BROADWIND, INC. 10-K

ITEM 9A. CONTROLS AND PROCEDURES   (a) Evaluation of Disclosure Controls and Procedures   We seek to maintain disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) that are designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. This information is also accumulated and communicated to management, including our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), as appropriate, to allow timely decisions regarding required disclosure. Our management, under the supervision and with the participation of our CEO and CFO, evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the most recent fiscal year reported on herein. Based on that evaluation, our CEO and CFO concluded that our disclosure controls and procedures are effective as of December 31, 2022.   (b) Changes in Internal Control over Financial Reporting   There were no changes in our internal control over financial reporting that occurred during our last fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.   (c) Report of Management on Internal Control Over Financial Reporting   Our management, including our CEO and CFO, is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act).   Our management, including our CEO and CFO, assessed the effectiveness of our internal control over financial reporting as of December 31, 2022. Management based this assessment on criteria for effective internal control over financial reporting described in “Internal Control—Integrated Framework (2013)” issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, management determined that our internal control over financial reporting was effective as of December 31, 2022.   We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting.   ITEM 9B. OTHER INFORMATION   None.     ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS   None. 30       PART III   ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE   With the exception of the description of our Code of Ethics and Business Conduct below, the information required by this item is incorporated herein by reference from the discussion under the headings “Directors and Director Compensation,” “Corporate Governance,” and “Executive Officers” in our definitive Proxy Statement to be filed in connection with our 2023 Annual Meeting of Stockholders (the “2023 Proxy Statement”).   Code of Ethics and Business Conduct   We have adopted a Code of Ethics and Business Conduct (the “Code”) that applies to all of our directors, executive officers and senior financial officers (including our principal executive officer, principal financial officer, principal accounting officer, controller, and any person performing similar functions). The Code is available on our website at www.bwen.com under the caption “Investors” and is available in print, free of charge, to any stockholder who sends a request for a paper copy to Broadwind, Inc., Attn: Investor Relations, 3240 South Central Avenue, Cicero, IL 60804. We intend to include on our website any amendment to, or waiver from, a provision of the Code that applies to our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, that relates to any element of the code of ethics definition enumerated in Item 406(b) of Regulation S-K.   ITEM 11. EXECUTIVE COMPENSATION   Information regarding director and executive compensation is incorporated by reference from the discussion under the headings “Directors and Director Compensation,” “Executive Officers” and “Compensation Discussion and Analysis” in the 2023 Proxy Statement.   ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS   Certain of the information required by this item is incorporated herein by reference from the discussion under the heading “Security Ownership of Certain Beneficial Holders and Management” in the 2023 Proxy Statement.   31     The following table provides information as of December 31, 2022, with respect to shares of our common stock that may be issued under our existing equity compensation plans:   EQUITY COMPENSATION PLAN INFORMATION       (a)       (b)     (c)                         Number of securities                         remaining available for       Number of securities               future issuances under       to be issued upon       Weighted‑average     equity compensation       exercise of       exercise price of     plans (excluding       outstanding options,       outstanding options,     securities reflected in   Plan Category   warrants, and rights       warrants, and rights     column (a))   Equity compensation plans approved by stockholders     822,737   (1)   $ 2.37       130,201   Total     822,737       $ 2.37       130,201       (1) Includes outstanding restricted stock awards pursuant to the Broadwind Energy, Inc. 2015 Equity Incentive Plan, as amended. This plan has been approved by our stockholders.   ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE   The information required by this item is incorporated herein by reference from the discussion under the headings “Certain Transactions and Business Relationships” and “Corporate Governance” in the 2023 Proxy Statement.   ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES   The information required by this item is incorporated herein by reference from the discussion under the heading “Ratification of Appointment of Independent Registered Public Accounting Firm” in the 2023 Proxy Statement.   32     PART IV   ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES   1. Financial Statements   The financial statements listed on the Index to Financial Statements (page 34) are filed as part of this Annual Report.   2. Financial Statement Schedules   These schedules have been omitted because the required information is included in the consolidated financial statements or notes thereto or because they are not applicable or not required.   3. Exhibits   The exhibits listed on the Index to Exhibits are filed as part of this Annual Report.   ITEM 16. FORM 10-K SUMMARY   None.     33       INDEX TO FINANCIAL STATEMENTS                  Page   Report of Independent Registered Public Accounting Firm ( PCAOB ID 49 )   35   Consolidated Balance Sheets as of December 31, 2022 and 2021   37   Consolidated Statements of Operations for the Years Ended December 31, 2022 and 2021   38   Consolidated Statements of Stockholders’ Equity for the Years Ended December 31, 2022 and 2021   39   Consolidated Statements of Cash Flows for the Years Ended December 31, 2022 and 2021   40   Notes to Consolidated Financial Statements   41       34     Report of Independent Registered Public Accounting Firm     To the Stockholders and the Board of Directors of Broadwind, Inc.   Opinion on the Financial Statements   We have audited the accompanying consolidated balance sheets of Broadwind, Inc. and its subsidiaries (the Company) as of December 31, 2022 and 2021, the related consolidated statements of operations, stockholders’ equity and cash flows for the years then ended, and the related notes to the consolidated financial statements (collectively, the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.   Basis for Opinion   These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.   We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.   Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.   Critical Audit   Matter   The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which is relates.     35       Long-Lived Assets   As described in Note 7 of the financial statements, the Company’s evaluation of long-lived asset impairment involves the comparison of the undiscounted future cash flows of a respective asset group to its corresponding carrying value. This requires management to make significant qualitative and quantitative estimates and assumptions including estimates of future revenue growth rates, operating cash flow margins, and capital expenditures. Changes in these assumptions could have a significant impact on the amount of undiscounted cash flows, which could have an impact on the impairment charge, if any.   The Company’s Heavy Fabrications asset group has experienced recurring operating losses in consecutive years ending December 31, 2022. Company management determined that the carrying amount of the Heavy Fabrications asset group may not be recoverable based on the operating performance of the asset group. Accordingly, the Company performed an impairment assessment of the asset group as of November 30, 2022. As part of the impairment assessment, it was determined that the asset group had undiscounted future cash flows that exceeded its estimated carrying value. Additionally, there were no changes in facts or circumstances following the November 30, 2022 assessment through December 31, 2022, which would alter the asset group’s initial undiscounted future cash flows or carrying value estimates. As a result, no impairment charge was recorded in the consolidated statement of operations for the year ended December 31, 2022, for the Heavy Fabrications asset group. Key financial assumptions used to determine the undiscounted cash flows of the asset group were developed by management.   We identified the long-lived asset impairment assessment of the Heavy Fabrications asset group as a critical audit matter because of the high degree of judgement and subjectivity involved in auditing management’s assumptions regarding their asset group determination, the asset group’s primary asset determination, and projected revenue growth rates, operating cash flow margins and capital expenditures utilized to determine the recoverability of the asset group’s long-lived assets.   How the Critical Audit Matter Was Addressed in the Audit   The audit procedures performed related to the evaluation of Company management’s assumptions and estimates relating to their determination of recoverability of the Heavy Fabrications asset group included the following, among others:     ● Evaluated the reasonableness of management’s determination that each asset group represented the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities by comparing the inputs and processes utilized within each asset group to each other to ensure the inputs and processes were not comingled and were independent of each other.   ● Evaluated the reasonableness of management’s determination of the primary asset for the asset group which included comparing the estimated future cash flows derived from the primary asset compared to other assets within the asset grouping.   ● Evaluated the reasonableness of management’s forecasted revenue, operating cash flow margins, and capital expenditures for the asset group by comparing the projections to historical results and industry expectations.     /S/ RSM US LLP We have served as the Company's auditor since 2016.   Chicago, Illinois March 9, 2023   36       BROADWIND , INC. AND SUBSIDIARIES   CONSOLIDATED BALANCE SHEETS   (In thousands, except share data)       As of December 31,       2022     2021                     ASSETS                 CURRENT ASSETS:                 Cash   $ 12,732     $ 852   Accounts receivable, net     17,018       13,802   Employee retention credit receivable     —       497   Contract assets     1,955       1,136   Inventories, net     44,262       33,377   Prepaid expenses and other current assets     3,291       2,661   Total current assets     79,258       52,325   LONG-TERM ASSETS:                 Property and equipment, net     45,319       43,655   Operating lease right-of-use assets     16,396       18,029   Intangible assets, net     2,728       3,453   Other assets     839       585   TOTAL ASSETS   $ 144,540     $ 118,047   LIABILITIES AND STOCKHOLDERS’ EQUITY                 CURRENT LIABILITIES:                 Line of credit and current portion of long-term debt   $ 1,170     $ 6,650   Current portion of finance lease obligations     2,008       2,060   Current portion of operating lease obligations     1,882       1,775   Accounts payable     26,255       16,462   Accrued liabilities     4,313       3,654   Customer deposits     34,550       12,082   Total current liabilities     70,178       42,683   LONG-TERM LIABILITIES:                 Long-term debt, net of current maturities     7,141       177   Long-term finance lease obligations, net of current portion     4,226       2,481   Long-term operating lease obligations, net of current portion     16,696       18,405   Other     26       167   Total long-term liabilities     28,089       21,230   COMMITMENTS AND CONTINGENCIES                     STOCKHOLDERS’ EQUITY:                 Preferred stock, $ 0.001 par value; 10,000,000 shares authorized; no shares issued or outstanding     —       —   Common stock, $ 0.001 par value; 30,000,000 shares authorized; 21,127,130 and 19,859,650 shares issued as of December 31, 2022, and December 31, 2021, respectively     21       20   Treasury stock, at cost, 273,937 shares as of December 31, 2022 and December 31, 2021     ( 1,842 )     ( 1,842 ) Additional paid-in capital     397,240       395,372   Accumulated deficit     ( 349,146 )     ( 339,416 ) Total stockholders’ equity     46,273       54,134   TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY   $ 144,540     $ 118,047     The accompanying notes are an integral part of these consolidated financial statements.   37       BROADWIND , INC. AND SUBSIDIARIES   CONSOLIDATED STATEMENTS OF OPERATIONS   (In thousands, except per share data)       For the Years Ended December 31,       2022     2021   Revenues   $ 176,759     $ 145,619   Cost of sales     166,049       140,108   Gross profit     10,710       5,511   OPERATING EXPENSES:                 Selling, general and administrative     16,592       17,372   Intangible amortization     725       733   Total operating expenses     17,317       18,105   Operating loss     ( 6,607 )     ( 12,594 ) OTHER INCOME (EXPENSE), net:                 Paycheck Protection Program loan forgiveness     —       9,151   Interest expense, net     ( 3,218 )     ( 1,129 ) Other, net     130       7,444   Total other (expense) income, net     ( 3,088 )     15,466   Net (loss) income before provision for income taxes     ( 9,695 )     2,872   Provision for income taxes     35       25   NET (LOSS) INCOME     ( 9,730 )     2,847   NET (LOSS) INCOME PER COMMON SHARE—BASIC:                 Net (loss) income   $ ( 0.48 )   $ 0.15   WEIGHTED AVERAGE COMMON SHARES OUTSTANDING—BASIC     20,299       18,726   NET (LOSS) INCOME PER COMMON SHARE—DILUTED:                 Net (loss) income   $ ( 0.48 )   $ 0.15   WEIGHTED AVERAGE COMMON SHARES OUTSTANDING—DILUTED     20,299       19,388     The accompanying notes are an integral part of these consolidated financial statements.   38       BROADWIND , INC. AND SUBSIDIARIES   CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY   (In thousands, except share data)       Common Stock     Treasury Stock                               Shares     Issued             Issued     Additional     Accumulated               Issued     Amount     Shares     Amount     Paid-in Capital     Deficit     Total   BALANCE, December 31, 2020     17,211,498     $ 17       ( 273,937 )   $ ( 1,842 )   $ 384,749     $ ( 342,263 )   $ 40,661   Stock issued for restricted stock     695,216       1       —       —       —       —       1   Stock issued under defined contribution 401(k) retirement savings plan     289,519       —       —       —       1,193       —       1,193   Share-based compensation     —       —       —       —       1,541       —       1,541   Shares withheld for taxes in connection with issuance of restricted stock     ( 234,280 )     —       —       —       ( 1,423 )     —       ( 1,423 ) Sale of common stock, net     1,897,697       2       —       —       9,312       —       9,314   Net income     —       —       —       —       —       2,847       2,847   BALANCE, December 31, 2021     19,859,650     $ 20       ( 273,937 )   $ ( 1,842 )   $ 395,372     $ ( 339,416 )   $ 54,134   Stock issued for restricted stock     818,956       —       —       —       —       —       —   Stock issued under defined contribution 401(k) retirement savings plan     629,213       —       —       —       1,244       —       1,244   Share-based compensation     —       —       —       —       944       —       944   Shares withheld for taxes in connection with issuance of restricted stock     ( 281,068 )     —       —       —       ( 549 )     —       ( 549 ) Sale of common stock, net     100,379       1       —       —       229       —       230   Net loss     —       —       —       —       —       ( 9,730 )     ( 9,730 ) BALANCE, December 31, 2022     21,127,130     $ 21       ( 273,937 )   $ ( 1,842 )   $ 397,240     $ ( 349,146 )   $ 46,273     The accompanying notes are an integral part of these consolidated financial statements.   39       BROADWIND , INC. AND SUBSIDIARIES   CONSOLIDATED STATEMENTS OF CASH FLOWS   (In thousands)       Year Ended December 31,       2022     2021   CASH FLOWS FROM OPERATING ACTIVITIES:                 Net (loss) income   $ ( 9,730 )   $ 2,847   Adjustments to reconcile net cash provided by (used in) provided by operating activities:                 Depreciation and amortization expense     6,060       6,336   Paycheck Protection Program loan forgiveness     —       ( 9,151 ) Deferred income taxes     ( 13 )     ( 2 ) Change in fair value of interest rate swap agreements     ( 27 )     23   Stock-based compensation     944       1,541   Allowance for doubtful accounts     ( 30 )     ( 426 ) Common stock issued under defined contribution 401(k) plan     1,244       1,193   Loss (gain) on disposal of assets     3       ( 33 ) Changes in operating assets and liabilities:                 Accounts receivable     ( 3,186 )     1,961   Employee retention credit receivable     497       ( 497 ) Contract assets     ( 820 )     1,117   Inventories     ( 10,885 )     ( 6,653 ) Prepaid expenses and other current assets     ( 629 )     133   Accounts payable     9,926       ( 1,736 ) Accrued liabilities     686       ( 2,676 ) Customer deposits     22,468       ( 6,737 ) Other non-current assets and liabilities     135       ( 66 ) Net cash provided by (used in) provided by operating activities     16,643       ( 12,826 ) CASH FLOWS FROM INVESTING ACTIVITIES:                 Purchases of property and equipment     ( 3,098 )     ( 1,707 ) Proceeds from disposals of property and equipment     —       33   Net cash used in investing activities     ( 3,098 )     ( 1,674 ) CASH FLOWS FROM FINANCING ACTIVITIES:                 (Payments on) proceeds from line of credit, net     ( 6,350 )     5,105   Payments for deferred financing costs     ( 470 )     —   Proceeds from long-term debt     8,113       817   Payments on long-term debt     ( 863 )     ( 161 ) Principal payments on finance leases     ( 1,776 )     ( 1,672 ) Shares withheld for taxes in connection with issuance of restricted stock     ( 549 )     ( 1,423 ) Proceeds from sale of common stock, net     230       9,314   Net cash (used in) provided by financing activities     ( 1,665 )     11,980   NET INCREASE (DECREASE) IN CASH     11,880       ( 2,520 ) CASH beginning of the period     852       3,372   CASH end of the period   $ 12,732     $ 852   Supplemental cash flow information:                 Interest paid   $ 1,638     $ 741   Income taxes paid   $ 23     $ 102   Non-cash investing and financing activities:                 Equipment additions via finance lease   $ 3,882     $ 2,757   Non-cash purchases of property and equipment   $ 134     $ 18       The accompanying notes are an integral part of these consolidated financial statements.   40     BROADWIND, INC. AND SUBSIDIARIES   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS   December 31, 2022 and 2021   (in thousands, except share and per share data)     1. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES   Description of Business   Broadwind, Inc. (the “Company”) is a precision manufacturer of structures, equipment and components for clean tech and other specialized applications. The Company provides technologically advanced high value products to customers with complex systems and stringent quality standards that operate in energy, mining and infrastructure sectors, primarily in the United States of America (the “U.S.”). The Company’s most significant presence is within the U.S. wind energy industry, although the Company has increasingly diversified into other industrial markets. Within the U.S. wind energy industry, the Company provides products primarily to turbine manufacturers. The Company also provides precision gearing and heavy fabrications to a broad range of industrial customers for oil and gas (“O&G”), mining, steel and other industrial applications, in addition to supplying components for natural gas turbines. The Company has three reportable operating segments: Heavy Fabrications, Gearing, and Industrial Solutions.   Heavy Fabrications   The Company provides large, complex and precision fabrications to customers in a broad range of industrial markets. The Company’s most significant presence is within the U.S. wind energy industry, although it has diversified into other industrial markets in order to improve capacity utilization, reduce customer concentrations, and reduce exposure to uncertainty related to governmental policies currently impacting the U.S. wind energy industry. Within the U.S. wind energy industry, the Company provides steel towers and adapters primarily to wind turbine manufacturers. Production facilities, located in Manitowoc, Wisconsin and Abilene, Texas, are situated in close proximity to the primary U.S. domestic wind energy and equipment manufacturing hubs. The two facilities have a combined annual tower production capacity of up to approximately 550 towers ( 1650 tower sections), sufficient to support turbines generating more than 1,100 MW of power. The Company has expanded its production capabilities and leveraged manufacturing competencies, including welding, lifting capacity and stringent quality practices, into aftermarket and OEM components utilized in surface and underground mining, construction, material handling, O&G and other infrastructure markets.   41     BROADWIND, INC. AND SUBSIDIARIES   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)   December 31, 2022 and 2021   (in thousands, except share and per share data)   Gearing   The Company provides gearing and gearboxes to a broad set of customers in diverse markets including; onshore and offshore O&G fracking and drilling, surface and underground mining, wind energy, steel, material handling and other infrastructure markets. The Company has manufactured loose gearing, gearboxes and systems, and provided heat treat services for aftermarket and OEM applications for nearly a century. The Company uses an integrated manufacturing process, which includes machining and finishing processes in addition to gearbox repair in Cicero, Illinois, and heat treatment and gearbox repair in Neville Island, Pennsylvania.   Industrial Solutions   The Company provides supply chain solutions, light fabrication, inventory management, kitting and assembly services, primarily serving the combined cycle natural gas turbine market.   Liquidity   The Company meets its short term liquidity needs through cash generated from operations, its available cash balances, through its 2022 Credit Facility (as defined and further discussed in Note 9 “Debt and Credit Agreements” of these consolidated financial statements), equipment financing, access to the public and private debt and/or equity markets, and has the option to raise capital under the Company’s registration statement on Form S- 3 (as discussed below). The Company uses the 2022 Credit Facility to fund working capital requirements. Under the 2022 Credit Facility, borrowings are continuous and all cash receipts are usually applied to the outstanding borrowed balance. As of December 31, 2022 , cash totaled $ 12,732 , an increase of $ 11,880  from December 31, 2021 . The Company had the ability to borrow up to $ 27,351  under the 2022 Credit Facility as of December 31, 2022 .   The Company also utilizes supply chain financing arrangements as a component of its funding for working capital, which accelerates receivable collections and helps to better manage cash flow. Under these agreements, the Company has agreed to sell certain of its accounts receivable balances to banking institutions who have agreed to advance amounts equal to the net accounts receivable balances due, less a discount as set forth in the respective agreements. The balances under these agreements are accounted for as sales of accounts receivable, as they are sold without recourse. Cash proceeds from these agreements are reflected as operating activities included in the change in accounts receivable in the Company's consolidated statements of cash flows. Fees incurred in connection with the agreements are recorded as interest expense by the Company.   During the years ended December  31, 2022 and December 31, 2021, the Company sold account receivables totaling $ 93,245  and $ 99,130 , respectively, related to supply chain financing arrangements, of which customers’ financial institutions applied discount fees totaling $ 1,431  and $ 251 , respectively.    42     BROADWIND, INC. AND SUBSIDIARIES   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)   December 31, 2022 and 2021   (in thousands, except share and per share data)   Debt and finance lease obligations at December 31, 2022 totaled $ 14,545 , which includes current outstanding debt and finance lease obligations totaling $ 3,178 , due over the next twelve months. The Company's outstanding debt includes $ 7,217   outstanding from the senior secured term loan under the 2022 Credit Facility. The Company had $ 0 drawn on the senior secured revolving credit facility as of December 31, 2022.    On August 18, 2020, the Company 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 the Company 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, the Company 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, the Company entered into a $ 10,000  Equity Distribution Agreement (the “Equity Distribution Agreement”) with Craig-Hallum Capital Group, LLC. Pursuant to the terms of the Equity Distribution Agreement, the Company issued 1,897,697  shares of the Company’s common stock thereunder during the first two quarters of  2021. The net proceeds (before upfront costs) to the Company from the sale of such shares were approximately $ 9,725  after deducting commissions paid of approximately $ 275  and before deducting other expenses of $ 411 .    On September 12, 2022, the Company 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, the Company 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 . Any shares offered and sold under the Sales Agreement are to be issued pursuant to the Form S- 3 and the 424 (b) prospectus supplement relating to the offering dated September 12, 2022. 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, the Company issued 100,379 shares of the Company’s common stock under the Sales Agreement and the net proceeds (before upfront costs) to the Company 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.   On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was signed into law providing numerous tax provisions and other stimulus measures, including an 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. 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” 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.     The Company anticipates that current cash resources, amounts available under the 2022 Credit Facility, cash to be generated from operations and equipment financing, and any potential proceeds from the sale of further Company securities under the Form S- 3 will be adequate to meet the Company’s liquidity needs for at least the next twelve months.   Reclassifications   Certain prior year amounts, which are not material, have been reclassified to conform to current year presentation in the consolidated financial statements and the notes to the consolidated financial statements.     Summary of Significant Accounting Policies   Management’s Use of Estimates   The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. (“GAAP”) requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities as of the date of the financial statements and reported amounts of revenues and expenses during the reported period. Significant estimates, among others, include inventory reserves, warranty reserves, impairment of long-lived assets, allowance for doubtful accounts, and valuation allowances on deferred taxes. Although these estimates are based upon management’s best knowledge of current events and actions that the Company may undertake in the future, actual results could differ from these estimates.    43     BROADWIND, INC. AND SUBSIDIARIES   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)   December 31, 2022 and 2021   (in thousands, except share and per share data)   Cash    As of December 31, 2022 and December 31, 2021 , cash totaled $ 12,732  and $ 852 , respectively. For the years ended December 31, 2022 and 2021 , interest income was $ 0   and $ 1 , respectively.   Revenue Recognition   Revenues are recognized when control of the promised goods or services is transferred to customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. Customer deposits, deferred revenue and other receipts are deferred and recognized when the revenue is realized and earned. Cash payments to customers are presumed to be classified as reductions of revenue in the Company’s statement of operations.   For many tower sales within the Company’s Heavy Fabrications segment, products are sold under terms included in bill and hold sales arrangements that result in different timing for revenue recognition versus shipment. The Company recognizes revenue under these arrangements only when there is a substantive reason for the agreement, the ordered goods are identified separately as belonging to the customer and not available to fill other orders, the goods are currently ready for physical transfer to the customer, and the Company does not have the ability to use the product or to direct it to another customer. Assuming these required revenue recognition criteria are met, revenue is recognized upon completion of product manufacture and customer acceptance.   During 2022  and 2021, the Company also recognized revenue over time, versus point in time, when products in the Gearing and Heavy Fabrications segments had no alternative use to the Company and the Company had an enforceable right to payment, including profit, upon termination of the contract by the customer. Since the projects are labor intensive, the Company uses labor hours as the input measure of progress for the contract. Contract assets are recorded when performance obligations are satisfied but the Company is  not yet entitled to payment. The Company recognizes contract assets associated with this revenue which represents its rights to consideration for work completed but not billed at the end of the period.    Cost of Sales   Cost of sales represents all direct and indirect costs associated with the production of products for sale to customers. These costs include operation, repair and maintenance of equipment, materials, direct and indirect labor and benefit costs, rent and utilities, maintenance, insurance, equipment rentals, freight, and depreciation.       Selling, General and Administrative Expenses   Selling, general and administrative (“SG&A”) expenses include all corporate and administrative functions such as sales and marketing, legal, human resource management, finance, investor and public relations, information technology and senior management. These functions serve to support the Company’s current and future operations and provide an infrastructure to support future growth. Major expense items in this category include management and staff wages and benefits, share-based compensation and professional services.   44     BROADWIND, INC. AND SUBSIDIARIES   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)   December 31, 2022 and 2021   (in thousands, except share and per share data)   Accounts Receivable (A/R)   The Company generally grants uncollateralized credit to customers on an individual basis based upon the customer’s financial condition and credit history. Credit is typically on net 30 day terms and customer deposits are frequently required at various stages of the production process to finance customized products and minimize credit risk.   Historically, the Company’s A/R is highly concentrated with a select number of customers. During the year ended December 31, 2022 , the Company’s five largest customers accounted for   69 % of its consolidated revenues and 43 % of outstanding A/R balances, compared to the year ended December 31, 2021 when the Company’s five largest customers accounted for 71 % of its consolidated revenues and 25 % of its outstanding A/R balances.   Allowance for Doubtful Accounts   Based upon past experience and judgment, the Company establishes an allowance for doubtful accounts with respect to A/R. The Company’s standard allowance estimation methodology considers a number of factors that, based on its collections experience, the Company believes will have an impact on its credit risk and the realizability of its A/R. These factors include individual customer circumstances, history with the Company and other relevant criteria. A/R balances that remain outstanding after the Company has exhausted reasonable collection efforts are written off through a charge to the valuation allowance and a credit to A/R.   The Company monitors its collections and write-off experience to assess whether or not adjustments to its allowance estimates are necessary. Changes in trends in any of the factors that the Company believes may impact the realizability of its A/R, as noted above, or modifications to the Company’s credit standards, collection practices and other related policies may impact its allowance for doubtful accounts and its financial results.   Inventories   Inventories are stated at the lower of cost or net realizable value. Net realizable value is the value that can be realized upon the sale of the inventory less a reasonable estimate of selling costs. Cost is determined either based on the first -in, first -out (“FIFO”) method, or on a standard cost basis that approximates the FIFO method. Any excess of cost over net realizable value is included in the Company’s inventory allowance. Net realizable value of inventory, and management’s judgment of the need for reserves, encompasses consideration of other business factors including physical condition, inventory holding period, contract terms and usefulness.   Inventories consist of raw materials, work-in-process and finished goods. Raw materials consist of components and parts for general production use. Work-in-process consists of labor and overhead, processing costs, purchased subcomponents and materials purchased for specific customer orders. Finished goods consist of components purchased from third parties as well as components manufactured by the Company that will be used to produce final customer products.   45     BROADWIND, INC. AND SUBSIDIARIES   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)   December 31, 2022 and 2021   (in thousands, except share and per share data)   Long-Lived Assets   Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation and amortization of property and equipment is recognized using the straight-line method over the estimated useful lives of the related assets for financial reporting purposes, and generally using an accelerated method for income tax reporting purposes. Depreciation expense related to property and equipment for the years ended December 31, 2022 and 2021 was $ 5,335  and $ 5,603 , respectively. Expenditures for additions and improvements are capitalized, while replacements, maintenance and repairs that do not improve or extend the useful lives of the respective assets are expensed as incurred.  Property or equipment sold or disposed of is removed from the respective property accounts, with any corresponding gains and losses recorded within the operating results of the Company’s consolidated statement of operations.   The Company reviews property and equipment and other long-lived assets (“long-lived assets”) for impairment whenever events or circumstances indicate that carrying amounts may not be recoverable. Asset recoverability is first measured by comparing the assets’ carrying amounts to their expected future undiscounted net cash flows to determine if the assets are impaired.   In evaluating the recoverability of long-lived assets, the Company must make assumptions regarding estimated future cash flows and other factors to determine the fair value of such assets. If the Company’s fair value estimates or related assumptions change in the future, the Company may be required to record impairment charges related to property and equipment and other long-lived assets. If such assets are considered to be impaired, the impairment recognized is measured based on the amount by which the carrying amount of the assets exceeds the fair value. See Note 7, “Long-Lived Assets” of these consolidated financial statements for further discussion of long-lived assets.   Leases   The Company leases various property and equipment under operating lease arrangements. On January 1, 2019, the Company adopted Accounting Standards Update (“ASU”) 2016 - 02, Leases (“Topic 842” ) and ASU 2018 - 11 using the cumulative effect method. Adopting the standard resulted in the Company recognizing operating lease assets and liabilities on the balance sheet. Rent expense for these types of leases is recognized on a straight-line basis over the lease term. In addition, the Company has entered into finance lease arrangements to finance property and equipment and assumed finance lease obligations in connection with certain acquisitions. The cost basis and accumulated amortization of assets recorded under finance leases are included in property and equipment, while the liabilities are included in finance lease obligations.   46     BROADWIND, INC. AND SUBSIDIARIES   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)   December 31, 2022 and 2021   (in thousands, except share and per share data) Warranty Liability   The Company provides warranty terms that generally range from one to five years for various products and services relating to workmanship and materials supplied by the Company. In certain contracts, the Company has recourse provisions for items that would enable the Company to pursue recovery from third parties for amounts paid to customers under warranty provisions. Warranty liability is recorded in accrued liabilities within the consolidated balance sheet. The Company estimates the warranty accrual based on various factors, including historical warranty costs, current trends, product mix and sales. The changes in the carrying amount of the Company’s total product warranty liability for the years ended December 31, 2022  and 2021  were as follows:       As of December 31,       2022     2021   Balance, beginning of period   $ 125     $ 33   Increase of warranty reserve     23       70   Warranty claims     3       22   Other adjustments     ( 2 )     —   Balance, end of period   $ 149     $ 125     Income Taxes   The Company accounts for income taxes based upon an asset and liability approach. Deferred tax assets and liabilities represent the future tax consequences of the differences between the financial statement carrying amounts of assets and liabilities versus the tax basis of assets and liabilities. Under this method, deferred tax assets are recognized for deductible temporary differences, and operating loss and tax credit carryforwards. Deferred tax liabilities are recognized for taxable temporary differences. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. The impact of tax rate changes on deferred tax assets and liabilities is recognized in the year that the change is enacted.   In connection with the preparation of its consolidated financial statements, the Company is required to estimate its income tax liability for each of the tax jurisdictions in which the Company operates. This process involves estimating the Company’s actual current income tax expense and assessing temporary differences resulting from differing treatment of certain income or expense items for income tax reporting and financial reporting purposes. The Company also recognizes as deferred income tax assets the expected future income tax benefits of net operating loss (“NOL”) carryforwards. In evaluating the realizability of deferred income tax assets associated with NOL carryforwards, the Company considers, among other things, expected future taxable income, the expected timing of the reversals of existing temporary reporting differences and the expected impact of tax planning strategies that may be implemented to prevent the potential loss of future income tax benefits. Changes in, among other things, income tax legislation, statutory income tax rates or future taxable income levels could materially impact the Company’s valuation of income tax assets and liabilities and could cause its income tax provision to vary significantly among financial reporting periods.   47     BROADWIND, INC. AND SUBSIDIARIES   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)   December 31, 2022 and 2021   (in thousands, except share and per share data)   The Company also accounts for the uncertainty in income taxes related to the recognition and measurement of a tax position taken or expected to be taken in an income tax return. The Company follows the applicable pronouncement guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition related to the uncertainty in these income tax positions.   Share-Based Compensation   The Company grants incentive stock options, restricted stock units (“RSUs”) and/or performance awards (“PSUs”) to certain officers, directors, and employees. The Company accounts for share-based compensation related to these awards based on the estimated fair value of the equity award and recognizes expense ratably over the required vesting term of the award. The expense associated with PSUs is also based on the probability of achieving embedded targets. Awards that are based on a fixed number of shares are treated as equity while awards that are based on a fixed amount of dollars are treated as liabilities. See Note  14 “Share-Based Compensation” of these consolidated financial statements for further discussion of the Company’s share-based compensation plans, the nature of share-based awards issued and the Company’s accounting for share-based compensation.   Net Income Per Share   The Company presents both basic and diluted net income (loss) per share. Basic net income (loss) per share is based solely upon the weighted average number of common shares outstanding and excludes any dilutive effects of restricted stock, options, warrants and convertible securities. Diluted net income (loss) per share is based upon the weighted average number of common shares and common-share equivalents outstanding during the year excluding those common-share equivalents where the impact to basic net income (loss) per share would be anti-dilutive.     2. REVENUES   Revenues are recognized when control of the promised goods or services is transferred to customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services.   The following table presents the Company’s revenues disaggregated by revenue source for the years ended December 31, 2022 and 2021 :       Year Ended December 31,       2022     2021   Heavy Fabrications   $ 117,206     $ 101,994   Gearing     42,588       28,583   Industrial Solutions     17,804       15,402   Eliminations     ( 839 )     ( 360 ) Consolidated   $ 176,759     $ 145,619     The Company’s revenue is generally recognized at a point in time, typically when control of the promised goods or services is transferred to its customers in an amount that reflects the consideration it expects to be entitled to in exchange for those goods or services. A performance obligation is a promise in a contract to transfer a distinct product or service to the customer. The Company measures revenue based on the consideration specified in the purchase order and revenue is recognized when the performance obligations are satisfied. If applicable, the transaction price of a contract is allocated to each distinct performance obligation and recognized as revenue when or as the customer receives the benefit of the performance obligation.   48     BROADWIND, INC. AND SUBSIDIARIES   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)   December 31, 2022 and 2021   (in thousands, except share and per share data)   For many tower sales within the Company’s Heavy Fabrications segment, products are sold under terms included in bill and hold sales arrangements that result in different timing for revenue recognition versus shipment. The Company recognizes revenue under these arrangements only when there is a substantive reason for the arrangement, the ordered goods are identified separately as belonging to the customer and not available to fill other orders, the goods are currently ready for physical transfer to the customer, and the Company does not have the ability to use the product or to direct it to another customer. Assuming these required revenue recognition criteria are met, revenue is recognized upon completion of product manufacture and customer acceptance.   During the years ended December  31,   2022 and 2021, the Company recognized a portion of revenue within the Gearing and Heavy Fabrications segments over time, as the products had no alternative use to the Company and the Company had an enforceable right to payment, including profit, upon termination of the contracts. Since the projects are labor intensive, the Company uses labor hours as the input measure of progress for the applicable contracts. Within the Heavy Fabrications segment, the Company recognized revenue over time of $ 14,298  and $ 5,665  for the years ended December  30, 2022  and 2021, respectively. Within the Gearing segment, the Company recognized revenue over time of $ 2,444  for the year ended December  31, 2021. During the fourth quarter of 2021, the Company ceased recording revenue over time within the Gearing segment due to a change in contract terms with a customer. Contract assets are recorded when performance obligations are satisfied but the Company is not yet entitled to payment. Contract assets represent the Company’s rights to consideration for work completed but not billed at the end of the period.    The Company generally expenses sales commissions when incurred. These costs are recorded within selling, general and administrative expenses. Customer deposits, deferred revenue and other receipts are deferred and recognized when the revenue is realized and earned. Cash payments to customers are classified as reductions of revenue in the Company’s statement of operations.   The Company does not disclose the value of the unsatisfied performance obligations for contracts with an original expected length of one year or less.     3 . EARNINGS PER SHARE   The following table presents a reconciliation of basic and diluted earnings per share for the years ended December 31, 2022 and 2021 as follows:       For the Years Ended December 31,       2022     2021   Basic earnings per share calculation:                 Net (loss) income   $ ( 9,730 )   $ 2,847   Weighted average number of common shares outstanding     20,298,641       18,726,459   Basic net (loss) income per share   $ ( 0.48 )   $ 0.15   Diluted earnings per share calculation:                 Net (loss) income   $ ( 9,730 )   $ 2,847   Weighted average number of common shares outstanding     20,298,641       18,726,459   Common stock equivalents:                 Non-vested stock awards (1)     —       662,030   Weighted average number of common shares outstanding     20,298,641       19,388,489   Diluted net (loss) income per share   $ ( 0.48 )   $ 0.15     ( 1 )   Restricted stock units granted and outstanding of 822,737   are excluded from the computation of diluted earnings for the year ended December 31, 2022  due to the anti-dilutive effect as a result of the Company’s net loss for that period.   49     BROADWIND, INC. AND SUBSIDIARIES   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)   December 31, 2022 and 2021   (in thousands, except share and per share data)     4. RECENT ACCOUNTING PRONOUNCEMENTS   The Company reviews new accounting standards as issued. Although some of the accounting standards issued or effective in the current fiscal year may be applicable to it, the Company believes that none of the new standards have a significant impact on its consolidated financial statements.   In June 2016, the FASB issued ASU No. 2016 - 13, “Financial Instruments-Credit Losses (Topic 326 ),” which replaces the current incurred loss impairment methodology for most financial assets with the current expected credit loss, or CECL, methodology. The series of new guidance amends the impairment model by requiring entities to use a forward-looking approach based on expected losses rather than incurred losses to estimate credit losses on certain types of financial instruments, including trade receivables and contract assets. The guidance should be applied on either a prospective transition or modified-retrospective approach depending on the subtopic. The guidance is effective for annual periods beginning after December 15, 2022, including interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the impact that the new guidance will have on its consolidated financial statements.   5 . ALLOWANCE FOR DOUBTFUL ACCOUNTS   The activity in the accounts receivable allowance from operations for the years ended December 31, 2022 and 2021 consists of the following:       For the Year Ended December 31,       2022     2021   Balance at beginning of period   $ 47     $ 473   Bad debt expense     —       9   Write-offs     —       ( 229 ) Other adjustments     ( 30 )     ( 206 ) Balance at end of period   $ 17     $ 47         6. INVENTORIES   The components of inventories as of December 31, 2022 and 2021 are summarized as follows:       As of December 31,       2022     2021   Raw materials   $ 27,644     $ 16,148   Work-in-process     13,843       13,639   Finished goods     4,916       6,575         46,403       36,362   Less: Reserve     ( 2,141 )     ( 2,985 ) Net inventories   $ 44,262     $ 33,377       50     BROADWIND, INC. AND SUBSIDIARIES   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)   December 31, 2022 and 2021   (in thousands, except share and per share data)     7. LONG-LIVED ASSETS   The cost basis and estimated lives of property and equipment from continuing operations as of December 31, 2022 and 2021 are as follows:       As of December 31,               2022     2021     Life (in years)   Land   $ 1,423     $ 1,423           Buildings     20,792       20,778       39   Machinery and equipment     120,893       116,725       2 - 10   Office furniture and equipment     5,705       5,480       3 - 7   Leasehold improvements     9,040       8,937     Shorter of asset life or life of lease   Construction in progress     2,360       677                 160,213       154,020           Less accumulated depreciation and amortization     ( 114,894 )     ( 110,365 )         Total property and equipment   $ 45,319     $ 43,655             As of December 31, 2022 , the Company had commitments of $ 1,942  related to the completion of projects within construction in progress.   Intangible assets represent the fair value assigned to definite-lived assets such as trade names and customer relationships. Intangible assets are amortized on a straight-line basis over their estimated useful lives, with a remaining life range from 1  to 5  years.   During November 2022, the Company identified a triggering event associated with   an expected operating loss within the Heavy Fabrications segment during the year ended December 31, 2022. Accordingly, the Company performed an undiscounted cash flow analysis as of November 30, 2022 and determined that the undiscounted future cash flows exceeded the asset group's carrying value. Additionally, there were no changes in facts or circumstances following the November 30, 2022 assessment through December 31, 2022, which would alter the asset group’s initial undiscounted future cash flows or carrying value estimates. As a result, no impairment charge was recorded for the Heavy Fabrications asset group for the year ended December 31, 2022.    During November 2021, the Company identified triggering events associated with operating losses within the Gearing segment and a decline in revenue and operating margin within the Heavy Fabrications segment during the year ended December 31, 2021. Accordingly, the Company performed undiscounted cash flow analyses as of November 30, 2021  and determined that the undiscounted future cash flows exceeded the asset groups' carrying values. Additionally, there were no changes in facts or circumstances following the November 30, 2021  assessments through December 31, 2021, which would alter the asset groups initial undiscounted future cash flows or carrying value estimates. As a result, no impairment charges were recorded for the Heavy Fabrications and Gearing asset groups for the year ended December 31, 2021.   51     BROADWIND, INC. AND SUBSIDIARIES   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)   December 31, 2022 and 2021   (in thousands, except share and per share data)   As of December 31, 2022 and 2021 , the cost basis, accumulated amortization and net book value of intangible assets were as follows:       December 31, 2022     December 31, 2021                                       Remaining                                     Remaining                                       Weighted                                     Weighted                       Accumulated     Net     Average                     Accumulated     Net     Average       Cost     Accumulated     Impairment     Book     Amortization             Accumulated     Impairment     Book     Amortization       Basis     Amortization     Charges     Value     Period     Cost     Amortization     Charges     Value     Period   Intangible assets:                                                                                 Noncompete agreements   $ 170     $ ( 167 )   $ —     $ 3       0.1     $ 170     $ ( 139 )   $ —     $ 31       1.1   Customer relationships     15,979       ( 7,581 )     ( 7,592 )     806       3.1       15,979       ( 7,284 )     ( 7,592 )     1,103       4.0   Trade names     9,099       ( 7,180 )     —       1,919       4.8       9,099       ( 6,780 )     —       2,319       5.8   Intangible assets   $ 25,248     $ ( 14,928 )   $ ( 7,592 )   $ 2,728       4.3     $ 25,248     $ ( 14,203 )   $ ( 7,592 )   $ 3,453       5.2     Intangible assets are amortized on a straight-line basis over their estimated useful lives, which range from 6 to 20  years. Amortization expense was $ 725  for the years ended December 31, 2022 and 2021 . As of December 31, 2022 , estimated future amortization expense is as follows:   2023   $ 664   2024     661   2025     661   2026     422   2027     320   Total   $ 2,728         8 . ACCRUED LIABILITIES   Accrued liabilities as of December 31, 2022 and 2021 consisted of the following:       December 31,     December 31,       2022     2021   Accrued payroll and benefits   $ 3,110     $ 2,992   Fair value of interest rate swap     —       27   Accrued property taxes     17       —   Income taxes payable     26       1   Accrued professional fees     118       129   Accrued warranty liability     149       125   Self-insured workers compensation reserve     30       166   Long term incentive plan accrual     619       —   Accrued other     244       214   Total accrued liabilities   $ 4,313     $ 3,654       52     BROADWIND, INC. AND SUBSIDIARIES   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)   December 31, 2022 and 2021   (in thousands, except share and per share data)     9. DEBT AND CREDIT AGREEMENTS   The Company’s outstanding debt balances as of December 31, 2022 and 2021 consisted of the following:       December 31,       2022     2021   Line of credit   $ —     $ 6,350   Other notes payable     1,094       477   Long-term debt     7,217       —   Less: current portion     ( 1,170 )     ( 6,650 ) Long-term debt, net of current maturities   $ 7,141     $ 177     As of December 31, 2022 , future annual principal payments on the Company’s outstanding debt obligations were as follows:   2023   $ 1,170   2024     1,969   2025     1,113   2026     1,114   2027     1,115   2028 and thereafter     1,830   Total   $ 8,311     Credit Facilities   On October 26, 2016, the Company established a three -year secured revolving line of credit with CIBC Bank USA (“CIBC”). This line of credit has been amended from time to time. On February 25, 2019, the line of credit was expanded and extended for three years when the Company and its subsidiaries entered into an Amended and Restated Loan and Security Agreement (the “2016 Amended and Restated Loan Agreement”), with CIBC as administrative agent and sole lead arranger and the other financial institutions party thereto (the “Lenders”), providing the Company and its subsidiaries with a $ 35,000 secured credit facility (as amended to date, the “2016 Credit Facility”). The obligations under the 2016 Credit Facility were secured by, subject to certain exclusions, (i) a first priority security interest in all accounts receivable, inventory, equipment, cash and investment property, and (ii) a mortgage on the Abilene, Texas tower and Pittsburgh, Pennsylvania gearing facilities.   On October  29, 2020, the Company executed the First Amendment to the 2016 Amended and Restated Loan Agreement (the “First Amendment”), implementing a payoff of a syndicated lender and a pricing grid based on the Company's trailing twelve month EBITDA under which applicable margins range from 2.25 % to 2.75 % for LIBOR rate loans and 0.00 % and 0.75 % for base rate loans, and extending the term of the 2016 Credit Facility to  July  31, 2023.     53     BROADWIND, INC. AND SUBSIDIARIES   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)   December 31, 2022 and 2021   (in thousands, except share and per share data)   On February 23, 2021, the Company executed the Second Amendment to the Amended and Restated Loan Agreement, which waived testing of the fixed charge coverage covenant for the quarters ended March 31, 2021 and June 20, 2021, added a new liquidity covenant applicable to the quarter ended March 31, 2021 and new minimum EBITDA covenants applicable to the quarters ended March 31, 2021 and June 30, 2021. As of September 30, 2021, the Company transitioned back to a fixed charge coverage covenant.   On November 8, 2021, the Company 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, the Company 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.   In conjunction with the 2016 Amended and Restated Loan Agreement, during June 2019, the Company entered into a floating to fixed interest rate swap with CIBC. The swap agreement has a notional amount of $ 6,000 and a schedule matching that of the underlying loan that synthetically fixes the interest rate on LIBOR borrowings for the entire term of the 2016 Credit Facility at 2.13 %, before considering the Company’s risk premium. The interest rate swap is accounted for using mark-to-market accounting. Accordingly, changes in the fair value of the swap each reporting period are adjusted through earnings, which may subject the Company’s results of operations to non-cash volatility. The interest rate swap liability is included in the “Accrued liabilities” line item of the Company’s consolidated financial statements as of  December 31, 2021.  The interest rate swap expired in  February 2022.    All obligations outstanding under the 2016 Credit Facility were refinanced by the 2022 Credit Facility on August 5, 2022. On August 4, 2022, the Company 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. The 2022 Credit Facility replaced the 2016 Credit Facility. In connection with the 2022 Credit Facility, the Company incurred deferred financing costs in the amount of $ 470 primarily related to the revolving credit loan. These costs are included in the “Other assets” line item of the Company's consolidated financial statements as of December 31, 2022.    The 2022 Credit Facility, as amended, contains customary covenants limiting the Company’s and its subsidiaries’ ability to, among other things, incur liens, make investments, incur indebtedness, merge or consolidate with others or dispose of assets, change the nature of its business, and enter into transactions with affiliates.  In addition, the 2022 Credit Facility contains financial covenants requiring the Company to have a Fixed Charge Coverage Ratio (i) as of the twelve -month period ending January 31, 2024 through and including June 30, 2024 of 1.0 to 1.0, and (ii) as of each twelve -month period thereafter to be greater than 1.1 to 1.0 and minimum EBITDA (as defined in the 2022 Credit Facility) on a month-end basis of $ 1,921,000 for the twelve -month period ending March 31, 2023, $ 3,661,000 for the twelve -month period ending June 30, 2023, $ 5,876,000 for the twelve -month period ending September 30, 2023, and $ 9,929,000 for the twelve -month period ending December 31, 2023. The initial term of the revolving credit facility matures August 4, 2027. The term loan also matures on August 4, 2027, with monthly payments based on an 84 -month amortization.    On February 8, 2023, the Company executed Amendment No. 1 to Credit Agreement and Limited Waiver (the “First Amendment to 2022 Credit Agreement”), which waived the Company's fourth quarter minimum EBITDA (as defined in the 2022 Credit Facility) requirement for the period ended December 31, 2022, amended the Fixed Charge Coverage Ratio (as defined in the 2022 Credit Facility) requirements for the twelve -month period ending January 31, 2024 through and including June 30, 2024 and each twelve -month period thereafter, and amended the minimum EBITDA requirements applicable to the twelve -month periods ending March 31, 2023, June 30, 2023, September 30, 2023, and December 31, 2023.   As of December 31, 2022 , only $ 7,217   from the senior secured term loan was outstanding under the 2022 Credit Facility. The Company had $ 0 drawn on the senior secured revolving credit facility and had the ability to borrow up to $ 27,351  under the 2022 Credit Facility as of December 31, 2022 . As of December 31, 2022, the effective interest rate of the senior secured revolving credit facility was 6.55 % and the effective rate of the senior secured term loan was 6.80 %. As of December 31, 2021, the effective interest rate of the 2016 Credit Facility was 4.0 %.    Other   In 2016, the Company entered into a $ 570 unsecured loan agreement with the Development Corporation of Abilene which is included in long-term debt, less current maturities. The loan is forgivable upon the Company meeting and maintaining specific employment thresholds. During each of the years ended December 31, 2022 and 2021 , $114 of the loan was forgiven. As of December 31, 2022  and December 31, 2021, the loan balance was $ 0   and $114, respectively. In addition, the Company has 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 the Company’s consolidated financial statements as of December 31, 2022 and 2021 , respectively. 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 July   2023  to September  2028.   On April 15, 2020, the Company received funds under notes and related documents (“PPP Loans”) with CIBC, under the Paycheck Protection Program (the “PPP”) which was established under the CARES Act enacted on March 27, 2020 in response to the COVID- 19 pandemic and is administered by the U.S. Small Business Administration (“SBA”). The Company received total proceeds of $ 9,530 from the PPP Loans and made repayments of $ 379 on May 13, 2020. Under the terms of the CARES Act, as amended by the Paycheck Protection Program Flexibility Act of 2020 enacted on June 5, 2020, the PPP Loans, and accrued interest and fees are eligible to be forgiven following a period of twenty-four weeks after PPP Loan proceeds are received (the “covered period”) if they are used for qualifying expenses as described in the CARES Act including payroll costs and certain employee benefits (which must equal or exceed 60% of the amount requested to be forgiven), rent, mortgage interest, and utilities. The amount of loan forgiveness is reduced if the borrower terminates employees or significantly reduces salaries during such period, subject to certain exceptions. The Company used at least 60% of the amount of the PPP Loans proceeds to pay for payroll costs and the balance on other eligible qualifying expenses consistent with the terms of the PPP and submitted its forgiveness applications to CIBC during the first quarter of 2021. During the quarter ended June  30,   2021, all loans were forgiven by the SBA and a gain of $ 9,151 was recorded in “Other income (expense), net” in the Company's condensed consolidated statements of operations.    54     BROADWIND, INC. AND SUBSIDIARIES   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)   December 31, 2022 and 2021   (in thousands, except share and per share data)   10. LEASES   The Company leases various property and equipment under operating lease arrangements. On January 1, 2019, the Company adopted Topic 842 and ASU 2018 - 11 using the cumulative effect method and has elected to apply each available practical expedient. The standard requires companies to recognize operating lease assets and liabilities on the balance sheet and to disclose key information regarding leasing arrangements. The Company has elected to apply the short-term lease exception to all leases of one year or less.    As of December 31, 2022 , the right-of-use (“ROU”) asset had a balance of $ 16,396   which is included in the “Operating lease right-of-use assets” line item of these consolidated financial statements and current and non-current lease liabilities relating to the ROU asset of $ 1,882   and $ 16,696 , respectively, and are included in the “Current portion of operating lease obligations” and “Long-term operating lease obligations, net of current portion” line items of these consolidated financial statements. As of December 31, 2021, the ROU asset had a balance of $ 18,029  and current and non-current lease liabilities relating to the ROU asset of $ 1,775   and $ 18,405 , respectively. The discount rates used for leases accounted for under Topic 842 are based on an interest rate yield curve developed for the leases in the Company’s lease portfolio.    Lease terms generally range from 3 to 15   years with renewal options for extended terms. Some of the Company’s facility leases include options to renew. The exercise of the renewal options is at the Company’s discretion. Therefore, the majority of renewals to extend the lease terms are not included in ROU assets and lease liabilities as they are not reasonably certain of exercise. The Company regularly evaluates the renewal options and includes them in the lease term when the Company is reasonably certain to exercise them. Certain leases contain rent escalation clauses that require additional rental payments in the later years of the term. Rent expense for these types of leases is recognized on a straight-line basis over the lease term. Operating rental expense for the years ended December 31, 2022 and 2021 was $ 4,253  and $ 4,302 , respectively.   In addition, the Company has entered into finance lease arrangements to finance property and equipment and assumed finance lease obligations in connection with certain acquisitions. Finance rental expense for the years ended December 31, 2022 and 2021 was $ 1,639  and $ 1,379 , respectively.   Amortization expense recorded in connection with assets recorded under finance leases was $ 1,172  and $ 984  for the years ended December 31, 2022 and 2021 , respectively.   55     BROADWIND, INC. AND SUBSIDIARIES   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)   December 31, 2022 and 2021   (in thousands, except share and per share data )   Quantitative information regarding the Company’s leases is as follows:       Year Ended December 31,       2022     2021   Components of lease cost                 Finance lease cost components:                 Amortization of finance lease assets   $ 1,172     $ 984   Interest on finance lease liabilities     467       395   Total finance lease costs     1,639       1,379   Operating lease cost components:                 Operating lease cost     2,839       2,965   Short-term lease cost     707       654   Variable lease cost (1)     898       870   Sublease income     ( 191 )     ( 187 ) Total operating lease costs     4,253       4,302                     Total lease cost   $ 5,892     $ 5,681                     Supplemental cash flow information related to our operating leases is as follows for the twelve months ended December 31, 2022 and 2021:                 Cash paid for amounts included in the measurement of lease liabilities:                 Operating cash outflow from operating leases   $ 3,496     $ 3,581   Right-of-use assets obtained in exchange for new                 operating lease liabilities   $ 187     $ 907                     Weighted-average remaining lease term-finance leases at end of period (in years)     3.3       1.9   Weighted-average remaining lease term-operating leases at end of period (in years)     8.1       8.9   Weighted-average discount rate-finance leases at end of period     6.0 %     6.3 % Weighted-average discount rate-operating leases at end of period     8.7 %     8.6 %   ( 1 ) Variable lease costs consist primarily of taxes, insurance, utilities, and common area or other maintenance costs for the Company’s leased facilities and equipment.   Amortization associated with new right-of-use assets obtained in exchange for new operating lease liabilities is $ 20  and $ 270  for the years ended December 31, 2022  and 2021, respectively.    As of December 31, 2022 , future minimum lease payments under finance leases and operating leases were as follows:       Finance     Operating               Leases     Leases     Total   2023   $ 2,372     $ 3,453     $ 5,825   2024     1,392       2,998       4,390   2025     986       3,064       4,050   2026     774       3,059       3,833   2027     671       3,098       3,769   2028 and thereafter     1,015       10,948       11,963   Total lease payments     7,210       26,620       33,830   Less—portion representing interest     ( 976 )     ( 8,042 )     ( 9,018 ) Present value of lease obligations     6,234       18,578       24,812   Less—current portion of lease obligations     ( 2,008 )     ( 1,882 )     ( 3,890 ) Long-term portion of lease obligations   $ 4,226     $ 16,696     $ 20,922     56     BROADWIND, INC. AND SUBSIDIARIES   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)   December 31, 2022 and 2021   (in thousands, except share and per share data)     11. COMMITMENTS AND CONTINGENCIES   Legal Proceedings   From time to time, the Company is subject to legal proceedings or claims that arise in the ordinary course of its business. The Company accrues for costs related to loss contingencies when such costs are probable and reasonably estimable. As of December 31, 2022 , the Company is not aware of any material pending legal proceedings or threatened litigation that would have a material adverse effect on the Company’s results of operations, financial condition or cash flows, although no assurance can be given with respect to the ultimate outcome of pending actions. Refer to Note  18, “Legal Proceedings” of these consolidated financial statements for further discussion of legal proceedings.   Environmental Compliance and Remediation Liabilities   The Company’s operations and products are subject to a variety of environmental laws and regulations in the jurisdictions in which the Company operates and sells products governing, among other things, air emissions, wastewater discharges, the use, handling and disposal of hazardous materials, soil and groundwater contamination, employee health and safety, and product content, performance and packaging. Also, certain environmental laws can impose the entire cost or a portion of the cost of investigating and cleaning up a contaminated site, regardless of fault, upon any one or more of a number of parties, including the current or previous owners or operators of the site. These environmental laws also impose liability on any person who arranges for the disposal or treatment of hazardous substances at a contaminated site. Third parties may also make claims against owners or operators of sites and users of disposal sites for personal injuries and property damage associated with releases of hazardous substances from those sites.   57     BROADWIND, INC. AND SUBSIDIARIES   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)   December 31, 2022 and 2021   (in thousands, except share and per share data)   Collateral   In select instances, the Company has pledged specific inventory and machinery and equipment assets to serve as collateral on related payable or financing obligations.   Warranty Liability   The Company provides warranty terms that generally range from one to five years for various products and services relating to workmanship and materials supplied by the Company. In certain contracts, the Company has recourse provisions for items that would enable the Company to pursue recovery from third parties for amounts paid to customers under warranty provisions.   Liquidated Damages   In certain customer contracts, the Company has agreed to pay liquidated damages in the event of qualifying delivery or production delays. These damages are typically limited to a specific percentage of the value of the product in question and dependent on actual losses sustained by the customer. When the damages are determined to be probable and estimable, the damages are recorded as a reduction to revenue. During 2022 and 2021 , the Company incurred no liquidated damages and there was no reserve for liquidated damages as of December 31, 2022  or December 31, 2021.   Workers’ Compensation Reserves   As of December 31, 2022 and 2021 , the Company had $ 30   and $ 166 , respectively, accrued for self-insured workers’ compensation liabilities. At the beginning of the third quarter of 2013, the Company began to self-insure for its workers’ compensation liabilities, including reserves for self-retained losses. The Company entered into a guaranteed workers’ compensation cost program at the beginning of the third quarter of 2016, but still maintains a liability for the trailing claims for the self-insured policy periods. Although the ultimate outcome of these matters may exceed the amounts recorded and additional losses may be incurred, the Company does not believe that any additional potential exposure for such liabilities will have a material adverse effect on the Company’s consolidated financial position or results of operations.   Health Insurance Reserves   As of December 31, 2022 and 2021 , the Company had $ 360  and $ 416 , respectively, accrued for health insurance liabilities. The Company self-insures for its health insurance liabilities, including establishing reserves for self-retained losses. Historical loss experience combined with actuarial evaluation methods and the application of risk transfer programs are used to determine required health insurance reserves. The Company takes into account claims incurred but not reported when determining its health insurance reserves. Health insurance reserves are included in accrued liabilities. While the Company’s management believes that it has adequately reserved for these claims, the ultimate outcome of these matters may exceed the amounts recorded and additional losses may be incurred.   58     BROADWIND, INC. AND SUBSIDIARIES   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)   December 31, 2022 and 2021   (in thousands, except share and per share data)   Other   As of December 31, 2022 , approximately 19 % of the Company’s employees were covered by two collective bargaining agreements with local unions at the Company’s Cicero, Illinois and Neville Island, Pennsylvania locations. During November 2022, the Company negotiated a  four -year collective bargaining agreement with the Neville Island union and it is expected to remain in effect through October 2026. A  four -year collective bargaining agreement in regards to the Cicero, Illinois facility was negotiated in February 2022 and is expected to remain in effect through February 2026.     12 . FAIR VALUE MEASUREMENTS   The Company measures its financial assets and liabilities at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., exit price) in an orderly transaction between market participants at the measurement date. Additionally, the Company is required to provide disclosure and categorize assets and liabilities measured at fair value into one of three different levels depending on the assumptions (i.e., inputs) used in the valuation. Level  1 provides the most reliable measure of fair value while Level  3 generally requires significant management judgment. Financial assets and liabilities are classified in their entirety based on the lowest level of input significant to the fair value measurement. Financial instruments are assessed quarterly to determine the appropriate classification within the fair value hierarchy. Transfers between fair value classifications are made based upon the nature and type of the observable inputs. The fair value hierarchy is defined as follows:   Level  1 — Valuations are based on unadjusted quoted prices in active markets for identical assets or liabilities.   Level  2 — Valuations are based on quoted prices for similar assets or liabilities in active markets, or quoted prices in markets that are not active for which significant inputs are observable, either directly or indirectly. For the Company’s corporate and municipal bonds, although quoted prices are available and used to value said assets, they are traded less frequently.   Level  3 — Valuations are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. Inputs reflect management’s best estimate of what market participants would use in valuing the asset or liability at the measurement date.   Fair value of financial instruments   The carrying amounts of the Company’s financial instruments, which include cash, A/R, accounts payable and customer deposits, approximate their respective fair values due to the relatively short-term nature of these instruments. Based upon interest rates currently available to the Company for debt with similar terms, the carrying value of the Company’s long-term debt is approximately equal to its fair value.   59     BROADWIND, INC. AND SUBSIDIARIES   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)   December 31, 2022 and 2021   (in thousands, except share and per share data)   The Company entered into an interest rate swap in June 2019 to mitigate the exposure to the variability of LIBOR for its floating rate debt described in Note 9, “Debt and Credit Agreements,” of these consolidated financial statements. The fair value of the interest rate swap is reported in “Accrued liabilities” and the change in fair value is reported in “Interest expense, net” of these consolidated financial statements. The fair value of the interest rate swap is estimated as the net present value of projected cash flows based on forward interest rates at the balance sheet date. The interest rate swap expired in  February 2022.    The following table represents the fair value of the Company’s financial assets measured as of December 31, 2022 and 2021 :       December 31, 2021       Level 1     Level 2     Level 3     Total   Liabilities measured on a recurring basis:                                 Interest rate swap   $ —     $ 27     $ —     $ 27   Total liabilities at fair value   $ —     $ 27     $ —     $ 27         13. INCOME TAXES   The provision for income taxes for the years ended December 31, 2022 and 2021 consists of the following:       For the Years Ended Year Ended December 31,       2022     2021   Current provision                 Federal   $ —     $ —   State     48       21   Total current provision     48       21   Deferred provision                 Federal     ( 2,102 )     ( 1,636 ) State     ( 460 )     ( 304 ) Total deferred provision     ( 2,562 )     ( 1,940 ) Increase in deferred tax valuation allowance     2,549       1,944   Total provision for income taxes   $ 35     $ 25     During the year ended December 31, 2022 , the Company recorded an expense for income taxes of $ 35 , compared to an expense for income taxes of $ 25  during the year ended December 31, 2021 . On  August 16, 2022, Congress enacted the Inflation Reduction Act which includes advanced manufacturing tax credits for manufacturers of eligible components, including wind and solar components produced and sold in the US from 2023 through 2032. No  rulings have been made on the taxability of these credits.    The total change in the deferred tax valuation allowance was $ 2,549   and $ 1,944  for the years ended December 31, 2022 and 2021 , respectively. The changes in the deferred tax valuation allowance in 2022 and 2021 were primarily the result of increases to the deferred tax assets pertaining to federal and state NOLs. Management believes that significant uncertainty exists surrounding the recoverability of deferred tax assets. As a result, the Company recorded a valuation allowance against the remaining deferred tax assets. 60     BROADWIND, INC. AND SUBSIDIARIES   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)   December 31, 2022 and 2021   (in thousands, except share and per share data)   The tax effects of the temporary differences and NOLs that give rise to significant portions of deferred tax assets and liabilities are as follows:       As of Year Ended December 31,       2022     2021   Noncurrent deferred income tax assets:                 Net operating loss carryforwards   $ 74,807     $ 71,967   Intangible assets     —       453   Accrual and reserves     3,531       2,946   Leases     3,834       4,428   Other     4       8   Total noncurrent deferred tax assets     82,176       79,802   Valuation allowance     ( 74,559 )     ( 72,010 ) Noncurrent deferred tax assets, net of valuation allowance     7,617       7,792   Noncurrent deferred income tax liabilities:                 Fixed assets     2,584       2,834   Intangible assets     674       —   Leases     4,344       4,956   Total noncurrent deferred tax liabilities     7,602       7,790   Net deferred income tax asset   $ 15     $ 2     Certain prior year amounts have been reclassified to conform to current year presentation. Valuation allowances of $ 74,559  and $ 72,010  have been provided for deferred income tax assets for which realization is uncertain as of December 31, 2022 and 2021 , respectively. A reconciliation of the beginning and ending amounts of the valuation is as follows:   Valuation allowance as of December 31, 2021   $ ( 72,010 ) Gross increase for current year activity     ( 2,549 ) Valuation allowance as of Balance at December 31, 2022   $ ( 74,559 )   As of December 31, 2022 , the Company had federal and unapportioned state NOL carryforwards of approximately $ 288,462  of which $ 227,781  will begin to expire in 2026. The majority of the NOL carryforwards will expire in various years from 2028 through 2037. NOLs generated after January 1, 2018 will not expire.   The reconciliation between the statutory U.S. federal income tax rate and the Company’s effective income tax rate is as follows:       For the Year Ended       December 31,       2022     2021   Statutory U.S. federal income tax rate     21.0 %     21.0 % State and local income taxes, net of federal income tax benefit     3.3       ( 6.6 ) Permanent differences     ( 0.6 )     1.9   Change in valuation allowance     ( 26.3 )     29.2   Equity compensation     0.0       14.5   Other     ( 2.1 )     0.2   State NOL deferred adjustment     4.3       -   PPP loan forgiveness     0.0       ( 59.6 ) Effective income tax rate     ( 0.4 )%     0.6 %   61     BROADWIND, INC. AND SUBSIDIARIES   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)   December 31, 2022 and 2021   (in thousands, except share and per share data)   The Company accounts for the uncertainty in income taxes by prescribing a minimum recognition threshold for a tax position taken, or expected to be taken, in a tax return that is required to be met before being recognized in the financial statements. The Company recognizes interest and penalties related to uncertain tax positions as income tax expense. As of December 31, 2022 , the Company had no unrecognized tax benefits that could impact the income tax expense.   The Company files income tax returns in the U.S. federal and state jurisdictions. As of December 31, 2022 , with few exceptions, the Company is no longer subject to federal or state income tax examinations by taxing authorities for years before December 31, 2018; however, taxing authorities have the ability to adjust NOL carryforwards in open tax years that may have been carried forward from closed years.   The Company’s 2008 and 2009 federal tax returns were examined in 2011 and no material adjustments were identified related to any of the Company’s tax positions. Although these periods have been audited, they continue to remain open until all NOLs generated in those tax years have either been utilized or expire.   Section  382 of the Internal Revenue Code of 1986, as amended (the “IRC”), generally imposes an annual limitation on the amount of NOL carryforwards and associated built-in losses that may be used to offset taxable income when a corporation has undergone certain changes in stock ownership. The Company’s ability to utilize NOL carryforwards and built-in losses may be limited, under this section or otherwise, by the Company’s issuance of common stock or by other changes in stock ownership. Upon completion of the Company’s analysis of IRC Section  382, the Company has determined that aggregate changes in stock ownership have resulted in an annual limitation of $ 14,284 on NOLs and built-in losses available for utilization based on the triggering event in 2010. To the extent the Company’s use of NOL carryforwards and associated built-in losses is significantly limited in the future due to additional changes in stock ownership, the Company’s income could be subject to U.S. corporate income tax earlier than it would if the Company were able to use NOL carryforwards and built-in losses without such annual limitation, which could result in lower profits and the loss of the majority of the benefits from these attributes.   In February 2013, the Company adopted a Stockholder Rights Plan, which was amended in February 2016 and approved by our stockholders (as amended, the “Rights Plan”), designed to preserve the Company’s substantial tax assets associated with NOL carryforwards under Section  382 of the IRC. On February 7, 2019, the Board of Directors (the “Board”) approved an amendment extending the Rights Plan for an additional three years, which was subsequently approved by the Company’s stockholders at the 2019 Annual Meeting of Stockholders held on April 23, 2019 ( the “2019 Annual Meeting of Stockholders”). On February 3, 2022, the Board approved an amendment which included an extension of the Rights Plan for an additional three years, which was subsequently approved by the Company's stockholders at the  2022 Annual Meeting of Stockholders.   The Rights Plan is intended to act as a deterrent to any person or group, together with its affiliates and associates, being or becoming the beneficial owner of 4.9 % or more of the Company’s common stock and thereby triggering a further limitation of the Company’s available NOL carryforwards. In connection with the adoption of the Rights Plan, the Board declared a non-taxable dividend of one preferred share purchase right (a “Right”) for each outstanding share of the Company’s common stock to the Company’s stockholders of record as of the close of business on February  22, 2013. Since the record date, the Company has issued one Right with each newly issued share of its common stock. Until the distribution date (unless earlier redeemed or exchanged or upon expiration of the Rights, as applicable), the Rights will be evidenced by certificates of the Company's common stock and will be transferred only with such certificates. Each Right entitles its holder to purchase from the Company one one -thousandth of a share of the Company’s Series A Junior Participating Preferred Stock at an exercise price of $ 7.26  per Right, subject to adjustment. As a result of the Rights Plan, any person or group that acquires beneficial ownership of 4.9 % or more of the Company’s common stock without the approval of the Board would be subject to significant dilution in the ownership interest of that person or group. Stockholders who owned 4.9 % or more of the outstanding shares of the Company’s common stock as of February  12, 2013 will not trigger the preferred share purchase rights unless they acquire additional shares after that date.   62     BROADWIND, INC. AND SUBSIDIARIES   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)   December 31, 2022 and 2021   (in thousands, except share and per share data)     14. SHARE-BASED COMPENSATION   Overview of Share-Based Compensation Plan   The Company has granted incentive stock options and other equity awards pursuant to previously Board approved equity incentive plans. Most recently, the Company has granted equity awards pursuant to the Broadwind Energy, Inc. 2015 Equity Incentive Plan, which was approved by the Board in February 2015 and by the Company’s stockholders in April 2015. On February 19, 2019, the Board approved an Amended and Restated 2015 Equity Incentive Plan (as amended, the “2015 EIP,”), which, among other things, increased the number of shares of our common stock authorized for issuance under the 2015 EIP from 1,100,000 to 2,200,000 . The amendment and restatement of the 2015 EIP was approved by the Company’s stockholders at the 2019 Annual Meeting of Stockholders. On February 7, 2021, the Board approved the Second Amendment to the Amended and Restated 2015 Equity Incentive Plan which, among other things, increased the number of shares of our common stock authorized for issuance under the 2015 EIP from 2,200,000 to 3,200,000 . The Second Amendment to the amendment and restatement of the 2015 EIP was approved by the Company’s stockholders at the 2021  Annual Meeting of Stockholders.   The purposes of the Company’s equity incentive plans are (a) to align the interests of the Company’s stockholders and recipients of awards by increasing the proprietary interest of such recipients in the Company’s growth and success; (b) to advance the interests of the Company by attracting and retaining officers, other employees, non-employee directors and independent contractors; and (c) to motivate such persons to act in the long-term best interests of the Company and its stockholders. Under the 2015 EIP, the Company may grant (i) non-qualified stock options; (ii) “incentive stock options” (within the meaning of Section 422 of the IRC); (iii) stock appreciation rights; (iv) restricted stock and restrictive stock units; and (v) performance awards.   Stock Options. The exercise price of stock options granted under the 2015 EIP is equal to the closing price of the Company’s common stock on the date of grant. Stock options generally become exercisable on the anniversary of the grant date, with vesting terms that may range from one to five years from the date of grant. Additionally, stock options expire ten years after the date of grant. The fair value of stock options granted is expensed ratably over their vesting term.   Restricted Stock Units (RSUs). The granting of RSUs is provided for under the 2015 EIP. RSUs generally contain a vesting period of one to five years from the date of grant. The fair value of each RSU granted is equal to the closing price of the Company’s common stock on the date of grant and is generally expensed ratably over the vesting term of the RSU award.   Performance Awards (PSUs). The granting of PSUs is provided for under the 2015 EIP. Vesting of PSUs is conditioned upon the Company meeting applicable performance measures over the performance period. The fair value of each PSU granted is equal to the closing price of the Company’s common stock on the date of grant and is generally expensed ratably over the term of the PSU award plan.     63     BROADWIND, INC. AND SUBSIDIARIES   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)   December 31, 2022 and 2021   (in thousands, except share and per share data)   The 2015 EIP reserves 3,200,000 shares of the Company’s common stock. As of December 31, 2022, 1,854,919   shares of common stock reserved for issuance pursuant to stock options and RSU awards granted under the 2015 EIP had been issued in the form of common stock and 822,737   shares of common stock are issued and unvested.   There was no  stock option activity during the years ended  December 31, 2022  and  2021 and no  stock options were outstanding as of December 31, 2022 and  2021.  The fair value of each stock option award is estimated on the date of grant using the Black-Scholes option pricing model. The determination of the fair value of each stock option is affected by the Company’s stock price on the date of grant, as well as assumptions regarding a number of highly complex and subjective variables. These variables include, but are not limited to, the Company’s expected stock price volatility over the expected life of the awards and actual and projected stock option exercise behavior. 64     BROADWIND, INC. AND SUBSIDIARIES   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)   December 31, 2022 and 2021   (in thousands, except share and per share data)   The following table summarizes information with respect to outstanding RSUs and PSUs accounted for as equity awards as of December 31, 2022 and 2021 :               Weighted Average               Grant-Date Fair Value       Number of Shares     Per Share   Unvested as of December 31, 2021     918,448     $ 2.73   Granted     748,694     $ 1.75   Vested     ( 818,956 )   $ 2.23   Forfeited     ( 25,449 )   $ 2.60   Unvested as of December 31, 2022     822,737     $ 2.37     RSUs and PSUs are generally subject to ratable vesting over a three -year period. Compensation expense related to these service and performance based awards is generally recognized on a straight-line basis over the vesting period. During the years ended December 31, 2022 and 2021 , the Company utilized a forfeiture rate of 25 % for estimating the forfeitures of stock compensation granted.   During the year ended December 31, 2022, the Company recorded share-based compensation expense in the amount of $ 619  for PSUs treated as liability awards that will be settled in shares in 2023. The liability is recognized in the “Accrued liabilities” line item of the Company’s condensed consolidated balance sheet and has a balance of $ 619  as of December 31, 2022. The following table summarizes share-based compensation expense, net of taxes withheld, included in the Company’s consolidated statements of operations for the years ended December 31, 2022 and 2021 as follows:       For the Years Ended       December 31,       2022     2021   Share-based compensation expense:                 Cost of sales   $ 129     $ 130   Selling, general and administrative     1,434       1,411   Net effect of share-based compensation expense on net income   $ 1,563     $ 1,541   Reduction in earnings per share:                 Basic earnings per share   $ 0.08     $ 0.08   Diluted earnings per share   $ 0.08     $ 0.08       ( 1 ) Income tax benefit is not illustrated because the Company is currently in a full tax valuation allowance position and an actual income tax benefit was not realized for the years ended December 31, 2022 and 2021 . The result of the income (loss) situation creates a timing difference, resulting in a deferred tax asset, which is fully reserved for in the Company’s valuation allowance.   As of December 31, 2022 , the Company estimates that pre-tax compensation expense for all unvested share-based RSUs and PSUs in the amount of approximately $ 1,162   will be recognized through the year 2024. The Company expects to satisfy the future distribution of shares of restricted stock by issuing new shares of common stock.     15. SEGMENT REPORTING   The Company is organized into reporting segments based on the nature of the products offered and business activities from which it earns revenues and incurs expenses for which discrete financial information is available and regularly reviewed by the Company’s chief operating decision maker.    65     BROADWIND, INC. AND SUBSIDIARIES   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)   December 31, 2022 and 2021   (in thousands, except share and per share data)   The Company’s segments and their product offerings are summarized below:   Heavy Fabrications   The Company provides large, complex and precision fabrications to customers in a broad range of industrial markets. The Company’s most significant presence is within the U.S. wind energy industry, although it has diversified into other industrial markets in order to improve capacity utilization, reduce customer concentrations, and reduce exposure to uncertainty related to governmental policies currently impacting the U.S. wind energy industry. Within the U.S. wind energy industry, the Company provides steel towers and adapters primarily to wind turbine manufacturers. Production facilities, located in Manitowoc, Wisconsin and Abilene, Texas, are situated in close proximity to the primary U.S. domestic wind energy and equipment manufacturing hubs. The two facilities have a combined annual tower production capacity of up to approximately 550  towers ( 1650 tower sections), sufficient to support turbines generating more than 1,100 MW of power. The Company has expanded production capabilities and leveraged manufacturing competencies, including welding, lifting capacity and stringent quality practices, into aftermarket and OEM components utilized in surface and underground mining, construction, material handling, O&G and other infrastructure markets.   Gearing   The Company provides gearing and gearboxes to a broad set of customers in diverse markets including; onshore and offshore O&G fracking and drilling, surface and underground mining, wind energy, steel, material handling and other infrastructure markets. The Company has manufactured loose gearing, gearboxes and systems, and provided heat treat services for aftermarket and OEM applications for nearly a century. The Company uses an integrated manufacturing process, which includes machining and finishing processes in Cicero, Illinois, and heat treatment and gearbox repair in Neville Island, Pennsylvania.   Industrial Solutions   The Company provides supply chain solutions, light fabrication, inventory management, kitting and assembly services, primarily serving the combined cycle natural gas turbine market.   66     BROADWIND, INC. AND SUBSIDIARIES   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)   December 31, 2022 and 2021   (in thousands, except share and per share data)   Corporate and Other   “Corporate” includes the assets and SG&A expenses of the Company’s corporate office. “Eliminations” comprises adjustments to reconcile segment results to consolidated results.   The accounting policies of the reportable segments are the same as those referenced in Note  1, “Description of Business and Summary of Significant Accounting Policies” of these consolidated financial statements. Summary financial information by reportable segment is as follows:       Heavy Fabrications     Gearing     Industrial Solutions     Corporate     Eliminations     Consolidated   For the Year Ended December 31, 2022                                                 Revenues from external customers   $ 117,194       42,572       16,993       —       —     $ 176,759   Intersegment revenues     12       16       811       —       ( 839 )     —   Net revenues     117,206       42,588       17,804       —       ( 839 )     176,759   Operating (loss) income     ( 1,044 )     43       120       ( 5,722 )     ( 4 )     ( 6,607 ) Depreciation and amortization     3,446       1,978       397       239       —       6,060   Capital expenditures     2,601       446       48       3       —       3,098   Total assets     45,475       51,944       12,775       224,856       ( 190,510 )     144,540         Heavy Fabrications     Gearing     Industrial Solutions     Corporate     Eliminations     Consolidated   For the Year Ended December 31, 2021                                                 Revenues from external customers   $ 101,989       28,583       15,047       —       —     $ 145,619   Intersegment revenues     5       —       355       —       ( 360 )     —   Net revenues     101,994       28,583       15,402       —       ( 360 )     145,619   Operating loss     ( 3,214 )     ( 2,593 )     ( 386 )     ( 6,401 )     —       ( 12,594 ) Depreciation and amortization     3,844       1,855       425       212       —       6,336   Capital expenditures     1,038       328       261       80       —       1,707   Total assets     37,131       46,219       10,825       228,219       ( 204,347 )     118,047     The Company generates revenues entirely from transactions completed in the U.S. and its long-lived assets are all located in the U.S. All intercompany revenue is eliminated in consolidation. During 2022 , two   customers accounted for more than 10% of total net revenues. The customers, reported within the Heavy Fabrications segment, accounted for revenues of $ 64,625 and $ 20,336 , respectively. During 2021 , two  customers accounted for more than 10% of total net revenues. The customers, reported within the Heavy Fabrications segment, accounted for revenues of $ 59,278  and $ 25,946 respectively. During the years ended December 31, 2022 and 2021 , five customers accounted for 69 % and 71 %, respectively, of total net revenues.   67     BROADWIND, INC. AND SUBSIDIARIES   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)   December 31, 2022 and 2021   (in thousands, except share and per share data)   16. EMPLOYEE BENEFIT PLANS   Retirement Savings and Profit Sharing Plans   Retirement Savings and Profit Sharing Plans   The Company offers a 401 (k) retirement savings plan to all eligible employees who may elect to contribute a portion of their salary on a pre-tax basis, subject to applicable statutory limitations. As of December 31, 2022 , all employees were eligible to receive safe harbor matching contributions equal to 100 % of the first 3 % of the participant’s elective deferral contributions and 50 % of the next 2 % of the participant’s elective deferral contributions. The Company has the discretion, subject to applicable statutory requirements, to fund any matching contribution with a contribution to the plan of the Company’s common stock. The Company periodically evaluates whether to fund the matching contribution in cash or in the Company’s common stock. Under the plan, elective deferrals and basic Company matching is 100 % vested at all times.   For the years ended December 31, 2022 and 2021 , the Company recorded expense under these plans of approximately $ 1,247  and $ 1,195 , respectively.   Deferred Compensation Plan   The Company maintains a deferred compensation plan for certain key employees and nonemployee directors, whereby certain wages earned, compensation for services rendered, and discretionary company-matching contributions may be deferred and deemed to be invested in the Company’s common stock. Changes in the fair value of the plan liability are recorded as charges or credits to compensation expense. Compensation income associated with the deferred compensation plan recorded during the years ended December 31, 2022 and 2021 was $( 1 )   and $( 55 ). The fair value of the plan liability to the Company is included in accrued liabilities in the Company’s consolidated balance sheets. As of December 31, 2022 and 2021 , the fair value of plan liability to the Company was $ 15  and $ 16 , respectively.   In addition to the employee benefit plans described above, the Company participates in certain customary employee benefits plans, including those which provide health and life insurance benefits to employees.   68     BROADWIND, INC. AND SUBSIDIARIES   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)   December 31, 2022 and 2021   (in thousands, except share and per share data)   17. QUARTERLY FINANCIAL SUMMARY (UNAUDITED)   The following table provides a summary of selected financial results of operations by quarter for the years ended December 31, 2022 and 2021 as follows:   2022   First     Second     Third     Fourth   Revenues   $ 41,844     $ 50,012     $ 44,843     $ 40,060   Gross profit     2,012       2,394       3,748       2,556   Operating loss     ( 2,073 )     ( 1,912 )     ( 520 )     ( 2,102 ) Net loss     ( 2,404 )     ( 2,703 )     ( 1,772 )     ( 2,851 ) Net loss per share:                                 Basic   $ ( 0.12 )   $ ( 0.13 )   $ ( 0.09 )   $ ( 0.14 ) Diluted   $ ( 0.12 )   $ ( 0.13 )   $ ( 0.09 )   $ ( 0.14 )   2021   First     Second     Third     Fourth   Revenues   $ 32,728     $ 46,491     $ 40,389     $ 26,011   Gross profit     282       2,198       2,074       957   Operating loss     ( 4,311 )     ( 2,311 )     ( 1,997 )     ( 3,975 ) Net (loss) income     ( 1,210 )     10,252       ( 2,105 )     ( 4,090 ) Net (loss) income per share:                                 Basic   $ ( 0.07 )   $ 0.55     $ ( 0.11 )   $ ( 0.21 ) Diluted   $ ( 0.07 )   $ 0.53     $ ( 0.11 )   $ ( 0.21 )     69     BROADWIND, INC. AND SUBSIDIARIES   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)   December 31, 2022 and 2021   (in thousands, except share and per share data)   18. LEGAL PROCEEDINGS   The Company is party to a variety of legal proceedings that arise in the normal course of its business. While the results of these legal proceedings cannot be predicted with certainty, management believes that the final outcome of these proceedings will not have a material adverse effect, individually or in the aggregate, on the Company’s results of operations, financial condition or cash flows. Due to the inherent uncertainty of litigation, there can be no assurance that the resolution of any particular claim or proceeding would not have a material adverse effect on the Company’s results of operations, financial condition or cash flows. It is possible that if one or more litigation matters were decided against the Company, the effects could be material to the Company’s results of operations in the period in which the Company would be required to record or adjust the related liability and could also be material to the Company’s financial condition and cash flows in the periods the Company would be required to pay such liability.   The Company received a notice dated January 18, 2023 from WM Argyle Fund, LLC, which allegedly owned approximately 1.0% of the Company’s outstanding shares at the time of submission, purporting to nominate a slate of six candidates for election as directors at the Company's  2023 Annual Meeting of Stockholders. The Company remains open to ongoing engagement with WM Argyle. However, if the Company and WM Argyle cannot reach an agreement in connection with its nomination, there will be a contested election at the Company’s 2023 Annual Meeting of Stockholders.   70       INDEX TO EXHIBITS   Exhibit Number   Description 3.1   Certificate of Incorporation of the Company (incorporated by reference to Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2008) 3.2   Certificate of Amendment to the Certificate of Incorporation of the Company (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed August 23, 2012) 3.3   Certificate of Amendment to the Certificate of Incorporation of the Company (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed May 6, 2020) 3.4   Third Amended and Restated Bylaws of the Company, adopted as of May 4, 2020 (incorporated by reference to Exhibit 3.2 to the Company's Current Report on Form 8-K filed May 6, 2020) 4.1   Section 382 Rights Agreement dated as of February 12, 2013 between the Company and Equiniti Trust Company, as rights agent, which includes the Form of Rights Certificate as Exhibit B thereto (incorporated by reference to Exhibit 1 to the Company’s Registration Statement on Form 8-A filed February 13, 2013) 4.2   Certificate of Designation of Series A Junior Participating Preferred Stock of the Company (incorporated by reference to Exhibit 2 to the Company’s Registration Statement on Form 8-A filed February 13, 2013) 4.3   First Amendment to Section 382 Rights Agreement dated as of February 2, 2016 between the Company and Equiniti Trust Company, as rights agent (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed February 8, 2016) 4.4   Second Amendment to Section 382 Rights Agreement dated as of February 7, 2019 between the Company and Equiniti Trust Company, as rights agent (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed February 12, 2019) 4.5   Third Amendment to Section 382 Rights Agreement dated as of February 3, 2022 between the Company and Equiniti Trust Company, as rights agent (incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed February 3, 2022 4.6   Description of Securities (incorporated by reference to Exhibit 4.5 to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2019) 10.1   Lease Agreement dated December 26, 2007 between Tower Tech Systems Inc. and City Centre, LLC (incorporated by reference to Exhibit 10.3 to the Company’s Annual Report on Form 10-KSB for the fiscal year ended December 31, 2007) 10.2   Amended and Restated Lease for Industrial/Manufacturing Space dated as of May 1, 2010 between Tower Tech Systems Inc. and City Centre, LLC (incorporated by reference to Exhibit 10.5 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2010) 10.3†   Form of Indemnification Agreement (incorporated by reference to Exhibit 10.6 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2010) 10.4†   Broadwind Energy, Inc. 2015 Equity Incentive Plan (incorporated by reference to Exhibit A to the Company’s Schedule 14A filed on March 12, 2015) 10.5†   Form of Executive Incentive Stock Option Agreement (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2010) 10.6†   Form of Restricted Stock Unit Award Agreement  (incorporated by reference to Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2012) 10.7†   Form of Restricted Stock Unit Award Agreement (incorporated by reference to Exhibit 10.3 to the Company's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2012) 10.8†   Form of Stock Option Agreement (incorporated by reference to Exhibit 10.4 to the Company's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2012) 10.9†   Form of Restricted Stock Unit Award Agreement (Non-Employee Directors) (incorporated by reference to Exhibit 10.35 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2015) 10.10†   Form of Restricted Stock Unit Award Agreement (Extended Executive Team) (incorporated by reference to Exhibit 10.36 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2015) 10.11†   Form of Restricted Stock Unit Award Agreement (incorporated by reference to Exhibit 10.37 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2015) 10.12†   Broadwind Energy, Inc. 2015 Equity Incentive Plan Restricted Stock Unit Award Notice (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2018) 10.13   Amended and Restated Loan and Security Agreement, dated February 25, 2019, among the Company, Brad Foote Gearworks, Inc., Broadwind Services, LLC, Broadwind Towers, Inc., Red Wolf Company, LLC, the other Loan Parties and Lenders party thereto, and CIBC Bank USA, as Administrative Agent and Sole Lead Arranger (incorporated by reference to Exhibit 10.25 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018) 10.14†   Severance and Non-Competition Agreement, dated as of May 4, 2018, between the Company and Eric Blashford (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed May 3, 2018) 10.15†   Form of Performance Award Agreement (Broadwind Energy, Inc. 2015 Equity Incentive Plan) (incorporated by reference to Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2019) 10.16†   Form of Performance Award Agreement (Amended and Restated Broadwind Energy, Inc. 2015 Equity Incentive Plan) (incorporated by reference to Exhibit 10.5 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2019) 10.17†   Form of Performance Award Agreement dated April 23, 2019 between the Company and Stephanie K. Kushner (incorporated by reference to Exhibit 10.6 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2019) 10.18†   Restricted Stock Award Agreement dated April 23, 2019 between the Company and Stephanie K. Kushner (incorporated by reference to Exhibit 10.7 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2019) 10.19†   Amended and Restated Broadwind Energy, Inc. 2015 Equity Incentive Plan (incorporated by reference to Exhibit D to the Company’s Schedule 14A filed on March 11, 2019) 10.20   Note dated April 5, 2020 by and between Brad Foote Gear Works, Inc. and CIBC Bank USA (incorporated by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2020) 10.21   Note dated April 5, 2020 by and between Broadwind Heavy Fabricators, Inc. and CIBC Bank USA (incorporated by reference to Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2020) 10.22   Note dated April 5, 2020 by and between Broadwind Industrial Solutions, Inc. and CIBC Bank USA (incorporated by reference to Exhibit 10.3 to the Company's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2020) 10.23   Note dated April 8, 2020 by and between Broadwind Energy, Inc. n/k/a Broadwind, Inc. and CIBC Bank USA (incorporated by reference to Exhibit 10.4 to the Company's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2020) 10.24†   Form of Performance Award  Agreement (Amended and Restated Broadwind, Inc. 2015 Equity Incentive Plan) (incorporated by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2020) 10.25†   First Amendment to Amended and Restated Broadwind Energy, Inc. 2015 Equity Incentive Plan (incorporated by reference to Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2020) 10.26   First Amendment to the Amended and Restated Loan and Security Agreement and Other Loan Documents, dated October 29, 2020, among the Company, Brad Foote Gearworks, Inc, Broadwind Services, LLC, Broadwind Heavy Fabrications, Inc., Broadwind Industrial Solutions, LLC, CIBC Bank USA, as Administrative Agent for itself and all Lenders and Siena Lending Group (incorporated by reference to Exhibit 10.3 to the Company's Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2020) 10.27   Second Amendment to the Amended and Restated Loan and Security Agreement, dated February 23, 2021, among the Company, Brad Foote Gearworks, Inc, Broadwind Services, LLC, Broadwind Heavy Fabrications, Inc., Broadwind Industrial Solutions, LLC, and CIBC Bank USA, as Administrative Agent for itself and all Lenders (incorporated by reference to Exhibit 10.33 to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2020) 10.28   Second Amendment to Amended and Restated Broadwind, Inc. 2015 Equity Incentive Plan (incorporated by reference to Appendix B to Amendment No. 1 to the Company's Schedule 14A filed April 5, 2021) 10.29   Third Amendment to Amended and Restated Loan and Security Agreement, dated November 8, 2021, among the Company, Brad Foote Gearworks, Inc., Broadwind Services, LLC, Broadwind Heavy Fabrications, Inc., Broadwind Industrial Solutions, LLC and CIBC Bank USA, as Administrative Agent for itself and all Lenders (incorporated by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2021)  10.30   Equity Distribution Agreement, dated March 9, 2021, by and between the Company and Craig-Hallum Capital Group LLC (incorporated by reference to Exhibit 1.1 to the Company's Current Report on Form 8-K filed March 9, 2021) 10.31   Fourth Amendment to Amended and Restated Loan and Security Agreement, dated February 28, 2022, among the Company, Brad Foote Gearworks, Inc., Broadwind Services, LLC, Broadwind Heavy Fabrications, Inc., Broadwind Industrial Solutions, LLC and CIBC Bank USA, as Administrative Agent for itself and all Lenders (incorporated by reference to Exhibit 10.30 to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2021) 10.32   Credit Agreement, dated as of August 4, 2022, by and among Broadwind, Inc., Brad Foote Gear Works, Inc., Broadwind Industrial Solutions, LLC, Broadwind Heavy Fabrications, Inc., 5100 Neville Road, LLC and Wells Fargo Bank, National Association (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed August 8, 2022)   10.33   Guaranty, dated as of August 4, 2022, by Broadwind, Inc., Brad Foote Gear Works, Inc., Broadwind Industrial Solutions, LLC, Broadwind Heavy Fabrications, Inc. and 5100 Neville Road, LLC in favor of Wells Fargo Bank, National Association (incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K filed August 8, 2022) 10.34   Severance and Non-Competition Agreement dated as of August 10, 2022, between Broadwind, Inc. and Thomas A. Ciccone (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed August 12, 2022) 10.35   Sales Agreement, dated September 12, 2022, by and among Broadwind, Inc., Roth Capital Partners, LLC and H.C. Wainwright & Co. (incorporated by reference to Exhibit 1.1 to the Company's Current Report on Form 8-K filed September 12, 2022) 10.36   Amendment No. 1 to Credit Agreement and Limited Waiver, dated as of February 8, 2023, by and among Broadwind Inc., Brad Foote Gear Works, Inc., Broadwind Industrial Solutions, LLC, Broadwind Heavy Fabrications, Inc., 5100 Neville Island, LLC and Wells Fargo Bank, National Association (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed February 14, 2023) 21   Subsidiaries of the Registrant (filed herewith) 23   Consent of RSM LLP (filed herewith) 31.1   Rule 13a-14(a) Certification of Chief Executive Officer (filed herewith) 31.2   Rule 13a-14(a) Certification of Chief Financial Officer (filed herewith) 32.1   Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith) 32.2   Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith) 101   The following financial information from this Form 10-K of Broadwind, Inc. for the year ended December 31, 2022, formatted in Inline XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets as of December 31, 2022 and 2021, (ii) Consolidated Statements of Operations for the years ended December 31, 2022 and 2021, (iii) Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2022 and 2021, (iv) Consolidated Statements of Cash Flows for the years ended December 31, 2022 and 2021, and (v) Notes to Consolidated Financial Statements, tagged as blocks of text. 104   Cover Page Interactive Data File (embedded within the Inline XBRL and contained in Exhibit 101)     † Indicates management contract or compensation plan or arrangement. 71         Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on the ninth  day of March, 2023 .       BROADWIND, INC.         By: /s/ Eric B. Blashford     Eric B. Blashford President and Chief Executive Officer (Principal Executive Officer)   Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed below by the following persons (including a majority of the board of directors) on behalf of the registrant and in the capacities and on the dates indicated.   SIGNATURE    TITLE    DATE             /s/ Eric B. Blashford   President, Chief Executive Officer, and Director (Principal Executive Officer)     March 9, 2023 Eric B. Blashford                   /s/ Thomas A. Ciccone   Vice President and Chief Financial Officer (Principal Financial Officer)   March 9, 2023 Thomas A. Ciccone                   /s/ David P. Reiland   Director   March 9, 2023 David P. Reiland                   /s/ Philip J. Christman   Director   March 9, 2023 Philip J. Christman                   /s/ Thomas A. Wagner   Director   March 9, 2023 Thomas A. Wagner                   /s/ Cary B. Wood   Director   March 9, 2023 Cary B. Wood                   /s/ Sachin Shivaram   Director   March 9, 2023 Sachin Shivaram           72