What changed in this filing

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Item 1. Financial Statements

2023-11-13 compared with 2023-08-14 · 220 added, 237 removed, 923 unchanged (33% of the section changed)

4 unchanged sentences

(in thousands, except share and per share data)

September 30,

CURRENT ASSETS:

5 unchanged sentences

AMP credit receivable

11,217  

Contract assets

49 unchanged sentences

30,000,000 shares authorized;

21,578,925 and 21,127,130 shares issued as of June 30, 2023, and December 31, 2022, respectively

Treasury stock, at cost, 273,937 shares as of June 30, 2023 and December 31, 2022

21,673,800 and 21,127,130 shares issued as of September 30, 2023, and December 31, 2022, respectively

Treasury stock, at cost, 273,937 shares as of September 30, 2023 and December 31, 2022

( 1,842 )  

15 unchanged sentences

(in thousands, except per share data)

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

$ 57,163  

8 unchanged sentences

10,167  

25,476  

OPERATING EXPENSES:

1 unchanged sentence

16,113  

12,109  

Intangible amortization

1 unchanged sentence

16,611  

12,659  

Operating income (loss)

43 unchanged sentences

BALANCE, December 31, 2021

19,859,650  

( 273,937 )  

$ ( 1,842 )  

$ 395,372  

$ ( 339,416 )  

$ 54,134  

Stock issued for restricted stock

480,595  

Stock issued under defined contribution 401(k) retirement savings plan

146,790  

Share-based compensation

Shares withheld for taxes in connection with issuance of restricted stock

( 194,962 )  

( 411 )  

( 2,404 )  

BALANCE, March 31, 2022

20,292,073  

( 273,937 )  

$ ( 1,842 )  

$ 395,435  

$ ( 341,820 )  

$ 51,793  

Stock issued for restricted stock

328,139  

Stock issued under defined contribution 401(k) retirement savings plan

207,722  

Share-based compensation

Shares withheld for taxes in connection with issuance of restricted stock

( 82,946 )  

( 133 )  

( 2,703 )  

BALANCE, June 30, 2022

20,744,988  

( 273,937 )  

( 1,842 )  

396,021  

( 344,523 )  

49,676  

Stock issued for restricted stock

Stock issued under defined contribution 401(k) retirement savings plan

Share-based compensation

Shares withheld for taxes in connection with issuance of restricted stock

Sale of common stock, net

BALANCE, September 30, 2022

BALANCE, December 31, 2022

21,127,130  

( 273,937 )  

$ ( 1,842 )  

$ 397,240  

$ ( 349,146 )  

$ 46,273  

Stock issued under defined contribution 401(k) retirement savings plan

64,807  

Share-based compensation

BALANCE, March 31, 2023

21,191,937  

( 273,937 )  

$ ( 1,842 )  

$ 397,720  

$ ( 348,377 )  

$ 47,522  

Stock issued for restricted stock

408,436  

Stock issued under defined contribution 401(k) retirement savings plan

71,536  

Share-based compensation

Shares withheld for taxes in connection with issuance of restricted stock

( 92,984 )  

( 117 )  

BALANCE, June 30, 2023

21,578,925  

( 273,937 )  

$ ( 1,842 )  

$ 398,180  

$ ( 346,962 )  

$ 49,398  

Stock issued under defined contribution 401(k) retirement savings plan

Share-based compensation

BALANCE, September 30, 2023

The accompanying notes are an integral part of these condensed consolidated financial statements.

3 unchanged sentences

(in thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income (loss)

$ 2,184  

Adjustments to reconcile net cash used in operating activities:

8 unchanged sentences

Accounts receivable

( 11,794 )  

AMP credit receivable

( 6,729 )  

Employee retention credit receivable

Contract assets

( 273 )  

( 4,293 )  

Prepaid expenses and other current assets

2 unchanged sentences

Customer deposits

( 4,190 )  

Other non-current assets and liabilities

Net cash used in operating activities

( 17,447 )  

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchases of property and equipment

( 3,977 )  

Proceeds from disposals of property and equipment

Net cash used in investing activities

( 3,962 )  

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from line of credit, net

11,991  

10,687  

Payments for deferred financing costs

Proceeds from long-term debt

Payments on long-term debt

( 607 )  

Principal payments on finance leases

( 1,113 )  

Shares withheld for taxes in connection with issuance of restricted stock

( 117 )  

Proceeds from sale of common stock, net

Net cash provided by financing activities

10,772  

NET DECREASE IN CASH

( 10,637 )  

NET (DECREASE) INCREASE IN CASH

CASH beginning of the period

12,732  

CASH end of the period

$ 2,095  

The accompanying notes are an integral part of these condensed consolidated financial statements.

14 unchanged sentences

Operating results for the 

three and six months ended June 30, 2023 are not necessarily indicative of the results that may be expected for the twelve months ending December 31, 2023, or any other interim period, which may differ materially due to, among other things, the risk factors set forth in our Annual Report on Form 10 -K for the year ended December 31, 2022  and as supplemented by the risk factors set forth in our other filings with the Securities and Exchange Commission (the “SEC”).

three and nine months ended September 30, 2023 are not necessarily indicative of the results that may be expected for the twelve months ending December 31, 2023, or any other interim period, which may differ materially due to, among other things, the risk factors set forth in our Annual Report on Form 10 -K for the year ended December 31, 2022  and as supplemented by the risk factors set forth in our other filings with the Securities and Exchange Commission (the “SEC”).

The December 31, 2022 condensed consolidated balance sheet was derived from audited financial statements, but does not include all disclosures required by GAAP.

1 unchanged sentence

There have been no material changes in the Company’s significant accounting policies during the 

six months ended June 30, 2023 as compared to the significant accounting policies described in the Company’s Annual Report on Form 10 -K for the year ended December 31, 2022 .

nine months ended September 30, 2023 as compared to the significant accounting policies described in the Company’s Annual Report on Form 10 -K for the year ended December 31, 2022 .

Company Description   

4 unchanged sentences

The Company’s most significant presence is within the U.S.

wind energy industry, which accounted for 50 % and 53 % of the Company’s revenue during the first  

six months of 2023  and 2022, respectively. 

wind energy industry, which accounted for 51 % of the Company’s revenue during the first  

nine months of both 

2023  and 2022.

The Company typically meets its short term liquidity needs through cash generated from operations, its available cash balances, the 2022 Credit Facility (as defined below), equipment financing, and access to the public or private debt and/or equity markets, including the option to raise capital from the sale of our securities under the Form S- 3  (as discussed below).

2 unchanged sentences

Debt and finance lease obligations at 

June 30, 2023 totaled $ 25,434 , which includes current outstanding debt and finance leases totaling $ 14,700 .

The Company’s outstanding debt includes $ 11,991  outstanding from the senior secured revolving credit facility under the 2022 Credit Facility.

The Company had $ 6,675  drawn on the senior secured revolving term loan as of June 30, 2023. 

September 30, 2023 totaled $ 31,564 , which includes current outstanding debt and finance leases totaling $ 21,374 .

The Company’s outstanding debt includes $ 18,518  

outstanding from the senior secured revolving credit facility under the 2022 Credit Facility.

The Company had $ 6,405  drawn on the senior secured term loan as of September 

The Company’s revolving line of credit balance is included in the “Line of credit and current portion of long-term debt”

line item in the Company's condensed consolidated balance sheet. 

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.

), replacing a prior shelf registration statement which expired on October 12, 2023.

This shelf registration statement, which includes a base prospectus, allows the Company 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 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 .

No shares of the Company’s common stock were issued under the Sales Agreement during the six  months ended June 30, 2023.

As of June 30, 2023, shares of the Company’s common stock having a value of approximately $ 11,667  remained available for issuance under the Sales Agreement.

No shares of the Company’s common stock were issued under the Sales Agreement during the nine  months ended September 

As of September 

30, 2023, shares of the Company’s common stock having a value of approximately $ 11,667  remained available for issuance under the Sales Agreement.

Any additional shares offered and sold under the Sales Agreement are to be issued pursuant to the Form S- 3 and a 424 (b) prospectus supplement.

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.

3 unchanged sentences

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

During the three and six months ended June 30, 2023, the Company sold account receivables totaling $ 9,495  and $ 18,807 , respectively, related to supply chain financing arrangements, of which customers’

financial institutions applied discount fees totaling $ 184  and $ 315 , respectively. During the three and six  months ended June 30, 2022, the Company sold account receivables totaling $ 30,512  and $ 46,438 , respectively, related to supply chain financing arrangements, of which customers’

During the three and nine  months ended September 

30, 2023, the Company sold account receivables totaling $ 12,084  and $ 31,081 , respectively, related to supply chain financing arrangements, of which customers’

financial institutions applied discount fees totaling $ 334  and $ 649 , respectively. During the three and nine  months ended September 

30, 2022, the Company sold account receivables totaling $ 30,662  and $ 77,099 , respectively, related to supply chain financing arrangements, of which customers’

financial institutions applied discount fees totaling $ 615  and $ 1,110 , respectively. 

The Company anticipates that current cash resources, amounts available under the 2022 Credit Facility, cash to be generated from operations and equipment financing, potential proceeds from the sale of Company securities under the Sales Agreement and any potential proceeds from the sale of further Company securities under the Form S- 3 (or a successor registration statement) will be adequate to meet the Company’s liquidity needs for at least the next twelve months.

If assumptions regarding the Company’s production, sales and subsequent collections from certain of the Company’s large customers, as well as receipt of customer deposits and revenues generated from new customer orders, are materially inconsistent with management’s expectations, the Company may in the future encounter cash flow and liquidity issues.

If the Company’s operational performance deteriorates significantly, it may be unable to comply with existing financial covenants, and could lose access to the 2022 Credit Facility.

This could limit the Company’s operational flexibility, require a delay in making planned investments and/or require the Company to seek additional equity or debt financing.

In January 2023, the Company announced that it had entered into a supply agreement for wind tower purchases valued at approximately $ 175 million with a leading global wind turbine manufacturer. 

Under the terms of the supply agreement, order fulfillment is to occur beginning in 2023 through year-end 2024.

In early November 2023, the parties discussed their joint intent to shift approximately half of the contracted tower section orders initially planned for 2024 into 2025, while maintaining the total number of tower sections stipulated under the supply agreement.

The Company anticipates that current cash resources, amounts available under the 2022 Credit Facility, cash to be generated from operations and equipment financing, potential proceeds from the sale of Company securities under the Sales Agreement 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.

If assumptions regarding the Company’s production, sales and subsequent collections from certain of the Company’s large customers, the Company’s ability to finalize the terms of the remaining obligations under a supply agreement from a leading global wind turbine manufacturer, as well as receipt of customer deposits and revenues generated from new customer orders, are materially inconsistent with management’s expectations, the Company may in the future encounter cash flow and liquidity issues.

If the Company’s operational performance deteriorates significantly, it may be unable to comply with existing financial covenants, and could lose access to the 2022 Credit Facility. This could limit the Company’s operational flexibility, require a delay in making planned investments and/or require the Company to seek additional equity or debt financing.

Any additional equity financing, if available, may be dilutive to stockholders, and additional debt financing, if available, would likely require new financial covenants or impose other restrictions on the Company.

8 unchanged sentences

Revenues are recognized when the promised goods or services are 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 three and six months ended June 30, 2023 and 2022 :

Three Months Ended June 30,

Six Months Ended June 30,

The following table presents the Company’s revenues disaggregated by revenue source for the three and nine months ended September 30, 2023 and 2022 :

Three Months Ended September 30,

Nine Months Ended September 30,

Heavy Fabrications

15 unchanged sentences

$ 136,699  

$ 91,856  

Revenue within the Company’s Gearing and Industrial Solutions segments, as well as industrial fabrication product line revenues within the Heavy Fabrications segment, are generally recognized at a point in time, typically when the promised goods or services are physically transferred to its customers in an amount that reflects the consideration it expects to be entitled to in exchange for those goods or services.

5 unchanged sentences

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

During the six  months ended June 30, 

During the nine  months ended September 

2023  and 2022, the Company recognized a portion of revenue within the Heavy Fabrications segment 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.

1 unchanged sentence

and $ 5,285  

for the three and six months ended June 30, 2023, respectively. Within the Heavy Fabrications segment, the Company recognized revenue over time of $ 4,182  

for the three and nine  months ended September 

30, 2023, respectively, and $ 5,927  

and $ 13,336  

for the three and six months ended June 30, 2022, respectively.

for the three and nine  months ended September 

30, 2022, respectively.

The Company uses labor hours as the input measure of progress for the applicable Heavy Fabrications contracts because the projects are labor intensive.

8 unchanged sentences

EARNINGS PER SHARE  

The following table presents a reconciliation of basic and diluted earnings per share for the three and six months ended June 30, 2023 and 2022 , as follows: 

The following table presents a reconciliation of basic and diluted earnings per share for the three and nine months ended September 30, 2023 and 2022 , as follows: 

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Basic earnings per share calculation:

35 unchanged sentences

$ 0.31  

( 1 ) Restricted stock units granted and outstanding of 829,890  as of June 30, 2022, are excluded from the computation of diluted earnings due to the anti-dilutive effect as a result of the Company’s net loss for the three  months and six months ended June 30, 2022.

( 1 ) Restricted stock units granted and outstanding of 811,342  as of September 

30, 2022, are excluded from the computation of diluted earnings due to the anti-dilutive effect as a result of the Company’s net loss for the three  months and nine  months ended September 

NOTE 4 —

INVENTORIES  

The components of inventories as of June 30, 2023 and December 31, 2022 are summarized as follows:

The components of inventories as of September 30, 2023 and December 31, 2022 are summarized as follows:

September 30,

Raw materials

14 unchanged sentences

AMP CREDITS

During the three and six months ended June 30, 2023, the Company recognized Advanced Manufacturing Production tax credits (“AMP credits”) totaling $ 3,567 and $ 6,729 , respectively, within the Heavy Fabrications segment.

During the three and nine  months ended September 30, 2023, the Company recognized Advanced Manufacturing Production tax credits (“AMP credits”) totaling $ 4,488  and $ 11,217 , respectively, within the Heavy Fabrications segment.

These AMP credits were introduced as part of the Inflation Reduction Act (“IRA”) which was enacted on August 16, 2022. 

5 unchanged sentences

Manufacturers who qualify for the AMP credits can apply to the Internal Revenue Service for cash refunds of the AMP credits or sell the AMP credits to third parties for cash.

The Company recognized the AMP credits as a reduction to cost of sales in the Company’s condensed consolidated statements of operations for the three and six months ended June 30, 2023.

The Company recognized the AMP credits as a reduction to cost of sales in the Company’s condensed consolidated statements of operations for the three and nine  months ended September 

The assets related to the AMP credits are recognized as current assets in the “AMP credit receivable”

line item in the Company's condensed consolidated balance sheets as of June 30, 2023. 

There are currently several critical and complex aspects of the IRA pending technical guidance and regulations from the Internal Revenue Service and the U.S.

line item in the Company's condensed consolidated balance sheet as of September 

 There are currently several critical and complex aspects of the IRA pending technical guidance and regulations from the Internal Revenue Service and the U.S.

Treasury Department.

1 unchanged sentence

Treasury Department could result in changes to the expected and/or actual benefits in the future, which could have a material adverse effect on the Company, results of operations, financial performance and future development efforts.

The potential shift in contracted tower section orders initially planned for 2024 into 2025  under the supply agreement referenced in Note 1, “Basis of Presentation,”

of these condensed consolidated financial statements could impact the availability of AMP credits for monetization by the Company in 2024.

NOTE 6 —

2 unchanged sentences

Intangible assets are amortized on a straight-line basis over their estimated useful lives, with a remaining life range from 2  

As of June 30, 2023 and December 31, 2022 , the cost basis, accumulated amortization and net book value of intangible assets were as follows:

June 30, 2023

to 4  years.

As of September 30, 2023 and December 31, 2022 , the cost basis, accumulated amortization and net book value of intangible assets were as follows:

September 30, 2023

December 31, 2022

21 unchanged sentences

$ 2,728  

As of June 30, 2023 , estimated future amortization expense was as follows:

As of September 30, 2023 , estimated future amortization expense was as follows:

$ 2,229  

2 unchanged sentences

ACCRUED LIABILITIES

Accrued liabilities as of June 30, 2023 and December 31, 2022 consisted of the following: 

Accrued liabilities as of September 30, 2023 and December 31, 2022 consisted of the following: 

September 30,

Accrued payroll and benefits

13 unchanged sentences

DEBT AND CREDIT AGREEMENTS

The Company’s outstanding debt balances as of June 30, 2023 and December 31, 2022 consisted of the following:

The Company’s outstanding debt balances as of September 30, 2023 and December 31, 2022 consisted of the following:

September 30,

Line of credit

2 unchanged sentences

Long-term debt

26,324  

Current portion

4 unchanged sentences

Credit Facility

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”), which replaced its prior credit facility and provided 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”).

On August 4, 2022, the Company entered into a credit agreement (the “2022 Credit Agreement”) with Wells Fargo which replaced its prior credit facility and provided 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.

In connection with the 2022 Credit Facility, the Company incurred deferred financing costs in the amount of $ 368  primarily related to the revolving credit loan, which is net of accumulated amortization of $ 112 . These costs are included in the “Other assets”

line item of the Company's condensed consolidated financial statements at 

June 30, 2023 and December 31, 2022. 

line item of the Company's condensed consolidated financial statements at September 

30, 2023 and December 31, 2022. 

On February 8, 2023, the Company executed Amendment No.

3 unchanged sentences

The term loan also matures on August 4, 2027, with monthly payments based on an 84 -month amortization.

As of June 30, 2023 , there was $ 18,666  

As of September 30, 2023 , there was $ 24,923  

of outstanding indebtedness under the 2022  Credit Facility, with the ability to borrow an additional $ 11,906 .

As of June 30, 2023, the Company was in compliance with all financial covenants under the 2022  Credit Facility. As of June 30, 2023, the effective interest rate of the senior secured revolving credit facility was 7.31 % and the effective rate of the senior secured term loan was 7.56 %. As of December 

As of September 

30, 2023, the Company was in compliance with all financial covenants under the 2022  Credit Facility. As of September 

30, 2023, the effective interest rate of the senior secured revolving credit facility and the senior secured term loan was 7.82 %. 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 %. 

 In addition, the Company has outstanding notes payable for capital expenditures in the amount of $ 1,647  and $ 1,094  as of June 30, 2023 and December 31, 2022 , respectively, with $ 37  and $ 88  included in the “Line of credit and current portion of long-term debt”

line item of the Company’s condensed consolidated financial statements as of June 30, 2023 and December 31, 2022 , respectively.

 In addition, the Company has outstanding notes payable for capital expenditures in the amount of $ 1,401  and $ 1,094  as of September 30, 2023 and December 31, 2022 , respectively, with $ 161  and $ 88  included in the “Line of credit and current portion of long-term debt”

line item of the Company’s condensed consolidated financial statements as of September 30, 2023 and December 31, 2022 , respectively.

The notes payable have monthly payments that range from $ 3  to $ 15  and an interest rate of approximately 6 %.

7 unchanged sentences

The Company has elected to apply the short-term lease exception to all leases of one year or less.

During the six months ended June 30, 2023  and 2022, the Company did not have additional operating leases that resulted in right-of-use assets obtained in exchange for lease obligations.

During the nine months ended September 30, 2023  and 2022, the Company had additional operating leases that resulted in right-of-use assets obtained in exchange for lease obligations of $ 65  and $ 187 , respectively.

During the 

six months ended June 30, 2023  and 2022, the Company had additional finance leases that resulted in property, plant, and equipment obtained in exchange for lease obligations of $ 0  

nine months ended September 30, 2023  and 2022, the Company had additional finance leases that resulted in property, plant, and equipment obtained in exchange for lease obligations of $ 780  

and $ 1,773 , respectively. 

3 unchanged sentences

Quantitative information regarding the Company’s leases is as follows:

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

Components of lease cost

17 unchanged sentences

$ 4,256  

Supplemental cash flow information related to our operating leases is as follows for the six months ended June 30, 2023 and 2022:

Supplemental cash flow information related to our operating leases is as follows for the nine months ended September 30, 2023 and 2022:

Cash paid for amounts included in the measurement of lease liabilities:

7 unchanged sentences

Variable lease costs consist primarily of taxes, insurance, utilities, and common area or other maintenance costs for the Company’s leased facilities and equipment.

As of June 30, 2023 , future minimum lease payments under finance leases and operating leases were as follows:

$ 1,066  

$ 1,725  

As of September 30, 2023 , future minimum lease payments under finance leases and operating leases were as follows:

$ 1,483  

40 unchanged sentences

Effective tax rates differ from federal statutory income tax rates primarily due to changes in the Company’s valuation allowance, permanent differences and provisions for state and local income taxes.

As of June 30, 2023 , the Company has a full valuation allowance recorded against deferred tax assets.

During the six months ended June 30, 2023 , the Company recorded a provision for income taxes of $ 51 , compared to a provision for income taxes of $ 22  

during the six months ended June 30, 2022 . On 

As of September 30, 2023 , the Company has a full valuation allowance recorded against deferred tax assets.

During the nine months ended September 30, 2023 , the Company recorded a provision for income taxes of $ 79 , compared to a provision for income taxes of $ 36  

during the nine months ended September 30, 2022 . On 

August 16, 2022, Congress enacted the IRA which includes advanced manufacturing tax credits for manufacturers of eligible components, including wind and solar components produced and sold in the U.S.

1 unchanged sentence

2023 through 2032.

The Company assumed no tax impact for the six  months ended June 30, 2023 since the Company believes the credits will not be taxable. 

The Company assumed no tax impact for the nine  months ended September 

30, 2023 since the Company believes the credits will not be taxable. 

The Company files income tax returns in U.S.

federal and state jurisdictions.

As of June 30, 2023 , open tax years in federal and some state jurisdictions date back to 1996 due to the taxing authorities’

As of September 30, 2023 , open tax years in federal and some state jurisdictions date back to 1996 due to the taxing authorities’

ability to adjust operating loss carryforwards.

20 unchanged sentences

12, 2013 will not trigger the preferred share purchase rights unless they acquire additional shares after that date. 

As of June 30, 2023 , the Company had no unrecognized tax benefits.

As of September 30, 2023 , the Company had no unrecognized tax benefits.

The Company recognizes interest and penalties related to uncertain tax positions as income tax expense.

The Company had no accrued interest and penalties as of June 30, 2023 .

The Company had no accrued interest and penalties as of September 30, 2023 .

NOTE 12 —

SHARE-BASED COMPENSATION  

There was no  stock option activity during the six months ended June 30, 2023  and no  stock options were outstanding as of June 30, 2023 . 

The following table summarizes the Company’s restricted stock unit and performance award activity during the six months ended June 30, 2023 : 

There was no  stock option activity during the nine months ended September 30, 2023  and no  stock options were outstanding as of September 30, 2023 . 

The following table summarizes the Company’s restricted stock unit and performance award activity during the nine months ended September 30, 2023 : 

Weighted Average

9 unchanged sentences

$ 3.13  

Unvested as of June 30, 2023

Unvested as of September 30, 2023

791,852  

1 unchanged sentence

Under certain situations, shares are withheld from issuance to cover taxes for the vesting of restricted stock units and performance awards.

For the six months ended June 30, 2023, 92,984  shares were withheld to cover tax obligations. 

The following table summarizes share-based compensation expense included in the Company’s condensed consolidated statements of operations for the six months ended June 30, 2023 and 2022 , as follows: 

Six Months Ended June 30,

For the nine  months ended September 

30, 2023, 92,984 shares were withheld to cover $ 117 of tax obligations. For the nine  months ended September 

30, 2022, 280,175  shares were withheld to cover $ 546  of tax obligations. 

The following table summarizes share-based compensation expense included in the Company’s condensed consolidated statements of operations for the nine months ended September 30, 2023 and 2022 , as follows: 

Nine Months Ended September 30,

Share-based compensation expense:

2 unchanged sentences

Net effect of share-based compensation expense on net income

$ 1,185  

Reduction in earnings per share:

52 unchanged sentences

of these condensed consolidated financial statements.

Summary financial information by reportable segment for the three and six months ended June 30, 2023 and 2022 is as follows:

Summary financial information by reportable segment for the three and nine months ended September 30, 2023 and 2022 is as follows:

Heavy Fabrications

Industrial Solutions

For the Three Months Ended June 30, 2023

For the Three Months Ended September 30, 2023

Revenues from external customers

7 unchanged sentences

57,163  

( 348 )  

50,843  

Operating income (loss)

4 unchanged sentences

Industrial Solutions

For the Three Months Ended June 30, 2022

For the Three Months Ended September 30, 2022

Revenues from external customers

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44,843  

( 727 )  

50,012  

Operating income (loss)

5 unchanged sentences

Industrial Solutions

For the Six Months Ended June 30, 2023

For the Nine Months Ended September 30, 2023

Revenues from external customers

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12,448  

( 7,091 )  

Depreciation and amortization

2 unchanged sentences

Industrial Solutions

For the Six Months Ended June 30, 2022

For the Nine Months Ended September 30, 2022

Revenues from external customers

9 unchanged sentences

( 819 )  

136,699  

Operating loss

6 unchanged sentences

Total Assets as of

September 30,

Heavy Fabrications

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Changes in trends in any of the factors that the Company believes may impact the collectability of its accounts receivable, as noted above, or modifications to its credit standards, collection practices and other related policies may impact the Company’s allowance for doubtful accounts and its financial results.

The activity in the accounts receivable allowance liability for the six months ended June 30, 2023 and 2022 consisted of the following: 

For the Six Months Ended June 30,

The activity in the accounts receivable allowance liability for the nine months ended September 30, 2023 and 2022 consisted of the following: 

For the Nine Months Ended September 30,

Balance at beginning of period

Bad debt expense

( 38 )  

Other adjustments

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There was no reserve for liquidated damages at 

June 30, 2023  and 

September 30, 2023  and 

December 31, 2022. 

NOTE 17 —

SUBSEQUENT EVENTS  

In January 2023, the Company announced that it had entered into a supply agreement for wind tower purchases valued at approximately $ 175 million with a leading global wind turbine manufacturer. 

Under the terms of the supply agreement, order fulfillment is to occur beginning in 2023 through year-end 2024.

Item 2.  

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Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Net income (loss)

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

Our backlog at June 30, 2023 and 2022 is net of revenue recognized over time. 

Our backlog at September 30, 2023 and 2022 is net of revenue recognized over time. Backlog is subject to adjustment based on the shift in timing of orders under the supply agreement referenced in Note 1, “Basis of Presentation,”

of the Company’s condensed consolidated financial statements. 

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

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Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Net income (loss)

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OUR BUSINESS  

Second Quarter Overview  

We booked $25,361 in new orders in the second quarter of 2023, down from $26,046 in the second quarter of 2022. Within our Heavy Fabrications segment, wind tower orders decreased compared to the prior year quarter primarily due to the timing of tower orders as a major wind tower customer secured relatively longer-term capacity during the fourth quarter of 2022 instead of ordering in more regular intervals as was the case in the prior year. Partially offsetting this decrease was a 12% increase in industrial fabrication orders primarily due to improved demand from mining customers and demand for our Pressure Reducing Systems (“PRS”) units. Gearing segment orders decreased 35% from the prior year period primarily due to reduced demand from oil and gas (“O&G”) customers. Orders within our Industrial Solutions segment increased by 75% as compared to the prior year quarter, primarily due to improved demand for new and aftermarket gas turbine content. 

We recognized revenue of $50,843 in the second quarter of 2023, up 2% compared to the second quarter of 2022. Within the Heavy Fabrications segment wind tower revenue decreased 7% primarily due to a 14% decrease in tower sections sold and the absence of revenue associated with a wind repowering project that was recognized in the prior year quarter.

Industrial fabrication revenue within the Heavy Fabrications segment increased 3% primarily due to increased PRS unit shipments.

Gearing segment revenue increased 9% relative to the comparable prior year period primarily due to higher order intake in recent quarters from industrial customers, partially offset by a decrease in mining revenue.

Industrial Solutions segment revenue increased by 24% from the prior year period primarily due to increased shipments  

of new and aftermarket gas turbine content.

We recorded net income of $1,415 or $0.07 per share in the second quarter of 2023, compared to a net loss $2,703 or $0.13 per share in the second quarter of 2022.

This increase in net income was primarily due to higher sales, improved operational execution, and $3,567 of AMP credits (discussed below) recognized in the current year quarter. 

During the second quarter of 2023, we recognized advanced manufacturing tax credits (“AMP credits”) of $3,567 within the Heavy Fabrications segment.

Third Quarter Overview  

We received $15,890 in new orders in the third quarter of 2023, down from $84,457 in the third quarter of 2022. Within our Heavy Fabrications segment, wind tower orders decreased compared to the prior year quarter primarily due to the timing of tower orders as a major wind tower customer secured relatively longer-term capacity during the fourth quarter of 2022 instead of ordering in more regular intervals as was the case during the first three quarters of 2022. Partially offsetting this decrease was a 47% increase in industrial fabrication orders primarily due to improved demand from mining customers. Gearing segment orders decreased 81% from the prior year period primarily due to reduced demand from oil and gas (“O&G”) mining, and industrial customers. Orders within our Industrial Solutions segment decreased by 20% as compared to the prior year quarter primarily due to reduced demand for new gas turbine content, partially offset by improved aftermarket demand. 

We recognized revenue of $57,163 in the third quarter of 2023, up 27% compared to the third quarter of 2022. Within the Heavy Fabrications segment wind tower revenue increased 40% primarily due to a 31% increase in tower sections sold and increased steel content, which is generally a pass-through to customers. Gearing segment revenue increased 12% relative to the comparable prior year period primarily due to higher order intake in recent quarters from industrial and steel customers.

Industrial Solutions segment revenue increased by 85% from the prior year period primarily due to  

the timing of  

shipments  

of new gas turbine content in addition to revenue recognized from international customers.

We recorded net income of $4,394 or $0.21 per share in the third quarter of 2023, compared to a net loss $1,772 or $0.09 per share in the third quarter of 2022.

This increase in net income was primarily due to higher sales and $4,488 of AMP credits (discussed below) recognized in the current year quarter. 

During the third quarter of 2023, we recognized advanced manufacturing tax credits (“AMP credits”) of $4,488 within the Heavy Fabrications segment.

The AMP credits were a part of the Inflation Reduction Act (“IRA”) which was enacted on August 16, 2022. The IRA includes advanced manufacturing tax credits for manufacturers of eligible components, including wind and solar components.

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RESULTS OF OPERATIONS  

Three months ended June 30, 2023, Compared to Three months ended June 30, 2022  

The condensed consolidated statement of operations table below should be read in connection with a review of the following discussion of our results of operations for the three months ended June 30, 2023, compared to the three months ended June 30, 2022.

Three Months Ended June 30,

Three months ended September 30, 2023, Compared to Three months ended September 30, 2022  

The condensed consolidated statement of operations table below should be read in connection with a review of the following discussion of our results of operations for the three months ended September 30, 2023, compared to the three months ended September 30, 2022.

Three Months Ended September 30,

Cost of sales

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Consolidated  

Revenues increased by $831 as compared to the prior year quarter primarily due to a 24% increase in Industrial Solutions segment revenue from the prior year period primarily due to increased shipments  

of new and aftermarket gas turbine content.

Additionally, Gearing segment revenue increased 9% relative to the comparable prior year period primarily due to higher order intake in recent quarters from industrial customers, partially offset by a decrease in mining revenue.  Industrial fabrication revenue within the Heavy Fabrications segment increased 3% primarily due to increased PRS unit shipments.

Wind tower revenue decreased by 7% primarily due to a 14% decrease in tower sections sold in addition to the absence of revenue associated with a wind repowering project that was recognized in the prior year quarter. 

Gross profit increased by $5,939 when compared to the prior year quarter, primarily due to the higher sales volumes, improved operational execution, and $3,567 of AMP credits recognized in the current year quarter.

Due primarily to proxy contest-related expenses, operating expenses as a percentage of sales increased to 12.0% in the current-year quarter from 8.6% in the prior year quarter.

Net income was $1,415 during the three months ended June 30, 2023, compared to a net loss of $2,703 during the three months ended June 30, 2022.

Revenues increased by $12,320 as compared to the prior year quarter primarily due to a 40% increase in wind tower revenue primarily due to a 31% increase in tower sections sold and increased steel content, which is generally a pass-through to customers.

Industrial Solutions segment revenue increased 85% from the prior year period primarily due to the timing of shipments  

of new gas turbine content in addition to revenue recognized from international customers.

Additionally, Gearing segment revenue increased 12% relative to the comparable prior year period primarily due to higher order intake in recent quarters from industrial and steel customers. 

Gross profit increased by $6,419 when compared to the prior year quarter, primarily due to the higher sales volumes and $4,488 of AMP credits recognized in the current year quarter.

Operating expenses increased $532 compared to the prior year quarter primarily due to higher medical costs and increased incentive compensation.

Operating expenses as a percentage of sales decreased to 8.4% in the current-year quarter compared to 9.5% in the prior year quarter primarily due to higher sales. 

Net income was $4,394 during the three months ended September 30, 2023, compared to a net loss of $1,772 during the three months ended September 30, 2022.

This increase in net income was primarily due to the factors described above.

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Three Months Ended

September 30,

Tower sections sold

1 unchanged sentence

Operating margin

Within our Heavy Fabrications segment, wind tower orders decreased 91% compared to the prior year quarter primarily due to the timing of tower orders as a major wind tower customer secured relatively longer-term capacity during the fourth quarter of 2022 instead of ordering in more regular intervals as was the case in the prior year. Partially offsetting this decrease in orders was a 12% increase in industrial fabrication orders primarily due to improved demand from mining customers and demand for our PRS units. 

Segment revenues decreased by 5% during the three months ended June 30, 2023 primarily due to a 7% decrease in wind tower revenue as tower sections sold decreased by 14% and the absence of revenue associated with a wind repowering project that was recognized in the prior year quarter.

Industrial fabrication revenue within the Heavy Fabrications segment increased 3% primarily due to increased shipments of our PRS units.

Within our Heavy Fabrications segment, wind tower orders decreased $57,264 compared to the prior year quarter primarily due to the timing of tower orders as a major wind tower customer secured relatively longer-term capacity during the fourth quarter of 2022 instead of ordering in more regular intervals as was the case during the first three quarters of 2022. Partially offsetting this decrease in orders was a 47% increase in industrial fabrication orders primarily due to improved demand from mining customers.

Segment revenues increased by 25% during the three months ended September 30, 2023 primarily due to a 40% increase in wind tower revenue as tower sections sold increased by 31% and increased steel content, which is generally a pass-through to customers. 

Heavy Fabrications segment operating results improved by $5,419 as compared to the prior year quarter.

The improvement in operating performance was primarily a result of reduced wind tower costs as a result of the AMP credits recognized of $3,567 in the current year quarter. Operating profit margin was 11.4% during the three months ended June 30, 2023 compared to 0.2% during the three months ended June 30, 2022. 

The improvement in operating performance was primarily a result of reduced wind tower costs as a result of $4,488 of AMP credits recognized in the current year quarter. Operating profit margin was 15.1% during the three months ended September 30, 2023 compared to 1.2% during the three months ended September 30, 2022. 

Gearing Segment

Three Months Ended

Operating income (loss)

September 30,

Operating income

Operating margin

Gearing segment orders decreased 35% from the prior year period primarily due to reduced demand from O&G customers. Gearing revenue was up 9% relative to the comparable prior year period primarily due to higher order intake in recent quarters from industrial customers, partially offset by a decrease in mining revenue.

Gearing segment operating income improved by $933 from the prior year period.

This improvement was primarily attributable to higher sales, improved operational efficiencies, a more profitable mix of product sold, and the absence of ramp-up costs that were recognized during the prior year period.

Operating margin was 3.2% during the three months ended June 30, 2023, an improvement from (5.8)% during the three months ended June 30, 2022, driven primarily by the items identified above.

Gearing segment orders decreased 81% from the prior year period primarily due to reduced demand from O&G, mining, and industrial customers. Gearing revenue was up 12% relative to the comparable prior year period primarily due to higher order intake in recent quarters from industrial and steel customers.

Gearing segment operating income decreased by $359 from the prior year period.

This reduction was primarily attributable to a less profitable mix of product sold as well as increased  

overhead costs. Operating margin was 2.3% during the three months ended September 30, 2023, a decrease from 6.1% during the three months ended September 30, 2022, driven primarily by the items identified above.

Industrial Solutions Segment  

Three Months Ended

Operating income

September 30,

Operating income (loss)

Operating margin

Industrial Solutions segment orders and revenues increased from the prior year period primarily due to improved demand for new and aftermarket gas turbine content.

Industrial Solutions segment orders decreased 20% from the prior year period primarily due to reduced demand for new gas turbine content, partially offset by increased demand for aftermarket gas turbine content.

Revenues increased 85% from the prior year period primarily due to the timing of shipments of new gas turbine content in addition to revenue recognized from international customers.

Operating income increased versus the prior-year quarter primarily as a result of higher sales and a more profitable mix of product sold. 

Corporate and Other  

Corporate and Other expenses during the three months ended June 30, 2023 increased from the prior year period primarily due to increased professional fees associated with the contested proxy election. 

Six months ended June 30, 2023, Compared to Six months ended June 30, 2022  

The condensed consolidated statement of operations table below should be read in connection with a review of the following discussion of our results of operations for the six months ended June 30, 2023, compared to the six months ended June 30, 2022.

Six Months Ended June 30,

Corporate and Other expenses during the three months ended September 30, 2023 increased from the prior year period primarily due to higher medical costs. 

Nine months ended September 30, 2023, Compared to Nine months ended September 30, 2022  

The condensed consolidated statement of operations table below should be read in connection with a review of the following discussion of our results of operations for the nine months ended September 30, 2023, compared to the nine months ended September 30, 2022.

Nine Months Ended September 30,

Cost of sales

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Consolidated  

Revenues increased by $7,860 as compared to the prior year period primarily due to higher sales in all segments.

Industrial fabrication revenue within the Heavy Fabrications segment increased 14% primarily due to increased shipments of our PRS units in the current year. Wind tower revenue increased 2% from the prior year period primarily as a result of less customer supplied materials in the current year and increased steel content, which is generally a pass-through to customers.

This was partially offset by a 16% decrease in tower sections sold. Industrial Solutions segment revenue increased 28% from the prior year period primarily due to increased shipments of new and aftermarket gas turbine content.

Revenues increased by $20,180 as compared to the prior year period primarily due to higher sales in all segments. Wind tower revenue increased 13% from the prior year period primarily as a result of less customer supplied materials in the current year and increased steel content, which is generally a pass-through to customers.

Additionally, industrial fabrication revenues increased primarily due to higher shipments of our Pressure Reducing Systems ( “PRS”) units in the current year. Industrial Solutions segment revenue increased 46% from the prior year period primarily due to the timing shipments of new and aftermarket gas turbine content in addition to revenue recognized from international customers.

Gearing segment revenue increased 11% relative to the comparable prior year period primarily due to higher order intake in recent quarters from industrial customers, partially offset by a decrease in revenue from mining customers.

Gross profit increased by $17,322 when compared to the prior year period, primarily due to the higher sales volumes within all segments and the $11,217 recognized from the AMP credits.

Due primarily to proxy-contest related expenses, operating expenses as a percentage of sales increased to 11.8% in the current year period from 9.1% in the prior year period.

Net income was $2,184 during the six months ended June 30, 2023, compared to a net loss of $5,107 during the six months ended June 30, 2022.

Due primarily to proxy-contest related expenses and higher medical costs, operating expenses as a percentage of sales increased to 10.6% in the current year period from 9.3% in the prior year period.

Net income was $6,578 during the nine months ended September 30, 2023, compared to a net loss of $6,879 during the nine months ended September 30, 2022.

This increase in net income was primarily due to the factors described above.

Heavy Fabrications Segment  

Six Months Ended

Nine Months Ended

September 30,

Tower sections sold

1 unchanged sentence

Operating margin

Within our Heavy Fabrications segment, wind tower orders decreased 65% compared to the prior year period primarily due to the timing of tower orders as a major wind tower customer secured relatively longer-term capacity during the fourth quarter of 2022 instead of ordering in more regular intervals as was the case in the prior year. Partially offsetting this decrease in wind tower orders was a 40% increase in industrial fabrication orders primarily due to improved demand for our PRS units. Segment revenues increased by 4% during the six months ended June 30, 2023 primarily due to a 14% increase in industrial fabrication revenue due to increased shipments of our PRS units in the current year. Wind tower revenue increased 2% primarily as a result of less customer supplied materials in the current year and increased steel content, which is generally a pass-through to customers.

This was partially offset by a 16% decrease in tower sections sold. 

Within our Heavy Fabrications segment, wind tower orders decreased 87% compared to the prior year period primarily due to the timing of tower orders as a major wind tower customer secured relatively longer-term capacity during the fourth quarter of 2022 instead of ordering in more regular intervals as was the case during the first three quarters of 2022. Partially offsetting this decrease in wind tower orders was a 42% increase in industrial fabrication orders primarily due to improved demand for our PRS units and higher demand from mining customers. Segment revenues increased by 11% during the nine months ended September 30, 2023 primarily due to a 13% increase in wind tower revenue primarily as a result of less customer supplied materials in the current year  

and increased steel content, which is generally a pass-through to customers. Additionally, industrial fabrication revenues increased primarily due to higher shipments of our PRS units in the current year. 

Heavy Fabrications segment operating results improved by $12,459 as compared to the prior year period.

The improvement in operating performance was primarily a result of reduced wind tower costs as a result of the AMP credits recognized of $6,729  

and higher industrial fabrication revenues recognized in the current year. Operating profit margin was 10.2% during the six months ended June 30, 2023 compared to (0.6%) during the six months ended June 30, 2022. 

The improvement in operating performance was primarily a result of reduced wind tower costs as a result of the AMP credits recognized of $11,217 in the current year. Operating profit margin was 12.0% during the nine months ended September 30, 2023 compared to 0.0% during the nine months ended September 30, 2022 primarily due to the factors described above. 

Gearing Segment

Six Months Ended

Nine Months Ended

September 30,

Operating income (loss)

Operating margin

Gearing segment orders decreased 21% from the prior year period primarily due to reduced demand from O&G customers. Gearing revenue was up 11% relative to the comparable prior year period primarily due to higher order intake in recent quarters from industrial customers, partially offset by a decrease in mining revenue.

Gearing segment orders decreased 45% from the prior year period primarily due to reduced demand from O&G and mining customers. Gearing revenue was up 11% relative to the comparable prior year period primarily due to higher order intake in recent quarters from industrial customers, partially offset by a decrease in mining revenue.

Gearing segment operating income improved by $1,267 from the prior year period.

This improvement was primarily attributable to higher sales, improved operational efficiencies, a more profitable product mix sold, and the absence of ramp-up costs incurred in the prior year.

Operating margin was 4.0% during the six months ended June 30, 2023, an improvement from (3.4)% during the six months ended June 30, 2022, driven primarily by the items identified above.

Operating margin was 3.5% during the nine months ended September 30, 2023, an improvement from (0.2)% during the nine months ended September 30, 2022, driven primarily by the items identified above.

Industrial Solutions Segment  

Six Months Ended

Nine Months Ended

September 30,

Operating income (loss)

Operating margin

Industrial Solutions segment orders and revenue increased from the prior year period primarily due to improved demand for new and aftermarket gas turbine content.

Industrial Solutions segment orders increased from the prior year period primarily due to improved demand for aftermarket gas turbine content.

Segment revenues increased from the prior year period primarily due to the timing of shipments to new and aftermarket gas turbine customers, in addition to revenue recognized from international customers.

Operating income increased versus the prior-year primarily as a result of higher sales and a more profitable mix of product sold. 

Corporate and Other  

Corporate and Other expenses during the six months ended June 30, 2023 increased from the prior year period primarily due to higher medical costs and increased professional fees associated with the contested proxy election. 

Corporate and Other expenses during the nine months ended September 30, 2023 increased from the prior year period primarily due to higher medical costs and increased professional fees associated with the contested proxy election. 

LIQUIDITY, FINANCIAL POSITION AND CAPITAL RESOURCES  

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

As of June 30, 2023, cash totaled $2,095, a decrease of $10,637 from December 31, 2022.

Debt and finance lease obligations at June 30, 2023 totaled $25,434.

As of June 30, 2023, we had the ability to borrow up to an additional $13,128 un der the 2022 Credit Facility. 

As of September 30, 2023, cash totaled $1,740, a decrease of $10,992 from December 31, 2022.

Debt and finance lease obligations at September 30, 2023 totaled $31,564.

As of September 30, 2023, we had the ability to borrow up to an additional $11,906 un der the 2022 Credit Facility. 

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

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We also have outstanding notes payable for capital expenditures in the amount of $1,401  

and $1,094 as of June 30, 2023 and December 31, 2022, respectively, with $37  

and $1,094 as of September 30, 2023 and December 31, 2022, respectively, with $161  

and $88 included in the “Line of Credit and current portion of long-term debt”

line item of our condensed consolidated financial statements as of June 30, 2023 and December 31, 2022, respectively.

The notes payable have monthly payments that range from $3 to $16 and an interest rate of approximately 5%.

line item of our condensed consolidated financial statements as of September 30, 2023 and December 31, 2022, respectively.

The notes payable have monthly payments that range from $3 to $15 and an interest rate of approximately 6%.

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

The outstanding notes payable mature in September 2028.

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

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

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

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

On September 22, 2023, 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 12, 2023 (the “Form S-3”), replacing a prior shelf registration statement which expired on October 12, 2023. This shelf registration statement, which includes a base prospectus, allows us to offer any combination of securities described in the prospectus in one or more offerings.

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

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

Pursuant to the terms of the Sales Agreement, we may sell from time to time through the Agents shares of our common stock 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.

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

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

No shares of the Company’s common stock were issued under the Sales Agreement during the six months ended June 30, 2023. As of June 30, 2023, shares of our common stock having a value of approximately $11,667 remained available for issuance under the Sales Agreement.

We anticipate that current cash resources, amounts available under the 2022 Credit Facility, cash to be generated from operations and equipment financing, proceeds from the sale of securities under the Sales Agreement and any potential proceeds from the sale of further securities under the Form S-3 (or a successor registration statement) will be adequate to meet our liquidity needs for at least the next twelve months.

If assumptions regarding our production, sales and subsequent collections from certain of our large customers, as well as receipt of customer deposits and revenues generated from new customer orders, are materially inconsistent with management’s expectations, we may encounter cash flow and liquidity issues.

No shares of the Company’s common stock were issued under the Sales Agreement during the nine months ended September 30, 2023. As of September 30, 2023, shares of our common stock having a value of approximately $11,667 remained available for issuance under the Sales Agreement.

Any additional shares offered and sold under the Sales Agreement are to be issued pursuant to the Form S-3 and a 424(b) prospectus supplement.

In January 2023, we announced that the Company had entered into a supply agreement for wind tower purchases valued at approximately $175 million with a leading global wind turbine manufacturer. 

Under the terms of the supply agreement, order fulfillment is to occur beginning in 2023 through year-end 2024.

In early November 2023, the parties discussed their joint intent to shift approximately half of the contracted tower section orders initially planned for 2024 into 2025, while maintaining the total number of tower sections stipulated under the supply agreement.  

We anticipate that current cash resources, amounts available under the 2022 Credit Facility, cash to be generated from operations and equipment financing, potential proceeds from the sale of securities under the Sales Agreement and any potential proceeds from the sale of further securities under the Form S-3 will be adequate to meet our liquidity needs for at least the next twelve months. 

If assumptions regarding our production, sales and subsequent collections from certain of our large customers, our ability to finalize the terms of the remaining obligations under a supply agreement with a leading global wind turbine manufacturer, as well as receipt of customer deposits and revenues generated from new customer orders, are materially inconsistent with management’s expectations, we may in the future encounter cash flow and liquidity issues.

If our operational performance deteriorates, we may be unable to comply with existing financial covenants, and could lose access to the 2022 Credit Facility.

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Any additional equity financing or equity-linked financing, if available, will be dilutive to stockholders, and additional debt financing, if available, would likely require new financial covenants or impose other operating and financial restrictions on us.

While we believe that we will continue to have sufficient cash available to operate our businesses and to meet our financial obligations and debt covenants, there can be no assurances that our operations will generate sufficient cash or that existing or new credit facilities or equity or equity linked financings will be available in an amount sufficient to enable us to meet these financial obligations.

While we believe that we will continue to have sufficient cash available to operate our businesses and to meet our financial obligations and debt covenants, there can be no assurances that our operations will generate sufficient cash, or that credit facilities or equity or equity-linked financings will be available in an amount sufficient to enable us to meet these financial obligations.

Sources and Uses of Cash  

The following table summarizes our cash flows from operating, investing, and financing activities for the six months ended June 30, 2023 and 2022:

Six Months Ended

The following table summarizes our cash flows from operating, investing, and financing activities for the nine months ended September 30, 2023 and 2022:

Nine Months Ended

September 30,

Total cash (used in) provided by:

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Financing activities

Net decrease in cash

Net (decrease) increase in cash

Operating Cash Flows  

During the six months ended June 30, 2023, net cash used in operating activities totaled $17,447 compared to net cash used in operating activities of $8,264 during the prior year period.

The increase in net cash used during the current year period was primarily due to the AMP credit receivable, a relatively larger increase in accounts receivable and inventory versus the prior year period, and less of an accounts payable build.

Increases in accounts receivable and inventory were driven by increased production levels when compared to the prior year period.

This was partially offset by less cash used related to customer deposit balances. 

During the nine months ended September 30, 2023, net cash used in operating activities totaled $22,593 compared to net cash used in operating activities of $10,271 during the prior year period. The increase in net cash used in operating activities during the current year period was primarily attributable to a significant increase in accounts receivable during the current year due to a change in payment terms with a major customer. 

Investing Cash Flows  

During the six months ended June 30, 2023, net cash used in investing activities tot aled $3,962, comp ared to net cash used in investing activities of $1,697 during the prior year period.

During the nine months ended September 30, 2023, net cash used in investing activities tot aled $5,300, comp ared to net cash used in investing activities of $2,757 during the prior year period.

The increase in net cash used in investing activities as compared to the prior-year period was primarily due to a net increase in purchases of property and equipment.

Financing Cash Flows  

During the six months ended June 30, 2023, net cash provided by financing activities tot aled $10,772, co mpared to net cash provided by financing activities of $9,158 during the prior year period.

During the nine months ended September 30, 2023, net cash provided by financing activities tot aled $16,901, co mpared to net cash provided by financing activities of $13,685 during the prior year period.

The increase was primarily due to increased net borrowings under the 2022 Credit Facility in the current year period. 

CRITICAL ACCOUNTING ESTIMATES

There have been no material changes in our critical accounting estimates during the six months ended June 30, 2023 as compared to the critical accounting estimates described in our Annual Report on Form 10-K for the year ended December 31, 2022. 

There have been no material changes in our critical accounting estimates during the nine months ended September 30, 2023 as compared to the critical accounting estimates described in our Annual Report on Form 10-K for the year ended December 31, 2022. 

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS  

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(viii) the sufficiency of our liquidity and alternate sources of funding, if necessary;

(ix) our ability to realize revenue from customer orders and backlog;

(ix) our ability to realize revenue from customer orders and backlog (including our ability to finalize the terms of the remaining obligations under a supply agreement with a leading global wind turbine manufacturer);

(x) our ability to operate our business efficiently, comply with our debt obligations, manage capital expenditures and costs effectively, and generate cash flow;

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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 quarter reported on herein.

Based on that evaluation, our CEO and CFO concluded that our disclosure controls and procedures were effective as of June 30, 2023.

Based on that evaluation, our CEO and CFO concluded that our disclosure controls and procedures were effective as of September 30, 2023.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during the three months ended June 30, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

There were no changes in our internal control over financial reporting during the three months ended September 30, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II.   OTHER INFORMATION  

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

What changed 10-Q

Item 1. Financial Statements