What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2025-03-05 compared with 2024-03-05 · 164 added, 147 removed, 1155 unchanged (21% of the section changed)

24 unchanged sentences

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.

The Company has also adopted the Insider Trading Policy which governs the purchase, sale and/or other disposition of the Company’s securities by its directors, officers and employees that is reasonably designed to promote compliance with applicable insider trading laws, rules and regulations.

A copy of this policy is filed as Exhibit 19 to this Annual Report.

EXECUTIVE COMPENSATION

65 unchanged sentences

Advanced Manufacturing Production Tax Credits

As described in Note 7 of the financial statements, in 2023, the Company recognized gross Advanced Manufacturing Production tax credits (AMP Credits) totaling $14,493, within the Heavy Fabrications segment.

As described in Note 7 of the financial statements, in 2024 and 2023, the Company recognized gross Advanced Manufacturing Production tax credits (AMP Credits) totaling $9,588,000 and $14,493,000, 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, sell the AMP Credits to third parties for cash, or apply the AMP Credits against taxable income.

The Company recognized the AMP Credits as a reduction to cost of sales in the Company’s consolidated statement of operations for the year ended December 31, 2023.

The assets related to the AMP credits are recognized as current assets in the “AMP credit receivable” line item in the Company’s consolidated balance sheet as of December 31, 2023.

The Company recognized the AMP Credits as a reduction to cost of sales in the Company’s consolidated statements of operations for the years ended December 31, 2024 and 2023.

The assets related to the AMP credits are recognized as current assets in the “AMP credit receivable” line item in the Company's consolidated balance sheets as of December 31, 2024 and 2023.

On December 21, 2023, the Company entered into an agreement to sell 2023 and 2024 AMP Credits to a third party.

3 unchanged sentences

The Company also incurred other miscellaneous administrative costs related to selling the credits in the amount of $254,000, $197,000 of which has been recorded as cost of sales, with the remaining capitalized and included in the “Prepaid expenses and other current assets” line item of the Company's consolidated financial statements at December 31, 2023.

The evaluation of the initial accounting, and subsequent sale of the AMP Credits involves judgement as there is no direct authoritative guidance under accounting principles generally accepted in the United States of America (US GAAP).

Additionally, current IRS and Department of the Treasury regulations are in the proposed stages.

During 2024, the Company recognized gross AMP credits totaling $9,588,000 and recognized a 6.5% discount on the credits totaling $623,000, which was recognized in cost of sales.

The Company also incurred other miscellaneous administrative costs related to the credits in the amount of $146,000, which have been recorded as cost of sales.

On January 28, 2025, the Company entered into an agreement, pursuant to which, for each of 2025 and 2026, the Company agreed to sell to a third party up to $15,000,000 and $20,000,000, respectively, of AMP Credits.

The purchaser will pay for the AMP Credits on a quarterly basis for AMP Credits generated in the immediately preceding calendar quarter.

The AMP Credits will be sold at a purchase price of $0.935 per $1.00 of AMP Credits.

The evaluation of the accounting, and subsequent sale of the AMP Credits involves judgement as there is no direct authoritative guidance under accounting principles generally accepted in the United States of America (US GAAP).

Changes in IRS and Department of the Treasury, or US GAAP guidance could have a significant impact on the accounting and presentation of AMP Credits in future periods.

We identified accounting for the AMP Credits as a critical audit matter because of the high degree of judgement and subjectivity involved in auditing management’s assertions related to the initial accounting for the AMP Credits, the subsequent sale of the AMP Credits, and the presentation and disclosure of the transactions related to the AMP Credits in the consolidated financial statements.

We identified accounting for the AMP Credits as a critical audit matter because of the high degree of judgement and subjectivity involved in auditing management’s assertions related to the accounting for the AMP Credits, the subsequent sale of the AMP Credits, and the presentation and disclosure of the transactions related to the AMP Credits in the consolidated financial statements.

How the Critical Audit Matter Was Addressed in the Audit

The audit procedures performed related to the evaluation of Company management’s assertions regarding the initial accounting for the AMP Credits, the subsequent sale of the AMP Credits, and the presentation and disclosure the AMP Credits, included the following, among others:

Evaluated the reasonableness of management’s application of IRS and Department of the Treasury regulations and proposed regulations in determining the Company’s eligibility for the AMP Credits, and in calculating the AMP Credit’s impact on the consolidated financial statements, by consulting with tax specialists along with reviewing and applying the regulations in recalculating the value of the AMP Credits recognized.

We evaluated the reasonableness of management’s conclusions regarding the accounting for AMP Credits by reading and evaluating management’s documentation, including relevant accounting policies.

Evaluated the reasonableness of management’s conclusion that the AMP Credits are not taxable, by consulting with tax specialists.

Evaluated the completeness of the disclosures in the consolidated financial statements, by consulting with tax specialists.

The audit procedures performed related to the evaluation of management’s assertions regarding the accounting for the AMP Credits, the subsequent sale of the AMP Credits, and the presentation and disclosure the AMP Credits, included the following, among others:

Evaluated management’s application of IRS and Department of the Treasury regulations in determining the Company’s eligibility for the AMP Credits, and in calculating the AMP Credit’s impact on the consolidated financial statements, by consulting with tax specialists along with reviewing and applying the regulations in recalculating the value of the AMP Credits recognized.

We evaluated management’s conclusions regarding the accounting for AMP Credits by reading and evaluating management’s documentation, including relevant accounting policies.

Evaluated management’s conclusion that the AMP Credits are not taxable, by consulting with tax specialists.

Evaluated the completeness and accuracy of the disclosures in the consolidated financial statements, by consulting with tax specialists.

/s/ RSM US LLP

78 unchanged sentences

16,964 21,369

Operating income (loss)

11,139 ( 6,607 )

OTHER EXPENSE, net:

Operating income

OTHER (EXPENSE) INCOME, net:

Interest expense, net

2 unchanged sentences

( 2,999 ) ( 3,249 )

Net income (loss) before provision for income taxes

7,890 ( 9,695 )

Net income before provision for income taxes

Provision for income taxes

NET INCOME (LOSS)

7,649 ( 9,730 )

NET INCOME (LOSS) PER COMMON SHARE—BASIC:

Net income (loss)

NET INCOME PER COMMON SHARE—BASIC:

$ 0.05 $ 0.36

1 unchanged sentence

21,896 21,189

NET INCOME (LOSS) PER COMMON SHARE—DILUTED:

Net income (loss)

NET INCOME PER COMMON SHARE—DILUTED:

$ 0.05 $ 0.36

18 unchanged sentences

( 160,403 ) — — — ( 735 ) — ( 735 )

Sale of common stock, net

— — — — — 7,649 7,649

— — — — — ( 9,730 ) ( 9,730 )

BALANCE, December 31, 2023

18 unchanged sentences

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income (loss)

$ 1,152 $ 7,649

Adjustments to reconcile net cash (used in) provided by operating activities:

Adjustments to reconcile net cash provided by (used in) provided by operating activities:

Depreciation and amortization expense

Deferred income taxes

( 10 ) ( 13 )

Change in fair value of interest rate swap agreements

Stock-based compensation

Allowance for doubtful accounts

Allowance for credit losses

Common stock issued under defined contribution 401(k) plan

Loss on disposal of assets

(Gain) loss on disposal of assets

Changes in operating assets and liabilities:

2 unchanged sentences

AMP credit receivable

Employee retention credit receivable

4,518 ( 7,051 )

Contract assets

5 unchanged sentences

Accrued liabilities

( 2,872 ) 2,782

Customer deposits

1 unchanged sentence

Other non-current assets and liabilities

Net cash (used in) provided by operating activities

Net cash provided by (used in) operating activities

13,806 ( 6,946 )

6 unchanged sentences

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from (payments on) line of credit, net

(Payments on) proceeds from line of credit, net

( 4,637 ) 4,705

8 unchanged sentences

( 130 ) ( 735 )

Proceeds from sale of common stock, net

Net cash provided by (used in) financing activities

Net cash (used in) provided by financing activities

( 3,725 ) 1,697

NET (DECREASE) INCREASE IN CASH

NET INCREASE (DECREASE) IN CASH

6,622 ( 11,633 )

38 unchanged sentences

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 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 1.7 GW of power (assuming a 3 MW tower).

The Company has expanded its production capabilities and leveraged manufacturing competencies, including welding, lifting capacity and stringent quality practices, into aftermarket and original equipment manufacturer (“OEM”) components utilized in surface and underground mining, construction, material handling, O&G and other infrastructure markets.

8 unchanged sentences

The Company provides gearing, gearboxes and precision machined components to a broad set of customers in diverse markets including;

surface and underground mining, wind energy, steel, material handling, infrastructure, onshore and offshore O&G fracking and drilling, marine, and other industrial markets.

surface and underground mining, wind energy, steel, material handling, infrastructure, onshore and offshore O&G fracking and drilling, marine, defense, and other industrial markets.

The Company has manufactured loose gearing, gearboxes and systems, and provided heat treat services for aftermarket and OEM applications for a century.

4 unchanged sentences

wind power generation market, by providing tower internals kitting solutions for on-site installations, as OEMs domesticate their supply chain due to lead time and reliability issues.

The Company leverages a global supply chain to provide instrumentation & controls, valve assemblies, sensor devices, fuel system components, electrical junction boxes & wiring, energy storage services and electromechanical devices.

The Company also provides packaging solutions and fabricates panels and sub-assemblies to reduce customers’ costs, improve manufacturing velocity and reliability.

2 unchanged sentences

Under the 2022 Credit Facility, borrowings are continuous and all cash receipts are usually applied to the outstanding borrowed balance.

As of December 31, 2023 , cash totaled $ 1,099 , a decrease of $ 11,633 from December 31, 2022 .

As of December 31, 2024 , cash totaled $ 7,721 .

The Company had the ability to borrow up to $ 24,901 under the 2022 Credit Facility as of December 31, 2024 .

12 unchanged sentences

The Company's outstanding debt includes $ 7,578 outstanding from the senior secured term loan under the 2022 Credit Facility.

The Company had $ 4,657 drawn on the senior secured revolving credit facility as of December 31, 2023.

The Company had no amounts drawn on the senior secured revolving credit facility as of December 31, 2024 .

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 the Company to offer any combination of securities described in the prospectus in one or more offerings.

This shelf registration statement, which expires on October 12, 2026 and 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.

3 unchanged sentences

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 year ended December 31, 2023.

No shares of the Company’s common stock were issued under the Sales Agreement during the years ended December 31, 2024 and 2023.

As of December 31, 2024 , shares of the Company’s common stock having a value of approximately $ 11,667 remained available for issuance under the Sales Agreement.

2 unchanged sentences

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.

In early November 2023, the parties jointly agreed 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, sales of shares under the Sales Agreement, cash to be generated from operations and equipment financing, any potential proceeds from the sale of further Company securities under the Form S- 3, and proceeds from sales of AMP credits will be adequate to meet the Company’s liquidity needs for at least the next twelve months.

5 unchanged sentences

(“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.

Significant estimates, among others, include inventory reserves, warranty reserves, impairment of long-lived assets, allowance for credit losses, 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.

7 unchanged sentences

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.

Revenues are generally 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.

Control is typically transferred upon shipment or delivery depending on the terms of the contract or under the terms of the bill and hold arrangements discussed below.

A performance obligation is a promise in a contract to transfer a distinct product or service to the customer.

Customer deposits, deferred revenue and other receipts are deferred and recognized when the revenue is realized and earned.

26 unchanged sentences

During the year ended December 31, 2024 , the Company’s five largest customers accounted for 73 % of its consolidated revenues and 50 % of outstanding A/R balances, compared to the year ended December 31, 2023 when the Company’s five largest customers accounted for 74 % of its consolidated revenues and 40 % of its outstanding A/R balances.

Allowance for Doubtful Accounts

The Company had an accounts receivable balance of $ 17,018 at December 31, 2022.

Allowance for Credit Losses

Beginning January 1, 2023, the Company assessed and recorded an allowance for credit losses using the current expected credit loss (“CECL”) model.

5 unchanged sentences

The Company’s policy is to deduct write-offs from the allowance for credit losses account in the period in which the financial assets are deemed uncollectible.

The adjustment for credit losses using this CECL model on accounts receivable and contract assets during the year ended December 31, 2023 was not material.

The allowance for credit losses for prior periods was prepared in accordance with legacy GAAP.

Based upon past experience and judgment, the Company established an allowance for doubtful accounts with respect to accounts receivable.

The Company’s standard allowance estimation methodology considered a number of factors that, based on its collections experience, the Company believed would have an impact on its credit risk and the collectability of its accounts receivable.

These factors included individual customer circumstances, history with the Company, the length of the time period during which the account receivable had been past due and other relevant criteria.

The adjustment for credit losses using this CECL model on accounts receivable and contract assets during the years ended December 31, 2024 and 2023 was not material.

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 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 Company accounts for government assistance that is not subject to the scope of ASC 740 using a grant accounting model, by analogy to International Accounting Standards 20, Accounting for Government Grants and Disclosure of Government Assistance, and recognizes such grants when it has reasonable assurance that it will comply with the grant’s conditions and that the grant will be received.

The Company accounts for government assistance that is not subject to the scope of Accounting Standards Codification 740 using a grant accounting model, by analogy to International Accounting Standards 20, Accounting for Government Grants and Disclosure of Government Assistance, and recognizes such grants when it has reasonable assurance that it will comply with the grant’s conditions and that the grant will be received.

Income-based grants are initially recognized as “AMP credit receivable” and as a reduction to cost of sales.

49 unchanged sentences

Other adjustments

( 163 ) ( 14 )

Balance, end of period

18 unchanged sentences

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 grants 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.

17 unchanged sentences

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.

Control is typically transferred upon shipment or delivery depending on the terms of the contract or under the terms of the bill and hold arrangements discussed below.

A performance obligation is a promise in a contract to transfer a distinct product or service to the customer.

9 unchanged sentences

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

During the year ended December 31, 2023, the Company recognized $ 5,370 of revenue within the Gearing segment under terms included in bill and hold sales arrangements.

During the years ended December 31, 2024 and 2023, the Company recognized $ 1,059 and $ 5,370 , respectively, of revenue within the Gearing segment under terms included in bill and hold sales arrangements.

During the years ended December 31, 2024 and 2023 , the Company recognized a portion of revenue within the 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.

3 unchanged sentences

Contract assets represent the Company’s rights to consideration for work completed but not billed at the end of the period.

Contract assets at December 31, 2022 were $ 1,955 .

The Company generally expenses sales commissions when incurred.

3 unchanged sentences

The Company does not disclose the value of the unsatisfied performance obligations for contracts with an original expected length of one year or less.

EARNINGS PER SHARE

The following table presents a reconciliation of basic and diluted earnings per share for the years ended December 31, 2023 and 2022 as follows:

NET INCOME PER SHARE

The following table presents a reconciliation of basic and diluted income per share for the years ended December 31, 2024 and 2023 as follows:

For the Years Ended December 31,

Basic earnings per share calculation:

Net income (loss)

Basic income per share calculation:

$ 1,152 $ 7,649

1 unchanged sentence

21,895,847 21,188,669

Basic net income (loss) per share

Basic net income per share

$ 0.05 $ 0.36

Diluted earnings per share calculation:

Net income (loss)

Diluted income per share calculation:

$ 1,152 $ 7,649

3 unchanged sentences

Non-vested stock awards

78,782 302,601

Weighted average number of common shares outstanding

21,974,629 21,491,270

Diluted net income (loss) per share

Diluted net income per share

$ 0.05 $ 0.36

( 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.

BROADWIND, INC.

6 unchanged sentences

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 Financial Accounting Standards Board issued Accounting Standards Update No.

2016 - 13, “Financial Instruments-Credit Losses (Topic 326 ),” which replaces the current incurred loss impairment methodology for most financial assets with the 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 implemented CECL during the year ended December 31, 2023.

The impact on the Company's financial statements was not material.

See Note 1, “Description of Business and Summary of Significant Accounting Policies,” of these consolidated financial statements for a further discussion of CECL.

In November 2023, the Financial Accounting Standards Board issued Accounting Standards Update No.

2 unchanged sentences

This guidance will be applied retrospectively and will be effective for the annual periods beginning the year ended December 31, 2024, and for interim periods beginning January 1, 2025.

The Company does not expect the adoption of this guidance to have a material impact on its consolidated financial statements.

The Company adopted this guidance for the year ended December 31, 2024.

Refer to Note 16 “Segment Reporting” of these consolidated financial statements for the additional disclosures applied on a retrospective basis.

In December 2023, the Financial Accounting Standards Board issued Accounting Standards Update No.

3 unchanged sentences

The Company does not expect the adoption of this guidance to have a material impact on the Company's consolidated financial statements.

ALLOWANCE FOR DOUBTFUL ACCOUNTS

In November 2024, the Financial Accounting Standards Board issued Accounting Standards Update No.

2024 - 03,“Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220 - 40 ):

Disaggregation of Incomes Statement Expenses,” which serves to improve the disclosures about a public business entity’s expenses by requiring more detailed information about the types of expenses in commonly presented expense captions.

This guidance will be effective for annual periods beginning after December 15, 2026.

The Company is currently evaluating the impact that the updated guidance will have on its consolidated financial statements.

ALLOWANCE FOR CREDIT LOSSES

The activity in the accounts receivable allowance from operations for the years ended December 31, 2024 and 2023 consists of the following:

9 unchanged sentences

Work-in-process

10,390 13,843

Finished goods

8 unchanged sentences

(in thousands, except share and per share data)

During 2023, the Company recognized gross AMP credits totaling $ 14,493 , within the Heavy Fabrications segment.

These AMP credits were introduced as part of the IRA, which was enacted on August 16, 2022.

During 2024 and 2023, the Company recognized gross AMP credits totaling $ 9,588 and $ 14,493 , 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.

The IRA includes advanced manufacturing tax credits for manufacturers of eligible components, including wind and solar components.

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, or apply the AMP credits against taxable income.

The Company recognized the AMP credits as a reduction to cost of sales in the Company’s consolidated statements of operations for the year ended December 31, 2023.

The assets related to the AMP credits are recognized as current assets in the “AMP credit receivable” line item in the Company's consolidated balance sheet as of December 31, 2023.

The Company recognized the AMP credits as a reduction to cost of sales in the Company’s consolidated statements of operations for the years ended December 31, 2024 and 2023.

The assets related to the AMP credits are recognized as current assets in the “AMP credit receivable” line item in the Company's consolidated balance sheets as of December 31, 2024 and 2023.

On December 21, 2023, the Company entered into an agreement to sell 2023 and 2024 AMP credits to a third party.

3 unchanged sentences

The Company also incurred other miscellaneous administrative costs related to selling the credits in the amount of $ 254 , $ 197 of which has been recorded as cost of sales, with the remaining capitalized and included in the “Prepaid expenses and other current assets” line item of the Company's consolidated financial statements at December 31, 2023.

During 2024, the Company recognized gross AMP credits totaling $ 9,588 and recognized a 6.5 % discount on the credits totaling $ 623 , which was recognized in cost of sales.

The Company also incurred other miscellaneous administrative costs related to the credits in the amount of $ 146 , which have been recorded as cost of sales.

LONG-LIVED ASSETS

17 unchanged sentences

As of December 31, 2024 , the Company had commitments of $ 1,005 related to the completion of projects within construction in progress.

During the year ended December 31, 2023, the Company did not identify any impairment triggering events within its segments.

As a result, no impairment charges were recorded for the year ended December 31, 2023.

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 the years ended December 31, 2024 and 2023, the Company did not identify any impairment triggering events within its segments.

As a result, no impairment charges were recorded for the years ended December 31, 2024 and 2023.

BROADWIND, INC.

23 unchanged sentences

$ 2,968 $ 5,051

Accrued property taxes

Income taxes payable

2 unchanged sentences

Self-insured workers compensation reserve

Long term incentive plan accrual

Accrued sales tax

17 unchanged sentences

As of December 31, 2024 , future annual principal payments on the Company’s outstanding debt obligations were as follows:

2029 and thereafter

Credit Facilities

1 unchanged sentence

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

Deferred financing costs related to the 2022 Credit Facility were $ 359 primarily related to the revolving credit loan, which is net of accumulated amortization of $ 141 , at December 31, 2023.

Deferred financing costs related to the 2022 Credit Facility were $ 414 which is net of accumulated amortization of $ 38 , at December 31, 2022.

Net deferred financing costs related to the 2022 Credit Facility which primarily relate to the revolving credit loan, were $ 269 at December 31, 2024 , which is net of accumulated amortization of $ 251 .

Net deferred financing costs at December 31, 2023 were $ 359 , which is net of accumulated amortization of $ 141 .

These costs are included in the “Other assets” line item of the Company's consolidated financial statements at December 31, 2024 and December 31, 2023 .

6 unchanged sentences

1 to Credit Agreement and Limited Waiver which waived the Company’s fourth quarter minimum EBITDA (as defined in the 2022 Credit Agreement) requirement for the period ended December 31, 2023 , amended the Fixed Charge Coverage Ratio (as defined in the 2022 Credit Agreement) 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.

The 2022 Credit Agreement 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.

On December 19, 2024, the Company executed Amendment No.

2 to Credit Agreement, which ( 1 ) increased the outstanding principal amount of the term loan to $ 7,578 and restarted the 84 -month amortization period, and ( 2 ) amended the Fixed Charge Coverage Ratio (as defined in the 2022 Credit Agreement) from 1.1:1.0 to 1.0:1.0 for each twelve -month period ending January 31, 2024 through and including December 31, 2025.

Proceeds from the increased amount of the term loan were used to repay the Company’s indebtedness under its existing revolving line of credit with Wells Fargo and related fees and expenses, thereby allowing for increased availability under the existing revolving line of credit.

The 2022 Credit Agreement, 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.

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.

The term loan also matures on August 4, 2027, with monthly payments based on an 84 -month amortization, with the remaining principal and accrued interest due at maturity.

As of December 31, 2024 , there was $ 7,578 of outstanding indebtedness under the 2022 Credit Facility, with the ability to borrow an additional $ 24,901 .

3 unchanged sentences

The Company has outstanding notes payable for capital expenditures in the amount of $ 1,618 and $ 1,361 as of December 31, 2024 and 2023 , respectively, with $ 371 and $ 163 included in the “Line of credit and current maturities of long-term debt” line item of the Company’s consolidated financial statements as of December 31, 2024 and 2023 , respectively.

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

The notes payable have monthly payments that range from $ 1 to $ 20 and a weighted average interest rate of 7 %.

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

The outstanding notes payable have maturity dates in September 2028.

The outstanding notes payable have maturity dates that range from September 2028 to June 2029.

BROADWIND, INC.

18 unchanged sentences

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, 2023 and 2022 was $ 1,790 and $ 1,639 , respectively.

The related assets are included in the “Property and equipment, net” line item of these consolidated financial statements and the liabilities are included in the “Current portion of finance lease obligations” line item and “Long-term finance lease obligations, net of current portion” line item of these consolidated financial statements.

Finance lease cost for the years ended December 31, 2024 and 2023 was $ 1,946 and $ 1,790 , respectively.

Amortization expense recorded in connection with assets recorded under finance leases was $ 1,473 and $ 1,263 for the years ended December 31, 2024 and 2023 , respectively.

81 unchanged sentences

When the damages are determined to be probable and estimable, the damages are recorded as a reduction to revenue.

During 2023 and 2022 , the Company incurred liquidated damages of $ 84 and $ 0 , respectively, and there was a reserve for liquidated damages of $ 84 and $ 0 as of December 31, 2023 and December 31, 2022, respectively.

There was no reserve for liquidated damages at December 31, 2024 .

The reserve for liquidated damages as of December 31, 2023 was insignificant.

Workers’ Compensation Reserves

The Company entered into a guaranteed workers’ compensation cost program at the beginning of the third quarter of 2016.

The Company entered into a guaranteed workers’ compensation cost program during 2016.

The reserve prior to 2016 is immaterial.

32 unchanged sentences

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.

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 10, “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.

BROADWIND, INC.

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Change in valuation allowance

22.8 ( 26.3 )

Other deferred adjustment

Effective income tax rate

( 151.2 ) ( 35.2 )

Effective income tax rate

BROADWIND, INC.

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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.

On February 3, 2025, the Board approved an amendment which included an extension of the Rights Plan for an additional three years.

The amendment is subject to approval by the Company’s stockholders at the Company’s 2025 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.

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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.

The Company has granted equity awards pursuant to previously Board approved equity incentive plans.

Most recently, the Company has granted equity awards pursuant to the Broadwind Energy, Inc.

16 unchanged sentences

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.

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, subject to continued employment/service.

Additionally, stock options expire ten years after the date of grant.

2 unchanged sentences

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.

RSUs generally contain a vesting period of one to five years from the date of grant, subject to continued employment/service.

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.

1 unchanged sentence

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.

Vesting of PSUs is conditioned upon the Company meeting applicable performance measures over the performance period, subject to continued employment/service.

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.

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The 2015 EIP reserves 4,700,000 shares of the Company’s common stock.

As of December 31, 2023, 2,187,843 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 687,206 shares of common stock are issued and unvested.

As of December 31, 2024 , under the 2015 EIP, 2,381,572 shares of common stock had been issued, pursuant to stock options, RSUs and PSUs and 823,808 shares of common stock were reserved for issuance under outstanding RSU and PSU awards.

There was no stock option activity during the years ended December 31, 2024 and 2023 and no stock options were outstanding as of December 31, 2024 and 2023 .

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During the years ended December 31, 2024 and 2023 , the Company utilized a forfeiture rate of 25%, based on historical activity, 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 were settled in shares of the Company’s stock 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, 2024 and 2023 as follows:

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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.

The Company is organized into reportable 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 (“CODM”).

The Company’s CODM has been identified as the Chief Executive Officer and President, who reviews operating income by segment in relation to total operating income to make decisions about allocating resources and assessing performance.

BROADWIND, INC.

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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.

3 unchanged sentences

The Company provides gearing, gearboxes and precision machined components to a broad set of customers in diverse markets including;

surface and underground mining, wind energy, steel, material handling, infrastructure, onshore and offshore oil and gas fracking and drilling, marine, and other industrial markets.

surface and underground mining, wind energy, steel, material handling, infrastructure, onshore and offshore oil and gas fracking and drilling, marine, defense, and other industrial markets.

The Company has manufactured loose gearing, gearboxes and systems, and provided heat treat services for aftermarket and OEM applications for a century.

4 unchanged sentences

wind power generation market, by providing tower internals kitting solutions for on-site installations, as OEMs domesticate their supply chain due to lead time and reliability issues.

The Company also provides packaging solutions and fabricates panels and sub-assemblies to reduce customers’ costs, improve manufacturing velocity and reliability.

17 unchanged sentences

82,657 35,588 26,056 — ( 1,165 ) 143,136

Operating income (loss)

Direct materials

46,398 8,797 14,867 — * 70,062

11,356 5,797 * — — 17,153

Indirect labor

10,575 4,972 1,711 — — 17,258

Variable overhead

* 4,397 1,861 — — 6,258

( 8,819 ) — — — — ( 8,819 )

Salaries and benefits

* * * 2,332 — 2,332

Share-based compensation

* * * 859 — 859

Depreciation and amortization

3,938 2,183 427 136 — 6,684

All other expenses (1)

12,081 9,580 3,925 2,703 ( 1,165 ) 27,124

Operating income (loss)

7,128 ( 138 ) 3,265 ( 6,030 ) — 4,225

Capital expenditures

9 unchanged sentences

133,368 45,408 25,159 — ( 458 ) 203,477

Operating (loss) income

Direct materials

76,769 13,819 14,460 — * 105,048

17,084 6,993 * — — 24,077

Indirect labor

13,202 6,085 1,379 — — 20,666

Variable overhead

* 5,499 1,973 — — 7,472

( 13,354 ) — — — — ( 13,354 )

Salaries and benefits

* * * 2,646 — 2,646

Share-based compensation

* * * 634 — 634

Depreciation and amortization

3,517 2,270 380 216 — 6,383

All other expenses (1)

21,144 8,896 3,807 5,388 ( 469 ) 38,766

Operating income (loss)

15,006 1,846 3,160 ( 8,884 ) 11 11,139

Capital expenditures

1 unchanged sentence

46,931 48,599 16,295 58,487 ( 35,156 ) 135,156

* Line item not deemed a significant expense for this segment (per analysis of Accounting Standards Update No.

( 1 ) All other expenses for each reportable segment primarily consist of:

Heavy Fabrications -variable overhead, salaries and benefits, and rent and utilities

Gearing - salaries and benefits and rent and utilities

Industrial Solutions -direct labor, salaries and benefits, and rent and utilities

Corporate -professional expenses

The Company generates revenues entirely from transactions completed in the U.S.

1 unchanged sentence

All intercompany revenue is eliminated in consolidation.

Transactions between reportable segments are treated consistent with the accounting policies referenced in Note 1, “Description of Business and Summary of Significant Accounting Policies” of these consolidated financial statements.

During 2024 , one customer accounted for more than 10% of total net revenues.

The customer, reported within the Heavy Fabrications segment, accounted for revenues of $ 71,607 .

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 the years ended December 31, 2023 and 2022 , five customers accounted for 65 % and 69 %, respectively, of total net revenues.

During 2023 , one customer accounted for more than 10% of total net revenues.

The customer, reported within the Heavy Fabrications segment, accounted for revenues of $ 107,555 .

BROADWIND, INC.

19 unchanged sentences

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.

BROADWIND, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

December 31, 2023 and 2022

(in thousands, except share and per share data)

QUARTERLY FINANCIAL SUMMARY (UNAUDITED)

The following table provides a summary of selected financial results of operations by quarter for the years ended December 31, 2023 and 2022 as follows:

$ 48,873 $ 50,843 $ 57,163 $ 46,598

6,976 8,333 10,167 7,032

Operating income

1,282 2,216 5,367 2,274

769 1,415 4,394 1,071

Net income per share:

$ 0.04 $ 0.07 $ 0.21 $ 0.05

$ 0.04 $ 0.07 $ 0.20 $ 0.05

$ 41,844 $ 50,012 $ 44,843 $ 40,060

2,012 2,394 3,748 2,556

Operating loss

( 2,073 ) ( 1,912 ) ( 520 ) ( 2,102 )

( 2,404 ) ( 2,703 ) ( 1,772 ) ( 2,851 )

Net loss per share:

$ ( 0.12 ) $ ( 0.13 ) $ ( 0.09 ) $ ( 0.14 )

CAPITALIZATION

At the Special Meeting of Stockholders held on October 23, 2024, the Company’s stockholders approved the ratification of the approval by the Company’s stockholders, filing and effectiveness of the certificate of amendment to the Company’s Certificate of Incorporation filed with the Secretary of State of the State of Delaware on May 16, 2024, and the increase in the number of authorized shares of the Company’s common stock, par value $ 0.001 per share, from 30,000,000 to 45,000,000 , effected thereby, as more particularly described in the Company’s definitive proxy statement filed with the SEC on August 30, 2024.

SUBSEQUENT EVENTS

On January 28, 2025, Broadwind Heavy Fabrications, Inc.

(“BHF”), a wholly owned subsidiary of the Company entered into a Tax Credit Transfer Agreement with MarketAxess Holdings Inc.

(the “Purchaser”), pursuant to which, for each of 2025 and 2026, BHF agreed to sell to the Purchaser up to $ 15,000 and $ 20,000 respectively, of AMP Credits.

The Purchaser will pay for the AMP Credits on a quarterly basis for AMP Credits generated in the immediately-preceding calendar quarter.

The AMP Credits will be sold at a purchase price of $ 0.935 per $1.00 of AMP Credits.

INDEX TO EXHIBITS

2 unchanged sentences

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)

Certificate of Amendment to the Certificate of Incorporation of the Company (incorporated by reference to Exhibit 4.4 to the Company’s Registration Statement on Form S-8 filed May 17, 2024)

Fourth Amended and Restated Bylaws of the Company, adopted as of June 26, 2023 (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed June 28, 2023)

4 unchanged sentences

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

Fourth Amendment to Section 382 Rights Agreement dated as of February 4, 2025 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 6, 2025

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)

48 unchanged sentences

(incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed December 27, 2023)

Amendment No.

2 to Credit Agreement, dated as of December 19, 2024, 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 December 23, 2024)

Tax Credit Transfer Agreement, dated as of January 28, 2025, by and between Broadwind Heavy Fabrications Inc.

and MarketAxess Holdings Inc.

(incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed January 30, 2025)

Guaranty, dated as of January 28, 2025, by and between Broadwind Inc.

and MarketAxess Holdings Inc.

(incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed January 30, 2025)

Insider Trading Policy (filed herewith)

Subsidiaries of the Registrant (filed herewith)

7 unchanged sentences

Broadwind, Inc.

Policy on Recoupment of Incentive-Based Compensation (filed herewith)

Policy on Recoupment of Incentive-Based Compensation (incorporated by reference to Exhibit 97 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023)

The following financial information from this Form 10-K of Broadwind, Inc.

12 unchanged sentences

/s/ Thomas A.

Vice President and Chief Financial Officer (Principal Financial Officer)

Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)

March 5, 2025

1 unchanged sentence

March 5, 2025

/s/ Thomas A.

/s/ Jeanette A.

March 5, 2025

2 unchanged sentences

March 5, 2025

/s/ Jeanette A.

March 5, 2025

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

What changed 10-K

Item 9A. Controls and Procedures