continue to monitor closely the Company’s financial health and liquidity and the impact of the pandemic on the Company, including emerging variants.

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Key Financial Measures

Net income (loss)

Net (loss) income

Adjusted EBITDA (1)

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Operating working capital (3)

Total debt (4)

Backlog at end of period (4)

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We define operating working capital as accounts receivable and inventory net of accounts payable and customer deposits.

Total debt at December 31, 2020 includes PPP loans totaling $9,151.

Our backlog at December 31, 2021 and 2020 is net of revenue recognized over time.

Our backlog at December 31, 2022 and 2021 is net of revenue recognized over time.

We define book-to-bill as the ratio of new orders we received, net of cancellations, to revenue during a period.

The following table reconciles our non-GAAP key financial measures to the most directly comparable GAAP measure:

Net income (loss) from continuing operations

Net (loss) income from continuing operations

Interest expense

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Total operating expenses

Operating (loss) income

Operating loss

Other income (expense), net

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Total other income (expense), net

Net income (loss) before provision for income taxes

Net (loss) income before provision for income taxes

Provision for income taxes

Net income (loss)

Revenues decreased by $52,877 during the year ended December 31, 2021 primarily due to a 35% decrease in tower sections sold as wind customers paused and delayed orders due to uncertainty regarding the timing and likelihood of potential wind energy incentives provided by the federal government and elevated steel prices.

Within our other segments, Gearing revenues increased as a result of increased order intake in recent quarters from O&G and mining customers, but was partially offset by decreased Industrial Solutions revenue due to the timing of new gas turbine and aftermarket installations in addition to supply chain constraints.

Gross profit decreased by $12,490 during the year ended December 31, 2021.

The decrease in gross profit reflects lower sales volumes and manufacturing inefficiencies caused by supply chain disruptions, and a temporary shut-down of our Abilene, Texas plant due to a weather event in the first quarter of 2021. As a result, our gross margin decreased from 9.1% for the year ended December 31, 2020, to  

Net (loss) income

Revenues increased by $31,140 during the year ended December 31, 2022 primarily due to a 92% increase in industrial fabrications product line revenue within the Heavy Fabrications segment compared to the prior year.

This was primarily due to higher recent order intake from industrial customers and revenue recognized from our PRS units in the current year. Gearing segment revenue increased by 49% compared to the prior year primarily due to higher order intake in recent quarters from customers in most end markets, particularly O&G, partially offset by a decrease in aftermarket wind revenue.

Industrial Solutions segment revenue increased 16% primarily due to the timing of aftermarket installations.

Gross profit improved by $5,199 during the year ended December 31, 2022 primarily due to higher sales volumes in the Gearing and the Heavy Fabrications segments, partially offset by higher material costs and ramp-up costs .

 As a result, our gross margin increased from 3.8% for the year ended December 31, 2021, to  

6.1% for the year ended December 31, 2022.

Due to lower revenue levels, higher commission expenses, and an increase in professional expenses, operating expenses as a percentage of sales increased to 12.4% in 2021 from 8.9% in 2020.

Net income  

improved from a loss $1,487 for the year ended December 31, 2020 to net income of $2,847  

for the year ended December 31, 2021.The improvement in net income was primarily due to income of $9,151 recognized from the PPP loan forgiveness and a $6,965 ERC benefit.

Both of these items were recognized in “Other Income (expense), net” in our consolidated statement of operations for the year ended December 31, 2021.

This increase was partially offset by the volume related decreases discussed above. 

Operating expenses as a percentage of sales decreased to 9.8% in 2022 from 12.4% in 2021 primarily due to higher revenue levels, reduced salaries and benefits and reduced legal fees.

Net income decreased from $2,847 for the year ended December 31, 2021 to a net loss of $9,730 for the year ended December 31, 2022.The decrease in net income was primarily due to the absence of the $9,151 benefit recognized from the PPP loan forgiveness and the $6,965 ERC benefit, both of which were recognized in “Other Income (expense), net” in our consolidated statement of operations for the year ended December 31, 2021.

This decrease was partially offset by the volume related increases discussed above. 

Heavy Fabrications Segment

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Tower sections sold

Operating (loss) income

Operating loss

Operating margin

Heavy Fabrications orders decreased by 12% versus the prior year as tower customers paused and delayed orders due to uncertainty regarding the timing and likelihood of potential federal wind energy incentives and elevated U.S.

steel prices.

This decrease was partially offset by a 72% increase in industrial fabrication product line orders as customers within all markets served resumed capital spending and inventory purchases.

Segment revenues decreased by 34% during the year ended December 31, 2021 primarily due to the aforementioned pause in wind tower orders. 

Heavy Fabrications segment operating results decreased by $13,599 versus the prior year.

The degradation reflects the adverse volume impacts described previously, the underutilization of plant capacity, manufacturing inefficiencies caused by supply chain disruptions and a temporary shut-down of our Abilene, Texas plant due to a weather event in the first quarter of 2021.

Heavy Fabrications orders increased by 215% versus the prior year as a result of increased demand for our capacity as tower customers secured production capacity through 2024 for ongoing wind turbine tower installation projects.

Segment revenues increased by 15% during the year ended December 31, 2022 primarily due to a 92% increase in industrial fabrication revenue due to higher recent order intake from industrial customers and revenue recognized from our PRS units in the current year. 

Heavy Fabrications segment operating results improved by $2,170 as compared to the prior year.

The improvement in operating performance was primarily a result of higher sales in the current year and the absence of one-time events that occurred during the prior year period including a weather-related event and a customer driven project delay, partially offset by costs associated with transitioning a portion of the workforce to support growth in the industrial fabrications product line and inefficiencies associated with a change to a new tower design in the fourth quarter.

Operating profit margin was (0.9%) during the year ended December 31, 2022 compared to (3.2%) during the year ended December 31, 2021.

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The following table summarizes the Gearing segment operating results for the twelve months ended December 31, 2022 and 2021:

Operating loss

Operating income (loss)

Operating margin

Gearing segment orders for the year ended December 31, 2021 increased $20,964 compared to the year ended December 31, 2020 primarily due to increased demand from O&G and mining customers, partially offset by the timing of aftermarket wind gearing orders, which can fluctuate based on customer order patterns and market conditions. Revenues increased 14% during the year ended December 31, 2021 primarily due to increased O&G and mining demand, partially offset by a reduction in demand from industrial customers. 

The Gearing segment's operating loss narrowed by $1,290  

during the year ended December 31, 2021 primarily due to increased sales volume and improved manufacturing efficiencies.

Gearing segment orders for the year ended December 31, 2022 increased 16% compared to the year ended December 31, 2021 primarily due to increased demand from customers in all end markets.

Revenues increased 49% during the year ended December 31, 2022 primarily due to higher order intake in recent quarters from customers in most end markets, particularly O&G, partially offset by a decrease in aftermarket wind revenue.

The Gearing segment's operating income improved by $2,636  

during the year ended December 31, 2022 from the year ended December 31, 2021 primarily due to higher sales, partially offset by higher material costs, ramp-up costs, and increased fixed costs to support higher volumes.

Operating margin was 0.1% for the year ended December 31, 2022 compared to (9.1)% during the year ended December 31, 2021.

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The following table summarizes the Industrial Solutions segment operating results for the twelve months ended December 31, 2022 and 2021.

Operating (loss) income

Operating income (loss)

Operating margin

Industrial Solutions segment orders increased by 10% in 2021 primarily due to an increase in orders associated with new gas turbine projects, partially offset by a decrease in orders associated with aftermarket projects.

Segment revenue decreased 16% primarily due to the timing of new gas turbine and aftermarket installations in addition to supply chain constraints.

The decrease in operating income  

during the year ended December 31, 2021 was a result of the revenue decrease and a lower margin sales mix sold during the year. The operating margin decreased from 4.8% during the year ended December 31, 2020, to (2.5)% during the year ended December 31, 2021.

Industrial Solutions segment orders increased by 3% for the year ended December 31, 2022 primarily due to an increase in new gas turbine orders. Segment revenue increased 16% from the prior year primarily due to the timing of aftermarket installations.

The improvement in operating income  

during the year ended December 31, 2022 was a result of the revenue increase, partially offset by increased labor and freight costs. The operating margin improved from (2.5)% during the year ended December 31, 2021, to 0.7% during the year ended December 31, 2022.

Corporate and Other

Corporate and Other expenses decreased by $679 during the year ended December 31, 2022.

The decrease was primarily attributable to reduced incentive compensation and marketing expenses. 

The decrease was primarily attributable to lower salaries and benefits. 

SUMMARY OF CRITICAL ACCOUNTING POLICIES AND ESTIMATES

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Assuming these required revenue recognition criteria are met, revenue is recognized upon completion of product manufacture and customer acceptance.

During 2021 and 2020, we also recognized revenue over time, versus point in time, when products in the Gearing and Heavy Fabrications segments had no alternative use to us and we had an enforceable right to payment, including profit, upon termination of the contract by the customer.

During 2022 and 2021, we also recognized revenue over time, versus point in time, when products in the Gearing and Heavy Fabrications segments had no alternative use to us and we had an enforceable right to payment, including profit, upon termination of the contract by the customer.

Since the projects are labor intensive, we use labor hours as the input measure of progress for the contract.

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We review property and equipment and other long-lived assets (“long-lived assets”) for impairment whenever events or circumstances indicate that their carrying amounts may not be recoverable.

Due to triggering events identified within our segments, we continue to evaluate the recoverability of certain of the long-lived assets.

During November 2021, we identified triggering events associated with the Gearing segment and the Heavy Fabrications segment. In accordance with GAAP, we compared the carrying value of the segment asset groups to the forecast undiscounted cash flows associated with the respective asset groups.

Based on the analyses performed, the forecast undiscounted cash flows exceeded the carrying values resulting in no recorded impairment of these groups. 

Due to triggering events identified within our segments at various times in the past, we continue to evaluate the recoverability of certain of the long-lived assets.

During November 2022, we identified a triggering event associated with the Heavy Fabrications segment. In accordance with GAAP, we compared the carrying value of the segment asset group to the forecast undiscounted cash flows associated with the asset group.

Based on the analysis performed, the forecast undiscounted cash flows exceeded the carrying value resulting in no recorded impairment of this group. 

We account for income taxes based upon an asset and liability approach.

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LIQUIDITY, FINANCIAL POSITION AND CAPITAL RESOURCES

As of December 31, 2021, cash totaled $852, a decrease of $2,520  

from December 31, 2020.

We have in place a line of credit with CIBC Bank (the “Credit Facility”) under which we can borrow up to $30,000, depending on our borrowing base.

Debt and finance lease obligations at December 31, 2021 totaled $11,368, and we had the ability to borrow up to $14,037 under the Credit Facility.

On August 4, 2022, we entered into a credit agreement (the “2022 Credit Agreement”) with Wells Fargo Bank, National Association, as lender (“Wells Fargo”), providing the Company and its subsidiaries with a $35,000 senior secured revolving credit facility (which may be further increased by up to an additional $10,000 upon the request of the Company and at the sole discretion of Wells Fargo) and a $7,578 senior secured term loan (collectively, the “2022 Credit Facility”).

The proceeds of the 2022 Credit Facility are available for general corporate purposes, including strategic growth opportunities.

As of December 31, 2022, cash totaled $12,732, an increase of $11,880  

from December 31, 2021. Debt and finance lease obligations at December 31, 2022 totaled $14,545, and we had the ability to borrow up to $27,351 under the 2022 Credit Facility.

In addition to the 2022 Credit Facility, we also utilize supply chain financing arrangements as a component of our funding for working capital, which accelerates receivable collections and helps to better manage cash flow.

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Fees incurred in connection with the agreements are recorded as interest expense.

On August 18, 2020, we filed a “shelf”

registration statement on Form S-3, which was declared effective by the Securities and Exchange Commission (the “SEC”) on October 13, 2020 (the “Form S-3”) and expires on October 12, 2023.

This shelf registration statement, which includes a base prospectus, allows us at any time to offer any combination of securities described in the prospectus in one or more offerings.

Unless otherwise specified in the prospectus supplement accompanying the base prospectus, we would use the net proceeds from the sale of any securities offered pursuant to the shelf registration statement for general corporate purposes. 

On March 9, 2021, we entered into a $10,000 Equity Distribution Agreement (the “Equity Distribution Agreement”) with Craig-Hallum Capital Group, LLC.

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The net proceeds (before upfront costs) to the Company from the sales of such shares were approximately $9,725 after deducting commissions paid of approximately $275 and before deducting other expense of $411. 

On November 8, 2021, we executed the Third Amendment to the Amended and Restated Loan Agreement (the “Third Amendment”) which waived the fixed charge coverage ratio default for the quarter ended September 30, 2021, suspended testing of the fixed charge coverage ratio covenant through September 30, 2022, added a minimum EBITDA covenant applicable to the three-month period ending December 31, 2021, the six-month period ending March 31, 2022, the nine-month period ending June 30, 2022 and the twelve-month period ending September 30, 2022 and added a reserve of $5,000 to the Revolving Loan Availability through December 31, 2022.

On February 28, 2022, we executed the Fourth Amendment to the Amended and Restated Loan Agreement (the “Fourth Amendment”) which reduced the line of credit from $35,000 to $30,000, extended the maturity date until January 31, 2024, waived the minimum EBITDA covenant for the three-month period ended December 31, 2021, revised the fixed charge coverage ratio covenant as of December 31, 2022 for the trailing nine-month period after March 31, 2022, revised the minimum EBITDA covenant applicable to the three-month period ending March 31, 2022, the six-month period ending June 30, 2022 and the nine-month period ending September 30, 2022, revised the liquidity reserve and amended certain other provisions in connection with the discontinuation of LIBOR and replacement with the forward-looking term Secured Overnight Financing Rate (Term SOFR) administered by CME Group, Inc.

For a more detailed description of the Fourth Amendment refer to Item 9B of this Form 10-K.

On March 27, 2020, the CARES Act was signed into law providing numerous tax provisions and other stimulus measures, including an ERC, which is a refundable tax credit against certain employment taxes. The Taxpayer Certainty and Disaster Tax Relief Act of 2020 and the American Rescue Plan Act of 2021 extended and expanded the availability of the ERC.

As amended, the ERC is available for wages paid through September 30, 2021 and is equal to 70% of qualified wages (which includes employer qualified health plan expenses) paid to employees.

During each quarter of 2021, a maximum of $10,000 in qualified wages for each employee is eligible for the ERC.

Therefore, the maximum tax credit that can be claimed by an eligible employer in 2021 is $7,000 per employee per calendar quarter.

In the first and second quarters of 2021, the Company received ERC benefits of $3,372 and $3,593, respectively, and under analogy to IAS 20 “Accounting for Government Grants and Disclosure of Government Assistance”

On September 12, 2022, we entered into a Sales Agreement (the “Sales Agreement”) with Roth Capital Partners, LLC and HC Wainwright & Co., LLC (collectively, the “Agents”).

Pursuant to the terms of the Sales Agreement, we may sell from time to time, through the Agents, shares of the Company’s common stock, par value $0.001 per share with an aggregate sales price of up to $12,000.

The Company will pay a commission to the Agents of 2.75% of the gross proceeds of the sale of the shares sold under the Sales Agreement and reimburse the Agents for the expenses incident to the performance of their obligations under the Sales Agreement.

During the year ended December 31, 2022, we issued 100,379 shares of the Company’s common stock under the Sales Agreement and the net proceeds (before upfront costs) from the sale of the Company’s common stock were approximately $323 after deducting commissions paid of approximately $9 and before deducting other expenses of $93.

As of December 31, 2022, shares of the Company’s common stock having a value of approximately $11,667 remained available for issuance under the Sales Agreement.

As amended, the ERC was available for wages paid through September 30, 2021 and was equal to 70% of qualified wages (which included employer qualified health plan expenses) paid to employees.

During each quarter of 2021, a maximum of $10,000 in qualified wages for each employee was eligible for the ERC.

Therefore, the maximum tax credit that could be claimed by an eligible employer in 2021 was $7,000 per employee per calendar quarter.

In the first and second quarters of 2021, we received ERC benefits of $3,372 and $3,593, respectively, and under analogy to IAS 20 “Accounting for Government Grants and Disclosure of Government Assistance”

were recorded in “Other income (expense), net”

in our consolidated statement of operations. The Company qualified for the ERC in the first quarter of 2021 because it experienced a reduction in gross receipts of more than 20% for the first quarter of 2021 compared to the first quarter of 2019, the relevant criteria for the ERC.

Since the Company qualified for the ERC in the first quarter of 2021, it automatically qualified for the ERC in the second quarter of 2021.

As a result of the Company averaging 500 or fewer full-time employees in 2019, all wages paid to employees were eligible for the ERC (rather than only wages paid to employees not providing services).

During the third quarter of 2021 due to relatively higher revenues in 2021 as compared to the third quarter of 2019, the Company did not qualify for the ERC benefit.

The receivable for the remaining uncollected ERC benefit is $497 as of December 31, 2021 and is included in the “Employee retention credit receivable”

line item in the Company’s consolidated balance sheet at December 31, 2021. The $497 receivable balance was collected during January 2022.  

We anticipate that we will be able to satisfy the cash requirements associated with, among other things, working capital needs, capital expenditures and lease commitments through at least the next twelve months primarily through cash generated from operations, available cash balances, our Credit Facility, additional equipment financing, and access to the public or private debt and/or equity markets, including the option to raise additional capital from the sale of our securities under a “shelf”

The receivable for the remaining uncollected ERC benefit was $497 as of December 31, 2021 and was included in the “Employee retention credit receivable”

line item in our consolidated balance sheet at December 31, 2021.

The $497 receivable balance was collected during January 2022.  

We anticipate that we will be able to satisfy the cash requirements associated with, among other things, working capital needs, capital expenditures and lease commitments through at least the next twelve months primarily through cash generated from operations, available cash balances, our Credit Facility, sales of shares under the Sales Agreement, additional equipment financing, and access to the public or private debt and/or equity markets, including the option to raise additional capital from the sale of our securities under a “shelf”

registration statement on Form S-3.

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As of December 31, 2022, the loan balance was $0.

In addition, we have outstanding notes payable for capital expenditures in the amount of $186 and $163 as of December 31, 2021 and 2020, respectively, with $186 and $161 included in the “Line of credit and other notes payable”

In addition, we have outstanding notes payable for capital expenditures in the amount of $1,094 and $363 as of December 31, 2022 and 2021, respectively, with $88 and $186 included in the “Line of credit and current portion of long-term debt”

line item of our consolidated financial statements as of December 31, 2022 and 2021, respectively.

The notes payable have monthly payments that range from $1 to $16 and an interest rate of 4%.

The notes payable have monthly payments that range from $3 to $16 and an interest rate of 4%.

The equipment purchased is utilized as collateral for the notes payable.

The outstanding notes payable have maturity dates that range from March  

2022 to September 2028.

The outstanding notes payable have maturity dates that range from July  

to September 2028.

Sources and Uses of Cash

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Financing activities

Net (decrease) increase in cash

Net increase (decrease) in cash

Operating Cash Flows

During the year ended December 31, 2021, net cash used in operations was $12,826 compared to net cash provided by operating activities of $5,330 for the year ended December 31, 2020.

The increase in net cash used in operating activities was primarily due to  

our operating performance (excluding the PPP loan forgiveness), the timing of accruals and an increase in operating working capital in the current year period.

During the year ended December 31, 2022, net cash provided by operations was $16,643 compared to net cash used in operating activities of $12,826 for the year ended December 31, 2021.

The increase in net cash provided by operating activities was primarily due to an increase in customer deposits for future scheduled production during the current year period and an increase in accounts payable as compared to the prior year. 

Investing Cash Flows

During the year ended December 31, 2021, net cash used in investing activities was $1,674 compared to net cash used in investing activities of $1,547 for the year ended December 31, 2020.

During the year ended December 31, 2022, net cash used in investing activities was $3,098 compared to net cash used in investing activities of $1,674 for the year ended December 31, 2021.

The increase was primarily due to an increase in net purchases of property and equipment.

Financing Cash Flows

During the year ended December 31, 2021, net cash provided by financing activities totaled $11,980 compared to net cash used in financing activities of $2,827 for the year ended December 31, 2020.

The increase was primarily due to proceeds from the sale of securities under the Equity Distribution Agreement and increased net borrowings under our Credit Facility in the current year, partially offset by the absence of the PPP Loan proceeds received in 2020. 

During the year ended December 31, 2022, net cash used in financing activities totaled $1,665 compared to net cash provided by financing activities of $11,980 for the year ended December 31, 2021.

The decrease was primarily due to greater proceeds from the sale of securities under the Equity Distribution Agreement received in the prior year and increased net repayments under our 2022 Credit Facility during the current year.

This was partially offset by an increase in proceeds from long term debt primarily related to the senior secured term loan under our 2022 Credit Facility. 

Contractual Obligations

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As of December 31, 2022, we have (i) debt obligations related to our Credit Facility and other notes payable as described in Note 9, “Debt and Credit Agreements”

of our consolidated financial statements and includes cash principal payments of $6,650 due in 2022, $28 in 2023, $29 in 2024, $30 in 2025, $32 in 2026 and $58 in 2027 and thereafter (ii) cash payments for operating and finance lease obligations that total $34,896 and are described in Note 10, “Leases”

of our consolidated financial statements (ii) cash payments for operating and finance lease obligations that are described in Note 10, “Leases”

of our consolidated financial statements and (iii) purchase obligations made in the normal course of business.

4 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 5. Market for Registrant’s Common Equity